Americans’ collective debt surpasses $4 trillion for the first time. This won’t end well.
Archives of “March 2019” month
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DowDupont warns of sharp earnings drop in first quarter
DowDupont, the chemicals group, has estimated that its earnings fell by a percentage in the “high teens” in the first quarter of the year, hit by flooding in the US midwest and a squeeze on margins in packaging and plastics.
Its previous guidance was that earnings before interest, tax, depreciation and amortisation would drop by a percentage in the low teens.
In after-hours trading the shares were down 2.6 per cent at $51.37.
The warning on earnings comes just a few days before DowDupont, formed in the 2017 merger of Dow Chemical with DuPont, begins its planned break-up. A new Dow, including plastics, petrochemicals and related products, will be spun out on Monday April 1, starting trading the following day. The agriculture business, called Corteva, is scheduled to be spun off in June.
The group identified two main factors hitting earnings in the first three months of 2019. The agriculture business, which makes seeds, pesticides and related chemicals, was hit by the flooding in the midwest, a key US farming region. Transport disruptions halted farming operations and restricted product deliveries, leading to a 4 to 6 per cent drop in sales and a loss of $125m to $150m in ebitda.
Meanwhile in the plastics and packaging division, part of the new Dow, sales have fallen more sharply than the company expected, dropping by a percentage in the low teens rather than the high single digits drop that was projected in January. The division’s ebitda has also dropped more than expected and is set to be about $100m lower than in the previous guidance, as a result primarily of “greater than-expected margin compression globally in packaging and speciality plastics”.
DowDupont said it would give further details, including an assessment of the full year impacts of the floods, with its first-quarter earnings on May 2.
Japan industrial production for February, preliminary: 1.4% m/m (expected 1.4%)
Japan industrial production has slumped in the wake of trade tensions, Feb showing a bounce back from the very poor January result
1.4% m/m, in line
- expected 1.4% m/m, prior -3.4%
-1.0% y/y, beat (not as bad as expected)
- expected -1.1% y/y, pri 0.3%
The survey by Japan’s Ministry of economy, Trade and Industry also garners ‘outlooks’:
- March seen at +1.3%
- April seen at +1.1%
mtc more to come
Japan retail sales for February: 0.2% m/m (vs. expected 1.0%)
Japan retail sales for February
0.2 % m/m , miss
- expected 1.0% m/m, prior -1.8%
0.4 % y/y, miss
- expected 1.0% y/y, prior 0.6%
mtc more to come
US President Trump says doing well in trade talks with China and other countries
OK then.
A comment like this has, in the past, sparked a bit of a flurry of movement in the forex. The impact of this comments is wearing off as the market wisened up to their value.
Wall St edges higher as trade talks resume and sovereign bond rally eases
Wall Street ended Thursday modestly higher as the US and China resumed trade talks, while the rally in sovereign debt eased as investors continued to assess implications of slowing global growth.
The S&P 500, which climbed as much as 0.5 per cent, finished 0.36 per cent higher, led by financials and materials. Utilities, considered a bond proxy were the biggest decliners on the day. The Dow Jones Industrial Average and Nasdaq Composite also carved out similar gains for the day.
The boost to the S&P 500, which remains on track for its best quarter since 2009, came as Robert Lighthizer, the US trade representative, and Steven Mnuchin, the US Treasury secretary, arrived in Beijing for yet another round of talks.
European stocks were a mixed bag. The Stoxx 600 failed to hang on to an earlier advance and closed down 0.1 per cent. Frankfurt’s Xetra Dax 30 pared its gains but managed to eke out a 0.1 per cent gain for the day. London’s FTSE 100 outperformed as sterling weakened, rising 0.6 per cent.
Asian bourses fared little better, with mainland China’s CSI 300 index down 0.4 per cent.
With little action on the equities front, the signals being sent by the government bond market remained the focus for investors. Treasuries slipped with the yield on the US 10-year up 2.4 basis points to 2.396 per cent, having hit a fresh 16-month low of 2.3384 per cent earlier in the session. The equivalent German Bund yield ticked up by 1bp to minus 0.074 per cent, leaving it near a 29-month low it touched during the previous session.
Brent crude fell as much as 1.6 per cent with concern at the outlook for growth and its implications on demand offsetting expectations that Opec looked set to extend its supply cuts at its next meeting in June. However, it reversed the bulk of its losses to settle roughly flat at $67.82 a barrel.
A rebound in the dollar also pressured gold prices. The yellow metal was trading 1.5 per cent lower at $1,290.14 per troy ounce.
The pound was hit — down over 1 per cent to $1.3044 — with the UK’s Brexit politics mired in confusion after parliament voted down a series of alternatives to prime minister Theresa May’s Brexit deal.
The euro was down 0.2 per cent at $1.1224.
Thought For A Day
Metallurgy in the Bronze Age
European major indices end the day with mixed results
The major European indices are ending the day with mixed results. The UK FTSE moved higher on the back of a lower GBP (helps exports). This despite the dire Brexit road ahead as lawmakers remain deadlocked with no agreeable solutions.
The provisional closes are showing:
- German DAX, up 0.09%
- France’s CAC, -0.1%
- UK’s FTSE, +0.57%
- Spain’s Ibex, -0.21%
- Italy’s FTSE MIB -0.53%
In the 10 year benchmark notes, yields are mostly higher with the UK the exception:
