So how come shares fell after US trading hours when the company gave every signal that it believes it is still riding the crest of the artificial intelligence (AI) wave?<\/p>\n
One might have been the lack of detail on delays that hit Blackwell chip production \u2013 although the company suggested those manufacturing issues had been sorted by TSMC, the Taiwan semiconductor manufacturer that builds Nvidia\u2019s most advanced chips.<\/p>\n
But another may be that the company\u2019s growth has been so enormous that it needs to not just beat expectations to rise further, but smash them.<\/p>\n
Henry Allen<\/strong>, a strategist at Deutsche Bank<\/strong>, said:<\/p>\n\nAt the same time, the Q3 revenue guidance came in a touch above the average estimate ($32.5bn vs $31.9bn est.) but still well within the range of analysts\u2019 views.<\/p>\n<\/blockquote>\n
UK car production slips as carmakers prepare for new models<\/h2>\n Back in the UK, car manufacturing numbers are down, but only as companies switch production to new models, according to the Society of Motor Manufacturers and Traders (SMMT).<\/p>\n
The lobby group said that production dropped 14.4% in July \u201cas model changeovers and temporary supply chain constraints restrict output\u201d.<\/p>\n
One of those new models is likely to be the electric Range Rover, the first electric car to be built in Britain by Jaguar Land Rover, the UK\u2019s biggest manufacturer. Its only other electric model, the Jaguar I-Pace, is built by a contract manufacturer in Austria.<\/p>\n
The industry produced 482,000 cars in the first seven months of the year, down 9% from 2023. The SMMT is hoping that annual production will rise above 1m cars next year as new models start production.<\/p>\n\nUK car production has fallen, but the industry hopes it will rise back above 1m cars this year.<\/span> Photograph: Society of Motor Manufacturers and Traders (SMMT)<\/figcaption><\/figure>\nMike Hawes<\/strong>, chief executive of the SMMT<\/strong>, said<\/p>\n\nAs the billions already committed to new models start to deliver a return, volume growth will resume, providing we seize every opportunity to enhance our global competitiveness.<\/p>\n<\/blockquote>\n
The agenda<\/h2>\n\n\n10am BST<\/strong>: Eurozone consumer confidence (August; -13 point; consensus: -13.4)<\/p>\n<\/li>\n\n10:15am BST<\/strong>: European Central Bank speech by chief economist Philip Lane in Frankfurt<\/p>\n<\/li>\n\n1pm BST<\/strong>: Germany inflation rate (August; prev.:2.3% annualised; cons.: 2.1%)<\/p>\n<\/li>\n\n1:30pm BST<\/strong>: US GDP second estimate (second quarter; prev.: 1.4% annualised; cons.: 2.8%)<\/p>\n<\/li>\n<\/ul>\nShare<\/p>\nKey events<\/p>\n
<\/span><\/gu-island><\/p>\nShow key events only<\/p>\nPlease turn on JavaScript to use this feature<\/span><\/p>\n<\/label><\/div>\n
<\/gu-island><\/span><\/p>\n\n\nUK to enter trans-pacific partnership trade bloc on 15 December<\/h2>\n<\/header>\n The UK will officially enter a new trading bloc on 15 December, after ratification by Peru completed the requirements to join.<\/strong><\/p>\nThe Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will eventually give British exporters tariff-free access to 11 countries, although it will only apply at first to the six who have ratified it: Japan, Singapore, Chile, New Zealand, Vietnam and now Peru.<\/p>\n
The UK\u2019s business department on Thursday said that \u201cthe agreement could boost the UK economy by around \u00a32bn annually\u201d \u2013 albeit by 2040. It was seen as a key trade achievement by the previous Conservative government.<\/p>\n
But don\u2019t think of it as an economic game-changer to make up for the dent to trade with the EU after Brexit. The Observer\u2019s political editor, Toby Helm, on Sunday reported:<\/p>\n
\nThe spending watchdog also said that two separate bilateral deals between Britain and Australia and New Zealand, also hailed as landmark trade agreements following Brexit, \u201cmight increase the level of real GDP by a combined 0.1% by 2035\u201d.<\/p>\n<\/blockquote>\nDouglas Alexander<\/strong>, the minister of state for trade policy<\/strong>, said businesses should contact the government to ask about possible benefits. He said:<\/p>\n\nWe\u2019re extremely grateful to all the CPTPP partners that have already ratified our accession – Japan, Singapore, Chile, New Zealand, Vietnam and now Peru – and look forward to more doing so over the coming months.<\/p>\n<\/blockquote>\nShare\n\nThe eurozone economy is on track to improve, according to a measure of economic sentiment from the European Commission.<\/strong><\/p>\nThe economic sentiment indicator, based on responses from businesses and households, rose from 95.8 points in July to 96.9 in August. That was higher than the flat reading expected by economists.<\/p>\n
