It started with a kiss: Juncker's trade Trump card

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Jean-Claude Juncker was hailed as a hero by European business yesterday for making Donald Trump blink and withdraw a threat to slap punitive import tariffs on EU cars and so escalate a trade war.

The White House deal is one to savour for the European Commission president, two weeks after doubts were raised, notably in Germany, over his fitness for the job after he was taken unwell during a Nato summit where the US president trashed his European allies.

The former Luxembourg premier and 30-year veteran of EU backroom haggling and his aides stressed the limits to what was achieved - well aware of Trump's ability to change tack.

And though Germany cheered that Mr Juncker had bought their carmakers time while talks are launched on freeing up trade, France sounded more cautious on possible new US farm imports.

Yet there was widespread praise among European governments and business for the Commission's strategy, in renewing offers that Trump had dismissed in the past for more free trade talks and sticking to its own threat of retaliation against US products by the world's biggest economic bloc.

There was appreciation too for Mr Juncker's personal charm offensive. A photograph of Mr Juncker planting one of his trademark kisses on Trump's cheek at the White House set the tone, prompting the US president to tweet about "love" across the Atlantic.

"A lot of love went into their preparations," a Brussels diplomat from one EU member state said. "Juncker knows how to tame Trump" wrote Vienna's left-leaning 'Der Standard', calling the deal a "masterpiece".

"The old fox showed that, even from the most difficult of political situations, he can find a diplomatic way out."

Mr Juncker, who has not spared his criticism of Mr Trump in public or private, also clearly thought about how to break the ice and presented the US President with a framed array of photographs showing US war graves in his native Luxembourg - including that of one of Trump's personal heroes, General George Patton.

"Dear Donald, we have history in common," Juncker wrote and later expanded on the theme of shared values. It was all rather different in tone from a comment by Juncker last month when he said Trump had called him a "brutal killer".

Mr Juncker told the 'Politico' news website that talks had been helped "by the fact that we get along well, surprisingly" and that he had spoken his mind - firmly but politely - at last month's G7 summit. "He doesn't like those who beat about the bush," Mr Juncker said.

One senior EU official said Mr Trump's team appeared to have been tempted by offers to increase EU imports of liquefied natural gas and soybeans and co-operate on challenging China's trade practices.

Zuckerberg down $16bn as market 'unlikes' Facebook


Facebook founder and CEO Mark Zuckerberg's fortune took an almost $16bn (€13.7bn) hit yesterday, as it headed for the biggest one-day wipeout in US stock market history, a day after executives forecast years of lower profit margins.

The plunge in Facebook shares dragged global tech stocks lower - even though the social media giant's shares had peaked at an all-time high only this week.

After falling overnight on Wednesday, Facebook shares were down as much as 19.6pc at $174.78 each in early trading yesterday in the US, a decline that would wipe about $124bn off the company's value - or nearly four times the entire market capitalisation of Twitter.

Facebook is one of Ireland's biggest private-sector employers, with close to 7,000 staff in Dublin.

The social media giant has been dogged by a series of privacy and content scandals - the latest this month when an investigation by UK-based Channel 4's 'Dispatches' programme found disturbing posts, including violent videos involving assaults on children, remained on Facebook after being reported by users and reviewed by moderators.

The 'Dispatches' show featured an undercover reporter who went to work at Irish staffing firm CPL Resources, which acts as Facebook's largest centre for UK content moderation.

At least 16 brokerages cut their price targets on Facebook after managers said the cost of improving privacy safeguards, as well as slowing usage in the biggest advertising markets, would hit the company's profit margins for more than two years.

Facebook's second-quarter results were the first sign that a new European privacy law and a string of privacy scandals involving Cambridge Analytica and other app developers are hitting the company's business.

Facebook also warned that the toll would not be offset by revenue growth from emerging markets and the company's Instagram app, which has been less affected by privacy concerns.

Describing the announcements as "bombshells", Baird analysts said the issues were to a large degree "self-inflicted" as Facebook sacrifices its core app monetisation to drive usage.

