With China's latest GDP data, it's hard to ignore fears about global growth - CNN

China's growth dropped to its lowest level in nearly three decades as the world's second largest economy continues to feel the pain from its trade conflict with the United States.

The country's gross domestic product grew at 6% between July and September, my CNN Business colleague Laura He reports from Hong Kong. That's the weakest quarterly growth rate since 1992, and down from 6.2% the previous quarter.

Context: The worse-than-expected figure emerged just one week after the United States and China reached a tentative trade truce to avert more damage. That agreement could relieve some pressure on China's economy. But it's far from a cure-all.

"Ongoing negotiations may have some positive impact on business [sentiment], but despite the potential mini deal, most of the US tariffs on imports from China remain, hurting Chinese exports," said Chaoping Zhu, global market strategist at JPMorgan Asset Management.

The Shanghai Composite dropped 1.3% Friday, erasing gains the index had made since news of an agreement.

The Chinese data showed some pickup in September. Growth in industrial production jumped to 5.8% from 4.4% the previous month, and retail sales rose 7.8% in September compared to the same period one year ago.

But experts warn that any recovery may be short-lived.

"Cooling global demand will continue to weigh on exports, fiscal constraints mean that infrastructure spending will wane in the near-term, and the recent boom in property construction looks set to unwind," Julian Evans-Pritchard, senior China economist for Capital Economics, said in a research note to clients.

Analysts at Nomura see China's GDP growth dropping to 5.8% in the fourth quarter of 2019 as exports are hit again by the slowing global economy and the trade conflict.

Aramco's IPO gets delayed ... again

Investors will have to wait a bit longer for a piece of Saudi Aramco's massive public listing.

The timing of the blockbuster IPO was pushed back to allow the state-run Saudi oil company to publish quarterly results, which will provide clarity on the impact of last month's attacks on its oil facilities, a source familiar with the process told CNN Business.

Market watchers had expected the IPO to launch in the coming days, paving the way for a November listing on Saudi Arabia's Tadawul exchange in Riyadh.

What Aramco says: "The company continues to engage with shareholders on IPO readiness activities. The company is ready and timing will depend on market conditions and be at a time of the shareholders' choosing."

Remember: The unprecedented September attack on Aramco, the world's most profitable company, briefly knocked out half of its oil production. But Aramco quickly restored the output, easing market fears of a shortage.

The company had been clear that it didn't expect the incident to derail the IPO process, and analysts believed it actually strengthened Crown Prince Mohammed bin Salman's resolve to get a deal done. But investors clearly want more information about the company's finances before committing to a valuation in the $2 trillion range that bin Salman is targeting.

Let the Brexit vote counting begin

The British pound and UK stocks shot up on news that Prime Minister Boris Johnson had clinched a new Brexit agreement with the European Union. Then the political reality set in.

Johnson still needs to get his deal through a special session of the UK Parliament scheduled for Saturday. Opposition parties and a group of lawmakers from Northern Ireland say they won't support the agreement, raising serious doubt about whether Johnson can succeed where his predecessor, Theresa May, failed.

"Johnson has a chance, but it is going to be tight," Kallum Pickering, senior economist at Berenberg, said Thursday in a note to clients. Expect the pound to stay jumpy on Friday as traders keep a running tally of the parliamentary math.

American Express (AXP) and Coca-Cola (KO) report earnings before US markets open.

Also today:

• The IMF and World Bank annual meetings take place in Washington, with speakers such as Bank of England Governor Mark Carney.

Coming tomorrow: Britain's Parliament will hold a make-or-break vote on Prime Minister Boris Johnson's new Brexit deal.

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2019-10-18 11:04:00Z
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Coca-Cola stock jumps as strong sales of Coke Zero Sugar continue to drive revenue growth - CNBC

Marcos Brindicci | Reuters

Coca-Cola on Friday reported quarterly revenue that topped analysts' expectations as more customers are drawn in by healthier options, like Zero Sugar soda and smaller size cans.

Shares of the company jumped 1.6% in premarket trading.

"Our performance gives us confidence that our strategies are taking hold with our consumers, customers and system," CEO James Quincey said in a statement.

Here's what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

• Earnings per share: 56 cents, adjusted, vs. 56 cents expected
• Revenue: $9.5 billion vs. $9.4 billion expected

Coke reported fiscal third-quarter net income of $2.6 billion, or 60 cents per share, up from $1.8 billion, or 44 cents per share, a year earlier.

Excluding items, the beverage giant earned 56 cents per share, in line with the 56 cents per share expected by analysts surveyed by Refinitiv.

Net sales rose 8% to $9.5 billion, topping expectations of $9.4 billion. Organic revenue grew by 5%, helped by higher prices and customers buying more expensive drinks.

As soda consumption declines in the U.S., Coke has been driving sales by focusing on drinks with less sugar and smaller packaging. Coke Zero Sugar once again saw double-digit volume growth, as did 7.5-ounce mini cans of soda.  

Outside of the U.S., Coke has been leveraging recognition of its namesake brand to expand its drink portfolio. It has launched its Coca-Cola Plus Coffee drink in more than 20 markets. The company is also launching its first energy drink under the Coca-Cola brand. Coke Energy is available in at least 25 countries and will be making its U.S. debut in January.

Coke once again updated its 2019 outlook for organic revenue. It now expects at least 5% growth after telling investors last quarter to expect organic revenue growth of 5%.

The company also released a partial forecast for fiscal 2020. It is expecting a 1% to 2% currency headwind next year to impact its comparable revenue and a 2% to 3% currency headwind to hit its operating income.

This story is developing. Please check back for updates.

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2019-10-18 10:42:46Z
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Asian shares slump after weak China GDP, pound retreats - Investing.com

© Reuters. FILE PHOTO: The German share price index DAX graph at the stock exchange in Frankfurt

By Marc Jones

LONDON (Reuters) - World stocks slipped after China posted its weakest growth rate in nearly three decades on Friday, while the dollar was set for its worst week in almost four months having been pummeled by pound and euro Brexit rallies.

China's economy grew a slightly less-than-expected 6% in the third quarter, leaving traders hoping that the swift stimulus Beijing and the major global central banks have provided in recent weeks will fend off a more serious downturn.

Main European bourses fell a modest 0.1%-0.3% () after Asia had been led lower by a 1.2% slump in top Chinese shares (). There was also a sharp reverse in car shares () after a Renault (PA:) profit warning. ()

"You can't get away from the fact that China is slowing, but it's not slowing more than we thought," said head of global macro strategy at State Street (NYSE:) Global Markets Michael Metcalfe.

"We know that Q4 is going to be a soft patch, but to a degree policymakers are ahead of this, so as long as we don't have an escalation of the trade war now I think markets can handle it."

In currencies, sterling was taking a breather at $1.2850 , having scored its best six-day streak in near 30 years on Thursday after Britain and the EU sealed a new Brexit deal.

Doubts about whether the deal will be approved in the British parliament were still sky high, though, with swathes of lawmakers, who are either reluctant about Brexit or worried the deal is not a clean enough break, due to debate the deal in a rare Saturday sitting.

"Whatever was agreed last night with the EU still has to go through the British parliament... the uncertainty surrounding that still hasn't changed one iota," said James McGlew, executive director of corporate stockbroking at Argonaut.

The euro rested at $1.1125 (), not far from $1.1140, its highest since Aug. 26. The dollar remained weak too having seen this week's weak retail sales data and more U.S. interest rate cut talk contribute to its biggest weekly slide since June. ()

EARNINGS

Helping to alleviate immediate trade war worries, China had said on Thursday that it hoped to reach a phased agreement in its trade dispute with the United States as soon as possible.

Investors were also encouraged by upbeat earnings from Netflix (O:) and Morgan Stanley (N:), but poor results from International Business Machines Corp (N:) and weak U.S. economic data weighed.

Housing starts, industrial production and mid-Atlantic factory output all fell short of economists' expectations.

Reflecting the cautious mood, the safe-haven yen strengthened, with the dollar falling 0.13% to 108.51. The yield on benchmark 10-year Treasury notes () edged up though to 1.764%, compared with a U.S. close of 1.755% on Thursday.

Euro zone bond yields were also nudging up with German Bund yields holding at -0.40%, the highest since early August. ()

The Bund yield is now up 16 bps since Irish and British leaders said on Oct. 10 they saw a path to a Brexit deal, which boosted risk appetite and weakened demand for safe-haven assets like bonds.

In commodities, oil fell on the China data, with Brent crude () easing 0.52% to $59.60 and U.S. crude () dropping 0.19% to $53.83.