However, the indicator remains below its long-term average \u2013 hardly surprising when the largest economy, Germany, is still struggling markedly.<\/p>\nEconomic sentiment in the eurozone picked up in August, according to the European Commission.<\/span> Photograph: European Commission<\/figcaption><\/figure>\nThe Commission\u2019s measure of consumer confidence fell slightly, to -13.5 points. That was down from -13.4 points the month before.<\/p>\nShare\n\nNvidia<\/strong> has been the biggest beneficiary of the hype around artificial intelligence, on the basis that it is the main \u201cpicks and shovels\u201d play: rather than trying to take part in the gold rush yourself, be the person who owns the tools for the rush.<\/p>\nBut another measure of whether that hype can be maintained will be the latest fundraising by OpenAI<\/strong>. It was the company that kicked off the investment frenzy when it released ChatGPT in late 2022, a chatbot that can speak and provide answers in a way that seems on a level with humans (albeit with the same human bluster and fallibility).<\/p>\nOpenAI chief executive Sam Altman speaks at a Microsoft conference in May.<\/span> Photograph: Jason Redmond\/AFP\/Getty Images<\/figcaption><\/figure>\nThe company, run by Sam Altman<\/strong>, has already achieved a valuation of $86bn, but it is reportedly seeking investment that will put it above the $100bn mark, Bloomberg News and the Financial Times reported. The FT said:<\/p>\n\nAccording to one investor in the company, OpenAI stock has recently traded on the secondary market at a price that implies a valuation of more than $110bn.<\/p>\n<\/blockquote>\n
That investment would be good news for Nvidia, as much of that money will probably go directly to it to buy graphical processing units (GPUs), the specialised chips designed for computer gaming that turned out to be ideal for training AI systems.<\/p>\n
Altman\u2019s most recent post on X (from three weeks ago) was very complimentary about Thrive\u2019s boss, Josh Kushner. But then again it\u2019s probably worth being nice when a billion dollars is reportedly on the table\u2026<\/p>\n<\/figure>\nShare\n\nEuropean big company share prices have risen to their highest level in six weeks, even if they have hardly been set alight.<\/p>\n
The Euro Stoxx 600<\/strong> index gained 0.4% to reach its highest since 15 July. Since then shares have plunged in that early August slump, and then more than recovered.<\/p>\nThe Euro Stoxx 600 index has edged up to a six-week high.<\/span> Photograph: Refinitiv<\/figcaption><\/figure>\nEuropean tech stocks have risen by 0.8% on Thursday morning. Reuters reported:<\/p>\n
\nShare\n\nDrax to pay \u00a325m fine for inaccurate data on source of wood for controversial generator<\/h2>\n\n
<\/div>\n
Kalyeena Makortoff<\/span><\/div>\n<\/header>\nDrax power station is controversial because some activists dispute the claim that burning wood pellets can be classed as enviromentally sustainable and ecologically sound.<\/span> Photograph: Gary Calton\/The Observer<\/figcaption><\/figure>\nThe power generator Drax has agreed to pay \u00a325m after the energy industry regulator found submitted inaccurate sustainability data on the sourcing of wood pellets used as its massive plant in North Yorkshire.<\/strong><\/p>\nThe investigation by Ofgem, which was launched last year, concluded that there was \u201can absence of adequate data governance and controls in place\u201d on the sourcing of wood from Canada between April 2021 the end of March 2022.<\/p>\n
Drax, which is the recipient of significant UK government subsidies, has faced continued scrutiny over the sustainability of its wood-burning power generation business.<\/p>\n
Around 80% of the wood pellets used in Drax\u2019s biomass plants are sourced from forests in the US and Canada.<\/p>\n
Ofgem said there was no evidence to suggest that that the breach was deliberate, saying instead that it was \u201ctechnical in nature\u201d.<\/p>\n
The regulator also said the data ultimately fell outside of the criteria used to determine the amount of public funding that Drax receives and would not impact its government subsidies. At least 70% of biomass has to come from sustainable sources in order for companies to receive government funding.<\/p>\n
Drax has agreed to pay \u00a325m towards a voluntary redress scheme to settle the matter, and resubmit its profiling data for Canadian-sourced wood pellets. It will also hire an independent auditor to produce data for its annual biomass report for the year to March.<\/p>\n
However, Ofgem\u2019s findings are likely to fuel further criticism around government support for Drax\u2019s and its biomass operations, which have increasingly come under scrutiny from MPs and environmental campaigners.<\/p>\nShare\n\nHSBC shuffles bosses ahead of new chief executive’s start<\/h2>\n<\/header>\nGeorges Elhedery, HSBC\u2019s incoming chief executive, in an interview in 2017.<\/span> Photograph: Tom Arnold\/Reuters<\/figcaption><\/figure>\nHSBC<\/strong>\u2019s new boss Georges Elhedery<\/strong> will not start his new job officially until Monday, but it looks like the customary reshuffle at the top under a new chief executive is already underway.<\/p>\nElhedery, who is still technically the UK-listed bank\u2019s chief financial officer until then, is replacing Noel Quinn, who in April made the unexpected announcement that he was stepping down after an \u201cintense\u201d five years in charge.<\/p>\n
