FT : National Grid explores paying UK households to turn down heating

National Grid explores paying UK households to turn down heating
Energy network operator to run a trial to reduce gas demand if shortages loom

Households in Britain could be offered payments to turn down their heating if needed to prevent gas shortages, under plans being considered by the UK’s biggest network operator. 

National Gas, which owns Britain’s main transmission network, is exploring plans for a similar scheme to one introduced for electricity customers last year after market turmoil triggered by Russia’s war on Ukraine. 

Under the proposals, households could volunteer to be offered payments to cut gas usage if shortages loomed, as one of many tools available to the network operator to help manage demand.

National Gas already has such a scheme for large industrial users, but any extension to households could be controversial given the importance of gas for heating homes and cooking food. 

The company, which is majority-owned by Australian bank Macquarie, expects to run a “small-scale” exercise this year to see if it is something it wants to introduce in the long term. 

Glenn Bryn-Jacobsen, head of energy resilience for National Gas, said: “We could end up in a situation where households can effectively say, ‘I’ll turn down my heating by two degrees today and make that saving’.”

But he cautioned the current effort was “more of an information gathering exercise to understand whether or not it should be part of any future balancing arrangements”.

The trial comes as energy network operators said Britain is heading into winter in a more resilient position than last year, but still warned energy shortages cannot be ruled out. 

Russia’s cuts to European gas supplies, combined with outages on France’s nuclear power fleet, threw energy markets into turmoil last year and led to warnings in the UK about blackouts.  

This year, the EU has managed to fill its gas storage sites to more than 90 per cent ahead of November, while EDF expects its French nuclear power stations to be running at much higher capacity. 

European supplies affect Britain because it relies on imports of gas and electricity at peak times, and also exports both back to Europe. 

National Gas has also revised up its assessment of the maximum amount of liquefied natural gas the UK can import in shipments from around the world, having seen the system operating close to capacity last winter. 

However, cold weather combined with the potential further loss of Russian gas to Europe could put the system under strain. 

“Whilst we are, collectively, in a better place than we were last year, it’s important to remain aware of the risks that are present,” Radley said.  

National Grid’s electricity system operator said it expects there to be “sufficient operational surplus” but warned “risks and uncertainties remain in global energy markets”. 

The ESO added it was able to take emergency measures such as planned, controlled blackouts in individual areas if needed to prevent uncontrolled shutdowns.  

The electricity operator also plans for the second year to have the option to call on households and businesses to cut their usage if needed at peak times to help manage the system. 

Under the “demand flexibility service”, households and businesses can voluntarily sign up to be paid by National Grid to cut usage for an hour or two, for example by delaying the washing machine, if shortages loom.

>>> US After Hours Summary: MU -4%, JEF -3.4% lower on earnings; PTON +16.8% pop

After Hours Summary: MU -4%, JEF -3.4% lower on earnings; PTON +16.8% pops on partnership with LULU; JCI -1.2% ticks lower on cybersecurity incident

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: None

Companies trading higher in after hours in reaction to news: GRTS +42.9% (awarded BARDA contract to conduct Phase 2b study for COVID-19 valued at up to $433 mln), PTON +16.8% (PTON and LULU announce partnership; PTON to become content provider for LULU, which will become primary athletic apparel partner to PTON), SLNO +4.2% (stock offering), FTI +0.8% (awarded large contract by EQNR for its Rosebank project), PTVE +0.6% (collaborating with XOM to provide packaging technologies to major food brands), TAK +0.6% (FDA approves subcutaneous administration of ENTYVIO), UBER +0.4% (names new CFO), UPS +0.4% (discusses automation improvements), LULU +0.3% (PTON and LULU announce partnership; PTON to become content provider for LULU, which will become primary athletic apparel partner to PTON; LULU to discontinue its Studio Mirror), PINE +0.1% (files for $350 mln mixed securities shelf offering)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: MU -4%, JEF -3.4%, NAPA -2.2% (also CEO to retire), CNXC -2% (also increases dividend)

