Tesla falls under $1 trillion valuation as shares keep sliding
Giulia Bottaro
·38-min read
Tesla chief Elon Musk
Tesla has lost its $1 trillion valuation for the first time since October amid a new investigation by US regulators.
The electric vehicle maker's shares have fallen 23pc since its record closing high of $1,229 on Nov 4.
The Securities and Exchange Commission has opened an investigation over whistleblower claims on solar panel defects, Reuters reported.
Tesla allegedly failed to properly notify its shareholders and the public of fire risks associated with solar panels over several years.
It follows a complaint filed in 2019 by Steven Henkes, a former solar field quality manager. Mr Henkes sued the company after he was fired last year, claiming that the dismissal was in retaliation for raising safety concerns.
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Tesla is also being investigated over accidents involving its driver assistance systems. Last month, it recalled nearly 12,000 US vehicles because of a communication error that could trigger a false collision warning or unexpected automatic emergency brake.
The stock had already been in decline amid market volatility. Traders have been spooked by the spread of the omicron variant and last week’s hawkish message from Federal Reserve chairman Jerome Powell, hitting Wall Street darlings such as Tesla.
Wedbush analyst Daniel Ives told Bloomberg: “The solar business has been a disaster for the Tesla story and the Street continues to be frustrated by this business segment.”
Investor sentiment has also been hit by chief executive Elon Musk declaring he would cut his holding by 10pc. He has so far offloaded stock worth $10bn, having sold 10m shares, though he has another 17m left before reaching the target.
Despite the latest weakness, Tesla is up by 39pc in the year to date, beating a 22pc rise in the S&P 500 index. The stock performed well in October after strong third-quarter results.
06:28 PM
Wrapping up
That's all from us today, thank you for reading! Here are some of today's stories from the business desk:
BuzzFeed posts underwhelming performance in first day on Wall Street
Digital media company BuzzFeed slid by over a tenth on its first day of trading.
The HuffPost and Complex Networks owner floated by merging with a blank-cheque company, but ended up with only $16m of the original $288m it hoped to raise after a spate of investors pulled out.
It is the first online publisher to pursue a listing and some see it as a sign of how other digital media companies could perform on the public market.
05:36 PM
FTSE 100 posts best session in months
The FTSE 100 has concluded its best session in over four months as defensive sectors and energy shares led gains, while Deliveroo fell on concerns about a European Union ruling on gig workers.
London's leading index closed 1.7pc higher at 7,232.
Defensive sectors such as consumer staples and healthcare tend to be less sensitive to the economic climate than some other groups. British American Tobacco, Reckitt Benckiser and Unilever gained nearly 2pc and were among the biggest boosts.
"Reports of the Omicron symptoms being less severe are boosting risk appetite but it's too soon to get carried away. For one, we've seen this repeatedly since the initial news broke a little over a week ago. Markets have been very headline-driven and this is just the latest rally on the back of some positive reports," commented Craig Erlam at OANDA.
"While this may be the first in a slew of positive data around the new variant, it could also be the anomaly and what follows could explain why world leaders and various agencies have been so anxious. Let's hope for the former but I expect extreme caution to remain until the data gives us cause for more optimism."
05:10 PM
Tesla competitor Lucid faces scrutiny into $24bn SPAC deal
Electric vehicle maker Lucid has received a subpoena from the US securities regulator relating to its acquisition by special purpose acquisition company (SPAC) Churchill Capital IV.
Shares in the Tesla competitor fell as much as 19.5pc as it joined a growing list of companies that have come under scrutiny for their merger with shell entities.
The group went public through a blank-cheque merger that valued it at $24bn (£17bn), one of the biggest deals of its kind.
Market listing via SPAC route has become popular among electric-vehicle (EV) makers that have a vision but no prototype in an already capital intensive industry.
Lucid spac deal $24bn shares - Lucid Motors
04:49 PM
Former LSE director to get millions after stock exchange buys his business for £274m
The London Stock Exchange Group (LSEG) has agreed to buy Quantile Group for up to £274m.
The deal is expected to be particularly lucrative for Stephen O’Connor, Quantile's chairman and a City veteran who sat on LSEG’s board for nearly a decade until August.
My colleague Simon Foy has more:
Quantile was co-founded by Mr O’Connor in 2015 and helps banks and other financial institutions manage risk in the trading of over-the-counter derivatives contracts.
Derivatives are financial instruments that underpin banking products, such as fixed rate mortgages.
Mr O’Connor owns between 25pc and 50pc of Quantile Group Limited’s shares, according to Companies House filings, meaning he will bag a windfall worth tens of millions of pounds.
