Boeing shares fall 8% in premarket trading after some 737 Max 9 planes grounded – business live

Shares in Boeing are set to fall sharply when Wall Street opens, after US federal regulators temporarily grounded some 737 Max planes.

Boeing’s shares have dropped by over 8% in pre-market trading, falling from $249 to $228.50.

Investors are reacting to the news that an Alaska Airlines Boeing 737 Max 9 aircraft suffered a blowout that left a gaping hole in the side of the fuselage.

The plug door tore off the left side of the jet on Friday after it took off at Portland, Oregon, en route to Ontario, California, depressurising the plane and forcing the pilots to turn back and land.

The chunk of fuselage has now been found in a teacher’s back yard, the US’s transportation safety board (NTSB) reported.

On Saturday, the US Federal Aviation Administration ordered the temporary grounding of certain Boeing 737 MAX 9 aircraft operated by U.S. airlines or in U.S. territory.

FAA Administrator Mike Whitaker said:

“The FAA is requiring immediate inspections of certain Boeing 737 MAX 9 planes before they can return to flight.

Safety will continue to drive our decision-making as we assist the NTSB’s investigation into Alaska Airlines Flight 1282.”

The FAA’s ruling means 171 Boeing 737 Max 9 aircraft are temporarily grounded.

No one was seriously injured during Friday’s incident, after which 171 passengers and six crew landed safely. But the incident has raised fresh safety concerns about Boeing planes.

Five years ago, two fatal crashes in 2018 and 2019 involving its Boeing 737 Max 8 aircraft left 346 people dead.

UK energy regulator Ofgem has announced that three suppliers are now allowed to install prepayment meters in people’s homes again without their permission, to recover unpaid debts.

Scottish Power, EDF and Octopus have all been given the green light to install prepayment meters with a warrant, or to switch a smart meter to prepayment meter mode.

This practice was suspended last year, after an investigation by the Times found that debt agents working for British Gas had ignored signs of vulnerability and broken into customers’ homes to force fit pay-as-you-go meters.

Scottish Power, EDF and Octopus have met Ofgem’s conditions to restart installing prepayment meters in the homes of customers who have fallen behind on their bills.

But they must make at least 10 attempts to contact a customer before a prepayment meter is installed, and carry out a site welfare visit first.

They are also banned from installing pay-as-you-go meters in homes where an occupant is 75 or older, or where there are children under 2, or where there are residents with severe health issues, or where no-one has the physical and mental capacity to top up the meter.

Channel 4 confirms round of major job cuts is looming

Mark Sweney

Newsflash: Channel 4’s chief executive has confirmed to its 1,200 staff that a round of major job cuts is looming, as the broadcaster seeks to hasten its shift to streaming amid the worst TV advertising downturn in 15 years.

Alex Mahon told the workforce in an internal email on Monday morning that the broadcaster needed to “accelerate” plans to become a “genuinely digital-first public service broadcaster” following the worst slump in traditional TV advertising since the financial crisis in 2008.

“Given all the market change and complexity that we need to adapt to, there will be an impact on jobs at Channel 4,” wrote Mahon, the day after the Guardian revealed the broadcaster was planning its biggest cuts to jobs in more than 15 years.

Channel 4 plans deepest job cuts in over 15 years after TV ad slump

Mark Sweney

In the media industry, Channel 4 is drawing up plans to cut potentially as many as 200 jobs in its biggest round of layoffs in more than 15 years.

The cuts, reported by my colleague Mark Sweney this morning, come as Channel 4 seeks to make savings to weather the worst TV advertising downturn since 2008.

The broadcaster, which has undergone a rapid expansion in recent years with staff numbers swelling to a record level of more than 1,200, aims to dramatically reduce a wage bill that now stands at more than £108m a year.

It said the restructure, which management began working on late last year, was intended to focus on accelerating its digital streaming strategy while limiting the extent to which it must make deep cuts to its £700m-plus content budget.

More here.

Elsewhere in the energy sector, Shell is taking impairment charges of up to $4.5bn on its assets.

Shell reported this morning that it will cut the value of its assets by between $2.5bn and $4.5bn in the last quarter.

These impairments are partly related to Shell’s Singapore refining and chemicals hub, which it is looking to sell, but are also due to “macro & external developments”, Shell adds.

But Shell also predicted that earnings at its integrated gas division are likely to be significantly higher in the last quarter of 2023 than in the third quarter.

The announcement comes ahead of Shell’s fourth-quarter earnings, due on 1 February.

Victoria Scholar, head of investment at interactive investor, says,

“Shell reported a mixed trading statement – it is expecting quarterly integrated gas trading to be significantly higher than the third quarter thanks to seasonal factors and increased optimisation opportunities.

However, it said profits from oil and chemicals would be lower resulting in a loss in that division. It is also facing an impairment charge of $2.5bn-$4.5bn in the fourth quarter, relating to its Singapore refining and chemicals hub.

Shell has been facing some price target cuts from the analyst community so far this year including from Morgan Stanley and Bernstein ahead of today’s update. Over the last six months, shares in Shell are up by around 10% thanks to higher underlying oil prices since last summer and better-than-expected third quarter earnings. But strong supply in the United States and a sluggish demand outlook could keep a lid of oil price gains this year. However offsetting this are Opec+ supply cuts and possible interest rate cuts this year and the potential for China’s economy to improve.

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Oil is weakening this morning after Saudi Arabia cut the prices charged to its customers.

The Middle Eastern energy powerhouse’s producer, Saudi Aramco, lowered its flagship Arab Light price to Asia by $2 per barrel, to $1.50 a barrel above the benchmark.

That’s a larger reduction than many in the industry expected, and is the biggest price cut in 13 months.

It lowers the February official selling price (OSP) of Saudi Arabia’s Arab Light crude to Asia to the lowest level in 27 months.

Aramco also cut all prices for February delivery to Northwest Europe, Mediterranean and North America.

The move indicates that concerns a slowing economy will hurt demand for oil are trumping fears that geopolitical tensions in the Red Sea will cause supply disruption.

The news has knocked Brent crude, the oil benchmark, down by 1.2% at the start of the week to $77.80 per barrel.

Late last year Saudi Arabia led the Opec+ group’s decision to make voluntary output cuts, to prevent a buildup of unsold oil. But those production cuts didn’t prevent oil posting its first annual fall since 2020 last year.

Geopolitical tensions are still heightened this morning, with US secretary of state, Antony Blinken, warning yesterdat that Israel’s war against Hamas risked spreading throughout the region.

IG analyst Tony Sycamore says those concerns will support the oil price:

“If we were just to focus on the fundamentals including, higher inventories, higher Opec/non-Opec production, and a lower-than-expected Saudi OSP, it would be impossible to be anything other than bearish crude oil.

However, that doesn’t take into account the fact that geopolitical tensions in the Middle East are undeniably rising again which will mean limited downside.”

Also coming up today

Financial markets remain edgy, as doubts creep in about how quickly central banks will be able to lower interest rates this year.

In the UK travel sector, a strike that threatened to halt all London Underground services for the next four days was called off last night, in a relief to commuters.

And there are signs of optimism in the UK factory sector, where manufacturers are more bullish about the sector’s prospects than they were 12 months ago.

A survey released this morning by industry body Make UK and PwC found that over 44% of companies see a moderate to significant improvement in industry conditions in 2024, while just a fifth expect conditions to worsen.

The agenda

• 7am GMT: German trade balance for November

• 10am GMT: Eurozone consumer and economic confidence data

• 1pm GMT: Israel business confidence report for December

• 4pm GMT: US consumer inflation expectations for December