China data sparks worries about a global slowdown… again, the euro economy is expanding, and it’s another bad day for both Anglo American and Chipotle. Here are some of the things that people in markets are talking about today.
1. More worries of slowdown in China
Another month, another weak economic report out of China. This time, it was Chinese trade data — imports fell for a 13th straight month — while a larger-than-expected decline in foreign-exchange reserves underscored the global demand slump that’s helped torpedo energy and metals prices. The Bloomberg World Mining Index plunged to its lowest level since 2008, the yuan closed at a four-year low of 6.4172 per dollar, crude lingered below $38 a barrel, and iron ore sunk to a record low.
2. Anglo stock tanks after dividend cut
The China data sent mining stocks tumbling and news that Anglo American PLC will suspend its dividend in the second half of 2015 and next year only made things worse. The global mining company also pledged deeper spending cuts to help withstand the collapse in commodities. “We think it’s the right thing to do to make sure the company remains in good shape,” said CEO Mark Cutifani. The last time Anglo cut its dividend, during the depths of the global financial crisis in 2009, the shares plunged 17 percent in one day. Today, the stock plummeted to a new record low.
3. Euro economy expands
Euro-area growth in the third quarter rose 0.3 percent, versus a 0.4 percent gain the prior quarter, bolstered by private consumption and government spending, while exports suffered from a slowdown in global trade. Says one economist at Berenberg Bank: “We have a dent caused by emerging markets, but the risk has lessened.” But Angus Deaton, winner of this year’s Nobel economics prize, begs to differ. He says Europe’s economic prospects are worsening as the region struggles to absorb the wave of asylum seekers. Across the pond, bets the Federal Reserve will end the era of near-zero borrowing costs at its Dec. 16 meeting have risen to 78 percent.
4. More bad news for Chipotle
Chipotle Mexican Grill Inc. dropped 6.6 percent in late trading after saying it closed a restaurant in Boston following complaints of illness from more than two dozen college students. The E. coli outbreak linked to Chipotle outlets has sickened at least 52 people in nine states, hammering sales at the chain. It has also hammered the stock — it’s down 19 percent this year.
5. CEOs speak up at climate summit
As the leaders of 195 countries gather in Paris to hammer out a global climate deal, business leaders and scientists say they’re trying to persuade U.S. Republicans to accept emissions curbs. To overcome opposition, “it takes the business leaders ultimately to speak up and show that this is good for job creation and for economic development,” said Paul Polman, CEO of Unilever PLC, who compared the effort to when Goldman Sachs Group Inc. and Starbucks Corp. joined the U.S. movement to legalize same-sex marriage. Helping his case: Kellogg Co., DuPont Co., Monsanto Co., and many European peers are pledging to cut emissions within their operations.