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You can find the current article at its original source at https://www.theguardian.com/business/live/2019/aug/19/markets-trump-recession-fears-ftse-dow-sterling-business-live
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| Markets rally despite new Germany recession warning - business live | Markets rally despite new Germany recession warning - business live |
| (about 1 hour later) | |
| Back in Washington, Donald Trump is demanding hefty interest rate cuts. | |
| He’s called on the Fed to cut borrowing costs by 100 basis points, or from 2.25% to just 1.25%. | |
| That would reverse roughly half of the tightening since the financial crisis ended. | |
| .....The Fed Rate, over a fairly short period of time, should be reduced by at least 100 basis points, with perhaps some quantitative easing as well. If that happened, our Economy would be even better, and the World Economy would be greatly and quickly enhanced-good for everyone! | |
| The UK pub sector needs a lift, but unfortunately the Greene King takeover may lead to more closures. | |
| As Neil Wilson of Markets.com explains, there’s more value in turning some pubs into homes or offices, or simply demolishing them. | |
| While it’s a bottle of champagne for shareholders, there may be fewer reasons to celebrate for patrons. I think we can comfortably expect more pub closures. It’s a whopping premium that implies CKA sees significant value in the property portfolio. | |
| For the battered pub trade, it’s clear the real value lies in the property. Greene King owns the freehold or long leasehold on 81% of its properties. The company recently carried out a revaluation of its property estate that indicated a market value of £4.5bn against the £3.5bn book value. | |
| More reaction: | More reaction: |
| Bit of late drama as Hong Kong's CK Asset makes an agreed bid for #GreeneKing. Greene King shares surge 52%, topping the 850p/share offer price. | Bit of late drama as Hong Kong's CK Asset makes an agreed bid for #GreeneKing. Greene King shares surge 52%, topping the 850p/share offer price. |
| Greene King takeover - backed by board - gives the brewer an enterprise value of £4.6billion. No small beer, you might say. | Greene King takeover - backed by board - gives the brewer an enterprise value of £4.6billion. No small beer, you might say. |
| My colleague Rob Davies has crunched the numbers behind the Greene King deal - it’s worth £1m for every pub! | My colleague Rob Davies has crunched the numbers behind the Greene King deal - it’s worth £1m for every pub! |
| The deal is worth £2.7bn, which is £1m for every pub that Greene King owns, allowing me to use the phrase "in a million-pound-per-pub deal" that will never make it past the subs. | The deal is worth £2.7bn, which is £1m for every pub that Greene King owns, allowing me to use the phrase "in a million-pound-per-pub deal" that will never make it past the subs. |
| Newsflash: CK Asset Holdings, a Hong Kong-based property developer, has agreed a cash offer for Greene King, the UK pub chain. | Newsflash: CK Asset Holdings, a Hong Kong-based property developer, has agreed a cash offer for Greene King, the UK pub chain. |
| It values Greene King at £2.7bn, or around 50% higher than its value on Friday night. A frothy premium! | It values Greene King at £2.7bn, or around 50% higher than its value on Friday night. A frothy premium! |
| On an enterprise basis (including debt) the deal is worth £4.6bn. Shares are, understandably, soaring, | On an enterprise basis (including debt) the deal is worth £4.6bn. Shares are, understandably, soaring, |
| Greene King shares up 51% after it receives a recommended cash offer at 850p a share from CK Noble pic.twitter.com/582MCIOvIF | Greene King shares up 51% after it receives a recommended cash offer at 850p a share from CK Noble pic.twitter.com/582MCIOvIF |
| Time for a recap | Time for a recap |
| Storm clouds are massing over Germany today, after its central bank warned that it could be sliding into recession. | Storm clouds are massing over Germany today, after its central bank warned that it could be sliding into recession. |
| The Bundesbank fears that Germany’s economy will contract this quarter, as factories continue to suffer a slump in orders. Brexit uncertainty. | The Bundesbank fears that Germany’s economy will contract this quarter, as factories continue to suffer a slump in orders. Brexit uncertainty. |
| It warned: | It warned: |
| The downturn in the industry has increased somewhat because demand from abroad has fallen.... | The downturn in the industry has increased somewhat because demand from abroad has fallen.... |
| “The main reason for this is the continuing downturn in the industry. | “The main reason for this is the continuing downturn in the industry. |
| “While domestic consumption continues to isolate the economy, the jobs market is already showing signs of weakness and confidence in the services sector is also dropping.” | “While domestic consumption continues to isolate the economy, the jobs market is already showing signs of weakness and confidence in the services sector is also dropping.” |
| The Bundesbank also singled out Brexit, and the fizzling out of the stockpiling rush this year. | The Bundesbank also singled out Brexit, and the fizzling out of the stockpiling rush this year. |
| The warning comes as Berlin faces calls for a new fiscal stimulus to get growth moving. | The warning comes as Berlin faces calls for a new fiscal stimulus to get growth moving. |
| Finance Minister Olaf Scholz has Germany could boost spending by €50bn, if needed, to combat the global slowdown and the US-China trade war. | Finance Minister Olaf Scholz has Germany could boost spending by €50bn, if needed, to combat the global slowdown and the US-China trade war. |
