(Alliance News) - The following is a summary of top news stories Friday.
----------
COMPANIES
----------
International Consolidated Airlines Group reported a narrowed first-quarter loss as the British Airways parent expects to turn a profit starting in the current quarter due to rising travel demand. For the three months ended March 31, pretax loss narrowed to EUR916 million from EUR1.22 billion in the first quarter last year, as total revenue more than tripled to EUR3.44 billion from EUR968 million. The load factor, measuring how many seats are filled, stood at 72%, up from 46% a year ago. While the first quarter of 2022 saw the highest load factor since the start of the pandemic, this was still 8.5 percentage points short of the first quarter of 2019, when capacity was 81%. The number of passengers in the quarter surged to 14.4 million from 2.6 million a year ago. IAG said it flew 65% of 2019 capacity in the first quarter. It expects to raise this to 80% in the second quarter, 85% in the third quarter and 90% in the fourth.
----------
InterContinental Hotels Group said revenue per available room surged in the first quarter compared to the previous year as trading improved in the Americas and in Europe, the Middle East and Africa regions. For the three months ended March 31, RevPAR- a key metric in the hotel industry - was up 61% from the first quarter of last year. Versus the same period in 2019, however, it was down 18%. First quarter average daily rate - which measures the average rental revenue earned for an occupied room per day - was up 27% from a year before. IHG said Americas and EMEAA regions saw sequentially improved trading in February and March after a challenging January. However, in Greater China, trading in March was hurt by the tightening of localised travel restrictions following a spike in Covid-19 cases. In Greater China, first-quarter RevPAR was down 7% from the first quarter of 2021 and down 42% from the same period in 2019.
----------
ING Group reported a sharp slump in profit in the first quarter of 2022 as the bank set aside nearly EUR1 billion in loan loss provisions as it gears up for slowing economic growth. In the three months to March 31, the Dutch financial services firm recorded net profit of EUR429, down sharply from EUR1.01 billion in the same period a year prior. Pretax profit slumped to EUR668 million from EUR1.46 billion. The bank set aside EUR987 million in additional loan loss provisions, up sharply from EUR223 million a year prior. Total income slipped 2.2% to EUR4.60 billion from EUR4.70 billion, with net interest income down to EUR3.42 billion from EUR3.51 billion, offsetting net fee & commission income rising to EUR933 million from EUR854 million. ING's net interest margin worsened in the first quarter, slipping to 1.37% from 1.46%.
----------
Adidas reported a drop in profit in the first quarter as the sportswear manufacturer blamed Covid restrictions in China for slowing sales, and guided for annual income to be at the lower end of its previous guidance. In the three months to March 31, net income dropped to EUR490 million from EUR554 million in the same period a year prior. Operating profit slumped to EUR437 million from EUR704 million. Net sales were flat year on year at EUR5.30 billion from EUR5.27 billion.
----------
Adidas also said it entered into a long-term strategic partnership with US athletic retailer Foot Locker. The partnership will establish Foot Locker as the lead partner for Adidas in the basketball category as well as its accelerate energy and hype launches. It will also include the development and expansion of key franchises across women's, kids, and apparel. Adidas said the partnership will target over USD2 billion in retail sales by 2025, nearly tripling levels from 2021. In 2022, Adidas expects to generate incremental revenue of up to EUR100 million as a result of the new partnership.
----------
S4 Capital released its long-awaited results for 2021, showing the advertising agency swung to a loss in the year, despite nearly doubling revenue. The Martin Sorrell-founded firm had delayed publication of the results twice back in March, after its auditor PricewaterhouseCoopers was unable to complete the work. Revenue nearly doubled to GBP686.6 million from GBP342.7 million, around 52% higher on a like-for-like basis, benefiting from organic growth as well as from acquisitions. Despite this, the firm swung to a pretax loss in the year of GBP55.7 million from a profit of GBP3.1 million. This was due to large adjusting items, which increased to GBP136.9 million in the year, from GBP49.8 million in 2020. The items related to acquisitions, amortisation and share-based payments, S4 said. On an adjusted basis, pretax profit rose to GBP81.2 million from GBP52.9 million.
