Early Edition September 04 2008 at 04:34 AM Chi-Chu Tschang and Harry Maurer
Asian Shares Hit Two-year Low, Markets Prepare For Rate Announcements
Asian shares dropped to a two-year low on Sept. 4 as further signs of a slowing global economy hit export-dependent sectors such as technology. Previous economic concerns primarily focused on the U.S. and Europe now are spreading to emerging economies, which have been highly dependent on exports to keep their economies ticking over.
The markets also are expecting a range of monetary announcements over the next few days, with investors betting the European Central Bank (ECB) will cut rates this year -- in contrast to the U.S. Federal Reserve, which is set to tighten monetary policy over the next 12 months. Ahead of the ECB interest rate announcement on Sept. 4, the dollar remains near an eight-month high against the euro.
Source: Reuters
Rising costs hit oil companies' profits
Soaring costs have offset rises in oil prices to hit oil companies' profitability, according to an industry study. The companies' return on capital from their oil and gas production fell to 19%, 3.5 percentage points lower than in 2006, according to the study from IHS Herold, a research firm, and Harrison Lovegrove, a corporate finance firm owned by Standard Chartered bank.
Source: Financial Times
Airlines face $5.2 billion loss in 2008
The global airline industry could face a $5.2 billion world-wide loss this year and a further $4.1 billion loss in 2009, according to the International Air Transport Association. Slowing passenger-traffic growth and high fuel prices have created a perfect storm for the sector, and many airlines are at risk of going bankrupt as the industry heads into autumn, typically its weakest season for generating revenue.
Source: Wall Street Journal
Sarah Palin talks tough, McCain chosen as Republican nominee
Sarah Palin, the presumptive Republican vice-presidential nominee, criticized restrictions on oil drilling and targeted Democratic nominee Barack Obama in a speech to the Republican Convention on Sept. 3. Right after her speech, convention delegates cast their votes for U.S. Senator John McCain, formally giving him the Republican party's presidential nomination for the November election.
Source: Financial Times
JPMorgan faces federal scrutiny over municipal swaps market
JPMorgan Chase is to stop selling interest-rate swaps to government borrowers in the $2.6 trillion U.S. municipal bond market roiled by an antitrust probe and the near bankruptcy of the U.S. state of Alabama's most-populous county. At least seven former JPMorgan bankers are under scrutiny in a U.S. Department of Justice criminal investigation over whether banks conspired to overcharge local governments on swaps and other derivatives.
Source: Bloomberg
Boeing workers to strike, but postpone walkout
U.S. aerospace manufacturer Boeing's largest labor union voted to strike on Sept. 3, but agreed to postpone a walkout for 48 hours after federal mediators urged both sides to return to the bargaining table in an effort to reach an agreement. Officials from Boeing and the International Association of Machinists and Aerospace Workers said they were willing to try negotiating with the help of a mediator.
Source: Wall Street Journal
Hurricane Gustav evacuees face tough times
Hundreds of thousands of Hurricane Gustav evacuees in the southern part of the U.S. returned home on Sept. 3 only to face widespread power outages, food shortages, and limited medical care. Officials along the Gulf Coast had begun lifting evacuation orders even as they expressed serious reservations about conditions that the returning residents would face.
Source: Washington Post
Russians buy U.S. steel producer
Russian steel maker Novolipetsk Steel has agreed to buy U.S. steel producer Beta Steel in a $400 million cash deal to expand its presence in North America. Novolipetsk -- Russia's fourth-largest steel maker by volume -- said on Sept. 4 it had signed an agreement to buy the Indiana-based company from a group of private shareholders.
Source: Reuters
Nestle exec tipped as next Unilever CEO
Unilever -- the world's second-largest food and detergent maker -- has hired Paul Polman from its biggest European rival Nestle to succeed Chief Executive Officer Patrick Cescau as the company struggles with slowing consumer spending. Polman is the first CEO hired from outside the company in Unilever's 78-year history.
Source: Bloomberg
Retailer H&M bucks economic downturn
With the credit crunch in full swing, retailers around the world are slashing prices and shuttering shops. But Sweden's Hennes & Mauritz, a pioneer of cheap but chic fashion, is managing to buck the trend: opening stores, entering new markets, and adding new brands.
Source: BusinessWeek
Staples suffers from slowing consumer spending
Staples -- the world's largest office products retailer -- on Sept. 3 said quarterly profit fell as customers cut back on spending. Earnings declined to $150.2 million in the second quarter from $178.8 million over the same period in 2007. Staples said savings from its $2.65 billion acquisition of Dutch rival Corporate Express were less than some analysts had expected.
Source: New York Times
Microsoft to cut Xbox prices
Microsoft is taking a page from Nintendo Wii's strategy in its battle to give its Xbox 360 video-console an advantage over rival products from Nintendo and Sony. BusinessWeek has learned Microsoft will cut prices on all three of its Xbox 360 models in the U.S. on Sept. 5, following a similar cut in Japan on Sept. 1. Microsoft also is repositioning the Xbox to make it more appealing to casual gamers.
Source: BusinessWeek
Conversation of the Day: Another Wii Lawsuit
Reader Oli Writes:"Patent law in the U.S. goes way too far. Look at the creation of intellectual-property rights companies, which buy up patents and then go find someone to sue."
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