Globescan: End Of An Era
The US economy grew faster than initially estimated in the third quarter, notching its best performance in two years, buoyed by strong consumer spending and a surge in soybean exports
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Fidel Castro, the Cuban revolutionary who built a communist state on the doorstep of the United States and for five decades defied US efforts to topple him, died on 28 November, 2016. He was 90. Castro had been in poor health since an intestinal ailment nearly killed him in 2006. He formally ceded power to his younger brother, Raul, two years later. A mix of tributes and condemnation poured in from allies and foes around the world.
The US economy grew faster than initially estimated in the third quarter, notching its best performance in two years, buoyed by strong consumer spending and a surge in soybean exports. In a separate report, US home prices rose 5.5 per cent in the year to September, meaning house prices overall have now fully recovered from their plunge during the 2008 financial crisis. A third report showed US consumer confidence rebounded in November to its highest level in nine years. US gross domestic product increased at a 3.2 per cent annual rate instead of the previously reported 2.9 percent pace, the Commerce Department said in its second GDP estimate.
A former Citigroup financial adviser filed a lawsuit accusing the bank of running a “boys’ club” that favoured men over women, treating her as a “glorified secretary”, and firing her in retaliation for whistleblowing activity. Erin Daly is seeking double back pay, unpaid bonuses and punitive damages over the bank’s alleged harassment, hostile work environment and unlawful retaliation, according to her lawsuit filed in Manhattan federal court. The resident of Manhattan’s Upper West side said Citigroup let her go less than two weeks after she complained that her manager demanded inside information from her work on restricted stock offerings, so that he could pass it to favoured clients.
Daly said she also filed a complaint with the US Equal Employment Opportunity Commission, and plans to add federal discrimination claims against the fourth-largest US bank.
The Big Monday
Shoppers spent $3.45 billion on Cyber Monday on Samsung 4K TVs, PlayStation 4s and Barbie dolls among other products, marking the largest online sales day in US history. The data compiled by Adobe Digital Insights, easily surpassed prior estimates, and dismissed fears that strong web sales during the Thanksgiving weekend would hurt sales on Cyber Monday the busiest day of the year for internet shopping historically. It also underscored the broader shift to shopping online, which is making up for slower spending in stores. Cyber Monday sales jumped 12.1 per cent year-over-year and surpassed initial expectations that called for total sales of $3.36 billion, according to Adobe Digital Insights.
Delta Air Lines imposed a lifetime ban on a passenger who disrupted a flight by yelling statements in favour of President-elect Donald Trump and making derogatory comments aimed at women who supported Democratic candidate Hillary Clinton. “This individual displayed behaviour that was loud, rude and disrespectful to his fellow customers,”Delta CEO Ed Bastian said in a letter. “He will never again be allowed on a Delta plane. “The man on Flight 248 from Atlanta to Allentown, Pennsylvania, shouted and clapped “Donald Trump, baby,” before telling his fellow passengers “He’s your president” and “If you don’t like it, too bad.” He also swore at them, according to a video.
The European Union has set provisional import duties on two types of steel coming into the bloc from China to counter what it says are unfairly low prices, in a move likely to anger Beijing. The duties are the latest in a line of trade defenses set up against Chinese steel imports over the past two years to counter what EU steel producers say is a flood of steel sold at a loss due to Chinese overcapacity.
Some 5,000 jobs have been axed in the British steel industry in the last year, as it struggles to compete with cheap Chinese imports. China, the source of 50 per cent of the world’s steel, has said the problem is a global one.
Uber defended its business model in Europe’s highest court, saying its service had made it easier for people to get around and cut pollution as it fights a case which could leave app-based startups facing tougher regulation. The ride-hailing app, which expanded into Europe five years ago, has come under attack from established taxi companies and some EU countries because it is not bound by strict local licensing which apply to some of its competitors. Uber’s dispute with Barcelona’s main taxi operator, which in 2014 accused it of running an illegal taxi service via its UberPOP service, is seen as a landmark case.
Ford wants to raise profitability in Europe by adding higher-margin versions of the Fiesta subcompact, its best-selling regional model, the carmaker’s top European executive said. High-volume carmakers such as Ford have for several years been squeezed in a downmarket expansion by luxury rivals including Daimler’s Mercedes-Benz and Volkswagen’s Audi. But Ford, which already targets premium buyers with higher-end versions of some of its larger cars under the Vignale label, now wants to take further advantage of that opportunity too. The next-generation Fiesta, unveiled in front of 2,500 staff, dealers and reporters at its Cologne plant, will come with advanced safety features and cater to more customers with new crossover and upscale variants.
The European Central Bank is ready to temporarily step up purchases of Italian government bonds if the result of a crucial referendum sharply drives up borrowing costs for the euro zone’s largest debtor, central bank sources said. Italian government debt and bank shares have sold off ahead of the 4 December referendum on constitutional reforms because of the risk of political turmoil. Opinion polls suggest the ‘No’ camp is heading for victory, which could force out PM Matteo Renzi in the latest upheaval against the ruling establishment. The ECB could use its $84.8 billion monthly bond-buying programme to counter any immediate spike in bond yields after the vote.
Tech giant Samsung Electronics, under pressure from shareholders to improve investor returns, said it will consider creating a holding company in what would be the biggest shake-up in its 47-year history. The move and a plan to raise dividends come after US hedge fund Elliott Management in October called for the South Korean firm to split itself into a holding vehicle and an operating company. However, the world’s top maker of smartphones, memory chips and televisions, said it was “absolutely neutral” about whether to proceed and provided little detail on the potential restructuring, underwhelming investors.
Hydro and Wind
China will spend at least 1.2 trillion yuan ($174 billion) on hydro and wind energy infrastructure between 2016 and 2020, the National Energy Administration (NEA) said in blueprint document for the two industries. NEA said construction of new wind farms would provide about 300,000 new jobs by 2020. In addition, the country aims to have a market-based subsidy system for the wind industry.
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