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

Apple: Revenue will be lower due to China (updated)

The US mobile phone manufacturer Apple (AAPL) has lowered its forecast for the fiscal-first quarter revenue outlook due to the China market. Apple says that it expects the revenue to be 84 billion dollars in the quarter. According to Bloomberg estimates, the revenue expectation was 91,3 billion dollars in average.

– While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China. In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad, Apple´s CEO Tim Cook said in an investor letter on Wednesday.

According to Cook, the other figures “remain broadly in line with our earlier estimates”. He also pointed out, that the revenue stream outside of the iPhone grew almost 19 % year-on-year. For example Wearables grew almost 50 % on annual basis. Also the services generated over 10,8 billion dollars during the quarter and according to Cook the company is on track to achieve its goal of doubling the size of this business from 2016 to 2020.

In spite of the cutting forecast, Cook expects to set all-time revenue records in several developed countries, including the United States, Canada, Germany, Italy, Spain, the Netherlands and Korea. – And, while we saw challenges in some emerging markets, others set records, including Mexico, Poland, Malaysia and Vietnam, he added.

Apple´s stock fell in after-hours trading about 7 % to 147 dollars.  Apple is to publish its final first fiscal quarter, ended 29th December 2018,  on the 29th January 2019.

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Business Tech

Highlights of the year 2018 – Brexit, trade talks and green finance

The year 2018 was a year of Brexit, electric cars and trade talks. It included special moments in the financial markets and in the company side. Green Bonds and Green Finance were getting more attention in the markets and trade talks and Brexit were the topics during the year 2018 along. Climate Change and low carbon landed also in the agenda of central banks.

Investors were also asking what is the role of the City as a global financial hub. Should it have its own rules in spite of the Brexit? In the financial hub competition, Frankfurt and Paris were the European cities to get more new financial offices as financial companies were moving some operations to the EU side.

The UK Parliament is expected to vote of the Brexit during Janury 2019 after very intensive debate about the deal during the year.

Climate Change has become part of the everyday life in the financial markets and for example one of the biggest insurance companies in the US, Berskhire Hathaway informed in February 2018, that it has got 3 billion dollars losses of the natural catastrophies, the hurricances in the US. Several central banks, including the European Central Bank and some Asian ones, have also agreed about the co-operation in the climate issues and how to monitor the impact on the markets.

In the tech-side augmented reality and ioT were the themes for the year. Apple, Amazon, Google, Tesla, Intel  and Samsung  were one of the tech-companies to deliver new services related to the new technology. On the other side of the topic, Facebook was dealing with the privacy issues globally. New tech- companies listed in the markets were for example Spotify and Xiaomi.

Year 2018 was a year of electric cars in many countries. The e-cars breakthrough with charging issues was one of the tech topics as well. Telsa founder Elon Musk was the leading industry sector figure as he estimated that Tesla would make one million cars by 2020 in February 2018.

Also the German automakers announced new investments and concept cars. For example the BMW Group launched an autonomous driving campus in Munich in March 2018.

Year 2018 was also a year for luxury goods and services. The Basel World 2018 -fair announced its good selling and for example the CEO of Hublot, Ricardo Guadalupe,  told ComteamPUB+ that the company expects double digit growth for the year and that the Chinese customers will be the leading segment.

In the debt markets the US Uber and Netflix issued their junk bonds to investors. Uber, the ride-sharing company, is said to plan an IPO for the year 2019 according to the secret filings to the SEC.

One of the biggest infrastructure projects ever, the China Silk Road, is getting more attention from the green investors side, while the organization made its first announcement of the green principles for the project co-operation and operators. The ancient Silk Road is expected to rise the GDP growth by 4 % or 240 billion dollars in the countries invlolved according to Credit Suisse analysis.

The aim of the Roman time Silk Road is to connect the western Europe with the eastern coast of China and to renew the infrasturcture in between. This means also that the 10 world largest container ports are located along the route.

