FirstFT: Apple profit almost doubles as iPhone sales surge

World updates

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Apple, Microsoft and Alphabet have reported revenues and earnings that surged above already optimistic expectations, confirming that demand for digital services and gadgets continued to soar as even as the global economy starts to emerge from the worst of coronavirus crisis.

The iPhone maker’s profits almost doubled in its latest quarter to $21.7bn, while its overall revenues grew 36 per cent compared with the same period last year.

Microsoft ended its financial year on a strong note, posting a 21 per cent jump in revenue on a flood of new business in areas including cloud computing, LinkedIn advertising and business applications.

Alphabet chief executive Sundar Pichai credited a “rising tide of online activity in many parts of the world” for driving profits almost three times higher than the same period of last year.

Five more stories in the news

1. Horizon Kinetics bets on property and cypto The $7bn contrarian investment firm, one of the year’s best performing US fund managers, is betting on property and cryptocurrencies to protect its investors against rising inflation. Soaring debt levels, accelerated by governments’ vast pandemic fiscal stimulus measures, have spurred investor efforts to inflation-proof their portfolios.

2. Wall St panics over China stocks The value of Chinese shares on Wall Street has soared to $2tn over the past two decades. But a crackdown on China’s $100bn tutoring industry, including a ban on a precarious legal structure underpinning many such listings, has raised the spectre of a broad disaster for some of the world’s biggest investors.

  • Chinese tech stocks plunged for a third day yesterday as shares of internet giant Tencent fell the most in a decade.

  • In Unhedged, Robert Armstrong examines the “China discount” on equities — and why it is so hard to pin down. Sign up for the newsletter here.

  • Go deeper: here’s why Xi Jinping is cracking down on China’s education sector.

3. US defence chief questions UK pivot to Asia Lloyd Austin said that Britain might be more helpful as an ally if it did not focus on Asia, highlighting US concerns that forays by European allies into the Indo-Pacific could weaken their defences closer to home.

4. Spyware group NSO’s owner stripped of control of €1bn fund Investors in private equity group Novalpina Capital’s €1bn fund voted this month to seize control after a tense three-hour video call, a dramatic intervention that left ownership of the Israeli company behind spying software Pegasus hanging in the balance.

5. UK financial watchdog probes Rio Tinto The Financial Conduct Authority is investigating whether the Anglo-Australian company breached listing rules in disclosures about the value of Oyu Tolgoi, $6.75bn underground copper project in Mongolia’s Gobi Desert, according to people familiar with the situation.

Tokyo Olympics round-up

  • Simone Biles cited mental health issues for her shock withdrawal from the women’s gymnastics team final, casting doubt on whether the star would continue her quest for gold in individual events.

  • Naomi Osaka, the face of the Tokyo Games, is out after a defeat in straight sets to Marketa Vondrousova of the Czech Republic.

  • US swimmer Lydia Jacoby won gold in the women’s 100-metre breaststroke. Returning champions Lilly King and Ryan Murphy were forced to settle for bronze in their respective events.

  • The men’s all-around gymnastics final takes place at 19:15 to 22:10 JST. The Russian Olympic Committee won the team event.

Add ‘Tokyo Olympics’ to myFT for all our coverage from the Games, and don’t miss our “alternative medals table”.

‘I just don’t trust myself as much as I used to,’ a tearful Simone Biles said. ‘I don’t know if it’s age, I’m a little bit more nervous when I do gymnastics’ © Loic Venance/AFP/Getty
‘I just don’t trust myself as much as I used to,’ a tearful Simone Biles said. ‘I don’t know if it’s age, I’m a little bit more nervous when I do gymnastics’ © Loic Venance/AFP/Getty

The days ahead

Earnings Street reported near-record banking revenues this month. Today, their European peers — Barclays, and Deutsche Bank — are expected to follow suit. Japan’s Nissan also reports, along with Pfizer, Boeing, Qualcomm, PayPal, Spotify and Facebook in the US. Read the full list here.

Fed monetary policy decision The Federal Reserve concludes a two-day rate-setting meeting, with investors seeking clues on the US central bank’s timeline to begin tapering its bond purchases — a development chair Jay Powell said this month was still “a ways off”.

Peru’s new president Pedro Castillo will be sworn in on Peru’s 200th anniversary of independence. The leftwing president’s rise to power marks the decline of the Fujimori dynasty, which has loomed large over Peruvian politics for more than 30 years.

Coronavirus digest

  • Downing Street is expected to approve reopening England to double-vaccinated tourists from the EU and the US today as falling case numbers offered Britons hope. But vaccination has become “divisive” for some young people.

  • Developing economies’ limited access to vaccines threatens to hinder the global economic recovery from the pandemic, the IMF has warned.

  • US health officials recommended vaccinated people in areas with “substantial and high transmission” wear masks indoors, reversing previous guidance.

The global race to vaccinate is having a use beyond the medical — it is delineating two populisms, writes Janan Ganesh. Sign up for our Coronavirus Business Update newsletter and get the latest on our blog.

What else we’re reading

Global Britain or hostile environment? Critics say the enforcement of post-Brexit immigration rules are harsh and inflexible, endangering the UK’s “global” aspirations and leaving sectors from meat-processing to haulage short of workers since the end of free movement.

  • Read more: Brussels has paused legal action over customs rules on goods entering Northern Ireland in a bid to ease tensions. Companies said a “confusing” UK scheme to support small businesses with Brexit disruption has discouraged them from applying.

Since January 1 citizens of the 27 EU states plus Switzerland, Norway, Iceland and Liechtenstein have required visas to take up work or long-term residence in the UK
Since January 1, citizens of the 27 EU states plus Switzerland, Norway, Iceland and Liechtenstein have required visas to take up work or long-term residence in the UK © FT Montage/Getty/Alamy

How SoftBank’s Greensill dalliance ended in disaster After coming unstuck on WeWork, the Japanese group pulled out all the stops to save its next investment. But rather than distancing itself from Greensill when it learnt of its shaky foundations, SoftBank got closer. Its strategy failed.

Nigel Farage pounces on migrant boat quandary For months, the godfather of Brexit has been filming on the shores of Essex and Kent, decrying boats en route to the British Isles. Public opinion is firmly on his side, writes Sebastian Payne.

Fire ‘season’ stalks California This year’s fire season is already on track to be another record breaker: the number of acres burning in California is already outpacing last year’s damage. But using lessons of the past, Cal Fire is deploying a fire behaviour-modelling system and weather data.

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