Live news updates from October 18: Russian missiles hit Kyiv for second day, Goldman Sachs announces overhaul

United Airlines is betting that strong air travel demand will outpace rising costs, as it forecast an adjusted profit in the current quarter that beat Wall Street expectations.

The Chicago-based airline estimated it will earn an adjusted, diluted $2 to $2.25 a share in the fourth quarter, compared to a consensus estimate of 98 cents.

The upbeat outlook came as the carrier reported earnings for the three months that ended in September, of $2.86 a share, that beat Wall Street’s estimate of $2.28.

“The ongoing Covid recovery trends at United continue to prevail,” said chief executive Scott Kirby, who remained upbeat despite recession concerns. “We remain optimistic that we’ll continue to deliver strong financial results in the fourth quarter.”

The stock rose nearly 7 per cent in after-market trading, after closing at $37.25 on Tuesday.

Still, input costs for the airline will remain elevated. The cost to fly one seat one mile, excluding the price of fuel, will rise between 11 and 12 per cent in the fourth quarter, compared to the same period three years ago when it cost $10.95.

The airline is also expected to continue flying less. United said its fourth-quarter capacity will only be about 90 per cent of the size of its 2019 network.

Strong consumer demand and higher airfares are expected to boost total revenue for the airline’s seat capacity to increase between 24 and 25 per cent compared to 2019.

Third-quarter revenue at United rose 13 per cent, compared to the same period in 2019, to $12.9bn. Net income fell 8 per cent to $942mn as operating costs rose, particularly for fuel.

Aerospace and defence group Lockheed Martin plans to boost the annual production rate of its Himars, the rocket launcher that has become a critical weapons system for the Ukrainian military in its fight against Russia.

“We started the year at 48,” which has been “stepped [up] to 60” since Russia’s invasion, chief operating officer Frank St John told the Financial Times following the company’s third-quarter results on Tuesday.

Lockheed expects it will take 18 to 24 months to get the production level to 96, St John said.

“We’ve also gone out on long lead with our supply chain for about $65mn worth of advanced funding that will help that ramp occur even more rapidly,” he continued.

Western countries have been arming Ukraine with tens of billions of dollars’ worth of equipment by sending weaponry in their national stockpiles. That has left defence groups with the task of increasing production of multiple weapons to replenish those stockpiles.

However, the additional Himars — or high mobility artillery rocket systems — will not be solely to replenish the US’s stockpile, but to satisfy “strong international demand that we’re seeing in eastern Europe and in the Pacific Rim,” including Australia, St John said.

So far, the US has sent about 16 Himars to Ukraine, while European governments have sent 10 equivalent systems. Last month, the Pentagon committed to sending an additional 18 of the rocket launchers to Ukraine, although it will take a few years for those to arrive.

The Pentagon said in August it had been allocated almost $400mn to backfill its stockpile of Himars and guided multiple launch rocket systems, and would invest another $200mn to expand and accelerate weapons production. Those Pentagon dollars could go towards contract awards, establishing new production lines, and adding more worker shifts. Lockheed, one the Pentagon’s top five contractors, makes Himars in Camden, Arkansas.

Lockheed reported earnings slightly ahead of analysts estimates and said it would buy back $14bn of stock over the next three years. Shares closed 8.7 per cent higher.

Russia’s dependence on kamikaze drones supplied by Iran to conduct days of air strikes on Ukrainian electricity infrastructure and residential buildings reveal the “bankruptcy” of Vladimir Putin’s regime, Ukraine’s president said.

Volodymyr Zelenskyy, in his nightly video address, spoke hours after foreign minister Dmytro Kuleba appealed earlier on Tuesday for Israeli weaponry and announced plans to break diplomatic ties with its arch-enemy, Tehran.

Russia’s decision to appeal to Iran for assistance, which has included Shahed-136 kamikaze drones, “is the Kremlin’s recognition of its military and political bankruptcy,” Zelenskyy said.

“For decades, they have spent billions of dollars on their military-industrial complex, and in the end bowed to Tehran to get rather simple drones and missiles,” he said of Russia.

He thanked Germany for recently providing Iris-T surface-to-air defence systems, saying they have proved “very” effective.

“No matter what the enemy plans and does, Ukraine will defend itself  … 237 days of this war prove that we are able to find an answer to any threats. If we act together - all Ukrainians and peoples of the free world,” Zelenskyy added.

Netflix stemmed its subscriber losses in the third quarter, as popular programmes including the fourth season of Stranger Things and Dahmer — Monster: The Jeffrey Dahmer Story helped the company add 2.4mn members.

Netflix ended the third quarter with 223mn subscribers, up 2.6 per cent from a year earlier, and expects to reach 227mn by the end of the current quarter, according to its earnings release on Tuesday.

Netflix shares jumped nearly 15 per cent in after-hours trading.

But the streaming pioneer, which shocked investors with its revelation in April that it had lost subscribers, reported a slight decline in net income — from $1.44bn a year ago to $1.39bn. Earnings fell 2.8 per cent to $3.10 a share, better than the $2.10 a share Wall Street had expected.

It also warned that revenue and earnings would drop in the fourth quarter due to the effect of the strong dollar and macroeconomic weakness.

Revenue grew 6 per cent year-on-year to $7.9bn. “After a challenging first half, we believe we’re on a path to reaccelerate growth,” company officials wrote in a letter to shareholders.

Netflix will begin rolling out an advertising-supported service next month, a step it hopes will bolster revenues as subscriber growth slows in North America and other big markets.

As a result, Netflix said it would stop providing guidance to investors on its number of new subscribers — a big shift for a company whose share price rocketed for years based on its membership growth. The new ad service would mean that subscriptions will be “just one component of our revenue growth”, the letter said.