Companies trading lower in after hours in reaction to news: OPRA -6.1% (ADS offering by pre-IPO shareholder), JCI -1.2% (reports cybersecurity incident), CTVA -0.5% (files suit against Inari Agriculture), INTC -0.1% (starts high-volume plant in Ireland), KRP -0.1% (unit offering by selling unitholders)

Reuters : Apple is ordered to face Apple Pay antitrust lawsuit

Apple is ordered to face Apple Pay antitrust lawsuit

Sept 27 (Reuters) - Apple (AAPL.O) was ordered on Wednesday to face a private antitrust lawsuit by payment card issuers accusing the company of thwarting competition for its Apple Pay mobile wallet.

U.S. District Judge Jeffrey White said the plaintiffs could try to prove that Apple violated the federal Sherman antitrust law by enforcing a 100% monopoly over the domestic market for tap-and-pay wallets for iPhones, iPads and Apple Watches.

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The Oakland, California-based judge also dismissed a "tying" claim, which accused Apple of requiring purchasers of iOS devices to buy Apple Pay or forego purchases of competing wallets.

Apple, based in Cupertino, California, did not immediately respond to requests for comment.

"We are happy with this ruling," Steve Berman, a lawyer for the plaintiffs, said in an email. "There are billions at stake so getting by the motion (to dismiss) largely intact was huge for the class."

The proposed class action is led by Illinois' Consumers Co-op Credit Union, and Iowa's Affinity Credit Union and GreenState Credit Union.

They said Apple "coerces" people who use its smartphones, tablets and smart watches into using its own wallet for tap-and-pay transactions, unlike makers of Android-based devices that let people choose wallets such as Google Pay and Samsung Pay.

According to the complaint, Apple's conduct forces more than 4,000 banks and credit unions that use Apple Pay to pay at least $1 billion of excess fees, and harms consumers by minimizing the incentive to make Apple Pay safer and easier to use.

White said the plaintiffs plausibly alleged that Apple allow alternatives to Apple Pay, and that more competition would spur innovation and reduce prices.

In seeking a dismissal, Apple said it charged "nominal" fees to even smaller card issuers, and that the plaintiffs ignored the "competitive reality" that consumers could still pay with cash, credit and debit cards, and other means.

European Union antitrust regulators accused Apple in May 2022 of abusing its dominance in iOS devices and mobile wallets. The regulators have since continued their investigation.

The case is Affinity Credit Union et al v Apple Inc, U.S. District Court, Northern District of California, No. 22-04174.

>>> Micron sliding lower after memory chip maker issues mixed guidance for Q1 (6

Micron sliding lower after memory chip maker issues mixed guidance for Q1 (68.21 +0.27)
  • MU has now posted back-to-back quarters in which it beat EPS and revenue expectations. Encouragingly, gross margin continues to trend in the right direction, coming in at (9.1%) compared to (16.1%) in Q3. That also surpassed the midpoint of its guidance of (10.5)% +/- 2.5%. The upward trend is also expected to continue with MU guiding for non-GAAP gross margin of (4.0%), +/- 2%.
  • Offsetting that good news was MU's soft Q1 EPS guidance of ($1.07), +/- $0.07, which fell short of expectations. It's also notable that CEO Sanjay Mehrotra's commentary wasn't as upbeat as it was in last quarter's earnings press release. Recall that Mr. Mehrotra provided a lift for the industry last quarter when he stated that the memory industry has passed through a trough in revenue and that PC and smartphone OEMs have largely worked through their inventory. This time around, he didn't really provide an update regarding the recovery of the memory market.
  • So far, fellow memory stocks Seagate Technology (STX) and Western Digital (WDC) are little changed in the wake of MU's report.

