Economy

Households in the UK are investing less money for the future as they grapple with the rising cost of living, according to one of the country’s largest investment platforms.AJ Bell said on Thursday that rising inflation and the war in Ukraine had knocked investor confidence and put a squeeze on household budgets, resulting in less cash flowing into investments.Those forces resulted in lower net inflows during the first quarter of £1.6bn, compared with £1.8bn in the same three months last year, the company reported.“Customers invested slightly less via our platform than [last year] as they assess the impact of the rising cost of living,” said Andy Bell, chief executive.The warnings that cost of living pressures would slow the flow of cash into investments marks a sharp change of tone from last year, when investment businesses enjoyed bumper inflows as people invested money they had stashed during Covid-19 lockdowns. It is also the latest sign of the affordability crisis gripping UK households. A poll conducted by Interactive Investor, another UK platform, earlier this month found that one-quarter of its customers had cut back on paying into their investments or savings pots because of the cost of living.One in 20 respondents said they had stopped contributing to their pension, while 8.5 per cent had paused contributions to their stocks and shares Isa, a tax-protected UK investment account. The slowdown in investing has been exacerbated by turmoil in financial markets, which have been unsettled by the war in Ukraine and moves by central banks to tame inflation by reducing their support for the economy. The FTSE All-Share index fell half a per cent in the first quarter, while the MSCI World index tumbled 5.5 per cent. In contrast, stocks surged in 2021 in part thanks to central bank support, and many savers invested in the rising markets. By the end of March this year, AJ Bell’s assets under management stood at £74.1bn, up 14 per cent over 12 months, but down 2 per cent since January. AJ Bell said last year’s influx of new money into investments “was exceptionally strong . . . whereas this year [investors] have been faced with increased market uncertainty caused by factors including inflationary pressure on the cost of living and the war in Ukraine”.However, Bell warned that savers who pulled back from investing could also be hurt by rising inflation eroding their savings in real terms. The Financial Conduct Authority last autumn identified 8.6mn Britons with more than £10,000 in investable cash. AJ Bell on Wednesday launched a simplified stock brokerage app, with no trading fees, called Dodl, which it hopes will appeal to these potential customers. More

Weekly jobless claims totaled 184,000 for the week ended April 16, slightly above the previous week and a bit higher than the estimate.
Continuing claims hit their lowest level since Feb. 21, 1970.
A separate report showed that manufacturing activity in the Philadelphia area increased less than expected in April.

Initial jobless claims last week were a bit higher than expected but still reflective of a labor market where employers are loathe to fire workers.
First-time claims for benefits in the week ended April 16 totaled 184,000, a decline of 2,000 from the previous week but just ahead of the Dow Jones estimate for 182,000, the Labor Department reported Thursday.

The numbers indicate the U.S. employment picture remains historically tight as job openings outnumber the available labor pool by about 5 million.
Continuing claims, which run a week behind the headline number, fell by 58,000 to 1.417 million, the lowest level since Feb. 21, 1970.
A separate economic report Thursday showed that manufacturing expanded in the Philadelphia area in April, but at a slower pace than expected.
The Philadelphia Federal Reserve’s monthly manufacturing index registered a 17.6 reading, representing the difference between companies seeing expansion versus contraction. That was a decline of nearly 10 points from March and below the Dow Jones estimate of 21.9.
Measures of new orders, shipments, unfilled orders, delivery times and the average employee workweek showed declines from March. However, prices paid and prices received both increased, reflecting continued inflation pressures, while the number of employees index also gained.

On Wednesday, the Fed’s “Beige Book” summary of economic conditions around the U.S. noted the difficulty companies are having finding workers.
“Demand for workers continued to be strong across most Districts and industry sectors. But hiring was held back by the overall lack of available workers, though several Districts reported signs of modest improvement in worker availability,” the report said. “Many firms reported significant turnover as workers left for higher wages and more flexible job schedules.”
Fed officials are responding to the inflation surge with an expected series of interest rate hikes that they hope won’t derail the 2-year-old economic recovery. Markets expect the central bank’s benchmark overnight borrowing rate to rise to about 2.5% this year from near zero where it stood at the outset of 2022.
The jobless claims numbers reflect the continued progress in hiring. The total of those receiving benefits dropped to 1.62 million, as of data through April 2. A year ago, that total was 17.4 million, a number pared as the government has restricted extended unemployment benefits and as hiring accelerated following the release of Covid vaccines and a sharp drop in virus cases.
Still, the labor market hasn’t quite caught up to its pre-pandemic self.
Even though the unemployment rate has fallen to 3.6%, there are 408,000 fewer Americans working than in February 2020, just before the pandemic hit. The labor market also is smaller by 174,000 and the labor force participation rate is a full percentage point below its pre-Covid level.