Democratic New York Governor Kathy Hochul’s lead in the New York gubernatorial race has narrowed over Republican challenger Lee Zeldin, according to two polls released on Tuesday, making a solidly Democratic state a potential battleground in the upcoming midterm election.

Hochul’s lead over Zeldin fell to just 4 percentage points in a new Quinnipiac poll. Zeldin also gained on Hochul in a Siena College poll, shrinking the governor’s lead from 17 points last month to 11.

Zeldin, a New York state congressman, has increased his odds of becoming the first Republican in 20 years to win a statewide election, just three weeks before the midterm election.

Although 60 per cent of New York voters have an unfavourable opinion of Trump, the Quinnipiac poll showed, the former president’s endorsement may not dissuade New Yorkers from voting for Zeldin, as crime becomes a top issue for voters.

“Across the board, crime ranks high on the list of pressing issues. Zeldin making crime a major part of his campaign could be where he’s making inroads in this race,” said Mary Snow, Quinnipiac University polling analyst.

Crime and inflation are the top issues for Republican and Independent voters in New York, but protecting democracy and crime are the top two issues for Democrats, according to Quinnipiac.

Hochul has maintained a lead in New York City, however Zeldin is leading in the suburban and upstate regions of the country, according to both polls. Zeldin is now leading by 4 points in the Long Island suburbs, according to the Siena poll, where Hochul was leading by 5 points in September.

US stocks rose on Tuesday, extending gains from the previous session after Goldman Sachs became the latest bank to post better than expected quarterly results.

The benchmark S&P 500 index was up 1.3 per cent by mid-afternoon in New York, while the technology-heavy Nasdaq Composite had added 1.2 per cent. Europe’s regional Stoxx 600 and Hong Kong’s Hang Seng closed up 0.3 per cent and 1.8 per cent respectively.

Those advances in equity markets followed a rally on Monday, with the S&P 500 closing 2.6 per cent higher — supported by better than expected third-quarter results from Bank of America. BofA attributed its earnings to “resilient” US consumers.

Investors have been monitoring the latest corporate financial statements for signs of strain from high inflation and rising borrowing costs.

The Federal Reserve has led the charge this year on aggressively tightening monetary policy to curb rapid price growth — lifting interest rates by an extra-large 0.75 percentage points at each of its past three meetings to a target range of 3 to 3.25 per cent. Concerns have intensified in recent months that the Fed and its peers will turn the policy screws into a protracted slowdown.

But the early stages of the latest US corporate earnings season have helped brighten sentiment. Shares in Goldman were up almost 3 per cent on Tuesday, after the bank reported third-quarter net income of $3.1bn, down from $5.4bn a year earlier but above analysts’ estimates of $2.9bn.

The strong start to the week for equity markets was also boosted by the UK government’s decision on Monday to ditch most of last month’s “mini” Budget measures, which had spooked markets and sparked a fire-sale of pension fund assets.

Read more on the day’s market moves here

Amazon employees at a warehouse outside of New York state’s capital city voted nearly two to one to reject the formation of a union, dashing hopes that a grassroots effort to organise workers would spread across the ecommerce giant’s facilities.

Employees at the Castleton-on-Hudson warehouse near Albany voted 406 to 206 against being represented by the grassroots Amazon Labour Union, labour officials said after tallying the votes on Tuesday.

The group, led by former employee Christian Smalls, made history by unionising the company’s Staten Island distribution centre in April but has failed to organise another Amazon facility since.

Labour leaders hoped the Staten Island victory would reinvigorate a years-long effort to organise Amazon’s workers, but the following three Amazon warehouse union elections this year have failed.

The group’s subsequent losses have prompted questions about whether the upstart union has the resources and experience to challenge the nation’s second-largest employer.

The Amazon Labour Union said workers at the Castleton-on-Hudson facility known as ALB1 deserved higher pay and safer working conditions. But Amazon opposed their efforts, leading to accusations from organisers that the company had forced employees to attend anti-union meetings and retaliated against those involved in the drive.

Labour officials said 949 workers were eligible to vote and the turnout was nearly 68 per cent.

“Proud of the brave workers of ALB1 regardless of today’s results taking on a trillion dollar company can never be a loss for workers,” Smalls wrote on Twitter ahead of the vote count. “We will continue to empower all workers to give them the right to unionise.”

Read more on the Amazon union story here

French building materials manufacturer Lafarge has agreed to pay almost $780mn in fines and forfeitures to the US government, after pleading guilty to conspiring to provide material support to Isis and the Al-Nusrah Front in war-torn Syria.

The company was charged by federal prosecutors with making payments to both terrorist organisations at its cement plant in Jalabiyeh, Syria in 2013-2014. The US Department of Justice said the payments helped Lafarge’s local subsidiary make roughly $70mn in additional revenue.

Nearly $6mn in payments, some disguised as “donations”, were sent to Isis and Al-Nusrah for the purchase of raw materials and to ensure protection of staff, ensuring operations would continue, the DoJ added.

The case follows years of parallel legal challenges and investigations in France. A French court in May upheld charges of complicity in crimes against humanity against Lafarge, after the group’s bid to have them dismissed.

The company has in the past carried out its own internal investigation, and concluded that its Syrian unit paid armed groups to help protect employees at a factory there, but has long rejected that it was complicit in crimes against humanity.

Read more on Lafarge’s penalty here

Activist hedge fund Starboard Value has taken a stake in Salesforce and is calling for the cloud software group to increase its margins, arguing that the company has not taken advantage of its position as a market leader.

The $8.4bn New York-based fund, led by Jeff Smith, set out its argument in a presentation published on Tuesday. It attributed Salesforce’s valuation discount relative to its peers to a “subpar mix of growth and profitability”.

“The company’s share price has underperformed its benchmark indices, its closest peers, and the broader market over the last three years,” the hedge fund wrote in a presentation.