"The (China) GDP print has weighed on short-term sentiment and we have seen regional stock markets and oil contracts edge lower because of that," said Jeffrey Halley, senior market analyst for Asia Pacific at brokerage OANDA.

Crude demand growth tends to track economic growth trends, but Halley said China's need for oil would not recede any time soon.

Underlining that view, Chinese official data released on Friday showed robust refinery throughput in September, rising 9.4% from a year earlier to 56.49 million tonnes, on increases from new refineries and some independent refiners resuming operations after maintenance.

Gold dipped to $1,488 per ounce.

(GRAPHIC: GBP loses Brexit deal boost - https://fingfx.thomsonreuters.com/gfx/mkt/12/7551/7482/gbp.png)

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2019-10-18 06:32:00Z
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China's economic growth sinks to a 26-year low - Fox Business

Treasury Secretary Steven Mnuchin on the status of China trade talks.

China's economy took another hit last quarter as the tariff war with the United States takes its toll.

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China's economic growth decelerated to a 26-year low in the latest quarter, adding to a deepening slump that is weighing on global growth.

The world's second-largest economy expanded by 6 percent in the three months ending in September, down from the previous quarter's 6.2 percent, data showed Friday.

An impressive number for most countries, but not for China.

It was the lowest rate since China started reporting data by quarters in 1993.

U.S. growth was 2.1 percent in the second quarter.

The slump increases pressure on Chinese leaders to avert politically dangerous job losses as they fight a tariff war with President Trump over Beijing's trade surplus and technology ambitions.

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The slowdown in China, the world's biggest trader, has global repercussions. It is depressing demand for industrial components from Asian countries and prices of soybeans, iron ore and other commodities, hitting Brazil, Australia and other suppliers.

The International Monetary Fund cited the U.S.-Chinese tariff war as a factor in this week's decision to cut its 2019 global growth forecast to 3 percent from its previous outlook of 3.2 percent.

Trump agreed last week to delay a tariff hike on Chinese goods and said Beijing promised to buy up to $50 billion of American farm goods. Officials say the two sides still are working out details.

Beijing has yet to confirm the scale of possible purchases of U.S. goods. It is unclear whether Chinese leaders want more steps including possibly lifting punitive tariffs already in place before purchases go ahead.

An even bigger impact on Chinese growth appears to come from cooling domestic activity including consumer spending and investment.

Retail sales growth declined to 8.2 percent over a year earlier in the first three quarters of 2019, down from the first half's 8.4 percent, the National Bureau of Statistics reported.

China's exports to the United States, its biggest foreign market, fell 21.9 percent in September from a year ago. That helped to drag down overall Chinese exports by 1.4 percent. Imports of American goods sank 15.7 percent.

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The latest economic growth figure was the lowest since China began reporting data by quarters in 1993. Annual growth tumbled to 3.9 percent in 1990, but rebounded to 9.3 percent the following year.

The Associated Press contributed to this article.

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2019-10-18 03:56:42Z
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China's economic growth continues to cool off - MarketWatch

SHANGHAI--China's economy grew 6% in the third quarter, landing right on the central government's full-year baseline target for gross domestic product, as business activity continues to deteriorate in the world's No. 2 economy.

Growth across the board cooled in the third quarter, despite some recoveries in industrial production and retail sales at the end of the quarter, according to data published Friday by the National Bureau of Statistics.

But investment in fixed assets, a measure of construction activity that has long been a major economic driver but is becoming less so, was weaker in the first nine months, with a 5.4% rise from a year earlier. That compared with a 5.5% pace in the first eight months and was down from 5.8% growth announced after the first half.

Investment in the agricultural, manufacturing and industrial sectors retreated in September while infrastructure investment accelerated ahead of the Communist Party's celebration of its 70th year in power on Oct. 1.

Ding Shuang, an economist with Standard Chartered, said the pickup in infrastructure investment was attributable to greater bond issuances to finance projects launched by local governments, though he said the acceleration in September's industrial production was probably due to the inclusion by the statistics bureau of previously missed data.

Chinese growth has been on a downward trajectory for the past several years. Each quarterly slowdown in growth pulls the economic performance to new lows not seen since the current measure of GDP was adopted in 1992. The economy performed worse in 1990, when China was reeling from the 1989 crackdown on students in Tiananmen Square, which crippled investment.

The deceleration reported Friday compares with a 6.2% rate of growth posted in the second quarter--which economists said was driven by more lending--and a 6.4% figure in the first quarter, which was helped by a March tax cut worth 2 trillion yuan ($283 billion).

