Must read: Apple, US dollar, Japan GDP, Restaurant Group

GLOBAL MARKETS

After seven straight down days, European markets are attempting to claw back some lost ground, trading marginally in the green on the final trading session of the week. 

On the FTSE 100, inflation sensitive stocks in the retail sector like JD Sports Fashion (LSE:JD.) and Next (LSE:NXT) are outperforming following a survey from the Bank of England to suggest that businesses are aiming for their lowest price increases since February 2022. 

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Drinks companies like Campari, Carlsberg, Diageo (LSE:DGE), and Remi Cointreau are trading in the green after Deutsche Bank raised its price targets on these stocks. 

The dollar is on track for its longest winning streak since 2014, driven by a string of robust economic data points that suggest it could be more difficult for the Fed to end this rate hiking cycle. Meanwhile, the offshore yuan weakened to its lowest level on record against the greenback after China set its fixing at a two-month low overnight. The weak economic backdrop in China which contrasts with the resilience of the US have both contributed towards widening interest rate differentials, a weaker yuan, and stronger US dollar. 

Japan’s second-quarter GDP was revised lower to 1.2% versus its previous estimate for 1.5%. Nonetheless it still represented the second straight quarter of growth and the fastest quarter in a year. The Nikkei fell by more than 1% overnight, partly reflecting the downward revision. 

APPLE

Shares in Apple Inc (NASDAQ:AAPL) fell further on Thursday, dropping another 2.9%, reflecting concerns about a ban on the use of iPhones among Chinese government officials. Beijing is looking to reduce its dependence on US technology, but this acts as a significant headwind to Apple as China is its largest international market and accounts for about 20% of its revenues. 

The developments overshadow Apple’s hotly anticipated iPhone 15 launches next week and comes at a suspicious time given that Chinese smartphone maker Huawei last week released a new rival smartphone. It also shines a light on the risk to the US tech sector from growing US-Sino trade tensions. But protectionism has been coming in both directions, from the US as well as from China. 

Along with Apple, its suppliers have also been negatively impacted. Qualcomm Inc (NASDAQ:QCOM) was hardest hit, slumping 7.2% on Thursday.

RESTAURANT GROUP 

Shares in Restaurant Group (The) (LSE:RTN) are trading sharply higher after chairman Ken Hanna announced his intentions to step down amid pressure from activist investors including Oasis Management and Irenic Capital Management. Citing personal reasons, Hanna said he is not planning to seek re-election at its next AGM. 

Although its shares have been staging a sharp recovery this year, last year was a tough time for the stock which fell over 75% from the July 2021 highs to the nadir in December 2022. 

This week Restaurant Group said it expects higher annual profits after reporting an increase in first-half earnings. Following the optimistic update, Hanna clearly decided now is a good time to depart, rather that engaging in a dispute with activist investors that could detract from the company’s gathering momentum. 

Like many businesses in the hospitality sector, Restaurant Group has been grappling with macro headwinds like the cost-of-living crisis and inflation cost pressures. However, it has been carrying out cost saving measures, including closing a number of venues that have helped to improve its financials and as a result, its outlook is improving.