The German economy stagnated in the first quarter, a weaker result than expected, as high inflation and rising central bank rates weighed on spending.
Germany’s gross domestic product flatlined from January to March compared with the previous quarter, according to preliminary data from the country’s statistics office released Friday, from a downwardly revised 0.5% contraction in the fourth quarter of 2022.
French Economy Expanded Slightly in 1Q Despite High Inflation
France’s economy expanded in the first quarter, despite the pressures of high inflation, shrugging off earlier fears of a recession in the eurozone’s second-largest economy.
French gross domestic product grew by 0.2% from January to March compared with the previous three-month period, after stagnation in the fourth quarter of 2022-downwardly revised from 0.1% expansion-according to preliminary data from the country’s statistics office Insee released Friday.
Inflation and French Croissants: Why Europe’s High Prices Are So Sticky
A short march from the Gare du Nord station in Paris’s 9th Arrondissement, Charles Ye and Maeva Manchon wake early to follow their passion-baking baguettes, croissants, and cakes at the boulangerie they started three years ago.
Sipping shots of searing-hot espresso, they say the problem is that runaway inflation means they are no longer able to pay themselves with the bakery’s earnings. Since Russia invaded Ukraine last year, the cost of electricity has jumped almost four times. Flour, butter, and eggs are all about 50% more expensive, according to the bakers.
Electrolux Backs Guidance After Price Increases Supported 1Q Earnings
Electrolux AB on Friday backed full-year guidance as price increases and currency effects during the first quarter helped boost sales and resulted in a smaller-than-expected net loss.
The Swedish home-appliance manufacturer swung to a first-quarter net loss of 588 million Swedish kronor ($57.1 million) from a profit of SEK950 million after being hit by factory closure costs, weaker demand and higher costs.
ProSiebenSat.1 Shares Tumble on Outlook, Dividend
Shares in ProsiebenSat.1 Media SE tumbled after the German media company said TV advertising revenue would fall this year and proposed cutting its dividend for 2022.
The company expects adjusted earnings to decline this year due to an expected decrease in TV advertising revenue, though revenue overall should grow slightly on an organic basis, it said late Thursday. ProSieben proposed a sharp reduction in its 2022 dividend to 0.05 euros (6 cents) from EUR0.80 the previous year.
Prudential 1Q Sales, New Business Profit Rose on China Rebound
Prudential PLC said Friday that first-quarter sales rose significantly following the easing of pandemic-related restrictions in China.
The insurance-and-investment business reported APE sales-a measure that comprises the aggregate of annualized regular premiums and a 10th of single premiums on new business written during the year for all insurance products-rose 35% to $1.56 billion.
Deutsche Bank offers $512.5 million all-cash offer for London’s Numis
Numis Corp. said Friday that it has agreed to a 410 million-pound ($512.5 million) takeover by Deutsche Bank AG DB XE:DBK.
Under the deal, accepting shareholders of the London-based investment bank UK:NUM will get 350 pence for each share held. The price is a 72% premium to the share’s closing price of 204 pence on Thursday.
Danske Bank Confirms Preliminary Earnings, Backs Recent Guidance Upgrade
Danske Bank AS on Friday confirmed preliminary first-quarter earnings and backed its recently upgraded guidance.
The Copenhagen-based bank earlier this month raised its full-year profit guidance and said it expected to report a forecast-beating first-quarter net profit as higher interest rates and high trading income helped boost earnings at the start of the year.
Eni 1Q Profit Fell on Weaker Energy Scenario
Eni SpA on Friday said that profit fell in the first quarter mainly due to a decline in the energy scenario, but saw a recovery in hydrocarbon production and a very strong gas performance.
The Italian oil-and-gas major said net profit was 2.39 billion euros ($2.64 billion) from EUR3.58 billion in the year-earlier period. On an adjusted basis, profit was EUR2.91 billion.
OMV 1Q Profit Fell, Sees Lower Production in Full Year
OMV AG on Friday reported a fall in net profit for the first quarter and said it expects lower production in the full year.
The Austrian oil-and-gas company posted a quarterly net profit of 390 million euros ($430.3 million) compared with EUR546 million a year earlier. On an adjusted basis, net profit came in at EUR1.03 billion from EUR1.07 billion.
Europe to ChatGPT: Disclose Your Sources
Makers of artificial-intelligence tools such as ChatGPT would be required to disclose copyright material used in building their systems, according to a new draft of European Union legislation slated to be the West’s first comprehensive set of rules governing the rollout of AI.
