Good Morning,

Here are this mornings headlines:

It’s been a strong start to the day for Team GB with the men’s 4 x 200m relay team taking gold and coming within a whisker of a world record. We’ve also taken silver in the men’s quadruple sculls rowing and this now takes our medal tally to 15 and puts us in 6th place, with Australia in 5th (level on total medals but one gold ahead – for now).

European Commission

The European Commission has said that they won’t press ahead with the next steps of legal action against the UK after the government here requested a “standstill”. The legal proceedings were a result of us unilaterally changing some Northern Ireland trading arrangements back in March, but yesterday the EU said “in order to provide the necessary space to reflect on these issues and find durable solutions to the implementation of the protocol, we have decided, at this stage, not to move to the next stage of the infringement procedure”. The move can be seen as a sign of goodwill that a longer term solution is the preferred outcome of the current negotiations, though whether we’ll get that by the end of September is anyone’s guess.

Arrivals to the UK from the US and Europe won’t have to quarantine as long as they’ve been fully vaccinated if plans being finalised today by Boris and his teams go ahead. The move would see US and European citizens treated in the same way as Britons who have been double jabbed and therefore won’t have to quarantine if coming back from medium risk countries. This isn’t likely to be reciprocated by the US anytime soon as recent guidance to Americans is to avoid travel here because of surging cases – though data yesterday shows the seventh straight day of falling cases. The aviation industry would no doubt welcome the plans, which could be in place as early as next week, but will be flying uneven passenger loads, as it could be one way traffic for the first week or two.
The US is having to revise its mask mandates, as the delta variant spreads: the CDC has said that in areas where there are growing cases even those that are double jabbed should be wearing masks. This comes as the White House is considering a move to make vaccinations mandatory for all federal employees, which they’ve been trying to avoid doing at a federal level and have instead begged and pleaded with the public to get jabbed, whilst some employers have made vaccination mandatory and those mandates have been tested by the courts and upheld. We could see the US start by making all military personnel get jabbed to hopefully re-ignite the stalling vaccination campaign, but clearly this is a contentious issue anywhere in the world and he’d be walking a very fine line.


Tech Giants
Yesterday we saw earnings from Microsoft, Google and Apple and the numbers were highly impressive; Microsoft topped $60bn in earnings on $165bn of sales last year, a record for the company and quarterly sales were up more than 20% on where they were last year. Google almost tripled its quarterly income numbers, with $18.5 billion dollars last quarter, up from $7bn the year before. The company say they are benefitting from a rising tide in consumer and enterprise demand and that YouTube is their strongest revenue growth area, with people advertisers more readily turning to video advertising for “both direct response and brand goals” (whatever that means). Apple almost doubled their profit in the last quarter as iPhone sales surged to  $39bn in the quarter, far exceeding analysts expectations of $34bn and last year’s $26bn. The company isn’t immune to global challenges though and Tim Cook said they were paying more in freight costs than they’d like, whilst supply chain issues might hamper stock availability next quarter, though they’ve been able to mitigate this to an extent and things aren’t as bad as they’d previously forecast. They did say that they don’t expect the growth to continue at this rate though and that led to their share price sliding by more than 2% after hours – still, they’re share price is up 13% year to date,  whilst Microsoft is +32% to date and Google is +51%!

Down Under, the lockdown in Sydney has been extended by at least another four weeks as cases of the delta variant continue to spread. The lockdown started at the end of June with 12 cases identified and were the result of the hotel quarantine system not being robust enough. Today they’ve recorded 177 positive cases. As well as the duration, the areas covered by lockdown have also been extended, as has the money being spent by the government in supporting businesses, which is now around A$750m per week across New South Wales. Australia has only managed to vaccinate about 22% of the population so far.

Looking Ahead
Today we’ve seen Asian markets close to flat, which is a welcome change to the chaotic moves seen in China and Hong Kong markets since the start of the week. We’re likely to see the European markets playing a waiting game until the Federal Reserve’s rate announcement and subsequent press conference this evening. We’ve already seen UK house price data come and go this morning and obviously the prices were higher! There was an interesting read in the Guardian yesterday about how house prices are now 30% higher than they were at the peak before the financial crisis in 2008, having nearly tripled in the last twenty years, whilst average wages have grown by about 55%.


Have a great day


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