Market news

LONDON, Jan 3 (Reuters) – Apple’s first revenue warning in nearly 12 years sent European shares sliding on Thursday with the tech sector particularly badly bruised as chipmakers which supply to the iPhone maker fell sharply.

The pan-European STOXX 600 fell 0.7 percent as Europe joined a selloff in Asia with the Apple warning compounding fears of slowing global growth.

Apple’s Frankfurt-listed shares fell 8.9 percent after the tech giant cut its revenue forecast, blaming weaker iPhone sales in China, whose economy has been hit by an ongoing trade war with the U.S.

Chipmakers who supply parts to Apple were the worst-hit. Shares in AMS, which provides the facial recognition sensors used in the latest iPhones, fell 19.4 percent to the bottom of the STOXX.

Dialog Semiconductor tumbled 7.8 percent, while Infineon, ASML, ASM International , Logitech, and STMicroelectronics fell 3.4 to 5.9 percent.

The tech sector was the worst-performing, down 2.4 percent while only telecoms stayed in the black.

Luxury goods shares, which are also highly sensitive to signs of slowing demand in China, joined the selloff.

LVMH, Kering, Burberry, and Swatch were down 2.7 to 3.8 percent, among the biggest fallers.

Among rare gainers, Next shares topped the STOXX with a 5.9 percent gain after the clothing retailer reported a rise in sales in the run-up to Christmas in line with its own expectations.

Peer Marks & Spencer also gained 3.3 percent.

WASHINGTON (Reuters) – In their first action in control of the U.S. House of Representatives, Democrats plan to adopt a bill on Thursday to end a federal shutdown without funding a Mexican border wall, trying to firmly fasten blame for the 13-day-old closure on President Donald Trump and his Republicans.

Passage of the bill by the new Democratic majority was expected to occur shortly after Nancy Pelosi is elected speaker of the House, returning the liberal from San Francisco to one of Washington’s most powerful posts for a second time.

But Senate Majority Leader Mitch McConnell said on Wednesday his chamber, still in Republican hands, would not vote on the legislation, calling it a “political sideshow” and “total nonstarter.”

“We’re asking the president to open up government,” Pelosi told reporters outside the White House on Wednesday after another unproductive meeting with Trump on the matter. “We have given the Republicans a chance to take yes for an answer.”

The Democrats’ shutdown-halting bill closely resembles one that won overwhelming bipartisan support in the Senate, which Democratic leaders say will put the onus on Republicans to accept it or clearly own the shutdown.

Congressional leaders said they would return to the White House on Friday to resume talks with Trump, a sign that the government is likely to remain closed for the rest of the week.

While the first 12 days of the shutdown crept by quietly during the holiday season, Thursday will mark the changing of power in the House, in which the Democrats won a majority of seats in November’s elections, and a new dynamic, with Pelosi again central to moving any legislation through Congress.

SAN FRANCISCO/BENGALURU/SHANGHAI (Reuters) – Apple Inc on Wednesday took the rare step of cutting its quarterly sales forecast, with Chief Executive Tim Cook blaming slowing iPhone sales in China, whose economy has been dragged down by uncertainty around U.S.-China trade relations.

The news, which comes as a spotlight grows on Beijing’s attempts to revive stalling growth, sent Apple shares tumbling in after-hours trade, hammered Asian suppliers and triggered a broader selloff in global markets.

The revenue drop for the just-ended quarter underscores how an economic slowdown in China has been sharper than many expected, catching companies and leaders in Beijing off balance and forcing some to readjust their plans in the market.

WASHINGTON (Reuters) – President Donald Trump invited Democratic and Republican leaders in Congress to the White House on Wednesday for a border security briefing on the 12th day of a partial federal government shutdown triggered by the Republican president’s demand for $5 billion in border wall funding.

Senior Department of Homeland Security officials will brief the congressional leaders, White House press secretary Sarah Sanders said, on the last day of the Republican-controlled 2017-2018 Congress.

It was unclear if the meeting would lead to a breakthrough in the standoff over a funding dispute that centers of Trump’s demand that $5 billion in funding for a wall on the Mexican border to be part of any spending measure. Democrats rejected the demand and parts of the federal government have been shut since Dec. 22 because of lack of funding as a result.

When Democrats, led by presumptive House Speaker Nancy Pelosi, take over the House on Thursday, they plan to approve a two-part spending package meant to end the shutdown. But its prospects of passage are grim in the Senate, where Republicans hold a majority.

The House Democrats’ measure does not contain the $5 billion Trump wants for the wall – one of his key campaign promises – and sets up the first major battle of the new Congress between House Democrats led by Pelosi and Republican Senate Majority Leader Mitch McConnell.

The White House dismissed the Democrats’ proposal.

“The Pelosi plan is a non-starter because it does not fund our homeland security or keep American families safe from human trafficking, drugs, and crime,” Sanders said in a statement late on Tuesday.

LONDON (Reuters) – Britain’s transport minister has defended awarding a 14 million-pound ($18 million) contract for shipping goods after Brexit to a new ferry company that owns no ships.

The government last week awarded three contracts to charter extra ferries to ease congestion if the United Kingdom fails to secure a trade deal before leaving the European Union in March.

