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Stocks choppy, dollar frothy

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Eurozone consumer price inflation soared to 8.6 percent in June, up from the prior record of 8.1 percent in May
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Stock markets wobbled on Friday while the dollar shot higher against the euro and pound as investors fretted about interest rate hikes and a possible recession.

Both Paris and Frankfurt stocks ended the day with small gains despite news of record-high eurozone inflation that reinforced expectations of a European Central Bank interest rate hike later this month.

The EU’s Eurostat data agency said annual consumer price inflation in the 19 countries that use the euro soared to 8.6 percent in June, up from the prior record of 8.1 percent in May.

“Today’s figures bolster the European Central Bank’s intended decision to start raising interest rates at its next Governing Council meeting in July,” noted economist Pushpin Singh at research group CEBR.

The ECB stated last month that it will deliver its first interest rate hike in more than a decade in July to combat inflation. 

Eurostat added Friday that core inflation — stripping out volatile components like energy and food — slowed to 3.7 percent from 3.8 percent, helping equities to calm heading into the weekend pause.

Wall Street’s main indices were marginally lower in late morning trading, having bounced around since the opening bell.

– ‘Another big leg lower’ – 

Chris Beauchamp, chief market analyst at online trading platform IG, said there was little buying interest at the start of the second half of the year, even though the sharp drops suffered by stocks in the first half open up the possibility for gains.

New York’s S&P 500 index suffered its worst first-half performance since 1970.

“There is a growing unease about the summer, especially with a potentially very gloomy (second-quarter) earnings season nearly upon us,” he said in a note to clients. 

“It really does look like we have another big leg lower before this bear market is done,” added Beauchamp.

With the war in Ukraine showing no sign of ending — keeping energy costs elevated — there is an expectation that borrowing costs will continue to rise and send economies into recession.

Losses across world markets this week come after a rally last week fuelled by hopes that an economic slowdown or signs of recession would lead central banks to ease off their monetary tightening drive.

But comments from top finance chiefs, including Federal Reserve boss Jerome Powell, suggest they are willing to endure the pain of a contraction as long as they can rein in prices — which are rising at their fastest pace in 40 years on both sides of the Atlantic.

“Investors know that inflation is high and is likely to push higher,” City Index analyst Fiona Cincotta told AFP.

“Instead, the market’s obsession is turning from inflation to recession fears. Given the steep declines in stock prices this week, much of the bad news is priced in for now, until it starts again next week,” she added.

The dollar, a safe-haven currency, jumped one percent against the pound and the euro on rising expectations of a recession.

“The US dollar looks set to end the week stronger against most major currencies, nearing its strongest level since 2002 as ‘risky’ assets remained under pressure,” said economist James Reilly at Capital Economics.

The euro slid to a low of $1.0369 before rebounding back above the $1.04 level. The pound touched a low of $1.1979.

Oil rebounded on tight supplies despite persistent recession concerns.

– Key figures at around 1530 GMT –

New York – Dow: DOWN 0.3 percent at 30,693.52 points

EURO STOXX 50: DOWN 0.2 percent at 3,448.31

London – FTSE 100: FLAT at 7,168.65 (close) 

Frankfurt – DAX: UP 0.2 percent at 12,813.03 (close)

Paris – CAC 40: UP 0.1 percent at 5,931.06 (close)

Tokyo – Nikkei 225: DOWN 1.7 percent at 25,935.62 (close)

Shanghai – Composite: DOWN 0.3 percent at 3,387.64 (close)

Hong Kong – Hang Seng Index: Closed for a holiday

Brent North Sea crude: UP 1.9 percent at $111.12 per barrel

West Texas Intermediate: UP 2.2 percent at $108.08 per barrel

Euro/dollar: DOWN at $1.0405 from $1.0484 Thursday

Pound/dollar: DOWN at $1.2037 from $1.2178

Euro/pound: UP at 86.46 pence from 86.09 pence

Dollar/yen: DOWN at 135.19 yen from 135.72 yen

burs-rl/imm

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Uber courts drivers by letting them pick rides

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Uber drivers in the United States who had to accept ride requests before learning where they were headed will soon be seeing details of trips being sought along with the fares
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Uber on Friday said it will let drivers in the United States see trip details before deciding whether to accept them — a new feature long sought by drivers.

A common lament by drivers at the app-summoned ride platform has been that they have to accept a request before learning where trips will take them, or how profitable they will be.

