European stocks fell to the lowest in three months this week on concerns that banks would post more losses and a US manufacturing index provided the latest evidence the world's largest economy is slipping into recession.
UBS AG and Deutsche Bank AG dropped after Goldman Sachs Group Inc forecast more writedowns and Lehman Brothers Holdings Inc cut earnings estimates for the banks. Groupe Danone SA, the world’s largest yogurt maker, and Unilever led losses among the food and beverage industry after UBS recommended selling the shares. Trinity Mirror PLC declined as Morgan Stanley downgraded European media stocks.
The Dow Jones STOXX 600 Index dropped 3.5 percent to 295.08, bringing the total fall for the past three weeks to 8.4 percent, ending the week at its lowest since March 17. The STOXX 50 retreated 3.3 percent and the Euro STOXX 50 slid 3.8 percent.
“It will take quite some time before we see an improvement in the banks and in the earnings situation,” Petra von Kerssenbrock, an analyst at Commerzbank AG in Frankfurt, said in a Bloomberg Television interview.
“It’s too early to invest” in financial stocks, she added.
National benchmark indexes retreated in 16 of the 18 western European markets. Germany’s DAX Index fell 2.8 percent and France’s CAC 40 lost 3.7 percent. The UK’s FTSE 100 slipped 3.1 percent.
The benchmark STOXX 600 has fallen 19 percent this year on concerns that credit-related losses approaching US$400 billion, record oil prices and higher inflation will push the US economy into a recession.
The next 18 months “will be a very testing time,” Julian Chillingworth, London-based chief investment officer at Rathbone Brothers PLC said in a Bloomberg Television interview. “It’s really like the early ‘90s. I don’t think the depth of the slowdown will be as deep but it could be as long.”
MILESTONE: The foreign minister called the signing ‘a major step forward in US-Taiwan relations,’ while the Presidential Office said it was a symbol of the nations’ shared values US President Donald Trump on Tuesday signed into law the Taiwan Assurance Implementation Act, which requires the US Department of State to regularly review and update guidelines governing official US interactions with Taiwan. The new law is an amendment to the Taiwan Assurance Act of 2020 focused on reviewing guidelines on US interactions with Taiwan. Previously, the state department was required to conduct a one-time review of its guidance governing relations with Taiwan, but under the new bill, the agency must conduct a review “not less than every five years.” It must then submit an updated report based on its findings “not later
The Presidential Office today thanked the US for enacting the Taiwan Assurance Implementation Act, which requires the US Department of State to regularly review and update guidelines governing official US interactions with Taiwan. The new law, signed by US President Donald Trump yesterday, is an amendment to the Taiwan Assurance Act of 2020 focused on reviewing guidelines on US interactions with Taiwan. Previously, the department was required to conduct a one-time review of its guidance governing relations with Taiwan, but under the new bill, the agency must conduct such a review "not less than every five years." It must then submit an updated
STAYING ALERT: China this week deployed its largest maritime show of force to date in the region, prompting concern in Taipei and Tokyo, which Beijing has brushed off Deterring conflict over Taiwan is a priority, the White House said in its National Security Strategy published yesterday, which also called on Japan and South Korea to increase their defense spending to help protect the first island chain. Taiwan is strategically positioned between Northeast and Southeast Asia, and provides direct access to the second island chain, with one-third of global shipping passing through the South China Sea, the report said. Given the implications for the US economy, along with Taiwan’s dominance in semiconductors, “deterring a conflict over Taiwan, ideally by preserving military overmatch, is a priority,” it said. However, the strategy also reiterated
CROSS-STRAIT COLLABORATION: The new KMT chairwoman expressed interest in meeting the Chinese president from the start, but she’ll have to pay to get in Beijing allegedly agreed to let Chinese Nationalist Party (KMT) Chairwoman Cheng Li-wun (鄭麗文) meet with Chinese President Xi Jinping (習近平) around the Lunar New Year holiday next year on three conditions, including that the KMT block Taiwan’s arms purchases, a source said yesterday. Cheng has expressed interest in meeting Xi since she won the KMT’s chairmanship election in October. A source, speaking on condition of anonymity, said a consensus on a meeting was allegedly reached after two KMT vice chairmen visited China’s Taiwan Affairs Office Director Song Tao (宋濤) in China last month. Beijing allegedly gave the KMT three conditions it had to
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