Economic news update – Tuesday 22nd January 2020

Global economy

Scheduled events 22nd January 2020

World Economic Forum at Davos. UK public sector net borrowing data due. Canada price index data and interest rate decision due. U.S. housing data.

Shares in Asia made gains, as earlier investor concerns about the coronavirus in China eased.

Netflix results

Netflix reported results for the last three months of 2019 – revenue of $5.47 billion, slightly above the $5.45 billion predicted by analysts. The company also said it expects slower growth in the number of new subscribers in 2020. Boeing has said it doesn’t expect its 737 Max plane to return to service before the summer.

Other results

IBM figures beat analyst expectations.

S&P 500 companies report

More than 10% of the S&P 500 companies have reported their quarterly results thus far. Of those, 75% have posted better earnings than forecast.

Jaguar Land Rover is reported to have confirmed that it plans to cut around 500 jobs at its Halewood plant.

DSG yesterday (21st January 2020) reported 2% profit but later made a u-turn to record a 2% loss?

Ted Baker’s shares dropped by just over 10% – the clothes store is reported to have overstated the value of its stock by £58 million.

Burberry says its sales in Hong Kong halved in the 13 weeks to 28th December 2019 but in mainland China, revenues increased.

UK chancellor and U.S. treasury secretary join in the forum fun at Davos

U.S. Treasury Secretary Steve Mnuchin is reported to have said that, ‘he expected a trade deal with the UK this year‘. But he made it clear the U.S. is unhappy with the planned UK digital tax due to come in to force April 2020.

UK digital tax

The UK won’t back down over the introduction of a new tax on large U.S. tech firms Chancellor Sajid Javid is reported to have told a meeting at the Davos summit.

The U.S. would consider ‘arbitrarily putting taxes on car companies’ if the UK goes ahead, U.S. Treasury Secretary Steve Mnuchin is reported to have said.

Prince Charles

Prince Charles launches sustainable markets initiative at the World Economic Forum in Davos.

More company results

W H Smith’s stores in train stations and airports etc. are doing well, but High Street shops trade remain in subdued.

Coca-Cola is reported to have said it won’t ‘dump’ single use plastic bottles – as consumers still want them, apparently. The plastic bottle is light weight and easy to use and consumers like them.

U.S. markets

The S&P 500 and the Nasdaq opened at new all time highs as investors enjoyed strong trade data from IBM. Investors were hopeful too that China’s efforts to contain a virus outbreak would be positive.

U.S. impeachment update

Democrats are preparing to make their case for removing President Trump from office.

UK market news

Lloyds Bank customers are to be charged new overdraft rates of up to 49.9% from April.

The FTSE 100 fell 39 points to close down at 7572 on 22nd January 2020

Tui shares dropped around 5.50% today after news that Boeing has again pushed back the date when its 737 Max plane can fly again.

Burberry also had a bad day, slipping 4.99%

U.S. market news

Tesla became the second most valuable car manufacturer after Toyota as it passes the £100 billion valuation.

S&P 500 turns negative and Dow gives up 100 plus point gain.

China and the coronavirus

The Chinese government is reported to have quarantined the city of Wuhan and plans to shut down the airport and public transportation system due to the coronavirus outbreak.

Markets close

FTSE 100 closed down at: 7572

Dow closed down at: 29186

Dax closed down at: 13516

S&P 500 closed up at: 3322

Nasdaq closed up at: 9384

Nikkei closed up at: 24031


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