This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.theguardian.com/business/live/2019/jul/09/us-china-trade-war-basf-warning-markets-jerome-powell-philip-lane-business-live
The article has changed 17 times. There is an RSS feed of changes available.
| Version 1 | Version 2 |
|---|---|
| US-China trade war blamed as BASF issues hefty profits warning - business live | US-China trade war blamed as BASF issues hefty profits warning - business live |
| (32 minutes later) | |
| Deutsche Bank is also having a bad morning. | |
| Its shares are down 5% below €6.50, adding to Monday’s 5.4% slide. That means they’ve lost a tenth of their value since the bank revealed its new restructuring plan. | |
| Market to watch: Deutsche BankIt's been a bad start to the week for Deutsche Bank. The German firm's price has fallen over 13% after plans to cut 18,000 jobs globally were announced. 78% retail CFD accounts lose money. pic.twitter.com/rUKRtKvmR3 | |
| Investors may be doubting DB’s plan to oust 18,000 staff over the next three years, suspend its dividend, scale back its investment bank and quit the equity sales and trading businesses. | |
| Royal Bank of Canada analysts who raised their Deutsche Bank price target from €7.50 to €8 yesterday, have now cut it back to €7, warning: | |
| The presentation of the strategic plan confirmed our view that execution of the new business plan remains key. Execution risk seems higher though than we initially expected given more headwinds to capital. | |
| European stock markets have hit a one-week low, dragged down by the chemicals industry. | European stock markets have hit a one-week low, dragged down by the chemicals industry. |
| Miners and industrial groups are also out of favour, amid fresh worries about the impact of the global slowdown on corporate profits. | Miners and industrial groups are also out of favour, amid fresh worries about the impact of the global slowdown on corporate profits. |
| This has pulled the EU-wide Stoxx 600 index down by 0.5%, with the German market particularly weak (-1%). | This has pulled the EU-wide Stoxx 600 index down by 0.5%, with the German market particularly weak (-1%). |
| BASF’s struggles will fuel concerns that Germany’s economy is dangerously close to a recession. | BASF’s struggles will fuel concerns that Germany’s economy is dangerously close to a recession. |
| Manufacturing companies across Europe’s largest economy have been hurt by trade tensions -- lower economic growth means less demand for German-made products. | Manufacturing companies across Europe’s largest economy have been hurt by trade tensions -- lower economic growth means less demand for German-made products. |
| Bloomberg explains: | Bloomberg explains: |
| Warnings of economic weakness had been racking up from chemical companies including German lubricant maker Fuchs Petrolub SE and U.S. manufacturer H.B. Fuller Co. amid a deterioration in manufacturing. | Warnings of economic weakness had been racking up from chemical companies including German lubricant maker Fuchs Petrolub SE and U.S. manufacturer H.B. Fuller Co. amid a deterioration in manufacturing. |
| The diminished outlook underscores the difficulties in the chemical sector as demand weakens in industries from cars to farming to electronics | The diminished outlook underscores the difficulties in the chemical sector as demand weakens in industries from cars to farming to electronics |
| Worryingly, BASF blamed its woes on “significantly weaker-than-expected industrial production”, particularly in China’s car industry. | Worryingly, BASF blamed its woes on “significantly weaker-than-expected industrial production”, particularly in China’s car industry. |
| BASF’s profit warning is hurting the wider German chemicals industry, as investors worry that trade conflicts are hurting the sector. | BASF’s profit warning is hurting the wider German chemicals industry, as investors worry that trade conflicts are hurting the sector. |
| Covestra, which makes high-tech polymer materials, have fallen 5%, while specialty chemicals group Lanxess are down 4%. BASF’s 6% plunge makes it the worst-performing major stock in Frankfurt. | Covestra, which makes high-tech polymer materials, have fallen 5%, while specialty chemicals group Lanxess are down 4%. BASF’s 6% plunge makes it the worst-performing major stock in Frankfurt. |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| The world’s largest chemicals company, BASF, is taking a hammering this morning after the company became the latest victim of Donald Trump’s trade war with China. | The world’s largest chemicals company, BASF, is taking a hammering this morning after the company became the latest victim of Donald Trump’s trade war with China. |
