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You can find the current article at its original source at http://www.theguardian.com/business/live/2019/feb/06/german-recession-fears-factory-orders-brexit-stock-markets-business-live
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| German recession fears grow as factory orders tumble - business live | German recession fears grow as factory orders tumble - business live |
| (35 minutes later) | |
| Newsflash: America’s trade deficit with the rest of the world has narrowed, due to a big drop in imports. | |
| The gap between imports and exports narrowed to $49.3bn in November, the Census Bureau reports, down from $55.7bn in October. | |
| November ‘18 #trade #deficit down 11.5% to $49.3b. #Exports down 0.6% to $209.9b. #Imports down 2.9% to $259.2b. https://t.co/IeSYeEdI0d #Census pic.twitter.com/iSmFTvAWMa | |
| That’s a smaller deficit than economists had expected. | |
| Imports shrank by 2.9%, mainly due to fewer mobile phones and less petroleum being imported (the US has just become a net exporter of oil, following the shale boom). | |
| Trade data for Nov (delayed) just published. Cell phone imports to the US -23%, or -$2.3bln, is 29% of change in goods trade. Not exactly a healthy decline in trade deficit. pic.twitter.com/W21UqD5mDn | |
| November ‘18 #petroleum deficit ($0.6b) was the lowest on record, accounting for only 1.3% of the overall #trade #deficit. For historical trade data, go to: https://t.co/UuCv60yPcd #Census pic.twitter.com/vVaHV4gMry | |
| No early fireworks expected on Wall Street today: | |
| US Opening Calls:#DOW 25370 -0.12%#SPX 2730 -0.23%#NASDAQ 7007 -0.20%#IGOpeningCall | |
| It’s been a rather underwhelming day in the markets. The FTSE 100 is now flat, while Germany’s DAX has shed 0.5%. | |
| Lukman Otunuga, research analyst at FXTM, suspects a sell-off could be looming. | |
| Stocks in Asia witnessed another muted session today as many markets in the region remain closed for the Lunar New Year holiday. | |
| In Europe, shares got out of the wrong side of the bed thanks to weak earnings from French banking group BNP Paribas and disappointing data from Germany. While Wall Street has the potential to extend gains this afternoon on strong corporate earnings and cautious optimism over US-China trade talks, the medium- to longer-term outlook for equity markets tilts to the downside. | |
| Concerns over slowing global growth remains a dominant theme while the unpredictable nature of trade negotiations has certainly left investors on edge. With other geopolitical risks such as Brexit, China’s slowdown, Eurozone growth concerns and political turbulence in Washington seen stimulating risk aversion, the ingredients are in place for a stock market sell-off. | |
| It’s worth noting that the recent rally has coincided with a pick-up in the amount of money sloshing around in the markets, as central bankers have pumped up liquidity. Bloomberg has a good take here. | |
| Since Powell backtracked and the PBOC stepped up liquidity injections, global money supply has roundtripped to March 18 levels.Forget earnings or macro. This is why markets have rallied. pic.twitter.com/ANxj0EcdD1 | |
| The eurozone slowdown comes at a tricky time for the European Central Bank. | The eurozone slowdown comes at a tricky time for the European Central Bank. |
| The ECB only just ended its stimulus programme of buying bonds with newly-created money, and has suggested it could start raising interest rates from their current record lows this summer. | The ECB only just ended its stimulus programme of buying bonds with newly-created money, and has suggested it could start raising interest rates from their current record lows this summer. |
| Some economists are now wondering if the ECB might be forced to offer more cheap long term loans for banks (through its TLTRO programme) in the next few months. | Some economists are now wondering if the ECB might be forced to offer more cheap long term loans for banks (through its TLTRO programme) in the next few months. |
| With German factory orders dropping -7% yoy for the biggest year on year drop since 2012 it is time for the ECB to go to negative rates to stimulate the economy.Oh. pic.twitter.com/CdqqODIeaA | With German factory orders dropping -7% yoy for the biggest year on year drop since 2012 it is time for the ECB to go to negative rates to stimulate the economy.Oh. pic.twitter.com/CdqqODIeaA |
| Emerging stock markets have made a good start to 2019; Brazil is up over 10%, Mexico has gained 6.5% and China is 5% higher. | Emerging stock markets have made a good start to 2019; Brazil is up over 10%, Mexico has gained 6.5% and China is 5% higher. |
| That’s due to a pick-up in risk appetite after last autumn’s sell-off. Signs that central bankers are turning more dovish has also boosted shares. | That’s due to a pick-up in risk appetite after last autumn’s sell-off. Signs that central bankers are turning more dovish has also boosted shares. |
| But has the rally gone too far? Morgan Stanley suspects a correction is coming.... | But has the rally gone too far? Morgan Stanley suspects a correction is coming.... |
