Editor Brian Harrod Provides Comprehensive up-to-date news coverage, with aggregated news from sources all over the world from the Roundup Newswires Network
Equity sell-off deepens and oil falls below $59 as death toll from coronavirus rises, sparking fears over economic impact
Stock markets in UK, Germany and France fall more than 2%
My colleague Joanna Partridge writes:
Brexit uncertainty plus political turmoiled equalled financial distress for almost half a million British businesses in the final three months of last year, according to a new survey which measures corporate health.
On currency markets, sterling has risen slightly versus the dollar and the euro (to $1.3087 and €1.1872), as the Brexit date of 31 January approaches.
FTSE 100 records best performance since the referendum year, jumping 12%
Global stock markets have posted their best year since the aftermath of the financial crisis a decade ago, as investors shrugged off trade tensions and warnings of slowing growth in major economies.
The MSCI World Index, which tracks stocks across the developed world, jumped by almost 24% during 2019 – the strongest performance since 2009. A surge in US technology giants and a strong recovery in eurozone and Asian stocks drove the rally.
He suspects that some home owners may have been keen to move before the general election, as a hung parliament could have created more economic uncertainty in 2020.
Global stock markets have gained another $700bn this week in thin trading on santa rally. All equities now worth $87.1tn, just $200bn shy of a fresh life-time high and equal to 100% of global GDP so stocks have entered bubble territory. pic.twitter.com/JgXmKPDWCN
Nostalgia for the good times has been a coping mechanism for the world’s third largest economy
On 29 December 1989, Japan’s Nikkei stock market index hit a high of 38,916, a milestone that proved to be the last hurrah of the country’s asset-inflated bubble economy – a period of ostentatious consumption and overconfidence in the infallibility of Japan, Inc.
What followed was a spectacular fall from the heights of the mid- to late 1980s. The stock market plummeted, losing more than $2tn (£1.5tn) in value by December 1990. In the years that followed, the Japanese surveyed an alien landscape of “restructuring” – code for cost-cutting – deflation and stagnation. When the bubble party ended, its hosts appeared to have no idea how to clean up the mess left by absurdly high share and property prices.
World’s biggest listed company briefly reaches valuation sought by Saudi ruler
Saudi Aramco has touched a market value of $2tn a day after the Saudi state-backed oil company made its stock market debut.
The shares rose almost 10% at the open on the second day of trade on Riyadh’s Tadawul stock exchange, lifting the company’s market value briefly to $2tn, before giving up some of their gains.
Asian markets plunge after Trump comments about trade deal delay made worse by possible Xinjiang sanctions
Global financial markets have gone into a tailspin amid mounting concern that the US and China are not going to conclude an interim trade agreement before a new set of American tariffs hit Chinese goods on 15 December.
De facto Opec leader will push other countries to rein in oil output before Aramco’s IPO
Saudi Arabia is planning to use its position at the head of the Opec oil cartel to buoy global oil prices before the $25bn stock market debut of its state-owned oil giant.
The Organization of the Petroleum Exporting Countries is due to meet its oil market allies this week to agree the cartel’s oil production policy for 2020.
A lot of people face losses because of Thomas Cook’s collapse.
The companies suppliers could be left with unpaid bills, while employees need to submit claims to obtain the redundancy payments and wages they’re entitled to.
Decision to rule out UK and Hong Kong would be major blow to both financial centres
Saudi Arabia’s revived plans for a $2tn mega-listing of its state oil company may rule out the London Stock Exchange amid Britain’s rising political uncertainty, according to reports.
Saudi Aramco, the world’s most profitable company, may instead look to Japan’s Tokyo stock exchange to host the second phase of what would be the biggest public offering in history.
If President Xi would meet directly and personally with the protesters, there would be a happy and enlightened ending to the Hong Kong problem. I have no doubt! https://t.co/eFxMjgsG1K
Sharp declines come after Tuesday rally inspired by tariff delays
Trump urges Fed chief Powell to make further interest rate cuts
Signs of a global economic slowdown roiled the markets on Wednesday as shares dived and investors fled to bonds with such intensity that short-term yields rose above longer-term ones for the first time since the crisis of a decade ago – an inversion many market-watchers saw as a strong signal of an approaching recession.
A degree of calm has returned to world stock markets, after heavy selling earlier this week amid fears that the one-year trade war between the US and China was turning into a full-blown currency war. Washington branded Beijing a currency manipulator after the yuan fell sharply beyond the seven-to-one-dollar mark on Monday. This led to turmoil in financial markets – and US and UK stocks had their worst day this year.
The pound is declining again today and is trading close to two-year lows versus the dollar and the euro. It is down 0.21% against the dollar at $1.2145, not far from the 31-month low of $1.2080 reached last week. Against the euro, sterling is 0.12% lower at €1.0855, not far from the 23-month low hit yesterday.
The risk of a no-deal Brexit has increased markedly under Boris Johnson’s government. When he became prime minister a fortnight ago, he said he would take Britain out of the EU at the end of October “do or die”. Investors are also fretting about the possibility of a no-confidence vote in the new Conservative government after the summer recess, or an early general election.
There are many key dates ahead for sterling, but the passing of 5 September without a successful of no confidence in the government will in our view be a further important step along the road of a no-deal Brexit on 31 October.
