>>> Europe : Brokers Upgrades & Downgrades - 20th of July 2022 V2(+)

>>> Up
* Albemarle Raised to Sector Weight at KeyBanc
* Alibaba ADRs Raised to Outperform at Bernstein
* Bavarian Nordic Raised to Outperform at Cowen; PT 433 kroner
* Chevron Raised to Buy at HSBC; PT $167
* Fevertree Drinks Raised to Hold at SocGen; PT 900 pence
* Mediobanca Raised to Buy at Banca Akros (ESN); PT 11 euros (+)
* Saipem Upgraded to Ba3 by Moody’s
* Scout24 SE Raised to Overweight at Morgan Stanley; PT 70 euros
* Tecnicas Reunidas Raised to Outperform at Renta 4; PT 6.50 euros
* Yara Raised to Sector Perform at Scotiabank; PT 490 kroner

>>> Down
* Adevinta Cut to Equal-Weight at Morgan Stanley; PT 85 kroner
* Addiko Cut to Neutral at Citi; PT 11.80 euros
* Apple PT Cut to $180 from $185 at Morgan Stanley
* Autogrill Cut to Hold at HSBC; PT 6.33 euros
* Beijer REF Cut to Hold at DNB Markets; PT 158 kronor
* Cint Cut to Hold at Jefferies; PT 50 kronor
* Direct Line Cut to Reduce at HSBC; PT 175 pence
* Disney Cut to Hold at CFRA on Risks to Parks and Streaming
* Eutelsat Cut to Add at AlphaValue/Baader
* Komplett Cut to Hold at Pareto Securities; PT 20 kroner
* Lagercrantz Cut to Hold at ABG; PT 105 kronor
* Moonpig Cut to Hold at Numis; PT 210 pence
* Quilter Cut to Neutral at Citi; PT 105 pence
* REN Cut to Underperform at RBC; PT 2.40 euros
* Schibsted PT Cut to 280 kroner from 405 kroner at Morgan Stanley
* UMG Cut to Reduce at HSBC; PT 16.10 euros

>>> Initiation
* Amundi Rated New Buy at Goldman; PT 65 euros
* Abrdn plc Rated New Neutral at Goldman; PT 180 pence
* Cazoo Group Rated New Sell at Berenberg; PT 49 cents
* DWS Rated New Neutral at Goldman; PT 29 euros
* Elis Rated New Buy at Bryan Garnier; PT 23 euros
* Haleon Rated New Underweight at JPMorgan; PT 280 pence
* Haleon ADRs Rated New Buy at Spin-Off Research; PT $9
* Hypoport Rated New Underperform at Exane; PT 162 euros
* Intercos Rated New Buy at Berenberg; PT 16.50 euros
* Man Group Rated New Buy at Goldman; PT 315 pence
* Pandora Rated New Hold at Jefferies; PT 470 kroner
* Schroders Rated New Sell at Goldman; PT 2,530 pence

>>> Call
* Adevinta Cut, Scout24 Raised as MS Rejigs Classifieds Picks
* Barry Callebaut Growth Overshadowed By Salmonella Case: Vontobel (+)
* Bavarian Nordic Upgraded on Monkeypox Vaccine Stockpiling: Cowen
* BillerudKorsnas Bottom Line Beat Highlights Momentum, Citi Says
* Elis Rated New Buy at Bryan Garnier on Low Valuation, Outlook (+)
* Georg Fischer 1H Results Beat, on Track to Reach Targets: Baader (+)
* Intercos Sits in ‘Sweetspot’ Within Beauty, New Buy at Berenberg
* Jefferies Downgrades Cint, Cuts Software PTs on Weaker Momentum
* Pandora Shares Not as Cheap as They Look, New Hold at Jefferies
* Quilter Downgraded to Neutral at Citi on Limited Optionality
* REN Cut at RBC as Inflation Vulnerability Offsets Better Returns

FT : How FTX plans to reshape the US futures market with crypto tech

How FTX plans to reshape the US futures market with crypto tech
Exchange is seeking regulatory approval for products that render margin calls obsolete

FTX is seeking to shake up the sprawling US derivatives market, marking the biggest intervention to date by a crypto group in to the heart of traditional finance.