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WASHINGTON (Reuters) -The number of Americans filing new claims for unemployment benefits fell moderately last week, still suggesting that April was another month of strong job growth.The report from the Labor Department on Thursday also showed unemployment rolls shrinking to the lowest level in 52 years in the first week of April, reinforcing the tightening labor market conditions. An acute shortage of workers is keeping layoffs low, helping to fuel inflation, and forcing the Federal Reserve to adopt a restrictive monetary policy stance.”Jobless claims at near-record lows mean worker wages will continue to go up and up, guaranteeing that inflation remains more persistent and at more worrisome levels for longer than Fed officials believe,” said Christopher Rupkey, chief economist at FWDBONDS in New York. Initial claims for state unemployment benefits declined 2,000 to a seasonally adjusted 184,000 for the week ended April 16. Data for the prior week was revised to show 1,000 more applications received than initially reported.Economists polled by Reuters had forecast 180,000 applications for the latest week. Claims plunged to a more than 53-year low of 166,000 during the week ending March 19. There is probably limited scope for further declines.Last week, applications tumbled by 7,656 in Missouri. There were also substantial declines in Ohio, Texas, New York and Michigan, which offset increases in Connecticut and California. The Fed in March raised its policy interest rate by 25 basis points, the first rate hike in more than three years. Economists expect a half-percentage-point rate increase next month, and for the U.S. central bank to soon start trimming its asset holdings.Claims, which have dropped from a record high of 6.137 million in early April 2020, will be closely watched for signs of whether rising borrowing costs are curbing demand.So far, demand for labor is holding strong. The Fed’s Beige Book, based on information collected on or before April 11 from the central bank’s business contacts, showed on Wednesday that “demand for workers continued to be strong across most districts and industry sectors,” but noted “hiring was held back by the overall lack of available workers.”There were a near record 11.3 million job openings at the end of February. The unemployment rate is at 3.6%, just one-tenth of a percentage point above its pre-pandemic level.But there are signs labor supply will soon improve. The claims report showed the number of people receiving benefits after an initial week of aid dropped 58,000 to 1.417 million during the week ending April 9. The was the lowest level for the so-called continuing claims since February 1970.Last week’s claims data covered the period during which the government surveyed business establishments for the nonfarm payrolls component of April’s employment report. Claims rose marginally between the March and April payrolls survey periods. Economists are expecting strong employment growth in April. Payrolls increased by 431,000 jobs in March, marking the 11th straight month of employment gains in excess of 400,000. More

