News updates from September 7: Former FTX executive pleads guilty, rouble and renminbi sink

A retired Colombian soldier charged in the 2021 assassination of Haitian president Jovenel Moïse pleaded guilty on Thursday in Miami, as authorities continue to pursue individuals linked to a murder that has deepened a spiralling crisis in the Caribbean country.

Germán Rivera, 45, admitted partaking in “a conspiracy to kill and kidnap a person outside of the United States” that resulted in Moïse’s death, according to the plea agreement reached with federal prosecutors.

Prosecutors said in a statement filed in court Thursday that Rivera met with co-conspirators in person in Haiti and virtually in south Florida, where they discussed “methods for carrying out the operation and the need to acquire weapons to facilitate the operation”.

Read more about the assassination here

Peter Navarro, a former top trade adviser to Donald Trump, has been convicted of contempt of Congress, after he failed to comply with a subpoena from a congressional committee probing the January 6 2021 attack on the US Capitol.

A federal jury in Washington delivered the verdict on Thursday afternoon after deliberating for several hours.

Navarro is the second former aide to the former US president to be prosecuted over a failure to co-operate with the congressional investigation into January 6. Steve Bannon, a former senior adviser to Trump, was convicted last year on two contempt of Congress charges, and sentenced to four months in jail. He has appealed against the decision.

Read more about Navarro’s charges here

John Williams, president of the New York Federal Reserve, on Thursday said monetary policy is currently in a “good place” in the latest signal that the US central bank is readying to hold interest rates at its September meeting. 

Williams cited mounting evidence that supply and demand across the world’s largest economy is coming into better balance in remarks at a Bloomberg event, but stopped short of declaring victory in the Fed’s flight against the worst inflation shock in decades. 

Williams said the Fed would be closely parsing incoming economic data before finalising its policy decision for its next gathering on September 19-20. He also expects the unemployment rate to eventually eclipse 4 per cent, up from its current 3.8 per cent level.

Charter chief executive Chris Winfrey on Thursday said it was “worth it” for the pay-television provider to cut access to ESPN during a busy sports week.

In remarks at a Goldman Sachs conference, Winfrey apologised to customers who have missed the tennis US Open and college football games because of the carriage dispute, but said Disney’s demands for higher carriage fees will cost consumers too much for channels they “don’t want or they can’t afford”.

“It was the right time to say enough is enough or else we’re going to have to move on to a different model,” Winfrey said.

Disney issued a statement on Thursday calling Charter’s decision “unfortunate” and accused the company of abandoning its customers. 

The owner of a vessel carrying Iranian oil that was seized by Washington has pleaded guilty to conspiring to violate US international commerce laws.

The owner, Suez Rajan Limited, in March signed an agreement with the Department of Justice pleading guilty to one count of conspiring to violate the International Emergency Economic Powers Act, which gives the US president power to freeze and confiscate foreign assets, according to court filings that were unsealed last month.

The Marshall Islands company is the registered owner of the Suez Rajan, a 12-year-old tanker. It agreed to a three-year probation period and a $2.46mn fine. Empire Navigation, the Greece-based operator of the vessel, entered into a deferred prosecution agreement, according to court documents.

Read more about the Suez Rajan case here

Apple shares dropped more than 3 per cent for the second consecutive session, weighing on the broader US stock market and putting the stock on course for its biggest two-day drop this year that has wiped off more than $200bn from its valuation.

The iPhone maker’s shares were down 3.7 per cent during lunchtime trading in New York on Thursday. Its drop since Tuesday’s closing bell reached 7.2 per cent, on course to be its biggest-two day percentage drop since November 2022.

Apple’s market capitalisation has dropped by more than $200bn over the past two sessions to about $2.76tn, propelled by media reports that China said government employees would be banned from using iPhones as their work mobiles.

The stock, which carries a large weighting in US stock market indices, helped push the Nasdaq Composite down 1 per cent and the S&P 500 down by 0.3 per cent.