| Stimulus hopes are pushing markets higher. The main European indies have gained around 1%, and Wall Street is rallying too. | Stimulus hopes are pushing markets higher. The main European indies have gained around 1%, and Wall Street is rallying too. |
| Donald Trump has also tried to calm nerves, insisting that America is wealthy and not heading into recession (he’s now engaged in some digital eye-gouging with one-time advisor Anthony Scaramucci) | Donald Trump has also tried to calm nerves, insisting that America is wealthy and not heading into recession (he’s now engaged in some digital eye-gouging with one-time advisor Anthony Scaramucci) |
| Trump lashes out at former top aide, calling him a 'nut job' – live | Trump lashes out at former top aide, calling him a 'nut job' – live |
| Connor Campbell of SpreadEx says: | Connor Campbell of SpreadEx says: |
| Keen to shake off the stink of last week’s havoc-causing recession-warnings, the European indices followed the lead of their Asian counterparts and galloped out of the gate this Monday. | Keen to shake off the stink of last week’s havoc-causing recession-warnings, the European indices followed the lead of their Asian counterparts and galloped out of the gate this Monday. |
| Investors appeared to take to heart Trump’s claim that the US is ‘doing tremendously well’, alongside his reassurances that Washington and China are continuing to talk trade-wise. | Investors appeared to take to heart Trump’s claim that the US is ‘doing tremendously well’, alongside his reassurances that Washington and China are continuing to talk trade-wise. |
| Perhaps more important, however, were the comments of US trade advisor Peter Navarro. He insisted that the ‘Fed will be lowering rates’ – the central bank is in focus this week with July’s meeting minutes on Wednesday and the Jackson Hole Symposium on Thursday – before predicting that the ECB ‘will be engaging in monetary stimulus’ and China will be ‘engaging in fiscal stimulus’. | Perhaps more important, however, were the comments of US trade advisor Peter Navarro. He insisted that the ‘Fed will be lowering rates’ – the central bank is in focus this week with July’s meeting minutes on Wednesday and the Jackson Hole Symposium on Thursday – before predicting that the ECB ‘will be engaging in monetary stimulus’ and China will be ‘engaging in fiscal stimulus’. |
| In the UK, households are growing more pessimistic about their financial prospects in the year ahead. | In the UK, households are growing more pessimistic about their financial prospects in the year ahead. |
| Back in the UK, households are more worried about their economic prospects - and less willing to make major purchases. | Back in the UK, households are more worried about their economic prospects - and less willing to make major purchases. |
| Data firm Markit reported this morning that its UK Household Finance index has hit three-month low. That shows that families are more pessimistic about the state of their finances. | Data firm Markit reported this morning that its UK Household Finance index has hit three-month low. That shows that families are more pessimistic about the state of their finances. |
| The index dropped to 43.7 in August, a decrease from July’s 44.3, and below last year’s average. | The index dropped to 43.7 in August, a decrease from July’s 44.3, and below last year’s average. |
| Financial wellbeing expectations also declined, showing that households are now gloomier about their prospects over the next year. There’s also more anxiety about job prospects, despite wages rising. | Financial wellbeing expectations also declined, showing that households are now gloomier about their prospects over the next year. There’s also more anxiety about job prospects, despite wages rising. |
| The number of households keen to make a major purchase also fell -- in the second-biggest decline since September 2017 [after March, when Brexit put a dampener on things]. | The number of households keen to make a major purchase also fell -- in the second-biggest decline since September 2017 [after March, when Brexit put a dampener on things]. |
| Joe Hayes, economist at IHS Markit, says Brexit uncertainty is a factor: | Joe Hayes, economist at IHS Markit, says Brexit uncertainty is a factor: |
| “Latest survey data continued to highlight a fragile state among UK households towards their financial wellbeing. The Brexit haze, uncertainty over the political environment and the increased possibility of the UK entering recession appear to have dented expectations, which dipped into negative territory following positive readings in both June and July. | “Latest survey data continued to highlight a fragile state among UK households towards their financial wellbeing. The Brexit haze, uncertainty over the political environment and the increased possibility of the UK entering recession appear to have dented expectations, which dipped into negative territory following positive readings in both June and July. |
| “A sharp decline in appetite for major purchases was also signalled, while pessimism towards job security also intensified during August, explaining why UK households have withdrawn into a more risk-averse approach and subsequently tapered their expectations for the coming year. | “A sharp decline in appetite for major purchases was also signalled, while pessimism towards job security also intensified during August, explaining why UK households have withdrawn into a more risk-averse approach and subsequently tapered their expectations for the coming year. |