(Reuters) -A surge in Tesla (NASDAQ:TSLA) shares was set to lift U.S. equity indexes at the open on Thursday, with airline stocks providing added boost after United Airlines and American Airlines (NASDAQ:AAL) forecast a return to profitability in the current quarter.The world’s most valuable automaker jumped 9.4% in premarket trading after its results beat Wall Street expectations as higher prices helped it overcome supply-chain chaos and rising costs.Meanwhile, United Airlines Holdings (NASDAQ:UAL) Inc and American Airlines Group Inc rose 8.7% and 11.3%, respectively, after their upbeat outlook on bookings due to booming travel demand.Shares of peers Southwest Airlines (NYSE:LUV) Co, JetBlue Airways (NASDAQ:JBLU) Corp and Delta Air Lines Inc (NYSE:DAL) gained between 3.1% and 4.8%.U.S. stocks fell sharply on Wednesday after dismal results from Netflix Inc (NASDAQ:NFLX) triggered a selloff in technology and growth stocks. “Earnings have been a mixed big so far, obviously you saw the disappointment with Netflix. We’re probably going to go back and forth on a day-to-day basis,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.”People are still looking at the bond market and the Fed policy over the longer term, it’s not just earnings.”Investors will focus on Federal Reserve Chair Jerome Powell’s speech later in the day for clues on monetary policy tightening plans, with many expecting a 50 basis points rate hike next month to contain soaring inflation.Markets have been jittery about the prospect of rising interest rates this year and their impact on rate-sensitive growth stocks. [US/] Manufacturing activity in the Mid-Atlantic region fell short of estimates, while input costs shot to their highest since 1979, a regional Federal Reserve survey showed on Thursday.Another set showed, the number of Americans filing new claims for unemployment benefits fell moderately last week, suggesting that April was another month of strong job growth.At 09:01 a.m. ET, Dow e-minis were up 248 points, or 0.71%, S&P 500 e-minis were up 42 points, or 0.94%, and Nasdaq 100 e-minis were up 183 points, or 1.31%.AT&T Inc (NYSE:T) rose 1.4% after posting a rise in core wireless revenue for the first quarter, as the telecom giant benefited from the aggressive expansion of its fiber internet and 5G services.Overall, analysts expect S&P 500 earnings growth of 6.5% in the first quarter as of Wednesday, compared with the 32.1% rise in the previous quarter, according to Refinitiv data. More

ZURICH (Reuters) -Makers of chocolate bars and coffee to lawn mowers and industrial robots were succeeding in passing on soaring costs to consumers, first-quarter earnings showed on Thursday, allaying fears higher prices could dent demand for their products.Some of Europe’s biggest companies reported first quarter sales increases, with KitKat maker Nestle, Evian water owner Danone and Dulux paint maker Akzo Nobel (OTC:AKZOY) saying they were able to accomplish the gains while raising their prices.Engineering company ABB and gardening equipment maker Husqvarna also reported strong demand despite both increasing prices.Outside Europe, Tesla (NASDAQ:TSLA) surged past Wall Street expectations on Wednesday, as higher prices helped insulate the electric vehicle maker from supply chain chaos and rising costs. [nL3N2WI3AV]But while cheering investors, with Nestle, ABB and Akzo Nobel enjoying share price gains, the strategy is stirring worries about households’ ability to cope and the outlook for the rest of the year.Rising interest rates and lagging pay deals are squeezing consumers, who are seeing their disposable incomes shrink and shopping bills rise.”Food and price and cost inflation pressure are going to be higher and more persistent,” said Berenberg in a recent note.”The sector outlook has become more challenging,” the bank added. “Nevertheless, grocery demand will be resilient, but inflation will reveal outperformers.”Nescafe owner Nestle was one of the winners on Thursday, reporting a 7.6% rise in organic sales during the first three months of the year as pet food and coffee sales performed strongly despite big price increases.The measure, which strips out currency swings and M&A deals, beat a 5.0% average forecast in a company-compiled consensus thanks to price increases of 5.2%.”We stepped up pricing in a responsible manner and saw sustained consumer demand,” said the Swiss company whose products include Purina pet food and Nespresso.MORE HIKES LIKELYThe world’s biggest food group said the current price rises were also unlikely to be the last.”Cost inflation continues to increase sharply, which will require further pricing and mitigating actions over the course of the year,” Nestle added.French peer Danone, whose product line up includes Activia yoghurt and Evian water, said it was also ready for further rounds of price increases “if needed” after reporting a 7.1% sales increase late on Wednesday.The world’s biggest yoghurt maker benefited from price increases at the start of the year as well as easier comparisons and stronger demand for baby formula in China.Higher prices could be a sensitive topic in its French home market where the cost of living crisis sets the tone for the presidential runoff between incumbent Emmanuel Macron and his right-wing challenger Marine Le Pen.Price rises have also not hurt demand for Dutch paint and coatings maker Akzo Nobel, which beat quarterly core earnings estimates on Thursday while reporting a 17% increase in prices compared with a year earlier.Chief Executive Thierry Vanlancker said that the group’s “vigorous pricing initiatives” had helped it manage “the unprecedented variable cost inflation that impacted our industry during the quarter”.Beyond the consumer area, factory robots and industrial drive maker ABB also reported a 21% jump in orders during its first quarter despite increasing prices.Chief Executive Bjorn Rosengren said there were was no end in sight to price increases for components and metals, as well as rising transport costs.This meant ABB would have to continue to lift prices to deal with it, he said, although there was no sign of customers holding back from equipping their factories with new products. “They are still placing orders, I guess they are accepting it,” Rosengren told reporters. “We are not the only one lifting prices, everyone is doing that in the market. That is the new reality.”Also on Thursday, Husqvarna, the world’s biggest maker of gardening power equipment, said it was raising prices further this month in response to rising supply and energy costs and said it had no indication retailers were holding back. “They accept the price increases,” Henric Andersson, chief executive of the Swedish group told Reuters after the earnings report. More

