Friday Briefing: U.K. Interest Rates Kept on Hold Despite Brexit

July 15, 2016

It’s got a lot harder to distinguish the interest rates of the U.K. from a straight line after the Bank of England decided to keep the rates on hold again in its latest meeting. The decision went against the expectations of a rate cut in order to cushion the economic impact of Brexit. The weekend is here, but Sentifi crowd shows no sign of slowing down in their discussions about financial events, so read on to discover and join the conversations.


1/ BOE: Keeps rates on hold

BOE had a meeting to figure out the best strategies to deal with the financial implications of Brexit, and the investors expected the first cut in rates in more than seven years. Unfortunately, things didn’t go their way as the BOE decided to keep the rates on hold for the time being, which is at 0.5%. The sterling rose to its two-week high as a result.

2/ JPMorgan Chase: Second-quarter results are better than expected

JPMorgan shrugged off the effect of Brexit like a big bank it is. (Michael Nagle/Bloomberg News)

The largest bank in the U.S. by assets JPMorgan scored a net profit of $6.2 billion on revenues of $25.2 billion during the second quarter. They topped the analysts forecasts of $24.5 billion. The bank shows that Brexit has virtually no impact on its performance.

3/ Nintendo Co Ltd: Shares reach six-year high

“Pokemon GO” has been a blessing for Nintendo, as the game has boosted the company’s shares nearly 10% to a six-year high and almost doubled the company’s market value in just over a week. It now has more users than Twitter in the U.S. The game is now available in the U.K. and Germany after launching first in the U.S., Australia and New Zealand, and it will launch in Asia very soon.

4/ George Osborne: Steps down from his post

It’s a good six-year run for George Osborne. Now the U.K. needs a new beginning for its economy.

After six year, George Osborne is no longer the U.K. chancellor, instead replaced by former foreign secretary Philip Hammond after the U.K.’s new Prime Minister Theresa May announced a cabinet reshuffle after taking the office on Wednesday. Leaving behind him a mixed legacy of austerity and spending cuts, people will remember him for keeping U.K. growth robust and the unemployment rate low.

5/ Airbus Group: Tallies more orders than Boeing at Farnborough show

The Farnborough Airshow in the U.K. has been a success to Airbus as it’s got 279 orders worth $35 billion. It also received new deals for 197 aircraft worth $26.8 billion compared to Boeing’s orders of 182 aircraft. Regarding Brexit, CEO Fabrice Brégier conveyed his disappointment with the result and commitment to Airbus’ 15,000 employees in Britain.

6/ BlackRock: Profit heads down

The second quarter saw BlackRock’s profit fell 3.7% as investors shifted from stocks to cash and bonds to cope with global market turmoil. Despite the total assets rising to nearly $5 trillion, revenue from fees for managing money and lending out securities fell 1.8%. Total revenue and net income were also down. And the firm’s shares dropped 0.6%.

7/ NASDAQ Composite: Edges higher

The NASDAQ Composite rose 0.57% but failed to gain more as the upside has been capped by a declining trendline from July 2015 highs. Among the active stocks on the NASDAQ, American Airlines saw extending gains of 4.15%. eBay also rallied 3.82%.

8/ Samsung Electronics: Invests in automobile

Samsung’s decision to invest in BYD came under scrutiny from the crowd as the investors speculated that the deal was part of the BYD tie-up.

The Korean company announced a $448 million investment in China’s largest electric vehicle manufacturer BYD primarily for automotive and smartphone parts. This move is the company’s latest attempt to cement its position in the battery market. As of now, Samsung SDI is supplying batteries to global carmarkers and is the sole supplier to BMW’s electric cars.

9/ SGX: Resumes after a shutdown

The Singapore Exchange equity market experienced a half-day shutdown due to a technical glitch related to its trade confirmation process. This is far from the first technical problems the SGX has experienced. In fact, the investing community has expressed concerns about the frequent problems as they are affecting the SGX’s reliability.

10/ Delta Air Lines: Plans to cut British routes

The Atlanta-based carrier announced it will cut its flight capacity between the U.S. and the U.K. by 6% in the winter schedule due a 5% drop in second-quarter revenue. It was a result of airlines adding flights and seats faster than public demand thanks to cheap fuels, which forced Delta to drop its prices. With Brexit bringing more financial effect, the airline opted for the safe route by cutting British routes.

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