Connect with us

Economy

Big Tech is strengthening its hold on the US economy – CNN

Published

 on


A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here.
What’s happening: Apple (AAPL), Amazon (AMZN), Facebook (FB) and Alphabet (GOOGL) all reported impressive results on Thursday for the July to September period. Their ability to generate tens of billions of dollars in revenue during a pandemic has made these companies the envy of Wall Street, which predicts Big Tech will continue to benefit from changes to daily life caused by Covid-19.
Expectations are so high for these companies, however, that their stocks are extremely sensitive. Shares of Apple are down 4% in premarket trading, while Facebook and Amazon are off about 1%. Google’s stock is rallying 7%.
Breaking it down:
  • Apple: The iPhone maker reported nearly $65 billion in revenue for the quarter, up 1% from the same period last year and $1 billion ahead of what analysts had expected. But iPhone sales disappointed due to a delay in the release of the iPhone 12, which is expected to drive a wave of new purchases.
  • Facebook: Facebook’s revenue jumped 22% over the previous year to $21.5 billion, also beating analysts’ forecasts. Yet the huge bump in usage that the company experienced early in the pandemic appears to be waning. Daily and monthly active users in the US and Canada, a core market, declined slightly in the third quarter.
  • Amazon: Amazon’s sales grew 37% to $96 billion year-over-year (yes, you read that correctly). Profit increased 197% to more than $6 billion. “There is no doubt that Amazon’s latest results show it continues to be a winner from disruption caused by the pandemic,” Neil Saunders, analyst at GlobalData Retail, told clients.
  • Google: Parent Alphabet reported revenue of $46 billion — a 14% increase from the same period last year. The company made more than $11 billion in profit. The report marks a strong turnaround from the previous quarter, when Alphabet posted its first revenue decline in history as online ad spending dropped in the early days of the pandemic. Between July and September, Google’s advertising revenue jumped nearly 10% year-on-year, with search advertising revenue growing 6.5% and YouTube ad revenue surging 32%.
Big picture: Even if some results aren’t playing as well this morning, on a macro level, tech’s top companies are clearly emerging from a tumultuous economic period with even more clout. This helps justify their growing importance to US stock markets, but likely won’t stop warnings that their dominance creates vulnerabilities. (Just think: If Apple were to really tumble, it could take the market down with it.)
On the radar: Strong earnings in a tough environment could also ramp up calls in Washington for greater regulation.
Google’s results are particularly awkward given that the US Justice Department has brought a huge antitrust lawsuit against the company. One has to wonder: Will blockbuster revenue make it harder for Google to argue that it doesn’t have a lock on the search market?

Stocks are set for another choppy session

A volatile week could end with another bumpy trading day.
The latest: US stock futures are lower again after the Dow, S&P 500 and Nasdaq Composite gained ground on Thursday. Concerns about rising Covid-19 cases in North America and Europe have sent the S&P 500 down 4.5% this week, putting the index on track for its second straight month of losses.
One warning sign has been the price of oil. West Texas Intermediate futures, the US benchmark, have shed more than 10% this week, with oil now trading around $36 per barrel.
The worst drop in US oil prices since March reflects growing fears that the demand outlook could be hit by another wave of shutdowns. France and Germany will enact tight new restrictions on Friday and Monday that echo the strict measures taken earlier this year.
“Many nations with high oil consumption across the world are seeing infection levels that they didn’t have even during the first wave,” said Paola Rodriguez-Masiu, senior analyst at Rystad Energy. “Demand will not fall as much as during the pandemic’s first wave as the world is now better prepared, but is sure to take a hit.”
Watch this space: Analysts expect markets to experience a relief rally once a winner emerges in the US presidential election, since that will eliminate a major area of uncertainty. But that outcome may take time given the complexities of tallying votes during a pandemic and a tense political environment. Next week could be turbulent, too.

The truth about a record economic bounce

There’s plenty to celebrate in the latest GDP reports out of the United States and Europe.
Over the summer, the US economy grew at a record annualized rate of 33.1%, while the 19 countries that use the euro saw output jump 12.7% compared to the previous quarter, the fastest growth rate going back to 1995.
But the reality of what could happen to the economy during the fourth quarter means few people (other than the US president) are cheering the results. Economies are still well behind where they were before the crisis, and fresh restrictions in the fall and winter could stall or reverse early progress, economists warn.
“Incoming information signals that the euro area economic recovery is losing momentum more rapidly than expected after a strong yet partial and uneven rebound in economic activity over the summer months,” European Central Bank President Christine Lagarde said Thursday.
With Europe staring at a potential double-dip recession, anxiety is rising that the United States isn’t far behind. The Back-to-Normal Index from CNN Business and Moody’s Analytics edged higher in October, but some view new social distancing rules as inevitable as coronavirus cases spike. An inability to agree on another stimulus package in Congress could make matters worse.
“An intensifying pandemic and probable lack of another round of fiscal aid this year will almost certainly dampen overall economic activity to close the year and to begin 2021,” said Joseph Brusuelas, chief economist at RSM US.

