Morning, I'm Louise Moon from Bloomberg UK's breaking news team, bringing you up to speed on today's top business stories.
Strong sales of cancer medicines are proving a boon to the two largest London-listed drugmakers: AstraZeneca and GSK.
The former has built itself up as an oncology powerhouse under CEO Pascal Soriot, and it's paying off. Existing blockbusters and a pipeline of newer medicines have helped reassure investors that the once ambitious target of $80 billion in annual revenue by 2030 is achievable.
First quarter profit grew more than expected and Astra maintained guidance, though shares were little changed. Other drugs are still lagging.
It's a similar story for GSK. Profits were better than expected, helped by cancer, HIV and immune diseases medicines, but shares inched lower.
New CEO Luke Miels has a big task to overhaul the company, which has long struggled to allay investor concerns over a dearth of promising new drugs. While oncology is particularly strong, there's work to be done.
What's your take? Ping me on X, LinkedIn or drop me an email at lmoon13@bloomberg.net. Oh, and do subscribe to Bloomberg.com for unlimited access to trusted business journalism on the UK, and beyond.
What We're Watching
Carmaker Aston Martin posted yet another loss as billionaire owner Lawrence Stroll's turnaround struggles to get out of first gear. It's been relying on capital raises led by Stroll's consortium, including another £50 million facility today.
Lloyds' profit rose 33%, with CEO Charlie Nunn saying it was "resilient" amid current uncertainties. As Britain's biggest mortgage lender, the bank's fortunes are more tied to consumer health.
Weak demand for cold and flu drugs hit sales at Panadol maker Haleon, echoing rival Reckitt last week. A wary shopper adds to higher energy costs and supply chain disruptions. Shares fell 1.2%.
The UK risks slipping into recession later this year and the BOE could be forced to aggressively hike rates if the Middle East crisis worsens, warned NIESR. In an adverse scenario (hostilities resume, Hormuz stays closed and oil prices spike further), the think tank expects inflation to climb above 5%, which could mean rates raised by a total of 150 basis points by December.
Plus, Keir Starmer won a parliamentary vote yesterday meaning the PM won't face an ethics probe over his handling of Mandeldon's appointment as US ambassador. He can breathe a quick sigh of relief, before a potentially bruising set of high-stakes local elections next week. Over in the US, King Charles has urged Americans to resist the pull of isolation.
Global Catch-Up
- Trump reportedly tells aides to prepare for a lengthy Hormuz blockade.
- How North Korea's nuclear arsenal is outgrowing US missile defences.
- Elon Musk testifies he's suing OpenAI to stop Sam Altman's "looting".
Markets Today: Bank On It
Here's your daily snap analysis from Bloomberg UK's Markets Today blog:
Banks are giving off some pretty good vibes so far this earnings season, particularly when it comes to their UK businesses.
That's perhaps a bit surprising, coming against a backdrop of sluggish economic growth and amid worries that the conflict in the Middle East could lead to an inflation shock.
Still, Lloyds’s first-quarter profit beat expectations with net interest income growth driven by the strength of its structural hedge, a portfolio of income lenders use to offset fluctuations in lending margins.
Lloyds said that its structural hedge got a boost from reinvesting balances into a higher rate environment. Barclays, too, saw its UK income boosted by the performance of its structural hedge.
If rates remain higher for longer, or even rise, as could be the case in the future, then this would serve to further benefit UK banks. Of course, much will depend on how the economy holds up given the cyclical nature of banks’ business.
But so far, so good, especially given all of the Middle East-related uncertainty.
Next up in a big week of banking earnings is Standard Chartered with first-quarter numbers tomorrow. Heavyweights Unilever, which has been moving to focus on beauty, personal care and wellbeing, and miner Glencore are also due to report.
That's alongside Premier Inn-owner Whitbread, which is reportedly selling hotels to unlock £1.5 billion; housebuilder Persimmon; and insurer Beazley.
King Charles' state visit to Washington has become all the more important as the "special relationship" cracks. It's elicited reassuring words from President Trump, known for his love of the Royals. What caption did the White House use to describe the below photo, on its official social media account?
[Yesterday's answer: The UK has been leapfrogged once again, by South Korea becoming the world's eighth-largest stock market.]
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