Of 47 analysts covering Facebook, 43 rate the stock as 'buy', two rate it 'hold' and two rate it 'sell'. Their median target price is $219.30 a share.

Moffett Nathanson analysts called the company's forecast "either the new economic reality of their business model or a very public act of self-immolation to stave off further regulatory pressure".

The $15.8bn in net worth that Zuckerberg stands to lose in the move is equal to the wealth of the world's 81st-richest person, currently Japanese businessman Takemitsu Takizaki, according to Forbes real time data.

Some analysts said Facebook's issues would not be easily resolved.

"Unlike Netflix, whose quarterly shortfall we saw as temporary, here we see an evolution of the story, albeit a portion of which we expected," said Daniel Salmon, analyst at BMO Capital Markets.

Others, however, saw a silver lining in Facebook's emphasis on more engaging content and its promotion of stories on its News Feed, which would support revenue over the longer term.

"Bears win this quarter ... but not the war," said Brent Thill, an analyst with Jefferies.

Singapore's Unemployment Rate Rises In Q2


Singapore's unemployment rate increased marginally in the second quarter as more people entered the labor force, the Ministry of Manpower reported Friday.

The jobless rate rose to a seasonally adjusted 2.1 percent in the second quarter from 2 percent in the first quarter.

Total employment increased even as unemployment rates edged upwards. The ministry said this occurred as more persons entered the labor force to look for work on the back of continued expansion in economic activities.

Total employment rose 7,100 in the second quarter. This was bigger than the increase of 400 seen a quarter ago, reflecting the moderated pace of contractions in construction and manufacturing employment.

Further, data showed that the number of retrenchments increased 2,500 in the second quarter, reflecting on-going restructuring and reorganization.

France's Q2 GDP Growth Steady At 0.2%


France's economy grew at a steady pace in the second quarter, the statistical office Insee said Friday.

Gross domestic product grew 0.2 percent sequentially, the same pace of growth as seen in the second quarter.

The expenditure-side breakdown of GDP showed that household spending dropped slightly by 0.1 percent, reversing a 0.2 percent rise, whereas growth in total gross fixed capital formation accelerated to 0.7 percent from 0.1 percent.

Overall, final domestic demand excluding inventory changes contributed 0.2 points to GDP growth, the same as in the first quarter.

Imports rebounded 1.7 percent after falling 0.3 percent. Likewise, exports climbed 0.6 percent versus a 0.4 percent drop a quarter ago. All in all, foreign trade balance contributed negatively to GDP growth, by 0.3 points, after a neutral contribution in the first quarter.

Conversely, changes in inventories boosted GDP growth, by contributing 0.3 points.

China's Industrial Profit Growth Slows In June


China's industrial profit growth eased in June, data from the National Bureau of Statistics showed Friday.

Industrial profits surged 20.0 percent year-over-year in May, slower than the 21.1 percent increase in April.

During the first half of this year, industrial profits advanced 17.2 percent annually compared with a 16.5 percent rise in the first five months.

Earnings at state-owned firms jumped 31.5 percent and private firm's profits climbed by 10.0 percent in the January to June period.

European Economics Preview: France GDP Data Due


Quarterly national accounts data from France is due on Friday, headlining a light day for the European economic news.

At 1.30 am ET, the statistical office Insee is set to release France's second quarter GDP data. The economy is forecast to grow 0.3 percent in the second quarter, after rising 0.2 percent a quarter ago.

At 2.00 am ET, Destatis is scheduled to issue Germany's foreign trade prices. Import prices are forecast to climb 4.5 percent on year in June, following a 3.2 percent rise in May.

At 2.45 am ET, France's Insee publishes consumer spending data. Economists forecast household spending to rise 0.6 percent on month in June, after gaining 0.9 percent a month ago.

At 3.00 am ET, retail sales from Spain and unemployment from Hungary are due. Spain's retail sales are forecast to grow 0.3 percent on year, in contrast to a 0.3 percent drop in May. Hungary's jobless rate is seen unchanged at 3.7 percent in June.

At 3.30 am ET, Statistics Sweden publishes retail sales and foreign trade figures. Sales are forecast to remain flat on month in June compared to a 0.2 percent rise in May.