The three-year-old exchange, founded by Sam Bankman-Fried, is seeking approval from the US Commodity Futures Trading Commission to offer customers bitcoin futures — contracts that allow users to bet on the price of the world’s most actively traded digital token.

The proposed process would strip out the brokers that for the past 40 years have acted as intermediaries between customers and the exchanges where deals are done. America accounts for a big slice of the global futures market where 29bn contracts were traded last year, meaning if FTX’s plans are approved, its effects could be wide-ranging.

Rather than brokers asking customers to stump up extra cash, known as margin, when trades go bad, the exchange would automatically monitor the market, 24 hours a day, seven days a week, and debit client balances accordingly.

This rewrites the mechanics of futures trading and if it sticks, it could apply also to everyone who trades in futures markets, from farmers locking in prices for corn to hedge funds betting on oil prices.

Automatic liquidations vs margin calls
At the heart of the existing system and FTX’s proposal is leverage. Futures traders typically only put down a small fraction of the overall value of their position, something that magnifies potential gains and losses. The chips that market participants place on the table are know as “margin”. Margin is critical in leveraged trading because it ensures that if a bet turns sour, the participant on the other side of the trade can be made whole.

A key difference between the system that is in place and the FTX proposal is the approach to margin. Under the current framework, when a bet falls too deeply underwater, a broker will ask a trader to stump up additional funds to back the trade, known as a “margin call”, by a certain deadline. If the trader meets the margin call, their trade remains opens, otherwise the broker will begin unwinding their positions and taking back the margin used to make the trade.

On crypto exchanges such as FTX and Binance — global platforms that are broadly unregulated — margin requirements on products such as bitcoin futures are constantly updated. Traders deal directly with the exchange rather than through a broker.

Crypto platforms automatically begin unwinding positions if a user’s margin falls below a pre-determined level. Typically a user will receive an alert if their account is in danger — but given the volatility of digital assets, these kinds of forced liquidation events can leave traders wiped out extremely quickly.

Unlike crypto, which trades nonstop, most traditional futures such as those tracking commodities close at the weekend. However, since most trade effectively all the time during business days, some smaller market participants have said they worry about getting wiped out during off hours under the FTX proposal. A margin call, in contrast, provides some breathing room to meet funding requirements.


Case study: May 2021 crypto ‘flash crash’
Automatic liquidations are already in extensive use in the crypto industry, where $1.3tn worth of bitcoin futures trading took place last month alone. Traders can be wiped out extremely quickly during times of market tumult, with more leverage increasing the speed at which a user is forcibly liquidated.

The case study below is based on a “flash crash” about a year ago that wrongfooted many leveraged bitcoin traders. The trader in this illustration has taken out a 100-times leveraged position on Binance by putting down $2,500 on a trade notionally worth $250,000. When the market starts to tumble, they need to kick in more and more money to avoid being liquidated despite prices rapidly rebounding.

The brief tumble, which took place in May 2021, left many retail traders with steep losses. However, because of automatic liquidations, typically market participants can only lose as much as they bet on the trade as opposed to running up a debt.


The debate
The FTX plan has kicked off a fierce debate in the US since the CFTC opened a consultation in March.

Those in favour of the FTX proposal believe it is the next evolution of the market, as technology inevitably advances on markets like it has the rest of society. It fosters competition, democratises futures trading and just as importantly, protects smaller investors from racking up debts they cannot afford, which has sometimes led to tragic consequences, proponents say.

On the other side of the debate are those who say the traditional system provides a vital “breathing space” for important decisions to be taken and time to find extra cash. A farmer, for example, would not have to worry about sudden market moves liquidating positions he had opened to hedge against fluctuations in the prices of commodities. Customers would not have to put up more funds than are necessary, just to give them peace of mind. The intermediaries at the heart of the system, the exchanges and brokers, would be able to use human judgment to smooth out potential issues in volatile times.

