Today's business and finance round up 30th July 2021

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30th July 2021

Good morning Attention all Android phone users. Google could owe you £50 in damages if a new legal claim over Android app costs is successful. The claim has been filed on behalf of Brits who have downloaded an app via the Google Play Store in the past six years.

Today's stories

• £7bn investor payout bonanza

• US economy back to pre-pandemic level

Yesterday's market moves

FTSE 100  +0.9% 7,078 FTSE 250 +0.2% 23,050

Markets continued their winning streak as investors waded through an extremely busy day of corporate earnings alongside the Federal Reserve’s decision to maintain its accommodative monetary policy approach, at least for now.

INVESTORS£7bn investor payout bonanza

What’s going on?Yesterday six FTSE 100 companies announced increases in the amount of dividends and share buybacks to shareholders, totalling £7bn.

Why is this important?

This week many companies reported bumper results for the first six months of the year as they bounce back from the pandemic.As a consequence shareholders are being rewarded for sticking with those companies through a tough 2020.Yesterday the cash was splashed in a wide range of sectors:

• Miner Anglo American was boosted by soaring demand for copper and iron ore - £2.9bn in dividends and share buybacks.

• Oil giant Shell benefited from the recovery in oil prices - £1.4bn share buyback.

• Drinks maker Diageo was helped by the reopening of the hospitality sector - £1bn dividend.

• Pharma giant AstraZeneca saw continued growth in its Covid-19 vaccine sales - £720m dividend.

• Defence firm BAE Systems was largely unimpacted by the pandemic as governments stayed committed to military spend - £500m share buyback plan and £290m dividend.

• Lloyds Bank reported that the amount of bad debts as a result of the pandemic were less than originally feared - £473m dividend

It’s been a great week for FTSE 100 investors more widely. On Wednesday miner Rio Tinto announced its highest ever dividend of £6.5bn. On the same day Barclays confirmed a £340m dividend and a £500m share buyback programme. 

TakeawayLast year was the worst for UK dividends in a decade with companies cutting back on shareholder payments to preserve cash in the pandemic. Now that they have lapped the lows of last year and economies have reopened, companies are feeling more confident and are compensating investors for their patience.

ECONOMYUS economy back to pre-pandemic level

The world’s biggest economy has officially bounced back to where it was pre-Covid after GDP - a measure of all goods and services produced - grew 6.5% between April and May.This is a key milestone and is an impressively quick recovery compared to the 2008-09 recession when it took three and a half years for the US economy to reach its pre-crisis level.The improvement has been credited to the widespread coronavirus vaccinations and a nearly full reopening of the economy. Consumer spending, the main engine of the US GDP, soared 11.8% higher in the period.People were eager to get back to leisure activities in shops and restaurants with the personal savings rate halving to $2 trillion from $4 trillion in the previous period.However analysts had expected GDP growth to be even stronger than 6.5% - closer to 8.5% - over the past few months. Constraints in the supply chain meant companies couldn’t stock up on goods as quickly as they wanted which limited economic growth.Going forward the good news is, the economy appears to have plenty of staying power.The US government has been cautious about reimposing restrictions as the delta variant causes Covid cases to rise again in some states. Businesses are also investing heavily to prepare for a post-pandemic world and consumers still have lots of savings to tap into.

Stat of the day

More than four billion Covid-19 vaccine doses have been given globally eight months after the vaccination drive started

Other stories to keep you in the loop

• Shares in BT slide 8% as trouble in the telecom giant's global business service arm hits revenues

• Shareholder dissent grows over Morrison's takeover bid

• Facebook beats earnings expectations, but warns of significant growth slowdown

• Uber slides over reports SoftBank selling 45 million shares

• Trading app Robinhood off to a quiet start in first day on stock market

• Pets at Home keeps lockdown puppy boom momentum and hoists revenue

• Google and Facebook mandate vaccines for all employees returning to offices

• Netflix fires three staff after 'criticising co-workers' in work Slack chat

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