European stocks edge lower on China trade concerns and ‘worst of all worlds’ German economic data - MarketWatch

European stocks slipped on Thursday on concern over the state of U.S.-China trade talks, as data showed a stagnating economy in Germany.

The Stoxx Europe 600 SXXP, -0.11%  dropped 0.08% to 405.52, which still is near to its record close of 414.06.

“European equities appear modestly cheap on an absolute basis and extremely cheap relative to government and corporate bonds,” said strategists at Citi, who forecast the Stoxx 600 will reach 420 by the end of 2020.

The German DAX DAX, -0.32%  declined 0.34% to 13184.51, the French CAC 40 PX1, +0.01%  weakened 0.04% to 5904.98 and the U.K. FTSE 100 UKX, -0.47%  fell 0.18% to 7338.01,

Trade talks between the U.S. and China have hit a snag over farm purchases, according to The Wall Street Journal.

Meanwhile, Germany reported its economy grew 0.1% in the third quarter, which was slightly better than forecast but from a downwardly revised second quarter.

#GrossDomesticProduct in the 3rd quarter of 2019 up 0.1% on the previous quarter. Further information at: https://t.co/fsJheFassL #GDP pic.twitter.com/beiHOKjJQh

— Destatis news (@destatis_news) November 14, 2019

“In some sense, this is the ‘worst’ of both worlds for markets. Today’s data confirm that the German economy has now stalled, but the headlines are probably not dire enough to prompt an immediate and aggressive fiscal response from Berlin,” said Claus Vistesen, chief eurozone economist at research consulting firm Pantheon Macroeconomics.

Also on the economics front, U.K. retail sales grew 0.2% in the three months ending October, which is the worst showing in 16 months.

Of stocks on the move, Qiagen QIA, +10.38%  jumped 13.6% after Bloomberg News reported biotechnology developer Thermo Fisher Scientific TMO, +1.37% has approached the German-listed genetic testing company with an offer. Neither Thermo Fisher nor Qiagen has commented.

Burberry Group BRBY, +4.22%  rallied 4.5% as the luxury-goods company reported a stronger-than-forecast profit in its fiscal first half. It did cut its outlook for gross margin because of the disruptions in Hong Kong.

Daimler DAI, -2.90%  as the Mercedes-Benz automaker said profits in 2020 and 2021 will be negatively affected by efforts to meet carbon targets. Daimler said it will cut an unspecified number of jobs.

3i Group III, -5.73%  declined 4.4% after the private-equity firm reported a 10% return in the six months to September 30. The stock is nonetheless up 39% this year.

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https://www.marketwatch.com/story/european-stocks-edge-lower-on-china-trade-concerns-and-worst-of-all-worlds-german-economic-data-2019-11-14

2019-11-14 10:22:00Z
52780436153080

Google set to offer banking current accounts - BBC News

Google has become the latest big tech firm to move into banking by offering current accounts.

The firm said it plans to partner with banks and credit unions in the US to offer the "smart checking" accounts.

It said the service, to be launched via Google Pay, will allow users to add Google's analytic tools to traditional banking products.

The move follows offerings of credit cards, payment systems and loans by Facebook, Uber, Apple and Amazon.

While the products and arrangements differ, the tech giants entering the world of banking share an underlying motive: making themselves indispensable, says Gerard du Toit, a partner at the Bain & Co consulting firm.

"They're all competing for consumer attention and for their ecosystem and platform to win," he says.

Amazon's credit card and business loans are aimed at boosting its e-commerce business, while Uber Money is providing credit cards, debit accounts and money tracking tools to serve the company's taxi operations.

Facebook has said its Facebook Pay service will complement its messaging tools.

And both Google and Apple, which has teamed up with Goldman Sachs' new consumer arm, Marcus, on a credit card as part of its Apple Pay and Wallet service, want to to make iPhones and Androids essential.

Wading into financial services will also provide Google and Facebook information for their advertising business, helping to track what ads lead to purchases, Mr du Toit said.

