Wall Street slump depresses world markets
The Dow Jones suffered its biggest losses since February yesterday, with the index falling 317 points. A rise in weekly jobless totals, earnings and the Argentine default all prompted sales. Yesterday’s activity has meant a poor day for the Asian markets although China has fared better after figures pointed to a fast-pace in manufacturing growth. Europe was also down following the US slump but also with growing concerns over the Eurozone’s economy and rising tensions with Russia.
The big news this morning will be the US monthly jobs report at 8.30am ET. Expectations are broadly in line with June with a 6.1 per cent rate of unemployment. A stronger report could raise fears of an earlier interest rate hike. ISM manufacturing data and auto sales for July are also out today. Earnings from Burger King, Chevron and Berkley Hathaway are all expected before the opening bell.
California premiums for Obamacare more modest than many states
With some states having announced some double-digit rises in next year’s Obamacare premiums, 1.2 million in California have been waiting to find out what the cost will be to their healthcare. Given the rises elsewhere they may be relieved by Covered California’s announcement of an average rise of 4.2 per cent. There are some wide variations though; 6.6 per cent in San Francisco while in LA it’s nearer 4 per cent. The cost of healthcare in the longer term is still to be determined as there are subsidies for insurers until year 4. Read the full story.
China see sharp rise in manufacturing
Official figures released today by the Chinese government, show a sharp increase in manufacturing activity in July, the biggest rise since 2012. Some government schemes to encourage activity seem to be helping to add pace to the economy and the latest figures have beaten forecasts. Experts say they are very optimistic about the world’s second largest economy. Read the full story.
Eurozone manufacturing raises concern
Factories in the Eurozone shed jobs in July for the first time in 7 months. Poor growth in many of the bloc’s nations and rising tension with Russia over Ukraine are adding to the lack of confidence in manufacturing businesses, many of whom rely on Russian trade. Poland, part of the EU although not the Eurozone, saw a decline in activity for the first time in over a year and the UK also saw a slowdown in the last month. On a positive note, unemployment in Europe is falling which may go some way to halt the decline in inflation which is crucial to the region’s economic stability. Read the full story.
Could Sony be about to ditch smartphones
Yesterday’s earnings report from Sony included a warning about the outlook for its smartphones division. Operating profit for the company doubled from April to June but predicts sales in the smartphones division to drop by 14 per cent. As the company had previously planned to expand this area with its other core business activities being a good fit for the mobile platform, this could mean a change of direction for the business. Some experts say that Sony should let go of failing business divisions; although consumer electronics is a big part of its heritage, smartphones and TVs are highly competitive areas in which it may struggle to gain ground. Read the full story.