Tuesday update

DB Live: Two-metre rule relaxed in England; markets rise

10pm: Markets

On Wall Street the Dow Jones Industrial Average was up 0.5%, over 100 points, while the S&P 500 rose 0.4% and the tech-heavy Nasdaq Composite gained 0.7%, hitting a new all-time high.

The Nasdaq posted its eighth straight day of gains, hitting a new intraday record high. The index was boosted by several big tech stocks—including Apple, Amazon and Netflix—hitting new all-time highs.

6.10pm: AG Barr contract canned

Irn-Bru maker AG Barr said its sales and distribution contract with US energy drink firm Rockstar has been terminated.

Launched in the UK in 2007, the brand has contributed approximately 8% of AG Barr’s sales volumes in the previous financial year. It is expected to continue to manufacture, sell and distribute Rockstar energy drinks up to 1 November.

The Cumbernauld company said it will get a one-off compensation payment in accordance with the terms of the contract.

In March PepsiCo announced that it was planning to acquire Rockstar Energy Beverages, owner of the Rockstar brand. PepsiCo has been a distribution partner for Rockstar in North America since 2009

Providing an update on the COVID-19 impact, AG Barr said trading continues to be adversely impacted by the lockdown measures, affecting major retail, impulse and hospitality channels.

“At the current time it remains difficult to predict how the balance of the financial year will evolve, with the easing of lock-down restrictions and resulting impact on consumer purchasing patterns,” it added.

6pm: TV journalist dies

STV’s Westminster correspondent Harry Smith has died at the age of 69, his family has confirmed.

Full story here

4.45pm: London close

The FTSE 100 closed the day up 75.5 points or 1.21% at 6320.12, helped by the announcement of further easing of the lockdown restrictions in England.

Markets reversed the falls from yesterday, despite the best attempts of the White House to send shivers through Asian markets overnight.

Comments made by the US Government’s economic adviser Peter Navarro in an interview with Fox News, saw him say the US-China trade deal was over.

President Donald Trump took to Twitter to say it is “fully intact” and Mr Navarro claimed his comments had been taken out of context.

2.30pm: BBC to axe jobs

The BBC is axeing up to 160 jobs in Scotland, Wales and Northern Ireland to help save £50m across the nations over the next two years. 

Full story here

12.45pm: Boris Johnson relaxes two-metre rule

George IV pub

The Prime Minister has announced that the two-metre rule will be relaxed from 4 July when pubs, bars, cafes, galleries, museums, hotels and cinemas will reopen.

Boris Johnson said a fall in the rate of infection means “we can now safely ease the lockdown in England”.

However, he warned that the government will not hesitate to reverse the decision if the the number of infections start to rise.

Scotland’s First Minister is still reviewing the rule north of the border.

British Chambers of Commerce director general Adam Marshall said: “While the relaxation of the two-metre rule will help more firms increase capacity, we are still a long way from business as usual. Broader efforts to boost business and consumer confidence will still be needed to help firms trade their way out of this crisis.

“A comprehensive test and trace system, including a mass testing regime, must be in place to realise the benefits that the easing of restrictions could bring to firms across the UK, many of whom are relying on the swift return of consumer confidence.

“Businesses also need a clear roadmap to recovery, including fresh support for the worst-affected sectors and geographic areas, and broader fiscal measures to get the economy moving again.”

11am: Legal Awards

The Scottish Legal Awards 2020 will now take place on Thursday 1 October 2020 at the DoubleTree by Hilton Hotel in Glasgow.  

All bookings for the March event, which was postponed due to the COVID19 pandemic, will be automatically carried over to the new date. 

9.45am: SFE chief to retire

Scottish Financial Enterprise Chief Executive Graeme Jones will be retiring at the end of this year following five years at the helm of the representative body.

Full story

9.40am: Oil and manufacturing higher

Strong manufacturing data from the Eurozone helped investors “put on a happy face”, although second wave concerns and geopolitical strife linked to Hong Kong have not gone away,” said Russ Mould, investment director at AJ Bell.

“Oil prices continue to creep up with the global benchmark Brent now firmly above $40 per barrel as lockdown measures start to be eased and supplies begin to tighten. Gold retained its shine though at $1,754 per ounce, suggesting there is still demand for safe havens amid lingering uncertainty.”

9.30am: Return to growth forecast

Business activity slowed by less than expected this month as more companies restarted work, putting the economy on course to return to growth from next month.

The IHS Markit/CIPS flash composite Purchasing Managers’ Index (PMI), which measures activity in the services and manufacturing sectors, jumped to 47.6 in June from 30.0 in May.

IHS Markit economist Chris Williamson said: “June’s PMI data add to signs that the economy looks likely to return to growth in the third quarter, especially given the further planned easing of the lockdown [in England] from 4 July.”

9am: German Covid outbreak

More than 1,500 people have tested positive for coronavirus in a German meat factory outbreak blamed for a spike in the country’s R rate which determines the rate of contagion.   

Health authorities have quarantined all 6,500 workers at the Toennies plant and carried out tests on the entire workforce. 

About 1,553 tests have already come back positive and the regional premier of North Rhine-Westphalia has warned that the whole state could have to go back into lockdown.   

8.15am: London open

London saw an uptick following Donald Trump’s comments on China (see below). The FTSE 100 index was 44 points higher at 6,289.03.

7am: Shopping centre crisis

Intu Braehead

Braehead shopping centre owner Intu, has appointed administrators as a “contingency” in the event that its rescue talks fail.

The company, which also owns the Trafford Centre in Manchester, is in talks with lenders.

On Tuesday, Intu said “notwithstanding the progress made” it had appointed KPMG to plan for administration.

It is trying to arrange a system that would provide money to KPMG in order to avoid closing its shopping centres which remain closed under the pandemic order.

Car industry calls for tax cut

Vardy Dundee Car Store

Britain’s car industry is asking the Treasury to cut sales tax to boost the sector as a third of automotive workers remain furloughed due to the coronavirus outbreak.

Car and van volumes are expected to fall by a third to 920,000 units this year and up to one in six jobs are at risk, the Society of Motor Manufacturers and Traders (SMMT) industry body said.

RBS extends account switching

Royal Bank of Scotland said it will give business customers another six months to take advantage of incentives to switch their accounts to other banks, under terms of the bank’s crisis-era state aid package.

In a statement, the bank said: “As a result of the on-going COVID-19 pandemic, fewer customers have been switching under the Incentivised Switching Scheme and these changes are being announced by the Banking Competition Remedies to preserve momentum and aims of the ISS.”

It said 200,000 additional RBS and NatWest plc business banking customers with turnover of up to £1 million will have the opportunity to participate from 25 August.

Customers will be able apply to switch their account until 28 February 2021 and will have until 30 June 2021 to complete the switch.

6am: Markets

Asian equity markets rebounded after US President Donald Trump said the U.S.-China trade pact was “fully intact”.

Mr Trump tweeted: “China trade deal is fully intact. Hopefully they will continue to live up to the terms of the agreement.”

In Hong Kong, the Hang Seng rose about 1% in early afternoon trade and Japan’s Nikkei jumped 0.8%.

Today’s agenda

* Boris expected to announce decision on relaxing social distancing

Cinemas, museums and galleries will be able to reopen in England from 4 July. Boris Johnson will also reveal the findings of a review into whether social distancing measures can be relaxed and the two-metre gap reduced.

Today’s top Daily Business headlines

M&D theme park reopened by family that closed it

Higgins: Scotland needs £6bn for Covid recovery

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