The truth about a record economic bounce

There’s plenty to celebrate in the latest GDP reports out of the United States and Europe.
Over the summer, the US economy grew at a record annualized rate of 33.1%, while the 19 countries that use the euro saw output jump 12.7% compared to the previous quarter, the fastest growth rate going back to 1995.
But the reality of what could happen to the economy during the fourth quarter means few people (other than the US president) are cheering the results. Economies are still well behind where they were before the crisis, and fresh restrictions in the fall and winter could stall or reverse early progress, economists warn.
“Incoming information signals that the euro area economic recovery is losing momentum more rapidly than expected after a strong yet partial and uneven rebound in economic activity over the summer months,” European Central Bank President Christine Lagarde said Thursday.
With Europe staring at a potential double-dip recession, anxiety is rising that the United States isn’t far behind. The Back-to-Normal Index from CNN Business and Moody’s Analytics edged higher in October, but some view new social distancing rules as inevitable as coronavirus cases spike. An inability to agree on another stimulus package in Congress could make matters worse.
“An intensifying pandemic and probable lack of another round of fiscal aid this year will almost certainly dampen overall economic activity to close the year and to begin 2021,” said Joseph Brusuelas, chief economist at RSM US.
Altria (MO), Chevron (CVX), Colgate-Palmolive (CL), ExxonMobil (XOM), Honeywell (HON), Newell Brands (NWL), Phillips 66 (PSX) and Under Armour (UA) report results before US markets open.
Also today: US personal income and spending data post at 8:30 a.m. ET, along with the PCE Price Index, a crucial reading of US inflation.
Coming up: The US election, now just five days away, will dominate markets next week. Want to stay in the loop? Special editions of Before the Bell will hit your inbox starting Sunday.

Let’s block ads! (Why?)



Source link

Continue Reading

Economy

As economy struggles, Fed weighs boosting bond purchases – Investment Executive

Published

 on


The Fed since June has been buying $120 billion in bonds each month to keep downward pressure on long-term interest rates as a way of giving the economy a boost as it struggles to emerge from a deep recession.

The purchases have included $80 billion a month in Treasury bonds and $40 billion in mortgage-backed securities.

With the economy showing signs of slowing in the face a resurgence in coronavirus cases and a return to shutdowns in some areas, there has been market speculation that the Fed could decide to boost the size of its monthly purchases.

The minutes show that while no decision was taken on what to do or when, Fed officials were keeping their options open. Some analysts believe the Fed will make an announcement on boosting the bond purchase program at its next meeting on Dec. 15-16, especially if there has been no movement by Congress to provide more economic relief to individuals and businesses.

The minutes said that many Fed officials “judged that asset purchases helped provide insurance against risks that might reemerge in financial markets in an environment of high uncertainty.”

Concern has been growing among economists that the economy is slowing after an initial rebound this summer and could even topple into a double-dip recession in the early part of 2021 if Congress does not replenish expiring support programs.

At the White House Wednesday, Peter Navarro, one of President Donald Trump’s economic advisers, told reporters that a “sober” reading of the economic recovery shows “we are facing … a chasm ahead for millions of Americans unless there can be a bipartisan” deal to provide further economic relief.

The minutes released Wednesday covered the Fed’s Nov. 4-5 meeting, held just after the November elections, and were released with the customary lag of three weeks.

At the meeting, the central bank kept its benchmark interest rate at a record low near zero and signalled that it was prepared to do more if needed to support the economy.

A multitrillion-dollar stimulus effort enacted in the spring has helped support millions of Americans who have been thrown out of work and provided further assistance to struggling individuals and businesses.

But many of those programs have expired and jobless benefits are due to run out for millions of Americans by the end of this year.

Federal Reserve Chairman Jerome Powell had said at a news conference following the two-day meeting that Fed officials had discussed whether and how a bond buying program might be altered to provide more economic support.

In addition to increasing the size of the program, the Fed could decide to alter the composition of the bonds purchases to focus on buying long-term securities as a way of putting added downward pressure on long-term rates.

Let’s block ads! (Why?)



Source link

Continue Reading

Economy

Mexico Economy Grows at Record Pace With Long Recovery Ahead – Yahoo Canada Finance

Published

 on


GlobeNewswire

Chicco Black Friday & Cyber Monday Deals (2020): Best Nextfit Car Seat, Bravo Travel System & More Deals Reviewed by Saver Trends

