No surprise that the US Federal Reserve kept interest rates unchanged yesterday though there was more than a nod to winding back the cheap money program – but not yet.
"The committee," the Fed said, "expects to begin implementing its balance sheet normalization…relatively soon, provided that the economy evolves broadly as anticipated.” Whether that “relatively soon” is this year – September – or later is the real question and hinges on an inflation climb.
The Fed ambivalence did little for the US dollar, down 0.18% overnight to 93.33, a 14-month low, while the euro was up 0.12%, taking it to $1.1740 while the pound strengthened to $1.3141, a 10-month high. Against the euro the pound was down 0.15%.
Later today US unemployment numbers emerge (1.30pm); at 11am in the UK the CBI puts out its distributive trades survey, a guide to UK retail trends.
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Facebook and BAT earnings up
Good news for Facebook which says revenues soared 45% for the April-June quarter while profits did even better, surging 71% to $3.9bn. The company’s head count is also substantially up – a 43% climb to more than 20,000.
"We had a good second quarter and first half of the year," said CEO founder Mark Zuckerberg. “Our community is now two billion people and we’re focusing on bringing the world closer together.”
Dunhill and Benson & Hedges maker British American Tobacco (BAT) says 2017 half-year revenues came in at £7,717m, a 15.7% climb at constant currency levels while profits surged 16.3% to £2,574m.
BAT basic earnings per share were 15.3% lower at 121.8p (2016: 143.8p) says BAT “due to the impact in 2016 of the sale by Reynolds American Inc of the international brand rights to Natural American Spirit”.
Diageo, Shell & Lloyds profits boosted
Gordon's Gin and Smirnoff maker Diageo says full-year operating profits have risen to £3.6bn helped by more currency gusts and organic growth. "We are raising our productivity goal to £700 million with two thirds being reinvested in the business," says boss Ivan Menezes.
"We expect," adds Menezes, "mid-single digit top line growth, and we are raising our operating margin expansion objective to 175bps over the three years ending 30 June 2019." Diageo's final dividend rises 5% to 62.2p.
Meanwhile Shell says second quarter profits have gushed 245% higher to to $3.6bn. "Cash generation has been resilient over four consecutive quarters at an average oil price of just under $50 per barrel," Shell boss Ben van Beurden said.
Breaking news: More pressure on Lloyds with news that it has put more cash – up to £700m – aside for more PPI mis-selling claims. Softening this blow Lloyds says half-year profits landed at £2.5bn, 4% up on this time last year. Amazon expands into South East Asia with new delivery Prime service to Singapore.