| Last night,the German chemicals giant hit investors with a nasty looking profits warning. BASF slashed its full-year profits forecast for 2019 by up to 30%, warning that profits would half in the second quarter of 2019. | Last night,the German chemicals giant hit investors with a nasty looking profits warning. BASF slashed its full-year profits forecast for 2019 by up to 30%, warning that profits would half in the second quarter of 2019. |
| Sales are now expected to decline slightly in 2019 - down from a previous forecast of growth of 1%-5%, meaning the company is pressing on with 6,000 job cuts. | Sales are now expected to decline slightly in 2019 - down from a previous forecast of growth of 1%-5%, meaning the company is pressing on with 6,000 job cuts. |
| BASF makes a wide range of chemicals, plastics and foams which are used in a wide range of industries, from pharmaceutical and car-making to construction and textiles. | BASF makes a wide range of chemicals, plastics and foams which are used in a wide range of industries, from pharmaceutical and car-making to construction and textiles. |
| It blamed the profits warning on slowing global economy, and the damage caused by America’s trade conflicts with other major economies, saying: | It blamed the profits warning on slowing global economy, and the damage caused by America’s trade conflicts with other major economies, saying: |
| “To date, the conflicts between the United States and its trading partners, particularly China, have not eased. | “To date, the conflicts between the United States and its trading partners, particularly China, have not eased. |
| “In fact, the G20 summit at the end of June has shown that a rapid detente is not to be expected in the second half of 2019. Overall, uncertainty remains high.” | “In fact, the G20 summit at the end of June has shown that a rapid detente is not to be expected in the second half of 2019. Overall, uncertainty remains high.” |
| Investors are worried, driving BASF’s shares price down by 6% at the start of trading in Frankfurt. | Investors are worried, driving BASF’s shares price down by 6% at the start of trading in Frankfurt. |
| It’s another blow for Deutschland PLC, on top of the problems at banking giant Deutsche Bank which is slashing 18,000 jobs in a desperate turnaround bid. | It’s another blow for Deutschland PLC, on top of the problems at banking giant Deutsche Bank which is slashing 18,000 jobs in a desperate turnaround bid. |
| Deutsche Bank starts cutting London jobs with 18,000 at risk worldwide | Deutsche Bank starts cutting London jobs with 18,000 at risk worldwide |
| Reaction to follow.... | Reaction to follow.... |
| Also coming up | Also coming up |
| Two central bankers could move the markets today. | Two central bankers could move the markets today. |
| Federal Reserve chair Jerome Powell will discuss the Fed’s stress tests, at a conference hosted by the Boston Federal Reserve. Investors, though, will want to hear any hints on monetary policy -- and whether a rate cut is still likely in July. | Federal Reserve chair Jerome Powell will discuss the Fed’s stress tests, at a conference hosted by the Boston Federal Reserve. Investors, though, will want to hear any hints on monetary policy -- and whether a rate cut is still likely in July. |
| They’ll also be keen to hear from the European Central Bank’s new chief economist, Philip Lane, who’s answering questions on Twitter today. Lane’s views on the state of the eurozone’s economy will be crucial, as the ECB weighs up whether to launch fresh stimulus measures. | They’ll also be keen to hear from the European Central Bank’s new chief economist, Philip Lane, who’s answering questions on Twitter today. Lane’s views on the state of the eurozone’s economy will be crucial, as the ECB weighs up whether to launch fresh stimulus measures. |
| Online grocery group Ocado and housebuilder Bovis are both reporting results - Ocado has posted a half-year loss of £142.8m after taking a £98.5m hit from a warehouse fire earlier this year. | Online grocery group Ocado and housebuilder Bovis are both reporting results - Ocado has posted a half-year loss of £142.8m after taking a £98.5m hit from a warehouse fire earlier this year. |
| The agenda | The agenda |
| 11am BST: Marks & Spencer AGM | 11am BST: Marks & Spencer AGM |
| 1.45pm BST: US Federal Reserve chair Jerome Powell | 1.45pm BST: US Federal Reserve chair Jerome Powell |
| 3.15pm BST: ECB chief economist Philip R. Lane holds an online Q&A | 3.15pm BST: ECB chief economist Philip R. Lane holds an online Q&A |