Review of the latest Chicco deals for Black Friday & Cyber Monday, featuring offers on Keyfit 30 car seat, Bravo Travel System & more Here’s a comparison of the latest Chicco deals for Black Friday & Cyber Monday, including the best sales on convertible car seats, car seat and bases and more. Links to the top deals are listed below.Best Chicco Deals: * Save up to 43% on Chicco travel systems, carriers, sterilizers, and more at Walmart – see the latest discounts on a wide variety of Chicco infant car seats, strollers, food warmers, and modular sterilizers   * Save on Chicco travel systems, portable bassinets, hook-on chairs, and more at Amazon  – click the link to see live prices on top-rated baby safety car seats, travel gear, and more * Save on top-rated Chicco baby safety car seats, travel systems at buybuyBABY.com – check live prices on Chicco KeyFit 30 Infant Car Seat, Chicco Fit 4-in-1 Convertible Car Seat, and more      * Save up to 32% on top-rated Chicco travel systems at Walmart – check the latest deals on travel system models, including Chicco Mini Bravo, Chicco Activ3 Jogging, Chicco Bravo Trio, and more    * Save on best-selling Chicco KeyFit series car seats at Walmart – click the link for the latest deals on Chicco KeyFit series car seats, including the Onyx, Regatta, Q Collection, and more    * Save up to $90 on car seats from the Chicco NextFit series at Walmart – check the latest savings on top-rated Chicco NextFit convertible car seats    Best Baby Deals: * Save up to 40% off on a wide selection of baby gear at Walmart – find the latest deals on car seats, strollers, bassinets, activity centers, bouncers & rockers, carriers, playmats, and more   * Save up to 40% on Graco baby strollers, car seats & more baby gear at GracoBaby.com – click the link to see updated prices on best Pack ‘n Play® playards and other top-rated Graco cribs, strollers, and car seats * Save up to 49% on baby gear including car seats, strollers, clothing & essentials at Amazon – check live prices on clothing, bedding, baby care items and accessories   * Save up to $105 on baby strollers, car seats, cribs & more at buybuyBABY.com – including deals on Fisher Price, Carter’s and Disney    * Save on a wide range of Burt’s Bees baby items at BurtsBees.com – click the link for latest deals on baby ointment, lotion, creams, and bath bundles from Burt’s Bees    * Shop baby swings, bassinets, playards & more at 4moms.com – click the link to see the latest prices on baby stuff like the mamaRoo4, rockaRoo, mamaRoo sleep bassinet, and more   Searching for more deals? We recommend checking Walmart’s Black Friday & Cyber Monday sale and Amazon’s Black Friday & Cyber Monday deals for thousands more live discounts. Saver Trends earns commissions from purchases made using the links provided.About Saver Trends: Saver Trends research and share online sales news. As an Amazon Associate and affiliate Saver Trends earns from qualifying purchases.Contact: Andy Mathews (andy@nicelynetwork.com)

Let’s block ads! (Why?)



Source link

Continue Reading

Economy

Iran economy could rebound to 4.4% growth if U.S. sanctions lifted: IIF – TheChronicleHerald.ca

Published

 on


By Davide Barbuscia

DUBAI (Reuters) – Iran’s economy could grow 4.4% next year if U.S. President-elect Joe Biden lifts sanctions that have contributed to a deep three-year recession, although the COVID-19 crisis could limit foreign investment, the Institute of International Finance (IIF) said.

Biden’s victory in the Nov. 3 U.S. election has raised chances that the United States could rejoin a deal Iran reached with world powers in 2015, under which sanctions were lifted in return for curbs on Iran’s nuclear programme.

This is unlikely to happen overnight, however, and the prospects remain uncertain as the adversaries would both want additional commitments.

Iran’s rial currency has lost about 50% of its value against the U.S. dollar in 2020, reflecting economic damage from sanctions and the coronavirus pandemic, although it strengthened in late October in anticipation Biden would unseat U.S. President Donald Trump.

Iran has the highest COVID-19 death toll in the Middle East.

Trump abandoned the nuclear deal in 2018, and Tehran responded by scaling down its compliance.

The IIF, a trade body for the global financial industry, said that if United States lifted most of the economic sanctions on Iran by the end of 2021, the economy could expand 4.4% next year after an expected 6.1% contraction in 2020.

It would then grow by 6.9% in 2022 and 6% in 2023, the IIF said, adding that if oil exports increase, Iran could see its foreign reserves rise to $109.4 billion by the end of 2023.

Tehran has spoken optimistically about the return of foreign companies under a new U.S. administration, but lack of financial transparency could still curb interest from firms who had made tentative moves to invest after the 2015 deal was struck.

Garbis Iradian, IIF’s chief economist for the MENA region, told Reuters foreign direct investment inflows would increase progressively from this year’s $890 million to over $6.4 billion in 2025.

Assuming most sanctions could be lifted by late next year, FDI is likely to remain below $2 billion in 2021, with most of the money coming from China, Iradian said, adding: “Moreover, the coronavirus pandemic will limit FDI inflows in 2021.”

The Iranian economy would remain fragile, though “not to the brink of collapse” if most of the sanctions remain in place, the IIF said.

Under such a “pessimistic” scenario, Iran would post 1.8% growth next year and its foreign reserves would steadily decrease from about $80 billion this year to $46.9 billion by the end of 2023.

About 90% of Iran’s official reserves are frozen abroad due to U.S. sanctions.

(Reporting by Davide Barbuscia; Editing by Catherine Evans)

Let’s block ads! (Why?)



Source link

Continue Reading

Trending