LSEG said the deal was being treated as a related party transaction due to Mr O’Connor’s “previous and continuing appointments”. He remains a director of London Stock Exchange plc, a subsidiary of the parent company, and spent the majority of his career at Morgan Stanley.
Shipping services giant Clarkson said results for the year ending 31 Dec are expected to beat current market expectations.
Profits are forecast to come in at £65m, up from £45m in 2020.
The group said trading has been strong across all divisions, with the financial and broking segment performing particularly well. Shares advanced nearly 5pc.
clarkson shipping results forecasts - Sam Wolfe /Bloomberg
Good afternoon, this is Giulia Bottaro taking over from my colleague Matt Oliver.
Soft drinks group AG Barr is expanding into plant-based milk after buying a 60pc stake in Moma Foods, an oat milk and porridge brand.
The Irn Bru and Rubicon maker has also agreed plans to potentially take full ownership of Moma within the next three years.
Moma was founded in 2006 in the porridge market and is now the UK’s third largest oat milk brand.
Shares in AG Barr rose 1.3pc to £5.27.
03:33 PM
Trump social media venture predicts 81m users by 2026
The blank check firm taking Donald Trump's social media venture public has predicted it will have 40million subscribers by 2026.
Digital World Acquisition Corp, which announced a merger with the former US president's media business in October, said it also expected to gain 81million users overall in regulatory filings.
Mr Trump has vowed his business will “stand up to the tyranny of Big Tech” after he was banned from Twitter for stoking false claims of election rigging.
He had previously garnered 89million followers on Twitter but was banned from the platform over posts that were alleged to have risked “incitement of violence”.
03:20 PM
Sainsbury's asks staff to delay Christmas parties to 'keep everyone safe'
Sainsbury's has asked staff to delay Christmas parties - REUTERS/Hannah McKay
Sainsbury's has asked staff to delay their Christmas parties until the New Year.
The supermarket giant said the decision aimed to help "keep everyone safe", despite assurances from ministers that parties can still go ahead.
Boris Johnson and Sajid Javid, the Health Secretary, have both said there is no need for firms to cancel their festive gatherings.
But Simon Roberts, chief executive of Sainsbury's, said the "delicate" decision was intended to "make Christmas safe" for staff and customers.
He told the BBC:
We are doing everything we can to protect Christmas for our colleagues and our customers and keep everyone safe. As government guidance on face coverings changed on Tuesday, we have gone above and beyond to put safety first and have asked all of our colleagues to wear a face covering both on the shop floor and in all colleague areas.
03:10 PM
West End retailers accuse the Government of scaring away shoppers
Shoppers on Regent Street, London - REUTERS/Henry Nicholls
West End retailers have accused the Government of scaring spenders away from Europe’s busiest shopping district during the crucial Christmas season, my colleague Russell Lynch reports.
The New West End Company, which represents retailers in Bond Street, Oxford Street and Regent Street, said visitor numbers were flat across the district in the first full week after Boris Johnson imposed restrictions to combat the spread of the omicron Covid variant.
Masks are now compulsory in stores and on public transport while health officials and ministers review the impact of the new strain, ahead of a decision on further measures next week.
While Saturday’s footfall rose 23pc on the previous week, visitor numbers overall across the previous seven days remained 30pc below pre-pandemic levels, the organisation said.
It added:
Despite the resilience shown by high street retailers in enticing customers back to their stores, footfall remains lower than pre-pandemic levels. The impact of Government messaging around Omicron, combined with the latest round of tube strikes, may have contributed to flat footfall figures this week.
The NWEC hailed “strong signs” that visitor numbers will rise again this week but fewer than three weeks remain until Christmas for retailers to salvage something from a Covid-disrupted year in the traditional “golden quarter”.
Research firm Springboard’s latest figures showed a marginal 0.7pc rise in weekly visits across UK shopping centres, retail parks and high streets although footfall overall remains 17pc below 2019 before the pandemic.
02:49 PM
Wall Street opens on a positive note, but tech-heavy Nasdaq plunges
Wall Street - AP/Mary Altaffer
The tech-heavy Nasdaq has plunged by 1pc after US markets opened.
Tech giant Nvidia plunged by more than 7pc, following an announcement on Friday that American regulators would oppose its takeover of British chip designer Arm.
However, the Dow Jones industrial average leapt more than 1.2pc higher and the S&P 500 0.6pc higher as Wall Street investors bet on an economic recovery - despite concerns about the omicron Covid variant.