>>> US Close Dow -0,20% S&P +0,02% Nasdaq +0,22% Russell +0,98%

Closing Stock Market Summary
Stocks were seemingly poised for a rebound in the early going following sharp losses yesterday and this month. Equities started to fade, however, as oil prices and market rates moved higher. The major indices ultimately settled off their lows thanks to a mega-cap powered climb in the afternoon trade.
Notably, the afternoon improvement happened despite yields and crude oil futures remaining elevated. The 10-yr note yield, which fell to 4.48% on no news shortly before the stock market opened, settled seven basis points higher at 4.63%. The 2-yr note yield hit 5.04% overnight, but settled unchanged from yesterday at 5.14%. The U.S. Dollar Index rose 0.4% to 106.70.
WTI crude oil futures jumped 3.8% to $93.93/bbl, which stoked lingering concerns about inflation expectations, rising gas prices, and a slowdown in consumer spending. That move helped drive a 2.5% gain in the S&P 500 energy sector.
The next best performing sector was industrials (+0.8%) followed by communication services (+0.5%) and information technology (+0.2%). The rate-sensitive utilities sector (-1.9%) saw the steepest decline.
Despite the mixed index level performance, breadth was positive this session. Advancers had a roughly 11-to-10 lead over decliners at the NYSE and the Nasdaq.
Mega caps, semiconductor stocks, and growth stocks outperformed and helped support the broader market. The Vanguard Mega Cap Growth ETF (MGK) rose 0.1% after being down nearly 1.0%, the Russell 3000 Growth Index rose 0.2%, and the PHLX Semiconductor Index rose 1.0%.
Separately, the Russell 2000 paced index level gains (+1.0%) thanks to its energy components.
  • Nasdaq Composite: +25.1% YTD
  • S&P 500: +11.3% YTD
  • S&P Midcap 400: +2.3% YTD
  • Dow Jones Industrial Average: +1.2% YTD
  • Russell 2000: +1.0% YTD
Reviewing today's economic data:
  • The weekly MBA Mortgage Applications Index declined 1.3% with purchase applications falling 1% and refinance applications dropping 2%.
  • Total durable goods orders increased 0.2% month-over-month in August ( consensus -0.2%) following a downwardly revised 5.6% decline (from -5.2%) in July. Excluding transportation, durable goods orders were up 0.4% ( consensus 0.3%) following a downwardly revised 0.1% increase (from 0.5%) in July.
    • The key takeaway from the report is that orders for nondefense capital goods excluding aircraft -- a proxy for business spending -- were up a robust 0.9% month-over-month, rebounding from a 0.4% decline in July.
Looking ahead to Thursday, market participants will receive the following economic data:
  • 8:30 ET: Q2 GDP -- third estimate ( consensus 2.1%; prior 2.1%), Q2 GDP Deflator -- third estimate ( consensus 2.0%; prior 2.0%), weekly Initial Claims ( consensus 215,000; prior 201,000), and Continuing Claims (prior 1.662 mln)
  • 10:00 ET: August Pending Home Sales ( consensus -1.0%; prior 0.9%)
  • 10:30 ET: Weekly natural gas inventories (prior +64 bcf)

FT : UK regulator to launch review of private market valuations

UK regulator to launch review of private market valuations
Financial Conduct Authority will examine ‘disciplines and governance’ as concerns over potential blow-ups increase

The UK’s top financial regulator is preparing to launch a sweeping review of valuations in private markets, according to people familiar with its plans, amid growing fears over the impact of higher borrowing costs on the sector.

The Financial Conduct Authority’s exercise, which follows a major review of asset managers’ liquidity in the aftermath of last year’s UK bond market turmoil, will look at the “disciplines and governance” over valuations, one of the people said.

That includes looking at who within a firm is accountable for valuations, how information about those valuations is passed upwards to the relevant management committee and board, and what other governance procedures are in place, the person said.

The exercise, to be kicked off by the FCA by the end of the year, comes as global regulators grow increasingly uneasy about the potential for blow-ups in private assets and other markets following the abrupt reversal of more than a decade of low interest rates.

