Markets may face ‘pretty serious reckoning’ as coronavirus slows growth, Yale’s Stephen Roach says

The coronavirus may significantly weaken a global economy that was already in a precarious position, Yale University’s Stephen Roach told CNBC on Wednesday. “If the global economy is as weak as I think it is in the first half of this year, that points to a pretty serious reckoning for frothy financial markets,” the former Morgan Stanley Asia chairman said on “Closing Bell.” Roach’s warning Wednesday comes hours after the International Monetary Fund’s leader called the coronavirus “most pressing


The coronavirus may significantly weaken a global economy that was already in a precarious position, Yale University’s Stephen Roach told CNBC on Wednesday.
“If the global economy is as weak as I think it is in the first half of this year, that points to a pretty serious reckoning for frothy financial markets,” the former Morgan Stanley Asia chairman said on “Closing Bell.”
Roach’s warning Wednesday comes hours after the International Monetary Fund’s leader called the coronavirus “most pressing
Markets may face ‘pretty serious reckoning’ as coronavirus slows growth, Yale’s Stephen Roach says Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-19  Authors: kevin stankiewicz
Keywords: news, cnbc, companies, uncertainty, serious, roach, economy, slows, global, yales, growth, yale, reckoning, pretty, world, coronavirus, stephen, markets, face, think


Markets may face 'pretty serious reckoning' as coronavirus slows growth, Yale's Stephen Roach says

The coronavirus may significantly weaken a global economy that was already in a precarious position, Yale University’s Stephen Roach told CNBC on Wednesday.

“If the global economy is as weak as I think it is in the first half of this year, that points to a pretty serious reckoning for frothy financial markets,” the former Morgan Stanley Asia chairman said on “Closing Bell.”

Roach’s warning Wednesday comes hours after the International Monetary Fund’s leader called the coronavirus “most pressing uncertainty” for the world economy. Goldman Sachs also warned that for markets “risks of a correction are high.”

Investors have been trying to make sense of what the coronavirus means for businesses since late January. And yet, the market has only seen a few pullbacks in that stretch as the major U.S. stock indexes continue to set fresh highs.

The S&P 500 and Nasdaq Composite posted record highs Wednesday. The S&P 500 is up 4.8% so far this year, while the tech-heavy Nasdaq is up 9.4%.

Roach said the markets continued move to the upside despite coronavirus uncertainty does not make sense because “irrational exuberance never makes sense.”

“As long as central banks are opening up the liquidity spigot as wide as they are, the markets pay absolutely no attention to any potential threats to economic activity,” Roach said. “It’s the here and now, and it works until it doesn’t.”

Roach said the coronavirus outbreak carries increased financial risk due to the state of the global economy entering 2020.

He previously pointed to the IMF’s estimate of 2.9% global growth in 2019, writing in a piece for Yale that it had “slowed into the danger zone.”

“The world was only about 0.4 above the global recession threshold,” he said Wednesday.

And since the IMF published that figure in January, Roach said more sour economic data has emerged. Japan may have fallen back into recession, he said, and Germany and France reported poor December industrial output figures.

“With Europe and Japan and China in trouble, the U.S. certainly will not once again be the oasis the market seems to think it will [be] in 2020,” he said.


Company: cnbc, Activity: cnbc, Date: 2020-02-19  Authors: kevin stankiewicz
Keywords: news, cnbc, companies, uncertainty, serious, roach, economy, slows, global, yales, growth, yale, reckoning, pretty, world, coronavirus, stephen, markets, face, think


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Euro zone GDP slows as expected in the fourth quarter, but employment beats consensus

Euro zone economic growth slowed as expected in the last three months of 2019 as gross domestic product shrank in France and Italy against the previous quarter, but employment growth picked up more than expected, official estimates showed on Friday. The European Union’s statistics office Eurostat said GDP in the 19 countries sharing the euro expanded 0.1% quarter-on-quarter in the October-December period, as announced on Jan 31, for a 0.9% year-on-year gain – a downward revision from the previou


Euro zone economic growth slowed as expected in the last three months of 2019 as gross domestic product shrank in France and Italy against the previous quarter, but employment growth picked up more than expected, official estimates showed on Friday.
The European Union’s statistics office Eurostat said GDP in the 19 countries sharing the euro expanded 0.1% quarter-on-quarter in the October-December period, as announced on Jan 31, for a 0.9% year-on-year gain – a downward revision from the previou
Euro zone GDP slows as expected in the fourth quarter, but employment beats consensus Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-14
Keywords: news, cnbc, companies, beats, economy, growth, slows, fourth, euro, biggest, quarter, slowed, italy, expected, france, zone, consensus, employment, gdp


Euro zone GDP slows as expected in the fourth quarter, but employment beats consensus

Euro zone economic growth slowed as expected in the last three months of 2019 as gross domestic product shrank in France and Italy against the previous quarter, but employment growth picked up more than expected, official estimates showed on Friday.

