The administrators for Wirecard, the German payments company whose fall from grace has been truly spectacular, are planning to cut more than half its staff, according to Bloomberg.

The company filed for insolvency in June after it admitted that almost €2bn in cash on its balance sheet didn’t actually exist.

Auditor EY, which only discovered the missing funds a week before its collapse, said there were clear indications of “an elaborate and sophisticated fraud involving multiple parties around the world”. Since then there have been reports from the Financial Times (£) of a plan to buy Deutsche Bank, non-existent companies and executives on the run.

This is from Bloomberg’s report (£):

Wirecard AG’s administrator Michael Jaffe is set to axe more than half of the disgraced company’s German employees as he seeks to reduce cash outflows to protect creditors.

The current staff level of 1,500 will fall to somewhere between 500 and 600, including a few hundred voluntary departures, a person familiar with the matter said.

The FTSE 100 has dragged back into the red for today, dipping by 0.1% at the time of writing.

Losses are broad-based, with the biggest faller Standard Chartered, down by only 1.7%.

But Wall Street is looking like it will be perkier: futures prices suggest the S&P 500 benchmark will gain 0.4% at the opening bell. The Dow Jones industrial average is tipped for a 0.6% gain but the Nasdaq will fall by 0.1% if the futures are to be trusted.

Oil prices have gained more ground today, with producers in the Gulf of Mexico braced for storms.

Brent crude oil futures prices have gained 1.4% today, pushing up to near $46 per barrel.

Any higher than $46.23 and it would represent the strongest since the pandemic prompted the historic price plunge in March and April.

Reuters reported that 82% of US Gulf Coast output has been temporarily shut down in anticipation of the tropical storms Marco and Laura. Refineries have also shut down, given the lack of products to process.

West Texas Intermediate futures prices, the North American oil benchmark, have increased by 0.8% today to hit $42.94.

The pound has been relatively unmoved over August – hardly a surprise given that many traders take time off and big corporate transactions also quieten down – but today there is a bit of life: it’s up by 0.6% against the US dollar at $1.3137.

Investors appear to be ignoring the fairly grim reading from the CBI’s distributive trades survey (or have already priced it in), and the dollar has also slipped slightly following positive trade talks between China and the US, which boosted risk appetite.

Sterling slumped against the dollar in March as investors and companies around the world stampeded towards the relative safety of the world’s reserve currency. Since then, however, it has recovered to trade at pre-pandemic levels.

Morten Lund, an analyst at Nordea Markets, told Reuters that “general risk sentiment” and a weaker dollar had helped sterling.

Francesco Pesole, a foreign exchange strategist at ING, warned that the pound’s rise might show that investors are underpricing the risk of a no-deal Brexit. He said:

GBP positioning is a good indication of how investors are currently keeping a highly complacent approach to the Brexit story. While the collapse of Brexit negotiations late last week will only be mirrored in next week’s CFTC positioning report – and we may see the rebuild of some GBP shorts – sterling’s positioning is still far from the levels it hovered around when markets were pricing in a no-deal Brexit.

In our view, this continues to highlight how GBP is underpricing the risk of a no-deal outcome of current UK-EU trade negotiations, which in turn flags a non-negligible risk of more stress being built into sterling in the coming weeks.

A British music tech startup has struck a surprise $70m deal to buy Napster, one of the pioneers of the music streaming revolution.

London-listed MelodyVR, which films and streams gigs fans watch with virtual reality headsets, is taking over Rhapsody International, which operates as Napster and is owned by Nasdaq-listed RealNetworks.

MelodyVR is aiming to create a music platform combining Napster, which began life in the 1990s as an illegal downloading platform, with its immersive live performances. Napster, which has 3 million users, has a library of 90m licensed tracks.

You can read the full report here:

It looks like worse is to come for UK retail employees, according to the CBI’s lead economist.

Certainly there has already been a litany of major employers who have already cut thousands of retail jobs, and many economists expect a big increase in unemployment across the economy as we get into winter.

Here are the job losses in the retail and hospitality sectors alone:

Howard Archer, chief economic adviser to EY Item Club, a forecaster, said the survey showed an unexpected loss in momentum.

Some more data from the CBI distributive trades survey: retail sales fell slightly in the year to August, and a sharper fall is expected next month, adding to the concerns about the UK’s economic recovery.

On balance 6% of retailers reported a fall in sales in the year to August, compared with a 4% positive balance in July, the CBI said. The expectation for the next month is significantly worse, with a balance of 17% of retailers expecting a decline.

The worsening outlook comes as the UK prepares to wind down the job retention scheme that is supporting the wages of furloughed workers. That has helped to support spending, but employers are now obliged to contribute to payments for workers, and the scheme will stop entirely at the end of October, raising concerns about a wave of job losses in the meantime.

Internet sales provided a bright spot with continued growth, and a balance of 46% of retailers reporting increases. That was roughly in line with the long-run average of 45%.

Among the other distributive trades surveyed, the CBI said that:

• Wholesalers saw sales fall at a somewhat faster pace than last month (-30% from -22%) but expect an easing in the decline in the year to September (-18%).
• Motor traders saw a second consecutive month of strong growth, reflecting dealers’ comments that they are seeing pent-up demand as well as some people looking for alternatives to public transport.
  

