Business
Inflation in spotlight as Tesco to disclose latest trading
Tesco will shed more light on how the conflict in the Middle East is affecting inflation and consumer confidence when it updates shareholders next week.
The UK’s largest supermarket group has grown its share of the UK grocery market in recent years, on the back of a strong focus on pricing, helping support customer demand despite pressure from industry rivals.
Investors will be keen for the retail giant to report on its outlook for costs and pricing in its full-year results update on Thursday April 16, amid uncertainty driven by the Iran war.
Grocery price inflation held at 4.3% in March, according to data from Worldpanel by Numerator, but is expected to increase.
Industry group the Food and Drink Federation predicted food inflation could soar higher than 9% by the end of 2026 because of surging energy costs, which are a significant component in the cost of food production.
It was also among retailers brought before the Chancellor earlier this month to discuss the impact of the conflict, as bosses and the Government agreed to explore together how to ease the cost of living for consumers.
Tesco is also the UK’s largest petrol retailer, with more than 500 forecourts across the country.
The price of petrol has risen by about 19% to an average of 158.03p per litre since the crisis began at the end of February, and diesel prices have shot up by about 34%.
Shareholders and analysts will be interested to hear if consumer sentiment has been affected by news of the conflict and rising fuel costs.
Dan Coatsworth, AJ Bell head of markets, said: “Inflation should nominally boost sales figures and translate into increased revenue, but volumes may be affected as consumers cut back, and margins, which are always thin in the supermarket game, will come under pressure.
“A key question will be the extent to which Tesco seeks to take on some pain in order to protect its competitive position.”
Next Thursday, Tesco is expected to reveal adjusted operating profits of about £3.1 billion for the year to February, close to the £3.13 billion profit reported a year earlier.
It is also predicted to deliver revenues of £72.5 billion for the year, according to a consensus of analysts.
In its previous update in January, Tesco cheered its highest market share for more than a decade after reporting stronger festive sales despite “intense” competition.
It had reported a 3.3% rise in UK and Ireland like-for-like sales over the six weeks to January 3.
Business
Donald Trump targets Fed chief Jerome Powell again, threatens to fire him if he is ‘not leaving on time’ – The Times of India
US President Donald Trump on Wednesday renewed his attack on Federal Reserve Chair Jerome Powell, saying he would fire him if he continues in the role beyond the end of his mandate.Powell’s term as Fed chair ends in mid-May, and Trump has repeatedly criticised him for not cutting interest rates more aggressively, AFP reported.
“I’ll have to fire him,” Trump told Fox Business, if Powell “is not leaving on time.”The president added: “I’ve wanted to fire him.”The remarks come as the Trump administration steps up pressure on the independent central bank, including initiating a Department of Justice probe into Powell over alleged renovation cost overruns and seeking to remove Fed governor Lisa Cook.Asked if he would drop the DOJ investigation, Trump said: “I’m not playing. I have to find out.”Trump has nominated former central banker Kevin Warsh to succeed Powell, but his appointment requires confirmation by the US Senate.Warsh is scheduled to appear before the Senate Banking Committee next Tuesday, though his confirmation faces resistance.Senator Thom Tillis, a Republican member of the committee, has said he would hold up the nomination while the probe into Powell remains unresolved.As long as the nomination process is delayed, Powell can legally continue as Fed chair.While uncommon, it is possible for a Fed chair to remain on the board even after their term as chief expires.Powell first became Fed chair in 2018 during Trump’s earlier presidency and was reappointed in 2022 under then president Joe Biden.
Morgan Stanley on Wednesday posted results that topped analyst estimates as the firm’s trading operations generated almost $1 billion more in revenue than expected.
Here’s what the company reported:
- Earnings: $3.43 a share vs. $3 LSEG estimate
- Revenue: $20.58 billion vs. $19.72 billion estimate
The bank said profit jumped 29% to $5.57 billion, or $3.43 a share. Revenue rose 16% to $20.58 billion, fueled by gains in the firm’s trading, investment banking and wealth management businesses.