Energy, industrial firms and airlines are among the stocks doing well.
Tom Essaye, author of the Sevens Report, told CNBC that investors were ditching expensive tech stocks and backing firms that were better-positioned for the economic recovery and higher interest rates:
With the prospect of rates rising and this new Fed paradigm, we are seeing investors rotate out of tech and into sectors with better exposure to higher growth.
Tech pulled the entire market lower. Essentially, we are seeing a sort of Taper Tantrum 2.0 as markets react to a more hawkish Fed and rotate into sectors with more positive exposure to rising rates.
02:37 PM
Former WH Smith boss pays tribute to City stalwart John Barton
Former WH Smith and SSP boss Kate Swann has paid tribute to City grandee John Barton, who has died aged 77.
Barton, who was most recently chairman of fashion house Ted Baker, previously sat on the boards of WH Smith and SSP.
Swann said:
John gave me my first job as chief executive and was quite simply the best chair and [senior independent director] you could possibly have had - he had insane skills of knowing what to say when, he was insightful, supportive, never flinched when difficult discussions had to be had, and people loved working with him.
I would walk over hot coals for one more lunch where he shared his wisdom. He was the best of the best, and so unassuming and willing to give of his time to help people grow and develop.
Having John on your board was like having a safety net as a trapeze artist, you always knew with John that he would be there, rock solid when you needed him. John was the wisest business person I know, he is quite simply irreplaceable for me and for many who worked with him.
02:26 PM
Chinese central bank releases cash in bid to reassure markets over Evergrande
As property giant Evergrande teeters on the brink, China's central bank has released extra money for lending in a bid to reassure the public.
The People's Bank of China freed up 1.2 trillion yuan (£142bn) for banks to lend on Monday by reducing the amount of money they must hold as reserves.
It means they will have more firepower at their disposal if Evergrande collapses under the weight of its $310bn debt mountain.
The central bank's announcement made no mention of Evergrande but the move was expected after regulators promised to keep lending markets functioning following the company's warning Friday it might run out of cash to pay debts.
02:16 PM
US tech giants control more than half of global advertising market
Google, Facebook and Amazon control more than half of the global ad market outside China - DENIS CHARLET/AFP/Getty Images
Google, Facebook and Amazon collectively control more than half of the global advertising market outside China, according to a new report.
Research by agency GroupM, which is owned by WPP, found the three American tech giants had more than doubled their share of ad sales in just five years.
It comes at a time when regulators are taking a tougher approach to the firms.
Earlier this year, the Competition and Markets Authority criticised Facebook and Google's "duopoly" of the UK's £14bn digital advertising market after finding that the pair had a combined share of about 80pc.
GroupM said the value of the digital ad market globally is expected to surge 30.5pc further this year, to around $491bn (£370bn).
01:42 PM
Sterling strengthens following Bank of England rate-setter's speech
Sterling has further strengthened this afternoon after Bank of England Deputy Governor Ben Broadbent warned the tight labour market will add fuel to inflation, stoking expectations of an interest rate hike.
After Friday's slump, sterling strengthened 0.3pc versus the dollar, to $1.3269, remaining not far from a 2021 low of $1.3194 touched last week.
Versus the euro, the pound was 0.4pc higher at 85.10 pence, after touching a three-week low of 85.52 pence on Sunday.
Sterling strengthened after Broadbent said Britain's tight labour market was likely to be a more persistent source of inflation.
He said inflation might "comfortably exceed" 5pc in April next year and that transitory inflation should be understood as referring to the next 18 to 24 months.
01:38 PM
Four in five City workers back at their desks in time for party season
Almost four in five City workers have returned to the office in time for Christmas party season, new data shows.
Nearly 80pc were back at their desks in the Square Mile on Tuesday and Thursday last week, according to Google, which tracks the locations of its users.
That was the biggest figure at any time since the Government imposed a lockdown in March last year as Covid-19 ripped through the country.
Christmas parties may have been encouraging more people to come back, with bars and restaurants thronged with revelers midweek.
But some firms are starting to cancel gatherings, or scale back their party plans, in the face of the new variant.
01:22 PM
US open: Tech-heavy Nasdaq expected to fall
A trader on the floor of the NYSE - REUTERS/Brendan McDermid
The tech-heavy Nasdaq index in New York is expected to fall when the opening bell rings later.
Trading across the pond is due to kick off at 9.30am local time (2.30pm GMT), with futures pointing to a 0.35pc drop for the Nasdaq.
