US Business

Major global equities rose Tuesday, with sentiment soothed after Britain shredded its controversial budget and following a series of upbeat US earnings.

On Wall Street, the Dow Jones jumped two percent at the open after a day of strong trading in Asia and Europe, as several big banks updated with healthy data.

Goldman Sachs reported lower profits in its results Tuesday — but the firm still topped analyst expectations on strong trading revenues.

It follows positive earnings news from the Bank of America on Monday, days after JPMorgan Chase and others also logged solid numbers.

“Better-than-expected US earnings reports sparked a rally on Wall Street with positive momentum reverberating across European equities,” Interactive Investor analyst Victoria Scholar told AFP.

“Risk appetite is picking up after a volatile week for markets, as corporate results look to be the main driver of price action today.”

Later on Tuesday, investors will also digest results from Johnson & Johnson, Lockheed Martin and Netflix.

Analysts remain hopeful that an upbeat third-quarter results season could give a shot in the arm to markets which have been slammed this year on fears over inflation and Federal Reserve interest rate hikes.

But Craig Erlam, senior market analyst at OANDA, warned the upbeat investor sentiment might not last, saying there was a “strong feeling of a bear market rally about trading over the course of the last week.”

“From the post-US-inflation rebound to what has now been a strong start to the week — in part driven by the UK’s decision to no longer shoot itself in the foot — nothing about this screams sustainable.”

– European positivity –

Frankfurt stocks jumped nearly two percent on Tuesday as a key survey showed German investor confidence climbed slightly in October, but it still held at a low level.

London gains were muted after the Bank of England poured cold water on a newspaper report that it could delay the sale of government bonds again to help maintain market stability.

A BoE spokesperson described the Financial Times story as “inaccurate”.

But the British pound retreated slightly after jumping Monday above $1.14 as the UK government sensationally ripped up its controversial debt-fuelled budget.

After a volatile few weeks during which the pound hit a record low, new finance minister Jeremy Hunt sought Monday to reassure investors as he scrapped tax cuts and warned of tough spending cuts.

Monday’s move, which dealt a blow to Prime Minister Liz Truss’s authority, sent sterling up as much as two percent at one point and the cost of government borrowing tumbled, while the FTSE 100 jumped.

“Investors continue to monitor the political and economic turbulence surrounding the UK,” noted XTB analyst Walid Koudmani.

Markets in China fluctuated a day after authorities delayed the release of third-quarter economic figures, which analysts said were likely to show the weakest growth since the pandemic owing to Covid-19 lockdowns.

The decision comes as the Communist Party holds a key gathering at which President Xi Jinping is expected to be handed a third term.

– Key figures around 1340 GMT –

London – FTSE 100: UP 1.0 percent at 6,985.33 points

Frankfurt – DAX: UP 2.1 percent at 12,931.76

Paris – CAC 40: UP 1.5 percent at 6,130.52

EURO STOXX 50: UP 1.9 percent at 3,504.68

New York – Dow: UP 2.1 percent at 30,828.15 

Tokyo – Nikkei 225: UP 1.4 percent at 27,156.14 (close)

Hong Kong – Hang Seng Index: UP 1.8 percent at 16,914.58 (close)

Shanghai – Composite: DOWN 0.1 percent at 3,080.96 (close)

Pound/dollar: DOWN at $1.1320 from $1.1358 on Monday

Dollar/yen: DOWN at 149.00 yen from 149.04 yen

Euro/dollar: UP at $0.9853 from $0.9841 

Euro/pound: UP at 87.07 pence from 86.64 pence

Brent North Sea crude: DOWN 0.3 percent at $91.30 per barrel

West Texas Intermediate: DOWN 0.6 percent at $84.03 per barrel

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Ukraine warned Tuesday of an emerging “critical” risk to its power grid after President Volodymyr Zelensky said that repeated Russian bombardments had destroyed one-third of the country’s power facilities as winter approaches.

That warning came as Russian forces claimed to have retaken territory from Ukrainian troops in the eastern Kharkiv region, Moscow’s first announced capture of a village there since being nearly entirely pushed out of the region last month.

At the same time, Russian attacks rocked energy facilities in Kyiv and urban centres across the country, causing blackouts and disrupting water supplies, just one day after the capital was bombarded with a swarm of suicide drones.

“The situation is critical now across the country because our regions are dependent on one another… it’s necessary for the whole country to prepare for electricity, water and heating outages,” Kyrylo Tymoshenko, the deputy head of the Ukrainian president’s office, told Ukrainian television.

The strikes in the early hours of Tuesday hit Kyiv, Kharkiv in the east, Mykolaiv in the south and central regions of Dnipro and Zhytomyr, where officials said hospitals were running on backup generators.

Drones also bombarded Kyiv on Monday leaving five dead, officials said, in what the presidency described as an attack of desperation.

It was the second Monday in a row that Russia launched punitive strikes which military observers have said appear to be Moscow’s response to battlefield losses.

