Stocks up in Wall Street – Brexit talks continued

Stocks ended up in Wall Street on Friday. All the three major indices gained over 1 % because of the Bloomberg news that China has agreed to buy US goods by a value of 1 trillion dollars in order to reduce the US trade surplus to zero by 2024. Last year the trade surplus was 323 billion dollars.

Dow Jones – index gained 1,38 % and ended to 24706 points, S&P 500 -index gained 1,32 % and ended to 2670 points and Nasdaq 1,03 % to 7157 points. On Monday the markets will be closed due to Martin Luther King Jr holiday.

In London the Brexit talks continued and PM Theresa May had talks with EU-leaders and she met also other members of her Cabinet. According to Bloomberg she will have to present a new plan on Monday in the Parliament. The House of Commons will vote on different Brexit plans on January 29th. The stock markets ended up in London City and FT 100 -index gained 1,95 % to 6968 points.

In Germany the DAX index ended up 2,63 % to 11205 points and in France the CAC 40-index 1,70 %  to 4875 points.

In Asia the Nikkei-index ended up 1,24 % to 20666 points and in Hong Kong the Hang Seng index ended up 1,25 % to 27090 points.

Euro was trading 0,21 % down to 1,136 dollars. The UK sterling was down 0,85 % to 1,28 dollars.

Business Finance

Tesla: Focus on standard-range Model 3

Tesla has today published a blog and according to it, the company will cut workforce by 7 % in order to meet the targets regarding the Model 3 production and focusing also more in mid-range models.

-Starting around May, we will need to deliver at least the mid-range Model 3 variant in all markets, as we need to reach more customers who can afford our vehicles. Moreover, we need to continue making progress towards lower priced variants of Model 3.
Right now, our most affordable offering is the mid-range (264 mile) Model 3 with premium sound and interior at $44k. The need for a lower priced variants of Model 3 becomes even greater on July 1, when the US tax credit again drops in half, making our car $1,875 more expensive, and again at the end of the year when it goes away entirely, the CEO Elon Musk writes.

-Sorry for all these numbers, but I want to make sure that you know all the facts and figures and understand that the road ahead is very difficult. This is not new for us – we have always faced significant challenges – but it is the reality we face, he continues.

– As a result of the above, we unfortunately have no choice but to reduce full-time employee headcount by approximately 7% (we grew by 30% last year, which is more than we can support) and retain only the most critical temps and contractors. Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months. Higher volume and manufacturing design improvements are crucial for Tesla to achieve the economies of scale required to manufacture the standard range (220 mile), standard interior Model 3 at $35k and still be a viable company. There isn’t any other way, he says.

Tesla shares were trading down, -9,9 % to 312,79 dollars, after the blogging in Wall Street on Friday. Company also reminded that it made 4 % profit during the Q3. The last quarter figures of the year 2018 are not yet published.

– In Q4, preliminary, unaudited results indicate that we again made a GAAP profit, but less than Q3. This quarter, as with Q3, shipment of higher priced Model 3 variants (this time to Europe and Asia) will hopefully allow us, with great difficulty, effort and
some luck, to target a tiny profit, he estimated.

 

 

Lifestyle Travel

Davos: Companies should have Climate Change strategy

According to the Global Risk Report by the World Economic Forum, Climate Change, Natural Resources and Biodiversity are among the the top global risk areas for this year. 

– Rising geopolitical and geo-economic tensions are the most urgent risk areas in 2019, with 90% of experts saying they expect further economic confrontation between major powers in 2019, the World Economic Forum Report states.

– Environmental degradation is the long-term risk. Rapidly evolving cyber and technological threats are the most significant potential blind spots; we still do not fully appreciate the vulnerability of networked societies, the report says.

– 2018 was sadly a year of historic wildfires, continued heavy flooding and increasing greenhouse gas emissions. It is no surprise that in 2019, environmental risks once again dominate the list of major concerns. So, too, does the growing likelihood of environmental policy failure or a lack of timely policy implementation. To effectively respond to climate change requires a significant increase in infrastructure to adapt to this new environment and transition to a low-carbon economy. By 2040, the investment gap in global infrastructure is forecast to reach $18 trillion against a projected requirement of $97 trillion. Against this backdrop, we strongly recommend that businesses develop a climate resilience adaptation strategy and act on it now, says Alison Martin, Group Chief Risk Officer in the  Zurich Insurance Group.

The Wef Davos meeting will be held next week in Davos, in Switzerland. Around 3000 quests are expected to come to Davos, including Japan PM Shinzo Abe, German Angela Merkel and Prince William, the Duke of Cambridge.

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Business Lifestyle

Stocks to one-month high – Goldman up

The US stock markets continued their upward trend and the shareindexes reached one-month high during Wednesday trading. Two big financial companies, Goldman Sachs and Bank of America, both exceeded their earnings estimates.

Goldman Sachs reported its full year and fourth quarter earnings and according to the report, the group´s net revenues were 36,62 billion dollars and net earnings 10,46 billion dollars for the whole year 2018. The company shares jumped and lifted also Dow Jones- index and the banking sector as well.