The moves into banking are likely to add to the debates over the tech giants, which are already facing probes related to competition, data protection and privacy.

Some officials have also expressed worry about gaps in financial oversight as growing activity occurs outside of traditional banking. And in recent days, New York announced it would investigate Apple, after accusations that its credit card relied on "sexist" algorithms.

Mr du Toit said regulatory concerns represent the "fly in the soup" for tech firms.

"They will have to be very careful," he said.

Partnerships

In many cases, the tech firms are working with traditional banks - a sign they are aware of the potential issues, he said.

Google said its US partners, which reportedly include Citigroup, would start to offer the accounts by 2020.

"We believe our partners' regulatory and financial know-how is a great complement to our experience in building helpful tools and technology for our users," it said in a statement.

Lagging China

Amazon has offered small business loans since 2011 and launched its credit card with JP Morgan Chase in 2017.

But in some ways, the flurry of announcements by companies this year, is a sign that the US is late to the party.

In China and some other countries, the tech firms moved quickly into banking, motivated by the need to fill the gaps left by traditional finance industry that created hurdles for their businesses, whether they were e-commerce firms or food delivery companies.

In the US, however, the need was less pressing, thanks in part to the ubiquity of credit cards and other "good enough solutions", Mr du Toit said.

Big tech payment services provided by the likes of Alibaba's Ant Financial and Tencent's WeChat account for roughly 16% of China's GDP, compared to less than 1% in the US, according to the Bank for International Settlements, an organisation backed by 60 of the world's central banks.

• Chat and pay: How social media is beating the banks
• Is old tech putting banks under threat of extinction?

Tech companies "are now increasingly getting into it because they do believe they can offer a materially better solution to customers," he said.

Last month, Facebook chief executive Mark Zuckerberg evoked the threat of Chinese competition while defending his firm's interest in developing a cryptocurrency before Congress last month.

"I view the financial infrastructure in the US as outdated," he said.

'Darwinian experiment'

As the tech companies start to make use of their massive reach, close customer relationships and giant data sets, banks "have woken up" to the threat, leading to collaborations and other uneasy "frenemy" arrangements, Mr du Toit said.

With tech firms moving beyond credit cards, regional banks will get left behind, while smaller financial technology firms are forced out or acquired, Mr du Toit said.

"I sometimes describe this as a giant Darwinian experiment of different couplings of the banks and the big techs," he says. "There will be some mutations that succeed and others that fail."

While Google's earlier efforts to build up Google Pay failed to gain much traction in the US, the firm has developed significant payment business in India, where a Bain & Co survey found that more than half of respondents had used the platform in the last 12 months.

"I would not count them out," Mr du Toit said.

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https://www.bbc.com/news/business-50412568

2019-11-14 10:15:46Z
52780435198567

Google set to offer banking current accounts - BBC News

Google has become the latest big tech firm to move into banking by offering current accounts.

The firm said it plans to partner with banks and credit unions in the US to offer the "smart checking" accounts.

It said the service, to be launched via Google Pay, will allow users to add Google's analytic tools to traditional banking products.

The move follows offerings of credit cards, payment systems and loans by Facebook, Uber, Apple and Amazon.

While the products and arrangements differ, the tech giants entering the world of banking share an underlying motive: making themselves indispensable, says Gerard du Toit, a partner at the Bain & Co consulting firm.

"They're all competing for consumer attention and for their ecosystem and platform to win," he says.

Amazon's credit card and business loans are aimed at boosting its e-commerce business, while Uber Money is providing credit cards, debit accounts and money tracking tools to serve the company's taxi operations.

Facebook has said its Facebook Pay service will complement its messaging tools.

And both Google and Apple, which has teamed up with Goldman Sachs' new consumer arm, Marcus, on a credit card as part of its Apple Pay and Wallet service, want to to make iPhones and Androids essential.

Wading into financial services will also provide Google and Facebook information for their advertising business, helping to track what ads lead to purchases, Mr du Toit said.