Starboard stopped short of making any specific recommendations, which is common for activist hedge funds that buy small stakes and usually seek to change management or force a sale or acquisition.

The hedge fund went as far as saying that Salesforce’s refreshed management team “has been increasingly focused on improving the company’s growth and profitability”.

Salesforce, which launched in 1999, is run by its founder Marc Benioff together with Bret Taylor, co-chief executive.

Technology stocks have been badly hit in recent months as central banks across the world have tightened monetary policy to combat historically high inflation. However, Salesforce has been hit harder than its rivals.

Salesforce shares have plunged about 40 per cent since the start of the year, double the drop of its main rival Oracle, the cloud computing company founded by billionaire Larry Ellison. They rose 6.3 per cent in morning trading on Tuesday following news of Starboard’s stake.

Read more on Starboard’s call for change at Salesforce here

State Street said the likelihood of a successful outcome for its much-delayed plan to buy Brown Brothers Harriman’s investor service business is “increasingly uncertain”.

The US custody bank will decide whether to pull the plug on what was a $3.5bn deal by the end of the year, chief executive Ron O’Hanley said during an earnings call Tuesday.

Announced more than a year ago, the deal has been hung up so long by regulatory scrutiny that the two sides would have to renegotiate the terms if it did receive the green light, and any potential boost to State Street’s profits would be delayed, O’Hanley said as State Street reported third-quarter results.

Rising net interest income from lending helped offset falling asset management fees during the company’s latest quarter. Total revenue of just under $3bn, was down 1 per cent year on year, while net income of $690mn was 8 per cent below last year. Earnings per share narrowly beat average analyst expectations of $1.78, as polled by Bloomberg.

US homebuilder confidence fell for the tenth consecutive month in September, as high home prices, construction costs and interest rates threatened housing affordability and continued to damp demand.

The National Association of Home Builders’ housing market index for September dropped 8 points to 38,  below economists’ forecasts of 43, according to a Refinitiv poll. Any reading below 50 is considered a negative reading.

It is the lowest level since August 2012, excluding the onset of the pandemic that saw confidence drop to a reading of 30 in April 2020.

Rising mortgage rates are largely responsible for the drop in demand and, coupled with high home prices, make home ownership unaffordable for many first time homebuyers. The 30 year mortgage rate jumped to 6.9 per cent last week, according to Freddie Mac, increasing the average monthly mortgage payment on an already expensive home.

“Given expectations for ongoing elevated interest rates due to actions by the Federal Reserve, 2023 is forecasted to see additional single-family building declines as the housing contraction continues,” said Robert Dietz, NAHB chief economist. The home ownership rate, he continued, will decline in the quarters ahead because high interest rates and construction costs will price out prospective buyers.

The report’s sub-indices — including traffic for prospective buyers, current sales conditions and expectations in the next six months — all fell. Of these, sales expectations in the next six months fell the most, declining 11 points to 35.

“This will be the first year since 2011 to see a decline for single-family starts,” Dietz said.

The UK will call fresh elections in Northern Ireland unless the region’s power-sharing executive, which has been unable to form because of a row over post-Brexit trade negotiations, can be restored by an October 28 deadline.

Chris Heaton-Harris, secretary of state for Northern Ireland, told the Northern Ireland Affairs Committee at Westminster that he “cannot be clearer” on the prospect.

“If we do not get a reformed executive by one minute past midnight on October 28, I will be calling an election,” he said. “That is the law.”

The nationalist Sinn Féin party won a historic victory in May when it became Northern Ireland’s largest party for the first time. But the Democratic Unionist party, which highly values ties to the UK, has blocked a new executive from forming because it opposes post-Brexit trade arrangements known as the Northern Ireland Protocol.

That opened a 24-week period through October 28 to form an executive, otherwise caretaker ministers must resign and civil servants be placed in charge. A new election would have to occur within 12 weeks. Heaton-Harris declined to specify a date but said it would be before Christmas.

Despite renewed protocol talks between the EU and UK, an improved atmosphere and exhortations from London, Dublin and Brussels to get the executive back up and running, there appeared little prospect of the DUP reversing course before the deadline.

DUP leader Sir Jeffrey Donaldson has said he needs to see concrete progress on his demands. Many in Northern Ireland, including DUP members, question what a new election would achieve given that parties would probably win similar seat allocations but without the guarantee of a restored executive.

The European Commission president has said that the EU was “better prepared” for this winter but still required “exceptional” measures to prevent an acute winter energy crisis.

Ursula von der Leyen on Tuesday said that the EU had reached its “first main goal, which was to be better prepared for this winter” and that now the bloc would take “further steps towards an energy union”.

EU countries had achieved a cut in gas demand of 15 per cent in September and the bloc’s storage facilities were filled to 92 per cent of total capacity, she added.

Her comments came as Brussels proposed a set of measures to further ease gas prices. These include a dynamic price cap on the EU’s main gas market and a new benchmark for shipped gas, a structure for joint buying of gas, an easing of trading requirements for energy companies and a template for “solidarity agreements” that allow EU countries to source gas from neighbours.

Up to €40bn of EU funds will also be made available to support citizens and small businesses, the commission said.

Several European leaders have warned of civil unrest this winter if energy prices do not come down, while hundreds of factories in energy intensive industries have already had to close.

At least 15 countries have requested that the commission establish a cap on the price of gas without much agreement on how it should be formed.

Ukraine plans to appeal again to Israel for arms while considering a break with Tehran, citing Iran’s supply of kamikaze drones that Moscow has used to hit infrastructure and civilian buildings.

Kyiv on Tuesday will send an official request to the government of Israel to provide it with air defence systems and to start “high-quality co-operation” on Ukraine’s acquisition of relevant technologies, foreign minister Dmytro Kuleba said in an online briefing with journalists.