Here is what we have learned today about the jostling behind the scenes (via a statement from the bank reported Reuters). The resignation of Nuno Matos in particular is interesting: he was seen as a potential candidate to take the top chief executive job.<\/p>\n
Out:<\/strong><\/p>\n\n\nHSBC chief executive of wealth and personal banking Nuno Matos will resign.<\/p>\n<\/li>\n
\nJohn Hinshaw, HSBC group chief operating officer, has also decided to leave the group to pursue other opportunities.<\/p>\n<\/li>\n<\/ul>\n
In:<\/strong><\/p>\n\n\nStuart Riley is appointed to the expanded HSBC global chief information officer role, which will assume responsibility for data and innovation.<\/p>\n<\/li>\n
\nSuzy White, HSBC global banking and markets chief operating officer, has been appointed global chief operating officer on an interim basis.<\/p>\n<\/li>\n<\/ul>\nShare\n\nEuropean stock markets<\/strong> are basically unmoved this morning, despite the money on the move in the US after Nvidia<\/strong>\u2019s results.<\/p>\nA reminder that we are still just about in August, when much of the investment world takes a holiday. Of course, that can lead to dramatic volatility as we saw this month.<\/p>\n
Today we appear to have the opposite though. In a rare occurrence, none of the major stock market indices have stirred. Here are the opening snaps from Reuters:<\/p>\n
\n\nEUROPE\u2019S STOXX 600 FLAT<\/p>\n<\/li>\n
\nBRITAIN\u2019S FTSE 100 FLAT; GERMANY\u2019S DAX FLAT<\/p>\n<\/li>\n
\nFRANCE\u2019S CAC 40 FLAT; SPAIN\u2019S IBEX FLAT<\/p>\n<\/li>\n
\nEURO STOXX INDEX FLAT; EURO ZONE BLUE CHIPS FLAT<\/p>\n<\/li>\n<\/ul>\nShare\n\nNvidia shares down 7% pre-market; UK car production falls 14%<\/h2>\n<\/header>\n Good morning, and welcome to our live coverage of business, economics and financial markets.<\/strong><\/p>\nNvidia<\/strong> shares are down 7% in after-hours trading despite actually beating analyst expectations for sales and profits.<\/p>\nThe Silicon Valley chip designer reported sales more than doubling to $30bn (\u00a323bn), up 122% in the second quarter compared with last year. Analysts had expected sales of $28.7bn on average.<\/p>\nJensen Huang<\/strong>, founder and chief executive of Nvidia<\/strong>, said anticipation for its forthcoming Blackwell chips \u2013 which squeeze in 208bn transistors to carry out the calculations needed to train large language model \u2013 was \u201cincredible\u201d, and demand for its current range remained strong. He said:<\/p>\n\nSo how come shares fell after US trading hours when the company gave every signal that it believes it is still riding the crest of the artificial intelligence (AI) wave?<\/p>\n
One might have been the lack of detail on delays that hit Blackwell chip production \u2013 although the company suggested those manufacturing issues had been sorted by TSMC, the Taiwan semiconductor manufacturer that builds Nvidia\u2019s most advanced chips.<\/p>\n
But another may be that the company\u2019s growth has been so enormous that it needs to not just beat expectations to rise further, but smash them.<\/p>\n
Henry Allen<\/strong>, a strategist at Deutsche Bank<\/strong>, said:<\/p>\n\nAt the same time, the Q3 revenue guidance came in a touch above the average estimate ($32.5bn vs $31.9bn est.) but still well within the range of analysts\u2019 views.<\/p>\n<\/blockquote>\n
UK car production slips as carmakers prepare for new models<\/h2>\n Back in the UK, car manufacturing numbers are down, but only as companies switch production to new models, according to the Society of Motor Manufacturers and Traders (SMMT).<\/p>\n
The lobby group said that production dropped 14.4% in July \u201cas model changeovers and temporary supply chain constraints restrict output\u201d.<\/p>\n
One of those new models is likely to be the electric Range Rover, the first electric car to be built in Britain by Jaguar Land Rover, the UK\u2019s biggest manufacturer. Its only other electric model, the Jaguar I-Pace, is built by a contract manufacturer in Austria.<\/p>\n
The industry produced 482,000 cars in the first seven months of the year, down 9% from 2023. The SMMT is hoping that annual production will rise above 1m cars next year as new models start production.<\/p>\nUK car production has fallen, but the industry hopes it will rise back above 1m cars this year.<\/span> Photograph: Society of Motor Manufacturers and Traders (SMMT)<\/figcaption><\/figure>\nMike Hawes<\/strong>, chief executive of the SMMT<\/strong>, said<\/p>\n\nAs the billions already committed to new models start to deliver a return, volume growth will resume, providing we seize every opportunity to enhance our global competitiveness.<\/p>\n<\/blockquote>\n
The agenda<\/h2>\n