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Bryan Reynolds

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  1. FTSE 100 has been trading positively today, mostly supported by investor enthusiasm for housebuilders. The index is currently trading up 41 points (+0.5%) in London. Vodafone (LON:VOD) is one of the biggest movers today after the firm announced plans to spin off its pan-European mobile mast business. The IPO, to be completed in the next 18 months, is expected to be worth as much as €20bn. “Vodafone’s latest quarterly update has given investors somewhat of a reprieve as shares of the telecoms giant have risen by over 7%. The group’s service revenues, which have been under pressure, showed significant improvements against the prior quarter coming in materially ahead of the markets expectations,” reported Helal Miah, an investment research analyst at The Share Centre. Elsewhere, Pearson (LON:PSON) surged more than 5% higher after the latest financial data from the company show underlying growth in all divisions.
  2. Shares of Alphabet Inc. (NASDAQ:GOOGL) climbed 7% yesterday following the company’s earnings report that beat analysts’ estimates. The online behemoth reported Q2 net income of $9.95bn, or $14.21 a share, beating the $4.54 a share in the same quarter last year. The company reported revenue of $38.94bn, 19% higher than revenue from the year-ago period. Consensus estimates were $11.10 a share on revenue of $38.15bn. Reported ad sales were 16% higher than from the year-ago period, hitting $32.6bn. Cloud and Youtube sales were exceptionally good this quarter said the company’s CFO Ruth Porat. Unlike Facebook, Alphabet didn’t publicly confirm that it is under an antitrust investigation by the Justice Department and Federal Trade Commission. When asked about the investigation, “We understand there will be scrutiny. It’s not new to us.” Google chief executive officer Sundar Pichai said.
  3. Shares of Alphabet Inc. (NASDAQ:GOOGL) climbed 7% yesterday following the company’s earnings report that beat analysts’ estimates. The online behemoth reported Q2 net income of $9.95bn, or $14.21 a share, beating the $4.54 a share in the same quarter last year. The company reported revenue of $38.94bn, 19% higher than revenue from the year-ago period. Consensus estimates were $11.10 a share on revenue of $38.15bn. Reported ad sales were 16% higher than from the year-ago period, hitting $32.6bn. Cloud and Youtube sales were exceptionally good this quarter said the company’s CFO Ruth Porat. Unlike Facebook, Alphabet didn’t publicly confirm that it is under an antitrust investigation by the Justice Department and Federal Trade Commission. When asked about the investigation, “We understand there will be scrutiny. It’s not new to us.” Google chief executive officer Sundar Pichai said.
  4. The founder of the UK retail bank Metro Bank (LON: MTRO), Vernon Hill, will be replaced as chairman. Metro Bank had "reached a size and scale where it is appropriate to appoint an independent chair", Hill said. The bank has recently reported a big decline in profits for the first half of the year, due to a large accounting failure which occurred this year. Following the failure, customers withdrew £2bn of deposits over the six months. Pre-tax profits in the first half of the year dropped to £3.4m, compared with the £20.8m from the year-ago period. After he gets replaced as a chairman, Vernon Hill will remain the bank’s non-executive director and president. Regarding Mr Hill’s replacement, Metro Bank said a chairman should "lead the board and is responsible for its effectiveness and governance", adding that as president, Vernon Hill "will continue to instil, challenge and drive the Metro Bank model.
  5. Shares of Deutsche Bank (ETR:DBK) tumbled after the German lender reported a bigger-than-expected second-quarter net loss. The net loss is greater than both analysts’ and bank’s estimates. Surveyed analysts expected a net loss of 1.7 billion euros for the quarter because of the lender’s huge restructuring plans announced earlier in July. Deutsche Bank also estimated a smaller net loss of 2.8 billion euros for Q2. The bank has been struggling lately with the falling share prices and scandals related to anti-money laundering failures in the past. Shares of Deutsche Bank have tumbled around 30% over the last 12 months. At the beginning of July, the bank has announced a huge transformation plan which included leaving its global equities business and cut 18,000 jobs by 2022. “These are reflected in our results. A substantial part of our restructuring costs is already digested in the second quarter. Excluding transformation charges, the bank would be profitable and in our more stable businesses revenues were flat or growing,” said the bank’s CEO Christian Sewing, referring to the bank’s restructuring strategy.