The CFTC is examining every step of the chain to understand how it will work and the consequences, so it is taking its time. A decision may not come this year. It is possible it will permit both models. But as investors explore bitcoin futures, it may face more proposals.

>>> Stoxx 600 Pre-Market Indications

  • Uniper (UN01 TH) +8.4%
    • German Government Is Said to Near State-Led Bailout of Uniper
  • Fortum (FOT TH) +4.4%
  • Thyssenkrupp (TKA TH) +2.4%
  • Scout24 SE (G24 TH) +2.1%
    • Adevinta Cut, Scout24 Raised as MS Rejigs Classifieds Picks
  • Alfa Laval (AA9 TH) +1.5%
    • Alfa Laval 2Q Orders Beats Estimates
  • AstraZeneca (ZEG TH) +1.5%
  • TUI (TUI1 TH) +1.5%
  • VW (VOW3 TH) +1.4%
  • BASF (BAS TH) +1.4%
  • Amundi (ANI TH) +1.3%
  • Hermes (HMI TH) -0.9%
  • TAG Immobilien (TEG TH) -1%
  • STMicroelectronics (SGM TH) -1.1%
    • Watch European Chip Stocks as ASML Cuts Full-Year Sales Forecast
  • Nordic Semiconductor (N0S TH) -1.2%
  • Rational (RAA TH) -1.4%
  • UMG (0VD TH) -1.4%
  • Haleon (H6D0 TH) -1.7%
  • Antofagasta (FG1 TH) -2.3%
    • Antofagasta Cuts FY Copper Production Forecast
  • ASML (ASME TH) -3%
    • ASML Cuts Sales Forecast Amid Continued Testing Delays
  • BE Semiconductor (BSI TH) -3.6%
    • Watch European Chip Stocks as ASML Cuts Full-Year Sales Forecast

>>> TradeGate Pre-Market Indications

DAX:
  • VW (VOW3 TH) +1.5%
  • Daimler Truck (DTG TH) +1.3%
  • BASF (BAS TH) +1.3%
    • BASF Gives Final OK for Construction of Zhanjiang Verbund Site
  • Porsche SE (PAH3 TH) +1%
  • Vonovia (VNA TH) +1%
  • Infineon (IFX TH) -0.4%
    • Watch European Chip Stocks as ASML Cuts Full-Year Sales Forecast
MDAX:
  • Uniper (UN01 TH) +9.6%
    • German Government Is Said to Near State-Led Bailout of Uniper
  • Thyssenkrupp (TKA TH) +2.7%
  • Jungheinrich (JUN3 TH) +2.1%
  • Aixtron (AIXA TH) +1.5%
  • Commerzbank (CBK TH) +1.4%
SDAX:
  • About You (YOU TH) +2.4%
  • Adler Group (ADJ TH) +1.8%
  • Deutsche PBB (PBB TH) +1.2%
  • PNE AG (PNE3 TH) +1.1%
  • Heidelberger Druck (HDD TH) +1%
  • Jenoptik (JEN TH) -1.1%

>>> What to look at today - 20th of July 2022

Stocks extended a rally in Asia Wednesday amid a dip in the dollar and speculation that the worst of this year’s equity rout may be over. A gauge of Asian equities added 1.5%, lifted by Japan and Hong Kong, after the S&P 500’s biggest jump since June. US futures pushed higher, encouraged by a late Netflix Inc. surge on a smaller-than-expected subscriber loss. Chinese share gains were more muted given property-sector and Covid challenges. Traders were also digesting a report that Beijing is preparing to hand down a fine of more than $1 billion to Didi Global Inc. before wrapping up a year-long probe into the ride-hailing giant. A dollar gauge has shed about 1% this week, underscoring waning haven demand for the greenback and a brighter mood in markets. Treasuries held a decline that’s taken the 10-year yield back above 3%. The euro hovered around a two-week high against the dollar on the possibility of a bigger-than-expected European Central Bank interest-rate hike Thursday. Speculation that company earnings will hold up and that the Federal Reserve will avoid very aggressive monetary tightening appears to be giving investors some comfort.  In Europe, Gazprom PJSC is poised to restart gas exports through its Nord Stream pipeline to Europe on Thursday at reduced capacity, as the continent braces for shortages amid the war in Ukraine. Elsewhere, crude oil slipped below $104 a barrel. Bitcoin hovered above $23,000 after climbing out of a one-month-old trading range. US After Hours NFLX +8.2% jumps as net adds better than expected, other streaming names also higher; OMC +7.1% also up big on earnings

