The Sino-US trade dispute is beginning to translate into real-life numbers and is hitting China’s retail sales and industrial output.
The country’s November numbers came in below expectation and although they are still growing at a rate that Europe and the US would consider remarkable, they are now moving at the slowest pace since 2003.
Chinese markets reacted immediately with declines in the Shanghai Composite, the Hong Kong’s Hang Seng and a weakening in the yuan. The country’s government has already responded with comments that it will make sure domestic economic growth continues apace, prompting expectations that there will be further stimulus measures and potentially rate cuts.
Dow futures lost 200 point during the morning while European gauges also weakened. The German DAX which is the most sensitive to the Chinese economy lost 1.49% while the FTSE slid 1.19%.
LVMH snaps up London hotel chain
The protracted and unresolved Brexit issues are paralysing a number of UK companies into inaction, particularly in the property, consumer goods and travel sectors, causing them to lose profits and making them a target for mergers and acquisitions.
One of them, the London-based high-end hotel group Belmond, was snapped up this week by French luxury goods firm LVMH Moet Hennessy Louis Vuitton (LON:0HAU). Given the current circumstances in the UK LVMH managed to buy Belmond for $2.6 billion while the company’s value including debt is closer to $3.2 billion.
Over the coming months and throughout the early part of next year there are likely to be more such deals as UK firms continue to lose value.
Euro weakens as Eurozone PMI declines
The common currency lost ground this morning after the Eurozone PMI data showed another sign of decline. The euro traded at $1.1294 against the dollar but held nearly flat against the pound as sterling remains under pressure from unresolved Brexit issues. While PM Theresa May managed to come up for air after winning a no-confidence vote late Wednesday the Brexit saga now continues with the EU refusing to yield to her attempts to renegotiate the current deal.
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