| “Latest survey data showed a growing number of UK households expecting that the next Bank of England move will be a rate cut, with almost one-in- four stating this view, the largest proportion since October 2016.” | “Latest survey data showed a growing number of UK households expecting that the next Bank of England move will be a rate cut, with almost one-in- four stating this view, the largest proportion since October 2016.” |
| Remember last week’s 800-point tumble on the Dow, when the inverted US yield curve triggered recession anxiety? | Remember last week’s 800-point tumble on the Dow, when the inverted US yield curve triggered recession anxiety? |
| Wednesday’s 3% sell-off was the worst day of 2019, and the fourth biggest points fall ever (although that doesn’t mean a lot). | Wednesday’s 3% sell-off was the worst day of 2019, and the fourth biggest points fall ever (although that doesn’t mean a lot). |
| But it’s but a memory. Those losses have now been recovered - as this morning’s gains add to Friday’s rally. | But it’s but a memory. Those losses have now been recovered - as this morning’s gains add to Friday’s rally. |
| Ding ding! Shares are rising at the start of trading in New York. | Ding ding! Shares are rising at the start of trading in New York. |
| Here’s the early moves | Here’s the early moves |
| Dow Jones Industrial Average: up 329 points or 1.27% at 26,215 points | Dow Jones Industrial Average: up 329 points or 1.27% at 26,215 points |
| S&P 500: up 33.6 points or 1.1% at 2,922 points | S&P 500: up 33.6 points or 1.1% at 2,922 points |
| Nasdaq: up 111 points or 1.4% at 8,007 points | Nasdaq: up 111 points or 1.4% at 8,007 points |
| Investors have moved on from worrying about a recession, and are now hoping that central banks and world leaders might unleash new stimulus plans. Very low interest rates, tax cuts and higher spending should all help stocks. | Investors have moved on from worrying about a recession, and are now hoping that central banks and world leaders might unleash new stimulus plans. Very low interest rates, tax cuts and higher spending should all help stocks. |
| Fears of a possible recession, sooner or later, are still swirling in America today. | Fears of a possible recession, sooner or later, are still swirling in America today. |
| It is bringing out Donald Trump’s tendency to pin the blame elsewhere (and in as many different places as possible). | It is bringing out Donald Trump’s tendency to pin the blame elsewhere (and in as many different places as possible). |
| As our US Politics liveblog explains: | As our US Politics liveblog explains: |
| Where economist and analysts see an interplay between Trump’s policies and the markets, Trump sees a conspiracy involving his own appointees, foreign lands and the US media, reports Maggie Haberman in the New York Times: | Where economist and analysts see an interplay between Trump’s policies and the markets, Trump sees a conspiracy involving his own appointees, foreign lands and the US media, reports Maggie Haberman in the New York Times: |
| He has insisted that his own handpicked Federal Reserve chair, Jerome H Powell, is intentionally acting against him. He has said other countries, including allies, are working to hurt American economic interests. And he has accused the news media of trying to create a recession. | He has insisted that his own handpicked Federal Reserve chair, Jerome H Powell, is intentionally acting against him. He has said other countries, including allies, are working to hurt American economic interests. And he has accused the news media of trying to create a recession. |
| Trump lashes out at former top aide, calling him a 'nut job' – live | Trump lashes out at former top aide, calling him a 'nut job' – live |
| But any unbiased view has to include Trump’s ongoing trade war with China, which has dampened economic demand across the globe. | But any unbiased view has to include Trump’s ongoing trade war with China, which has dampened economic demand across the globe. |
| As the New York Times’ Neil Irwin tweets, this conflict could come back to roost next year - in time for the next presidential election..... | As the New York Times’ Neil Irwin tweets, this conflict could come back to roost next year - in time for the next presidential election..... |
| There won't necessarily be a recession in 2020. But if there is, this is how it will happen.In short: a capital spending downturn spurred by the trade war and global forces, exacerbated by high corporate debt and inadequate government response.https://t.co/yNGkJ9Qtkk | There won't necessarily be a recession in 2020. But if there is, this is how it will happen.In short: a capital spending downturn spurred by the trade war and global forces, exacerbated by high corporate debt and inadequate government response.https://t.co/yNGkJ9Qtkk |
| Back in the UK, there’s a move afoot to cut the stock market opening hours. | Back in the UK, there’s a move afoot to cut the stock market opening hours. |
| The plan could make it easier for working parents to hold down a job at the Stock Exchange. | The plan could make it easier for working parents to hold down a job at the Stock Exchange. |
| Currently trading begins at 8am -- too early to combine with a nursery or breakfast club stop-off, and runs until 4.30pm. | Currently trading begins at 8am -- too early to combine with a nursery or breakfast club stop-off, and runs until 4.30pm. |
| Trimming the trading day, perhaps to a 9.30am kick-off and a 3.30pm final whistle, could help address the City’s gender imbalances. More here. | Trimming the trading day, perhaps to a 9.30am kick-off and a 3.30pm final whistle, could help address the City’s gender imbalances. More here. |
| Call for cut in stock market trading hours to aid working parents | Call for cut in stock market trading hours to aid working parents |