| By Charles Riley • Thursday, November 14 | | | | Happy Thursday. In today's newsletter: China and Germany deliver mixed signals about the global economy; Google wants to be your bank and what to expect from Walmart.
US stock futures point lower after the Dow and S&P 500 finished Wednesday's session at record highs. European markets opened down, following most major indexes in Asia. The Shanghai Composite bucked the trend, gaining 0.2% despite weaker than expected economic data out of China.
▸ Forwarded this newsletter? Want global markets news and analysis from CNN Business reporters every morning? You can sign up here. | | | What's happening now in markets: MARKET DATA AS OF 6:10 AM ET | | MARKET FLASH Mixed signals from two major economies
Investors have a heap of economic data to sort through on Thursday.
First up, China: Retail sales in China grew 7.2% in October compared to a year prior, below the 7.9% increase expected by analysts polled by Refinitiv. Industrial output, meanwhile, grew 4.7%, which was also weaker than anticipated.
"Downward pressure has continued to increase on the economy," China's national statistical authority said in a statement.
China's massive economy is already growing at the slowest pace since 1992, but signs of further deterioration helped push stocks down in Asia. The silver lining?
"Looking through all the volatility and base effects, we see a picture of fragile stabilisation, of weak growth, rather than another sharp deceleration," economists at Societe Generale said in a research note. | |
And in Europe: At first glance, there was better news out of Germany.
Europe's largest economy narrowly avoided a recession in the third quarter, expanding by 0.1% over the previous three-month period. Still, the outlook for Germany remains poor.
Here's what Andrew Kenningham, chief Europe economist at Capital Economics, gleaned from the data:
"The trivial increase in GDP in Q3 means that Germany has narrowly averted a technical recession. But second-quarter GDP fell more than previously thought, and we think the economy will probably contract slightly next year – so a recession may have been postponed rather than avoided altogether," he said. | | TECH WATCH Silicon Valley vs. Wall Street
Another big tech company is trying to get into your wallet.
Google plans to offer checking accounts to customers starting next year. It's partnering with Citigroup and a credit union at Stanford University on the project.
More details: Google doesn't plan to take center stage on the checking accounts. Instead, the financial institutions' brands will be put on the accounts and banks will be responsible for the financial plumbing and compliance.
Partner banks and credit unions will offer these smart checking accounts through Google Pay. Google also hasn't decided whether the accounts will have fees.
The case for banking: Google already offers smart home devices and Google Assistant, and it just entered the health and wellness world with its planned acquisition of Fitbit.
Banking is one big piece of the consumer puzzle that's still missing.
But there's no first mover advantage: Amazon also wants to introduce checking accounts for customers. Facebook announced its Libra cryptocurrency project earlier this year. And Apple has teamed up with Goldman Sachs to launch a credit card, while its Apple Pay service has become a go-to payment method for many iPhone customers.
| | VOICES On Google's banking ambitions "The company has an unmatched position within the consumer life cycle and now they're trying to leverage where they are." DAN IVES OF WEDBUSH SECURITIES Read more on CNN Business. | | RETAIL PULSE What to expect from Walmart
The world's biggest retailer will report its third quarter results before the opening bell, giving investors a fresh look at the health of US consumers.
Wall Street thinks: Walmart is expected to report earnings per share of $1.09 on revenue of $128.1 billion, according to Briefing.com. Expectations are high: The company's stock is trading near a record high above $120 per share.
The scene: Walmart has successfully defended its stores against Amazon and pressed its advantage with middle and lower-income shoppers across the country. To do so, it has invested heavily in lower prices, spruced up stores and grown in e-commerce.
A strong report would help convince investors that US recession fears are overblown.
| | UP NEXT
Fed chair Jerome Powell testifies before Congress for a second day.
Also today →
▸ Viacom and Brookfield Asset Management will report earnings before the bell.
▸ Nvidia and Williams-Sonoma report after the close.
Coming tomorrow: US retail sales; J.C. Penney and JD.com earnings
| |
WHAT WE'RE READING AND WATCHING
▸ Disney+ already has 10 million subscribers (CNN Business)
▸ Carl Icahn makes the case for Xerox-HP union (WSJ)
▸ WeWork's losses doubled to $1.25 billion last quarter (CNN Business)
▸ Japan's economic growth falls sharply (NYT)
▸ Americans now have a record $14 trillion in debt (CNN Business)
▸ One day before deadline, Trump says he'll decide on auto tariffs 'soon' (Reuters)
▸ What will become of the internet? (NYT Magazine) | | | THE FINAL WORD Facebook shuts down 5.4 billion fake accounts So far this year, Facebook has shut down 5.4 billion fake accounts on its main platform. That's compared to roughly 3.3 billion fake accounts removed in the whole of 2018.
The disclosure highlights the scale of the challenge before Facebook as it prepares for a high-stakes election season in the United States. On a call with reporters, CEO Mark Zuckerberg framed the large number of fake accounts that have been removed as a sign of how seriously the company is taking this issue. He called on other platforms to make similar disclosures.
The huge volume of fake accounts also shows that bad actors are determined to use social media to sew discord and profit from illicit scams. The big questions: How did we design a system with so many flaws? And can social media be fixed? | | | | |
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