By Alec Hogg
In today’s global business news headlines:
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- Stock markets are cheering after yesterday’s unexpected reversal of US Fed interest rate policy. Chairman Jerome Powell transformed from hawk to dove, putting US interest rate hikes on ice because of slower global economic growth and uncertainty around international trade. On Wall Street, the S&P 500 index doubled earlier gains to end 1.5% higher and the Dow Jones Industrial average broke back above 25,000. Asian markets followed this morning and China’s currency, the Renminbi, rose 20 points to a six-month high. Traders are now watching for a breakthrough after two days of US/China trade talks in the White House, which conclude today.
- Share prices were also buoyed by better than anticipated quarterly results from internet giants Facebook and AliBaba. Mark Zuckerberg’s company was rewarded with a 12% price surge in after-hours trading with Facebook stock reaching almost $170 a share after a 30% revenue increase and record profits for the fourth quarter of 2018. Alibaba’s price rose more than 6% following a 41% year-on-year jump in the December quarter’s revenue, comfortably beating consensus estimates and the overall Chinese market’s retail growth of 16%. Tesla shares rallied briefly after the electric car company reported a second successive quarterly profit but gave up those gains to trade below $300 a share in after-hours trading. Investors were spooked by the unexpected second time resignation of CFO Deepak Ahuja, who re-joined the company in 2017 after serving as its top finance executive from 2008 to 2015.
- There was more bad news for Tesla from Europe yesterday as the world’s largest car maker, Volkswagen, unveiled an electric car chassis which by 2022 will be the building block for 50 different models. VW has been working for three years on what the motoring press has dubbed its Tesla Killer. The MEB chassis will be manufactured at eight sites in Europe, China and North America. The German company has committed €30bn for investing in electric cars over the next five years, the most of any major manufacturer. It intends supplying the MEB chassis to other carmakers, including Ford with whom VW confirmed a global alliance earlier this month.
- From the US comes news with particular relevance for countries like South Africa which are haemorrhaging skills. The Trump Administration yesterday announced changes designed to increase by around five and a half thousand a year, the H-1B visas issued to highly skilled foreigners. Would-be US immigrants with a master’s degree or higher will now be included first in the general lottery of 65,000 visas and if unsuccessful also go into a second lottery of 20,000 visas restricted to advanced degree holders. Demand by US employers for highly skilled workers has significantly exceeded the number of visas available for some years.
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