The mood in financial markets is still fragile. Oil prices have hit a fresh seven-month low as traders worried about the impact of the US-China trade war on the global economy.
Brent crude, the global benchmark, fell nearly 2% to $58.57 a barrel earlier this morning and is now trading down 0.2% at $58.82 a barrel. Prices have tumbled more than 20% since hitting their 2019 peak in April.
Gold has hit a fresh six-year high, rising above $1,473 this morning, after Beijing hit back at Washington’s branding of the country as a currency manipulator.
Asian stock markets were painted red overnight but shares in Europe have stabilised, no doubt helped by the strong factory orders data from Germany this morning. Germany’s Dax has risen 0.46%, France’s CAC is up 0.67%, Spain’s Ibex has edged 0.09% higher and Italy’s FTSE MiB is 0.25% ahead.
UBS, the Swiss investment bank, has sent us its analysis of the impact of the 10% tariff on $300bn of US imports from China threatened by Donald Trump last Friday.
The direct impact of the new tariffs, if implemented, would reduce US GDP by 0.15%, and we estimate Chinese GDP growth in the next 12 months could fall by 0.25–0.5 percentage points as a result, which would push the country’s growth rate below 6% into 2020.
China’s response to recent trade escalations has been relatively measured and we expect a similar reaction this time, with retaliation involving a mix of more tariffs and non-tariff measures. Potential non-tariff measures include a managed depreciation of the yuan to mitigate the trade impact from higher tariffs, penalising select US companies operating in China, and imposing export restrictions on rare earth metals.
There is still time to find a compromise, trade talks between the US and China scheduled for September have not been called off, and investors should also consider potential offsetting factors such as rate cuts by central banks and stimulus in China. Our base case assumes a long, drawn-out negotiation process, during which tensions can occasionally flare up.
An environment of a) rising trade tensions and b) potential stimulus, including falling interest rates, is tricky for investors to navigate. While we ultimately believe that US–China tradetensions will be resolved through negotiations, we think equities may struggle to move markedly higher until there is greater certainty.
Markets fell sharply as Trump threatens fresh tariffs; US non-farm payrolls matched economists’ expectations in July, while June figures were revised down
The Bank of Finland governor Olli Rehn has confirmed that he has withdrawn from the race to become the next managing director of the International Monetary Fund.
EU is about to vote on Europe’s candidate for IMF managing director. It is an exceptionally meaningful and motivating job. However, at this stage I withdraw my name from the ballot, so that we can achieve a broad-based consensus for the European candidate, and world-wide support.
Star listing of domestic tech firms is seen as an attempt to bypass US markets in trade war
China’s tech scene was handed a fresh vote of confidence as investors piled into Shanghai’s new Nasdaq-style stock exchange and sent shares skyrocketing up to 500%.
The launch of the Star listing of domestic tech firms is seen as China’s answer to the US’s Nasdaq, and an attempt to sidestep American markets in its long-running trade war with Washington.
- the employment level is at a record high - there are 3.7m more people in work than in 2010 - wages have grown faster than inflation for almost a year - female unemployment has fallen to a new record low of 3.6% pic.twitter.com/V9C5NMXW9l
Andy Bruce of Reuters has also spotted that rising self-employment is making up for a drop in the number of employed workers.
Cause for concern?
That there was any employment growth at all in 3 months to May is down to a hefty increase in self-employment.
If you’re just tuning in, here’s our news story on the Chinese growth figures.... and president Trump’s response.
Donald Trump has claimed that his tariff battle with China is working after official data from Beijing showed growth in the world’s second biggest economy dropping to its slowest pace since 1992.
The US president said the impact of his protectionist measures had been to cause an exodus of companies from China, as Beijing announced that its annual rate of expansion had slowed from 6.4% to 6.2% in the second quarter of 2019.
In tweets that were immediately challenged by economists, Trump said his tough action had forced China’s leaders to the negotiating table.
European stock markets ended the day higher, blown upwards by hopes of fresh Chinese stimulus measure to prop up growth.
After a brief stint in the red the FTSE has powered higher on Monday as risk on dominated. Better than expected results from Citigroup boosting Wall Street and the prospect of stimulus for China lifted the FTSE at the start of the week.
Chinese GDP data showed that the economy grew by 6.2% its lowest level of growth in almost a decade. However, rather than depressing the market, hopes of stimulus for the world’s second largest economy have boosted risk appetite, lifting demand for riskier assets such as stocks. Just as we are seeing with the US, the prospect of easing financial conditions is not being interpreted as bad news for stocks. Instead the prospect of cheaper borrowing in the case of the Fed and support from the PBOC is giving investors plenty of confidence to buy in.
Iran hasn’t said who it thinks is responsible for today’s attacks off its coastline.
But on Twitter, foreign minister Javad Zarif has described the attacks as beyond suspicious:
Reported attacks on Japan-related tankers occurred while PM @AbeShinzo was meeting with Ayatollah @khamenei_ir for extensive and friendly talks.
Suspicious doesn't begin to describe what likely transpired this morning.
Iran's proposed Regional Dialogue Forum is imperative.
Here’s the key line from president Rouhani’s speech on Iranian TV:
“Security is of high importance to Iran in the sensitive region of the Persian Gulf, in the Middle East, in Asia and in the whole world. We have always tried to secure peace and stability in the region.”