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The Morning Ledger: European Finance Chiefs Prepare for Slowing Growth |
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Dulux paint maker Akzo Nobel said the prices for its paint products on average rose by 5% in the third quarter. PHOTO: CHRIS RATCLIFFE/BLOOMBERG NEWS
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Good day. Declining economic growth, trade uncertainty and rising raw materials costs are presenting finance chiefs at European companies with a cocktail of challenges, resulting in slower earnings growth.
Lower EPS: As of Friday, 49% of the 369 companies in the Stoxx Europe 600 that have reported their quarterly results beat analysts’ earnings per share expectations in the third quarter. That is lower than the 56% recorded in the same period a year ago.
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Cocktail of challenges: Decreased economic activity in Europe and China, Britain’s 2019 exit from the European Union and the impact of trade tensions between the U.S. and China also cloud the horizon.
Changing course: Executives are taking various measures to prepare their companies for a potential period of uncertainty. “Companies are rethinking their supply chains and their production lines,” said Mislav Matejka, global equity strategist at JPMorgan & Chase Co.
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Aecom Technology Corp., Eventbrite Inc. and UGI Corp. are among the companies slated to report earnings Monday.
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Investors will be seeking clues about the all-important holiday shopping season when U.S. retailers including Walmart Inc., Macy's Inc. and J.C. Penney Co. report results this week.
Japan’s July–September gross domestic product results are due on Tuesday. The economy is expected to have shrunk 1.0% on an annualized basis, according to economists polled by data provider Quick.
On Wednesday, the U.S. Labor Department publishes October inflation and real earnings figures. Also on Wednesday, China will release its monthly business activity data. Industrial output likely rose 5.7% in October, only a tick down from September’s 5.8% growth. Germany's statistics agency releases gross domestic product figures for the third quarter on Wednesday.
On Thursday, the U.S. Commerce Department releases retail sales data for October. On Friday, the U.S. Federal Reserve releases its industrial production report for October. Economists expect a pull back.
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A SoftBank humanoid robot stands inside a company store in Tokyo earlier this year. PHOTO: AKIO KON/BLOOMBERG NEWS
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SoftBank Group Corp. said it would seek to raise more than $20 billion with the initial public offering of its Japanese mobile unit, as it hunts for funds to fuel its nearly $100 billion investment machine.
SAP SE, the German business-software vendor, agreed Sunday to buy Qualtrics International Inc. for $8 billion, taking the market-analytics startup off the market just days before it planned to sell shares to the public.
Alibaba Group Holding Ltd. turned in another record-setting Singles Day on Sunday, with consumers snapping up bargains resulting in sales of $30.8 billion in a 24-hour span that began at 12 a.m. Sunday.
Facebook Inc. is ending its policy of requiring employee sexual-harassment claims to be settled in private arbitration, a day after Alphabet Inc.'s Google rolled back a similar policy.
Ex-Goldman Sachs Group Inc. CEO Lloyd Blankfein attended two meetings with Malaysian financier Jho Low, who is at the center of the 1MDB scandal. The second occurred after the bank’s compliance department raised concerns about the financier’s background.
United Parcel Service Inc.’s freight workers ratified a final contract offer, averting a work stoppage that prompted the carrier to clear its network ahead of the vote.
Drinks giant Diageo PLC has announced that it is selling a portfolio of 19 brands to U.S. privately owned firm Sazerac for $550 million, the BBC reports.
Tech-focused private-equity firm Vista Equity Partners LLP struck a deal to take software company Apptio Inc. private for $1.94 billion.
Fights are emerging across the U.S. auto industry over who should bear the costs of tariffs, leading to new stress along the supply chain.
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Federal Reserve Vice Chairman Randal Quarles. PHOTO: ANDREW HARRER/BLOOMBERG NEWS
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The U.S. Federal Reserve plans to broaden its plan to ease stress tests for the nation’s largest banks with a revised proposal that could reduce the chance banks fail the annual assessments.
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The Federal Reserve said Friday it plans to start publishing a periodic report on the stability of the U.S. financial system, a bid to shed light on a potential source of risk as the economy’s expansion progresses.
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New York City law-enforcement officers swarmed a Manhattan condominium last month, issuing 27 notices of violations in one of the largest crackdowns on short-term rentals such as those listed on Airbnb Inc.
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A federal grand jury indicted a former Tesla Inc. employee accused of engaging in a $9.3 million embezzlement scheme by impersonating a car parts supplier.
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American Express Co. won approval to set up card-clearing services in China—the first U.S. card network to gain permission—as Beijing seeks to show progress in opening its markets ahead of a summit between the Chinese and U.S. presidents.
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Brexit Affects Jobs, Hiring in London |
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Britain's 2019 exit from the European Union is making a dent on hiring in London, the heart of the country's financial industry, according to a survey released Monday by Morgan McKinley, a recruitment company.
The number of available jobs declined 7% in October compared with the previous month, and 33% compared with the same month a year ago. The number of jobseekers, however, increased 26% in October compared with September, but declined 23% compared with last October.
Jobseekers are hunting for new jobs as employers remain tight-lipped about their hiring plans, Morgan McKinley said. “Businesses are holding their cards close to their chests, prepared to hold off on announcements until the very last minute, and that’s worrying their staff”, said Hakan Enver, managing director financial services at Morgan McKinley.
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The Treasury Department said outlays for net interest on the public debt rose 20% in fiscal year 2018, one of the key drivers behind increased spending last year. PHOTO: BRIAN SNYDER/REUTERS
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In the past decade, U.S. debt held by the public has risen to $15.9 trillion from $5.1 trillion, but financing all of that debt hasn’t been a problem. That is about to change.
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OPEC is likely to agree to an oil production cut when it meets next month in Vienna as oil prices enter bear market territory and signs of oversupply loom. Saudi Arabia confirmed that it would cut its own oil supplies next month and Russia signaled that it could follow suit.
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Space is corporate China’s newest frontier, as Chinese startups prepare to go head-to-head with the likes of Elon Musk’s SpaceX and Jeff Bezos’s Blue Origin LLC for a slice of the space market.
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U.S. sanctions on Iran and the trade battle with China have become a boon for owners of tankers, with daily freight rates at their highest in two years as ships shift their routes to load up crude from other oil-producing countries.
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The economic outlook for U.S. consumers remained strong in early November as their income expectations rose, suggesting Americans could increase their spending heading into the important holiday retail season.
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