The European Union’s statistics office Eurostat said GDP in the 19 countries sharing the euro expanded 0.1% quarter-on-quarter in the October-December period, as announced on Jan 31, for a 0.9% year-on-year gain – a downward revision from the previously estimated 1.0% growth.

The quarterly growth rate slowed compared to the 0.3% expansion in the third quarter because of a 0.1% contraction in the second biggest economy France and a 0.3% contraction in the third biggest Italy. Growth in Germany, the biggest euro zone economy, stagnated.


Company: cnbc, Activity: cnbc, Date: 2020-02-14
Keywords: news, cnbc, companies, beats, economy, growth, slows, fourth, euro, biggest, quarter, slowed, italy, expected, france, zone, consensus, employment, gdp


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US productivity rebounds in fourth quarter as labor costs growth slows

U.S. worker productivity rebounded in the fourth quarter, keeping labor costs in check. Productivity decreased at an unrevised 0.2% pace in the July-September period, the biggest drop since the fourth quarter of 2015. Compared to the fourth quarter of 2018, productivity increased at a 1.8% rate. With productivity rebounding last quarter, growth in unit labor costs — the price of labor per single unit of output — slowed to a 1.4% rate. Compared to the fourth quarter of 2018, labor costs grew at a


U.S. worker productivity rebounded in the fourth quarter, keeping labor costs in check.
Productivity decreased at an unrevised 0.2% pace in the July-September period, the biggest drop since the fourth quarter of 2015.
Compared to the fourth quarter of 2018, productivity increased at a 1.8% rate.
With productivity rebounding last quarter, growth in unit labor costs — the price of labor per single unit of output — slowed to a 1.4% rate.
Compared to the fourth quarter of 2018, labor costs grew at a
US productivity rebounds in fourth quarter as labor costs growth slows Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-06
Keywords: news, cnbc, companies, growth, unit, rebounds, labor, increased, slows, rate, costs, quarter, pace, 2019, fourth, productivity


US productivity rebounds in fourth quarter as labor costs growth slows

U.S. worker productivity rebounded in the fourth quarter, keeping labor costs in check.

The Labor Department said on Thursday nonfarm productivity, which measures hourly output per worker, increased at a 1.4% annualized rate last quarter. Productivity decreased at an unrevised 0.2% pace in the July-September period, the biggest drop since the fourth quarter of 2015.

Economists polled by Reuters had forecast productivity rebounding at a 1.6% rate in the fourth quarter. Compared to the fourth quarter of 2018, productivity increased at a 1.8% rate. It accelerated by 1.7% in 2019, the strongest since 2010, after increasing 1.3% in 2018.

Sluggish productivity is one of the reasons the economy has struggled to achieve the Trump administration’s target of 3% annual growth. The economy grew 2.3% in 2019, the slowest in three years, after logging 2.9% in 2018.

Productivity increased at an average annual rate of 1.3% from 2007 to 2019, below its long-term rate of 2.1% from 1947 to 2019, indicating that the speed at which the economy can grow over a long period without igniting inflation has slowed.

Economist estimate the economy’s growth potential at around 1.8%. Some economists blame tepid productivity on a shortage of workers as well as the impact of rampant drug addiction in some parts of the country.

Others also argue that low capital expenditure, which they say has resulted in a sharp drop in the capital-to-labor ratio, is holding down productivity. There is also a belief that productivity is being inaccurately measured, especially on the information technology side.

Hours worked rose at a 1.1% rate in the fourth quarter. That was down from the 2.5% pace notched in the third quarter, when hours were boosted by a surge in the volatile self-employed and unpaid family workers component.

With productivity rebounding last quarter, growth in unit labor costs — the price of labor per single unit of output — slowed to a 1.4% rate. Unit labor costs increased at a 2.5% rate in the July-September period.

Compared to the fourth quarter of 2018, labor costs grew at a 2.4% rate. They increased 2.0% in 2019 after rising 1.8% in 2018, suggesting inflation will probably continue to run below the Federal Reserve’s 2% target even as the labor market has tightened.

Hourly compensation increased at a 2.8% rate in the fourth quarter. That followed a 2.3% pace in the prior quarter.