“If Israel’s policy really consists in consistently countering Iran’s destructive actions, then it is time for Israel to openly side with Ukraine,” Kuleba said.

Israel has refrained from providing or selling weaponry to Kyiv over the past eight months since Russia invaded Ukraine, even after repeated appeals from President Volodymyr Zelenskyy, who has Jewish roots.

Kuleba called upon Europe to deepen sanctions against Tehran and said he was urging President Zelenskyy to break diplomatic relations with Iran.

“If Iran stops supplying Russia with weapons, we will talk about restoring relations,” Kuleba added.

Russia has pounded Ukraine’s capital Kyiv and other major cities for the past two days with missiles and drones, targeting power generators and hitting residential buildings.

US stocks rose sharply on Tuesday, extending gains from the previous session, after Goldman Sachs became the latest company to post better than expected quarterly results.

The benchmark S&P 500 rose 2.2 per cent and the technology-heavy Nasdaq Composite advanced 2.6 per cent after the New York opening bell. Europe’s regional Stoxx 600 added 1.2 per cent. Hong Kong’s Hang Seng closed up 1.8 per cent.

Those gains in equity markets followed a rally on Monday, with the S&P closing 2.6 per cent higher — supported by better than expected third-quarter results from Bank of America. BofA attributed its earnings to “resilient” US consumers.

Investors have been monitoring the latest flurry of corporate financial statements for signs of strain from high inflation and rising borrowing costs.

The Federal Reserve has led the charge this year on aggressively tightening monetary policy to curb rapid price growth — raising interest rates by 0.75 percentage points over its past three meetings to a target range of 3 to 3.25 per cent.

The early stages of the new US corporate earnings season have helped brighten sentiment. Shares in Goldman added more than 4 per cent on Tuesday, after the bank reported third-quarter net income of $3.1bn, down from $5.4bn a year earlier but above analysts’ estimates of $2.9bn.

The strong start to the week for equity markets was also boosted by the UK government’s decision on Monday to ditch most of last month’s “mini” Budget measures, which had spooked markets and sparked a fire sale of pension fund assets.

Senior editors and columnists at the Financial Times will host a debate on the future of UK prime minister Liz Truss as pressure mounts from her own Conservative party for her to quit.

Robert Shrimsley, UK chief political commentator; Miranda Green, deputy opinion editor; Stephen Bush, columnist; and economics editor Chris Giles will take to Twitter Space to discuss:

“What’s next for UK prime minister Liz Truss and the UK economy?”

Please join them at 4.30pm London time on Tuesday on Twitter Space here.

Australia has reversed a four-year-old decision to recognise west Jerusalem as Israel’s capital, in a U-turn that drew an angry response from the Middle Eastern country.

Penny Wong, Australia’s foreign minister, said the original decision to recognise west Jerusalem undermined efforts to resolve the decades-old Israeli-Palestinian conflict, and had put Canberra “out of step with the majority of the international community”.

Israel’s foreign ministry hit back, describing the decision as “resulting from short-sighted political considerations”, and summoned the Australian ambassador to express its concerns.

The status of Jerusalem is bitterly contested, with Israel claiming the city as its “eternal and undivided capital” and the Palestinians seeking East Jerusalem as the capital of a future state.

Under the 1993 Oslo accords, the final status of Jerusalem is meant to be determined in peace talks between Israel and the Palestinians, and most countries maintain their embassies to Israel in the Mediterranean city of Tel Aviv.

In 2017, then US president Donald Trump broke ranks, recognising Jerusalem as Israel’s capital and moving the US embassy from Tel Aviv to Jerusalem. The following year, Australia’s then-government followed suit and recognised west Jerusalem as Israel’s capital.

Apart from the US, only a handful of countries, such as Kosovo and Guatemala, have their embassies in Jerusalem. However, Prime Minister Liz Truss has raised the prospect of relocating the UK embassy as well.

Goldman Sachs reported a 43 per cent drop in third-quarter profits as it overhauled its organisational structure in an effort to buoy the bank’s stagnating stock market valuation.

The results were better than analysts expected, while chief executive David Solomon confirmed Goldman would fold its trading and investment banking business into one unit as it shrinks from four to three divisions.

Goldman reported third-quarter net income of $3.1bn, or $8.25 a share, down from $5.4bn, or $14.93 a share in the same period last year. This was ahead of analysts’ estimates for $2.9bn, or $7.75 a share, according to consensus data compiled by Bloomberg, but was still Goldman’s fourth straight quarterly decline.

The bank is facing a prolonged slowdown in investment banking fees and markdowns of equity investments at its asset management arm.

Read more about Goldman’s reorganisation here.

UK competition regulators have ordered Meta again to sell gif platform Giphy, crushing the $315mn deal for good after a protracted challenge.

The Competition and Markets Authority said on Tuesday that Meta’s purchase of New York-based Giphy, the biggest provider of animated images known as gifs to social networks, would “limit choice for UK social media users and reduce innovation in UK display advertising”.

The final decision underlines the pressure on Silicon Valley’s biggest technology company from the UK watchdog, which has broad discretion to intervene in tie-ups touching British consumers even when the companies are based overseas.

The ruling serves as a warning to acquisitive tech companies that operate in the UK that regulators are increasingly wary of waving through even small deals involving the largest internet groups because of fears about their market power.

The CMA first told Meta to unwind the deal in November, and on Tuesday stood by its original conclusions.

It said Meta, which owns Facebook, WhatsApp and Instagram, could cut off access to gifs for its rivals such as TikTok or Twitter.

It also found that Giphy could have been an important competitor to Facebook in UK advertising, even though it does not currently offer such a service in Britain.

Meta will now have to sell Giphy to an approved buyer, something the company says will be difficult to achieve.

Ukraine’s president on Tuesday decried more than a week of Russian kamikaze drone and missile strikes that have destroyed a third of electricity generators, triggering blackouts ahead of the winter season.