“Our new trip request screen makes it easier for drivers to decide if a trip is worth their time and effort by providing all the details — including exactly how much they’ll earn and where they’re going — upfront,” chief executive Dara Khosrowshahi said in a blog post.

Revealing details only once a driver had accepted a trip was seen as a way to ensure riders would get picked up promptly, and not be snubbed because they were headed to locations deemed undesirable by drivers.

But Khosrowshahi said drivers have made it clear that they want more flexibility and choice.

Uber said the new feature, called Upfront Fares, was tested in several cities and was a success with drivers while resulting in shorter wait times for passengers.

The ride-sharing firm will also shift from sending drivers a single ride request at a time, to letting them pick from a list of detailed passenger requests in an area.

Uber is engaged in a long-term effort to prove that its business model is socially and economy viable.

The “gig economy” — which uses temporary independent contractors for short-term tasks — has grown rapidly since Uber’s launch in 2009 and is promoted as a flexible way for people to earn money without the constraints of a full-time job.

But there has been growing backlash in countries around the world about the conditions and dangers gig workers face.

Uber driver ranks — which shrank during the Covid-19 pandemic — have not rebounded as quickly as demand for rides, and soaring fuel costs have made the gigs less attractive.

The firm in March announced a surcharge on both rides and Uber Eats meal deliveries that would go directly to drivers to help offset high fuel prices.

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Elon Musk fires back at Twitter in court battle

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Court rules require Elon Musk to provide a public version of his 'confidential' counter claims against Twitter as the court battle over holding him to the terms of the $44 bn buyout deal heads for trial in October.
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Elon Musk on Friday filed claims against Twitter as he fights back against the tech firm’s lawsuit demanding he be held to his $44 billion buyout deal.

Musk’s counter-suit was submitted along with a legal defense against Twitter’s claim that the billionaire is contractually bound to complete the deal he inked in April to buy Twitter, the Chancery Court in the state of Delaware said in a notice.

The 164-page filing was submitted as being “confidential,” meaning the documents were not accessible by the public, the notice indicated.

Rules of the court, however, require Musk to submit a public version of the filing with trade secrets or other sensitive information redacted.

A judge has ordered a five-day trial over Twitter’s lawsuit against Musk to begin on October 17.

The Tesla boss wooed Twitter’s board with a $54.20 per-share offer, but then in July announced he was “terminating” their agreement on accusations the firm misled him regarding its tally of fake and spam accounts.

Twitter, whose stock price closed at $41.61 on Friday, has stuck by its estimates regarding accounts run by software “bots” rather than people, and argued that Musk is contriving excuses to back out of the contract.

The social media platform has urged shareholders to endorse the deal, setting a vote on the merger for September 13.

“We are committed to closing the merger on the price and terms agreed upon with Mr. Musk,” Twitter chief executive Parag Agrawal and board chairman Bret Taylor said in a copy of a letter to investors.

Billions of dollars are at stake, but so is the future of Twitter, which Musk has said should allow any legal speech — an absolutist position that has sparked fears the network could be used to incite violence.

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Musk, Twitter get Oct. 17 trial in buyout fight

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Twitter is due to face off with Tesla boss Elon Musk on October 17 in the US state of Delaware in a buyout trial
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Twitter’s lawsuit to force Elon Musk to complete his $44 billion buyout bid is set to go to trial on October 17, a US judge has ordered, in a case with major stakes for both sides.

The trial is due to open in a court in the eastern state of Delaware and is set to last five days to decide whether Musk can walk away from the deal.

The Tesla boss wooed Twitter’s board with a $54.20 per-share offer, but then in July announced he was “terminating” their agreement on accusations the firm misled him regarding its tally of fake and spam accounts.

Twitter has countered by saying Musk already agreed to the deal and can’t back out now.

An order from the judge handling the case, Kathaleen McCormick, lays out an expedited schedule to resolve a fight that has left Twitter in limbo.

She reminds both sides that they “shall cooperate in good faith” on matters like handing over information to each other, a key topic that can result in delays. 

Billions of dollars are at stake, but so is the future of Twitter, which Musk has said should allow any legal speech — an absolutist position that has sparked fears the network could be used to incite violence.

Twitter blamed disappointing results last week on “headwinds,” including the uncertainty imposed on the company by Musk’s chaotic buyout bid.

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