(Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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Apple is expected to unveil the next generation of iPhone on Wednesday, with an 'always on' display widely tipped as a major upgrade. The announcement is expected to feature an iPhone 14 Pro and a cheaper iPhone 14, each available in normal and large sizes. However reports suggest that the cheaper model might contain the same series of processors – Apple's A15 Bionic chips – that are already used in the iPhone 13, meaning that there is unlikely to be a noticeable performance difference. Instead, the latest handsets are rumoured to include an always-on display, giving users the ability to see the time and other basic notifications while the screen is locked. The Apple Watch has also typically been upgraded in the autumn, and there are suggestions that a new model could involve a low-power mode being introduced to win over consumers using Fitbit or Garmin.
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Apple has been barred from selling iPhones without a charger in Brazil and fined more than USD2 million over the issue, the government said, after accusing Apple of "discriminatory practices." In an official notice, Brazilian authorities ordered "the immediate suspension of the distribution of iPhone brand smartphones, regardless of model or generation, that are not accompanied by a battery charger." The Ministry of Justice & Public Security ordered the California company to pay a fine of BRL12.3 million, nearly USD2.4 million. The measure from the Department of Consumer Protection & Defence effectively prohibits the sale of all iPhone 12 and 13 models. Apple has been under investigation in Brazil since December for "the sale of an incomplete product," "discrimination against the consumer" and "the transfer of responsibility to third parties" by offering iPhone 12s and newer versions without chargers for power outlets, according to an official statement.
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Juul Labs will pay USD438.5 million to settle a probe by 34 US states that found the vaping company marketed to underage smokers, state officials announced. Tobacco firm Altria Group acquired a 35% stake in Juul in 2018 to diversify its business strategy in the face of falling smoking rates. Under the agreement, which is still being finalized, Juul would provide payments over the next 6-10 years to individual US states and pledge to not employ cartoons in ads or otherwise market to younger consumers. The probe was led two years ago by state officials in Connecticut, Oregon and Texas and joined by other states. The investigation "revealed that Juul wilfully engaged in an advertising campaign that appealed to youth, even though its e-cigarettes are both illegal for them to purchase and unhealthy for children," according to a press release from the Oregon Department of Justice.
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BP has agreed to sell its upstream business in Algeria to Italy's Eni, for an undisclosed amount. The London-based oil major said the deal includes its stake in the gas-producing In Amenas and In Salah concessions. BP holds working interests of 33.15% and 45.89% in the In Salah and In Amenas projects, respectively. Both projects are operated by joint ventures co-owned by BP, Norwegian oil company Equinor and Algerian state-owned energy company Sonatrach.
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Siemens Energy has placed EUR960 million of mandatory convertible notes to help finance its offer for Siemens Gamesa Renewable Energy. Back in May, Siemens Energy had launched a tender offer to buy up the remaining stake in wind power subsidiary, Spain-based Siemens Gamesa. Siemens Energy, a subsidiary of Munich-based Siemens, already owns some two-thirds of Gamesa shares. The offer at EUR18.05 per share will see Gamesa delisted from Madrid, where it is a IBEX 35 index constituent, and integrated into Siemens Energy. The deal is expected to total EUR4.3 billion.
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Barratt Developments unveiled a GBP200 million share buyback programme after reporting a record profit figure with the UK housing market supported by an "imbalance" in supply and demand. In the financial year to June 30, the housebuilder said statutory pretax profit slumped 21% to GBP642.3 million from GBP812.2 million a year before. This was largely due to a GBP408.2 million cost booked relating to legacy property costs and an industry pledge on building safety. Stripping this cost out, adjusted pretax profit rose 15% to GBP1.05 billion - a record figure which matched consensus forecasts. Revenue improved 9.5% to GBP5.27 billion from GBP4.81 billion. Barratt upped its total shareholder payout to 36.9 pence from 29.4p. It has also approved a GBP200 million share buyback programme, with an initial GBP50 million tranche to be completed by the end of 2022 and the remainder before the end of June next year.
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MARKETS
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Stock markets were lower in Europe on Wednesday after poor set of trade figures from China had send Asia shares into the red. Wall Street was called slightly higher, major indices having closed 0.4% to 0.7% down on Tuesday. Apple shares were up 0.4% in pre-market trade.
The week's market focus remained on a European Central Bank rate decision due on Thursday. "We expect the ECB to hike by 50 basis points at its September meeting," said ING bank. "Markets are pricing in 66bp at the moment, and the consensus is leaning in favour of 75bp, so we see some downside risks for the euro."
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CAC 40: down 0.4% at 6,080.22
DAX 40: down 0.4% at 12,814.90
FTSE 100: down 0.8% at 7,240.08
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Hang Seng: closed down 0.8% at 19,044.30
Nikkei 225: closed down 0.7% at 27,430.30
S&P/ASX 200: closed down 1.4% at 6,729.30
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DJIA: called up 0.1%
S&P 500: called up 0.2%
Nasdaq Composite: called up 0.3%
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EUR: soft at USD0.9902 (USD0.9910)
GBP: down at USD1.1495 (USD1.1531)
USD: up at JPY144.12 (JPY142.90)
GOLD: up at USD1,704.20 per ounce (USD1,702.85)
OIL (Brent): flat at USD93.12 a barrel (USD93.17)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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China's export growth slowed significantly in August, customs authorities said, as economic uncertainty is exacerbated by strict Covid-19 lockdowns across the country. Last month, China's exports expanded 7.1% year-on-year, down from 18% growth in July, China's General Administration of Customs said, while imports were up only 0.3%, compared with a 2.3% rise in July. Analysts surveyed by Bloomberg forecast export growth of 13% and a 1.1% increase in imports. The slowdown in trade comes as global demand for Chinese products weakens with energy prices soaring and the US facing the threat of recession. Sporadic Covid-19 lockdowns around China have also dampened consumer enthusiasm and business confidence, while searing temperatures across large parts of the country this summer prompted power rationing for factories.
