Global News July 18, 2018

  1. BBC
  2. Global News July 18, 2018

“U.S. Housing Starts Drop by Most Since ’16 to Nine-Month Low.”

U.S. new-home groundbreaking and permits fell in June to the slowest paces in nine months, as higher mortgage rates and elevated costs for labor and materials pinch the housing market, government figures showed Wednesday.
Shares of homebuilders fell after the report. While the data are volatile and often subject to significant revisions, the report suggests growth in the housing market may be more modest than previously thought amid constraints for both buyers and developers. Economists may wait for July data to judge whether the trend in construction has shifted. The figures mark the weakest activity since hurricanes Harvey and Irma struck the U.S. in August and September.
Potential customers are grappling with elevated interest rates and ever-rising home prices that are easily outpacing wage gains, even as a robust job market and tax cuts support demand. For builders, issues include elevated prices of lumber and other imported materials, partly due to tariffs. Developers have also cited difficulties finding qualified workers and ready-to-build lots.
The data follow a report Tuesday showing that a gauge of homebuilders’ confidence was unchanged in July from the prior month to match the lowest level this year. An index of the six-month sales outlook fell to the lowest since September, according to the survey from the National Association of Home Builders/Wells Fargo.


“White House’s Kudlow blames China’s Xi for blocking U.S. trade deal.”

U.S. President Donald Trump’s top economic adviser said on Wednesday that Chinese President Xi Jinping was holding up a deal to resolve a significant trade dispute between the United States and China.
Larry Kudlow, head of the White House Economic Council, also said he expects European Commission President Jean-Claude Juncker to bring an important trade offer to Trump when he visits Washington next week.
Kudlow said he believed lower-ranking Chinese officials want to put a stop to dueling U.S. and Chinese tariffs. These officials include Xi’s top economic adviser Liu He, Kudlow said, but Xi has refused to make changes to China’s technology transfer and other trade policies.
“So far as we know, President Xi, at the moment, does not want to make a deal,” Kudlow said at the Delivering Alpha conference sponsored by CNBC and Institutional Investor magazine. “I think Xi is holding the game up. I think Liu He and others would like to move but haven’t,” Kudlow said. “We are waiting for him (Xi). The ball is in his court.”
China could end U.S. tariffs “this afternoon by providing a more satisfactory approach” and taking steps that other countries are also calling for, he said.
These included cutting tariff and non-tariff barriers to imports, ending the “theft” of intellectual property and allowing full foreign ownership of companies operating in China, Kudlow said.
Trump has also demanded that the European Union cut its 10 percent tariffs on imported cars, and his administration is conducting a national security study that could lead to a 25 percent U.S. tariff on imported vehicles. Such a move would hit European and Japanese automakers hard. He said Juncker would bring a trade offer to Trump next week, but did not provide further details.


BBC News
“Google hit with €4.3bn Android fine from EU.”

Google has been fined a record €4.34bn ($5bn; £3.9bn) over Android. The European Commission said the firm had used the mobile operating system to illegally «cement its dominant position» in search.
The firm’s parent Alphabet has been given 90 days to change its business practices or face further penalties of up to 5% of its average global daily turnover. It has said it plans to appeal
However, it could easily afford the fine if required – its cash reserves totalled nearly $103bn at the end of March.
At a press conference in Brussels, Competition Commissioner Margrethe Vestager said consumers needed choice. And she suggested the ruling could lead manufacturers to sell smart devices using different versions of the Android operating system to Google’s, such as Amazon’s Fire OS, which she said they had been prevented from doing. «This will change the market place,» she said.
Russia may give one example of how this could be achieved. After similar complaints by the country’s regulator, Google now offers Android users a choice between Google, Yandex and as the default search engine the first time they use the Chrome browser.
Google’s chief executive Sundar Pichai has blogged in response. «Rapid innovation, wide choice, and falling prices are classic hallmarks of robust competition and Android has enabled all of them,» he wrote. «Today’s decision rejects the business model that supports Android, which has created more choice for everyone, not less.»
Ms Vestager previously fined Google €2.4bn ($2.8bn; £2.1bn) over a separate probe into its shopping comparison service – a ruling the tech firm is in the process of appealing against. In addition, her team has a third investigation underway into Google’s advert-placing business AdSense.


“Tech Shares Lead Stocks Lower; Dollar Strengthens: Markets Wrap.”

U.S. equities mostly edged lower as shares of slumping energy and technology companies offset gains in financials after Morgan Stanley earnings beat forecasts. European shares advanced after a mixed session in Asia.
The Nasdaq Composite Index dropped from a record high as Google parent Alphabet Inc. faced a $5 billion fine and Twitter was downgraded. The dollar strengthened as Federal Reserve Chairman Jerome Powell began a second day of testimony before Congress on the U.S. economy after delivering an upbeat assessment Tuesday, helping spur declines in raw materials prices and emerging-market currencies.
“You’ll have these news headlines and different issues that will rattle some of these stocks, especially given how fast some of them have run,” said Lindsey Bell, an investment strategist at CFRA. “Google today is not moving significantly on the news out of the EU but you’ll see these headlines cause certain stocks, maybe even the sector, to waver a little bit.”
The greenback outperformed most of its major peers, helping push down an index of developing-nation currencies by the most in two weeks. China’s yuan approached its weakest close in almost a year. The pound slumped after U.K. inflation came in below expectations, while CPI for the euro zone matched forecasts. A Bloomberg commodities gauge was further weighed down by oil futures, which tumbled through a technical support level on rising inventories.