“Since Oct 10, 30 per cent of Ukraine’s power stations have been destroyed, causing massive blackouts across the country,” Volodymyr Zelenskyy tweeted.

His post, which included a video depicting the strikes and damage, described the targeting of energy and critical infrastructure as well as residential buildings as “terrorist attacks”.

“No space left for negotiations with [Vladimir] Putin’s regime,” Zelenskyy added.

Johnson & Johnson maintained its adjusted full-year guidance after beating earnings expectations in the third quarter, despite a strong dollar weighing down on sales outside the US.

The world’s largest healthcare company slightly narrowed its forecasts for full-year adjusted operational sales growth, to between 6.7 and 7.2 per cent. But it brought down its forecasts for reported sales from a midpoint of $93.8bn to a midpoint of $93.3bn.

J&J now expects adjusted operational diluted earnings per share to grow at a midpoint of 9.5 per cent, compared with a midpoint of 9.2 per cent when it issued its guidance in July.

Joaquin Duato, chief executive, said the third quarter demonstrated “continued strength and resilience” across all three J&J businesses: pharmaceuticals, medical devices, and consumer.

“We continue to navigate the dynamic macroeconomic environment and remain focused on delivering transformative healthcare solutions,” he said. “I remain confident in our business and ability to continue advancing our innovative portfolio and pipeline.”

In the third quarter, J&J reported adjusted earnings per share of $2.55, above the average consensus forecast for $2.48, decreasing 1.9 per cent.

Reported sales were $23.8bn, up 1.9 per cent year-on-year, above the average analyst estimate for $23.3bn. The strong dollar weighed down on international sales, with a 12.6 per cent currency drag.

Shares in J&J rose 2.2 per cent in pre-market trading in New York.

One in 10 UK voters hold a favourable opinion of Liz Truss after about six weeks as prime minister, becoming the most unpopular leader “by some distance” tracked by YouGov.

The survey, which questioned 1,724 British adults on October 14-16, showed that the figure had fallen from 15 per cent a week ago.

In a separate YouGov poll, conducted over the past two days among 530 Conservative party members, 55 per cent say Truss should resign. A third would like to see former prime minister Boris Johnson take over while 23 per cent prefer Rishi Sunak.

The popularity of Truss, who became prime minister in early September, has been sliding following a tax-cutting package, most of which was unwound this week.

“Truss is now by some distance the most unpopular leader we have tracked,” Patrick English, an associate director in the political and social research team of YouGov, said in a tweet.

Four out of five British adults view Truss unfavourably, while 62 per cent regard her “very unfavourably”. Twenty per cent of 2019 Conservative voters maintain a favourable view of her.

Truss has a net favourability rating of minus 70, a drop of 14 percentage points since last week, the YouGov poll said on Tuesday.

Truss on Friday sacked chancellor Kwasi Kwarteng and replaced him with Jeremy Hunt, who on Monday ditched most of his predecessor’s fiscal package announced on September 23.

Truss is more unpopular than Johnson, her predecessor who resigned after a number of scandals, and her rivals for the Tory leadership, according to the YouGov poll.

Penny Mordaunt, the leader of the House of Commons who stepped in for Truss on Monday in the House of Commons, ranked the highest among the top Tory figures with a favourability score of minus 17. Hunt has a favourability score of minus 41.

Goldman Sachs: The Wall Street bank is expected to announce plans for a major reorganisation as it reports third-quarter earnings. Profit at Goldman Sachs, the last of the six biggest US banks to report, are expected to almost halve to $2.86bn from $5.28bn, according to analysts polled by Refinitiv. Investment banking fee-related income is drying up, which is expected to outweigh the benefit that rising rates will have on net interest income.

Netflix: Investors will be keen for an update from the streaming giant on its subscriber growth days after it announced it would launch its ad-supported tier. In April, Netflix reported a subscriber loss for the first time in a decade, a trend that continued into the past quarter. Analysts forecast the group to post third-quarter revenue of $7.84bn, up from $7.48bn a year before, while earnings per share will fall from $3.19 a share to $2.13.

Other earnings: Healthcare company Johnson & Johnson, investment manager State Street, and defence group Lockheed Martin report before opening bell. After closing bell, United Airlines is expected to report its strongest earnings since the start of the Covid-19 pandemic as high air travel demand has carried into the autumn.

Fedspeak: Atlanta Fed president Raphael Bostic will discuss what lies ahead for workers in an uncertain economy during a virtual panel hosted by Workrise. Separately, Minneapolis Fed president Neel Kashkari will speak about the economy on a panel before the Minnesota chapter of Women Corporate Directors.

Nine out of 10 Ukrainians consider victory over Russia to mean regaining all territory lost since 2014, including Crimea, according to a new opinion poll by Gallup.

Two-thirds of Ukrainians say Kyiv should keep fighting until it wins the war, while 26 per cent want it to negotiate an end to the fighting as soon as possible, the survey found.

The poll results underscore the Ukrainian government’s determination to liberate all of its territories before engaging in peace talks with Moscow.

Some 94 per cent of those polled expressed confidence in the Ukrainian military, while 85 per cent approved of Volodymyr Zelenskyy’s performance as president.

The poll was conducted across Ukraine in early September.

Stock markets extended their gains on Tuesday, as the UK’s U-turn on planned tax cuts bolstered sentiment ahead of a fresh batch of Wall Street corporate earnings.

Europe’s regional Stoxx 600 added 0.6 per cent in early London trading. Hong Kong’s Hang Seng rose 1.4 per cent, while futures contracts tracking the S&P 500 advanced 1.4 per cent. Those tracking the Nasdaq 100 gained 1.6 per cent.