Company: cnbc, Activity: cnbc, Date: 2020-02-06
Keywords: news, cnbc, companies, growth, unit, rebounds, labor, increased, slows, rate, costs, quarter, pace, 2019, fourth, productivity


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Indonesia’s growth in the 4th quarter slows to weakest in 3 years

Indonesia’s economy expanded 4.97% on an annual basis in the October-December quarter, data from the statistics bureau showed on Wednesday, slower than expected in a Reuters poll. Household consumption, which accounts for more than half of Indonesia’s GDP also slowed, with sales of clothes, mobile phones, cars and motorbikes contracting, Suhariyanto, the head of the statistics bureau, said. BI last year cut interest rates four times by 100 basis points and eased lending rules in a bid to prop up


Indonesia’s economy expanded 4.97% on an annual basis in the October-December quarter, data from the statistics bureau showed on Wednesday, slower than expected in a Reuters poll.
Household consumption, which accounts for more than half of Indonesia’s GDP also slowed, with sales of clothes, mobile phones, cars and motorbikes contracting, Suhariyanto, the head of the statistics bureau, said.
BI last year cut interest rates four times by 100 basis points and eased lending rules in a bid to prop up
Indonesia’s growth in the 4th quarter slows to weakest in 3 years Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-05
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Indonesia's growth in the 4th quarter slows to weakest in 3 years

Indonesia’s economic growth in the final quarter of 2019 was the slowest in three years, hit by a weakening global economy, and despite supportive efforts by policy makers that included four rate cuts by the central bank.

Growth may ease further for Southeast Asia’s largest economy this quarter due to the impact of the coronavirus outbreak in China, the country’s biggest trading partner and a major source of direct investment.

Indonesia’s economy expanded 4.97% on an annual basis in the October-December quarter, data from the statistics bureau showed on Wednesday, slower than expected in a Reuters poll.

For 2019, the economy grew 5.02%, close to the poll’s forecast but short of the government’s 5.3% target.

Slowing global trade amid the U.S.-China tariff dispute had hurt Indonesia’s important commodity exports, while national elections delayed investment decisions.

Household consumption, which accounts for more than half of Indonesia’s GDP also slowed, with sales of clothes, mobile phones, cars and motorbikes contracting, Suhariyanto, the head of the statistics bureau, said.

Investment also remained sluggish, despite political uncertainty easing in the October-December period following last year’s elections. President Joko Widodo, who won a second term in office, started the term in October.

The rupiah barely moved after the data was released, trading at 13,715 per dollar at 0430 GMT. There was also a muted reaction in the main stock index.

At a separate financial event, ahead of the data, Bank Indonesia (BI) Governor Perry Warjiyo vowed to use all the central bank’s tools to support growth. BI last year cut interest rates four times by 100 basis points and eased lending rules in a bid to prop up GDP growth.

“BI will maintain an accommodative macroprudential policy stance and strengthen coordination with other relevant authorities in order to maintain financial system stability and stimulate the bank intermediation function,” he said.

The governor forecast a GDP growth rate of 5.3% in 2020, in line with the government’s target.

Indonesian authorities have expressed confidence that travel curbs and capital outflows stemming from the virus outbreak that has killed nearly 500 people and infected more than 24,000 others, mostly in China, will not seriously dent Indonesia’s economy.

Chinese tourists represent some 13% of total visitors to Indonesia and the country is also the biggest buyer of Indonesian goods, with any deceleration in China’s growth likely to affect commodity prices.

A central bank official said on Tuesday that any economic impact in 2020 from the coronavirus epidemic will be small.


Company: cnbc, Activity: cnbc, Date: 2020-02-05
Keywords: news, cnbc, companies, 4th, weakest, term, gdp, economy, data, slows, growth, bank, quarter, central, trading, indonesias


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UK annual economic growth slows to weakest since 2012 in November

Britain’s economy grew at its weakest annual pace in more than seven years in November, after output fell sharply that month, though a stronger performance in previous months brightened the picture slightly. Monday’s official figures showed the economy in November was just 0.6% larger than a year before, the weakest expansion since June 2012, down from annual growth of 1.0% in October, which represented an upward revision from previously reported data. “Overall, the economy grew slightly in the


Britain’s economy grew at its weakest annual pace in more than seven years in November, after output fell sharply that month, though a stronger performance in previous months brightened the picture slightly.
Monday’s official figures showed the economy in November was just 0.6% larger than a year before, the weakest expansion since June 2012, down from annual growth of 1.0% in October, which represented an upward revision from previously reported data.
“Overall, the economy grew slightly in the
UK annual economic growth slows to weakest since 2012 in November Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-13
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UK annual economic growth slows to weakest since 2012 in November

Britain’s economy grew at its weakest annual pace in more than seven years in November, after output fell sharply that month, though a stronger performance in previous months brightened the picture slightly.