Zelensky described the repeated targeting of energy infrastructure as “another kind of Russian terrorist attacks”.

“Since October 10, 30 percent of Ukraine’s power stations have been destroyed, causing massive blackouts across the country,” the Ukrainian leader said on Twitter. 

– Hospitals on back-up power –

He said the attack meant that there was “no space left for negotiations with (President Vladimir) Putin’s regime”. 

Many towns and cities in the Zhytomyr region west of Kyiv and parts of the city of Dnipro in central Ukraine were without electricity, while power was restored to the southern city of Mykolaiv after strikes overnight. 

“Now the city is cut off from electricity and water supplies. Hospitals are working on backup power,” the mayor of Zhytomyr, Sergiy Sukhomlyn, said in a statement online.

In the northeast meanwhile, Ukraine’s second-largest city of Kharkiv some 40 kilometres (25 miles) from the border with Russia was hit with eight missiles, the regional governor said. 

In Kyiv, meanwhile, the DETK energy provider said its staff were “doing their best to restore electricity supply after the destruction of a critical infrastructure facility in Kyiv city.”

The mayor Vitali Klitschko said three people had been killed in Tuesday’s strikes.

Zelensky earlier said the fresh wave of nationwide strikes — which he said had damaged a residential buidling and flower market in Mykolaiv — was a Russian attempt to “terrorize and kill civilians.”

– Kremlin denies Iran drone use –

Following the wave of kamikaze drone attacks against Kyiv on Monday, Foreign Minister Dmytro Kuleba demanded EU sanctions on Iran, accusing Tehran of providing Russia with drones.

The Kremlin said Tuesday it has no knowledge of its army using Iranian drones in Ukraine.

“Russian tech is being used,” Kremlin spokesman Dmitry Peskov said, referring other questions to the defence ministry.

The defence ministry did however confirm strikes on energy facilities over the past 24 hours, saying it had used long-range and precision weapons.

Iran has denied exporting any weapons to either side, but the United States warned it would take action against companies and nations working with Tehran’s drone programme following the strikes in Kyiv.

Western officials however said it was “increasingly evident that Russia is pursuing a deliberate strategy of trying to destroy heating, electrical networks” and that Iranian drones were playing an “increasingly significant role” in the conflict.

Senior presidential aide Mykhaylo Podolyak meanwhile called for Russia to be excluded from the upcoming G20 summit.

With fighting ongoing across a sprawling frontline in east and southern Ukraine, its military said that over the past 24 hours it had shot down 38 Iranian-made Shahed-136 unmanned aerial vehicles.

Separately on Tuesday, Russian investigators said initial indications suggest that the crash of a military plane into a residential building near Ukraine was due to a technical malfunction.

Investigators said they were questioning the pilots of the Sukhoi Su-34, who managed to parachute out of the plane before it crashed on Monday evening into the nine-storey building, engulfing it in flames.

Goldman Sachs reported lower profits Tuesday on a big drop in revenues tied to corporate merger advising, but the firm still topped analyst expectations on strong trading revenues.

The big New York investment bank, which unveiled details of a reorganization plan, pointed to a “significant decline in industry-wide completed mergers and acquisitions,” as well as lower revenues from debt and equity underwriting.

But that drag was offset by elevated volatility in financial markets during the period, which led to “significantly higher” revenues in interest rate products and currencies and boosted performance in commodities and credit products.

The firm also scored higher net interest income tied to the benefits of higher Federal Reserve interest rates on its lending.

Profits were $3.0 billion, down 44 percent from the 2021 period, while revenues declined 12 percent to $12.0 billion.

The results come on the heels of similar reports from other large banks that have seen earnings drop, but still exceed expectations.

Goldman increased its provisions for credit losses compared with the year-ago period, citing growth in its consumer business, charge-offs for bad loans and the impact of “continued broad concerns on the macroeconomic outlook.”

The investment bank’s chief executive, David Solomon, told CNBC early Tuesday that businesses should be “cautious” in light of increased volatility.

“That doesn’t mean for sure that we have a really difficult economic scenario,” Solomon said. “But on the distribution of outcomes, there’s a good chance that we have a recession in the United States.”

Goldman plans to streamline its businesses to three operating segments from four, one of which is “platform solutions,” which will include consumer partnerships and its GreenSky acquisition of a fintech platform for home improvement consumer loans.

Shares rose 3.2 percen to $316.60 in pre-market trading.

UK Prime Minister Liz Truss has vowed to lead Britain’s Conservatives into the next election — due within two years — but after a disastrous six weeks in Downing Street many doubt she will remain leader long.

Here are the main contenders who could take over.

– Rishi Sunak – 

Truss easily beat the former chancellor of the exchequer in this summer’s Tory leadership contest, winning party members over with promises to slash taxes and regulations without curbing government spending.

Sunak, 42, repeatedly warned that her plans to fund the proposals through extra borrowing were reckless and could worsen decades-high inflation as well as market confidence in the UK.