-We are pleased with our performance for the year, achieving stronger top and bottom line results despite a challenging backdrop for our market-making businesses in the second half. For the year, we delivered double-digit revenue growth,
the highest earnings per share in the firm’s history and the strongest return on equity since 2009. We are confident that we are well positioned to support an even larger universe of clients, continue to diversify our revenue mix and deliver
strong returns for our shareholders in the years ahead, David Salomon, the CEO and Chairman of the Group said.

Dow Jones index ended up 0,90 % to 24 282 points, S&P 500 -index 0,41 % to 2623 points and Nasdaq ended up 0,39 % to 7051 points.

In London, where the UK Goverment won the confidence vote, FTSE ended down 0,47 % to 6862 points. The voting started at 7 pm local time. In Germany the DAX-index ended up 0,36 % to 10 931 points and in France the CAC-index ended up 0,51 % to 4810 points.

In Asia the Nikkei-index traded down 0,55 % to 20 442 points, while in Hong Kong the Hang Seng index ended up 0,27 % to 26 902 points.

 

Business Finance

Brexit: UK May wins confidence vote – crosstalks continue

The UK Prime Minister Theresa May´s Goverment wins the confidence vote in the Parliament today.  Numbers 325-306 the Goverment will continue its Brexit-negotiations and reaching some kind of deal with the EU.

Prime Minister Theresa May said after the voting results that she will continue the Brexit-negotiations with all the party leaders, starting tonight. She said that the target is to reach a statement by Monday about the EU deal in the Parliament.

Yesterday evening the Parliament rejected the  Goverment´s Brexit-deal and now the UK does not have any agreement to face the exit timetable March 29th. Many party leaders, including the Labour leader Jeremy Corbyn have stated that no-deal Brexit must be ruled out of the Brexit options.

EU leaders have not yet responded to the voting results but during the day there has been discussions of various options – including the extending the exit-time.

 

Business Finance

Brexit-deal rejected – stocks gaining in US

The UK Parliament has rejected the Brexit-deal with numbers 432-202. Prime Minister Theresa May and the other supporters fear that this could lead to a disorderly exit from the EU. According to the plan, the UK should leave the EU on March 29th.

After years of negotiations and fierce debate in the Parliament, the historic vote today means that the UK is now in a political crisis. The Labour leader Jeremy Corbyn said that he will ask for a vote of confidence, which will be tomorrow on Wednesday.

According to Reuters, the Cabinet ministers are still having a confcall tonight with the UK business leaders about the Brexit-vote and what does it mean to the business and City.

The EU has said that there will be no emergency summit beause of the situation. The EU leaders also confirmed that the deal, which was negotiated in November, will not be reopened.

The UK sterling was trading about 0,04 % up at 1,286 against to dollar. Euro was down by 0,49% to 1,14 dollars.

The US stocks were all up and Dow Jones showed 0,41 % to 24 008 points, S&P 500 -index was up 0,96 % to 2607 points and Nasdaq 1,47 % to 7007 points. In London the FTSE 100 ended up 0,73 % to 6895 points. In Germany the Dax-index ended up 0,33 % to 10891 points and in France the CAC 40 -index 0,49 % to 4786 points.

Business Finance

Brexit: Is there democracy?

After several months fierce debate over the Brexit agreement and its content, the next week will be historic for the UK economy and the country´s citizens. The Parliament is voting on Tuesday about the Brexit-deal and it will then give more guidance, how the Brexit-deal is going further and how the exit will happen on March this year.

The UK Prime Minister Theresa May and the Bank of England have warned of the non-deal Brexit. This means that if the Parliament rejects the negotiated Brexit-deal by the PM, this would be the worst scenario for the UK´s economy and its citizens, according to Central Bank´s analysis. The analysis, which was published in December, highlights that this would mean dramatically lower property prises, market volatility and  severe difficulties in trade for goods and services.

Today on Sunday, the PM Theresa May wrote in Sunday Express about her feelings and thoughts. Her message was clear: “It is time to forget the games and do what is right for the country”. She also pointed that by rejecting her Brexit-deal would mean that the Parliament has forgotten the original Brexit-vote and thus undermined the deomocracy.

In the BBC TV Labour leader Jeremy Corbyn told in today´s interview that his own view is that he would rather get a negotiated deal now and stop the danger of a no-deal exit from the EU.

Also the Japanese Prime Minister Shinzo Abe, who was visting the UK Cabinet last week in the UK,  sent his greetings that “the whole world want UK to avoid no-deal Brexit” and gave his full-support for the UK-EU deal.

Theresa May and her Cabinet have been discussing with the EU leaders about the Irish border issue ( a new physical border)  during the December and January time. This issue is sensitive for the UK, while the critics see this border issue as an binding element for the UK to follow the EU rules forever.  The new border would be between the Northern Ireland and the Republic of Ireland.

The UK economy saw the worst Christmas sales for years while the consumer confidence was weak due to Brexit. The UK economy is like in a war situation: the inventories are been filled with foods and drugs if the non-deal Brexit would cause chaos in the customs during the spring time. Travellers have been warned for the longer waiting times in the customs.

According to the Band of England´s Governor Mark Carney, the banks and the banking system are prepared for the worst, if this would be the case.

So, what to expect from the next week? The market volatility is expected to continue, but the traders and markets are looking for the Tuesday  UK decision until they make any big decisions. The markets are doing the thing PM May wished for today.

 

 

Business Finance