Peers including Qualcomm and Advanced Micro Devices are also expected to fall, alongside heavyweight stocks such as Microsoft, Google-owner Alphabet, Facebook owner Meta Platforms, Amazon and Tesla.
The Dow Jones Industrial Average is set to rise 0.57pc, however, and the S&P 500 is set to rise 0.23pc.
01:11 PM
Blow to Uber as judges say business model must change
Uber boss Dara Khosrowshahi - REUTERS/Anushree Fadnavis
Uber has suffered a fresh blow after a British court rejected calls to declare its gig economy business model as lawful.
The taxi app firm had argued that it only acts as an "agent" between drivers and passengers, meaning drivers are liable if things go wrong.
But the High Court ruled that it was unlawful for a private hire vehicle operator to act as such an agent.
It means that Uber will now have to make contracts directly with passengers and that drivers will be considered its employees - and echoes a Supreme Court ruling in February which also ruled drivers were not self-employed.
In the latest ruling today, Mr Justice Peter Fraser and Lord Justice Stephen Males said that "to operate lawfully, an operator must undertake a contractual obligation to passengers".
12:48 PM
Franco Manca breaks sales records
pizza
The owner of the Franco Manca pizza chain is doing better than expected as many sites break sales records.
Fulham Shore says revenue for the six months to September 30 doubled to almost £40m compared with the same period in 2020.
David Page, the chairman, says the performance is ahead of management's expectations: "This augurs well for the group's full-year performance, which we expect to be now ahead of market expectations, and our UK-wide expansion plans."
During the period it also announced plans for Franco Manca's first outlets abroad, with at least six sites in Greece over the next three years.
Shares in Fulham Shore rose 4.5pc, with the company valued at £111m.
12:34 PM
£85,000 savings protection limit to stay
The City watchdog says there should be no increase in the amount of money that customers can get back if their bank, building society or other investment company collapses.
The Financial Conduct Authority believes the £85,000 limit is enough to cover the vast majority of cases and does not need to change.
However, it suggested the level should be reviewed once every three years to ensure that it keeps pace and can be adjusted to account for inflation.
The FCA says: "Generally, we consider the current levels, which were only recently changed, represent an appropriate level of consumer protection in that they are at an adequate level to cover a reasonable proportion of customers' claims."
It is consulting on potential changes to the way the Financial Services Compensation Scheme (FSCS) works following a series of high-profile failures, some of which the scheme has not been able to fully compensate.
12:02 PM
Blue Monday: Bitcoin's bumpy ride
Here's a graph showing the recent performance of bitcoin:
12:00 PM
Bank of England deputy governor: Inflation to 'comfortably exceed' 5pc
Ben Broadbent bank of england - Julian Simmonds
Inflation will “comfortably exceed” 5pc in the spring as energy prices and supply chain pressures feed through, a key Bank of England official has warned, my colleague Louis Ashworth reports.
The deputy governor, Ben Broadbent, said “chances are” the consumer prices gauge will clear the level, far above the 2pc target, after the Ofgem price cap is next adjusted in April.
Speaking at Leeds University, Mr Broadbent, who is regarded as a swing vote on the Monetary Policy Committee, said the path of the economy is “extremely uncertain”.
But he did not indicate how he intends to vote at the policy-setting committee’s next meeting, on December 16.
Here are a few excerpts from his remarks:
Annual CPI inflation rose to over 4pc in October, with the jump in domestic energy bills the single most important contributor to the change on the month. The aggregate rate of inflation is likely to rise further over the next few months and the chances are that it will comfortably exceed 5pc when the Ofgem cap on retail energy prices is next adjusted, in April. ...
It would be wrong to say this inflation is only about energy. It’s broader than that. What we can say, however, is that most of it – thus far, at least – has been concentrated in tradable goods in general (non-energy as well as energy), much less of it in the non-traded parts of the economy.
11:53 AM
Bitcoin's blue monday
Bitcoin has tumbled by almost 5pc after a bruising weekend in which it lost one fifth of its value.
The world's largest cryptocurrency is trading at around $36,400 (£27,400) per coin, down 4.1pc compared to a day ago.
That is down from a peak of $51,000 last month.
Traders said the weekend fall was due to a move away from riskier assets in traditional markets amid worries about the Omicron variant of the coronavirus.
Matt Dibb at Stackfunds, a Singapore-based crypto fund distributor, told Reuters:
Our expectation is the rest of Q4 will be a hard month; we aren't seeing the strength in bitcoin that we generally see after one of these crushing days.
11:38 AM
Euro banknotes to get 'more relatable' redesign
Christine Lagarde, president of the European Central Bank, has ordered a redesign of euro banknotes to make them “more relatable to Europeans of all ages and backgrounds”.