  6. The British car manufacturer Aston Martin (LON: AML) cut some of its 2019 forecasts as weak demand in the UK and Europe have created additional macro-economic issues. Just two months ago, the carmaker had admitted that its markets were up against a demanding environment. “We are disappointed that short-term wholesales have fallen short of our original expectations… We are today taking decisive action to manage inventory and the Aston Martin Lagonda brands for the long-term,” Aston Martin’s CEO Andy Palmer said. The company changed its 2019 forecasts by reducing annual wholesale volumes to 6,300-6,500 vehicles, lower than the previous forecast of 7,100-7,300 vehicles. Aston Martin also lowered capital expenditure to nearly 300, compared with the 320-340 million pounds from the previous forecast. Aston Martin said that in the second quarter, demand in the UK dropped 22% and 28% in Europe, while its Asian and American markets recorded double-digit gains.
  7. The British energy company BP Plc (LON: BP) plans to join forces with the US food company Bunge Limited (NYSE: BG) to create the third-largest sugarcane processor in the world. The two companies will run 11 cane processing plants in Brazil, which allows them to crush 32 million tonnes of cane a year, slightly behind Raízen and Biosev. This will be an important move for BP, as Brazil’s ethanol market is flourishing and a new federal policy which is expected to become effective next year includes increasing the use of biofuels, which are used interchangeably with gasoline in Brazilian vehicles. BP's head of Alternative Energy, Dev Sanyal described Brazil as "the Saudi Arabia of biofuel." After the deal is completed, Bunge will receive cash proceeds of $775m which it intends to use to reduce debt. "This partnership with BP represents a major portfolio optimization milestone for Bunge which allows us to reduce our current exposure to sugar milling," Bunge Chief Executive Gregory Heckman."
  8. Getlink (EPA:GET), which operates the Channel Tunnel between England and France, announced lower-than-expected first half results today as it continues preparing for a hard Brexit. The railway company said it expects a “no-deal” scenario, which will impact its 2019 annual results. The company is now predicting its 2019 EBITDA earnings to fall to 560 million euros (£503m) from 569 million euros in 2018. “Clearly our scenario is the no-deal but we can cope. We remain confident we can manage the next stages of Brexit and confirm the dividend growth policy,” Getlink CEO Jacques Gounon told a conference call. “We are cautious but not worried. Economic activity will continue to develop”, he added. During the previous year, the company carried 26% of trade between Britain and the European Union. Although revenue rose 2% in the first half of the year, there are fears that a hard Brexit would slow business.
  9. Oil prices jumped high today as tensions continue to escalate following Iran's seizure of a British oil tanker, which might heavily impact the supply system. Futures of Brent crude climbed over 2% today settling at $64.02 per barrel. US oil prices advanced as well and reached $56.83. “The events in the Gulf have definitely taken the market into a more bullish territory in today’s trading,” said Erik Norland, CME Group. “But that doesn’t mean markets will continue to go higher, and previous incidents in the Gulf haven’t driven up prices much – suggesting that investors’ calculus, rightly or wrongly, is that war is not very likely.” Iran seized a British-flagged oil tanker in the Gulf on Friday, responding to the UK doing the same to one of its tankers earlier in July. Investors are concerned whether the problems will continue to happen in the Strait of Hormuz, the most important place for the global supply of oil in the world.
  10. Metro Bank (LON: MTRO) is getting closer to offloading the £500m of mortgages to a US hedge fund, believing this move will help the company recover after a very tough quarter. Metro Bank has been discussing the deal with the private equity company Cerberus Capital Management, from which it has purchased over £1bn of assets. A source familiar with the matter said that the deal could be finalised on Wednesday when Metro Bank is expected to post its half-year results. The deal would be of significant financial help to Metro Bank, after a troublesome quarter. “Balance sheet shrinkage is never ideal in the case of a company that has attracted an investor base owing to its high growth prospects. However, capital sufficiency trumps growth and profitability considerations at the current time,” said John Cronin, an analyst at Goodbody, who is concerned about how might selling assets affect the bank’s future profitability.
