Aurelia Butler

British retail sales dropped unexpectedly in December, as consumers dealt with rising inflation during the crucial Christmas shopping period.The volume of retail sales in Great Britain fell by 1 per cent between November and December, according to figures published by the Office for National Statistics on Friday.The reading was well below the 0.5 per cent rise forecast in a Reuters poll of economists.Retail sales fell despite government payments to help households with the rising cost of living, delivered in mid to late November, which were expected to have “given an extra boost to spending in the lead-up to Christmas”, according to Paul Dales, chief UK economist at Capital Economics.The figure is the second monthly decline in retail sales volumes, following a 0.5 per cent drop in November, when Black Friday failed to produce a significant bump in sales.Food sales volumes fell by 0.3 per cent in December, down from a 1 per cent rise in the previous month. Heather Bovill, ONS deputy director for surveys and economic indicators, said: “After last month’s boost as shoppers stocked up early, food sales fell back again in December.” Non-food sales volumes fell by 2.1 per cent over the month. Within the category, clothing stores sales volumes rose by 1 per cent, while household goods stores, such as furniture stores, increased by 1.5 per cent over the month.But the figure was dragged down by a large drop in the “other” non-food subcategory, which went down by 6.2 per cent because of falls in common gift categories such as toys, cosmetics, jewellery and sports equipment, according to the ONS. “December’s fall in sales suggests consumers didn’t see Christmas or the World Cup as strong enough incentives to loosen the purse strings,” said Aled Patchett, head of retail and consumer goods at Lloyds Bank.Online shopping fell to 25.4 per cent, from 25.9 per cent in November, with some online retailers reporting that they were set back by Royal Mail strikes last month. Latest data from the ONS public opinion survey, covering the period between December 21 and January 8, showed that 65 per cent of adults were spending less on non-essentials as their living costs increased.The ONS findings are in line with separate data by research company GfK, released earlier on Friday, which showed that UK consumer confidence remained below minus 40 for the ninth month in a row in January, marking the longest period of pessimism in nearly 50 years.“With a renewed fall in consumers’ confidence in January”, weak retail sales were “very likely to continue as the broader economy slips into recession in 2023”, said Olivia Cross, assistant economist at Capital Economics.

Nevertheless, the ONS reported that the value of retail sales was up 3.8 per cent compared with December 2021, despite their volume being down 5.8 per cent on the same period. As prices surge to near-record highs, particularly following Russia’s invasion of Ukraine, retailers’ turnover rose but people could buy less with their money.Consumer price inflation eased slightly to 10.5 per cent last month, after hitting a 41-year high of 11.1 per cent in October.“With the UK forecast to enter recession this year, combined with energy bills remaining sky-high and savings starting to run low for many households, retailers face a challenging year,” said Phil Monkhouse, head of sales at financial services firm Ebury. More