Nikkei +2.55% Hang Seng +1.46% CSI +0.02% Shanghai +0.46% Shenzen +0.27%

Eur$ 1.0243 CNH 6.7490 CNY 6.7463 JPY 138.10 GBP 1.2025 CHF 0.9683 RUB 56.50 TRY 17.5443 WTI$ 103.53 -0.66% Gold 1,712.22 +0.03% BTC 23,426 +0.53% ETH 1,560.65 +0.08%

S&P +0.41% Nasdaq +0.35% EuroStoxx +0.08% FTSE +0.49% Dax +0.32% SMI +0.16%

Macro :
- *EU CONSIDERS 15% REDUCTION IN NATURAL GAS DEMAND FOR AUG-MARCH
- China’s Loan Boycott Spreads to Property Industry Suppliers
- JPMorgan Could Move 1,000 UK Staff to Paris or Frankfurt: Echos
- Italian Stocks Could Be Active as Political Turmoil Rattles On

Keep an eye on :
- AIR FP : *AIRBUS CEO SAYS SUPPLY CHAIN CRISIS WILL LAST UNTIL 2023: FT
- AKZA NA : Akzo Nobel 2Q Adjusted Operating Income Misses Estimates (1)
- ALFA SS : Alfa Laval 2Q Orders Beats Estimates
- ALSN SW : Also Maintains FY Ebitda Forecast
- ASML NA : ASML Cuts Sales Growth Forecast Amid Continued Testing Delays
- ATL IM : Atlantia to Consider Mutually Agreed Exit of CEO Bertazzo
- BARN SW : Barry Callebaut 9M Sales CHF6.1B Vs. CHF5.35B Y/y
- BAS GY : BASF Gives Final OK for Construction of Zhanjiang Verbund Site
- BHG SS : BHG Group 2Q Sales Beats Estimates
- BILL SS : BillerudKorsnas 2Q Adjusted Ebitda Beats Estimates
- CA FP : Carrefour to Sell 60% Stake in Taiwan Unit at EU2B Ent. Value
- ACA FP : Credit Agricole Deputy General Manager Jacques Ripoll to Leave
- DFL Deutsche Fussball Liga : German DFL May Get EU3b-EU4b from Sale of Media Rights Stake: HB
- EZJ LN : EasyJet Founder Plans to Vote in Favor of Airbus Order: FT
- GF SW : Georg Fischer 1H Ebit Beats Estimates
- HYL BB : Hyloris Announces Positive Results in Phase 1 Study of HY-004
- MGGT LN : UK’s Kwarteng Clears Meggitt Acquisition by Parker-Hannifin
- MTC LN : Mothercare may Leave Russia, Vedomosti Reports
- CFR SW : Activist Bluebell Wants Ex-Bulgari CEO on Richemont Board
- STM FP : Stephen Nellis: Plans for @GlobalFoundries $5.7 billion fab with STMicro in France came together in just six months because
- TELIA SS : Telia 2Q Net Sales Meets Estimates
- UN01 GY : German Government Is Said to Near State-Led Bailout of Uniper
- UN01 GY : Uniper Supervisory Board Holds Special Meeting on Gas Crisis: RP
- VALN SW : Valora 1H Ebit CHF8.1M Vs. CHF7.4M Y/y (1)
- DG FP : Vinci Airports 2Q Traffic Sees 3.4x Increase Y/Y
- VIRP FP : Virbac 2Q Organic Revenue at Constant FX +7.8%
- VOW GY : VW Puts US CEO in Charge of Revived Scout Pickup, SUV Brand
- VOW GY : VW’s Affordable Brands Will Become More Similar Under the Hood
- VOW GY : Indonesia to Sign EV Investment Pact With Volkswagen This Year
- WBD IM : Webuild’s US Unit Wins $223m Highway Contract in Florida