The French former head of the International Monetary Fund has commissioned experts in fields from art and design to physics and archaeology to come up with fresh ideas, which will be chosen in 2024.
Current notes feature exciting pictures of, ahem... windows, doorways and bridges.
🧵We’re planning to redesign euro banknotes! Almost twenty years have passed since euro banknotes entered into circulation. We will soon launch the redesign process and expect to select new banknote designs by 2024. Press release https://t.co/a0FD2foa01 1/3 pic.twitter.com/yMsCkumPWD
Growth in Britain's construction industry hit its strongest pace in four months in November after a slowdown caused by global supply chain problems and labour shortages.
At the same time, soaring inflation pressures abated, the latest IHS Markit/CIPS UK Construction Purchasing Managers' Index (PMI) showed.
The index rose to 55.5 last month from 54.6 in October. Any reading above 50 indicates growth.
Commercial building led the way as a recovery in the economy led to new projects and infrastructure work also helped to offset a slight slowdown in house-building.
More good news on the UK economy (and another sector where #BrexitBritain is outperforming Germany and France): the #construction PMI climbed to 55.5 in November, from 54.6 in October, with supplier delays and price pressures easing...
Former Today programme editor to join Channel 4 board amid privatisation battle
Former Evening Standard and BBC Today Programme editor Sarah Sands - Rick Findler/PA Wire
The former editor of Radio 4's Today programme has been recruited to the board of Channel 4 as the broadcaster battles privatisation, my colleague Ben Woods reports.
Sarah Sands, 60, will join as a non-executive director of the Bake Off broadcaster after leaving the BBC's flagship current affairs radio show in September last year, sources have said.
The former Evening Standard editor oversaw a period when the Today programme was at war with the Government after Number 10 banned ministers from appearing on the show.
Deliveroo crashes to record lows amid fears of EU crackdown
Shares in Deliveroo have crashed to a record low amid fears of an EU crackdown on the gig economy.
The firm's stock tumbled by as much as 9.6pc following reports the European Commission is set to propose strict new labour rules that would affect how riders are paid.
Shares in rival Just Eat also fell by as much as 6.1pc this morning, with German-listed Delivery Hero falling as well.
In a note to clients, analysts at Citi warned the new regulation could see gig economy workers treated as employees rather than contractors.
This could have a "potentially significant" impact on Deliveroo's earnings, they added.
10:49 AM
Turkish minister: We are not asking Qatar for currency help
Turkey is not asking Qatar to send any money to help a meltdown in the lira currency, the country's foreign minister has insisted.
Speaking at a news conference in Doha, Mevlut Cavusoglu claimed his visit was solely about improving ties.
"We didn't come to Qatar to ask them to send any specific (amount of) money", he told reporters. "We are here only to discuss improving our ties."
The lira has plunged by about 30pc in the past month in a selloff driven by aggressive interest rate cuts championed by Turkish president Tayyip Erdogan.
Tesco facing Christmas strikes amid row over workers' pay
Tesco strike Unite - Nick Ansell/PA Wire
Tesco is facing the threat of strikes this Christmas following a row with unions over workers' pay.
Unite said more than 1,200 of its members are poised to strike in the coming weeks and claimed that the logistics problems it will cause could result in more empty spaces on shelves.
The workers are based at Tesco's depots in Didcot and Doncaster, as well as Antrim and Belfast in Northern Ireland.
Tesco has offered them a 4pc pay rise but Unite insists this is "well below" Britain's current Retail Prices Index (RPI) inflation rate of 6pc.
In a statement, the supermarket giant has stuck by its guns, however:
Our distribution colleagues have worked tirelessly through the pandemic in order to keep products moving for customers.
The pay offer we have made is a fair recognition of this.
10:34 AM
November's new car sales remain below pre-Covid levels
Another graph here which shows the November comparisons for the past decade:
10:18 AM
How do 2021's new car registrations compare to previous years?
Although new car registrations in November rose by 1.7pc, the Society of Motor Manufacturers and Traders (SMMT) says they are still about a third below pre-pandemic levels.
Overall, registrations in both 2021 and 2020 have been well below previous years, owing to the pandemic and subsequent supply chain snarl-ups.
You can see the difference clearly in this graph that my colleague Joe Curtis has pulled together:
10:13 AM
Lorry driver shortage still acute but signs of green shoots
Britain is still suffering from an acute shortage of lorry drivers but the rate at which people are leaving the sector has slowed, according to an industry group.
