Good morning. Today we're talking about the falling UK stock market, Germany in a recession and Nvidia’s AI win.
UK shares slide on US fears
The FTSE 100 fell for the fifth day in a row yesterday as the risk of a US default on its debts draws ever closer. It comes after major credit agency Fitch signalled it could downgrade the US credit rating as a deal to raise the country’s borrowing limit continues to elude politicians. The blue-chip index, which is affected by news across the pond, sank a further 0.7% to 7,570.87, the lowest in two months. The US debt issue has been weighing heavy on global sentiment amid concerns the US government is running out of money to pay its bills.
Europe’s largest economy officially entered a recession, with its economy contracting 0.3% in the first three months of the year after shrinking 0.5% in the final quarter of last year. The government said the country’s previous high dependency on Russia for energy supply led to the recession. Germany has been under pressure in the wake of Russia’s invasion of Ukraine and the subsequent decision of European leaders to cut ties with Moscow. The toll of high inflation meant German consumers cut back on spending. This week the International Monetary Fund predicted that Germany will be the weakest of the world's advanced economies, shrinking 0.1% this year.
Chipmaker Nvidia announced a 50% increase to its quarterly sales expectations thanks to soaring demand for its AI chips. The news sent shares in the US company, which have already more than doubled since the start of the year, up a further 27%. The company has added more than $220bn to its market value this year - that’s more that the value of McDonald’s. Nvidia AI chips, which it also sells in systems designed for data centres, cost roughly $10,000 each, though its latest and most powerful version sells for far more.
Falling prices: The energy price cap on household bills has fallen by 17% to an annual average of £2,074.
Rising pay: Over 24,500 Lidl staff are to receive a third pay rise over the course of 12 months.
Stepping down: Anne Boden is stepping down as chief executive of Starling Bank, nine years after founding the company.
Coming together: Asda is finalising a deal to buy its sister business EG Group’s UK and Irish petrol forecourts in a deal worth £3bn, allowing the supermarket to step up its shift into convenience retailing.
Number Of The Day
Net immigration to the UK last year, a record high. The figure – roughly equivalent to a city the size of Glasgow – has been boosted by arrivals from outside the EU, and influxes of refugees from Ukraine and Hong Kong.
Not a subscriber? Sign up for free
Want to reach an audience of UK business leaders, young professionals and 1,000+ other smart, ambitious people? Reply to this email and we'll be in touch!24t6