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US President Joe Biden said he was "sure" he'd meet Xi Jinping in November if the Chinese leader decides to attend a G20 meeting planned in Indonesia's resort island of Bali. "If he's there I'm sure I'll see him," Biden told reporters at the White House. Biden has not met with Xi since becoming president in January 2021, limiting contact between the two superpower leaders to a series of phone and video calls. Tensions are mounting over China's threats to US-backed Taiwan and a still unresolved trade dispute between the world's two biggest economies.
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China and Australia could hold top-level talks for the first time since 2017, with senior figures from both countries this week signalling a willingness to break the years-long impasse. Australia Prime Minister Anthony Albanese said that he would "welcome" such a meeting, when asked about the potential for talks on the sidelines of the G20 summit in November in Indonesia. "I'm open to dialogue with anyone at any time, particularly with leaders of other nations," he told reporters. The prime minister's comments came after China's ambassador to Australia, Xiao Qian, told ABC that he would "love" to see Chinese President Xi meet with Albanese.
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The eurozone economy grew faster-than-expected in the second quarter. In the three months to the end of June, the single currency bloc recorded sequential growth of 0.8%, a second estimate showed on Wednesday, revised up from last month's flash reading of 0.6%. This was also ahead of the first quarter's growth of 0.7%. Annually, the eurozone notched growth of 4.1%, above the prior estimate of 3.9%. However, this marked a slowdown from the first quarter growth of 5.4%.
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German industrial production fell into contraction in July, but the drop wasn't as bad as feared. Production fell 0.3% month-on-month in July, swinging from growth of 0.8% the month before. However, the drop was better than the 0.5% decline expected by analysts, according to FXStreet. Annually, production fell 1.1%, deepening June's 0.1% decline.
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Retail sales in Italy returned to growth on both a monthly and an annual basis in July, figures from national statistics office Istat showed. Italy's retail sales inched up by 1.3% on a monthly basis in July after the 1.1% decrease in June. On an annual basis, the 4.2% jump in July follows the 1.3% rise in June, with the latter downwardly revised from the initially estimated 1.4% increase.
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New UK Prime Minister Liz Truss will work to finalise a multi-billion package to freeze energy bills after conducting a brutal Cabinet cull of Rishi Sunak supporters and rewarding her allies with the top jobs. On Wednesday she will face Labour leader Keir Starmer in her first prime minister's questions, and is expected to continue with a reshuffle of government positions. First Truss will hold the debut meeting of her new-look Cabinet in the morning, as ministers seek to finish an emergency package to ease the cost of living crisis. New Chancellor Kwasi Kwarteng has summoned the bosses of major banks to discuss the new economic strategy, with fresh support possibly being announced as soon as Thursday. In her first speech as PM, Truss insisted the nation can "ride out the storm" caused by Russian leader Vladimir Putin's war in Ukraine.
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House prices crept higher in the UK in August from July, but the annual rate of growth - while still steep - has slowed, data from Halifax showed. The Halifax house price index saw house prices rise 11.5% in August from a year before, but this was behind the 11.8% annual rise in July. It also was significantly behind market consensus, according to FXStreet, which had forecast a 12.5% rise. Versus the previous month, house prices increased by 0.4% in August, picking up from July's 0.1% slip.
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UK PM Truss and US President Biden "agreed on the importance of protecting" peace in Northern Ireland, in a phone call on Tuesday. Truss told Biden that she also looked forward to "working closely" with Washington "as leaders of free democracies to tackle shared challenges," a Downing Street spokeswoman said. They include "the extreme economic problems unleashed by [Russian President] Putin's war," she added in a readout of their call. It comes amid reported concerns in the US over Truss, after her one-year tenure as foreign secretary saw post-Brexit tensions in Northern Ireland surface and strain Britain's ties with Brussels, Dublin and Washington.
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Biden's administration said it would be counterproductive to brand Russia a "state sponsor of terrorism," rejecting calls from Ukraine and lawmakers to take the far-reaching action. Biden, asked by a reporter on Monday if he would blacklist Russia as a terrorist state, said simply, "no," after months of non-committal answers from senior officials. Asked whether a decision had been made, White House Press Secretary Karine Jean-Pierre said a terrorism designation was "not the most effective or strongest path forward" to "hold Russia accountable." She said the designation would hamper aid delivery to parts of war-ravaged Ukraine or prevent aid groups and companies from participating in a deal brokered by the United Nations and Turkey to ship badly needed grain from Ukraine's blockaded ports.
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By Tom Waite; thomaslwaite@alliancenews.com
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