The moves into banking are likely to add to the debates over the tech giants, which are already facing probes related to competition, data protection and privacy.

Some officials have also expressed worry about gaps in financial oversight as growing activity occurs outside of traditional banking. And in recent days, New York announced it would investigate Apple, after accusations that its credit card relied on "sexist" algorithms.

Mr du Toit said regulatory concerns represent the "fly in the soup" for tech firms.

"They will have to be very careful," he said.

Partnerships

In many cases, the tech firms are working with traditional banks - a sign they are aware of the potential issues, he said.

Google said its US partners, which reportedly include Citigroup, would start to offer the accounts by 2020.

"We believe our partners' regulatory and financial know-how is a great complement to our experience in building helpful tools and technology for our users," it said in a statement.

Lagging China

Amazon has offered small business loans since 2011 and launched its credit card with JP Morgan Chase in 2017.

But in some ways, the flurry of announcements by companies this year, is a sign that the US is late to the party.

In China and some other countries, the tech firms moved quickly into banking, motivated by the need to fill the gaps left by traditional finance industry that created hurdles for their businesses, whether they were e-commerce firms or food delivery companies.

In the US, however, the need was less pressing, thanks in part to the ubiquity of credit cards and other "good enough solutions", Mr du Toit said.

Big tech payment services provided by the likes of Alibaba's Ant Financial and Tencent's WeChat account for roughly 16% of China's GDP, compared to less than 1% in the US, according to the Bank for International Settlements, an organisation backed by 60 of the world's central banks.

• Chat and pay: How social media is beating the banks
• Is old tech putting banks under threat of extinction?

Tech companies "are now increasingly getting into it because they do believe they can offer a materially better solution to customers," he said.

Last month, Facebook chief executive Mark Zuckerberg evoked the threat of Chinese competition while defending his firm's interest in developing a cryptocurrency before Congress last month.

"I view the financial infrastructure in the US as outdated," he said.

'Darwinian experiment'

As the tech companies start to make use of their massive reach, close customer relationships and giant data sets, banks "have woken up" to the threat, leading to collaborations and other uneasy "frenemy" arrangements, Mr du Toit said.

With tech firms moving beyond credit cards, regional banks will get left behind, while smaller financial technology firms are forced out or acquired, Mr du Toit said.

"I sometimes describe this as a giant Darwinian experiment of different couplings of the banks and the big techs," he says. "There will be some mutations that succeed and others that fail."

While Google's earlier efforts to build up Google Pay failed to gain much traction in the US, the firm has developed significant payment business in India, where a Bain & Co survey found that more than half of respondents had used the platform in the last 12 months.

"I would not count them out," Mr du Toit said.

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https://www.bbc.com/news/business-50412568

2019-11-14 09:01:44Z
52780435198567

Fed's Powell says interest rates unlikely to change as long as growth continues - CNBC

The Federal Reserve is unlikely to adjust interest rates anytime soon so long as the economy remains on its present path, central bank Chairman Jerome Powell told Congress on Wednesday.

In commentary he provided to the Joint Economic Committee, Powell reiterated a stance he outlined a few weeks ago that the Fed's moves this year toward more accommodative monetary policy have helped support an economy that continues to grow. He noted that Fed moves tend to have a lagged effect, meaning that it will take time to assess what impact they are having.

"We see the current stance of monetary policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook of moderate economic growth, a strong labor market, and inflation near our symmetric 2 percent objective," he said in prepared remarks.

The Fed has cut its benchmark rate three times this year to its current target range of 1.5% to 1.75%. While the fed funds rate specifically sets the rate banks charge each other for very short-term lending, it also is tied to multiple forms of consumer debt.

Following the Federal Open Market Committee meeting late last month, Powell said he sees the economy as "being in a good place" and unlikely to need more stimulus if the data stays consistent.

