Every week at theCurrent we bring you the biggest business stories from around the globe. This week: the Twitter founder is back, IMF lowers forecast, US trade deficit, losses at Deutsche Bank, Canadian manufacturing down but loonie up, and British steel cuts.
Twitter founder back as CEO
Jack Dorsey was reappointed as Twitter’s CEO. Dorsey helped found Twitter but was replaced as CEO 7 years ago. Following Dick Costolo’s resignation this past summer Dorsey was brought back to operate in an interim capacity. Dorsey will try to turn around a string of poor quarterly earnings at Twitter but will also retain his role as Chief Executive of Square, a mobile payment startup.
IMF lowers forecast
The IMF lowered its forecast for global economic growth to just 3.1%. If the projection proves correct then it will be the worst global economic performance since 2009. Faltering recoveries in Japan and the eurozone are the primary causes for the recent recalculation. Developing countries, however, will be hit hardest, particularly commodity-oriented countries like Brazil and Russia whose economies will contract by 3% and 3.8% respectively.
US trade deficit
America’s trade deficit increased, meaning that the country is importing even more than it is exporting. A strong USD has increased the cost of American exports which have dropped to their lowest level since 2012. German exports have also fallen recently, with a 5.2% drop in August alone. The sudden fall is linked to falling demand in China – Germany’s 4th largest export market.
Deutsche Bank loss
Deutsche Bank surprised markets by announcing that it was anticipating a €6.2bn loss. The loss is being attributed to writedowns and accounting charges. Consequently the bank may not be able to pay a shareholder dividend. Goldman Sachs, meanwhile has posted a drop in profits of almost 33%, while Citigroup has enjoyed a 50% increase in profits over the same period last quarter.
Canadian manufacturing down
Canadian manufacturing fell by 0.2% to $52.1bn in August following three consecutive months of growth. The largest losses were in oil and coal production and aerospace parts. Motor vehicle assembly, in contrast, was up 6.7% to $5.7bn – the highest level since 2007.
Loonie on the rise
The loonie rebounded to 77.75 cents US on Thursday. Speculation that the Fed was unlikely to raise rates before next year helped boost the loonie as investors turned away from the greenback in search of higher returns elsewhere.
British steel cuts
Tata Steel will announce 1200 job cuts next week in one of the UK’s largest steel plants. The manufacturing sector in Britain has been on a long decline. Tata employs roughly 17 000 people but may lay off more workers across the UK as it restructures. The decision also follows SSI’s closure of its blast furnace and coke ovens in Redcar. The closures and the perilous position of the steel industry in Britain and around the world has attracted the attention of British MPs. China’s slowdown has not helped the industry and unions in Britain are calling for drastic measures to save the industry.
Stay informed. Stay Current.