DAVOS, Switzerland (Reuters) -Business titans trudging through Alpine snow can’t stop talking about a chatbot from San Francisco.Generative artificial intelligence, tech that can invent virtually any content someone can think up and type into a text box, is garnering not just venture investment in Silicon Valley but interest in Davos at the World Economic Forum’s annual meeting this week.Defining the category is ChatGPT, a chatbot that the startup called OpenAI released in November. The tech works by learning from vast amounts of data how to answer any prompt by a user in a human-like way, offering information like a search engine would or prose like an aspiring novelist.Executives have floated wide-ranging applications for the nascent technology, from use as a programming assistant to a step forward in the global race for AI and military supremacy.Conference goers with a major stake in the development of the technology include Microsoft Corp (NASDAQ:MSFT), whose chief executive, Satya Nadella, said the tech’s progress has not been linear.AI capabilities will “completely transform” all of Microsoft’s products, he said in an on-stage interview with the Wall Street Journal.Microsoft has a $1 billion investment in San Francisco-based OpenAI that it has looked at increasing, Reuters has reported. In an announcement that coincided with the conference, Microsoft said it plans to market ChatGPT to its cloud-computing customers. The company has also worked to add OpenAI’s image-generation software to its Bing search engine in a new challenge to Alphabet (NASDAQ:GOOGL) Inc’s Google.Later on Tuesday, the political sphere gets to weigh in on the craze. French politician Jean-Noël Barrot planned to join a panel discussion with a Sony (NYSE:SONY) Group Corp executive on the technology’s impact.Matthew Prince, CEO of Cloudflare (NYSE:NET) Inc, a company that defends websites against cyberattacks and offers other cloud services, sees generative AI as good enough to be a junior programmer or a “really good thought partner.”In an interview, Prince said Cloudflare was using such technology to write code on its Workers platform. Cloudflare is also exploring how such tech can answer inquiries faster for its free-tier customers as well, he said on the annual meeting’s sidelines.Alex Karp, CEO of Palantir Technologies (NYSE:PLTR) Inc, a software provider helping governments visualise an army’s movements or enterprises vet their supply chains, among other tasks, said such AI could have military applications.Karp told Reuters in Davos, “The idea that an autonomous thing could generate results is basically obviously useful for war.”The country that advances the fastest in AI capabilities is “going to define the law of the land,” Karp said, adding that it was worth asking how tech would play a role in any conflict with China.Businesses including CarMax Inc (NYSE:KMX) have already used Microsoft and OpenAI’s tech, such as to generate thousands of customer review summaries when marketing used vehicles. Proposed venture-capital investment has also exceeded what some startups want to take.Such buzz carried through gatherings at Davos, like talk about a slide-generating bot dubbed ChatBCG after the management consulting firm. The service said on its website that it had too much demand to keep operating.Generative AI is “a game-changer that society and industry need to be ready for,” stated an article on the World Economic Forum’s website. More

The sudden shift in Chinese policy has boosted many different asset classes, from commodities and mining stocks to currencies and equity markets in popular tourist destinations. Hong Kong’s share benchmark, the Hang Seng Index closed on Friday at an over six-month high ahead of the Lunar New Year Holiday. Chinese onshore blue chips went into the break at a five-month peak. The BofA data also showed weekly flows of $14.4 billion into bond funds, $7.5 billion into equities, $0.6 billion into cash and $0.6 billion from gold.European equities witnessed their first weekly inflow in almost a year. BofA said there were $0.2 billion of inflows to European stock funds, the first inflows in 49 weeks. Europe has benefited both from China’s reopening as well as recent declines in gas prices.BofA’s “Bull & Bear indicator” is at 3.5, a 10-month high driven by the inflows into emerging markets. Nonetheless, the note also says that markets are still facing several major uncertainties despite the recent optimism, as central banks near the end of their aggressive interest rate hikes, as well as the possibility of an economic “hard landing” and political tension in the United States around its debt ceiling. “We are in the trickiest part of the investment cycle: tightening ending but easing far from beginning, inflation over but recession not yet begun, China reopen vs US recession…little wonder Wall St narratives (are) changing quicker than a TikTok video,” it said. More

