Times (UK) Fall in house prices accelerates but Bank of England leaves rates on hold
Francis Elliott and Gráinne Gilmore
05 Sep 08
Howard Archer, of Global Insight, the economic consultancy, predicted that rates would be cut to 4.75 per cent in November and “significantly further to 3.5 per cent in 2009”.
Wall Street Journal Europe's Stock Indexes Pull Back;
Central Banks Keep Rates Steady
Growth, Inflation
Still Vex Officials;
Siemens Falls 4.8%
05 Sep 08
By SARAH TURNER and ANDREA TRYPHONIDES
Despite the growing risk of euro-zone recession, the ECB gives no sign at all that it is anywhere near to cutting interest rates given current well-above-target inflation and still significant upside risks to medium-term price stability," said economists at Global Insight.
Ward's Dealer Business Inventories Laden With Trucks
By David E. Zoia
Ward's Dealer Business
05 Sep 08
“Truck inventories are onerous,” sums up George Magliano, a research director at Global Insight Inc.
.... “The house has to be cleaned,” Magliano says in a webcast to discuss the forecast firm's medium-term sales and production outlook. “We're in the midst of a correction cycle. But unfortunately, it's a moving target and the floor has dropped out on truck sales.
“We're going to have to see some sort of (incentive-induced) sell-off,” he adds. “And hopefully consumers will respond, even with high gas prices and declining residual values, and get those (trucks) out of the showroom.”
Global Insight expects inventories to get back into balance sometime in first-quarter 2009.
“And then things will stabilize on the production side,” says Haig Stoddard, Global Insight's manager-light vehicle production forecast. “Then we'll be done with most of the announced production cuts and plant closings. We'll be done with a lot of the chaos and uncertainty.”
Washington Post (US) Ciena Shares Sink As Profit Plunges, Outlook Weakens
By Jordan Weissmann
05 Sep 08
The global telecom companies that Ciena serves have pulled back their spending for a variety of reasons, analysts said. Carriers have been wary of pumping money into new infrastructure, both because of the economic downtown and because of regulatory concerns, particularly in Europe, said Julian Watson, a telecom analyst with Global Insight. Many companies just finished upgrades to their mobile networks and are opting for less expensive projects. Several are also turning to Chinese vendors for network equipment.
WSJ.com (Wall Street Journal on line) Economists React: Jobs Report ‘Screams Recession’
Economists and others weigh in on the jump in the unemployment rate to 6.1% and the 84,000 job losses reported in August.
05 Sep 08
The improvement in GDP growth to 3.3% in the second quarter was just a head-fake. We expect growth to slow in the current quarter to just over 1% and then turn negative in the fourth quarter. For the Fed, the report confirms that the notion of a rate hike to combat inflation is fanciful — the question now is rather whether the Fed might need to cut again. –Nigel Gault, Global Insight
WSJ.com (Wall Street Journal online) Laboring
05 Sep 08
Spending rose at a 1.7% annual rate in the second quarter, up from 0.9% in the first. But the latest evidence shows consumers pulling back," Jim Dorsey of Global Insight wrote. "We expect outright declines in real consumer spending during both the third and fourth quarters -- the first such declines since 1991."
Daily Mail (US) 10PC, A RECORD ANNUAL RISE IN THE COST OF YOUR SHOPPING
BY TESSA THORNILEY
04 Sep 08
Yesterday the pound fell more than a cent, to $1.77. Howard Archer, economist at Global Insight, said the increase in shop prices showed retailers were increasingly trying to pass on their elevated costs.
Daily Telegraph (UK) UK house prices are falling at fastest rate on record, Halifax says
By Emma Thelwell
04 Sep 08
Howard Archer, chief UK economist at Global Insight, agreed that the outlook for the once-booming market is darkening.
"It seems odds-on that house prices will continue to head rapidly south given that the Bank of England reported record low mortgage approvals for house purchases in July, while latest surveys generally show that house sales are depressed, buyer interest remains weak," Mr Archer said.
Detroit News Neil Winton: European Perspective
Ford Europe kicks off world car onslaught with new Fiesta
04 Sep 08
Global Insight analyst Colin Couchman worries that although the Fiesta seems very competitive as a design and right for the current market, it is making its debut at an unfortunate time, as the European markets begin weakening badly.
But he sees Fiesta sales in Western Europe hitting 400,000 a year by 2009, and staying there until beginning to slip in 2011. In 2007, Ford Europe sold about 350,000 old Fiestas and should sell about 330,000 old and new ones this year.
Couchman said GM Europe, with its Opel, Vauxhall and Saab brands, is also using European designs to sell globally as well as in America, including an Opel model for Saturn.
"We think Ford is doing something similar. It will take a European design and develop this for other markets. For instance, adding two seats to the 5-seat (Focus-derived) C-Max and adding a sliding door. The Kuga too (a Toyota Rav4-sized SUV) might be a bit small for the U.S., but it does have a quite funky design," said Couchman.
....Global Insight's Couchman believes Ford Europe is doing most things right.
"It's definitely on the right track. It makes cars now that do really well in magazine tests, the motoring testers like Ford. It's used lots of time and money modernizing the range with the kinetic design and modern gadgets," he said.
There is one area which still refuses to be reformed; the lack of brand power. Ford is still unable to demand premium pricing, with its public perception as being only the equal of other mass market brands in Europe.
"That will take time (transforming a weak brand). It's a function of all of the above," said Couchman.
Financial Times (UK) Shares gain ahead of rate decision
By Michael Hunter
04 Sep 08
“The further sharp fall in house prices in August adds to the already serious downside risks facing the economy, but an interest rate cut later today remains unlikely given the Bank of England’s concern over current elevated inflation levels and risks, “ said Howard Archer.
“It now seems a question of when - rather than if - the Bank will cut interest rates,” said Howard Archer at Global Insight. “It is now odds-on that the next move in interest rates will be down as the UK economy heads towards recession. Furthermore, we believe it is now more likely than not that interest rates will be be cut before the end of 2008”.
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