"Despite increased downward pressure on economic growth, major economic indicators remained in a reasonable range," a spokesman for the Statistics Bureau, Mao Shengyong, said, citing steady employment and inflation, aside from energy and food prices.

The fourth quarter, Mr. Mao forecast, would feature "conditions and supports" for the economy, including a less-steep drop in auto sales and industrial production, as well as stabilizing infrastructure investment.

Mr. Mao also cited apparent progress between U.S. and Chinese trade negotiators as a positive factor, describing it as "a good thing for the markets and the global economy, including the Chinese economy."

Capital Economics's China economist, Julian Evans-Pritchard, wrote in a note that despite the stronger September figures, downward economic pressure is building.

"We expect monetary policy to be loosened before long in response, but it will take time for this to put a floor beneath economic growth," Mr. Evans-Pritchard wrote.

The quarterly figure was slightly lower than a median forecast for 6.1% growth in a poll of 13 economists by The Wall Street Journal. Beijing's target range for GDP growth of between 6.0% and 6.5% this year has anticipated a weakening performance. The average for the first nine months is 6.2%.

Last year, the Chinese economy expanded 6.6%.

Friday's report showed value-added industrial output in China rose 5.8% in September from a year earlier, accelerating from a 4.4% figure in August and better than a median 4.9% forecast of 15 economists surveyed by the Journal.

Retail sales climbed 7.8% in September from a year earlier, matching economist expectations. That was a touch better than August's 7.5% rise.

The 5.4% growth in construction activity matched economists' median forecast.

Home sales by value for the January-to-September period rose 10.3% from a year earlier, versus a 9.9% gain in the first eight months of the year. Investment in commercial and residential real estate gained 10.5% in the first nine months of the year, unchanged from the first eight months.

Construction starts were somewhat weaker, increasing 8.6% from January to September from a year earlier, compared with 8.9% in the first eight months of the year.

The government put the final consumption expenditure at 60.5% of the GDP in the first nine months of the year, with investment at 19.8% and net exports at 19.6%.

Liyan Qi and Grace Zhu contributed to this article.

Write to James T. Areddy at james.areddy@wsj.com

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2019-10-18 03:51:00Z
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Netflix finally admits the obvious: Competition from Apple and Disney will hurt - MarketWatch

Bloomberg News/Landov

Apple Inc. is just one of many well-funded competitors looking to challenge Netflix Inc. in streaming video.

Netflix Inc. has been dismissive of the anticipated impact of an onslaught of streaming competitors, but as a wave of well-financed streaming services from big-name companies is about to be unleashed, the tone from executives has changed.

Through the years, Netflix NFLX, +0.71%  has insisted that “there is room for multiple parties to have attractive offerings” in streaming media, and that new competitors would not “materially affect our growth because the transition from linear to on-demand entertainment is so massive.” At the beginning of the year, as plans for competing streaming services were arriving rapidly, executives attempted to change the conversation by saying, “We compete with (and lose to) Fortnite more than HBO.”

From January: Netflix thinks ‘Fortnite’ is a bigger competitor than other streaming services

Netflix finally admitted the obvious when it reported third-quarter earnings Wednesday afternoon, though: At least in the short term, the arrival of a slew of new services from companies like Apple Inc. AAPL, -0.40%  and Walt Disney Co. DIS, +0.85%  is going to hurt its new-subscriber growth. The company expects that subscriber growth will decline year-over-year in the usually strong fourth quarter and for the entire year, even with a strong slate of new shows.

“The launch of these new services will be noisy,” Netflix executives said in their quarterly letter to shareholders. “There may be some modest headwind to our near-term growth, and we have tried to factor that into our guidance.”

In the analyst interview session, Netflix executives played down those comments. When asked about the change in tone toward the competitive landscape, Chief Financial Officer Spencer Neumann said “inevitably there will be some curiosity and some trial of those new service offerings.”

“Fundamentally, it is more of the same,” Netflix Chief Executive Reed Hastings responded. “Disney is going to be a great competitor, Apple is just beginning, but they will probably have some great shows too. But again, all of us are competing with linear TV. We are all small relative to linear TV.”

For more: Here comes the Netflix competition, with lots of fresh content

That sounds more similar to Netflix‘s long-held rhetoric that it expects to win in the long term as viewers transition en masse from a linear model to the on-demand streaming option that Netflix pioneered. As it has for years in mentioning competitors like Amazon Prime and Hulu, Netflix insisted that bringing more viewers into the streaming world will eventually help it secure a larger presence in a completely changed media environment.