So how much will Ant Group be worth?

The company was started by Alibaba founder Jack Ma and has a dominant position in China’s financial services industry.

Ant Group was previously known as Ant Financial. It was established in 2014 and grew out of Ma’s Alipay, an escrow payments service started by Alibaba in 2004 to serve shoppers and merchants on Taobao, one of the world’s largest e-commerce sites (and also owned by Alibaba).

It is still in the very early stages of the to-and-fro over the valuation of the company, but some reports suggest it could aim to rival Paypal, which is currently valued at $233bn (£178bn).

The Financial Times (£) in July reported that Ant Group was last valued at $150bn in mid-2018 after raising around $14bn from investors including Temasek, General Atlantic, Warburg Pincus and Baillie Gifford.

The IPO prospectus suggests that the company could be vulnerable to trade tensions between the US and China. Donald Trump has certainly proven himself to be very interested in the fortunes of Chinese tech companies, with TikTok under pressure.

The early stock market bounce from earlier appears to be fading somewhat: the FTSE 100 is only up by 0.1% at mid-morning at 6,111 points.

Germany’s Dax is performing better, up 0.6% after economic indicators suggested that a recovery is underway - albeit a fragile one.

France’s Cac 40 has gained 0.8%, and the broad Europe-tracking Stoxx 600 is up by 0.5%.

Consumers spending more on their homes compared with other sectors, and pent up demand following lockdown have helped push homeware retailer DFS Furniture’s trading beyond the firm’s expectations.

The retailer said in a trading update that its financial year had “started strongly”, with year-on-year order intake growth over the past six weeks equivalent to about £70m of revenues.

However the chain, which has around 30% of UK market share for upholstered furniture according to analysts at Jefferies, said it was difficult to forecast trading in the long term, given the ongoing risks to consumer confidence because of Covid-19, and the potential impact of Brexit.

DFS shares have gained 14% so far on Tuesday following the announcement.

More info on that AstraZeneca trial: the pharmaceutical group has started a clinical trial of a drug to help prevent and treat Covid-19, with the first volunteers already receiving doses.

The company, which is separately developing a potential Covid-19 vaccine together with scientists at Oxford University, said the drug, known as AZD7442, is a combination of two monoclonal antibodies.

AstraZeneca said the trial, which will include up to 48 healthy volunteers in the UK aged 18 to 55, will be focused on safety, and the body’s reaction to the drug and how it processes it.

You can read the full report here:

We knew that a recovery from the April nadir was coming, but economists are intently studying early indicators for signs of how fast activity will come back.

Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said Ifo’s business climate indicator is “slightly less upbeat” than the headline improvement suggested. He said:

The main lift to the headline increase came from the current assessment gauge, rising to 87.9 from 84.5 in July, while the rebound in the expectations index appears to be petering out. [...]

As with the PMIs, however, the key test in the next few months will be whether it stabilises at its current level, having already rebounded significantly. If it does, it will indicate the recovery is ongoing.

Overall, these data only really confirm what we already know, namely that economic activity is now recovering after having collapsed during lockdown. We know from the hard data that the rebound was very strong in the latter part of the second quarter, but it is now almost surely easing, though survey data remain consistent with decent data through July and August.

A back-of-the-envelope calculation suggests a 7% bounceback would leave the German economy 3.4% smaller than it was in the first quarter of the year by the end of the third quarter.

And remember, German’s economy was already relatively weak even before the pandemic, flirting with recession in recent years. Here is quarter-on-quarter GDP since the third quarter of 2017.

Here’s a handy graph showing that “V shape” for which everyone is hoping.

However, note that the white “business climate” line has still not rebounded to the level seen before the pandemic hit.

If the Ifo forecasts of 7% quarter-on-quarter GDP growth in the tird quarter are correct, then the eurozone’s largest economy will not recover anything like what it lost in the second quarter when the virus hit with its full force.

Good news for Devon: Infrastrata, the company that stepped in to save Belfast’s Harland & Wolff shipyard, has bought the historic Appledore shipyard on the river Torridge.

Appledore had been threatened with closure and the loss of 200 jobs after defence company Babcock International did not renew its lease in 2018.

Infrastrata will pay £7m for the shipyard, which it will rename H&W (Appledore). It hopes to focus on smaller vessels there for navies, while Belfast will focus on larger ships of more than 300m in length such as cruise ships.

The Appledore shipyard traces its history back to 1855 and played a part in the shipbuilding effort during the second world war.

Finablr, the embattled payments group, has delayed its accounts amid a probe into potential wrongdoing.

The company had announced on 23 June that it had changed its accounting reference date to 28 February, giving it until 28 August to publish its financial statements.

The company is currently unable to adhere to this deadline and will provide an update on the anticipated publication date when it is able to do so.

Finablr appointed a law firm last month to investigate £1bn in undisclosed debt. The company was formerly the owner of the Travelex foreign exchange service, but lost control of it in April after it nearly collapsed.

Last week the company announced that its Indian founder, BR Shetty, had resigned with immediate effect. Shetty was also the founder of NMC Health, the former FTSE 100 hospitals company that collapsed into administration in April after reporting billions more in undisclosed debt.