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Global growth fears grow as German and Spanish industrial output falls - business live

Discussion in 'Market News' started by Lily, Oct 7, 2015.

  1. Lily

    Lily Forum Member

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    Rolling economic and financial news, as Europe’s largest economy is hit by falling demand and Tesco’s profits halve


    9.31am BST

    Volkswagen shares have jumped by 5% this morning after the German carmaker coughed up its plan to fix the emissions scandal.

    “If everything goes as planned, we can start the recall in January...All the cars should be in order by the end of 2016.”

    Related: VW's CEO: all cars affected by rigging to be repaired by end of 2016

    Volkswagen's stock chart is starting to look like BP's after oil spill http://t.co/IK62g3vi52 pic.twitter.com/nWCCjUkqQV

    Related: Volkswagen Australia confirms 77,000 cars with emissions-rigging software

    9.01am BST

    This chart shows that a) monthly German industrial orders are volatile, b) August’s 1.2% decline was the biggest in a year:

    More bleak numbers. German industry output unexpectedly falls even ahed of VW crisis. http://t.co/m5q7i61p5K pic.twitter.com/0sv2zn9db0

    8.46am BST

    European stock markets are all gaining ground this morning, despite the disappointing factory output figures from Spain and Germany.

    Speculation that the US Federal Reserve won’t raise interest rates this year is driving up the value of commodities. Weak data probably means looser monetary policy, for even longer.

    Last couple of days have seen FTSE100 back above 6300 for first time since August's Black Monday. pic.twitter.com/tmdCfJp1An

    8.38am BST

    Another blow to the eurozone. Output at Spain’s factories shrank by 1.4% month-on-month in August.

    That’s rather worse than the 0.4% decline which economists had expected, and even sharper than the reversal in Germany.

    Spanish Industrial Production Data (Aug): M/M -1.4% v -0.4% exp, prev +0.6% rev +0.7% SA Y/Y +2.7% v +4.7% exp, prev +5.2%

    8.23am BST

    There’s a frisson of deal mania in the City this morning, after brewing giant Anheuser-Busch InBev hiked its proposed takeover offer for British brewer SABMiller to £68bn.

    Related: AB InBev raises takeover offer for SABMiller to $104bn

    8.13am BST

    Shares in Tesco have fallen by more than 3% after the supermarket chain told shareholders that operating profits more than halved in the last six months, to £354m.

    Tesco has had a traumatic year, hit by an accounting scandal and the fierce grocery price war. It has been losing sales to discount retailers such as Aldi and Lidl and last year posted a record £6.4bn loss, one of the biggest in British corporate history.

    The company’s chief executive, Dave Lewis, who joined from Unilever just over a year ago, has embarked on a turnaround plan for the group, cutting prices and improving customer services. But some City analysts say progress has been too slow.

    Related: Tesco profits tumble by more than half

    8.08am BST

    Germany’s economy ministry is urging us not to panic, and claiming that the drop in factory output is partly due to the summer holidays.

    Carsten Brzeski, economist at ING, agrees that’s a factor -- but says the figures are still disappointing.

    Yesterday’s drop in new orders already signalled a note of caution. The August drop marked the first decline for two consecutive months since the beginning of the year. A clear sign for caution.

    Over the last couple of months, the industrial safety net of low inventories and filled order books has become thinner.

    German industrial production disappoints. Impact of Chinese slowdown or simply too much vacation? http://t.co/gSJWWSofRm

    8.02am BST

    The German economy doesn’t need any more bad news at present, given the VW emissions scandal:

    Warning lights are flashing RED on entire Germany economy, not just on the dashboards of Volkswagen. MINUS 1.2% https://t.co/ULcKANOLoA

    8.00am BST

    Christian Lips, an economist at NordLB in Hanover, says today’s report shows Germany’s industry is now lagging behind the consumer sector.

    He told Bloomberg:

    “A certain weakness in the [German] manufacturing sector cannot be ignored, even though it stands in stark contrast to strong private consumption.”

    7.52am BST

    Germany’s powerhouse manufacturing sector has suffered a poor August, in another signal that the global economy is feeling a chill.

    Figures just released show that industrial output across Germany shrank by 1.2% in August, much worse than the +0.2% which economists had expected.

    German Industrial Production for Aug follows in footsteps of yesterday's awful Factory Orders

    German IP down 1.2% vs forecast for 0.2% increase. After factory orders, that's second disappointment this week.

    7.41am BST

    Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

    There’s a subdued feeling in the markets this morning, after the International Monetary Fund warned that the global economy is on the brink of stagnation

    Related: IMF warns of stagnation threat to G7 economies

    #IMF cuts its global forecast to 3.1% this year. Now pretty similar to us. But key thing is heightened EM risks as #US tightening nears

    Continue reading...
     

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