4 February 2019

Scott Reid

4 February 2019

Good morning,

If there’s one event renowned for sending Britons tired and bleary-eyed to work that isn’t an election (though more on that later), it’s the annual NFL Super Bowl.
 
Though as no big fan of either the New England Patriots nor the Los Angeles Rams who battled it out in Atlanta yesterday evening – and in truth, just a strong supporter of catching an early Sunday night – I will take the word in the morning papers that the four-hour epic ended up a bit of a damp squib.
 
The result was historic, with the Patriots claiming their sixth Super Bowl title to equal the record of the Pittsburgh Steelers. A defensive 13-3 score and half-time entertainment described as the “worst in event’s history” were perhaps less so. It restores my faith in America that even the charms of a winning set-piece which combined Spongebob Squarepants, Maroon 5 and Travis Scott didn’t seem to wash on the home audience.
 
Back in Blighty, Brenda from Bristol must be livid. Not an avowed LA Rams fan, as far as we know, but in response to the rumours that the government may be considering a snap general election for 6 June if Theresa May cannot get her Brexit deal through parliament before the 29 March deadline.
 
Home secretary Sajid Javid was quick to rubbish the idea as he shared the Sunday sofa with Andrew Marr. Suggestions this morning that the Brexiteer European Research Group will refuse to support anything less than a unilateral drop of the Irish backstop won’t have been encouraging, with their spokesman Boris Johnson branding the threat of an election as a “scare tactic” by the government.
 
Happily for the prime minister, the opposition looks to be in equal disarray. The Observer broke that at least six Labour MPs are finally ready to quit the party, to then work across party lines with Tory Remainers and Lib Dems in order to prevent the UK lurching towards their doomsday scenario of no-deal.
 
But let’s not forget that this is British politics we’re talking about. So the rumours – however fraught – may turn out to be just that. After all, no party is in any position, or able to offer any position on Brexit, that could gain a majority when put to the public. My bet is that Brenda, like the rest of us, won’t be facing any all-nighters soon.

News

The wreckage of a plane carrying Cardiff City footballer Emiliano Sala and his pilot David Ibbotson has been found in the English Channel. The plane was lost on 21 January on its way from Nantes, France to Cardiff, and is believed to have been found near Guernsey on Sunday by a team of private investigators led by marine scientist David Mearns.
 
The US is to begin sending food and medicine to Venezuela in direct support of the administration of opposition leader Juan Guaidó. Meanwhile, President Nicolás Maduro failed to rule out the possibility of a civil war as pressure mounts in the country, rejecting calls for snap elections from Western powers during a TV interview yesterday. Countries including France, Britain, Germany and Spain have now said they would recognise Mr Guaidó as interim president if no elections take place.
 
President Trump has ordered an additional 2,000 troops to be stationed at the US-Mexico border brining the total number of US army personnel to 4,350. The Pentagon said the 90-day deployment would help border patrol agents carry out surveillance work and install miles of razor wire. The move coincides with the national State of the Union address on Tuesday in which the president Trump is expected to prioritise national security concerns.

Business & Economy

Michael O’Leary will remain as group CEO of Ryanair for another five years, whilst relinquishing his leadership of the airline itself, the company has announced alongside third-quarter results this morning. In the three months to the end of December, Ryanair made a “disappointing” €22 million pre-tax loss, compared with €113 million profit the year before. David Bonderman will also step down as group chairman, with Stan McCarthy named as his replacement.
 
Nissan has confirmed plans to withdraw manufacturing of the new X-trail car series from its Sunderland plant. No jobs will be lost as a result of the news and Nissan has confirmed its commitment to manufacture the current Qashqai, Leaf and Juke models in Sunderland. Business secretary Greg Clark meanwhile has commented that the cancellation is “a warning sign” of the potential impact of a no-deal Brexit, and which The Times reports may lead to the government withdrawing £60 million in support of Nissan.
 
Drugmakers Bristol-Myers Squibb and Celgene will pay an estimated $1 billion in fees to confirm their $90 billion merger, ranking it among the most lucrative global advisory assignments ever recorded. The fees will be shared by investment banks including Morgan Stanley, JPMorgan Chase and Citigroup.
 
Debenhams is in talks to bring forward the closure of around 20 department stores via a company voluntary arrangement (CVA), the BBC reports. The CVA would allow the department chain to renegotiate its rental rates with landlords as well as accelerate plans for store closures. Debenhams is also believed to be nearing the end of £520 million in borrowing.