Those gains in equity markets followed a rally in the previous session, with the S&P closing 2.7 per cent higher on Monday — supported by Bank of America posting better than expected third-quarter results. BofA attributed its earnings to “resilient” US consumers.

On Tuesday, attention will turn to closely watched reports from Wall Street bank Goldman Sachs, streaming group Netflix and consumer and pharmaceuticals giant Johnson & Johnson.

Investors have been monitoring companies’ latest financial statements for signs of pressure from high inflation and rising borrowing costs, as central banks around the world tighten monetary policy aggressively to curb rapid price growth. Concerns have intensified that the US Federal Reserve and its peers will raise interest rates, prompting a protracted slowdown.

The Fed has led the charge on raising interest rates, with increases of 0.75 percentage points at each of its previous three meetings — taking its target range to 3-3.25 per cent. The central bank is expected to implement another three-quarter-point rise in November.

The strong start to the week for equity markets also came as new British chancellor Jeremy Hunt abandoned most of his predecessor Kwasi Kwarteng’s “mini” Budget measures, which had spooked markets and sparked a fire sale of pension fund assets.

Read more about markets here.

Fintech group Wise has upgraded its full year outlook, driven by growth in customer numbers and rising rates boosting the income it earns on customers’ balances.

In the three months to September 30, total income rose almost 75 per cent year on year to £229mn. Rising interest rates provided a tailwind, with Wise earning £17.5mn in net interest income on its customers’ balances compared with a loss of £600,000 a year earlier.

“This quarter 5.5mn customers moved £27bn with us, 50 per cent more than in the second quarter last year and for the second consecutive quarter more than half our payments were instant,” said Kristo Käärmann, chief executive and co-founder.

The UK fintech expects that growth for the full year will be 55-60 per cent, up from its previous estimate of 30-35 per cent.

After listing in London last year, Wise shares have fallen 25 per cent.

In June, it was revealed that the Financial Conduct Authority was investigating Käärmann over deliberately defaulting on tax payments. In August, an Emirati regulator fined a Wise subsidiary $360,000 over failures in its anti-money laundering controls.

The UK’s armed forces minister vowed to safeguard a commitment to defence spending as the chancellor seeks efficiencies in all government departments.

James Heappey stressed on Tuesday that a pledge to spend 3 per cent of gross domestic product on defence by 2030 “must be delivered given the need to keep our nation safe in increasingly uncertain times”.

“You cannot have prosperity at home or internationally without security,” Heappey told Sky News on Tuesday. “That is a really good reason to be investing in defence.”

Jeremy Hunt, on his first full day as chancellor, told parliament the government would seek to reduce spending after a tax-cutting “mini” Budget sent shockwaves through markets.

Heappey also cautioned former members of the RAF from training military personnel in other countries without approval, following reports that retired pilots were helping China’s military to defeat western warplanes and helicopters.

“We have approached the people that are involved and been clear with them that it is our expectation that they would not continue,” he said.

He added: “We are going to put into law that once people have been given that warning, it will become an offence to then go forward and continue with that training.”

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Ukraine’s capital Kyiv and other cities have been hit for a second day by Russian missile and kamikaze drone strikes, which were targeting electricity generators but also hit residential buildings.

“There were explosions again in Kyiv this morning,” the city’s mayor Vitaliy Klitschko said in a Telegram channel post.

He identified the incident as occurring at “critical infrastructure” in Kyiv’s northeastern Desnyansky district.

Kyrylo Tymoshenko, deputy head of Ukrainian president Volodymyr Zelenskyy’s administration, said “there were three strikes upon a power supply facility” in Kyiv.

As photos on social media emerged of a fireball and plumes of smoke over an electricity generator in the central Ukrainian city of Dnipro, Tymoshenko added in a separate Telegram post that “there may be no electricity and water supply in some areas” of the city.

He pointed to early morning strikes on power infrastructure in other Ukrainian cities and towns including Zhytomyr, a provincial capital west of Kyiv whose mayor Serhiy Sukhomlyn said electricity and water supply had been knocked out.

The campaign of strikes against infrastructure comes as Ukrainian troops push an autumn counteroffensive that has liberated swaths of territory from Russia’s invading forces in far eastern and southern regions.

Zelenskyy said civilians had been targeted directly in the strikes.

“Ukraine is under fire by the occupiers. They continue to do what they do best — terrorise and kill civilians,” Zelenskyy wrote on Telegram.

North Sea explorer and producer Ithaca Energy has outlined plans for a London listing, as the soaring price of oil and gas spurs renewed interest in the region.

In a statement on Tuesday, Ithaca said the cash raised through the float would allow it to become a “key player in providing energy security to the UK”, at a time when Russia’s reduction of gas flows has sent shockwaves through Europe.

Gas represented 35 per cent of Ithaca’s production over the first nine months of the year.

Ithaca, previously listed in Toronto and London, was acquired by Tel Aviv-listed Delek in 2017. It has since bought assets in the North Sea to form one of the country’s largest independent oil and gas groups.

Ithaca’s acquisitions include a $2bn buyout of Chevron’s North Sea operations in 2019, and the more recent $1.5bn deal for private equity-backed Siccar Point Energy.

Ithaca said it had proven or probable reserves of 244mn barrels of oil equivalent, as of June 30 this year.

As part of the listing, Delek will reduce its stake in Ithaca but will remain a controlling shareholder, the statement said.

Shares in Hybe surged a day after the South Korean entertainment and talent agency behind global pop superstars BTS said the band members would do their military service before getting back together around 2025.

The group’s shares closed up 4.8 per cent on Tuesday, outperforming a 1.4 per cent gain in the benchmark Kospi Composite index, as fans and investors were relieved at the shorter-than-expected hiatus of the seven-member boy band.

BTS have become a global sensation, spearheading a global K-pop craze and releasing hit songs such as “Dynamite” and “Butter” since their debut in June 2013.