"Looking ahead, my colleagues and I see a sustained expansion of economic activity, a strong labor market, and inflation near our symmetric 2 percent objective as most likely," he said in his remarks Wednesday. "This favorable baseline partly reflects the policy adjustments that we have made to provide support for the economy."

Inflation warnings

As he has multiple times before, Powell cautioned that challenges remain, such as weakness abroad, trade tensions and low inflation.

Several officials recently have placed particular emphasis on inflation that remains below the Fed's 2% target. Minneapolis Fed President Neel Kashkari, for instance, has said the Fed should state publicly that it won't raise until inflation is firmly at the target. Chicago's Charles Evans went even further, saying the Fed should articulate that it would be OK if the level ran a little hotter than 2%. Both officials made the remarks in CNBC interviews.

For his part, Powell also has said that inflation would have to rise substantially before he would consider a rate hike. He said Wednesday that policymakers will continue to assess what needs to be done.

Powell said the labor market remains strong, incomes are rising and consumer confidence continues to grow.

"We will be monitoring the effects of our policy actions, along with other information bearing on the outlook, as we assess the appropriate path of the target range for the federal funds rate," he said. "Of course, if developments emerge that cause a material reassessment of our outlook, we would respond accordingly. Policy is not on a preset course."

On other topics, Powell addressed the mid-September flare-up in the repo market, where banks go to exchange ultra-safe assets for reserves. The Fed responded to a cash crunch by opening up a series of temporary and longer-term market operations that have pumped billions into the system.

Powell called the operations "technical measures" that do not reflect a change in monetary policy, though the moves have led to a $270 billion expansion in the Fed balance sheet.

He also repeated that fiscal policy is on an unsustainable path and could limit the ability to respond to an economic downturn.

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https://www.cnbc.com/2019/11/13/feds-powell-says-rates-unlikely-to-change-as-long-as-growth-continues.html

2019-11-13 14:30:00Z
52780434873150

Elon Musk says Tesla will build cars in Berlin - CNN

In a tweet late Tuesday, Tesla CEO Elon Musk said the plant would build batteries, powertrains and vehicles, "starting with the Model Y." The factory is also expected to produce the Model 3, the company's best-selling car.

Tesla (TSLA) has already posted jobs for construction, operations, engineering and manufacturing workers for the factory in the German capital. The US carmaker did not say when its factory would open, or how many cars would be produced there. Tesla declined to provide additional details.

The move takes the great electric car race to Germany, the manufacturing heart of Europe and the home of Volkswagen (VLKAF), Daimler (DDAIF) and BMW (BMWYY).

Volkswagen has made the most aggressive move of the traditional auto companies into electric vehicles, announcing plans to invest €30 billion ($33 billion) to electrify its entire product lineup over the next four years.

The world's largest carmaker has just started making its new ID.3 electric vehicle series and recently announced a deal with Sweden's Northvolt to build a giant battery factory in Germany. One of the group's luxury brands, Audi, is already building electric SUVs that are designed to appeal to potential Tesla buyers.

Musk came face-to-face with his main German rival on Tuesday, when he appeared onstage with Volkswagen CEO Herbert Diess at an awards ceremony in Berlin.

Diess praised the billionaire entrepreneur for showing that electric cars are capable of competing with vehicles powered by fossil fuels. But he also eluded to the looming competition between the carmakers.

"I'm happy that Elon is pulling us, but I think the German industry is really now strongly investing — and we will keep you alert," Diess told Musk.

The big question is whether Tesla can hold onto its lead in electric-car manufacturing once Volkswagen and other established carmakers really get into the game. The old guard have several advantages: they possess huge expertise in manufacturing and deep pockets that can fund new technology.

In 2018, Volkswagen delivered a record 10.8 million cars. The company has 665,000 employees and annual revenue of $265 billion.

Hosting Tesla

Peter Altmaier, Germany's economics minister, touted the new Tesla factory as a vote of confidence in his country.

"The decision by Tesla to build a highly modern factory for electric cars in Germany is further proof of the attractiveness of Germany as an automotive manufacturing base," he said in a statement.