Read more on Apple here

France’s Pinault family has agreed to buy a majority stake in Hollywood talent group Creative Artists Agency from private equity firm TPG in the largest transaction ever for the family’s holding company, Artémis.

Details of the transaction were not disclosed, but Artémis will take a roughly 53 per cent stake in CAA from TPG, said two people with knowledge of the situation.

The talent agency has an enterprise value of $7bn including debt, one of the people said, and had sales, largely through commissions earned by agents on its artists and sports stars, of about $1.7bn in 2022.

Artémis will pay a multiple of 13 times earnings before interest, tax, depreciation and amortisation for its stake, one of the people said.

Read more on CAA here

The US Senate has voted to confirm Adriana Kugler as a governor at the Federal Reserve, making her the first Latina to serve as a top policymaker in the central bank’s 110-year history.

Votes for Kugler, who previously worked at the World Bank as an economist, were largely cast along party lines, with 53 lawmakers backing her nomination and 45 voting against it.

Kugler is the latest official to be confirmed to a new posting at the Fed following a string of votes this week that confirmed Philip Jefferson as vice-chair of the Federal Reserve and Lisa Cook for a 14-year term as a Fed governor.

The White House has nominated a former Obama administration official to run the US aviation regulator, after it has been without a leader confirmed by the Senate for more than 17 months.

Michael Whitaker, currently chief operating officer at Hyundai’s electric air taxi company Supernal, was deputy administrator at the agency between 2013 and 2016.

His nomination comes as US aviation is struggling with crowded airspace, understaffing at air traffic control, and a series of near-misses among commercial jets that have rattled regulators and airlines alike.

President Joe Biden’s first nominee, Phil Washington, chief executive of Denver International Airport, withdrew his nomination in March.

Former FTX executive Ryan Salame will plead guilty on Thursday to criminal charges over the collapse of the cryptocurrency exchange, less than a month before the trial against founder Sam Bankman-Fried begins in New York.

Salame, who co-led the exchange’s chief Bahamian entity FTX Digital Markets, will appear in a Manhattan court at 3pm Eastern time, according to people familiar with the matter, becoming the fourth former FTX executive to cut a deal with prosecutors.

A lawyer for Salame did not respond to a request for comment. A spokesman for Sam Bankman-Fried declined to comment.

Read more on FTX here

Lord Rothermere’s Daily Mail and General Trust has held talks with Qatari backers to support a combined bid for Telegraph Media Group, the latest example of bidders for the UK national newspaper scouring the oil-rich Gulf for financial backing.

DMGT, which owns the Daily Mail and Metro newspapers, is in discussions over additional equity to finance a bid for the rival media group that could cost more than £500mn, according to two people familiar with the situation.

Read more about a possible sale of Telegraph Media Group here.

Private equity group Carlyle has hired advisers to explore a sale of its Cambridge-based video game developer Jagex, according to people familiar with the matter.

Jagex, which has developed games including Runescape, is working with bankers at Morgan Stanley, the people said. The company could fetch more than £1bn in a sale, the people said.

Discussions are at an early stage and the timeline on a sale process could last from the end of this year until the first half of 2024, the people cautioned.

The company had previously been seen as a candidate for a UK initial public offering.

Read more here.

New applications for US state unemployment aid, considered a proxy for lay-offs, fell to a seven-month low last week, a sign the broader labour market is slowing but not collapsing in the high interest rate environment.

Initial jobless claims totalled 216,000 during the week ended September 2, the US labour department said on Thursday, the lowest weekly figure since early February. Economists expected 234,000 claims, increasing from the previous week’s upwardly revised 229,000.

Last Friday’s August jobs report raised hope of a Goldilocks scenario for the US economy, giving the Federal Reserve breathing room on interest rates. Policymakers have signalled they will hold rates steady later this month, but a resilient labour market could keep them higher for longer.

US Treasury yields remained about flat following the data.

The US and UK governments on Thursday announced new sanctions against 11 people affiliated with Trickbot, a major Russian cyber crime group.