Logistics UK, which represents freight and haulage businesses, estimates the country lacks around 120,000 drivers, shortages that have disrupted supply chains and left gaps on supermarket shelves.
That reflects the tens of thousands who have returned to the European Union following Brexit and the pandemic, as well as the cancellation of 40,000 truck driver tests during repeated lockdowns.
Logistics UK said the number of HGV drivers fell by 44,000 in the third quarter of 2021 compared with the same time in 2019, leaving the workforce 14pc smaller than it was at the outset of the pandemic.
But that represented an improvement on the fall of 72,000, or 23.4pc, in the second quarter.
Elizabeth de Jong, the group's director of policy, said:
It is still at an acute level but we are beginning to see those little green shoots that we couldn't see before.
10:06 AM
Sterling up against dollar as traders wait to Bank rate setter's speech
Sterling has edged higher against the dollar as investors wait for a speech on monetary policy and economic growth from Bank of England Deputy Governor Ben Broadbent.
The pound rose 0.2pc to $1.3262, although this was not far from a 2021 low of $1.3194 touched last week.
Markets now broadly expect the Bank's monetary policy committee (MPC) to keep interest rates unchanged at a December 16 policy meeting, as the omicron Covid variant spreads across the world.
But Broadbent's speech, at 11.30am in Leeds University, will still be watched closely for clues, says Jeremy Stretch, head of G10 foreign currency strategy at CIBC:
Should he validate the case for a hike, Omicron risks notwithstanding, we would regard there to be scope for a modest GBP bounce.
09:48 AM
Car registration figures "reassuring" despite supply chain woes
Richard Peberdy, KPMG's UK head of automotive, claims the car registration figures from the SMMT are actually reassuring, even though the impact of supply chain problems is being felt:
Supply shortages continue to limit the amount of cars produced, and as a consequence it’s no surprise to still see lower numbers of car registrations when compared to pre pandemic.
Demand for what’s available, both new and old, continues to outpace car supply however. That’s reassuring for the industry, despite the frustration and financial challenge of not being able to increase supply in order to meet demand.
Electric vehicle adoption is also a huge reassurance during these times. It’s a key reason why our recently published annual survey of global automotive executives shows that the majority are optimistic about the coming years.
09:46 AM
Hopes for "mild" omicron lift Footsie
Russ Mould, investment director at AJ Bell, says hopes that the omicron coronavirus variant will turn out to be mild are driving the FTSE 100 higher this morning.
He says this is down to recent comments by officials in the US and South Africa, but warns:
It doesn’t feel like we are out of the woods yet, particularly as, even if this definitely proves to be the case, increased transmissibility could mean a wave of hospitalisations from a lower proportion of people getting really sick.
It still feels like we’re in the guesswork stage of working out what the impact of Omicron will be so it would be naïve to rule out further volatility as markets attempt to work out exactly what’s going on.
09:40 AM
New car registrations down, but demand for electric surges
SMMT car registrations electric - Getty Images
New car registrations remained well below pre-pandemic levels in November but demand for electric vehicles continued to grow, according to the Society of Motor Manufacturers and Traders (SMMT).
Some 115,700 new cars were registered last month, the group says.
This was 1.7pc more than a year ago, but 31.3pc below the pre-Covid five-year average.
However, the green technology revolution continued to reshape the market, with the proportion of electric vehicle registrations more than doubling from 9.1pc to 18.8pc of the total.
Mike Hawes, the SMMT's chief executive, warned the "underlying weakness" was being caused by supply chain shortages, which are holding back production.
Demand is there, with a slew of new, increasingly electrified, models launched but the global shortage of semiconductors continues to bedevil production and therefore new car registrations. The industry is working flat out to overcome these issues and fulfil orders, but disruption is likely to last into next year, compounding the need for customers to place orders early.
The continued acceleration of electrified vehicle registrations is good for the industry, the consumer and the environment but, with the pace of public charging infrastructure struggling to keep up, we need swift action and binding public charger targets so that everyone can be part of the electric vehicle revolution, irrespective of where they live.
09:29 AM
"Cold shower" for German manufacturers
Carsten Brzeski, global head of macro at ING, says of the collapse in German factory orders:
Today’s industrial orders data is a cold shower for German industry. When the global economy came out of the 2020/21 winter lockdown, German industrial orders jumped to unprecedented levels, growing on average by more than 2pc per month.
At the end of the summer, however, orders collapsed and dropped by more than 12pc between July and October. The sharp collapse over the summer is increasingly leaving its mark on industry - a reflection perhaps of ongoing supply chain frictions and companies simply delaying new orders or, worse, cancelling orders, knowing that delivery times are long anyway.