| Time to call a pause on the emerging market rally, says Morgan Stanley. Total returns over the last 3 months have been "aggressive" - approaching 10% - and risks of a correction in DM risk assets are building. pic.twitter.com/V2xeX3IgNL | Time to call a pause on the emerging market rally, says Morgan Stanley. Total returns over the last 3 months have been "aggressive" - approaching 10% - and risks of a correction in DM risk assets are building. pic.twitter.com/V2xeX3IgNL |
| Overnight, tech giant Apple revealed that its retail boss - Angela Ahrendts - is leaving. | Overnight, tech giant Apple revealed that its retail boss - Angela Ahrendts - is leaving. |
| Ahrendts was recruited (at no small expense!) from luxury fashion chain Burberry. She played a key role over the last few years as Apple turned itself into a trillion dollar company last year, while earning twice as much as CEO Tim Cook himself. | Ahrendts was recruited (at no small expense!) from luxury fashion chain Burberry. She played a key role over the last few years as Apple turned itself into a trillion dollar company last year, while earning twice as much as CEO Tim Cook himself. |
| My colleague Alex Hern says it’s a “rare loss of talent” for Apple. | My colleague Alex Hern says it’s a “rare loss of talent” for Apple. |
| Ahrendts’ replacement, Deirdre O’Brien, has a more typically Apple history: she joined the company 30 years ago and is already the vice-president of the people department at the company. | Ahrendts’ replacement, Deirdre O’Brien, has a more typically Apple history: she joined the company 30 years ago and is already the vice-president of the people department at the company. |
| The Apple retail arm, which covers its online and brick-and-mortar stores, has been a jewel in the crown throughout the period, with Ahrendts a regular fixture at press conferences to share successes such as new flagship locations, popular live events and free tutorials for new buyers. | The Apple retail arm, which covers its online and brick-and-mortar stores, has been a jewel in the crown throughout the period, with Ahrendts a regular fixture at press conferences to share successes such as new flagship locations, popular live events and free tutorials for new buyers. |
| Here’s his full take: | Here’s his full take: |
| Angela Ahrendts quits as head of Apple retail | Angela Ahrendts quits as head of Apple retail |
| Recent German manufacturing data do not paint a pretty picture: | Recent German manufacturing data do not paint a pretty picture: |
| That does not look good. #German #Factory #Orders disappoint in December. Outlook for the industrial production is deteriorating. pic.twitter.com/4AfL9DkbDm | That does not look good. #German #Factory #Orders disappoint in December. Outlook for the industrial production is deteriorating. pic.twitter.com/4AfL9DkbDm |
| Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, has now weighed in on this morning’s dire German factory orders. | Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, has now weighed in on this morning’s dire German factory orders. |
| He says the 1.6% month-on-month decline was a “nasty headline”, adding: | He says the 1.6% month-on-month decline was a “nasty headline”, adding: |
| “Across sectors, weakness in capital and intermediate goods were the primary drivers, especially on the export side to non-eurozone countries. By contrast, new orders for consumer goods rebounded strongly across the board, pointing to a revival in the auto sector towards the end of the year. | “Across sectors, weakness in capital and intermediate goods were the primary drivers, especially on the export side to non-eurozone countries. By contrast, new orders for consumer goods rebounded strongly across the board, pointing to a revival in the auto sector towards the end of the year. |
| “The year-over-year rate was depressed by base effects from a very strong finish to the year in 2017, but the message remains clear: German manufacturing is suffering.” | “The year-over-year rate was depressed by base effects from a very strong finish to the year in 2017, but the message remains clear: German manufacturing is suffering.” |
| Europe’s competition authorities have just derailed a massive planned merger between trainmakers Alstom and Siemens, triggering a massive political row. | Europe’s competition authorities have just derailed a massive planned merger between trainmakers Alstom and Siemens, triggering a massive political row. |
| Antitrust commissioner Margrethe Vestager has ruled that allowing France’s Alstom and Germany’s Siemens to combine would have created a near monopoly in the European train-making market. | Antitrust commissioner Margrethe Vestager has ruled that allowing France’s Alstom and Germany’s Siemens to combine would have created a near monopoly in the European train-making market. |
| This, she fears, would have hampered competition and driven prices up, so she’s pulled the emergency cord and brought the deal to a sudden halt. | This, she fears, would have hampered competition and driven prices up, so she’s pulled the emergency cord and brought the deal to a sudden halt. |