Short-term government borrowing costs in the eurozone shot to an eight-year high on Thursday after central bank officials said they could raise interest rates as soon as July.The yield on Germany’s two-year bond — a benchmark for the entire euro area that closely tracks expectations of the path of European Central Bank interest rates — climbed as much as 0.13 percentage points to 0.18 per cent, its highest level since 2014. It later trimmed some of those gains to trade at 0.13 per cent. Longer-dated bonds were also hit, with Germany’s 10-year yield adding 0.03 percentage points to 0.89 per cent in afternoon trading.The moves came after ECB vice-president Luis de Guindos said in an interview with Bloomberg that the central bank’s first interest rate rise since 2011 could come as soon as July. His colleague Pierre Wunsch said in a separate Bloomberg interview that the ECB could lift policy rates above zero before the end of 2022, bringing eight years of sub-zero rates in the eurozone to an end.The shift in communication has shaken markets that, as recently as the start of the year, were expecting the ECB to move more slowly in tightening monetary policy than its counterparts in the UK and the US.“Four months ago, [Christine] Lagarde said it was very unlikely that they’d raise rates in 2022 and now we have . . . governors speaking about a rate hike in July,” said Bastien Drut, chief thematic macro strategist at CPR Asset Management. “Everything has changed,” he added.Derivatives markets are pricing in a return to zero for the ECB’s deposit rate by October, from the current level of minus 0.5 per cent.ECB president Lagarde will participate in an IMF panel on the global economy later on Thursday alongside Federal Reserve chair Jay Powell. Powell and Lagarde are due to make separate speeches on Thursday and Friday respectively.Central bankers in Europe and the US have embraced a more hawkish stance as inflation rates rise to their highest in decades, and they battle to keep a lid on price growth expectations. A closely watched gauge that tracks market expectations for the eurozone’s inflation rate over a five-year period beginning five years from now climbed to 2.44 per cent on Thursday, the highest in a decade.The rise in the Bund yield, seen as a bellwether for eurozone borrowing costs, came as German exports fell 7.2 per cent in March, according to the national statistics office Destatis, in the first such set of economic data to reflect the impact of sanctions against Russia. In the UK, short-term government bonds similarly came under pressure, with the two-year gilt yield rising to its highest since 2009 at 1.63 per cent.In equity markets, Europe’s regional Stoxx 600 share gauge rose 0.8 per cent. Germany’s Dax index added 1.5 per cent, while London’s FTSE 100 rose 0.2 per cent. France’s CAC 40 added 1.8 per cent following a combative television debate days before the final vote of the country’s presidential election.Hedge funds had helped push equities higher earlier this week, as they sought to unwind negative bets. They were net buyers of North American equities on Tuesday, according to a note sent to clients by Morgan Stanley’s prime brokerage unit. Futures contracts tracking Wall Street’s S&P 500 gauge added 0.9 per cent on Thursday, with Nasdaq 100 contracts rising 1.3 per cent. Additional reporting by Laurence Fletcher More

