Elon Musk Announces New Twitter CEO

Published on

UK economy returns to growth, Elon Musk announces new Twitter CEO

  • UK GDP nudged up 0.1% in the first quarter, following forecast upgrades from Bank of England
  • FTSE 100 and US market struggle where to find landing spots this week
  • Elon Musk has found a new Twitter Chief Executive
  • Oil price remains subdued on demand concerns

UK GDP Grows 0.1% In Q1

“UK GDP edged forward 0.1% in the first three months of the year, with growth eked out despite strike activity which derailed some momentum. The data comes hot on the heels of changed forecasts from the Bank of England. Lower energy prices are expected to stop the UK economy from contracting compared to previous expectations.

The economy is also being boosted by higher household spending, thanks to government measures earlier in the year. While the surprise change in the UK’s economic growth is certainly welcome, there are still real hurdles to overcome. There’s no sugar coating the fact that growth remains very sluggish – the UK is hardly on course to shoot the lights out this year.

The main issue is that inflation is set to fall more slowly than expected, partly because of the unprecedented rise in supermarket prices. It’s now thought that inflation will stay above its 2% target until 2025, a full nine months longer than initially forecast. The labour market also remains very tight, and high levels of job security makes for more money pumping around the system.

This all leads back to the fact interest rates will have to rise again to bring inflation in line. As things stand, the average household may have to pay £200 extra a month on mortgages, and that could have real implications for the housing market, and by proxy, banks and housebuilders, in the not-too-distant future.

FTSE 100 Stuggles To Find Landing Spots

The FTSE 100 held relatively steady in the last trading session and is predicted to do the same to round off the week, with some losses possible. There was initially a positive reaction to the fresh economic outlook, but broader concerns about global recession have put pressure on the value of the pound.

There have been mixed messages from US markets, with the S&P500 falling 0.7% and the Nasdaq Composite shedding 0.2% in the last regular trading session. Investor sentiment was put to the test following disappointing subscriber numbers at Disney, as well as renewed pressure in the US regional banking system because of PacWest Bancorp’s (NASDAQ:PACW) developments.

That said, there have also been positive moves, especially from Alphabet as it signalled plans to beef up the use of AI. Ultimately, the US is grappling with a heady mixture of exciting growth stories and tough conditions, both corporate and economic. Together, that makes for an impasse with little movement on the markets.

New Twitter CEO Announced

Twitter has found someone to take over the top job, according to Elon Musk. True to form, the move was announced in a tweet. The new CEO will start in around six weeks, and Mr Musk won’t be moving too far, with plans to be Executive Chair and CTO.

The new boss will be female in a move that goes a small way to shaking up the status quo of the pecking order of tech top dogs. Musk’s handling of Twitter has been controversial, but he has done a lot to stabilise the social media shift in the recent storm, hopefully laying a firmer foundation from which the new CEO will build.

There’s no denying Musk’s ability to bulldoze through problems. Tesla investors are likely to celebrate this move too, with Musk’s very hands-on approach at Twitter leading to concerns he had taken his eye off the ball at this EV giant.

This announcement should go some way to restoring that confidence, at a time when Tesla faces a crossroads when it comes to pricing, demand and margin.

Oil Price Remains Subdued

Although off recent lows, Brent crude remains subdued at under $75 a barrel. This contradicts the jumps seen earlier in the week after President Biden’s administration said it was cutting 140m barrels of previously mandated crude sales from the Strategic Petroleum Reserve.

The downward move is a result of data which shows an unexpected increase in US inventories, highlighting concerns about demand – which have been made worse by a 16% reduction in crude imports in China.”

Article by Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown