Innovative do: German industrial output rebounds in September

German industrial output rebounds in September

German industry rebounded in September, official data shows

Frankfurt (AFP) - Both exports and industrial production bounced back in Germany in September, data showed on Friday, helping to mitigate some of the gloom that has descended on Europe's biggest economy recently.

Following a sharper-than-expected slowdown in activity in August resulting from the late timing of the summer holidays, industrial data for September showed a tangible improvement.

According to the economy ministry, industrial output rose by 1.4 percent in September, after contracting by 3.1 percent in August.

The day before, factory orders had also stabilised from the previous sharp drop.

And the federal statistics office Destatis calculated that German exports were up by as much as 5.5 percent in September, almost making up for the sharp 5.8-percent contraction seen the previous month and boosting the country's trade surplus.

Exports to the EU were 7.1 percent higher than they had been a year ago and exports to countries outside the EU jumped by 10.5 percent.

Analysts said the positive data were largely a technical correction to the holiday-related slump the previous month.

Berenberg Bank economist Christian Schulz said Germany's "current rough patch is driven by a downward spiral in business confidence," which was triggered by concerns about the economic fallout from the crisis in Ukraine.

However, "the strong trade data recalls that Germany remains fundamentally strong and competitive. These fundamentals will come through eventually and some surveys suggest that confidence may be stabilising at the moment," Schulz said.

With the European Central Bank easing monetary conditions and German Finance Minister Wolfgang Schaeuble announcing plans for more public investment, that "might aid the turn-around, which we expect to lead Germany back to trend growth in the second quarter of 2015," the expert added.

UniCredit economist Andreas Rees that on the basis of all available monthly hard data so far, he was pencilling in gross domestic product (GDP) growth of 0.1 percent in the third quarter.

"The forecast risks are tilted to the upside," meaning that the prognosis could be upgraded, Rees said.

Germany would therefore escape a technical recession, which is defined as two consecutive quarters of GDP contraction, the analyst said.

German GDP had contracted in the second quarter and official third-quarter growth data are scheduled to release next week.

BayernLB economist Stefan Kipar said that "following the September data, the economic situation is looking a lot less threatening than earlier."

"The data strengthen our conviction that the German economy will not slip into recession. Indeed, we're pencilling in slight growth of 0.1 percent and continuing moderate growth in the winter," Kipar said.

"Nevertheless, increased growth momentum cannot be expected in the coming quarters, with the conflict in Russia still weighing on the German economy," he warned.

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It'll Be A Busy 4-Day Week For The Economy — Here's Your Complete Preview

Manny Pacquiao Chris Algieri

Markets will be closed on Thursday as America celebrates Thanksgiving Day.

However, the shortened week will be stacked with economic data. We'll get key readings on consumer confidence and housing. The latest durable goods report and the revised GDP estimate may help give us a clearer picture of the health of the economy.

Meanwhile, the US stock market continues to set new record highs.

Here's your Monday Scouting Report:

Top Stories

Here Comes 2015: There's still over a month left in 2014. But Wall Street's research departments have already begun releasing their outlooks for 2015.

On Wednesday, Goldman Sachs' David Mericle published forecasts going through 2018. He see 3% GDP growth in 2015, 2.9% growth in 2016, and 2.7% growth in 2017.

From his note: "We expect the US economy to grow at a solidly above-trend rate through 2017, slowing towards trend thereafter. On the demand side, the basic reason for near-term optimism is that our financial balances model indicates that the continued easing in financial conditions should provide a positive growth impulse from the private sector, while the growth impulse from the public sector should be neutral. On the supply side, we still see considerable labor market slack. We continue to expect the first hike of the funds rate in September 2015. While the pace of hikes is likely to be gradual at first, we expect it to accelerate after 2016. By end-2018, we expect the funds rate to reach 3.75-4%, above current market pricing."