>>> Europe : Brokers Upgrades & Downgrades - 20th of July 2022

>>> Up
* Albemarle Raised to Sector Weight at KeyBanc
* Alibaba ADRs Raised to Outperform at Bernstein
* Bavarian Nordic Raised to Outperform at Cowen; PT 433 kroner
* Chevron Raised to Buy at HSBC; PT $167
* Fevertree Drinks Raised to Hold at SocGen; PT 900 pence
* Saipem Upgraded to Ba3 by Moody’s
* Scout24 SE Raised to Overweight at Morgan Stanley; PT 70 euros
* Tecnicas Reunidas Raised to Outperform at Renta 4; PT 6.50 euros
* Yara Raised to Sector Perform at Scotiabank; PT 490 kroner

>>> Down
* Adevinta Cut to Equal-Weight at Morgan Stanley; PT 85 kroner
* Addiko Cut to Neutral at Citi; PT 11.80 euros
* Apple PT Cut to $180 from $185 at Morgan Stanley
* Autogrill Cut to Hold at HSBC; PT 6.33 euros
* Beijer REF Cut to Hold at DNB Markets; PT 158 kronor
* Cint Cut to Hold at Jefferies; PT 50 kronor
* Direct Line Cut to Reduce at HSBC; PT 175 pence
* Disney Cut to Hold at CFRA on Risks to Parks and Streaming
* Eutelsat Cut to Add at AlphaValue/Baader
* Komplett Cut to Hold at Pareto Securities; PT 20 kroner
* Lagercrantz Cut to Hold at ABG; PT 105 kronor
* Moonpig Cut to Hold at Numis; PT 210 pence
* Quilter Cut to Neutral at Citi; PT 105 pence
* REN Cut to Underperform at RBC; PT 2.40 euros
* Schibsted PT Cut to 280 kroner from 405 kroner at Morgan Stanley
* UMG Cut to Reduce at HSBC; PT 16.10 euros

>>> Initiation
* Amundi Rated New Buy at Goldman; PT 65 euros
* Abrdn plc Rated New Neutral at Goldman; PT 180 pence
* Cazoo Group Rated New Sell at Berenberg; PT 49 cents
* DWS Rated New Neutral at Goldman; PT 29 euros
* Elis Rated New Buy at Bryan Garnier; PT 23 euros
* Haleon Rated New Underweight at JPMorgan; PT 280 pence
* Haleon ADRs Rated New Buy at Spin-Off Research; PT $9
* Hypoport Rated New Underperform at Exane; PT 162 euros
* Intercos Rated New Buy at Berenberg; PT 16.50 euros
* Man Group Rated New Buy at Goldman; PT 315 pence
* Pandora Rated New Hold at Jefferies; PT 470 kroner
* Schroders Rated New Sell at Goldman; PT 2,530 pence

>>> Call
* Adevinta Cut, Scout24 Raised as MS Rejigs Classifieds Picks
* Bavarian Nordic Upgraded on Monkeypox Vaccine Stockpiling: Cowen
* Intercos Sits in ‘Sweetspot’ Within Beauty, New Buy at Berenberg
* Jefferies Downgrades Cint, Cuts Software PTs on Weaker Momentum
* Pandora Shares Not as Cheap as They Look, New Hold at Jefferies
* Quilter Downgraded to Neutral at Citi on Limited Optionality
* REN Cut at RBC as Inflation Vulnerability Offsets Better Returns

FT : Auction for failed UK energy supplier Bulb draws single bid

Auction for failed UK energy supplier Bulb draws single bid
Rival Octopus lodges sole entry to government sale of collapsed group that is leaching taxpayer cash

The British government is scrambling to salvage a deal for collapsed energy supplier Bulb after attempts to auction off the company attracted just a single bid — from its one-time rival Octopus Energy.

