UNITED STATES
Roubini warns on policy
While President Barack Obama deserves credit for a stimulus package that has avoided another depression and for supporting a “growth now” rather than “austerity now” approach, his administration has failed to “anticipate what the economy will need tomorrow,” Nouriel Roubini wrote in the Financial Times. Given the likely path of fiscal policy after next week’s midterm Congressional elections, the US economy will soon experience “serious fiscal drag just when it needs a further boost,” and the administration will be left relying on the Federal Reserve’s expansionary policies, said Roubini, the New York University professor who predicted the global financial crisis. Further quantitative easing will have little effect on US growth next year, and “fiscal policy should be doing some of the lifting to prevent a double dip recession,” he wrote.
AUTOMOBILES
Honda profit doubles
Japan’s Honda Motor said yesterday its net profit more than doubled to ￥135.9 billion (US$1.7 billion) for the three months ending September, from ￥54 billion a year earlier. Sales rose 9.5 percent to ￥2.25 trillion and operating profit soared to ￥163.4 billion from ￥65.5 billion for the quarter. Honda revised upward its net profit forecast for the financial year to March to ￥500 billion from the ￥455 billion projected earlier. The firm is now forecasting a full-year operating profit of ￥500 billion, up from the ￥450 billion predicted earlier, but downgraded its annual sales forecast to ￥9 trillion from its earlier estimate of ￥9.1 trillion.
APPLIANCES
Panasonic profit up fivefold
Panasonic, Japan’s biggest home appliance maker, said yesterday its quarterly profit surged more than fivefold on strong consumer demand despite a strong yen and intensifying competition. Panasonic Corp said yesterday it made a profit of ￥31 billion in the three months through September, up from ￥6.1 billion the year before. Quarterly revenue rose 27 percent year-on-year to ￥2.21 trillion. Panasonic left its forecasts for this fiscal year through March unchanged at a profit of ￥85 billion on sales of ￥8.9 trillion.
AVIATION
BA returns to profit
British Airways (BA) yesterday reported a net profit of ￡107 million (US$170.5 million) for the first six months of its fiscal year, its first interim profit for two years, as revenues rose and non-fuel costs fell. The impressive result, equivalent to 122 million euros, or US$170 million, compared with a net loss of ￡217 million in the six months to September last year, the airline said in a results statement. BA, which is merging with Iberia of Spain, said interim pre-tax earnings hit ￡158 million, compared with a year-earlier loss of ￡292 million.
SPAIN
Jobless rate below 20%
The unemployment rate fell below 20 percent in the third quarter, its first decline since the second quarter of 2007 as the service sector created jobs, the national statistics institute said yesterday. The jobless rate dipped to 19.79 percent in the July-September period, down from 20.09 percent in the previous three months, a 13-year high and the highest level in the 16-nation eurozone, it said in a statement. Last month, the government raised its forecast for the unemployment rate for next year to 19.3 percent from a previous estimate of 18.9 percent.
Japanese technology giant Softbank Group Corp said Tuesday it has sold its stake in Nvidia Corp, raising US$5.8 billion to pour into other investments. It also reported its profit nearly tripled in the first half of this fiscal year from a year earlier. Tokyo-based Softbank said it sold the stake in Silicon Vally-based Nvidia last month, a move that reflects its shift in focus to OpenAI, owner of the artificial intelligence (AI) chatbot ChatGPT. Softbank reported its profit in the April-to-September period soared to about 2.5 trillion yen (about US$13 billion). Its sales for the six month period rose 7.7 percent year-on-year
CRESTING WAVE: Companies are still buying in, but the shivers in the market could be the first signs that the AI wave has peaked and the collapse is upon the world Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported a new monthly record of NT$367.47 billion (US$11.85 billion) in consolidated sales for last month thanks to global demand for artificial intelligence (AI) applications. Last month’s figure represented 16.9 percent annual growth, the slowest pace since February last year. On a monthly basis, sales rose 11 percent. Cumulative sales in the first 10 months of the year grew 33.8 percent year-on-year to NT$3.13 trillion, a record for the same period in the company’s history. However, the slowing growth in monthly sales last month highlights uncertainty over the sustainability of the AI boom even as
AI BOOST: Next year, the cloud and networking product business is expected to remain a key revenue pillar for the company, Hon Hai chairman Young Liu said Manufacturing giant Hon Hai Precision Industry Co (鴻海精密) yesterday posted its best third-quarter profit in the company’s history, backed by strong demand for artificial intelligence (AI) servers. Net profit expanded 17 percent annually to NT$57.67 billion (US$1.86 billion) from NT$44.36 billion, the company said. On a quarterly basis, net profit soared 30 percent from NT$44.36 billion, it said. Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said earnings per share expanded to NT$4.15 from NT$3.55 a year earlier and NT$3.19 in the second quarter. Gross margin improved to 6.35 percent,
BUST FEARS: While a KMT legislator asked if an AI bubble could affect Taiwan, the DGBAS minister said the sector appears on track to continue growing The local property market has cooled down moderately following a series of credit control measures designed to contain speculation, the central bank said yesterday, while remaining tight-lipped about potential rule relaxations. Lawmakers in a meeting of the legislature’s Finance Committee voiced concerns to central bank officials that the credit control measures have adversely affected the government’s tax income and small and medium-sized property developers, with limited positive effects. Housing prices have been climbing since 2016, even when the central bank imposed its first set of control measures in 2020, Chinese Nationalist Party (KMT) Legislator Lo Ting-wei (羅廷瑋) said. “Since the second half of
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