----------
The US on Thursday said only adults who "have personal concerns" about mRNA vaccines, access issues or medical reasons for refusing them may now receive the Johnson & Johnson Covid shot, which has been linked to a rare but serious clotting condition. The vaccine, which was authorized as a single shot, is less protective than those developed by Pfizer and Moderna, and in December the Centers for Disease Control & Prevention advised the public to steer clear. Thursday's decision by the Food & Drug Administration builds on that recommendation by limiting the J&J vaccine's emergency use authorization. "Today's action demonstrates the robustness of our safety surveillance systems and our commitment to ensuring that science and data guide our decisions," said FDA scientist Peter Marks in a statement. Sixty US cases of thrombosis with thrombocytopenia syndrome, which produces rare and potentially life-threatening blood clots with low levels of blood platelets, had been reported by March 18, with nine deaths.
----------
Walgreens Boots Alliance said it entered into a USD683 million settlement agreement with the US state of Florida to resolve claims related to prescriptions for opioid medications that were filled at its pharmacy locations. Under the agreement, the company will settle all opioid claims with the state for USD683 million. This includes USD620 million to be paid to the state over 18 years as well as a one-time payment of USD63 million for attorney fees. The Illinois, US-based pharmacy chain owner added that the settlement included no admission of wrongdoing or liability by the company.
----------
German industrial giant Siemens unveiled its first hydrogen-powered train developed with rail operator Deutsche Bahn, with a plan to put it into service regionally in 2024. The locomotive which runs on electricity produced by a hydrogen fuel cell "should replace diesel powered trains in regional traffic and reduce carbon emissions on rails to zero," Deutsche Bahn said in a statement. Hydrogen-powered trains is part of the German government's plan to "electrify 75% of the rail network by 2030," said Michael Theurer, state secretary at the transport ministry. Fuel cells generate clean electricity from reactions using hydrogen and oxygen as the only emission is water. While most hydrogen currently comes from the gas industry, the Siemens train model called Mireo Plus H will use "green hydrogen" from sustainable energy.
----------
MARKETS
----------
Wall Street was called to open with further losses on Friday after a torrid session the day before. On Thursday, the Dow closed down 3.1%, the S&P 500 down 3.6%, and the Nasdaq Composite down 5.9%. The S&P and Nasdaq indices suffered their worst sessions since 2000, as investors adjusted to the reality of tightening monetary policy.
"The turnaround was notable since on Wednesday both stocks and bond prices rose after Fed Chair [Jerome] Powell pushed back on some of the more extreme tightening scenarios, such as the possibility of a 75 bps hike," commented Marshall Gittler, head of Investment Research at BDSwiss.
"Thursday's slump suggests that the market doesn't think the Fed will be able to keep to the script and manage a 'soft landing', that it will have to tighten enough to cause a recession. there's no possibility of a 'Powell put' this time, unlike most of the last 30 to 40 years. They can't lower rates to rescue the market because interest rates are already too low for the current level of inflation."
Friday's key event is the US nonfarm payrolls report for April, due at 1230 GMT.
----------
CAC 40: down 1.6% at 6,268.05
DAX 40: down 1.4% at 13,709.49
FTSE 100: down 0.9% at 7,439.44
----------
Hang Seng: closed down 3.8% at 20,001.96
Nikkei 225: closed up 0.7% at 27,003.56
S&P/ASX 200: closed down 2.2% at 7,205.60
----------
DJIA: called down 0.4%
S&P 500: called down 0.6%
Nasdaq Composite: called down 0.7%
----------
EUR: up at USD1.0565 (USD1.0516)
GBP: firm at USD1.2340 (USD1.2331)
USD: firm at JPY130.40 (JPY130.30)
Gold: up at USD1,882.30 per ounce (USD1,881.76)
Oil (Brent): up at USD112.78 a barrel (USD110.84)
(currency and commodities changes since previous London equities close)
----------
ECONOMICS AND GENERAL
----------
UK Prime Minister Boris Johnson is facing an angry backlash from local Tories as the party saw key London strongholds fall to Labour while also suffering losses in councils across England. Keir Starmer hailed a "turning point" as his party strengthened its grip on the capital, taking the totemic Tory authority in Wandsworth, winning Westminster for the first time since its creation in 1964 and clinching victory in Barnet. As scores of Tory councillors lost their seats against a backdrop of the row about lockdown-busting parties in No 10 and the cost-of-living crisis, local Conservative leaders pointed the finger of blame at Johnson. However, allies of Johnson warned it was not the time for a change in the occupant of No 10, saying the Labour gains fell short of what was needed for the party to secure victory at a general election. That did not deter a jubilant Starmer from proclaiming clear evidence of a Labour revival following its crushing defeat in the 2019 general election. "This is a big turning point for us," he told cheering supporters in Barnet. "We've sent a message to the prime minister: Britain deserves better."
