David Fuller and Eoin Treacy's Comment of the Day
Category - General

    China's Economy Slows Again, Adding Pressure for Policy Action

    This article from Bloomberg news may be of interest to subscribers. Here is a section:

    Industrial output rose 4.4% from a year earlier in August, the lowest for a single month since 2002, while retail sales came in below expectations. Fixed-asset investment slowed to 5.5% in the first eight months, with the private sector lagging state investment for the 6th month.

    The data add support to the argument that policy makers’ efforts to brake the slowing economy aren’t sufficient as the nation grapples with structural downward pressure at home, the risk of yet-higher tariffs on exports to the U.S. and now surging oil prices. Nomura International Ltd. said this all raises the likelihood that the People’s Bank of China will cut its medium-term lending rate on Tuesday.

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    Fast Strike Against GM Breaks Years of UAW Negotiating Tradition

    This article by Andrew Wallender for Bloomberg may be of interest to subscribers. Here is a section:

    “I think that they were just very impatient in this round of negotiations,” said Marick Masters, a management professor and the director of Wayne State University’s labor studies program.

    But there’s a flurry of complicating factors in ongoing negotiations. Union leadership is under increased scrutiny as federal prosecutors continue to unravel a sprawling culture of corruption among former UAW leaders and negotiators.

    There also was a strong sense inside and outside the union that a strike was likely, Masters said. Such an outlook could have contributed to the speed with which the strike was called, according to the professor.

    “It’s hard to say how far apart they are,” Masters said of the UAW and GM. “But I get the feeling that they are pretty far apart. So you hope that they come to their senses pretty soon. But it certainly has the makings to go on for a very long time with the caveat that when reality sets in, they’re probably going to want to sit down and see what they can do to bring things back together.”

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    Crops Surge as China Moves to Increase U.S. Farm Purchases

    This article by Millie Munshi and Michael Hirtzer for Bloomberg may be of interest to subscribes. Here is a section:

    China is encouraging companies to buy U.S. farm products, and will exclude them from added tariffs. Many crop prices are heading for their best week since at least June on optimism that Beijing and Washington are inching toward a deal. The year-long trade spat has undercut farmer profits and boosted debt levels in the U.S. as Chinese demand fell off.

    There was evidence of fresh Chinese buying Friday as the U.S. government reported 204,000 tons of soybeans sold to the Asian nation, the first such announcement in more than two
    months.

    “We are hopeful that this apparent gesture of goodwill by China leads not only to more sales of U.S. pork, but that it contributes to a resolution of U.S.-China trade restrictions,” said David Herring, a North Carolina hog farmer and president of trade group National Pork Producers Council.

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    Sturdy Sales, Confidence Show U.S. Consumer Holds Up as Pillar

    This article by Vince Golle for Bloomberg may be of interest to subscribers. Here is a section:

    Spurred by a resilient labor market and income gains, the consumer remains the chief source of firepower for economic growth that’s slowed amid fragile global demand, uncertainty surrounding trade policy and lackluster factory output. The report suggests another solid quarter of household consumption, which grew in the April-June period at the fastest pace since 2014.

    “At a time when recession risk dominates most economic discussions, the strength of the U.S. consumer is among the more compelling examples of an economy that is still firing on all cylinders,” Tim Quinlan, senior economist at Wells Fargo Securities LLC, said in a report.

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    It's A Fish-Eat-Fish World Scientists Want To Change That

    This article by Jon Emont for the Wall Street Journal may be of interest to subscribers. Here is a section:

    “If we take any more fish out of the ocean—what we call wild-caught—then literally the ecosystem could collapse,” said Alan Shaw, the chief executive of Calysta, a Menlo Park, Calif.-based startup that is among the first companies to use bacteria to convert natural gas into protein that can be used as an alternative fish feed. Calysta operates a factory in northeast England where its bacteria feed on methane producing single-cell proteins that are dried and packaged into pellets it calls FeedKind.

    The company announced a $30 million investment from BP in June, which gave the British energy giant the right of first refusal to supply natural gas to Calysta’s future factories. It already had a partnership with Thai Union, an Asian seafood giant, which says trial shrimp grown on Calysta’s bacterial protein taste the same as those fed traditional diets that include fish.

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    Draghi Faced Unprecedented ECB Revolt as Core Europe Resisted QE

    This article by Jana Randow for Bloomberg may be of interest subscribers. Here is a section:

    The unprecedented revolt took place during a fractious meeting where Bank of France Governor Francois Villeroy de Galhau joined more traditional hawks including his Dutch colleague Klaas Knot and Bundesbank President Jens Weidmann in pressing against an immediate resumption of bond purchases, the people said. They spoke on condition of anonymity, because such discussions are confidential.

    Those three governors alone represent roughly half of the euro region as measured by economic output and population. Other dissenters included, but weren’t limited, to their colleagues from Austria and Estonia, as well as members on the ECB’s Executive Board including Sabine Lautenschlaeger and the markets chief, Benoit Coeure, the officials said.

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    Trump Advisers Considering Interim China Deal to Delay Tariffs

    This article by Jenny Leonard and Shawn Donnan for Bloomberg may be of interest to subscribers. Here is a section:

    The proposal also would be an interim deal, which would freeze the conflict, rather than bring a final resolution to a trade war that has cast a shadow over the global economy. U.S. stocks advanced on the news.

    The plan reflects concerns within the White House over the recent escalation in tariffs and their economic impact on the U.S. going into an election year. Polls show the trade war is not popular with many voters and farmers are increasingly angry over depressed commodity prices.

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