Political uncertainty hung over British businesses and consumers in late 2019, when the country had been due to leave the European Union on Oct. 31 until parliament forced a delay and Prime Minister Boris Johnson called an early election.

Monday’s official figures showed the economy in November was just 0.6% larger than a year before, the weakest expansion since June 2012, down from annual growth of 1.0% in October, which represented an upward revision from previously reported data.

Output in November alone shrank by 0.3%, the biggest drop since April, when businesses ran down stocks of goods built up in anticipation of a disruptive no-deal Brexit at the end of March, the Office for National Statistics said.

Economists polled by Reuters had expected a flat reading for the month.

Looking at the three months to November, which smooths out some volatility, the economy grew by 0.1% versus poll forecasts for a 0.1% fall, reflecting unexpected upward revisions to output in October and September, which the ONS said reflected late survey returns.

“Overall, the economy grew slightly in the latest 3 months, with growth in construction pulled back by weakening services and another lacklustre performance from manufacturing,” ONS statistician Rob Kent-Smith said.

The period covered both the politically turbulent run-up to an Oct. 31 Brexit deadline, which parliament forced Prime Minister Boris Johnson to defer, and the start of an election campaign, when Johnson chose to put his Brexit plans to the public rather than seek support from opposition legislators.

He won an unexpectedly large majority in the Dec. 12 vote and private-sector business surveys since then have pointed to a recovery in sentiment at the tail end of 2019 and the very start of 2020.

The new parliament has approved Johnson’s plans to take Britain out of the European Union on Jan. 31, which will start the clock on an 11-month transition period during which Johnson wants to negotiate a long-term trade deal with the EU.

European Commission President Ursula von der Leyen called this timescale “basically impossible” when she met Johnson last week, and with Johnson ruling out an extension to the transition period, some businesses fear they could face tariffs and other obstacles to trade with the EU from 2021.

The Bank of England predicted in November that the economy would eke out very limited quarterly growth in the fourth quarter, before recovering in 2020.

This forecast assumes progress towards a trade deal and a reduction in U.S.-China trade tensions.

In the past week BoE Governor Mark Carney – who steps down in March – and two other rate-setters, Silvana Tenreyro and Gertjan Vlieghe, said a rate cut could be needed if these assumptions prove over-optimistic.

Two more policymakers, Michael Saunders and Jonathan Haskel, already support a rate cut.


Company: cnbc, Activity: cnbc, Date: 2020-01-13
Keywords: news, cnbc, companies, johnson, months, growth, economic, slows, trade, grew, weakest, start, period, businesses, parliament, annual, economy


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People are still dying from mysterious vaping illness, even as outbreak slows

The vaping illness outbreak worsened over the last week with 41 people hospitalized and two additional deaths, even as the pace of new illnesses slows, according to new data from the Centers for Disease Control and Prevention. The CDC calls the illness EVALI, short for e-cigarette, or vaping, product use associated lung injury. Public health officials say the main culprit is vitamin E acetate, a sticky compound found in some THC vaping products. The vaping illness comes amid a surge in teen vapi


The vaping illness outbreak worsened over the last week with 41 people hospitalized and two additional deaths, even as the pace of new illnesses slows, according to new data from the Centers for Disease Control and Prevention.
The CDC calls the illness EVALI, short for e-cigarette, or vaping, product use associated lung injury.
Public health officials say the main culprit is vitamin E acetate, a sticky compound found in some THC vaping products.
The vaping illness comes amid a surge in teen vapi
People are still dying from mysterious vaping illness, even as outbreak slows Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-09  Authors: berkeley lovelace jr
Keywords: news, cnbc, companies, ban, dying, vaping, week, illness, outbreak, lung, vape, surge, mysterious, thc, slows, teen, cdc


People are still dying from mysterious vaping illness, even as outbreak slows

Demonstrators vape during a consumer advocate groups and vape storeowners rally outside of the White House to protest the proposed vaping flavor ban in Washington DC, on November 9, 2019.

The vaping illness outbreak worsened over the last week with 41 people hospitalized and two additional deaths, even as the pace of new illnesses slows, according to new data from the Centers for Disease Control and Prevention.

The total number of cases now stands at 2,602 with 57 fatalities across 27 states, the CDC said Thursday, citing data compiled through Tuesday. Patients have been found in all 50 states as well as the District of Columbia, Puerto Rico and the Virgin Islands, according to the CDC.

