What made the business news in Asia and Europe this morning? Here's our daily business round-up:
Continue reading the main storyEconomic concerns continued to dominate headlines, with problems in the eurozone threatening to have an impact on economies outside the bloc.
Developing nations should brace themselves for weak growth and "tougher times", the World Bank has warned.
It said that there may be "a long period of volatility in the global economy" as the eurozone debt crisis escalates.
The bank forecast that developing economies would grow by 5.3% this year, down from 6.1% in 2011.
There was, however, some good news for the eurozone, with new data showing that inflation for the larger economies has eased.
And although the Spanish economy continues to suffer, not all the country's companies are struggling. Retailer Inditex, whose brands include Zara, posted a surge in profits and sales, sending the company's share price up 8%.
In Japan, there was a boost for machinery orders in April, a key indicator of capital expenditure.
In what was a positive sign for the economy, orders rose 5.7% from a month earlier. Most analysts had projected 1.5% growth.
Failed carmaker Saab has found a buyer, with the identity of the new owner due to be announced later on Wednesday. However, media in Sweden reported that the buyer was a Swedish-Chinese investment group.
Also being announced later is the result of a shareholder vote on remuneration at advertising group WPP. Chief executive Martin Sorrell is facing a backlash over his £6.8m package.
In the UK, the chief executive of the financial regulator has been speaking about one of the defining moments of the financial crisis.
Hector Sants disclosed to the BBC that the crisis that forced the nationalisation of Northern Rock bank might have been avoided if his advice had been heeded.
Also in the UK, one of the leading supermarkets, Sainsbury's, has seen a rise in sales due to the opening of smaller stores.
The figures come two days after the UK's largest supermarket group Tesco reported a fall in UK sales.
In the latest Business Daily podcast, the team examines how Europe is starting to think the unthinkable - what happens if the eurozone splits. The BBC's Chris Bowlby runs through some of the possible scenarios.
WWDC 2012: Top iOS 6 Features Suitable for Business Users - ibtimes.co.uk
Like us on Facebook
FaceTime is now enabled over cellular networks as well as Wi-Fi allowing users to make and receive FaceTime calls from any location. To make a call, users will have to use their Apple ID and phone number. A colleague can use FaceTime on his/her iPhone and call you by using your phone number and you can answer to his/her call using your Mac or iPad. The technology appears to be more suitable for business users.
[3] Passbook
The new Passbook app will bring together all your boarding passes, movie tickets, retail coupons and more all in just one place. It best suits for frequent flyers and users who regularly fly on business trips. Moreover, it allows you to scan your device to check in for a flight. Your boarding passes will appear on the lock screen when you enter the airport. It will even alert you with gate change information.
[4] Real-time traffic update
Users can get real-time traffic information to calculate Estimated Time of Arrival (ETA). It offers information about the trouble areas or what is causing a backup (major incident or a minor slowdown). Moreover, it offers alternative routes which will in turn save users time, possibly reaching the destination without delay.
[5] Do not disturb
Do not disturb functionality will restrain all incoming calls as well as any notifications. Users can activate it manually by setting the specific time. In addition, they can set "Allow Calls From" for specific contacts or favourites.
Stocks drift on mixed economic data - News4Jax.com
U.S. stocks drifted in a narrow range Wednesday as investors weighed mixed economic reports and congressional testimony by JPMorgan chief Jamie Dimon.
The Dow Jones industrial average was up 6 points, or less than 0.1%, at midday. The S&P 500 fell 1 point, or 0.1%, and the Nasdaq rose 4 points, or 0.1%.
Stocks opened lower after reports showed that retail sales remained weak in May and producer prices fell sharply. But the market recouped those losses following a better-than-expected report on U.S. business inventories.
Investors were also focused on Capitol Hill, where Dimon told lawmakers that he could not defend the trades that led to JPMorgan's multi-billion loss.
Dimon blamed the loss on insufficient risk controls and a failure by traders to understand the bets they were placing. But he refused to say that JPMorgan was using trades from its chief investment office to make money.
JPMorgan shares rose 3.5%.
Meanwhile, ongoing concerns about the debt crisis in Europe continue to weigh on the market. Investors are worried about Spain, which recently requested up to €100 billion to recapitalize insolvent banks. Greece is also in focus ahead of a crucial election this weekend.
"There are a lot of cross currents today with no hard-and-fast drivers," said Lawrence Creatura, a portfolio manager with Federated Clover Investment Advisors. "We've got confrontational testimony following mixed data and sparse corporate earnings. It will be difficult for the market to latch on to anything."
Despite the immediate concerns, many investors expect stocks to move higher later in the year. There is widespread speculation that the Federal Reserve will take additional steps to support the economy if conditions continue to deteriorate.