The government has been trying to sell Bulb since it collapsed last November after natural gas prices soared and it failed to raise new money. The government stepped in to ensure that its 1.6mn customers would still receive energy and aimed to sell the business by the end of July.

Final bids were due last month and only Octopus, the fifth-biggest UK gas and electricity supplier, tabled an offer after the government “hardballed” suppliers, according to three sources close to the discussions.

Centrica, the largest UK supplier, had been tipped to lodge a bid but pulled out of the competition last month. Masdar, an Abu Dhabi-based company that had been in discussions with the government, declined to submit a bid but may provide financing for Octopus, according to two sources close to the process. A government official confirmed that only one bid had been received.

The government is now in a weakened position as it attempts to agree terms for a sale of Bulb, which is burning through taxpayer cash and losing staff. The company is already expected to cost the government at least £2.2bn, marking the biggest state bailout since Royal Bank of Scotland in 2008.

A ministerial meeting was held last Friday to discuss options for Bulb, which could still include dividing up its customers between other suppliers or handing incentives to Octopus to take them on, said two people close to the sales process.

The terms of Octopus’s offer are not yet clear.

The sources added that the government could decline Octopus’s bid, although it is keen to sell the business as it is haemorrhaging cash as a result of government rules that do not allow it to hedge — or buy in advance the energy it sells. That has left it exposed to volatile gas prices, which have soared since Russia invaded Ukraine.

The Bulb brand has also been tarnished and there is a risk that customers will leave, industry experts said.

The government is “selling a semi-derelict building in a ropey area and they are trying to do the estate agent’s job of making it out to be a des res”, one person close to the sales process said. “This is a market that is a disaster and this is a company that is a disaster within that market.”

One person close to Bulb said they were still optimistic that more bids could come out of the woodwork. Handing the customers to a host of other suppliers could also cause confusion this winter when average energy bills are expected to surge by almost 65 per cent to £3,200 a year, sources close to the sales process said.

Bulb was the biggest supplier out of 31 companies that have failed since the middle of last year as a result of poor capitalisation and inadequate hedging that left them unable to manage the sharp rise in gas prices.

Although millions of customers from other collapsed suppliers have been transferred to solvent rivals, Bulb was considered too large so the costs are currently being borne by taxpayers. All households are already paying £94 a year to cover the cost of failed suppliers but this is expected to rise to £164 a year once the price of Bulb’s administration is eventually spread across customer energy bills, according to analysis by Citizens Advice.

The government and regulator Ofgem’s handling of the crisis has been strongly criticised after founders and shareholders have been allowed to walk away without penalty while households across the country bore the “brunt” of the supplier failures, according to a National Audit Office report.

Hayden Wood, chief executive and founder of Bulb, has received the same £250,000 salary as before the company’s rescue until he steps down at the end of this month. Wood and his co-founder Amit Gudka both earned more than £8mn from a share sale in 2018.

Octopus, Bulb and Teneo, the administrator, declined to comment. Masdar had not replied to a request for comment at the time of publication.

FT : Airbus chief says supply chain crisis will last until 2023

Airbus chief says supply chain crisis will last until 2023
Guillaume Faury cites other sector-wide challenges of components, labour shortages and inflation

Airbus expects the supply chain crisis gripping the global aerospace industry to last until next year while suppliers struggle to increase production as the world emerges from the pandemic.

Guillaume Faury, chief executive of the world’s largest plane maker, said the crisis would not be resolved in the next two or three months.

“We guess, a year as an order of magnitude. We have difficulties to believe that in two years from now it’s not going to be resolved. This is not unusual. It is just the depth and magnitude of what’s happening [which] is more than what we’ve seen in previous crises,” Faury told the Financial Times at the Farnborough Air Show.

Like other global manufacturers, including US rival Boeing, Airbus is struggling with shortages of raw materials, electronic components and other parts.