Investing.com — Technology stocks rise as Alphabet announces big job cuts and Netflix returns to the kind of subscriber growth that investors had thought was gone forever. Netflix founder Reed Hastings is also ascending to executive chairman position, with COO Greg Peters replacing him as co-CEO. Existing home sales data for December are due and are unlikely to break the flow of gloomy economic data this week. Western defense ministers meet to agree on more arms shipments to Ukraine, with a new German defense minister under pressure to let the country’s main battle tank join the fighting. And crypto lender Genesis files for bankruptcy with debts of more than $3.8 billion. Here’s what you need to know in financial markets on Friday, 20th January. 1. Alphabet announces job cutsGoogle parent Alphabet (NASDAQ:GOOGL) said it will cut 12,000 jobs, in an effort to restore profitability as its growth slows.The cuts, the latest in a series of mass culls of excess staff by Big Tech, will be spread across the group’s business lines and geographies. They come only days after a similar move by Microsoft (NASDAQ:MSFT).CEO Sundar Pichai said in a memo to staff that: “Over the past two years we’ve seen periods of dramatic growth. To match and fuel that growth, we hired for a different economic reality than the one we face today.”Alphabet stock rose 1.6% in premarket in response.2. Netflix subscriber growth roars backThere was upheaval, too, at another of the previously untouchable “FAANGs” group. Netflix (NASDAQ:NFLX) co-founder said he will leave his position as co-CEO to become chairman of the streaming giant, allowing chief operating officer Greg Peters to step up alongside programming chief Ted Sarandos.Netflix also handsomely beat its own forecasts – and the market’s for subscriber growth in the three months through December, reviving faith in the sustainability of its model after a miserable year for streaming companies.Net subscribers rose by 7.7M, well above the 4.5M it had guided for. Netflix stock rose nearly 6% in premarket in response.3. Stocks mixed as tech outperforms; existing home sales, earnings in focusU.S. stocks are set to open mixed later, with Netflix and Alphabet news supporting technology stocks more broadly.However, the disappointing economic data seen this week continue to cast a shadow, while comments from Federal Reserve vice-chair Lael Brainard and New York Fed President John Williams on Thursday were a reminder that the central bank is still far from being ready to cut interest rates. Existing Home Sales data are the only economic figures of note due Friday.By 06:30 ET (11:30 GMT), Dow Jones futures were down 23 points or less than 0.1%, while S&P 500 futures were up by a similar amount. Only Nasdaq 100 futures were clearly moving, up 0.4%. The main three cash indices all lost between 0.7% and 1% on Thursday and are set for their worst weekly loss in three.Other stocks likely to be in focus later include Schlumberger (NYSE:SLB) and State Street (NYSE:STT), which both report earnings, and T-Mobile (NASDAQ:TMUS), which admitted to a major data breach late on Thursday.4. Tanks but no tanksU.S. and European defense ministers are set to meet for discussions over increasing military aid to Ukraine, aiming to give it the means to recapture lost territory from Russia when the winter is over.Central to the discussions will be the issue of tanks, where Germany is under increasing pressure both to send its Leopard 2 main battle tank to Ukraine and allow its NATO partners such as Poland to send their Leopards too. Chancellor Olaf Scholz earlier this week said he wouldn’t agree to offer Leopards until the U.S. offered its main battle tank, the Abrams M1. The U.S. has also held back from that step, arguing that Leopards dispatched from Europe would have a bigger and faster impact. The U.K. has already approved sending its main battle tank, the Challenger 2.The U.S. approved another $2.5B of military aid this week, hinting heavily that it is now more relaxed about Ukrainian ambitions to retake the province of Crimea, which Russia annexed in 2014.5. Genesis files for bankruptcyCrypto lender Genesis finally bowed to the inevitable and filed for bankruptcy, two months after it was forced to suspend client withdrawals due to massive losses on its exposure to FTX.The move effectively puts a court in charge of the biggest fight going on in crypto land right now, between the Winklevoss twins and Barry Silbert’s Digital Currency Group, Genesis’ ultimate owner. It will have to decide which of Genesis’ creditors get paid first, and who – if anyone – will make whole over 340,000 customers of the Winklevoss investment platform Gemini.Both Gemini and Genesis have been charged by the Securities and Exchanges Commission with illegally offering securities in the U.S. Both the SEC investigation and the bankruptcy process raise the specter of a largely forced liquidation of some of the world’s largest holdings of crypto assets. According to its filing, Genesis owes its 50 biggest creditors some $3.8B, a little more than anecdotal reports had suggested earlier. More

Investing.com — Bank of Japan governor Haruhiko Kuroda defended the central bank’s decision to widen its yield curve control band in December, saying the move was designed to improve bond market functioning and not a sign that it will step away from its long-standing ultra-loose monetary policy.Speaking at a panel at the World Economic Forum in Davos, Kuroda – who is expected to step down as governor later this year – said the BOJ’s expansion of its allowable 10-year yield band to between -0.5% and 0.5% last month “was not wrong.”He stressed as well that the BOJ would continue to pursue an “extremely accommodative” policy in order to achieve its 2% inflation target in a “sustainable” manner. Kuroda argued that the BOJ predicts that recently elevated inflation in Japan will begin to abate “probably from February” this year, and eventually dip below 2% over 2023 “as a whole.” He added that Japan’s economy is still recovering from the pandemic.Japanese inflation stands at a 41-year high of 4%, as volatile commodity prices and a relatively weaker yen ramp up the cost of raw material imports. Kuroda’s comments also come after the central bank kept overnight interest rates unchanged at -0.1% earlier this week and maintained the rate of yield curve control, defying many market expectations for a more hawkish policy shift. More