At 4.00 am ET, producer prices are due from Italy. Prices had advanced 2.7 percent on year in May.

Japanese Market Rebounds

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The Japanese stock market is rebounding on Friday as a weaker yen, higher crude oil prices and easing worries about trade tensions helped offset the mixed cues overnight from Wall Street.

The benchmark Nikkei 225 Index is adding 78.67 points or 0.35 percent to 22,665.54, off a high of 22,689.98 earlier. Japanese shares ended a choppy session slightly lower on Thursday.

In the auto space, Toyota is advancing almost 1 percent and Honda is adding 0.2 percent. In the banking sector, Mitsubishi UFJ Financial is adding almost 1 percent and Sumitomo Mitsui Financial is up 0.3 percent.

Among oil stocks, Inpex is advancing more than 2 percent and Japan Petroleum is adding more than 1 percent after crude oil prices extended gains to a third session overnight.

The major exporters are mostly lower despite a weaker yen. Panasonic is edging down less than 0.1 percent and Sony is declining 0.2 percent, while Mitsubishi Electric is advancing more than 1 percent.

Canon is down 0.3 percent after the digital camera maker lowered its full-year operating profit and sales forecast.

Among the market's best performers, Fuji Electric is gaining almost 5 percent and Kao Corp. is rising almost 3 percent, while Concordia Financial and Nisshin Seifun are higher by more than 2 percent each.

On the flip side, Nomura Holdings is losing almost 5 percent after reporting a 91 percent fall in its profit for the June quarter. Chughai Pharmaceutical is down more than 2 percent.

In economic news, the Ministry of Internal Affairs and Communications said that consumer prices in the Tokyo area advanced an annual 0.9 percent on year in July. That exceeded expectations for an increase of 0.7 percent and was up from 0.6 percent in June.

Core CPI, which excludes volatile food costs, advanced an annual 0.8 percent. That also exceeded expectations for 0.7 percent, which would have been unchanged from the previous month.

In the currency market, the U.S. dollar is trading in the upper 110 yen-range on Friday.

On Wall Street, stocks closed mixed on Thursday as a notable decline by Facebook weighed on the Nasdaq after the social media giant reported better than expected second-quarter earnings but weaker than expected revenues. Other stocks benefited from news President Donald Trump and European Commission president Jean-Claude Juncker agreed to work towards eliminating trade barriers on industrial goods.

While the Dow climbed 112.97 points or 0.4 percent to 25,527.07, the Nasdaq slumped 80.05 points or 1 percent to 7,852.18 and the S&P 500 dropped 8.63 points or 0.3 percent to 2,837.44.

Meanwhile, European stocks moved higher on Thursday. While the U.K.'s FTSE 100 Index inched up by 0.1 percent, the French CAC 40 Index jumped by 1 percent and the German DAX Index surged up by 1.8 percent.

Crude oil prices climbed higher on Thursday, extending gains for a third successive session. WTI crude for September ended up $0.31 or 0.4 percent at $69.61 a barrel on the New York Mercantile Exchange.

Cautious Trading Sees Sensex & Nifty Moving Sideways


Indian shares were moving sideways in early trade on Wednesday as oil prices spiked again and investors awaited quarterly earnings results from many prominent companies later in the day.

The benchmark BSE Sensex was up 0.12 percent at 36,869 after rising modestly to close at a record high the previous day. The broader Nifty index was marginally higher at 11,139.35.

Asian Paints dropped 2.4 percent despite posting better-than-expected quarterly results.

ICICI Prudential Life Insurance rallied 2.5 percent even as it reported a 31 percent decline in quarterly profit because of new business strain from the protection business.

Mahindra & Mahindra slid half a percent after foraying into intermediate vehicle segment.

Music Broadcast jumped 2.4 percent after announcing a share buyback.

Andhra Bank advanced 1.4 percent after receiving capital infusion from the government.

Oil India added 0.8 percent after it signed a joint venture pact for construction of grid pipelines in eight North-East states.

HDFC gained 0.8 percent on fund raising reports.