Business Maverick

Business Maverick

Thursday, October 24, Five Things You Need to Know to Start Your Day

Tesla Inc. vehicles to be shipped sit in a parking lot at the Port Of San Francisco in San Francisco, California, U.S., on Thursday, Feb. 7, 2019. Tesla Inc.is loading as many Model 3 sedans as it can onto vessels destined for China ahead of March 1, when a trade-war truce between presidentsDonald TrumpandXi Jinpingis scheduled to expire.Photographer: David Paul Morris/Bloomberg

Western brands fear politically fueled boycotts by China, earnings season results hit, and Trump lifts sanctions on Turkey. Here are some of the things people in markets are talking about today.

Five Things You Need to Know to Start Your Day

By Sybilla Gross

Word Count: 793
(Bloomberg) —Western brands fear politically fueled boycotts by China, earnings season results hit, and Trump lifts sanctions on Turkey. Here are some of the things people in markets are talking about today.

Boycott Fears

A wave of nationalism sweeping the Chinese mainland could be bad news for Western brands. Even before Chinese retailers stripped NBA merchandise from their shelves in retaliation for a league executive’s public support of pro-democracy protesters in Hong Kong, a yearlong trade war has stoked a surge in Chinese nationalism and anti-American sentiment that’s increasingly bleeding into marketing decisions and consumer buying habits. Companies such as Apple have seen market share in the country dwindle, while American brands including Coach and Calvin Klein have rushed to issue public apologies after some of their products ran afoul of Beijing’s political sensitivities. Even Disney’s CEO said he won’t engage in Chinese political talk. Even if a trade truce is reached, marketing executives say that lasting brand damage has been done.

’Tis the Season

We’re well and truly in the midst of U.S. earnings season, with tech company reports stealing everyone’s attention. Microsoft posted a 14% jump in revenue that topped analysts’ projections, but Azure fell short: Sales rose 59%, compared with 64% in the previous period. EBay also missed expectations, suggesting last month’s departure of Chief Executive Officer Devin Wenig, who clashed with activist investors, could cloud the fourth quarter. PayPal, on the other hand, reported quarterly earnings that exceeded analysts’ estimates, sparking a surge in the stock — but the company acknowledged that EBay’s lost business will have an impact on next year’s performance. But perhaps the biggest surprise was Tesla: The electric-car maker surged in late trading after reining in expenses and posting its first profit in almost a year — a shock almost no one saw coming.

Markets Boost

Stocks in Asia looked primed for gains following an advance in U.S. equities, as earnings provided some optimism against a backdrop of concern for global economic growth. Equity futures in Japan, Hong Kong and Australia advanced, while the S&P 500 earlier added 0.3% and closed above the 3,000 level. While the picture isn’t uniformly positive, earnings season is dampening some fears that corporate outlooks are souring. About 80% of companies on the S&P 500 have topped expectations for profits, though Texas Instruments and Caterpillar both showed how uncertainty stemming from trade tensions and global economic weakness are making customers nervous. Treasuries yields rose off the lows of the session, while the dollar traded flat, and oil surged.

Sanctioned No More

President Donald Trump said he is lifting recently imposed sanctions against Turkey after the country complied with a cease-fire agreement with Kurdish forces in Syria, but warned the penalties would be reimposed if Turkey resumes attacks on the Kurds. The U.S. originally imposed sanctions on Turkey on Oct. 14, including penalties against three government ministers. Now, Trump’s decision on sanctions — and the assertion that his approach on Turkey was a success — is likely to reignite the bipartisan criticism that came to a head after the administration’s decision to withdraw forces from northern Syria, exposing U.S.-allied Kurdish fighters to attack by Turkey. This was so problematic, in part, because Kurds fought alongside American troops against Islamic State in Syria, but Trump has repeated his stance that the U.S. shouldn’t police the region.

On Hold

The European Union left Boris Johnson hanging on Wednesday night as officials in Brussels debated whether to grant him a third extension to the Brexit process. EU ambassadors meeting in the Belgian capital agreed that they should accept the British prime minister’s request for more time, but couldn’t settle on how long he will get, according to officials familiar with the discussions. The French are pushing for a tight deadline of Nov. 15 while many other countries want to give the U.K. the three months it has asked for. Ambassadors resolved to reach a decision when they meet again Friday. Meanwhile, if you missed the Brexit rally there may still be a few ways to claim a share of the spoils.

What We’ve Been Reading

This is what’s caught our eye over the past 24 hours.

Gallery

Please peer review 3 community comments before your comment can be posted

X

This article is free to read.

Sign up for free or sign in to continue reading.

Unlike our competitors, we don’t force you to pay to read the news but we do need your email address to make your experience better.


Nearly there! Create a password to finish signing up with us:

Please enter your password or get a sign in link if you’ve forgotten

Open Sesame! Thanks for signing up.

We would like our readers to start paying for Daily Maverick...

…but we are not going to force you to. Over 10 million users come to us each month for the news. We have not put it behind a paywall because the truth should not be a luxury.

Instead we ask our readers who can afford to contribute, even a small amount each month, to do so.

If you appreciate it and want to see us keep going then please consider contributing whatever you can.

Support Daily Maverick→
Payment options

Become a Maverick Insider

This could have been a paywall

On another site this would have been a paywall. Maverick Insider keeps our content free for all.

Become an Insider

Every seed of hope will one day sprout.

South African citizens throughout the country are standing up for our human rights. Stay informed, connected and inspired by our weekly FREE Maverick Citizen newsletter.