For the time being, order books are still well filled and every improvement in supply chains should lead to an immediate boost in industrial production. However, the summer collapse of industrial orders does not bode well for the medium-term outlook for industrial production.
09:27 AM
Germany factory orders collapse
German factory orders tumbled by 6.9pc in October amid falling foreign demand.
The monthly drop, which was worse than economists had predicted, came as supply chain problems continued to plague industry.
Destatis, the federal statistics office, said it followed a small 1.8pc rise in September.
One analyst said the bleak numbers were a "cold shower" for German manufacturers.
Good Morning from #Germany where factory orders collapse as foreign demand plummets. Orders fell 6.9% in Oct following 1.3% increase prev mth. Germany’s industry-focused economy being hit by squeeze on material & transportation, rising inflationary pressures and new Covid wave. pic.twitter.com/GJN2gvFwbR
Chinese tech index crashes to record low as Beijing meddles
China's flagship measure of tech stocks has tumbled to its lowest level since launching last year as concerns mount over how much more pain Beijing is willing to inflict on the sector, Bloomberg reports:
The Hang Seng Tech Index closed down 3.3pc, its biggest decline in nearly two months, to the lowest level since before its July 2020 inception. Alibaba and JD.com were the biggest losers, each sinking at least 4.9pc. Both companies are also traded in the U.S.
The decline tracks Friday’s 9.1pc plunge in the Nasdaq Golden Dragon China Index, which was the biggest decline since 2008, on worries that Didi Global Inc.’s delisting would put pressure on other Chinese firms to follow suit.
“The selloffs in the dual-listed stocks in both Hong Kong and the U.S. will continue given the US regulation scrutiny,” said Castor Pang, head of research at Core Pacific Yamaichi. “It could be troublesome for them to submit accounting records to the U.S. government.”
09:05 AM
Ted Baker chairman dies aged 77
John Barton, Ted Baker, Next, Easyjet - Chris Ratcliffe/Bloomberg
The chairman of Ted Baker, who also once led the boards of easyJet and Next, has died.
John Barton passed away suddenly, the fashion house announced this morning.
John was a source of great wisdom for me and for so many of us at Ted Baker and we will hugely miss his support and guidance.
Our thoughts and deepest sympathies are with his wife, Anne, and their family.
Helena Feltham, the senior independent director, has been appointed interim chairman with immediate effect.
08:48 AM
CBI warns of "significant headwinds" threatening recovery from Covid
Tony Danker CBI - Jonathan Brady/PA Wire
The Confederation of British Industry (CBI) has warned "significant headwinds" are threatening the economic recovery.
In a new economic forecast, Britain's biggest business lobbying group has cut its prediction for GDP growth in 2021 from 8.2pc to 6.9pc.
It has downgraded the figure for 2022 from 6.1pc to 5.1pc, pointing to "short-term headwinds" including inflation and labour shortages.
Tony Danker, the CBI's director general, is calling for more "pro-investment and pro-innovation regulation", as well as a "competitive" tax regime:
Significant headwinds and rising costs of living threaten the extent of recovery and prospects for economic success.
The UK’s New Year resolution must be to give firms the confidence to go for growth. We should be raising our sights on the economy’s potential and seizing the moment.
08:27 AM
Omicron leaves markets "beset by uncertainty"
Richard Hunter, head of markets at Interactive Investor, has warned that markets "remain beset by uncertainty as the spread of the Omicron variant threatens to derail the general economic recovery":
He warns that traders are in for a rollercoaster month, with concerns about the new Covid-19 variant being tempered with expectations that strong jobs data in the UK and US will bolster the case for interest rate rises.
Hunter adds:
The outlook remains immediately uncertain and the mixed economic messages, let alone the new variant, are muddying the waters.
It is likely that the remaining few weeks of the year will be equally volatile as new information emerges on both.
But his colleague Victoria Scholar, head of investment, says of this morning's trading in Europe:
European markets are trading on a stronger footing at the start of the week with oil & gas and construction at the top of the basket while all sectors are in the green. Europe’s Stoxx oil and gas index is extending gains after it was the best performer last week, rallying by 3pc.
The FTSE 100 is trading back above 7,160, after its best weekly performance since mid-October with the next major resistance hurdle at 7,200.
08:22 AM
BT rises as Discovery plots swoop on BT Sport
BT shares have risen by as much as 1.9pc following a Sunday Telegraph report that US media powerhouse Discovery could gatecrash the sale of BT Sport to streaming challenger Dazn.