The US Treasury said the individuals included “key actors involved in management and procurement” for the cybercriminal syndicate, which has ties to Russian intelligence services and a record of targeting critical infrastructure and companies in both the US and UK.

“In close co-ordination with our British partners, the United States will continue to leverage our collective tools and authorities to target these malicious cyber activities”, said Brian Nelson, under secretary of the US Treasury.

The Russian rouble fell beyond 98 to the US dollar on Thursday, giving up two-thirds of the gains that followed the central bank’s emergency rate hike on August 15.

The rouble’s slide has unnerved Vladimir Putin, who needs a strong currency to fund his war in Ukraine. A weak rouble, says Timothy Ash of Chatham House, “tells the whole world that the war is not going well”.

When the currency hit 102 to the dollar last month, the central bank upped its policy rate 3.5 percentage points to 12 per cent. This worked at first but the bank has since been pushed into new action; on Wednesday, it said it would increase foreign currency sales almost tenfold between September 14 and 22.

Eurozone growth was weaker than initially estimated in the second quarter, according to revised official figures showing output in the bloc expanded only 0.1 per cent.

Eurostat, the EU’s statistics office, cut its figure for eurozone gross domestic product growth from its flash estimate of 0.3 per cent published last month. 

The figure adds to the gloom over the eurozone and means it fell further behind the US, which grew 0.6 per cent in the second quarter.

The downgrade reflected cuts in GDP estimates by several eurozone members. Ireland slashed its quarterly growth figure from 3.3 per cent to 0.5 per cent, while Italy said its economy shrank 0.4 per cent, a deeper contraction than its estimated 0.3 per cent.

A European parliament committee has voted to tighten standards in the wake of the Qatargate scandal, paving the way for the approval of changes next week.  

A beefed-up board with independent experts will police MEP conduct and members will have to declare all meetings with interest groups and public authorities of foreign countries, if the full parliament votes in favour at its plenary session in Strasbourg from Monday. 

Three MEPs, an assistant and a former MEP are among those charged with fraud over allegations that they received cash for favours from countries including Qatar and Morocco after police raids in December.

Committee members, who reflect the make-up of parliament, also backed tighter rules on conflicts of interest, more complete financial declarations and increased penalties for rule breaches.

Jobless claims: Economists expect initial US state unemployment claims, considered a proxy for lay-offs, to have increased to 234,000 last week from 228,000 the previous week. The latest domestic jobs report showed a cooling labour market, giving the Federal Reserve some breathing room on its monetary policy decisions.

Fedspeak: Fed governor Michelle Bowman will appear on a panel on the future of money and consumer protection at the Philadelphia Fed’s annual fintech conference. The presidents of the Dallas, Atlanta, New York, and Chicago Fed branches will speak at different forums across the country.

Boeing: Boeing chief financial officer Brian West will speak at an industrial conference, where investors will be keen to hear about the aerospace and defence group’s return to delivering in China, as well as the latest supplier issues for the 737 Max narrow-body commercial jetliner.

UK businesses’ inflation and wage growth expectations eased in August, a monthly survey published by the Bank of England showed, providing some relief for policymakers.

Businesses expect their own output price inflation for the year ahead to be 4.9 per cent in the three months to August, down 0.5 percentage points from the three months to July, and below a recent peak of 6.6 per cent in the three months to September 2022.

Expected year-ahead wage growth eased to 5.1 per cent in the three months to August, continuing the declining trend from a recent peak of 6 per cent at the end of 2022.

The figures are closely watched by policymakers for signs of inflation becoming ingrained in the wage and price settlement. 

China’s currency has weakened beyond lows touched during nationwide lockdowns last year and to the lowest level against the dollar since 2007, as weak economic readings and a crisis in the property market pile downward pressure on the renminbi.

The currency edged down 0.1 per cent to a low of Rmb7.3259 per dollar on Thursday in the wake of data that showed China’s exports fell 8.8 per cent in August compared with a year ago.

The renminbi has fallen almost 6 per cent this year and has continued losing ground to the dollar despite a raft of direct and indirect measures taken by Chinese authorities to discourage bets against the currency.

