Markets Defused is an easy-to-understand and straightforward recap of the day’s most engaging business and stock market news.
- City Airport expansion greenlit
- FuboTV soared as Disney-Fox-Warner sports streamer stalled
- Barratt and Redrow rose as merger moved closer
- Ted Baker is closing the last of its UK stores
- AMD lifted as $4.9bn deal promises accelerated AI scale-up
- US Dollar weakened ahead of Jackson Hole meetings
- GBP was stronger against the USD, but not EUR or YEN
- Gold traded up to new high as dollar softened
City Airport expansion got the greenlight
London City Airport is now set to expand its capacity to 9 million from 6.5 million passengers per year, after an application was approved by the UK government.
The decision, announced on Monday, permits the airport to increase the number of weekend and early morning flights to accommodate this growth.
The Labour government deemed the expansion necessary to meet the expected rise in demand for flights and stated that the decision aligns with national climate policy.
It followed an appeal after Newham Council that previously blocked the airport’s expansion plans.
Sports-streaming underdog FuboTV gave media giants a bloody nose
FuboTV (NYSE:FUBO) stock surged close to 20% in Monday’s deals after a court ruling temporarily blocked the launch of Venu Sports – a new sports streaming joint venture owned Disney, Fox Corp and Warner Bros Discovery.
NYSE-quoted FuboTV, which has a market value of around $600 million, was an early-mover in sports streaming in North America – which has been carrying tier-one sports including NFL, NBA, NHL, MLB and the English Premier League since 2015, selling subscriptions through partnerships with various cable broadcasters.
FuboTV earlier this year filed an antitrust lawsuit against Venu, the proposed new sports streaming ‘giant’, claiming that the joint venture would monopolise the sports streaming market, reducing competition and driving up prices for consumers.
With an early, but not yet decisive, score FuboTV’s claim was supported by Judge Margaret Garnett of the Southern District of New York, who has temporarily ruled to halt the launch of Venu pending further legal proceedings or a final decision by the court.
Investors in FuboTV cheered this early ruling, sending the stock higher.
Barratt Developments and Redrow shares rose as merger moved closer
Barratt Developments PLC (LSE:BDEV) shares closed Monday’s comfortably in positive territory, as its deal to buy Redrow is expected to be completed later this week.
The £2.5 billion transaction is now advancing after Barratt announced that it would waive the conditions imposed by the UK’s Competition and Markets Authority (CMA).
Previously, the CMA raised concerns that the merger could reduce competition and potentially lead to higher prices in specific locations (namely Whitchurch and Shropshire) where both Barratt and Redrow hold significant land.
Barratt noted that this issue affects only one of the over 400 areas where the two companies operate.
The schedule anticipates that Redrow shares will be suspended on Thursday, and the enlarged version of Barratt will resume trading in London on Friday.
In London, Barratt shares gained 3.2% to end Monday’s session at 552.90p whilst Redrow was up 2.3% to 778.1p.
Ted Baker is closing the last of its UK stores
Designer clothes brand Ted Baker is closing its last 31 stores in the UK and Republic of Ireland this week, marking the end of its presence on British high streets and putting more than 500 jobs at risk.
The closures follow the collapse of the company’s UK partner, No Ordinary Designer Label Limited (NODL), which entered administration in March.
Ted Baker gained popularity in the early 2000s with its distinctive clothing and accessories, known for their patterns and florals. But, the brand has struggled in recent years, facing challenges from stronger competitors and shifting consumer preferences.
Efforts to revive the brand faced further setbacks when negotiations between Ted Baker's owner, Authentic Brands, and Mike Ashley's Frasers Group for a potential licensing deal stalled.
AMD shares lifted as $4.9bn ZT acquisition promises accelerated AI scale-up
Advanced Micro Devices Inc (NASDAQ:AMD, ETR:AMD) shares traded higher on Monday, moving up to $152.72, after announcing the acquisition of server maker ZT Systems for $4.9 billion.
It is described as part of AMD’s strategy to expand its portfolio of artificial intelligence (AI) chips and hardware, to compete more effectively with Nvidia.
The deal will be funded through a mix of cash and stock (75% cash and 25% stock).
ZT Systems, a privately held company based in New Jersey, has approximately 2,500 employees and AMD is expected to retain about 1,000 of the engineers to bolster its expertise in AI system design and deployment.
Post completion, meanwhile, AMD is expected to sell ZT’s server manufacturing business.
In New York, AMD shares gained $4.30 or 2.9% changing hands at $152.86.
US Dollar weakened ahead of Jackson Hole meetings
The US Dollar (USD) has declined to its lowest levels since January 2024 as markets anticipate key communications from the Federal Reserve at the Jackson Hole Symposium. On Monday morning, the dollar index was down 0.49% at 101.96 – whilst GBP/USD was up at 1.29865, and EUR/USD was up at 1.10747.
This week, traders are looking to the Federal Reserve to signal a dovish shift, potentially setting the stage for an interest rate cut in September. This expectation has contributed to a sustained weakening of the USD.
The recent fluctuations in the USD have been driven more by technical factors than macroeconomic changes, according to analysts at Goldman Sachs, who reckon there’s opportunity for “for tactical trades”.
Goldman reckons it is challenging to maintain a bullish stance on the dollar – even temporarily – until the Fed's policy path becomes clearer.
GBP was stronger against the USD, but not EUR or YEN
The British Pound (GBP) saw mixed trading in Monday’s forex markets.
While GBP was up against the US Dollar (USD) - which was weaker ahead of the Fed’s Jackson Hole meetings – it remained flat against the Euro (EUR) and was down versus the Japanese Yen (JPY). GBP/USD touched a one-month high, trading around 1.2988.
Whilst the Fed is the main factor, the brits can also claim positive UK economic data and diminishing expectations of a September interest rate cut at the Bank of England (BoE).
The Pound's resilience is also supported by solid UK economic indicators including a rebound in retail sales and a drop in unemployment.
Gold traded up to new high as dollar softened
The price of gold hit another new high, trading just above $2,500 per ounce on Monday.
It comes amid growing investor expectations that the US Federal Reserve will start rolling out rate cuts.
Fuelled by recent dovish sentiments emanating from the US Federal Reserve, ahead of the annual Jackson Hole Symposium (which takes place this week), financial markets are increasingly expecting a rate cut in September.
On top of the ecomonics, geopolitical tensions, particularly in the Middle East, are also contributing to the heightened demand for gold.