Caterpillar Inc manufactures huge yellow bulldozers. Nvidia Corp makes minuscule computer chips. Their products have little in common, but their earnings on Monday pointed to the same direction: Demand in China is slowing down for a widening range of goods.
The world’s second-largest economy, which contributes about one-third of global growth, has been weakening for years after averaging more than 10 percent growth for three decades through 2010.
The pace of expansion cooled to 6.6 percent last year, the slowest since 1990, while retail sales grew 9 percent, the least since 2003.
Since Apple Inc early this month shook investors with a warning, a picture is starting to emerge on where the tempering of the US$12.2 trillion economy is to hurt in the coming year.
It includes Stanley Black & Decker Inc’s tools, PPG Industries Inc’s automotive coatings, Intel Corp’s processors and Trinseo SA’s synthetic rubber tires.
Nvidia and Caterpillar are the latest examples of this anecdotal evidence. Here is a rundown of what we have heard so far from US, European and Asian businesses:
Caterpillar, an industry bellwether, on Monday sent a gloomy signal when it posted its biggest quarterly profit shortfall in a decade, and provided a yearly forecast that trailed some of Wall Street’s estimates.
Sales of excavators are to be flat year-on-year in China, the Deerfield, Illinois-based company said.
Shares of Japanese rivals Komatsu Ltd and Hitachi Construction Machinery Co each lost more than 4 percent in Tokyo yesterday. In China, Sany Heavy Industry Co (三一重工) and other heavy equipment makers fell.
Stanley Black & Decker CEO Jim Loree was not shy about raising the alarm bells on China last week, saying it was facing slowing economic growth there, along with most of the rest of the world.
The previous week, paint maker PPG talked about “sluggish industrial activity in China” among pressures that the company would hit the first half of the year.
Santa Clara, California-based Intel Corp, whose processors are the main component in most of the world’s personal computers and servers, cited softness in China among the reasons for its lower-than-expected full-year forecast last week.
Nvidia, the biggest maker of chips for computer graphics cards, on Monday echoed those comments, saying that “deteriorating macroeconomic conditions, particularly in China, impacted consumer demand” for its products.
Nidec Corp, a Japanese maker of precision motors used in computer drives, cut its profit outlook by 26 percent for the year ending on March 31, blaming it on the US-China trade war. It reported a 43 percent drop in operating profit for the quarter through last month.
Samsung Electronics Co’s quarterly profit and revenue missed estimates on sputtering demand for memory chips during the last three months of last year, the same period Apple saw anemic sales in China.
The South Korean company has been losing share for its smartphones for years in China, but the slowdown there is now threatening to hurt its crucial chips business.
Yesterday in Japan, Alps Alpine Co, a supplier of electronic parts to automakers and Apple, cut its operating profit forecast for the year by 24 percent, blaming the US-China trade dispute and Brexit.
Softbank Group Corp plans to keep a stake in the chip designer Arm Ltd, even if it sells a partial interest to Nvidia Corp, the Nikkei reported. The companies are negotiating terms, the newspaper reported, citing sources. Softbank might take a stake in Nvidia after it buys Arm, the report said. Nvidia and Arm might also merge through a share swap, and Softbank would become a major shareholder in the combined company, it said. The two parties aim to reach a deal in the next few weeks, the sources said, asking not to be identified because the information is private. Nvidia is the
END TO SPECULATION: The hotel’s management contract has been extended, despite reports that it wanted to end its alliance with Hyatt Hotels over a deal with Riant Capital Singapore-based Hong Leong Hotel Development Ltd (豐隆大飯店股份) yesterday said it has extended a management contract to ensure the continued presence of the Grand Hyatt brand in Taipei, ending rumors that the two sides were parting ways. “We are pleased Hyatt is able to come to terms on the extension of the management contract of Grand Hyatt Taipei,” said Kwek Leng Beng (郭令明), executive chairman of City Developments Ltd (城市發展) and Millennium & Copthorne Hotels Ltd (千禧國敦酒店). Hong Leong Hotel Development is a subsidiary of Millennium, and both fall under the Hong Leong Group (豐隆集團). The Grand Hyatt Taipei (台北君悅大飯店), owned and built by
Gold surged to a fresh record on Friday, fueled by US dollar weakness and low interest rates, while silver headed for its best month since 1979. Spot bullion is up more than 10 percent this month, as US real yields lingered near record lows. While the ferocity of rallies in gold and silver cooled in the middle of the week, most market watchers predict there might be more gains ahead. Both metals have added about 30 percent this year, with gold and silver exchange-traded funds boosting holdings to a record, as concern about the fallout from the COVID-19 pandemic fuels demand for
MOVING FROM CHINA? The article did not name the company, but Foxconn, Wistron and Pegatron were among firms chosen for a production-linked incentive plan in India An Apple Inc vendor is looking at shifting six production lines to India from China, which could result in US$5 billion of iPhone exports from the South Asian nation, the Times of India reported, citing people familiar with the matter who it did not identify. The establishment of the facility would create about 55,000 jobs over about a year, the newspaper reported, not naming the Apple vendor. It would also cater to the domestic market and expand operations to include tablets and laptops, the newspaper reported. Samsung Electronics Co and Apple’s assembly partners are among 22 companies that have pledged 110 billion