The International Organization of Securities Commissions (Iosco), a global securities watchdog, recently warned the $13tn global private capital sector was too complacent about the possible risks, highlighting valuations as one of a number of areas where vulnerabilities could emerge.

Private assets such as real estate and unlisted shares and bonds are often valued using models that are typically slower to respond to deteriorating market conditions than listed assets.

Assets are usually valued on a quarterly basis, meaning a sharp market correction may not feed through to the valuations for weeks, if not months.

Fund managers who invest in private markets typically have greater discretion over the valuation of their own assets because their holdings are not subject to the daily swings of public market sentiment.

If the FCA does not feel that the governance processes are robust, it can call out failures. If a firm does not respond to that then it can be ordered to make improvements, because valuations are “part of the risk environment” for regulated firms, the person added.

The second person said the review had not yet been fully scoped out and would not begin until later this year. The number and type of asset management firms involved has not yet been finalised, the person said.

The FCA declined to comment.

About 2,600 firms are in the UK’s £11tn asset management industry, with the FCA acting as their primary regulator. They include hedge funds, venture capital and private equity, as well as large institutional asset managers.

Richard Olson, a valuations expert at investment bank Lincoln International, said the FCA’s probe could be a “wake-up call”, that could push some funds towards outsourcing valuations.

An executive at a large institutional asset manager welcomed the review. “Private markets can’t just mark to their own models, there needs to be an independent verification process,” he said.

In July, the FCA sharply criticised asset managers’ liquidity management, warning that some firms’ plans to deal with large-scale redemptions “lacked coherence”, and ordered them to make improvements.

US regulators have responded to fears about private markets by ordering private funds to make more extensive disclosures about their performance and expenses, an initiative that has prompted a lawsuit from a coalition of private equity, venture capital and hedge funds.

FT : Prescriptions surge for Novo Nordisk’s Ozempic and similar drugs

Prescriptions surge for Novo Nordisk’s Ozempic and similar drugs
Report shows 300% increase in demand for GLP-1 weight loss and diabetes drugs

Healthcare providers in the US wrote more than 9mn prescriptions for Ozempic and similar weight loss and diabetes drugs in the final quarter of 2022, as demand soars for the blockbuster treatments.

Trilliant Health, a healthcare analytics group, said in a report on Wednesday the volume of prescriptions for GLP-1 weight loss drugs like Ozempic — approved by US regulators in 2017 to treat patients with type 2 diabetes — and Wegovy increased 300 per cent from the start of 2020 to the end of 2022.

In that period, “just over half of patients taking these medications have a history of type-2 diabetes or have an associated medical visit with their prescription”, the report said.

The report underscores how the drugs have skyrocketed in popularity since debuting a few years ago. Danish drugmaker Novo Nordisk developed semaglutide, branded as Ozempic for people with diabetes and Wegovy for weight loss.

Since Ozempic was approved in the US, it has made up almost two-thirds of GLP-1 prescriptions.

Many US insurers will not cover the cost of the GLP-1 drugs. Nevertheless, there is still high demand, despite monthly costs of more than $900 for uninsured users of semaglutide. Participants taking a weekly injection of semaglutide lost an average of about 15 per cent of their body weight, according to Novo’s research.

The popularity of the drug class has surged, as celebrities publicised their effectiveness in producing dramatic and rapid weight loss, and social media testimonials fuelled greater interest. Analysts at Barclays expect the market for GLP-1s to reach $100bn by 2030.

Shares of Novo Nordisk and Eli Lilly, which also produces weight loss drugs, have shot up more than 75 per cent in the past 12 months. Chinese pharmaceutical companies are hoping to enter the market by developing domestic versions of the drugs.

Obesity treatments could bring down overall healthcare costs in the US. Medical research cited by the Centers for Disease Control and Prevention said obesity-related healthcare accounts for more than $170bn in excess medical costs on an annual basis. In August, Novo Nordisk said Wegovy was shown to cut the risk of serious events such as heart attacks and strokes by 20 per cent.