Read more about the renminbi here.

Former Tory minister Chris Pincher has announced his resignation as an MP, triggering a by-election in his constituency of Tamworth.

Conservative leader Rishi Sunak now faces two challenging by-elections this autumn given the recent departure of former culture secretary Nadine Dorries as MP for Mid-Bedfordshire.

Pincher this week lost his appeal to an independent panel after the Commons standards committee decided to suspend him from the Commons for eight weeks for groping two men last year.

Pincher said: “Following the independent expert panel’s decision . . . I do not want my constituents to be put to further uncertainty and so in consequence I have made arrangements to resign and leave the Commons.”

European and Asian stocks fell on Thursday as investors worried over the prospect of slowing global economic growth and high US interest rates.

Europe’s region-wide Stoxx 600 fell 0.5 per cent at the open, after six straight days of losses, while France’s Cac 40 was down 0.3 per cent and Germany’s Dax gave up 0.3 per cent. 

The downbeat mood spread from China after official data showed trade was weakening in the world’s second-largest economy. 

The benchmark CSI 300 and Hong Kong’s Hang Seng both fell 1.4 per cent.

Read more from the Markets Briefing here

Big share price moves in Europe today include Danish shipping company AP Moeller Maersk, UK-based aerospace business Melrose and irish packaging company Smurfit Kappa:

• AP Moeller Maersk: Shares in the Danish shipping company slipped 2.6 per cent in early trading a day after Denmark’s supreme court ruled against it in a tax case involving its businesses in Algeria and Qatar in 2006-08. 
  

• Melrose Industries: Shares in the former UK buyout group turned aerospace manufacturer surged 7.5 per cent on Thursday after it raised its guidance for the year following an almost 20 per cent rise in revenues during the first half.
  

  

• Smurfit Kappa: Shares in the London-listed Irish packaging company slipped 2.6 per cent after it announced it was in talks with US-based rival Westock over a potential multibillion-dollar merger that would create one of the world’s largest paper and packaging companies.

The downturn in German industry deepened in July as production fell 0.8 per cent, hit by a sharp decline in carmaking, as the pressure rose on the government to do more to lift the economy out of the doldrums.

The third consecutive month-on-month decline exceeded the 0.5 per cent fall forecast by economists in a Reuters poll. It would have been even bigger without a rebound in energy and construction output in July. Production in the carmaking sector fell 9 per cent.

The German economy has shrunk or stagnated for the past three quarters. Commerzbank economist Ralph Solveen said the continued downturn in manufacturing indicated Europe’s largest economy “will contract again in the second half of the year”.

British American Tobacco, the world’s biggest cigarette maker by revenues, has agreed to sell its Russian business a year and half after vowing to exit the country following Vladimir Putin’s invasion of Ukraine.

The maker of Dunhill and Lucky Strike cigarettes said on Thursday it had agreed to sell its Russian and Belarussian arm to a consortium led by BAT Russia’s management team. The deal is expected to be concluded next month.

Japan Tobacco International, the biggest cigarette maker in Russia, has never promised to exit the country and Marlboro maker Philip Morris International previously told the FT it would “rather keep” its Russian business than sell on stringent Kremlin terms after initially vowing to leave.

UK insurer Direct Line has agreed to sell its brokered commercial insurance unit for £520mn in a bid to shore up its balance sheet after a string of profit warnings.

The group on Thursday said its first-half pre-tax loss had deepened to £76.3mn in the six months to June, compared with a £11.1mn loss in the same period last year as rising premiums take “longer than expected” to improve margins.

The group, which last week appointed Adam Winslow as chief executive, said the sale of the unit to RSA Insurance would allow it to increase its solvency ratio.

Direct Line added it would aim to restart dividends when it is able to generate organic capital in its motor division.

Melrose Industries, the former UK buyout group turned aerospace manufacturer, raised its guidance for the year after an almost 20 per cent rise in revenues during the first half.

The group said its adjusted operating profit this year was now expected to be in a range of £375mn to £385mn, an 8 per cent increase on previous forecasts.

