ECONOMY
Chinese services PMI slips
A gauge of China’s services industry expanded at the weakest pace in six months as a slowdown spreads to areas of the economy that had been outperforming the nation’s flagging factories and sagging property market. The Services Purchasing Managers’ Index (PMI) from HSBC Holdings PLC and Markit Economics for last month was at 51.8, down from 53.4 a month earlier, data showed yesterday. Numbers above 50 indicate expansion. The final reading of last month’s PMI for manufacturing from HSBC and Markit was 49.7, a separate report showed on Monday.
AUTOMAKERS
US sales surged last month
US automakers on Tuesday reported large gains in domestic sales last month, as the improving economy and low fuel prices kept demand high for larger vehicles. About 1.15 million cars and light trucks were sold in the first month of the year, an increase of 9.3 percent from a year ago and the best monthly performance since 2006, industry consultant Autodata reported. The blazing performance came after a banner year for US sales last year. At more than 16.5 million vehicles, it was the auto industry’s best year since 2006, just before the US economy began sinking into crisis and recession.
COMMODITIES
Iron market said in flux
The global iron ore market is in a period of transition as high-cost supplies are displaced by cheaper output, according to Rio Tinto Group, which highlighted the potential for significant volatility. There have already been significant cuts to production from mines in China, as well as to other higher-cost seaborne output, Alan Smith, Rio’s Asia president for iron ore, told a conference in Beijing yesterday, according to a copy of his speech. Crude steel production in China, the world’s largest producer, will keep rising, expanding from 823 million tonnes last year to 1 billion tonnes by 2030, Smith said.
UNITED STATES
Smucker enters pet foods
US food maker the JM Smucker Co on Tuesday said that it is buying pet food maker Big Heart Pet Brands in a US$3.2 billion cash-and-stock deal, giving it a presence in the fast-growing US$21 billion pet food industry. Big Heart Pet Brands, based in San Francisco, owns brands such as Meow Mix, Milk-Bone, Kibbles ‘n Bits and Pup-Peroni. The Orville, Ohio-based Smucker, whose brands include pantry staples such as Crisco shortening, Jif peanut butter and Folgers coffee products, says that the acquisition will add US$2.4 billion in sales for its fiscal year 2016, with an estimated growth rate of 4 to 5 percent over the next few years. It had revenue of US$5.61 billion in its last fiscal year.
RETAILERS
Macy’s upbeat amid merger
Macy’s Inc is raising its outlook for its annual profit as the department store chain announced it has signed an agreement to buy Bluemercury Inc, an upscale beauty retailer. The Cincinnati-based retailer also said that Macy’s president Jeff Gennette will be concentrating more of his time on executing broader growth strategies and be relinquishing his day-to-day responsibilities as Macy’s chief merchandise officer. Gennette was named president in May last year. The change in responsibilities increases speculation that he will be the heir apparent to CEO and chairman Terry Lundgren, observers said.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure
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