The writer is prime minister of UkraineIf Russia stops fighting, there will be peace. If Ukraine stops fighting, there will be no Ukraine.This feeling permeates our society. Ninety-five per cent of Ukrainians believe in our victory. The courage of our armed forces and citizens has excited the world. Mariupol, Kharkiv, Sumy, Mykolayiv — these cities have become symbols of our people’s invincibility. The heroism of Ukrainian soldiers has proved to be stronger than Russian weapons.To understand the scale of this heroism, compare the military budgets of the two countries. Ukraine’s military spending over the past five years has been about $20bn. Russia’s was almost $350bn. Despite this, Ukraine won the initial stage of the war.The war demands a rethinking of the “responsibility to protect”. We do not call on the west for humanitarian intervention or boots on the ground. Rather it is a responsibility to help David defeat Goliath and conquer the evil perpetrating a new genocide in the heart of Europe. We ask our allies to provide heavy weapons for the Ukrainian armed forces, levy new sanctions against the Russian economy and secure funding for the Ukrainian budget.According to the Congressional Research Service, the US has provided $4bn since 2014 in military assistance to Ukraine. Most of this has come from the Biden administration after Russia’s invasion. The Ukrainian people are grateful for the White House’s response to the threats Russia poses to the world. Unfortunately, the west’s support is not sufficient to liberate all Ukrainian cities, including Mariupol. We need much more weaponry from our allies. Ukraine is ready to fight without these weapons, but once supplied they could save thousands of lives.Sanctions against Russia are bringing peace closer. Russia’s foreign debt default is only a matter of time. But sanctions need to be reinforced and updated to close possible loopholes. Secondary sanctions must be imposed to demonstrate that the west will not tolerate such aggression.Oil and commodity embargoes, restrictions against the entire Russian banking sector — these are needed right now. Despite all the sanctions, Russia makes tens of billions of dollars on its commodity exports. Like the taxes western companies pay in Russia, these funds finance the bombs and shells that pound Ukrainian cities. There is no grey area any more. You either stay in Russia and finance the killing of Ukrainian children and women, or you leave this market, as more than 600 international companies have already done.The war on our territory is causing untold damage to our economy. From afar, it may seem that things are not that bad. The government is working. The state is fulfilling its social commitments. Transport, communications and the internet are still in operation. But this does not make the war less bloodthirsty. Every day people die, fierce fighting continues and cities are being bombed.The fact that Ukraine remains governed speaks of our state’s stability. It speaks of the strength of the government and President Volodymyr Zelensky, as well as the successful use of new technologies, digitalisation, reformed institutions and our people’s will to fight for their European future.Our state and its economy are losing billions of dollars every day. But they still meet their social liabilities, support internally displaced people, provide medications and food, restore infrastructure and defuse mines on our land. Now there is a need to restore damaged homes and construct shelter and transitional housing. But due to the blockade of our seaports and missile strikes on cities and towns, some businesses and a large share of exports are stopped. The budget deficit is growing. At this most difficult moment in our history, we need financial aid from partner countries.Supporting Ukraine is not just about helping an individual state, but the whole world. Despite the shells and mines, Ukrainian farmers are expected to sow 70 to 80 per cent of last year’s farmed areas with spring crops. We understand that Ukraine supplies food to almost 400mn people worldwide. Some countries rely on Ukrainian wheat for almost half their supplies. Russia’s aggression is causing a global food crisis and may lead to famine in parts of the world. Aid to Ukraine can stop this.Some 5mn Ukrainian women and children have left the country because of the war. Almost all refugees are ready to come back as soon as the hostilities are over. Aiding Ukraine will accelerate their return and help Europe avoid a migration crisis.Ukraine will not surrender or succumb to the aggressor. We will fight for as long as necessary. The world knows that the truth is with us. We ask the world to help us defend this truth. More

The U.S. health insurer took full ownership of Kindred at Home last year after acquiring the remaining 60% stake it did not own from TPG Capital for $5.7 billion to expand its patient care business.Humana (NYSE:HUM) said it intends to use proceeds from the transaction for repayment of debt and share buybacks. The company does not anticipate a material impact to 2022 earnings from this transaction, which is expected to close in the third quarter of 2022.Apart from hospice care, Kindred at Home also provides personal care and home health services.Once the deal closes, the hospice and personal care divisions will be restructured into a standalone operation with David Causby, the current president and CEO of these segments, leading the business.Goldman Sachs & Co (NYSE:GS). LLC and Barclays (LON:BARC) are acting as financial advisers to Humana, while Deutsche Bank (ETR:DBKGn) Securities Inc and UBS Investment Bank are acting as financial advisers to CD&R. More