Good morning. We start with Intel, which yesterday revealed drastic plans to slash its employee headcount and capital spending in an attempt to put its business back on a stable financial footing.
The emergency cost-saving moves include a 15 per cent cut to its workforce, or about 15,000 jobs, with most of the positions set to go this year.
To shore up its weakening finances, Intel also scrapped its dividend and announced an unexpected reversal in its surging capital spending, with investment this year now likely to be 20 per cent less than forecast.
The US chipmaker’s shares plunged as much as 20 per cent on the news in after-market trading, topping the 10 per cent decline seen after its last earnings report and reflecting another big hit to Wall Street’s confidence that chief executive Pat Gelsinger will be able to pull off his ambitious turnaround plan. Richard Waters has more.
In other tech news:
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Apple: Revenue increased 5 per cent in the quarter ending in June, as earnings from services and iPad purchases offset a continued slowdown in China.
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Amazon: The Seattle-based company beat Wall Street forecasts for artificial intelligence-fuelled cloud computing growth, though margins narrowed.
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Nvidia: The US Department of Justice is investigating the chipmaker’s acquisition of Run:ai, an Israeli AI start-up, for potential antitrust violations.
And here’s what I’m keeping tabs on today and at the weekend:
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Economic data: France reports June industrial production today,
while Switzerland has July consumer inflation figures and the US publishes employment and non-farm payroll data for the same month. -
Results: AXA, Capita, Chevron, ExxonMobil, IAG, Linde and Royal London report. Virgin Money UK has a trading update.
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Festivals: The 77th Edinburgh Festival Fringe starts today, and the National Eisteddfod of Wales, a festival of arts and culture performed entirely in the Welsh language, opens in Rhondda Cynon Taf tomorrow.
Five more top stories
1. Hizbollah leader Hassan Nasrallah said the battle between his militant group and Israel had “entered a new phase” with the killing of a senior commander in Beirut, adding that Israel had breached limits and should expect a “certain” response. Read more from Nasrallah’s remarks, delivered yesterday as diplomats held urgent talks to avoid an all-out regional war.
2. Russia has released Wall Street Journal reporter Evan Gershkovich as part of the largest prisoner swap of its kind since the cold war. The exchange in Ankara, which involved 26 prisoners and seven countries, was the culmination of months of painstaking diplomacy. Here were some of the other individuals released.
3. The Bank of England has cut interest rates for the first time in more than four years in a knife-edge vote that marks a boost to the Labour government’s promise to kick-start economic growth. The Monetary Policy Committee voted 5-4 to reduce the bank’s key rate by a quarter of a percentage point to 5 per cent. But BoE governor Andrew Bailey added words of caution.
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Doves vs hawks: Yesterday’s narrow decision reflects sharply contrasting views from two opposing camps, leaving the trajectory of rates uncertain.
4. Exclusive: The European Commission has set up a dedicated team of officials to prepare for the potential election of Donald Trump as the EU devises strategies to deal with a possibly dramatic shift in Washington on issues such as free trade and support for Ukraine. The closely held group is also determining what impact a Kamala Harris presidency could have for the EU. Read more about the preparations.
5. French insurer Axa has entered exclusive talks to sell its investment management arm to BNP Paribas for €5.1bn in a deal that would create one of the largest industry players in Europe. The anticipated transaction would create a business within the French bank with €1.5tn of assets under management.
How well did you keep up with the news this week? Take our quiz.
The Big Read
There is a belief that researchers, educators and clinicians have long failed to give adequate attention to the biological and societal factors that shape women’s health. Scientists say pre-clinical testing has sometimes focused disproportionately on male animals and male cells, and that women are persistently under-represented when the medicines reach human trials. The result is that women are being prescribed drugs that are not simply less effective, but sometimes less safe.
We’re also reading . . .
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Artificial intelligence: Models will struggle to improve if they are forced to learn from their own flawed data, writes John Thornhill. But roboticists, whose systems are not captive on the internet but venturing into the real world, offer lessons.
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Deep space: When the 50-year-old Voyager probe stopped sending messages home, Nasa had a problem: no one could remember how to repair it. A team at the Jet Propulsion Laboratory was assembled to come up with a fix.
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Nuclear ‘no first use’ debate: China has launched a diplomatic offensive pushing the US to match its own nuclear weapons posture as Beijing rapidly strengthens its nuclear capabilities.
Chart of the day
The rise in the use of super shoes in athletics appears to have sent times tumbling across the board. But advances in shoe technology have one crucial difference to the other technological tweaks that have modernised sports over the years: the benefits are not evenly distributed among competitors — even for those wearing the same shoes.
Take a break from the news
Henri Matisse and Pierre Bonnard are regarded as spiritual counterparts. An exhibition at the Fondation Maeght in southern France explores the two painters’ decades-long friendship.
Additional contributions from Emily Goldberg and Harvey Nriapia
