Week 37

12 September – 16 September

 

12 September

 

July was not a great month for India’s factories, as 12 out of its 22 manufacturing sectors recorded a drop in production compared to the same month a year earlier, including makers of electrical machinery, medical equipment and watches.

 

Janet Yellen will deliver the biggest shock to markets since taking over as chair of the Federal Reserve should the central bank raise interest rates this month, according to a survey of Wall Street economists that shows more than 85 per cent expect it to hold fire.

 

Manchester United has become the first British football club to earn more than half a billion pounds in a year, buoyed by large increases in television revenues that have helped its finances soar despite less-than-stellar performances on the pitch.

 

Crude shipments into the US are averaging 7.9m barrels a day this year, 8.5 per cent more than the same period in 2015 and the most since 2012. Meanwhile, data from the energy department showed exports had reached a record of nearly 700,000 b/d late last month — volume surpassing the oil output of some smaller Opec members.

 

13 September

 

The already depressed odds of a Federal Reserve interest rate rise happening this month took a further hit on Monday after a senior policymaker set out a series of arguments for not rushing to an increase.

 

The Obama administration is launching a final push to salvage negotiations on a trans-Atlantic free trade zone before it leaves office — despite growing political opposition in Europe.

 

Ikea, the Swedish flat-pack furniture retailer, said on Tuesday that its sales last year increased by 7.1 per cent to a record €34.2bn. Like-for-like sales rose by 4.8 per cent in the year to the end of August, the world’s largest furniture retailer added, writes Richard Milne.

 

Sharp moves higher in bond yields from Japan to Germany last week have spilled into stock markets over the past two days. The S&P 500 lost 2.5 per cent on Friday in its biggest drop since the vote for Brexit in late June, while European equities finished Monday lower.

 

14 September

 

In a sign of the extreme tightness of Japan’s labour market — with the working age population falling and three years of Abenomics stimulus boosting demand for staff — Lawson has started training up Vietnamese students before they even leave home.

 

Hermès fared better than its Swiss rival in the first half, reporting a 6 per cent increase in revenues to €2.4bn, at actual exchange rates, while operating profit improved 11 per cent to a better-than-expected €827m, as the group reported what it described as a “remarkable” 16 per cent jump in sales of leather goods and saddlery, which make up the core of the company. It was helped by the popularity of bags including its Constance, Halzan and Lindy models as well as its consistently popular Birkin bag.

 

US and European equity markets suffered further sharp declines as a more optimistic view of the outlook for Federal Reserve policy evaporated and energy stocks were hit by steep falls for oil prices.

 

Bayer and Monsanto have agreed a $65bn takeover deal. The German company sweetened its offer for the US seed maker to just under $130 a share, people informed about the negotiations said. The deal is the latest in a series of transactions in the agrichemical industry, which produces the seeds and fertilisers needed to grow the food we eat.

 

15 September

 

Services share of global exports rose to 23 per cent in 2015, the highest recorded by Unctad, the UN trade agency. The rise is largely a result of a double-digit drop in the value of goods exports, particularly commodities, and a milder contraction of services exports.

 

Tod’s had already released first half sales figures in July, which showed a 3.4 per cent fall to €497.6m. Diego Della Valle, the group chairman and chief executive, reiterated the challenging trading conditions for luxury goods maker at the moment.

 

This year’s historic debt rally is faltering, but the real pain has been in long bonds. And the chief source of anguish is Japan, where there is speculation the Bank of Japan may pull back from buying long-bonds in an effort to shield banks that historically have relied on a steep yield curve for profits.

 

Reits are ready for their coming out party. As of Friday, listed real estate investment trusts will become the 11th sector in the Global Industry Classification Standard (GICS), the ubiquitous system used by indexers and investors to drive asset allocation. Until now, they have been treated as financials, in the same sector as banks and insurers.

 

16 September

 

A dozen trade-oriented EU countries are making a final push to salvage European trade talks with the US as hope dims of a breakthrough.

 

Global private equity groups are joining forces with car parts makers to invest in the scandal-hit airbag maker Takata, as the industry tries to help the Japanese group bear ¥1tn ($9.8bn) of product recall costs.

 

Japan’s Topix was ahead 0.6 per cent despite the yen appreciating 0.1 per cent and eyeing a three-day winning streak. Australia’s S&P/ASX 200 was up 1.1 per cent, with investors piling back into yield stocks after those sectors had been sold off sharply in recent days.

 

The S&P/ASX 200 has shed 4.3 per cent in the past weeks, with industrials, energy, telecommunications and utilities the worst performing sectors, and all down by more than 7 per cent over this period. Financials and materials – the index heavyweights – are down by 3.6 per cent and 3.7 per cent, respectively.