Equities trading revenue jumped 25% to a record $5.15 billion, or about $450 million above the StreetAccount estimate. The firm cited strong volumes across its global equities franchise, especially in its prime brokerage business catering to hedge funds and its derivatives unit.
Fixed income revenue rose 29% to $3.36 billion, or about $540 million more than expected, helped by commodities trading that benefited from volatility in energy markets in the period.
Morgan Stanley, led by CEO Ted Pick since 2024, appears to have capably navigated the tumult of the first quarter, which saw rolling corrections in software stocks and the upheaval caused by the Iran war. Of note, the bank edged out rival Goldman Sachs in the key arena of fixed income trading, where Goldman posted an unusually large miss of $910 million versus the StreetAccount estimate.
Morgan Stanley’s investment banking revenue surged 36% to $2.12 billion, essentially matching the StreetAccount estimate, on rising fees from completed mergers, as well as stock and bond underwriting.
Wealth management revenue climbed 16% to a record $8.52 billion as the firm cited rising asset values and fee-generating transactions.
The firm’s smallest division, its investment management business, saw revenue drop 4.2% to $1.54 billion, or about $110 million below expectations. Morgan Stanley cited lower carried interest on private funds for the drop in performance.
Analysts will want to know what Pick has to say on the business outlook for the rest of the year as geopolitical tensions remain high.
This story is developing. Please check back for updates.
Bank of America, the nation’s second-largest lender, beat on the top and bottom lines during the first quarter, bolstered by equities sales and trading.
Here’s what the firm reported:
- Earnings per share: $1.11 per share vs. $1.01 LSEG estimate
- Revenue: $30.43 billion vs. $29.93 billion estimate
The bank said Wednesday that net income rose 17% to $8.6 billion, or $1.11 per share, Bank of America’s highest EPS in almost two decades.
Revenue rose 7.2% to $30.43 billion on rising net interest income, higher trading revenue, and fees from investment banking and asset management.
Tune in at 10:15 a.m. ET as Bank of America CEO Brian Moynihan joins CNBC TV to discuss the bank’s earnings report. Watch in real time on CNBC+ or the CNBC Pro stream.
Equities trading contributed to the beat, as the geopolitical environment roiled stock markets. Revenue in that business jumped 30% to $2.83 billion, topping the StreetAccount estimate by roughly $350 million and helping drive the bank’s trading operations to its best quarter in 15 years.
Investment banking also beat estimates and was up 21% to $1.8 billion, compared with StreetAccount consensus of $1.73 billion.
Net interest income, the profitability metric for loan-making, increased by 9% to $15.9 billion and beat expectations of $15.67 billion as well, according to StreetAccount. That was due to higher loan and deposit balances, fixed-rate asset repricing and markets activity.
In a sign that the bank’s borrowers weren’t deteriorating, the firm posted a $1.3 billion provision for credit losses in the quarter, lower than the $1.5 billion provision in the year earlier period and about $190 million below the estimate.
“We remain watchful of evolving risks. However, we saw healthy client activity, including solid consumer spending and stable asset quality, indicating a resilient American economy,” Bank of America CEO Brian Moynihan said in the release.
Still, like rival Goldman Sachs, the bank’s fixed income revenue came in below expectations. That business generated about $3.5 billion in revenue, missing the StreetAccount estimate by about $330 million.
The net-charge-off ratio, showing what proportion of total loans were deemed unable to be collected, improved 6 basis points during the quarter to 0.48%. The firm’s consumer banking and global wealth divisions each gained more than 20% in net income.
Return on tangible common equity, a measure of profitability, was 16%, a more than 200 basis point improvement.
— CNBC’s Hugh Son and Laya Neelakandan contributed to this report.
Correction: Bank of America previously guided to net interest income growth of between 5% and 7% this year. A previous version of this article misstated the range. And the firm’s consumer banking and global wealth divisions each gained more than 20% in net income. A previous version misstated the growth metric.
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