Revenues were £1.63bn in the first half, up from £1.36bn a year earlier. Aerospace operating profits were £175mn, up from £67mn.

Chief executive Simon Peckham and executive vice-chair Christopher Miller, co-founders, and finance director Geoffrey Martin will hand over to insiders next year.

Melrose said the three had successfully executed the company’s “buy, improve, sell” strategy and its transition to an aerospace group.

UK house prices fell for the fifth consecutive month and at the fastest annual pace since 2009 as higher mortgage rates hit prospective buyers, according to mortgage provider Halifax.

In the largest contraction since 2009, property prices dropped by 4.6 per cent in August compared with the same month last year, when prices reached a record peak, according to data released on Thursday.

Prices fell 1.9 per cent between July and August, following consecutive monthly drops since April, Halifax said.

The typical UK home now costs £279,569, down by around £14,000 over the past year.

The drop was larger than the monthly fall of 0.3 per cent and an annual contraction of 3.45 per cent forecast by economists polled by Reuters.

Lloyd’s of London has reaped the benefit of rising prices for insurance and higher interest rates, swinging to a pre-tax profit of £3.9bn in the first half from a £1.8bn loss in the same period last year.

Prices for insurance and reinsurance — the cover that insurers buy to protect their own balance sheets — have been rising as the industry reacts to increasing weather-related risks. Overall prices at Lloyd’s rose 9 per cent in the first half.

This helped to drive both a 22 per cent increase in premium income and a sharp rise in underwriting profits. The market also benefited from rising interest rates as it earned a better return on its £100bn investment book.

Economic data: The EU is to publish GDP data for the second quarter, while Germany is due to release industrial production figures. Halifax is set to present its house price index for the UK.

Results: Irish housebuilder Cairn Homes and British insurers Direct Line and Lloyd’s of London are to releases first-half earnings. Electrical retailer Currys is expected to issue a trading update as it holds its annual general meeting. 

UK finance: The City of London is due to publish a new blueprint for boosting its competitiveness by 2030.

Atlanta-based WestRock is in talks to merge with European rival Smurfit Kappa, in a deal that would create one of the world’s largest paper and packaging companies.

Smurfit, which is listed in London but based in Dublin, said on Thursday that its board was in talks with US-listed WestRock to create Smurfit WestRock, which would have its global headquarters in Ireland with US operations remaining in Atlanta.

The two companies have a combined market cap of about $18.7bn, according to Financial Times calculations based on Bloomberg data. The new group would have combined revenues of about $34bn, Smurfit Kappa said, adding that it would list on the New York Stock exchange.

China’s exports fell 8.8 per cent in August against a year earlier and imports declined 7.3 per cent in another hit for the manufacturing sector of the world’s second-largest economy.

The results compare with a forecast of a fall of 9.2 per cent for exports and 9 per cent for imports in a Reuters analyst poll.

China’s economy is suffering from turmoil in its property sector coupled with weak manufacturing and exports. But Beijing is avoiding launching a large stimulus programme, with the official gross domestic product growth target set at 5 per cent this year, the lowest in decades.

Baidu has expanded its fleet of autonomous taxis in the Chinese city of Wuhan, as the internet group accelerates its deployment of next generation technology.

Baidu’s robo-taxi business Apollo Go announced on Thursday that it had increased the number of its self-driving vehicles in Wuhan from five to 300, creating one of China’s largest fleets. Apollo Go said it had so far provided more than 3.3mn rides to the public across the country.

Baidu, which is known for its internet search engine, is recasting itself as an AI and high-tech leader. Last month, the company was among a clutch of tech groups to receive regulatory approval to launch generative AI applications to the public, as Beijing seeks to catch up on breakthroughs made by Microsoft’s OpenAI.

Asian equities declined on Thursday as strong US economic data heightened fears of interest rate increases and traders looked ahead to Chinese trade data due later in the day.