The CDC calls the illness EVALI, short for e-cigarette, or vaping, product use associated lung injury. Public health officials say the main culprit is vitamin E acetate, a sticky compound found in some THC vaping products. The CDC said in November it was narrowing in on the substance as a “potential toxin of concern” after it was detected in 29 out of 29 lung tissue samples tested by health officials.

The CDC has recommended that consumers stop vaping, particularly THC and especially anything bought off the street.

The vaping illness comes amid a surge in teen vaping. Last week, the Food and Drug Administration issued a ban on most fruit- and mint-flavored nicotine vaping products in an effort to curb a surge in teen use.

Health and Human Services Secretary Alex Azar told reporters that the ban had little to do with the vaping lung illness, which he said the administration saw as a “separate issue.”


Company: cnbc, Activity: cnbc, Date: 2020-01-09  Authors: berkeley lovelace jr
Keywords: news, cnbc, companies, ban, dying, vaping, week, illness, outbreak, lung, vape, surge, mysterious, thc, slows, teen, cdc


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Elizabeth Warren’s campaign sounds the alarm as fundraising pace slows about 30% in fourth quarter

Sen. Elizabeth Warren’s campaign told supporters in an email on Friday that, so far, it has raised just over $17 million in the fourth quarter, a significant drop from her fundraising haul during the third quarter. “So far this quarter, we’ve raised a little over $17 million. Sen. Bernie Sanders – who, like Warren, shuns big-money fundraisers – led the field with more than $25 million during the third quarter. If the $17 million total stands that would represent a 30% drop from the previous quar


Sen. Elizabeth Warren’s campaign told supporters in an email on Friday that, so far, it has raised just over $17 million in the fourth quarter, a significant drop from her fundraising haul during the third quarter.
“So far this quarter, we’ve raised a little over $17 million.
Sen. Bernie Sanders – who, like Warren, shuns big-money fundraisers – led the field with more than $25 million during the third quarter.
If the $17 million total stands that would represent a 30% drop from the previous quar
Elizabeth Warren’s campaign sounds the alarm as fundraising pace slows about 30% in fourth quarter Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-27  Authors: brian schwartz thomas franck, brian schwartz, thomas franck
Keywords: news, cnbc, companies, elizabeth, fourth, raised, worth, sen, democratic, slows, sounds, warren, alarm, pace, quarter, warrens, fundraising, reported, million, campaign


Elizabeth Warren's campaign sounds the alarm as fundraising pace slows about 30% in fourth quarter

Sen. Elizabeth Warren’s campaign told supporters in an email on Friday that, so far, it has raised just over $17 million in the fourth quarter, a significant drop from her fundraising haul during the third quarter.

The memo asks backers to step up giving to the campaign.

“So far this quarter, we’ve raised a little over $17 million. That’s a good chunk behind where we were at this time last quarter,” it says.

Warren finished the third quarter bringing in $24.6 million, which was much more than most of the other Democratic primary contenders, including former Vice President Joe Biden and South Bend Mayor Pete Buttigieg. Sen. Bernie Sanders – who, like Warren, shuns big-money fundraisers – led the field with more than $25 million during the third quarter.

If the $17 million total stands that would represent a 30% drop from the previous quarter. The current quarter ends in four days.

The development comes after Warren’s momentum in the Democratic primary race slowed down in recent months. At one point she was virtually neck and neck with Biden at the top of national polling averages. Biden’s campaign has said it expects to finish raising more in the fourth quarter compared with the previous period.

A spokesperson for Warren did not return a request for comment.

The dip in fundraising also comes after she escalated her attacks on billionaires and wealthy donors. She has accused rival Mike Bloomberg of trying to buy the Democratic nomination, while she has gotten into public spats with Wall Street titans such as Leon Cooperman and Lloyd Blankfein.

To pay for her ambitious progressive agenda, including “Medicare for All,” she is proposing a wealth tax that would seek 2% of every dollar over $50 million of someone’s net worth. That rate would go higher, to 6%, on net worth over $1 billion.

Warren’s disgust toward big-money fundraisers was on full display during the Democratic debate in Los Angeles. The senator battled with Buttigieg for taking part in a moneymaking event in California at an expensive wine cave. It turns out, the Massachusetts lawmaker also had a Senate fundraiser at a winery in Boston last year.

— Brian Schwartz reported from Englewood Cliffs, New Jersey, and Tom Franck reported from Cooperstown, New York.