| We need signalling systems to keep us safe & very high speed trains for climate friendly transport. @SiemensMobility and @Alstom are champions in rail industry. Without remedies the merger would have resulted in higher prices, less choice & innovation, so the merger is blocked. | We need signalling systems to keep us safe & very high speed trains for climate friendly transport. @SiemensMobility and @Alstom are champions in rail industry. Without remedies the merger would have resulted in higher prices, less choice & innovation, so the merger is blocked. |
| Announcing the decision, Vestager says: | Announcing the decision, Vestager says: |
| “The Commission prohibited the merger because the companies were not willing to address our serious competition concerns.” | “The Commission prohibited the merger because the companies were not willing to address our serious competition concerns.” |
| Alstrom makes trains for France’s high-speed TGV service, while Siemens ICE-4 ,models are used on Germany’s own high-speed network. The two companies had hoped to create a new European powerhouse that could have competed better on the world stage against rivals such as China’s CRRC. | Alstrom makes trains for France’s high-speed TGV service, while Siemens ICE-4 ,models are used on Germany’s own high-speed network. The two companies had hoped to create a new European powerhouse that could have competed better on the world stage against rivals such as China’s CRRC. |
| French finance minister Bruno Le Maire has alreay blasted the move, claiming it was a serious political and economic mistake, adding: | French finance minister Bruno Le Maire has alreay blasted the move, claiming it was a serious political and economic mistake, adding: |
| “It’s going to serve China’s economic and industrial interests.” | “It’s going to serve China’s economic and industrial interests.” |
| If so, this won’t make Vestager may new friends in Brussels.... | If so, this won’t make Vestager may new friends in Brussels.... |
| Am I wrong to think this will make it significantly harder for Vestager to secure French support for a commission presidency bid? https://t.co/otYVW2AbX4 | Am I wrong to think this will make it significantly harder for Vestager to secure French support for a commission presidency bid? https://t.co/otYVW2AbX4 |
| Ocado’s shares have now slumped by 7.5% since it warned that the fire at its Andover distribution centre was worse than first feared. | Ocado’s shares have now slumped by 7.5% since it warned that the fire at its Andover distribution centre was worse than first feared. |
| That wipes more than £500m off the value of the company, leaving it firmly stranded at the bottom of the FTSE 100 leaderboard. | That wipes more than £500m off the value of the company, leaving it firmly stranded at the bottom of the FTSE 100 leaderboard. |
| Here’s our news story about the fire, and the disruption it will cause: | Here’s our news story about the fire, and the disruption it will cause: |
| Ocado says fire at warehouse will hit sales growth and orders | Ocado says fire at warehouse will hit sales growth and orders |
| As these photos show, firefighters are still attending the scene in Hampshire today: | As these photos show, firefighters are still attending the scene in Hampshire today: |
| German carmaker Daimler has reported that net profits almost halved in the last quarter of 2017, as the diesel crisis hurt demand. | German carmaker Daimler has reported that net profits almost halved in the last quarter of 2017, as the diesel crisis hurt demand. |
| Daimler’s earnings were scraped by the cost of developing new, greener, technologies for electric vehicles. | Daimler’s earnings were scraped by the cost of developing new, greener, technologies for electric vehicles. |
| The US-China trade war also hurt profitability, as it meant higher tariffs on some cars manufactured at Chinese or American factories. | The US-China trade war also hurt profitability, as it meant higher tariffs on some cars manufactured at Chinese or American factories. |
| Although revenues rose 7%, net earnings fell 49% to €1.64bn, in another sign that German companies found 2018 tough going. | Although revenues rose 7%, net earnings fell 49% to €1.64bn, in another sign that German companies found 2018 tough going. |
| Associated Press has more details: | Associated Press has more details: |
| “For Daimler, 2018 was a year of strong headwinds,” said CEO Dieter Zetsche, presenting his last annual results before handing off to successor Ola Kallenius at the May 21 shareholder meeting. | “For Daimler, 2018 was a year of strong headwinds,” said CEO Dieter Zetsche, presenting his last annual results before handing off to successor Ola Kallenius at the May 21 shareholder meeting. |
| He said that “we cannot and will not be satisfied” with lower profit margins. He added that the company was coming up with plans to increase profitability though declined to indicate what steps might be taken. | He said that “we cannot and will not be satisfied” with lower profit margins. He added that the company was coming up with plans to increase profitability though declined to indicate what steps might be taken. |