Hong Kong’s Hang Seng index shed 1 per cent, China’s CSI 300 fell 0.8 per cent and South Korea’s Kospi declined 0.7 per cent. Japan’s Topix was flat.

Data released on Wednesday by the Institute for Supply Management showed an expansion in the US services sector and suggested that consumer demand had remained resilient as the Federal Reserve has repeatedly increased interest rates.

China, meanwhile, is set to release import and export figures for August. Exports, which provided an important economic lifeline to Beijing during the pandemic, have repeatedly disappointed this year.

A Japanese H2-A rocket bound for the Moon blasted off on Thursday morning in the country’s latest attempt at a lunar landing.

If successful, Japan would become the fifth nation to land a spacecraft on the Moon after India achieved the feat last month.

The launch of the rocket, manufactured and operated by Mitsubishi Heavy Industries, was delayed several times due to weather conditions. It carries Japan Aerospace Exploration Agency’s lightweight lander, which will attempt a lunar touchdown early next year.

Japan’s H3 rocket, its newest and largest in three decades, failed to launch in March. Tokyo start-up ispace failed in its first commercial attempt to land on the Moon in April.

Tencent: The Chinese tech giant is set to unveil its artificial intelligence chatbot, joining the global race in generative AI.

Economic data: China releases trade figures for August. A crucial economic lifeline during the pandemic, trade has slowed this year for China as global economic conditions have worsened.

Markets: Futures in Hong Kong and Tokyo pointed lower on Thursday morning. Wall Street’s benchmark S&P 500 fell 0.7 per cent and the Nasdaq Composite declined 1.1 per cent on Wednesday, as data showing unexpected strength in the country’s vast services sector supported the thesis that a “soft landing” for the domestic economy could mean interest rates remain elevated for an extended period.

GameStop shares rose by more than 6 per cent in extended trade on Wednesday after the company reported it had slashed net losses by more than 95 per cent in the last quarter.

The company’s loss of $2.8mn was significantly lower than analysts had expected and compared to a $108.7mn loss in the same period a year earlier. The improvement was driven by a steep decline in general and administrative expenses, it said. GameStop’s $1.16bn in revenue also exceeded forecasts.

In the second half of 2022, the company initiated a plan to cut costs and achieve profitability. GameStop’s chief executive Matt Furlong was ousted in June, with its largest shareholder, Ryan Cohen, elected executive chair.

Mitch McConnell insisted on Wednesday that he would stay in his leadership role as the Senate’s top Republican.

“I have no announcements to make on that subject. I am going to finish my term as leader and I am going to finish my Senate term,” the 81-year-old said in his first major press conference since freezing in front of reporters last week.

McConnell was pronounced “medically clear” to continue working after the incident. His term is due to end in 2026.

Rand Paul, the junior senator from Kentucky and a medical doctor, told reporters on Tuesday that his freeze looked like a “focal neurologic event”. Josh Hawley, the Republican senator from Missouri, said he was “concerned” about McConnell’s age.

A legal watchdog filed a lawsuit on Wednesday to remove Donald Trump from the Republican primary ballot in 2024, arguing that the former president disqualified himself from public office by violating the US Constitution on January 6 2021.

The suit advances a once-fringe legal argument that could fast become a lightning rod in the 2024 presidential election. Trump remains the undisputed frontrunner in a crowded field of Republicans vying for the party’s nomination for the White House, even as he faces 91 criminal charges across four separate criminal cases.

Read more about the lawsuit here.

Texas has been ordered to remove a floating border on the Rio Grande river after a federal judge found authorities had failed to secure the necessary permissions to erect the barricade.

The ruling is a significant win for the administration of Joe Biden, which had sued the state and its Republican governor, Greg Abbott, over its increasingly harsh crackdown on illegal immigration.

“Governor Abbott announced that he was not ‘asking for permission’ for Operation Lone Star, the anti-immigration program under which Texas constructed the floating barrier,” US district judge David Alan Ezra wrote in a ruling released on Wednesday.

“Unfortunately for Texas, permission is exactly what federal law requires before installing obstructions in the nation’s navigable waters.”