Hosting Tesla is a major prize. In an interview with a trade publication, Musk said that the United Kingdom, another major European base for global carmakers including Nissan (NSANF), had lost out because of Brexit.

"Brexit [uncertainty] made it too risky to put a Gigafactory in the UK," Musk told Auto Express.

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https://www.cnn.com/2019/11/13/business/tesla-berlin-gigafactory/index.html

2019-11-13 12:45:00Z
52780433290360

Elon Musk says Tesla will build cars in Berlin - CNN

In a tweet late Tuesday, Tesla CEO Elon Musk said the plant would build batteries, powertrains and vehicles, "starting with the Model Y." The factory is also expected to produce the Model 3, the company's best-selling car.

Tesla (TSLA) has already posted jobs for construction, operations, engineering and manufacturing workers for the factory in the German capital. The US carmaker did not say when its factory would open, or how many cars would be produced there. Tesla declined to provide additional details.

The move takes the great electric car race to Germany, the manufacturing heart of Europe and the home of Volkswagen (VLKAF), Daimler (DDAIF) and BMW (BMWYY).

Volkswagen has made the most aggressive move of the traditional auto companies into electric vehicles, announcing plans to invest €30 billion ($33 billion) to electrify its entire product lineup over the next four years.

The world's largest carmaker has just started making its new ID.3 electric vehicle series and recently announced a deal with Sweden's Northvolt to build a giant battery factory in Germany. One of the group's luxury brands, Audi, is already building electric SUVs that are designed to appeal to potential Tesla buyers.

Musk came face-to-face with his main German rival on Tuesday, when he appeared onstage with Volkswagen CEO Herbert Diess at an awards ceremony in Berlin.

Diess praised the billionaire entrepreneur for showing that electric cars are capable of competing with vehicles powered by fossil fuels. But he also eluded to the looming competition between the carmakers.

"I'm happy that Elon is pulling us, but I think the German industry is really now strongly investing — and we will keep you alert," Diess told Musk.

The big question is whether Tesla can hold onto its lead in electric-car manufacturing once Volkswagen and other established carmakers really get into the game. The old guard have several advantages: they possess huge expertise in manufacturing and deep pockets that can fund new technology.

In 2018, Volkswagen delivered a record 10.8 million cars. The company has 665,000 employees and annual revenue of $265 billion.

Hosting Tesla

Peter Altmaier, Germany's economics minister, touted the new Tesla factory as a vote of confidence in his country.

"The decision by Tesla to build a highly modern factory for electric cars in Germany is further proof of the attractiveness of Germany as an automotive manufacturing base," he said in a statement.

Hosting Tesla is a major prize. In an interview with a trade publication, Musk said that the United Kingdom, another major European base for global carmakers including Nissan (NSANF), had lost out because of Brexit.

"Brexit [uncertainty] made it too risky to put a Gigafactory in the UK," Musk told Auto Express.

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https://www.cnn.com/2019/11/13/business/tesla-berlin-gigafactory/index.html

2019-11-13 12:35:00Z
52780433290360

Elon Musk says Tesla will build cars in Berlin - CNN

In a tweet Tuesday, Tesla's billionaire CEO Elon Musk said the plant would build batteries, powertrains and vehicles, "starting with the Model Y."

The move takes the great electric car race to Volkswagen's (VLKAF) backyard. The German car giant has made the most aggressive move of the traditional auto companies into electric vehicles, announcing plans to invest €30 billion ($33 billion) to electrify its entire product lineup over the next four years.

Volkswagen has just started making its new ID.3 electric car series and recently announced a deal with Sweden's Northvolt to build a giant battery factory in Germany.

Tesla (TSLA) has already posted jobs for construction, operations, engineering and manufacturing workers for the factory in the German capital.

This is a developing story and will be updated.

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https://www.cnn.com/2019/11/13/business/tesla-berlin-gigafactory/index.html

2019-11-13 08:58:00Z
52780433290360