Aurelia Butler

1. Fed’s Powell to speak at Jackson HoleFederal Reserve Chair Jerome Powell is scheduled to deliver a speech on Friday at an economic symposium in Jackson Hole, Wyoming, with traders keen for any clues about the U.S. central bank’s monetary policy outlook.Powell’s comments have been preempted by statements from policymakers this week which tempered some speculation that the Fed was about to step back from a long-standing campaign of interest rate hikes.Officials flagged worries that inflation – the central focus of the tightening cycle – remains stubbornly higher than the Fed’s 2% target despite recently decelerating. Resilient retail sales and consumer confidence data have also exacerbated worries that demand may not yet be slowing enough to tamp down price growth.On Thursday, initial claims for jobless benefits dipped marginally but clung to a level indicating a robust labor market, while new orders for non-defence durable goods – a gauge of business investment – ticked up by 0.1% in July.Complicating matters further were numbers on Wednesday that showed that business activity growth was its weakest since February.How Powell interprets these mixed economic figures and how they could impact the Fed’s rate path will likely be closely scrutinized.2. Futures inch up with Powell speech aheadU.S. stock futures were slightly higher on Friday as investors awaited Powell’s speech.At 05:33 ET (09:33 GMT), the S&P 500 futures contract added 9 points or 0.2%, Dow futures gained 72 points or 0.2%, and Nasdaq 100 futures edged up 7 points or 0.05%.The main indices on Wall Street fell in the prior session after Boston Fed President Susan Collins told the Financial Times that more interest rate increases may be needed in order to corral inflation, fueling expectations that borrowing costs may remain higher for longer.Collins’s comments offset initial excitement over results from chipmaker Nvidia (NASDAQ:NVDA), which reported second-quarter revenue that smashed lofty expectations thanks to surging demand for generative artificial intelligence applications.3. Affirm beats estimatesShares in Affirm (NASDAQ:AFRM) soared in premarket trading on Friday after the buy-now-pay-later business posted a jump in transactions on its platforms that beat analysts’ estimates.The loss-making firm’s results were supported by new deals with travel companies Booking.com (NASDAQ:BKNG) and Cathay Pacific (HK:0293) that aimed to capture a boom in post-COVID consumer demand for experiences. But Affirm said that 2023 has still been a “challenging year” as it confronted a slowdown in online shopping after the pandemic, as well as shifting customer tastes and elevated interest rates.Gross merchandise value (GMV) – a total dollar measure of all Affirm transactions – surged by 25% to $5.5 billion in the California-based company’s quarter ended on June 30, topping Bloomberg consensus forecasts of $5.3B. Revenue climbed to $445.8 million, a 22% gain compared to the same timeframe last year.Affirm noted that it expects both GMV and revenue to be at similar levels during its current three-month period.4. Better slumps after SPAC mergerOnline mortgage lender Better saw its shares shed 93% of their value on Thursday after making its public market debut through a deal with a blank-check company.By the closing bell, shares in the Softbank-backed group had slipped to $1.15. The special purpose acquisition vehicle it merged with, Aurora Acquisition Corp (NASDAQ:AURC), was trading at $17.44 when markets shuttered on Wednesday.Better had been attempting to secure a SPAC tie-up since 2021, although the move was slowed in part by a recent fall in demand for mortgages. The New York-based group, which pledges to offer cheaper and faster home loan approvals, had been boosted by an era of rock-bottom interest rates during the pandemic. But housing loan application volumes have now slipped to their lowest level since 1995 as buyers shy away from rocketing mortgage costs.Meanwhile, Chief Executive Vishal Garg’s leadership practices have come into question, in particular his decision to carry out a mass firing over video conferencing app Zoom in December 2021. Better has also been the subject of an investigation by the U.S. Securities and Exchange Commission over allegations that it misled investors during its push to go public. Better denied the claims and the SEC ultimately chose not to recommend an enforcement action.5. Oil on pace for lower weekOil prices moved higher Friday, but remained on course for a second consecutive losing week as fears over slowing Chinese demand and increased U.S. supply as well as a stronger dollar weighed.The dollar jumped to its strongest level since early June ahead of Powell’s speech at the Jackson Hole symposium on Friday. Strength in the dollar weighs on oil markets by making crude more expensive for international buyers.By 05:52 ET, the U.S. crude futures traded 1.4% higher at $80.18 a barrel, while the Brent contract climbed 1.50% to $84.61. The benchmarks are set to fall between 1%-2% for the week. More