Trade talks between different countries have continued lively during the year. US and China have been in the headlines, but also the EU with its agreement with Japan.  The political situation and rising volatility in the financial markets tell the direction for the next year. Geopolitical easing is needed.

Päivi Härkönen, co-founder, ComteamPUB+

 

 

Business Finance Lifestyle

Stocks made comeback – Fed planning press calls 2019

The US stock markets made their comeback during Thursday trading. After the morning decline the stocks turned to green at the end of the trading day and for example the Dow Jones -index ended up 1,14 % to 23 138 points.

Investors were worried about the economy outlook related to tradetalks between the US and China, the goverment shutdowns and latest macro data regarding the consumer confidence.  According to the Conference Board ,the confidence index declined to 128,1, while the market estimate was 133,5 (Bloomberg).

Some new insight was given during the day, while it is expected that the US and China negotiators will meet on January the 7th in Beijing to continue the trade talks. One of the biggest issues is  also the tech-company Huawei and its position in the US markets. According to Reuters, President Donald Trump is considering different options related to the company and its security issues.

The recent discussion about the Federal Reserve and its interest rates policy has had its impact on the communications of the Central Bank. The Chairman  Jerome Powell is considering having press calls after each Fed meeting, starting next year. This would have its new impact on the trading activities as well, while new comments, and maybe market-moving comments may appear after the meetings.

The tech-index Nasdaq ended up 0,38 % 6579 points and larger S&P 500 -index 0,86 % to 2488 points.

In Europe the FTSE 100 -index declined 1,52 % to 6584 points – in Frankfurt the Dax-index ended down 2,37 % to 10381 points and in Paris the CAC 40 -index declined 0,60 % to 4598 points.

In Asia, Nikkei-index ended up 3,88 % to 20077 points in Tokyo but in Hong Kong the Hang Seng index declined 0,67 % to 25 478 points.

Euro gained 0,72 % against dollar and was 1,114 dollars. The UK sterling gained 0,13 % was was 1,265 dollars.

The Swiss franc gained as safe-haven currency against euro and dollar and was 0,9875 dollars and 1,129 euros.

Brent crude (ICE)  declined 2,92 % to 52,88 dollars per barrel.

Business Finance

Global fall in stocks – growth concerns

Equities fell in the markets globally on Friday trading. The major concerns were the Chinese signs of slowing economy, Brexit-situation and the ongoing  US China tradetalks. Dow Jones fell 2,02 % to 24 100 points, S&P 500  fell 1,91 % to 2599 and technology Nasdaq-index dropped 2,26 % to 6910 points.

The macro data regarding the Chinese retail sales was a disappointment for the markets and the Asian stocks fell as well. Tokio Nikkei 225-index ended down 2,02 % to 21374 points and Hang Seng in Hong Kong fell 1,62 % to 26 094 points.

In Europe stocks in London ended down 0,47 % and FTSE 100 stood at 6845 points. German DAX-index ended down 0,54 % to 10865 and CAC40 -index in Paris ended down 0,88 % to 4853 points.

According to Citigroup analysis, the company earnings are expected to rise on average 8 % in the US next year by the analysts compared to 6 %  growth by markets strategists and 4% by the markets itself. In Europe the difference is wider, while the analysts expect the company earnigns to grow on average by 8 % e and strategists by 2 % in 2019. The markets expectation is -4 %, Bloomberg news reported.

The slowing economy signs have also increased the expectations that the US Federal Reserve would have fewer rate rises in 2019 than earlier estimated. The European Central Bank signaled on Thursday that the ECB in ready to operate and feed the system in case of sudden economic turnarounds and political situations. At the same time the bank also announced the end of the bond buying programm.

The UK EU Brexit deal was on the news as well. The EU leaders declined to open the deal for new negotiations, but there where willingness to help the UK with the border issue. UK Prime Minister Theresa May said in Brussels that she feels that there could be more assurances while the talks will continue. The UK Parliament is going to vote about the deal during January 2019.

Euro fell against US dollar and was down 0,48 % at 1,130 dollars. The UK sterling fell 0,47 % to 1,258 dollars.

Business Finance