Crypto News: The London Rush: Diageo’s dry January

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Earnings from Diageo, the world's largest distiller, fell short of analyst expectations this morning (and so did its shares). Sales of Johnnie Walker, Tequila, and Captain Morgan all dropped over the past months.

As previously signalled, Latin America was the worst-performing region, with revenue slumping 23%, while North American sales dropped 1.5%. US demand is fizzling after the end of Covid-era savings and stimulus checks.

The results show that there's a limit to how much consumers are willing to spend on pricey spirits. And that beer really is recession-proof — Diageo's sales in Britain were up 9%, mainly thanks to good old Guinness.

What's your take? Ping me on X, LinkedIn or drop me an email at lkehnscherpe@bloomberg.net.

One for the finreg buffs. HSBC was fined £57.4 million by the Prudential Regulation Authority for failings tied to its compliance with depositor protection rules. The bank said "it's pleased to have resolved this matter." It might be less pleased that it was the PRA's second-highest fine to date (Credit Suisse got the highest one so far).

Inflation in UK stores dropped to the lowest level in more than 18 months (when supermarkets embarked on a bit of a price war). The British Retail Consortium's figures look encouraging, but the inflation fight's last mile won't get any easier with the upcoming rise in national living wage and higher business rates from April.

Order cancelled. Germany's Delivery Hero exited its 4.5% stake in Deliveroo two years after investing in the London-listed food delivery rival. Deliveroo earlier this month flagged slowing growth in its core UK market.

Photographer: Betty Laura Zapata/Bloomberg

Musk says first Neuralink patient received brain implant.
Renault scraps electric-car IPO, citing weak appetite for shares.
Finally, five of the so-called Magnificent Seven tech megacaps report earnings this week.

Here's your daily snap analysis from Bloomberg UK's Markets Today blog:

When veterinary provider CVS Group announced strong results last week, analysts at the time suggested that a reason for that was pet-related spending was one area that Brits weren't prepared to cut back on in a cost-of-living crisis.

Well, Pets at Home numbers today suggest even we have our limits when it comes to splashing out for our furry friends.

While the group saw a strong performance for its own vet group, and sales growth in its food products, it said that "discretionary accessories trends remained soft." That meant growth in its "retail business was not at the levels we had expected," the store said, leading it to slightly lower its guidance for full-year profit.

The spending mix laid out by Pets At Home makes sense — if money is tight you would still take your pet to the vet, but might draw a line at a shiny new collar or novelty Christmas outfit.

But it also chimes with something we've seen throughout earnings season: consumers are still happy to spend on essential items, or even big ticket ones like holidays or kitchens — but are increasingly pulling back on mid-level purchases.

— David Goodman

Check Bloomberg UK's Markets Today blog for updates all day.

It's a big week for European pharma earnings, and GSK will be in focus tomorrow — alongside aspiring upstarts such as Switzerland's Novartis and weight-loss drug maker Novo Nordisk.

The wild card, as Bloomberg Intelligence puts it, in GSK's earnings is its newly-launched respiratory virus vaccine Arexvy. Analysts expect the shot to hit blockbuster status ($1 billion in annual sales) this year, but revenue is tricky to predict given that virus seasons vary in length and intensity.

At $108 million, Gustav Klimt's Lady with a Fan is the most expensive artwork ever sold in Europe. That's a far cry though from the most valuable artwork sold globally. It went in 2017 for $450.3 million. Who is said to be the painter? Bonus points if you know the painting's name.

[The answer to yesterday's Pub Quiz is, of course, Kahlúa... Check back in tomorrow for the answer to today's question.]

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