Markets

The week ahead

Having been delayed since January 29 as a result of the 35-day government shutdown, President Trump will at last deliver his third State of the Union address to the collected members of Congress on Tuesday. Looking ahead to the second half of his term amid ailing polling ratings, the president is expected to return to hallmarks of his election campaign, including border security and immigration. He is also expected to announce the date and location of his second summit with North Korean leader Kim Jong Un with Vietnam floated as the most likely venue.

Thursday will see a monetary policy update from the Bank of England and the latest forecasts for eurozone growth from the European Commission. Amid Brexit uncertainty and a cooling in the housing market, the Bank’s MPC is expected to maintain interest rates. However, with continuing strong employment data and wage growth at a ten-year high, watch out for indications of whether a rate rise could be on the cards for later in the year.
 
Key corporate updates to look out for this week include fourth-quarter results from tech giant Alphabet today, and other updates from FTSE-listed BP, Ocado, and GSK. Wall St panicked in October when Alphabet – the owner of Google and YouTube – reported a deceleration in Google’s ad sales amid a wider tech slowdown. Recent difficulties at Facebook, however, could benefit YouTube revenues.

Q3 results  
Ryanair Holdings 

AGMs
CC Japan Income & Growth Trust         
Sealand Capital Galaxy Limited (DI)

UK Economic Announcements
(09.30) PMI Construction
 
Intl. Economic Announcements
(10.00) Producer Price Index (EU)
(15.00) Factory Orders (US)

Columns of Note

In the Financial Times, Nick Butler suggests how Turkey could become a regional gas superpower in the Mediterranean. By building an offshore pipeline running from the newly-discovered Leviathan and Aphrodite fields through the Levant northwards, the Turkish government could capitalise on trading links both east and west, mobilising an economy of 80 million citizens hungry for opportunity. Butler, however, concludes that Turkey seems too embroiled in national religious and cultural warfare to move on the offer. (£)
 
Alex Massie wrote yesterday in The Sunday Times that the choices for delaying Article 50 or a second EU referendum are no longer open to the SNP.Instead, by refusing to compromise on any Brexit deal, the party may be reinforcing the chances of no-deal. Massie concludes that you don’t have to like the agreement to appreciate that it is the only one on offer. (£)

Did you know?

At this year’s Super Bowl Sunday, Americans are estimated to have eaten 1.25 billion chicken wings  equivalent to 3.85 wings for every man, woman and child in the USA.

Parliamentary highlights

TODAY
 
House of Commons
Oral questions
Education (including Topical Questions)

General debate
Sport in the UK
 
Adjournment
Crown use licence for Orkambi – Bill Wiggin

House of Lords
Introduction(s)
Baroness Blackwood of North Oxford
 
Oral questions
Decision to reduce Public Health Grant to local authorities for 2019/20 by £85 Million - Baroness Barker
 
Ensuring sufficient numbers of nurses, doctors and community specialist staff to deliver the NHS long-term plan - Baroness Wheeler
 
Impact of RNLI's decision to downgrade all-weather lifeboats capacity in Ceredigion - Baroness Bloomfield of Hinton Waldrist
 
Ensuring public sector broadcaster content is easily discoverable by viewers - Baroness Benjamin
 
Legislation
Trade Bill - Committee stage (day 4) - Baroness Fairhead
 
Scottish Parliament
No business scheduled
 
TOMORROW
 
House of Commons
Oral questions
Justice (including Topical Questions)
 
Ten Minute Rule Motion
Crime (Impact Statements) - Melanie Onn
 
Motions
Police Grant; Local Government Finance Reports
 
Adjournment
Funding for children's social care in Rotherham - Sarah Champion
 
House of Lords
Oral questions
Publication of the NHS Workforce Implementation Plan - Lord Clark of Windermere
 
Reviewing security in the vicinity of the Palace of Westminster - Baroness Rawlings
 
Pausing the Article 50 process - Baroness McIntosh of Pickering
 
Legislation
Healthcare (International Arrangements) Bill - Second reading - Baroness Manzoor
 
Debate
United Nations Human Rights Council Resolutions - Lord Naseby
 
Scottish Parliament
Topical Questions (if selected)
 
Ministerial Statement
Publication of Scotland’s Forestry Strategy 2019-2029
 
Stage 1 Debate
Vulnerable Witness (Criminal Evidence) (Scotland) Bill
 
Financial Resolution
Vulnerable Witnesses (Criminal Evidence) (Scotland) Bill
 
Committee Announcements