“It’s bad everywhere . . . The global supply chains have real difficulties to operate normally and it’s not just an aerospace issue,” Faury said, adding that for the industry, the constraints were also happening “at the moment of demand”. 

Other challenges, he added, included industry-wide labour shortages, as well as higher inflation and energy costs.

Airbus is working on contingency plans to ensure its main manufacturing operations in Europe can continue to operate if there are energy shortages this winter.

In Germany, the government has asked large industrial users to make preparations for a potential cut-off of gas supplies from Russia.

Faury said the group was exploring options for cutting energy use, including asking some people to work from home again.

“We also have ideas to work in sequence differently to reduce the peak energy that is required.” He added that the company was starting to talk to governments to explore options and come up with adaptations.

In the supply chain, deliveries of engines have been a particular issue, he said.

Airbus now has 26 “gliders” — aircraft that have been built but are sitting in storage without engines. This is a particular issue for Airbus as it plans to increase production of its best-selling family of A320 jets to 75 a month by 2025, with an interim target to reach 65 a month by the middle of 2023 from about 50 currently.

Faury said he thought the company was “at the low point” of the problem but expressed frustration with engine manufacturers. “Not all engine makers started early enough to ramp up again, in spite of what we told them. Some of them waited too long.”

CFM International, the joint venture between Safran and GE, and Pratt & Whitney, which both provide A320 engines, had however signalled they were back on track, he said, adding he expected Airbus to have no remaining gliders by the end of the year.

In separate interviews, Olivier Andriès CEO of Safran, and Greg Hayes, CEO of Raytheon, the US group that owns Pratt & Whitney, both acknowledged the problems.

Andries said the industry had “swung from an unprecedented demand shock in 2020 to an unprecedented supply shock today”.

“When the traffic started to come back in the summer of 2021, the [plane makers] asked us to reverse gear — to accelerate like hell,” he added, noting that his focus for now was on the recovery and meeting targets in 2023.

Hayes told the FT that the company had, as predicted in February, ended the first half of the year about 70 engines behind schedule. “We ended about 70 behind and we’ve got a path to recovery, but it’s taken a lot longer and more resources than we thought.”

>>> US After Hours :  NFLX +8.2% jumps as net adds better than expected, other s

 NFLX +8.2% jumps as net adds better than expected, other streaming names also higher; OMC +7.1% also up big on earnings

After Hours Summary:

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: NFLX +8.2% (also to acquire animation studio Animal Logic), OMC +7.1%, FULT +3.6%, NBHC +3.3%, MATX +1.7%, CALM +0.5% (also to pay $0.75/sh dividend as part of variable div policy)

Companies trading higher in after hours in reaction to news: AEHR +7.1% (receives $12.8 mln in orders from its lead silicon carbide test and burn-in customer), ROKU +2.9% (in sympathy with NFLX earnings), FUBO +2.7% (in sympathy with NFLX earnings), INZY +2.4% (announces preliminary data from Phase 1/2 trial of INZ-701), DIS +2.4% (in sympathy with NFLX earnings), WBD +1.8% (in sympathy with NFLX earnings; also plans to add massive collection of A24 films to HBO Max, according to ScreenRant), PARA +1.2% (in sympathy with NFLX earnings), TSLA +1% (ordered to pay $10.5 mln in from car accident, according to Reuters), AIR +1% (awarded a Captains of Industry contract with the Defense Logistics Agency), NVAX +0.7% (confirms that CDC Advisory Committee voted unanimously to recommend COVID-19 vaccine), VALE +0.5% (provides Q2 production and sales data), GOGL +0.4% (files mixed securities shelf offering), EA +0.4% (CTO to depart; co to structure with two pillars, naming two separate CTOs for each division), BA +0.4% (VietJet places order for 200 737 MAX jets, according to Bloomberg), BV +0.1% (acquires commercial landscaping co), DCP +0.1% (increases dividend)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: FOR -17%, IBKR -1.4%, JBHT -1.3%, PNFP -0.4%