Economic Calendar

Markit US Services PMI (Mon): Economists estimate this services industry index climbed to 57.3 in November from 57.1 in October.
Dallas Fed Manufacturing Activity (Mon): Economists estimate this regional activity index slipped to 9.0 in November from 10.5 in October.
GDP (Tues): Economists estimate Q3 GDP growth will be revised down to 3.3% from an earlier estimate of 3.5%. Personal consumption is expected to be revised up to 1.9%. "September data suggest that consumption, residential investment, and equipment and intellectual property investment were stronger than assumed by the BEA in the advance estimate, while net trade and nonresidential structures investment were weaker," Barclays economists said.
S&P/Case-Shiller House Prices Index (Tues): Economists estimate home prices climbed 0.20% month-over-month in September or 4.6% year-over-year. "Other measures of home prices have risen in September, in line with our view that the underlying trend remains one of modest gradual improvement in the housing market," Barclays economists said.
Consumer Confidence (Tues): Economists estimate the Conference Board's index of sentiment climbed to 96.0 in November. "The Conference Board index hit a seven-year high of 94.5 in October," Credit Suisse economists noted. "We estimate that the upward momentum continued in November, given the stock market’s near record highs and significant further declines in gasoline prices."
Richmond Fed Manufacturing Index (Tues): Economists estimate this regional activity index fell to 15 in November from 20 in October.
Durable Goods Orders (Wed): Economists estimate durable goods orders dropped 0.6% in October. Nondefense capital goods orders excluding aircraft, or core capex, is estimated to have increased by 0.5%. "July’s 300%+ spike in aircraft orders is still in the process of unwinding, which should keep headline orders relatively subdued," Credit Suisse economists said. "Although short-run momentum has been sluggish, year-on-year trends in the key core aggregates have been decent"
Initial Jobless Claims (Wed): Economists estimate the pace of weekly claims climbed to 288,000 from 291,000 a week ago. "Initial claims have been below the 300k threshold for 11 consecutive weeks, a sign that involuntary separations have reached their nadir," Nomura economists said.
Personal Income And Spending (Wed): Economists estimate income increased by 0.4% while spending climbed by 0.3%. "A solid rebound in core retail sales and strong consumer confidence should have driven spending to accelerate after last month’s disappointment, although flat vehicle sales and a decline in utilities spending likely provided some offset," BNP Paribas economists said. "Meanwhile, solid gains in hours worked and earnings are expected to have lifted personal income in October."
Chicago Purchasing Manager (Wed): Economists estimate this PMI slipped to 63.0 in November from 66.2 in October. "Last month, the index reached the highest level since October 2013, so we expect some slowing from robust levels," Bank of America Merrill Lynch economists said. "That said, we think business activity in Chicago will remain strong and trend close to its 6-month moving average of 62.0. One potential downside risk has been the cold weather, as temperatures hit a record daily-low in the middle of the month. Temperatures in November this year are projected to be lower on average than they were in November 2013."
Univ. Of Michigan Confidence (Wed): Economists estimate this index of sentiment improved to 90.0 from the 86.9 in October. "Gasoline prices have continued to tumble since the preliminary survey window, while equity prices have moved higher," Barclays economists said. "A reading of 90.0 would represent the highest levels of consumer sentiment since July 2007."
Pending Home Sales (Wed): Economists estimate the pace of sales climbed 0.7% in October. "This index has increased in five of the past seven releases, as the market for previously owned homes appears to have escaped the doldrums," Nomura economists said. "For the longer trend, we expect to see a gradual pace of improvement that will not necessarily follow a straight line"
New Home Sales (Wed): Economist estimate the pace of sales increased 0.9% to an annualized rate of 471,000 in October. "New home sales exceeded 460k in August and September after subpar performance for most of the year," Nomura economists said. "The increase in building permits in October provide support for sales, but the decline in mortgage applications for purchases and less optimistic homebuilder sentiment in October put some downside risk on sales."
Markets will be closed Thursday in observance of Thanksgiving Day.

Market Commentary

Goldman Sachs David Kostin sees modest gains in the stock market for the next few years. "We forecast US stocks will deliver a modest total return of 5% in 2015, in line with profit growth.The US economy will expand at a brisk pace. Corporations will boost sales and keep margins elevated allowing managements to both invest for growth and return cash to shareholders via buybacks and dividends. Investors will cheer these positive fundamental developments."

GMO's Jeremy Grantham thinks stock surge before crashing. ""My personal fond hope and expectation is still for a market that runs deep into bubble territory (which starts... at 2250 on the S&P 500 on our data) before crashing as it always does."

For more insight about the middle market, visit mid-marketpulse.com.

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London's Cab Drivers Used Undercover Detectives To Spy On Uber

black cab

London's black cab drivers paid private detectives to pose as Uber customers in order to dig dirt on the company.

The revelation is part of a massive court case between the London Taxi Driver Association (LTDA) and the divisive taxi booking app, the Evening Standard reports.

This year the LTDA launched a private prosecution against Uber. Black cab drivers, who have long dominated London's streets, are angry about the rise of San Francisco-based Uber, which is undercutting traditional services by up to 50%.

The LTDA claims Uber's fare calculator is basically a taxi metre, and that taxi metres are only legal in licensed black cabs, the Standard explains. The High Court is set to rule one way or another on the issue.

In the meantime, The Sunday Times reports the taxi association has enlisted undercover investigators to spy on Uber and see how its drivers pick up passengers and work out fares. Steve McNamara, the general secretary of the LTDA, told The Sunday Times: "In order to prosecute them we obviously had to get evidence and ride in the cars and private detectives and all of that."

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It Looks Like Heads Are Going To Roll At Samsung

samsung family

There could be major changes on the way for Samsung if a proposed reshuffle of its top executives goes ahead.

The Wall Street Journal reports that the South Korean technology company is considering replacing some of its top executives as it tries to turn around the company's fortunes.