Company: cnbc, Activity: cnbc, Date: 2019-12-27  Authors: brian schwartz thomas franck, brian schwartz, thomas franck
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China races to build its own Tesla as economy slows and subsidies dry up

A view of electric cars owned by a local car-sharing company in Wuhan, China. Now, Chinese auto sales are in a slump, consumer subsidies for new energy vehicles are phasing out next year and economic growth is slowing. How it all startedWan Gang was an engineer for Audi in Germany before he returned to China in the early 2000s. Wan convinced the central government to roll out a national strategy for developing new energy vehicles and battery technology. But he noted there is little impact on pro


A view of electric cars owned by a local car-sharing company in Wuhan, China.
Now, Chinese auto sales are in a slump, consumer subsidies for new energy vehicles are phasing out next year and economic growth is slowing.
How it all startedWan Gang was an engineer for Audi in Germany before he returned to China in the early 2000s.
Wan convinced the central government to roll out a national strategy for developing new energy vehicles and battery technology.
But he noted there is little impact on pro
China races to build its own Tesla as economy slows and subsidies dry up Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-26  Authors: evelyn cheng lilian wu, evelyn cheng, lilian wu
Keywords: news, cnbc, companies, economy, vehicles, china, chinas, energy, technology, build, dry, company, tesla, slows, chinese, electric, subsidies, research, races


China races to build its own Tesla as economy slows and subsidies dry up

A view of electric cars owned by a local car-sharing company in Wuhan, China. Feature China | Barcroft Images | Barcroft Media | Getty Images

BEIJING — When an idea strikes a chord with national ambition in China, the result can be millions of dollars wasted and a handful of start-ups struggling to survive in a cooling economy. In the last few years, venture capitalists rushed to pour billions of dollars into the emerging electric vehicle industry backed by the Chinese government. So far, it’s less clear how that bet has paid off. Take a look at the recent headlines: Shares of U.S.-listed Nio, arguably China’s closest competitor with Tesla, are down more than 50% this year to about $2.70 each.

In November, Alibaba-backed XPeng tapped its own Chairman and CEO He Xiaopeng for a $400 million investment round, in which electronics company Xiaomi participated as a strategic investor.

Shenzhen-based BYD, which counts Warren Buffett as an investor, said in late October that net profits, ex-items, fell 130.1% in the third quarter. The Hong Kong-listed shares are down 25% for the year so far. These are some of the handful of survivors from Beijing’s efforts over the last decade to accelerate the creation of China’s own electric car. Now, Chinese auto sales are in a slump, consumer subsidies for new energy vehicles are phasing out next year and economic growth is slowing. Start-ups didn’t expect the subsidies to last this long, said Rupert Mitchell, chief strategy officer at Chinese electric car company WM Motor, founded in 2015 by a former Volvo and Geely executive. “What was not in the business plans was that China would have its first fully blown automotive downturn in Chinese history,” he told CNBC in late November.

How it all started

Wan Gang was an engineer for Audi in Germany before he returned to China in the early 2000s. Within 10 years, he became China’s minister of Science and Technology, despite not being a member of the Chinese Communist Party. Wan convinced the central government to roll out a national strategy for developing new energy vehicles and battery technology. Beijing was eager to jump at an opportunity to become a global leader in an emerging technology, which conveniently tied into efforts to combat pollution. As a result, the central government spent at least 33.4 billion yuan in subsidies between 2009 and 2015, according to the Ministry of Finance. At the height of the subsidy-driven boom, the number of new energy vehicles sold in 2014 more than quadrupled from the year before, and multiplied by more than four times in 2015 to more than 330,000 vehicles, according to data from China Automotive Industry Association accessed through Wind Information. In 2016, the Ministry of Finance said it found at least five companies cheated the system of over 1 billion yuan. That year, new energy vehicle sales grew just 53%, data showed. High levels of subsidy misuse are not uncommon in China. Between 2001 and 2011, about half of Chinese companies receiving direct grant subsidies for research and development were non-compliant, using the funds for other things such as private consumption and investments with higher returns. That’s according to a forthcoming working paper from Philipp Boeing and Bettina Peters, both researchers at the ZEW – Leibniz Centre for European Economic Research. The study did not cover consumer subsidies. The research did indicate that misuse of funds declined with time and that the actual effectiveness in Chinese government policy in spurring research and development, if monitored, increased and non-compliance was wiped out, Boeing said in an interview. But he noted there is little impact on productivity in the long term, which is a core problem for China’s economy.