Companies trading lower in after hours in reaction to news: VBLT -78% (announces top-line data from OVAL Trial), RVMD -9.8% (stock offering), LQDA -3.9% (US patent office rules in its favor), OMIC -2.4% (files for $250 mln mixed securities shelf offering), LSCC -1.5% (collaborates with LG to bring edge AI technology to LG's 2022 premium laptop lineup), BLTE -0.7% (submits IND application to FDA for LBS-008 Phase 3 clinical trial), XOS -0.5% (announces Q2 deliveries), QGEN -0.3% (surpasses 3 mln NGS patient test cases), KKR -0.1% (acquires Atlantic Yards from Hines)

FT : BoE governor says half-point interest rate rise ‘on table’

BoE governor says half-point interest rate rise ‘on table’
Historic tightening may be needed to return UK’s 40-year high inflation rate to central bank’s 2% target, says Bailey


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Bank of England governor Andrew Bailey has raised the possibility of increasing interest rates by half a percentage point in early August as he toughened the central bank’s language on battling rising prices.

Bailey said the central bank’s Monetary Policy Committee had an “absolute priority” to bring inflation back down to its 2 per cent target and faced the “largest challenge” to inflation control since the bank gained independence on setting interest rates in 1997.

With June inflation figures likely to rise to another 40-year high of at least 9.3 per cent on Wednesday, Bailey set out the policy options under consideration by the MPC.

A half-percentage-point interest rate rise would be the largest increase since 1995. The governor also raised the BoE’s thinking for the first time on selling some of the assets it bought under rounds of quantitative easing since 2009.

“In simple terms this means that a 50 basis point increase will be among the choices on the table when we next meet,” Bailey told an audience of financial and business leaders at the annual Mansion House dinner in the City of London.

Financial markets increasingly expect the European Central Bank to increase its main interest rates also by half a percentage point on Thursday.

Bailey said there was no guarantee a UK increase would be that large, adding that the committee would have to take into account the easing of global supply chain bottlenecks as well as higher gas, food and fuel prices following Russia’s invasion of Ukraine.

“We have been clear that we see the balance of risks to inflation as on the upside,” Bailey said.

The governor acknowledged that interest rate rises would come at a time when people in the UK were becoming poorer and struggling over accessing basic necessities, saying the BoE had already taken this into account when it set monetary policy.

Regarding the sale of assets, Bailey set out quite an aggressive timetable for bringing down the level of government bonds it had bought, which peaked at £895bn.

“Based on analysis conducted in conjunction with colleagues at the debt management office, we are currently looking at a total reduction in the stock of gilts held . . . in the region of £50bn‐£100bn in the first year,” Bailey said.

While the governor admitted challenges in battling inflation, chancellor Nadhim Zahawi threw a protective arm around the BoE, saying it had “a strong track record” on price control and had all the tools it needed to succeed.

The bank has faced criticism from Tory leadership contenders, including foreign secretary Liz Truss, who said she would tighten ministerial scrutiny of its activities if she became prime minister.

Meanwhile, Zahawi confirmed the government was considering taking powers to “intervene in financial regulation in the public interest”, a plan that has infuriated Bailey, who wants to preserve regulatory independence.

But Zahawi said the government would look at all the arguments before coming to a decision; the move is so controversial that any change to the rules will be left until September when a prime minister will be appointed and, possibly, a new chancellor.

The “call in” power, which is supported by Sunak, will not feature in the financial services bill to be published on Wednesday but could be added if he becomes prime minister.

Zahawi also flagged the importance of reforms to Solvency II rules to allow UK insurers to invest more in infrastructure alongside other reforms to London’s capital markets to make it easier for companies to raise money.

On Tuesday, the Treasury published the results of a review of the fundraising market by Freshfields’ lawyer Mark Austin, which recommended regulatory changes to increase the ability of companies to raise funds quickly and cheaply, and ensure greater involvement of retail investors.

In response, the Financial Conduct Authority said this aligned with its “strategic priority to ensure UK wholesale markets continued to be regarded as one of the leading global markets of choice for issuers, intermediaries and investors by identifying ways to streamline further capital raising by publicly traded companies and promote access for investors”.