  11. The Swiss pharmaceutical company Novartis (SWX: NOVN) raised its full-year forecast today, thanks to innovative products sales and increasing global demand for its biosimilar copies of blockbuster drugs. Second-quarter operating income climbed 20% to $3.6bn and sales advanced 8% to $11.8bn, beating the analysts’ expectations of $11.54bn. “We are really excited about the results we’re seeing in (the second quarter). We’ve seen strong sales momentum across all our growth-drivers,” Vasant Narasimhan, Novartis' chief executive officer said. One of the major factors that boosted the company’s performance for the quarter is its Sandoz division which saw global demand increase. The Basel-based company updated its full-year sales outlook for Sandoz as well, boosting it to the same level as last year or a possible low-single-digit growth. “We increased our full-year guidance for both sales and core operating income in light of our strong momentum,” Narasimhan said.
  12. The e-commerce giant eBay (NASDAQ: EBAY) reported better-than-expected second-quarter revenue and profit, as making its platforms easier to use and its advertising efforts have paid off. Shares of eBay rallied almost 7% to $41.60 in the extended session. The online retailer has been working hard on promoted listings and payment business lately, as well as making its platforms more customer-friendly and easier to use by implementing new features such as grouped listings and personal recommendations. Over 940,000 sellers have been using the promoted listings, which caused advertising revenue to hit $89m for the quarter. “The results show eBay’s new revenue sources are working to fuel growth in the bottom-line profitability. The company’s renewed focus on advertising and its new payments business are boosting sales, and that’s enough for investors to get excited,” said Haris Anwar, a senior analyst at Investing.com. eBay reported earnings per share of 68 cents, higher than consensus estimates of 62 cents. Revenue climbed almost 2% to $2.69bn, beating the expectations of $2.68bn.
  13. The rail transportation and real estate company CSX Corp (NASDAQ: CSX) reported lower-than-expected quarterly profit yesterday and lowered its full-year revenue outlook, as the shortcomings in its trade-related intermodal business hurt its quarterly performance, causing the company’s shares to sink 5.5% in after-hours trade. The third-biggest railroad company in the US said its Q2 revenue was 1% lower than from the year-ago period ($3.06bn), caused by the 11% decline in its intermodal business. Shares of CSX Corp. lost $4.35 settling at $75.20 after the company said it estimates full-year revenue decline of 1%-2%. In its previous forecast, the company estimated slight revenue growth for 2019. The company reported a net income of $870m in Q2, or $1.08 per share, versus $877m, or $1.01 per share, in the year-ago quarter. This year’s net income missed the consensus estimates of $1.11 per share.
  14. The American medical device company Johnson & Johnson (NYSE:JNJ) reported a 42% profit increase in the second quarter, as all of the company’s units have reported better-than-expected quarterly results. Although the sales in its medical device unit are significantly down, the company has boosted its full-year forecast today. The gamechanger was foreign medicine sales, which rocketed 6.5% to $4.75bn. This result boosted the total revenue to $20.56bn, beating consensus estimates. The New Jersey-based company’s pharmaceutical units, which contributes 50% of J&J’s total revenue, reported revenue of $3.54bn, higher than consensus estimates of $3.52bn. Its pharmaceutical business is famous for psoriasis drugs such as Stelara and Tremfya. J&J’s consumer health products unit, the maker of Aveeno body care, Tylenol and Neutrogena, posted revenue of $3.54bn, beating the expected $3.52bn. “If you look at our earnings growth this year, we’re maintaining it, it’s two times the rate of sales growth,” said Joseph Wolk, Johnson & Johnson’s CFO.
  15. Goldman Sachs (NYSE:GS) reported better-than-expected Q2 earnings results today, showing an extraordinary performance in its investment banking and trading units. The New York-based investment bank reported earnings of $5.81 per share, beating the consensus estimates of $4.89 per share. The company reported a revenue of $9.46bn, higher than analysts’ expectations of $8.83bn. Total revenue is 2% lower than from the year-ago quarter, while investment banking revenue is down 9%, however, still higher than consensus estimates. EPS is down 2.8% when compared to the year-ago period. “We’re encouraged by the results for the first half of the year as we continue to invest in new businesses and growth to serve a broader array of clients,” the company’s Chief Executive David Solomon said. “Given the strength of our client franchise, we are well-positioned to benefit from a growing global economy.” Shares of Goldman advanced 1% in today’s premarket.
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