Donald Trump has surrendered to authorities in Atlanta, Georgia, where he faces 13 criminal charges over alleged attempts to subvert the results of the 2020 presidential election.The former president shared his mugshot on X, formally Twitter, with the caption “Election interference. Never surrender!” and a link to his campaign fundraising site.The case of election interference, brought by Fulton County district attorney Fani Willis, is just one of the constellation of legal cases Trump is facing.With many of the trials set to play out during the presidential election cycle, some Republicans have said the charges are attempts to weaponise the political system against the former president.Earlier on Thursday, Trump ally Jim Jordan, the Republican chair of the House judiciary committee, launched an investigation into whether Willis collaborated with federal prosecutors.In a letter to the Georgia prosecutor, Jordan said: “The trial in this matter begin[s] on March 4 2024, the day before Super Tuesday and eight days before the Georgia presidential primary.” He added: “It is therefore unsurprising many have speculated that this indictment and prosecution are designed to interfere with the 2024 presidential election.” You can read the full story here.The cases against Donald Trump: Here is a full list of charges the former president is currently facingHere’s what else I’m keeping tabs on today:Jackson Hole: US Federal Reserve chair Jay Powell and his European counterpart Christine Lagarde speak at the central bankers’ gathering in Wyoming. US stocks fell yesterday after a senior Fed official warned interest rates could remain higher for longer.Consumer sentiment: The University of Michigan will release its final reading of consumer sentiment for July, with economists expecting the level to hold steady at the preliminary reading of 71.2, relatively unchanged from June. The expected July reading is 42 per cent above June 2022’s historic low and is moving closer to the historical average of 86.How well did you keep up with the news this week? Take our quiz.Five more top stories1. The plane carrying Yevgeny Prigozhin could have been brought down by an onboard explosion according to US officials. While they cautioned there were still lot of unknowns, they were working under the assumption Prigozhin was killed on the orders of Vladimir Putin. Read what the US knows about the incident here.2. Interview: A senior official at the US Federal Reserve has said interest rates may have to raise again. Susan Collins, president of the Boston Fed, told the FT: “I am not yet seeing the slowing that I think is going to be part of what we need for that sustainable trajectory to get back to 2 per cent [inflation] in a reasonable amount of time”. Read the full interview here.3. The Brics emerging market bloc has launched the biggest expansion in its history as Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates were invited to join. The expansion represents a victory for China, which pushed for rapid expansion of the grouping before the summit as part of its ambitions to lead the developing world.4. Heineken has finally sold its Russian operations for a loss of €300mn after mounting criticism of the brewer for staying in Russia after the country’s invasion of Ukraine. Talking about the long delay, chief executive Dolf van den Brink said: “There was a real risk for legal prosecution of our local people, there was a real risk of nationalisation.” Read the details of Heineken’s exit here.5. Hedge funds that try to make money by betting on prevailing trends in global markets are struggling to repeat their bumper 2022, posting losses of close to 10 per cent to date, as violent swings in asset prices and rapid shifts in investors’ interest rate expectations throw them off balance. Here’s more on the woes of so-called commodity trading advisers.The Big Read

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“De-dollarisation” has been on anti-imperialists’ radar for decades, but the overwhelming power of the US currency meant it amounted to little more than a slogan until recently, economists say. With the expansion of US economic sanctions and the explosion of new technologies for international payments, cracks are starting to appear in the dollar’s once-impregnable position — and China is hoping to take advantage.We’re also reading . . . Women at work: Post-pandemic the US workforce is being driven by women, argues Rana Foroohar.The Nimby tax: Local objections and protracted reviews mean new infrastructure projects cost far more in the UK and US than elsewhere, writes John Burn-Murdoch.Thai politics: The party of former prime minister Thaksin Shinawatra has sealed a “Faustian” pact with the country’s military, experts say, as Pheu Thai mends ties with its former foes.Chart of the dayChina imported a record amount of semiconductor equipment between June and July. The surge is most likely Beijing stocking up before restrictions kick in on the type of equipment the country can buy. China has bold plans to expand its semiconductor production and the high level of purchases suggest it wants to avoid any disruption to its goals.

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Take a break from the newsChefs and food producers are reducing their use of salt across the board, probably catering to a significant proportion of worried consumers who have been convinced that if food tastes perceptibly salty, they will surely die. But FT food writer Tim Hayward wants his salt back.

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Additional contributions from Tee Zhuo, Benjamin Wilhelm and Leah Quinn More

China’s imports of semiconductor equipment have surged to record highs ahead of the implementation of export curbs by US allies.Chinese customs data shows the country’s chip production tool imports in June and July totalled nearly $5bn, up 70 per cent from $2.9bn in the same period last year.Most of the imports came from the Netherlands and Japan, two countries that have imposed export restrictions on chipmaking equipment as they work with the US to slow China’s technological advancement.The restrictions mean buyers of some tools will have to apply for licences from the Dutch and Japanese governments, raising concern among Chinese chipmakers. Japan started enforcing its restrictions on July 23, while the Dutch curbs will come into effect on September 1.While it is not clear how much of the increase in imports relates to tools that will be covered by restrictions, the purchases suggest China wants to avoid any disruption to its plans to expand chip production.With the imported equipment, Chinese companies are trying to build up output of less cutting-edge chips that are not covered by western restrictions.“This is one of China’s responses to the . . . export restrictions in the Netherlands and Japan,” said Lucy Chen, vice-president of Taiwan-based research firm Isaiah Research. “China increased its inventory of semiconductor equipment through advance stockpiling to alleviate potential supply chain bottlenecks.”