“In our view, the likely outcome from the launch of these new services will be to accelerate the shift from linear TV to on-demand consumption of entertainment,” Netflix executives wrote, while specifically mentioning Disney+, Apple TV+, AT&T Inc.’s T, -0.29%  HBO Max and Comcast Corp.’s CMCSA, -0.15%  Peacock streaming services. “Just like the evolution from broadcast TV to cable, these once-in-a-generation changes are very large and open up big, new opportunities for many players.”

“We did well during the first decade of streaming,” executives wrote in closing out the “Competition” section of its quarterly letter. “We’re ready to compete to earn consumers’ attention and viewing.”

Netflix shares rose nearly 8% in after-hours trading following the results, and were up that amount in premarket trade Thursday, so investors must not have been surprised that executives tacitly admitted the obvious. They were likely relieved that Netflix’s subscriber growth bounced back from a shocking disappointment in the previous quarter.

See also: ‘Stranger Things’ fans are flocking to buy this item

The company’s actions could speak louder than its words, though. In addition to retracting its guidance for an annual increase in new paying customers this year, Netflix said it would stop projecting U.S. subscriber additions in future results, which does not bode well for growth in its biggest market. Netflix — which saw domestic subscribers decline in the second quarter for the first time in eight years and come in lighter than their projections in Wednesday’s results — will now only provide global membership forecasts, a twist on Apple’s move to stop breaking out iPhone unit sales.

It is never a good sign when companies stop offering information that they have long provided, or change their tune about the competitive landscape. In this case, though, Netflix appears to just be admitting the obvious: The next few months, at the very least, look like they will be tough for the company’s business in the U.S.

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2019-10-17 10:53:00Z
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What to expect from the tentative agreement that could end GM strike - Fox Business

FOX Business’ Grady Trimble reports on the GM-UAW deal. Then, a panel, including FOX Business panelists Steve Moore and Carol Roth, discuss how other unions in the U.S. may react to this deal.

The United Auto Workers announced a potentially strike-ending tentative agreement with General Motors on Wednesday, and while its exact contents aren't known, it's expected to fix some of the key issues that caused autoworkers to walk off the job more than a month ago.

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The tentative agreement is expected to appease autoworkers who were concerned by GM's plan to idle the Detroit-Hamtramck Assembly Plant in Michigan by placing production of an electric truck there. Meanwhile, the fate of the shuttered plant in Lordstown, Ohio, is unknown.

Ticker	Security	Last	Change	Change %
GM	GENERAL MOTORS COMPANY	36.65	+0.39	+1.08%

The agreement is also expected to make a pathway for temporary workers to become permanent employees after three years of consecutive service to the company. The number of temporary workers on GM's payroll fluctuates, but they typically make up about 7% of its hourly workforce.

In addition, it is expected that GM agreed to back down from making workers pay for a larger share of their health insurance costs. GM autoworkers are responsible for an extremely low cut of their health insurance costs — 3%. GM wanted to up that share to 15%, which is basically half the amount the average American worker pays, but GM employees were not having it.

Picketing United Auto Workers Richard Rivera, left, and Robin Pinkney react to news of a tentative contract agreement with General Motors, in Langhorne, Pa., Wednesday, Oct. 16, 2019. (AP Photo/Matt Rourke)

GM's Mexico production was another sticking point in the negotiations. The company's decision to open and invest in plants in Mexico while closing others in the U.S. is a sticking point for many UAW members on strike.

The company is the largest auto employer in Mexico, which is now home to assembly plants for brands including Ford, Toyota and Honda.

Picketing United Auto Workers Richard Rivera, left, and Will Myatt react to news of a tentative contract agreement with General Motors, in Langhorne, Pa., Wednesday, Oct. 16, 2019. (AP Photo/Matt Rourke)

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GM AND UAW REACH TENTATIVE AGREEMENT TO END MONTH-LONG STRIKE

Local UAW chapter leaders and the UAW GM National Council are expected to vote on the tentative agreement on Thursday. If they approve the deal, it will be up to rank-and-file members to ratify it. UAW members are remaining on strike as they await the results of Thursday's vote.

FOX Business' Grady Trimble contributed to this report.

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2019-10-17 10:20:29Z
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