(Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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AO World hailed a "significant increase in demand" during the lucrative Christmas trading period, but the online electrical retailer said it has incurred higher costs as well, due to the "operational challenges" of working in a Covid-secure environment. In the three months ended December 31, its third-quarter, AO's UK revenue rose 67% to GBP457.3 million, with Germany revenue jumping 77% to EUR73.6 million. "The significant increase in demand for AO's products and services since the start of the pandemic has continued throughout our third quarter as we experienced our strongest ever peak trading period over the Black Friday period and in the run up to Christmas," AO added. "We look forward to the last quarter and the next financial year with confidence as the structural shift to online is cemented in consumers' minds by the outstanding service millions of new customers have received in 2020." AO said it has seen costs rise "significantly" due to "some of the operational challenges of working in a Covid compliant environment". The company has also seen higher rates of cancellation of long-term mobile contracts and warranties, it added.
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Rio Tinto hailed a "strong" operational performance in 2020, with its Pilbara iron ore asset in Australia posting an output rise, shaking off Covid-19 and a cyclone at the start of the year. Pilbara iron ore shipments rose 2% annually in the fourth quarter to 88.9 million tonnes and were up 1% over 2020 to 330.6 million tonnes. Pilbara output rose 3% year-on-year to 86.0 million in the final quarter and by 2% over the whole year to 333.4 million tonnes. At Iron Ore Co of Canada, production of pellets and concentrate rose 7% annually in the fourth quarter but fell 1% in 2020. Rio's fourth-quarter output of bauxite fell 12% annually. Mined copper production fell 4% and titanium dioxide slag by 5%, but aluminium production rose by 4%. Rio on Tuesday warned the regulatory impacts on its Pilbara asset are "unknown".
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Experian reported a "better than expected" third quarter, with growth driven by the Americas. The London-based credit-checking firm said it delivered organic revenue growth of 7% for the three months to December 31 and total revenue growth of 10% at constant exchange rates. A year ago, Experian recorded organic growth of 7% and total revenue growth of 9% at constant exchange rates. By region, North America posted third quarter organic revenue growth of 9% and Latin America had organic revenue growth of 13%, while UK & Ireland saw revenue fall 2% and Europe, the Middle East & Africa & Asia Pacific reported an 11% decline.
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The EU Aviation Safety Agency plans to authorise Boeing Co's 737 MAX to fly again next week, 22 months after the plane was grounded following two fatal crashes. "For us, the MAX will be able to fly again starting next week," after publication of a directive clearing the jet, EASA director Patrick Ky said in a video conference. "We have reached the point where our four main demands have been fulfilled," Ky said during the conference, organised by the German association of aviation journalists. The MAX was grounded in March 2019 after two crashes that together killed 346 people – the 2018 Lion Air disaster in Indonesia and an Ethiopian Airlines crash the following year. Investigators said a main cause of both crashes was a faulty flight handling system known as the Maneuvering Characteristics Augmentation System, or MCAS.
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MARKETS
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Stocks in London were higher on Tuesday, though gains had been tempered by mid-morning. AO World was down 6.2% in the FTSE 250 index.
"After seemingly succumbing to the January blues, the FTSE 100 is feeling a lot brighter on Tuesday chalking up solid gains as investors look ahead to comments from Treasury secretary nominee Janet Yellen on the US stimulus plan," said AJ Bell investment director Russ Mould.
As Wall Street reopens from Monday's Martin Luther King Jr Day, the Dow Jones is called up 0.6%, the S&P 500 up 0.7% and the Nasdaq Composite up 1.0%. Before the opening bell are some more bumper bank earnings. Reports from Goldman Sachs and Bank of America are due on Tuesday, following an underwhelming start to earnings season on Friday last week from JPMorgan, Citigroup and Wells Fargo.
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FTSE 100: up 0.2% at 6,731.35
FTSE 250: up 0.2% at 20,686.84
AIM ALL-SHARE: up 0.1% at 1,175.12
GBP: higher at USD1.3621 (USD1.3570)
EUR: higher at USD1.2129 (USD1.2075)
GOLD: higher at USD1,844.50 per ounce (USD1,836.71)
OIL (Brent): higher at USD55.30 a barrel (USD54.90)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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An estimated one in eight people in England had had Covid-19 by December, up from one in 11 in November, new figures show. Antibody data on infection in private households suggests that one in 10 in Wales had also been infected by December, alongside one in 13 in Northern Ireland and one in 11 in Scotland. The figures come from the Office for National Statistic's Covid-19 Infection Survey in partnership with the University of Oxford, University of Manchester, Public Health England and Wellcome Trust. Last week, the Medical Research Council Biostatistics Unit Covid-19 Working Group at Cambridge University said it believed the proportion of the population who have ever been infected was 30% in London, 26% in the North West and 21% in the North East. This dropped to 13% in the South East and 8% in the South West.
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Boris Johnson has warned the UK is still in a "pretty precarious" position as ministers prepare for the easing of lockdown restrictions from early March. The prime minister said the process would be gradual, with no great "open sesame" moment when curbs on freedoms are suddenly lifted. He said decisions on loosening England's stay-home order will be made based on progress in the vaccination programme, which had been "very encouraging" despite concerns that some parts of the nation are falling behind. More than four million people in the UK have received a first coronavirus vaccine dose. The government is on track to vaccinate around 15 million high-priority people across the UK by February 15, including health and social care staff, the elderly and people in care homes. Once those vaccines have taken effect, around two to three weeks later ministers will consider whether lockdown measures can be eased.
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Chancellor Angela Merkel and leaders of Germany's 16 states are expected Tuesday to extend and tighten a partial lockdown beyond January, as fears grow over virus variant strains believed to be more contagious. Draft measures seen by AFP ahead of the emergency talks include prolonging current restrictions until at least mid-February, requiring medical masks on public transport and in shops, and increasing pressure on employers to allow staff to work from home where possible. Germany shuttered restaurants, leisure and sporting facilities in November, then expanded the shutdown in mid-December to include schools and most shops to halt runaway growth in new coronavirus infections. The measures ordered until the end of January have brought about a "flattening of the infections curve", said Merkel's spokesman Steffen Seibert, noting also that the number of patients in intensive care had also fallen slightly.
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German consumer prices fell 0.3% annually in December, in line with market forecasts and following a decline of the same rate in November. "As a result, the inflation rate did not exceed zero in the second half of 2020. The low inflation rate in December 2020 was due to the lowering of the VAT rate and the price of energy products, which were 6.0% below the level of the same month last year," Destatis said. Monthly, consumer prices rose 0.5%, again in line with expectations and following a 0.5% month-to-month climb in November. On a harmonised basis, allowing for EU-wide comparison, consumer prices fell 0.7% annually, in line with market forecasts. Monthly, they rose 0.6%, also meeting consensus.
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US President-elect Joe Biden's spokeswoman quickly dismissed Donald Trump's announcement Monday that a Covid-19 ban on travellers arriving from much of Europe and Brazil would be lifted, underlining the fractious transition of power. "On the advice of our medical team, the Administration does not intend to lift these restrictions on 1/26," tweeted Jen Psaki, Biden's press secretary. "In fact, we plan to strengthen public health measures around international travel in order to further mitigate the spread of Covid-19." "With the pandemic worsening, and more contagious variants emerging around the world, this is not the time to be lifting restrictions on international travel," she added. Just minutes prior to Psaki's tweet, President Trump said in a statement he would lift the travel ban on Europe and Brazil. Travel bans for China and Iran would remain in place, he said.
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