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Chinese groups such as Semiconductor Manufacturing International and Yangtze Memory Technologies depend on equipment from the US, the Netherlands and Japan to manufacture chips.The tools category in the customs data consists of equipment such as lithography and etching machines for chip production but does not include components and materials such as wafers.Chinese imports of Dutch chipmaking equipment doubled in June and July from May as a result of the delivery of more lithography machines to Chinese clients from ASML, said industry insiders familiar with equipment procurement in the country. ASML is one of the biggest producers of chipmaking equipment.ASML’s chief executive Peter Wennink said in an earnings call last month that there had been strong demand from Chinese customers for tools to make mature or less cutting-edge chips. ASML declined to comment further.Imports from Japan have also increased. Some Chinese companies started buying etching equipment and wafer-coating machines from Japanese companies after the US started tightening its export controls on chip equipment in 2020.

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Some of the machines imported in recent months have gone to recently established small foundries backed by local governments in China, as Beijing works to expand its chipmaking capacity, said two government officials familiar with the situation.China’s chip equipment purchases from other places, including Singapore and Taiwan, have also contributed to record imports from those countries.The surge highlights China’s attempt to keep expanding production of less advanced chips despite the challenges posed by tightened export controls, experts said.According to technology market research group Counterpoint, there was a 30 per cent increase in shipments from the top five chipmaking equipment sellers to China in the second quarter of this year.“China’s concentrated investment in strategic [fabrication plants] serves to ensure local supply, while sustained commitments to mature technologies act as a buffer against geopolitical uncertainties,” said Ashwath Rao, senior research analyst at Counterpoint.Rao said China was producing chips for use in electric vehicles, the green energy transition and industrial applications, which only require older chips not subject to export controls.Additional reporting by Tim Bradshaw in London More

The annual budget requests, to be submitted to the finance ministry by the end of August, highlight the difficulty of streamlining spending for the industrial world’s most heavily-indebted government.Under persistent pressure to inflate the world’s third largest economy, the finance ministry will scrutinise the budget requests before it compiles the draft annual state budget in December. This fiscal year’s budget stood at 114 trillion yen.Debt-servicing costs and defence spending will increase the overall budget from this year’s initial budget, while social security outlay will also rise due to the snowballing costs of supporting the fast-ageing society.For the past decade, the government has taken advantage of low borrowing costs thanks to the central bank’s ultra-loose monetary policy, put in place to achieve its elusive 2% inflation target.However, the BOJ’s policy tweaks last month brought home the reality that the government cannot count on the central bank to effectively monetise its massive borrowing indefinitely.The BOJ guides short-term interest rates at -0.1%, buying huge amounts of government bonds to cap the 10-year yield around 0% as part of efforts to fire up inflation to its 2% target.Last month, the BOJ said it would allow the 10-year bond yield to move up to 1%, having previously raised the cap to 0.5% last December from 0.25%.($1 = 146.0100 yen) More

(Reuters) -Australian conglomerate Wesfarmers Ltd said annual profit rose 4.8%, just ahead of analyst forecasts, as elevated living costs sent new shoppers to its budget department store chain Kmart, offsetting the impact of a renovation slowdown on its hardware unit.The result shows the benefit of diversification at the country’s biggest listed conglomerate which also owns pharmacies, an office supplies chain, an industrial chemicals business and a lithium mine that is scheduled to start making sales next year.For years the Perth-headquartered firm has grown most of its profit by riding a property and renovation boom at market-dominating hardware chain Bunnings. On Friday it said the chain’s profit grew just 1.2% in the year to June as shoppers showed “more caution in making big-ticket purchases and commencing larger DIY projects”.Its Kmart unit, which is unrelated to the U.S. chain, meanwhile grew profit by more than half as it shook off a period marked by COVID-19 trading restrictions and attracted cost-conscious shoppers amid a living cost squeeze.”As people become more value conscious, and also as the quality of Kmart’s quality improves, we’re attracting a lot of new shoppers,” said Wesfarmers CEO Rob Scott on a media call.”People are increasingly buying their clothes at Kmart where previously they might have only been buying their home products.”Total profit of A$2.47 billion came in just above the average analyst forecast of A$2.45 billion, according to data aggregator Visible Alpha.Wesfarmers shares were up 2.5% in early trading, against a 1% decline on the broader market, as analysts cheered a better-than-expected result from a company seen as exposed to changing consumption patterns.The result was “inline and could be seen as better than feared”, Macquarie Group (OTC:MQBKY) analysts said in a client note. “Seems like consumer drag marginal.”Wesfarmers said it expected to generate its first earnings from a new lithium business in the first half of calendar 2024 with offtake agreements “well progressed”.The company declared a final dividend of A$1.03 per share, taking total dividends for the year to A$1.91, up from A$1.80 the previous year.($1 = 1.5584 Australian dollars) More