The smallest contract was won by Seaborne Freight, a British business that has never previously operated a ferry route, raising concerns about whether the new service would be ready.

Extra ships will be needed to work new routes across the Channel if the main terminals of Calais in France and Dover and Folkestone in Britain are clogged by customs checks.

Currently, Britain’s membership of the EU means that trucks drive smoothly through border checks within the bloc. But in a no-deal Brexit, even a few minutes’ delay at customs for each truck could mean vehicles backed up at ports and queued on feeder roads on both sides of the Channel.

To ease a potential backlog, the government has awarded Seaborne Freight a contract to operate freight ferries from Ramsgate to the Belgian port of Ostend.

LONDON/HONG KONG (Reuters) – Factory activity weakened across much of Europe and Asia in December as the U.S.-led trade war and a slowdown in demand hit production in many economies, offering little reason for optimism as the new year begins.

A series of purchasing managers’ indexes for December released on Wednesday mostly showed declines or slowdowns in manufacturing activity across the globe.

Euro zone manufacturing activity barely expanded at the end of 2018, providing disappointing reading for European Central Bank policymakers, just after they ended their 2.6 trillion-euro asset-purchase scheme.

Earlier PMI surveys showed Italy remained in contraction territory and was joined by France, where data showed a first deterioration in operating conditions for 27 months.

Manufacturing growth in both Germany and Spain was modest, easing to the weakest in around two-and-a-half years.

British factories, however, ramped up stockpiling as they prepared for possible border delays when Britain leaves the European Union in less than three months’ time.

The UK manufacturing PMI rose to a six-month high, stronger than all forecasts in a Reuters poll of economists. [GB/PMIM]

Survey compiler IHS Markit cautioned the improvement did not herald a big change in the outlook for Britain’s stuttering economy — it was caused in large part by manufacturers stockpiling inputs and finished goods.

“Despite the headline index rising to a six-month high in December, the manufacturing PMI still suggests that the sector stagnated in Q4,” said Andrew Wishart at Capital Economics.

Later on Wednesday, surveys are expected to show U.S. activity was a tad slower, but still expanding, in a sign China has suffered more from trade frictions than the United States.But world shares started 2019 on a downbeat note, oil prices and bond yields slid, and the Japanese yen strengthened on Wednesday as the factory survey data confirmed the picture of a global economic slowdown.

HONG KONG (Reuters) – Factory activity weakened across Asia in December as the Sino-U.S. trade war and a slowdown in Chinese demand hit production in most economies, strengthening the case for a pause in interest rate hikes in the region in 2019.

A series of purchasing managers’ indexes for December released on Wednesday mostly showed declines or slowdowns in manufacturing factory activity across the region. In China, the Caixin/Markit PMI slipped into contraction territory for the first time in 19 months, broadly tracking an official survey released on Monday.

China’s weakness spilled over to other Asian economies, with Malaysia’s manufacturing activity shrinking to its weakest pace of expansion since it launched the survey in 2012 and Taiwan contracting to its lowest since September 2015.

Meanwhile, official economic data out of Singapore showed its gross domestic product grew more slowly than forecast in the fourth quarter as the city-state’s manufacturing sector contracted on a quarterly basis.

In other regions, the euro zone was expected to post steady manufacturing activity growth, while U.S. activity was seen a tad slower, but firmly in expansion territory, in a sign that so far China has suffered more bruises from its trade frictions than the United States.

With growth slowing and inflation below or barely within target in most countries, Asian central banks are unlikely to continue their tightening cycle this year, baring any shocks in currency markets.

China’s economic growth slowed to 6.5 percent in the third quarter of last year, the weakest since the global financial crisis. Reuters reported that government advisers had recommended a growth target of 6.0-6.5 percent for this year at the annual meeting, though the final figure won’t be made public until the annual parliament meeting in early March.

(Reuters) – U.S. stocks opened higher on Friday in broad-based gains, with technology stocks providing the biggest boost as the market rallied for the third day.

The Dow Jones Industrial Average .DJI rose 74.79 points, or 0.32 percent, at the open to 23,213.61. The S&P 500 .SPX opened higher by 9.94 points, or 0.40 percent, at 2,498.77. The Nasdaq Composite .IXIC gained 37.29 points, or 0.57 percent, to 6,616.79 at the opening bell.

ANKARA/WASHINGTON (Reuters) – President Donald Trump’s declaration in a phone call with Tayyip Erdogan that he was pulling U.S. troops from Syria has stunned Turkey and left it scrambling to respond to the changing battlefield on its southern border.

In the phone call two weeks ago, Trump had been expected to deliver a standard warning to the Turkish president over his plan to launch a crossborder attack targeting U.S.-backed Kurdish forces in northeast Syria, U.S. officials say.

Instead, in the course of the conversation Trump reshaped U.S. policy in the Middle East, abandoning a quarter of Syrian territory and handing Ankara the job of finishing off Islamic State in Syria.

“Trump asked: ‘If we withdraw our soldiers, can you clean up ISIS?’”, a Turkish official told Reuters. He said Erdogan replied that Turkish forces were up to the task.

“Then you do it,” Trump told him abruptly. To his national security adviser John Bolton, also on the call, Trump said: “Start work for the withdrawal of U.S. troops from Syria.”