----------
UK construction sector activity edged lower in April as rising energy and raw material costs weighed on client budgets, S&P Global said. The S&P Global-CIPS UK construction purchasing managers' index decreased to 58.2 points in April from 59.1 in March. The print just barely beat the market forecast, cited by FXStreet, of 58.0. Further, S&P said the near-term outlook for construction activity deteriorated in April as total new order volumes expanded at the slowest rate for four months. Escalating raw material prices and hesitancy due to higher borrowing costs and geopolitical uncertainty were among the reasons for reduced demand.
----------
UK house prices surged to fresh record highs in April but growth is expected to slow later this year amid inflationary pressures, according to mortgage lender Halifax. On an annual basis, the Halifax UK house price index rose by 10.8% in April, slowing slightly from 11.1% in March. The house price index increased 1.1% in April month-on-month, easing from a 1.5% rise in March. The average price for a home in the UK stood at a fresh record high of GBP286,079 in April, up from GBP258,295 at the same time last year. However, Russell Galley, managing director at Halifax, warned: "The house price to income ratio is already at its highest ever level, and with interest rates on the rise and inflation further squeezing household budgets, it remains likely that the rate of house price growth will slow by the end of this year."
----------
German industrial production fell by more than expected in March, data from Federal Statistical Office showed, as the war in Ukraine hurt manufacturers. Industrial output fell by 3.9% in March from February, on a price, seasonally and calendar adjusted basis, according to provisional data from Destatis. The drop was considerably worse than market expectations, which - according to FXStreet - had predicted a less-dramatic 1% fall. Annually, production was down 3.5% in March.
----------
Germany, among other EU member states, is pushing for harsher sanctions on Sberbank, Russia's largest bank, and measures to target nuclear energy materials for civil use, diplomatic sources told dpa. Representatives from the 27 EU member states in Brussels submitted amendments on Thursday to the European Commission's proposals for a sixth package of sanctions on Russia over the invasion of Ukraine. The package includes a planned phase out of Russian crude oil within six months and refined products by the end of the year from the EU to cut off a major source of revenue to the Kremlin. Hungary and Slovakia are to receive a 20-month-long extension in the proposals under consideration, EU diplomats said. Both EU member states are heavily dependent on Russian oil imports and struggled to source alternative supplies due to a lack of sea access. Bulgaria and the Czech Republic continue to pursue their own exemptions, diplomatic sources told dpa.
----------
Almost 500 civilians have been evacuated from the devastated city of Mariupol and its besieged Azovstal steel plant in a UN-led rescue operation, the Ukrainian president's office said. The United Nations had said Thursday that a new convoy would evacuate civilians from the "bleak hell" of the factory, which has become the last pocket of resistance in the southern port city. The Russian military had announced a three-day ceasefire at the site starting Thursday but a Ukrainian commander said there was still heavy fighting at the sprawling complex. Hundreds of soldiers and civilians have been holed up for weeks under heavy bombardment, many taking shelter in the plant's Soviet-era underground tunnels. Ten weeks into a war that has killed thousands, destroyed cities and uprooted more than 13 million people, Russia has focused its efforts on Ukraine's east and south, and taking full control of the now-flattened Mariupol would be a major victory for Moscow.
----------
By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.