As talks between BT and Dazn towards a £600m sale of BT Sport have become bogged down, Discovery is said to have put forward an alternative proposal that is being seriously considered.
Dazn is bankrolled by Sir Leonard Blavatnik, the billionaire who was named the UK's richest person with a fortune of £23bn earlier this year.
08:15 AM
Bank of England poised to loosen mortgage lending rules
The Bank of England is poised to loosen mortgage lending rules introduced in the wake of the financial crisis, in a move economists have warned risks sparking a housing bubble, my colleagues Tim Wallace and Tom Rees report.
Officials are understood to be considering softening affordability checks for borrowers as part of a review of the market restrictions that concludes next week.
One of the measures being looked at is reducing the additional interest rate charge used to test borrowers’ ability to pay the reversion rate after an initial deal ends.
Oil prices have rebounded by more than $1 a barrel after top exporter Saudi Arabia raised prices for crude sold to Asia and the United States.
Brent crude futures for February gained $1.39, or 2pc, to $71.27 a barrel earlier this morning, while US West Texas Intermediate crude for January were at $67.66 a barrel, up $1.40, or 2.1pc.
It came after Saudi Arabia on Sunday raised January official selling prices for all crude grades sold to Asia and the United States by up to 80 cents from the previous month.
The price hikes were implemented despite a decision last week by OPEC+ oil cartel, which includes Saudi Arabia, Russia and others, to continue increasing supplies by 400,000 barrels per day next month.
08:07 AM
London markets open, FTSE rises
Trading has begun in London and the FTSE 100 is up.
The blue chip index increased by about 0.6pc or 44.6 points to up 7,166.9.
Meanwhile, the mid-cap FTSE 250 index of firms has risen by about 0.5pc or 120.2 points to 22,766.3.
08:02 AM
Bank deputy governor to give speech, amid interest rates speculation
Bank of England deputy governor Ben Broadbent - Chris Ratcliffe/Bloomberg
One of today's key news events is expected to be a speech by Ben Broadbent, Deputy Governor of the Bank of England.
With the Bank's monetary policy committee (MPC) due to meet on December 16, traders will be watching carefully for hints as to whether interest rates are set to rise.
Michael Saunders, an external MPC member who had previously been seen as hawkish, appeared to soften his enthusiasm for an imminent hike when he gave a separate speech on Friday.
Dr Broadbent will be speaking at the University of Leeds, with a copy of his planned remarks set to be published at 11.30am.
07:49 AM
Markets "twitchy" due to omicron fears
Early bird Michael Hewson, chief market analyst at CMC Markets UK, has been discussing the reaction of European governments to the omicron variant of Covid-19 this morning.
In a note, he predicts that traders could be in for another week of volatility:
European stocks also appear to be finding further progress difficult, with the DAX down for the second week in a row as Germany struggles to deal with surging cases of Delta that are threatening to overwhelm its health service, while across the world political leaders appear to be panicking over the threat posed by the Omicron variant, by imposing new restrictions on travel.
While still early days, the evidence continues to support the notion that while Omicron is more transmissible it doesn’t appear to be more deadly with no deaths currently reported because of the virus.
Nonetheless, markets appear to be becoming increasingly twitchy, whether it be over Omicron, or the ability of Europe to deal with its current problem with Delta.
Despite these concerns, European markets look set to start the week in a positive fashion, with Asia markets trading cautiously with little in the way of news flow to drive direction.
07:43 AM
FTSE expected to open higher, but traders braced for more virus volatility
Good morning.
The FTSE 100 is expected to open higher this morning even as the spread of the omicron strain of the coronavirus keeps traders in a cautious mood.
Investors are braced for another week of volatility after concerns about the new variant led to the blue chip index's worst month for more than a year.
It shed more than 2pc in November, with airline stocks hit particularly hard. This morning the Footsie is expected to open 48 points, or about 0.7pc higher at 7,170.
Traders will also be keeping an eye on a speech by Ben Broadbent, Deputy Governor of the Bank of England, for hints about whether an interest rates rise is on the cards this month.
Asian markets broadly fell in morning trading on Monday, tracking uncertainty over the Omicron variant of Covid-19 as well as disappointing US jobs data and the future of Chinese tech firms on Wall Street. Tokyo, Seoul, Hong Kong and Australia fell in morning trading.
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Corporate: Paragon, Renew Holdings, CareTech (Full year results) Babcock, Supreme, Mercia Asset Management (Interims) Ashtead, BAT, Ferguson (Trading update)
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