European shares open lower at the end of the winning week

British luxury retailer Burberry reported an 18% increase in sales revenue for the quarter ending July 1, as earnings season kicks off.

Sales in Europe, the Middle East, India and Africa increased by 17%. But its biggest successes came in Asia, with sales increasing in mainland China by 46%, South Asia-Pacific by 39% and Japan by 44%. Sales in the Americas decreased by 8%.

The company reiterated its full-year guidance and announced a £400m share buyback to be completed by the end of the calendar year.

The fund manager behind a fixed-income fund that offers 10% dividends has predicted a “credit crunch” for the broader economy in the near future.

However, the portfolio manager expects the fund to be well positioned for such a scenario while generating above-market income.

It is one of the few funds available to retail investors across Europe that currently offers double-digit returns.

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—Ganesh Rao

Funding in fintech startups fell 49% globally to $23 billion in the first half of 2023 compared with a year ago, data from S&P Global Market Intelligence showed.

The deal count in the first six months of 2023 totaled 1,178, a 64% drop from the same period last year.

Meanwhile, mega funding rounds of more than $100 million have been rare, with just nine in the second quarter of 2023, compared to 23 in the first quarter of 2023 and 55 in the second quarter of 2022, S&P said.

The failure of Silicon Valley Bank in March “curbed investors’ risk appetite,” S&P said.

“A trio of big deals — $6.87 billion from Stripe, $1.5 billion from a unit of Ant Group and $850 million from PhonePe — masked the deterioration in the fintech funding environment in the first half of 2023,” it said. Sampath Sharma Nariyanuri, fintech research analyst at S&P. World market intelligence.

However, Nariyanuri expects “a recovery in public market valuations of technology stocks, a stabilization in interest rates, and a rebound in M&A activity” to drive the second half of 2023.

—Sheila Chiang

The International Monetary Fund said growth in China is slowing due to weaker private investment, as well as slowing exports and reduced domestic demand.

The organization’s spokesperson Julie Kozak said at a briefing“Growth momentum has slowed recently in China, largely due to weaker-than-expected private investment,” pointing to a recent decline in exports after seeing a strong performance in the first quarter of the year.

“The overall picture for growth in China is one of a slowing economy, and that’s consistent with the forecast we had in April,” noting that an “updated forecast” for China will be reflected in the next World Economic Outlook report. IMF.

—Jihye Lee

The producer price index, a measure of what wholesalers pay for goods, rose 0.1% in June. Economists polled by Dow Jones had expected an increase of 0.2%. Core PPI, which excludes volatile food and energy prices, rose 0.1%, also less than expected.

—Fred Imbert

Reserve Bank of Australia Deputy Governor Michele Bullock has been appointed as the new head of the central bank, the country’s Treasury said on Friday.

She succeeds incumbent Philip Lowe, whose term will end on August 17, ending his 43 years with the bank. Treasurer Jim Chalmers described Bullock’s appointment as “the optimal balance between providing exceptional experience and insight and offering a fresh perspective on leadership.”

Bullock’s appointment would mean the RBA will have a vacant lieutenant governorship, which the government said it would fill in the coming months.

—Lim Hui Jie

Federal Reserve Board Governor Christopher Waller has expressed the need for two more rate hikes to bring inflation down to its target.

“I see two more 25 basis point increases in the target range during the remaining four meetings this year as necessary to keep inflation moving toward our target,” he said, speaking at an event at New York University on Thursday.

He called the latest consumer price index reading that showed a cooling inflation rate “welcome” news, adding that “one data point does not mark a trend.”

“I’m going to need to see this improvement sustained before I’m sure inflation has slowed,” he said.

—Jihye Lee

Bank of America described the AI ​​opportunity within the software industry as “undeniably vast” and ranked European companies in the sector.

“We see generation AI as an opportunity for the software industry to realize potential revenue growth through an enhanced value proposition and data monetization, along with productivity improvements,” the bank said.

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—Lucy Handley

In another bullish sign for the market, the S&P 500 is now up 3.3% since the Fed began raising rates in March 2022. The move comes as traders cheer the prospects of the central bank reining in the stock market. inflation without driving the economy into a recession.

“For the first time in 2023, we’re being asked by several clients if we think the S&P 500 is on track to record an ATH before the end of the year. I’m going with a yes on this,” Goldman Sachs’ John Flood wrote in a note Wednesday.

—Fred Imbert