Now that he has been proved entirely right — and Truss has scrapped her plans and replaced her previous finance minister with the Sunak-backing Jeremy Hunt — some think he is the best-placed Conservative MP to replace Truss.

Sunak garnered the support of the largest number of Tory lawmakers in the early rounds of the recent leadership contest and is thought to still enjoy considerable support within the parliamentary party.

A new YouGov poll on Tuesday found he has the best ratings of the touted alternatives to Truss — albeit still with an overall net favourability rating of -18.

But he is also now viewed as a divisive figure. Many party members, who get the final say on who leads the party, are unwilling to forgive him for his role in ousting ex-prime minister Boris Johnson.

– Boris Johnson – 

The former premier left office early last month after a revolt among his cabinet and Tory MPs, sparked by the resignation of Sunak and others from his faltering government following months of controversies.

Encouraged by several strong hints from Johnson himself, speculation has swirled ever since that he would attempt an eventual comeback — though few thought that could be feasible this quickly.

The ever-ebullient Brexit figurehead remains popular with a section of Conservative MPs and the party but his brand among the wider electorate was severely damaged by his scandal-tainted three-year tenure.

Tuesday’s YouGov poll showed the 58-year-old is far more popular than Truss. Yet around two-thirds of those asked had an unfavourable opinion of him.

Johnson has kept a low profile since resigning, giving a paid speech in the United States last week but no indications of his views on the current crises gripping the UK.

He was thought to favour Truss in the summer leadership contest — although his former top aide-turned-arch-critic Dominic Cummings argued that was because he expected her tenure to be disastrous and short-lived, paving the way for his return. 

– Jeremy Hunt – 

Truss’s new finance minister has been a candidate in the Tories’ past two leadership contests. He lost in the final run-off in 2019 to Johnson and finished in last place in the first ballot of MPs this year.

But his appointment to the second most powerful job in government has returned the former foreign secretary from the political wilderness to centre-stage, and his assured performance so far has bolstered his standing.

As Conservative MPs plot Truss’s ousting, some suggest Hunt — an ex-entrepreneur who garners most support from the centrist wing of the party — could emerge as a competent unity candidate.

But the 55-year-old would enjoy even less of a democratic mandate than most of the rival contenders, probably heightening calls for a general election which — based on current polling — the Tories would lose by a landslide.

– Penny Mordaunt – 

The current cabinet member was an early favourite to succeed Johnson and came within eight votes of beating Truss to the run-off against Sunak.

The former defence and trade minister, who is popular with the Tories’ grassroots, was a strong Brexit supporter and key figure in the 2016 “Leave” campaign.

But she faced criticism in the recent leadership race from Conservative colleagues, with some accusing her of being ineffective in previous government roles.

Mordaunt’s profile rose this week after she was sent out on Monday in place of Truss to answer an urgent question in parliament from the Labour opposition about the recent economic turmoil.

Despite being forced to explain that the prime minister was “not under a desk” — in response to accusations that Truss was in hiding — Mordaunt was seen to have coped well with a febrile House of Commons.

Reports on Tuesday said a senior ally of the 49-year-old held private talks with Sunak last week about forming a unity ticket but the ex-finance minister rebuffed the offer because he does not want to be the junior partner.

Five years after lighting the fuse of MeToo, US actor Alyssa Milano says she is delighted with the way women are “refusing to be silenced”. 

“A lot has changed,” Milano told AFP, since sending her famous tweet on October 15, 2017 asking women to share their stories of sexual harassment under the hashtag #MeToo.

The 49-year-old, who grew up in public as the star of “Who’s the Boss?” and “Charmed”, was herself a victim of sexual assault during a shoot in the 1990s.

“The most obvious thing is that we are refusing to be silenced and really coming together,” she said in Cannes, where she was taking part in the Mipcom TV festival.

She pointed to new legislation against gender discrimination and harassment across the United States, as well as the introduction of “intimacy coordinators” to assist during sex scenes in movies. 

“It made no sense to me how, if there was an animal on the set, we would have to have someone from the humane society to oversee the health and welfare of the animal, and yet the actors are in such vulnerable situations not only with love scenes, but with all sorts of emotional scenes,” Milano said. 

Recent moves to ban abortions in the United States were a reaction against the empowerment of women triggered by MeToo, she added.

“Equality and equity are terrifying to a lot of white men in power,” she said. “Taking away our body autonomy is the most extreme case of trying to impede our evolution and our growth and our drive for a more equitable future.”

Milano’s activism did not start with MeToo, however. 

When “Who’s the Boss?” was the number one show in the United States, a 15-year-old Milano received a request from none other than Elton John. 

The singer asked her to meet a young fan, Ryan White, who had been expelled from his school after contracting HIV. 

“He asked me if I could go on TV and kiss him to prove that you couldn’t get HIV/AIDS through casual contact, and I said yes,” she said on a panel at Mipcom.  

“That was the moment that my life completely changed because I realised what it meant to be famous, and to do good with that voice,” she said.