The band was the world’s best-selling artists in 2020 and 2021, according to the International Federation of the Phonographic Industry.

Last year, the group generated about Won880bn ($615mn), which accounted for 70 per cent of Hybe’s Won1.3tn revenue, according to NH Investment & Securities.

But Hybe shares have slumped about 40 per cent after the group announced an indefinite hiatus to pursue solo projects.

The move has increased uncertainty over the group’s future but Monday’s announcement has cleared that uncertainty to some degree, analysts said.

Hybe chief executive Park Ji-won played down financial concerns related to BTS’s absence, citing its broader line-up of artists including other popular K-pop groups such as Le Sserafim and western pop stars such as Justin Bieber and Ariana Grande.

“We have always been aware of the eventuality of mandatory military service, and we have long been making preparations to be ready for this moment,” Park said in a letter to shareholders.

“In the short term, individual activities for several of the members are planned into the first half of 2023 and we have secured content in advance, which will enable BTS to continue their engagement with fans for the foreseeable future.”

Swiss Re said it expects more than $1bn in claims from last month’s hurricane that battered Florida, which will mean the reinsurer is “unlikely” to meet its target for return on equity this year.

The Zurich-based group on Tuesday forecast a third-quarter net loss of about $500mn, thanks to an expected $1.3bn in claims from Hurricane Ian.

While the company had given an overall target for return on equity for the full year of 10 per cent, it had not said what net income it expected to report in the third quarter.

The group is the first big reinsurer to warn about Hurricane Ian’s effects on its earnings. The company gave a preliminary total insured market loss from the storm at between $50bn and $65bn. Those figures would confirm the event as the second most expensive storm in US history after 2005’s Hurricane Katrina.

At an investor fay in April, Swiss Re committed itself to achieving a 14 per cent return on equity for 2024. It said on Tuesday it was still committed to that.

“While the 2022 target of 10 per cent group ROE is unlikely to be reached given the impact from natural catastrophes, the Ukraine war and financial market volatility, the group remains confident in the midterm outlook and committed to its 2024 profitability goals,” the company said in a statement.

Housing sales in the UK are slowing as economic turmoil and rising borrowing costs weigh down on buyers’ ability to transact, one of the country’s largest housebuilders has said.

Bellway said that buyers have reserved an average of 191 properties a week since the start of August, compared with 218 a week in the same period a year before.

The slowing sales market is likely to have a knock-on effect on new development.

Bellway will “take a more cautious approach to land investment in the year ahead” as a result of the economic uncertainty, said Jason Honeyman, chief executive of the FTSE 250 group.

The company posted revenues for the year to the end of July of £3.54bn, up 13 per cent on the previous year.

But pre-tax profits were down 36.5 per cent to £304mn after Bellway set aside £346mn to pay for repair work on buildings caught up in a fire-safety scandal.

Roche chief executive Severin Schwan said health authorities are holding back from ordering more Covid-19 medicines and tests, despite a rise in cases, as sales of its Covid-19 drugs fell by $1bn in the first nine months of the year.

The Swiss pharmaceutical company sells the antibody treatment Ronapreve and the anti-inflammatory Actemra, originally developed for arthritis, for Covid-19. Revenue from Covid-19 tests also fell, down 40 per cent year-on-year to $600,000.

Schwan said the drop in government orders was probably caused by fewer severe Covid-19 cases, which meant healthcare systems were better able to cope.

“In spite of increasing incidence rates for Covid-19, we actually don’t see an increase in the demand for Covid-19 related products,” he said. “It has nothing to do with inventories . . . there is simply much smaller demand than we have seen in the previous year.”

Sales were also hit by competition from biosimilars — generic versions of biologic drugs — especially for older cancer medicines, reducing revenue by $1.5bn.

But Roche confirmed its full-year guidance, expecting stable sales, or growth in the low single-digit percentages, at constant exchange rates. It forecasts core earnings per share will increase in the low to mid single-digit range and expects to increase its dividend.

In the first nine months, total sales rose 2 per cent year-on-year, at constant exchange rates, with growth driven by newer medicines to treat illnesses including the brain and nerve disease multiple sclerosis, the rare genetic condition spinal muscular atrophy and breast cancer.

China-based, Warren Buffett-backed BYD said on Monday that the company’s net profit is projected to quadruple in the third quarter, as it maintains growth momentum after surpassing Tesla as the world’s largest electric vehicle maker by sales earlier this year.

BYD expects record net income of Rmb5.5bn-5.9bn ($764mn-$820mn) for the three-month period, a rise of 333-365 per cent year-on-year, citing robust EV sales and improved cost control from the end of its mobile phone unit.

The company’s Hong Kong-listed stocks rose more than 6 per cent in Tuesday trading.

EVs are an increasingly important pillar for the Shenzhen-based conglomerate. Cars and related products accounted for 73 per cent of BYD’s total revenue in the first half of the year, the company’s interim report showed.

On the back of China’s burgeoning demand for cleaner cars, BYD saw its total sales of new energy passenger vehicles, which included plug-in hybrids, pure battery and hydrogen-powered models, rise 194.37 per cent year-on-year to 538,704 units in the July-September quarter. That compared with 343,000 pure electric cars sold by Tesla.

According to the China Passenger Car Association, BYD took 29.7 per cent of China’s new energy vehicle market in the year to September, 21 percentage points ahead of the next competitor, SAIC-GM-Wuling.  

The company is also venturing into overseas markets with its lower-cost models. BYD has forayed into India, Laos and Jordan in recent weeks and chose Thailand for its first wholly invested passenger car plant outside China last month.

Miner Rio Tinto has warned of a continued slowdown in global commodity markets as recessionary fears in Europe and the US and a weak property sector weigh on China, the largest buyer of its minerals.