Path to profitability


Company: cnbc, Activity: cnbc, Date: 2019-12-26  Authors: evelyn cheng lilian wu, evelyn cheng, lilian wu
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China races to build its own Tesla as economy slows and subsidies dry up

A view of electric cars owned by a local car-sharing company in Wuhan, China. Now, Chinese auto sales are in a slump, consumer subsidies for new energy vehicles are phasing out next year and economic growth is slowing. How it all startedWan Gang was an engineer for Audi in Germany before he returned to China in the early 2000s. Wan convinced the central government to roll out a national strategy for developing new energy vehicles and battery technology. But he noted there is little impact on pro


A view of electric cars owned by a local car-sharing company in Wuhan, China.
Now, Chinese auto sales are in a slump, consumer subsidies for new energy vehicles are phasing out next year and economic growth is slowing.
How it all startedWan Gang was an engineer for Audi in Germany before he returned to China in the early 2000s.
Wan convinced the central government to roll out a national strategy for developing new energy vehicles and battery technology.
But he noted there is little impact on pro
China races to build its own Tesla as economy slows and subsidies dry up Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-26  Authors: evelyn cheng lilian wu, evelyn cheng, lilian wu
Keywords: news, cnbc, companies, economy, vehicles, china, chinas, energy, technology, build, dry, company, tesla, slows, chinese, electric, subsidies, research, races


China races to build its own Tesla as economy slows and subsidies dry up

A view of electric cars owned by a local car-sharing company in Wuhan, China. Feature China | Barcroft Images | Barcroft Media | Getty Images

BEIJING — When an idea strikes a chord with national ambition in China, the result can be millions of dollars wasted and a handful of start-ups struggling to survive in a cooling economy. In the last few years, venture capitalists rushed to pour billions of dollars into the emerging electric vehicle industry backed by the Chinese government. So far, it’s less clear how that bet has paid off. Take a look at the recent headlines: Shares of U.S.-listed Nio, arguably China’s closest competitor with Tesla, are down more than 50% this year to about $2.70 each.

In November, Alibaba-backed XPeng tapped its own Chairman and CEO He Xiaopeng for a $400 million investment round, in which electronics company Xiaomi participated as a strategic investor.

Shenzhen-based BYD, which counts Warren Buffett as an investor, said in late October that net profits, ex-items, fell 130.1% in the third quarter. The Hong Kong-listed shares are down 25% for the year so far. These are some of the handful of survivors from Beijing’s efforts over the last decade to accelerate the creation of China’s own electric car. Now, Chinese auto sales are in a slump, consumer subsidies for new energy vehicles are phasing out next year and economic growth is slowing. Start-ups didn’t expect the subsidies to last this long, said Rupert Mitchell, chief strategy officer at Chinese electric car company WM Motor, founded in 2015 by a former Volvo and Geely executive. “What was not in the business plans was that China would have its first fully blown automotive downturn in Chinese history,” he told CNBC in late November.

How it all started

Wan Gang was an engineer for Audi in Germany before he returned to China in the early 2000s. Within 10 years, he became China’s minister of Science and Technology, despite not being a member of the Chinese Communist Party. Wan convinced the central government to roll out a national strategy for developing new energy vehicles and battery technology. Beijing was eager to jump at an opportunity to become a global leader in an emerging technology, which conveniently tied into efforts to combat pollution. As a result, the central government spent at least 33.4 billion yuan in subsidies between 2009 and 2015, according to the Ministry of Finance. At the height of the subsidy-driven boom, the number of new energy vehicles sold in 2014 more than quadrupled from the year before, and multiplied by more than four times in 2015 to more than 330,000 vehicles, according to data from China Automotive Industry Association accessed through Wind Information. In 2016, the Ministry of Finance said it found at least five companies cheated the system of over 1 billion yuan. That year, new energy vehicle sales grew just 53%, data showed. High levels of subsidy misuse are not uncommon in China. Between 2001 and 2011, about half of Chinese companies receiving direct grant subsidies for research and development were non-compliant, using the funds for other things such as private consumption and investments with higher returns. That’s according to a forthcoming working paper from Philipp Boeing and Bettina Peters, both researchers at the ZEW – Leibniz Centre for European Economic Research. The study did not cover consumer subsidies. The research did indicate that misuse of funds declined with time and that the actual effectiveness in Chinese government policy in spurring research and development, if monitored, increased and non-compliance was wiped out, Boeing said in an interview. But he noted there is little impact on productivity in the long term, which is a core problem for China’s economy.