Investment strategists surveyed by CNNMoneysaid the S&P 500 could rise more than 8% from its current level, which would translate into a 14% gain for the year.
U.S. stocks rose Tuesday, recovering the previous day's losses.
Economy: The Producer Price Index, which measures changes in wholesale prices, dropped 1% in May. Economists surveyed by Briefing.com had expected a decline of 0.7%.
The government's estimates on retail sales for May showed a decline of 0.2%. This was close to what economists expectations from economists surveyed by Briefing.com.
Business inventories rose 0.4% in April, which was slightly better than expected.
Companies: Computer maker Dell said Tuesday that it will start paying dividends to shareholders later this year, boosting its stock by 4.5%.
Philip Morris International announced an $18 billion share repurchase plan Wednesday. Shares of the company, which was spun off from domestic tobacco company Altria Group in 2008, are up 8% year-to-date.
Shares of Dow component Johnson & Johnson were up 2.4%. The company disclosed after the close Tuesday that it will be able to complete its purchase of Swiss medical device maker Synthes on Thursday, much sooner than expected.
It also said the deal will add 3 to 5 cents a share to its earnings this year, rather than shave 22 cents a share off its profits as it previously forecast.
World markets: European stocks ended mixed. Britain's FTSE 100 was little changed, while the DAX in Germany fell 0.1% and France's CAC 40 lost 0.7%.
Asian markets ended higher. The Shanghai Composite gained 1.3%, while the Hang Seng in Hong Kong rose 0.8% and Japan's Nikkei ended 0.6% higher.
U.S. business logistics costs rise in slow economic recovery - Reuters UK
* Uneven economy puts lid on logistics costs-study
* US business logistics costs up less in 2011 than 2010
* Costs not back to 2007 peak
* Rails poised to pick up slack amid truck capacity issues
By Lynn Adler
June 13 (Reuters) - U.S businesses paid more to manage and transport goods in 2011 as truckers and railroads charged higher rates to cover their rising expenses, but the uneven economy has contained volume and rate increases, according to a study issued on Wednesday.
"The longer the recovery takes without solid sustainable economic growth, the more reticent businesses become about hiring and investment," said Rosalyn Wilson, a senior business analyst at engineering consultant Delcan Corp.
Total U.S. business logistics costs rose 6.6 percent to $1.28 trillion in 2011, after jumping 10.4 percent the prior year, according to the Council of Supply Chain Management Professionals (CSCMP) annual state of logistics report.
Transportation expenses rose because shippers increased rates and carrying costs mounted on higher wholesale and manufacturing inventories, the study found.
Wilson authored the study funded by Penske Logistics.
Logistics costs most recently peaked at $1.39 trillion in 2007 before eroding during the recession to $1.1 trillion in 2009.
"Transportation costs had primarily rate-based increases because we had very little volume increase in 2011," Wilson said. "I don't think any of this is getting out of control."
For many transportation companies looking to cover rising commodities and labor costs - particularly trucking companies that move more than three-quarters of freight in the United States - "they are in a position of do or die, they've had to push (rate increases) through or go bankrupt."
Business logistics as a percentage of U.S. Gross Domestic Product last year rose 2.6 percent to 8.6 percent, the study found. During the recession, these costs represented just under 8 percent of GDP.
A level at or slightly above 9 percent would be optimal, Wilson said. The current ratio "is anemic" and shows that "we didn't have activity in the sector, not that we were more efficient."
The trucking industry faces an ongoing squeeze, having to pay higher wages to attract and retain drivers, and replacing older trucks with new, more expensive models.
Regulations that closely track and publish driver safety records, and a reduction in allowable driving hours, are also intensifying capacity difficulties in the industry.
More trucking companies are partnering with railroads for intermodal shipping to temper the labor and equipment cost issues, the study said.
Intermodal refers to the shipment of goods in containers that can move from one form of transportation to another, such as from truck to rail.
"I urge everyone to begin making contingency plans for the day you cannot get a truck," Wilson said. "The railroads are standing by with a great offer and have the capacity to take up the slack." (Reporting By Lynn Adler; Editing by Maureen Bavdek)
Financial crisis erases two decades of accumulated prosperity of US families - Economic Times
This vast loss of wealth was compounded by a loss of income, as the earnings of the median family fell by 7.7 percent over the same period.
The new data come from the Fed's release Monday of its triennial Survey of Consumer Finance, one of the broadest and deepest sources of information about the financial health of U.S. families. The latest survey is based on data collected in 2010. Figures are reported in 2010 dollars.
Unsurprisingly, the report is full of grim news, and although it is news from 18 months ago, fresher sources of economic data make clear that most households have since seen only modest increases, at best, in wealth and income.
Despite these setbacks, consumers have continued to spend surprising amounts of money in recent years, helping to keep the economy growing at a modest pace. The survey underscores where the money is coming from: Americans are saving less for future needs and making little progress in repaying debts.