The Anglo-Australian company said commodity prices continued to fall during the third quarter and further “downside risks to demand” have emerged as the global economy has slowed.

Rio Tinto said Beijing has increased policy support to restore confidence in its economy but the recovery has been uneven and the slowing of global demand poses a risk to the country’s export economy. China’s construction sector, a key market, remains weak, Rio noted.

The iron ore price has been weaker in the run-up to the mining results season and fell by as much as 1.4 per cent on Tuesday to $90.30 per tonne before recovering to be a modest 0.2 per cent lower at $91.40.

Rio Tinto said iron ore output from its mines in Western Australia this year would be at the lower end of its estimate of 320mn-335mn tonnes.

The company’s shares fell more than 0.4 per cent in Sydney on Tuesday as the S&P/ASX 200 index rose 1.8 per cent.

Wall Street stocks rallied on Monday, as better than expected earnings from Bank of America and an abrupt U-turn on tax cuts from the UK government buoyed market sentiment.

The S&P 500 rose 2.7 per cent while the tech-heavy Nasdaq Composite gained 3.4 per cent. In Europe, the regional Stoxx Europe 600 closed up 1.8 per cent and London’s FTSE 100 advanced 0.9 per cent.

US stocks rose after Bank of America’s third-quarter results beat expectations, attributed to “resilient” US consumers. Expanding profit margins from consumer lending helped to temper falling investment banking revenues.

Shares in the US bank rose more than 6 per cent, as it followed JPMorgan Chase in reporting a smaller than expected drop in profits.

“We’ve been waiting for warnings from earnings and none of the forecasts so far have confirmed our worst fears,” said Lou Brien, a market strategist at DRW Trading.

Investors are watching corporate earnings closely for signs of strain from high inflation and rising borrowing costs. The Federal Reserve has raised interest rates 0.75 percentage points at each of its past three meetings, taking its target range to 3 to 3.25 per cent.

Stocks were also buoyed on Monday after new UK chancellor Jeremy Hunt abandoned the majority of his predecessor Kwasi Kwarteng’s tax cuts. The reversal helped calm the gilts market and lifted the pound to its highest level in nearly two weeks.

Read more about today’s market moves here.

Ukraine’s president said Russia’s army has launched evening “kamikaze” drone strikes on the country in the third barrage of attacks for the day.

“Just now there is a new Russian drone attack,” Volodymyr Zelenskyy said in an evening video address to the nation as air raid sirens in Kyiv echoed for a fourth time on Monday.

Strikes in the morning killed four civilians in Kyiv, the capital.

“We manage to shoot down some of the missiles and drones. In just 12 hours from 9pm on Sunday, 37 Iranian Shahed [drones obtained by Russia] and several cruise missiles were destroyed,” Zelenskyy added.

He called upon the international community to “stop this terror” and provide his country with more air defence systems.

“Russia has no chance on the battlefield. And he tries to cover up his military defeats with terror,” Zelenskyy added. His comment referred to weeks of successful counteroffensives by Ukraine’s troops in far eastern and southern regions occupied by Russian forces.

Earlier on Monday evening, the mayors of two Kyiv suburbs confirmed that Ukrainian forces had shot down Russian lethal drones swarming around the capital.

Officials in the southern Black Sea port region of Odesa also reported Russian drone attacks, some of which they claimed were repelled by surface-to-air defences.

German chancellor Olaf Scholz has moved to defuse a damaging row in his three-party coalition by ordering Germany’s three remaining nuclear power plants to continue operating until mid-April next year, as Berlin battles to avert an energy crunch this winter.

The government will create a “legal basis” to allow the Isar 2, Neckarwestheim 2 and Emsland nuclear power plants to operate beyond December 31 until April 15 2023 at the latest, Scholz’s spokesman said in a statement.

The German leader’s latest move should resolve a long-running conflict between two of the three parties in Scholz’s coalition — the Greens and the liberal Free Democrat, or FDP — over the future of Germany’s last nuclear power stations.

Robert Habeck, the Green economy minister, had agreed to let Isar 2 in Bavaria and Neckarwestheim in the south-western state of Baden-Wuerttemberg, continue operating until next April.

But the FDP had insisted that Emsland in the northern state of Lower Saxony should also be kept online and that all three plants should remain running until 2024. Some in the party had even called for reactors that have already been shut down to be reactivated.

Christian Lindner, the FDP leader and finance minister, welcomed Scholz’s decision. “It’s in the vital interest of our country and our economy that we preserve all capacities for power generation this winter,” he said. “The chancellor has now created clarity.”

Canadian businesses signalled a significantly worsening outlook as they reported the biggest drop in sentiment since the start of the Covid-19 pandemic, according to a survey from the country’s central bank.

The Bank of Canada’s business outlook indicator fell to 1.69 in the third quarter from 4.87 in the prior quarter, on expectations of slower sales growth as interest rates rise and demand growth shifts back towards pre-pandemic levels.

Most businesses and consumer indicated they believed Canada is likely to enter into recession over the next year.

Rising interest rates have prompted businesses with sales linked to housing activity and household consumption to anticipate weaker sales growth. Other businesses predicted healthy sales growth, but at a slower rate than earlier points in the economic recovery from the pandemic.

“Early signs suggest that pressures on prices and wages have started to ease, but firms’ inflation expectations remain high,” the BoC said.

Businesses cited high global commodity prices and persistent worldwide supply chain issues, as well as strong domestic demand and high labour costs, as their primary inflationary pressures.

A separate survey released on Monday found that consumers thought the state of the Canadian economy was worsening and expected inflation — a figure to which they are more attentive — to remain elevated.

Consumers in the third quarter expected inflation to hit 7.11 per cent over the next 12 months, the highest since the end of 2014, up from 5.11 per cent in the second quarter.

The central bank is widely expected to raise rates by at least 0.5 percentage points in its next decision on October 26.