Path to profitability


Company: cnbc, Activity: cnbc, Date: 2019-12-26  Authors: evelyn cheng lilian wu, evelyn cheng, lilian wu
Keywords: news, cnbc, companies, economy, vehicles, china, chinas, energy, technology, build, dry, company, tesla, slows, chinese, electric, subsidies, research, races


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It could be time to buy defensive stocks if the rally slows down. Here are some favorites

Morgan Stanley is also bearish and recommends clients buy into defensive stocks, which are less tied to the economic cycle. Health care, utilities and consumer staples stocks are classic defensive stocks. The theory behind defensive stocks is that even in harder economic times, people will still pay for health-related items like medications and hospital visits. Here are the most-loved defensive stocks on Wall Street. CNBC used FactSet to screen to Wall Street’s favorite defensive stocks by picki


Morgan Stanley is also bearish and recommends clients buy into defensive stocks, which are less tied to the economic cycle.
Health care, utilities and consumer staples stocks are classic defensive stocks.
The theory behind defensive stocks is that even in harder economic times, people will still pay for health-related items like medications and hospital visits.
Here are the most-loved defensive stocks on Wall Street.
CNBC used FactSet to screen to Wall Street’s favorite defensive stocks by picki
It could be time to buy defensive stocks if the rally slows down. Here are some favorites Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-09  Authors: maggie fitzgerald
Keywords: news, cnbc, companies, defensive, stocks, nextera, market, favorites, walmart, analysts, slows, morgan, clients, 2020, rally, growth, buy


It could be time to buy defensive stocks if the rally slows down. Here are some favorites

Customers shop at a Walmart store in Secaucus, New Jersey, May 16, 2018. Timothy Fadek | Bloomberg | Getty Images

Wall Street is getting defensive. Stocks have had a great run this year — hitting all-time record highs — but uncertainty around the U.S.-China trade war and the 2020 election paint a tepid picture for markets in the new year. UBS sees the market coming under pressure next year with a continued slowdown in the economy. Morgan Stanley is also bearish and recommends clients buy into defensive stocks, which are less tied to the economic cycle. “We expect the market to vacillate between a pro-cyclical outcome and a defensive one as data comes in and trade tensions and the election evolve,” said Morgan Stanley chief U.S. equity strategist in a note to clients last week. “We slightly favor the more defensive outcome given our well below consensus forecast for S&P 500 earnings growth next year (flat versus approximately 10% growth for the bottom up consensus).”

Health care, utilities and consumer staples stocks are classic defensive stocks. The theory behind defensive stocks is that even in harder economic times, people will still pay for health-related items like medications and hospital visits. Plus, households and businesses will always need water and electricity and consumers will still purchase goods like toothpaste and laundry detergent. As analysts bet on slower growth in 2020, and December kicked off to a rocky start, defensive stocks could become the rage. Here are the most-loved defensive stocks on Wall Street.

CNBC used FactSet to screen to Wall Street’s favorite defensive stocks by picking the health care, utility and consumer staple stocks with the highest percentage of buy ratings by Wall Street analysts. The stocks also have at least a 10% upside to their 12-month price target, which is an attractive return considering the median S&P 500 strategist target for year-end 2020 is 3,325, about 5.4% above Friday’s close. The companies also have a market valuation above $5 billion and pay at least a 1% dividend yield. NextEra Energy, the largest producer of wind and solar energy, is the most loved defensive stock in the data set with nearly 90% of analysts recommending it a buy. Total shareholder return for NextEra includes 8% to 9% earnings growth with a 2.2% dividend yield, J.P. Morgan said in a note to clients. “Gulf Power growth from cost cuts and new investments is also expected to be a major driver of growth in the next 2 years,” said J.P. Morgan utilities analyst Christopher Turnure in a note to clients. The firm has an overweight rating on NextEra. Shares of NextEra are up about 35% this year. Tyson Foods and Walmart are the two consumer staples stocks on the list. Walmart is the largest retailer in the world and remains a top retail pick among many analysts for its ability to compete with e-commerce giant Amazon. A strong grocery business helped Walmart’s online sales grow 41% in the third quarter, the company said last month, fueling an earnings beat and 21 quarters of growth in the U.S. On the first two trading days of December last week, the Dow Jones Industrial Average lost 2.35%, after President Donald Trump suggested he may want to delay a trade deal with China until after the 2020 presidential election. While the broader market was tumbling and investors feared stocks were in for a tumultuous December like last year, Walmart’s stock gained a modest 0.2%.

Health care loved


Company: cnbc, Activity: cnbc, Date: 2019-12-09  Authors: maggie fitzgerald
Keywords: news, cnbc, companies, defensive, stocks, nextera, market, favorites, walmart, analysts, slows, morgan, clients, 2020, rally, growth, buy


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