Asia runs scared of US rate rises
Investors’ fears that the Fed may raise interest rates sooner than expected have prompted sales in Asian markets today. Investors are concerned that global economies outside the US are not strong enough to cope with Fed rate rises. US yields and the dollar were higher. Japan was the only major Asian market gaining as the yen fell and pension funds were expected to buy more. Europe’s shares have been lower so far following a report by the San Francisco Fed said that investors are banking on a rate rise later than the Fed are expecting. Initial excitement at Apple’s product launch yesterday soon waned with shares in the company falling amid concern that they may not have enough clout in China and that their products may not be exciting enough to put clear water between Apple and Samsung. US futures are down so far.
Vera Bradley and Manchester United report earnings before the bell with Men’s Warehouse posting after the close.
Economies threatened by poor employment growth
A report by the OECD, the International Labor Organization and the World Bank Group says that the world’s economies are under threat from a lack of good jobs. The data suggests that we may not see the supply of jobs reaching required levels until 2018, highlighting the damage to the labor market caused by the financial crisis. The figures are staggering; there are 100 million unemployed in the G20 countries but a further 447 million who are ‘working poor’ or living on less that $2 a day. Even where jobs are being created they are often part-time and lower paid roles and wage increases are generally small or non-existent. The report calls for more action to be taken to tackle problems in the labor force and suggests that it needs a collective approach from the G20 nations to be effective. Read the full story.
Apple launches new payments system
While the iPhone and iWatch news created short-lived excitement for investors and tech buffs were making comparisons with what is already offered by the likes of Samsung, another element of Apple’s launch may prove to be of great interest. The firm’s new mobile payments system could be the deal-breaker. The new phones will have the ability to be used as contactless payment devices, storing a user’s credit or debit card details and enabling payments in retailers to be used using the device. Major names including MacDonald’s, Starbucks and Disney are already on board to accept Apple Pay. There is likely to be a threat to PayPal’s dominance for processing eBay payments as it will be easier for Apple users to use the new method instead but MasterCard, VISA and American Express are all predicted to benefit as partners in the system. Read the full story.
Dollar General to go hostile with Family Dollar bid
It’s reported that Dollar General is to make a hostile bid for Family Dollar today with an offer of $80 per share, slightly above the firm’s closing price last night. The $9.1 billion offer would trump the agreed deal with Dollar Tree for $8.5 billion. The straight-to-shareholders route means that Dollar General would not get access to confidential financial data that a bid via the board would provide. Read the full story.