The share of families saving anything over the previous year fell to 52 percent in 2010 from 56.4 percent in 2007. Other government statistics show that total savings have increased since 2007, suggesting that a smaller group of families are saving more money, while a growing number manage to save nothing.
The survey also found a shift in the reasons that families set aside money, illustrating the lack of confidence that is weighing on the pace of economic growth. More families said they were saving as a precautionary measure, to make sure they had sufficient liquidity to meet short-term needs. Fewer said they were saving for retirement, education or for a down payment on a home.
And the report highlighted the fact that households have made limited progress in reducing the amount that they owe to lenders. The share of households reporting any debt declined by 2.1 percentage points over the past three years, but 74.9 percent of households still owe something and the median amount of the debt did not change.
The drop in reported incomes could have increased the weight of those debts, requiring families to devote a larger share of income to debt payments. But one of the rare benefits of the crisis, lower interest rates, has helped to offset that effect. Families also have been able to reduce debt payments by refinancing into mortgages with longer terms and deferring repayment of student loans.
The survey also confirmed that Americans are shifting the kinds of debts that they carry. The share of families with credit card debt declined by 6.7 percentage points to 39.4 percent, and the median balance of that debt fell 16.1 percent to $2,600.
Osborne tells big business 'back me or you won't get your taxes cut' - Daily Mail
- The Chancellor will cut higher rate income tax from 50p to 45p next year
- He told a summit of CEOs that a cut to 40p was difficult if they didn't stand up for the Coalition
- The 'politics of envy' and 'anti-business sentiment' could win, he said
|
War of words: The Chancellor George Osborne last night told big business to back him or face not getting tax cuts
George Osborne has told big business to back the Government or he will not cut the top rate of income tax for Britain's biggest earners to 40p.
The Chancellor warned that he and the Coalition 'are putting their necks on the line' to help them prosper but not enough are speaking out to support them.
In a speech to businesses leaders yesterday he slammed their 'near silence' when at the last Budget in March he agreed to cut the top rate of tax from 50p to 45p, to the anger of many Britons.
And he added that the 'politics of envy' and 'anti-business sentiment' could end any idea to cut the rate back to 40p - if they fail to back him.
'If your voice is not heard then elected politicians are going to find it very difficult to put together pro-business packages because you leave the space open for everyone else,' he told The Times CEO summit.
‘If you are not out there, engaged, in those arguments, then you are going to leave the field open to those people who want to fill that space, and who argue that companies have got to pay more tax.
'At the moment we are having a pretty big argument about the size of the State and who should be taxed and what are the right levels of taxation are. If we don't get much voice from the business community then that is more difficult,' he said.
Business leaders had to do more to counter the hostile public mood, he said. ‘You just see, otherwise, the politics of envy coming in and the politics that says it’s perfectly acceptable for the state to take half of all national income.’
Temporary: The Treasury has admitted the 45p rate will not be permanent, allowing for a further cut
The top rate of income tax will be cut from 50p in the pound to 45p next year for those earning over 150,000.
The 50 per cent level was introduced by Gordon Brown in April 2010.
George Osborne risked a political backlash by announcing that he would scrap the highest tax rate because he said it would raise five times as much in other tax raids targeted at the richest.
Critics said he and the Government had bowed down the the bankers and their giant salaries and bonuses.
The Treasury also said the change was 'temporary', leaving the Chancellor with the chance to cut it back to the 40p rate later.
In the same speech yesterday Mr Osborne accepted the March Budget, which caused him to do several sharp U-turns since, had led to 'lots of bad headlines' but added he was doing his bit to make Britain's economy more competitive.
He added that in the 1980s Margaret Thatcher had won the argument that high-earners should pay less tax, because big business had backed her.
In the same speech he said Angela Merkel may be willing to sacrifice Greece in order to persuade German voters to bail out the euro.
The Chancellor suggested Germany may ‘require’ the crisis that would follow a Greek exit to convince its voters to take the unpalatable steps needed to rescue the single currency.
‘I ultimately don’t know whether Greece needs to leave the euro in order for the eurozone to do the things necessary to make their currency survive.
‘I just don’t know whether the German government requires Greek exit to explain to their public why they need to do certain things like a banking union, eurobonds and things in common with that.’
Politics of envy? grow up Gideon, all we want is politics of fairness. This includes not taxing to the hilt the elderly, motorists, and every consumer item you can get away with. Business will do better when the working public has enough income left to buy their products and services. If the only qualification you have is a dodgy history exam it's no wonder your making a hash of running a country. The class war was supposed to be over, not stoked by an Eton toff who insists everything is envy, your supposed to work for the public who voted you in.... whilst you have the chance.
- Shass, Mids, 13/6/2012 18:25
Report abuse