The man in charge of Samsung's smartphone division, J.K. Shin, could soon be ousted from his role, with control handed over to B.K. Yoon, who runs the company's home appliance and television division.

Samsung has seen a disastrous collapse in its smartphone sales. It announced in its third-quarter earnings call that operating profits fell 60% from the previous year. The company also said it was changing its smartphone strategy to concentrate on cheaper models after it was comprehensively beaten in the high-end market by Apple. A senior executive even acknowledged during the call that high-end sales were "somewhat weak."

If the reshuffle goes ahead, smartphone boss Shin will lose his co-CEO role. Samsung has an unusual structure at the top that includes three co-CEOs, after Shin and Yoon were promoted in 2013. Above them is Samsung's Chairman Lee Kun-hee. The Lee family has presided over Samsung for two generations, and the chairman's son, Jay Y. Lee (pictured above), is expected to assume the role.

Changes won't be limited to Samsung's head office, though. The Wall Street Journal also reports that Samsung's UK division is in need of a mobile chief after Simon Stanford left earlier this year — his successor lasted only two months before leaving as well.

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'40 Detectives' Are Looking Into Claim That Conservative MP Killed A Boy At A Child Sex Party

Theresa May

Home Secretary Theresa May has warned that allegations surrounding historical cases of child abuse linked to Westminster could be merely "the tip of the iceberg" on the issue. She spoke after fresh allegations surrounding the murder of an 8-year-old boy by a paedophile ring, which included politicians, emerged in recent weeks. The ring organized a series of parties attended by two Conservative MPs, according to a man who claims to have been victimized at the gatherings as a child. As many as three boys were killed by the ring's members, he alleges.

In an interview with the BBC, May said there were serious questions still remaining about how "the very institutions of the state that should be protecting children were not doing so".

Metropolitan Police commissioner Sir Bernard Hogan-Howe said "We have got 40 detectives looking into these relatively new claims", according to Metro. Both May and Hogan-Howe said they would get to the bottom of whether there was a coverup or not. The Observer reported that several newspapers were served with "D-notices" — legal orders preventing them from publishing — when they tried to do stories about politicians who were child abusers in the 1980s.

Earlier this month an independent inquiry into what the Home Office knew about historical allegations of child abuse relating to senior establishment figures "found nothing specific to support a concern that the Home Office had failed in any organised or deliberate way to identify and refer individual allegations of child abuse to the police".

The authors stressed the limitations of the scope of their investigation and the serious failings in record-keeping from that period meant that their conclusions did not rule out the possibility of a cover-up. May reiterated that it was ""not possible" at this stage to say whether there had been a cover-up over the claims.

However, two former newspaper editors at the time have now come forward alleging that security services served them with warnings not to publish information relating to the role of powerful individuals in child sex abuse in 1984. The so-called D-notices claimed that the information relating to the abuse might damage national security, according to an article published in the Observer.

One of the editors alleges that he was accosted by police over a dossier passed to him by former Labour cabinet minister Barbara Castle, which reportedly implicated 16 MPs along with senior policemen, headteachers and clergy. The allegations are in keeping with those made by Don Hale, the editor of Castle's local newspaper, the Bury Messenger, in July to the Daily Mail who said that a "heavy mob" of Special Branch officers seized the dossier in a 1984 raid of the paper's office.

The second editor claims to have received D-notices relating to his paper's coverage of the police investigation into the Elm Guest House, where a group of high-profile abusers purportedly operated. Unfortunately, official in charge of running the D-notice system say the allegations could not be substantiated "because files are reviewed and correspondence of a routine nature with no historical significance destroyed".

This snowball of allegations is quickly gaining pace. But the government's attempt to get a grip on the story through an independent inquiry has stumbled. Both of the government's first two choices to lead the inquiry — Baroness Butler-Sloss and Fiona Woolf — resigned following revelations of personal connections to leading figures in the 1980s.

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Exploding excrement topples building in China, 15 injured

The blast was apparently sparked by a local man burning waste close to the cesspool, igniting methane gas which was emanating from the pit, the Xinhua news agency said late on Sunday

Beijing (AFP) - A cesspool filled with excrement has exploded in central China, injuring 15 people and knocking down a building, state-run media reported.

The blast was apparently sparked by a local man burning waste close to the cesspool, igniting methane gas which was emanating from the pit, the Xinhua news agency said late on Sunday.

The incident in Zhangjiajie city, in the central province of Hunan, caused a residential building to collapse and three of the injured had to be hospitalised, Xinhua said.

China's urban infrastructure has often been hastily built with little regard for safety as hundreds of millions of people have moved from the countryside to cities in recent decades.

In another excrement-related incident, a man and his mother both died trying to retrieve his wife's new mobile phone -- worth 2,000 yuan ($320) -- from a toilet septic tank, reports said in May.

The man jumped in to try to locate the phone but was overcome by fumes and passed out, according to Dahe, a web portal run by the provincial government in central Henan province.

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