Such an obligation would give publishers and content creators a new weapon to seek a share of profits when their works are used as source material for AI-generated content by tools like ChatGPT. The issue has been one of the thorniest commercial questions to emerge amid a frenzy of AI-powered tools being launched or tested by the likes of Microsoft Corp. and Google owner Alphabet Inc.
Iran Seizes U.S.-Bound Oil Tanker
Iran’s naval forces on Thursday seized an oil tanker bound for Texas in the Gulf of Oman, a move that drew condemnation from the U.S. military at a time of heightened tensions between Tehran and Washington.
The Islamic Revolutionary Guard Corps Navy seized the tanker, Advantage Sweet, while it moved through international waters at 1:15 p.m. local time, U.S. Naval Forces Central Command said. The U.S. Fifth Fleet, which is tasked with monitoring maritime activity in the area, is monitoring the situation, according to U.S. naval forces.
GLOBAL NEWS
First Republic Stock Is Rising Amid Report of Rescue. Other Regionals Edge Down.
Shares of regional lender First Republic Bank extended declines after reports that authorities are working on brokering new assistance for the bank.
The stock traded up 7.4% to $6.65 in Friday’s premarket. That follows an 8.8% gain Thursday.
BOJ Maintains Easing, Will Review Monetary Policy
TOKYO-The Bank of Japan said it will conduct a review of monetary policy but left its interest-rate targets unchanged with inflation expected to fall below 2% soon.
At the end of new governor Kazuo Ueda’s first policy-setting meeting Friday, the BOJ decided to maintain its cap on the 10-year Japanese government-bond yield at 0.5% and kept short-term interest rates at minus 0.1%. Mr. Ueda succeeded Haruhiko Kuroda as BOJ governor in early April.
China Politburo Says Expanding Demand Is Crucial to Continuing Current Recovery
China’s economy has performed better than expected so far this year, but ensuring that domestic demand continues to expand remains a critical question for the current recovery, the Communist Party’s top policy-making body said Friday.
The Communist Party’s Politburo called for fiscal policy to be strengthened and for monetary policy to be more targeted, which would work in tandem to help boost demand, according to a report by the state-run Xinhua News Agency.
China Ratchets Up Pressure on Foreign Companies
Chinese authorities have embarked on a campaign to bring foreign businesses to heel, just months after Beijing delivered an open-for-business message to global investors.
In recent weeks, Chinese authorities have questioned staff at consulting firm Bain & Co.’s Shanghai office in a surprise visit, launched a cybersecurity review of imports from chip maker Micron Technology Inc., detained an employee of Japanese drugmaker Astellas Pharma Inc. and raided the Beijing office of U.S. due-diligence company Mintz Group.
There’s ‘a disconnect’ between stock-market rally and Fed pivot expectations
This year’s stock market rally has been “very narrow” and may not be sustainable, according to Seema Shah, chief global strategist at Principal Asset Management.
U.S. stocks rose sharply Thursday, bringing the S&P 500 index’s gains this year to 7.7% despite a slowing economy, according to FactSet data. The U.S. economy expanded at a soft 1.1% annual pace in the first quarter, slower than Wall Street analysts’ forecast for 2% growth in gross domestic product.
Democrats Reject Starting Talks on Debt Ceiling
WASHINGTON-Democrats continued to say that the nation’s borrowing limit must be raised without conditions, waving away Republican demands to begin talks after the House passed a bill coupling an increase in the debt ceiling with sharp spending cuts.
House Speaker Kevin McCarthy (R., Calif.) said the legislation showed Republicans are unified on a plan and that President Biden now needs to come to the table. But the White House and top Democrats said they wouldn’t budge on their stance that Congress should pass a “clean” debt ceiling with no conditions attached before moving on to any talks on fiscal policy.
Top Biden Aide Says U.S. Subsidies Will Help, Not Hurt, Relationships With Allies
WASHINGTON-A top White House official said new U.S. industrial subsidies would help forge stronger international partnerships and counter China, rebuffing criticism that the policies are dividing the U.S. and its allies.
Jake Sullivan, President Biden’s national security adviser, defended new U.S. incentives for domestic production of clean-energy technologies and semiconductors in a speech Thursday at the Brookings Institution. He also stood by the Biden administration’s refusal to lower tariffs, calling for a pivot in U.S. trade policy.
Chinese Combat Drone Circles Taiwan in Mass Incursion
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04-28-23 0544ET
