Good morning! Here’s what you need to know in markets on Tuesday.
1.South Korea’s Hyundai Motor and Kia Motors on Tuesday flagged only modest sales growth in 2018, suggesting a slow recovery from a slump linked to their lack of SUVs in the United States and diplomatic tensions with China. Hyundai and smaller affiliate Kia, which together make the world’s fifth-largest automaker, said demand was expected to soften in the US and Chinese markets as they unveiled a combined sales target of 7.55 million vehicles this year.
2.Asian stocks began the new year close to their highest in a decade, helped by news that North Korea leader Kim Jong Un said he was “open to dialogue” with South Korea. Japan’s Nikkei share index was closed for a national holiday, but the Hong Kong Hang Seng is up 1.8% at the time of writing (6.25 a.m. GMT/1.25 a.m. ET) and China’s Shanghai Composite is up 1.07%.
3.Bitcoin has started the new year on the back foot. The digital currency is near a one-month low, down 0.5% t0 $US13,434.24 at the time of writing (6.35 a.m. GMT/1.35 a.m. ET). Bitcoin futures are down 8% at the same time.
4. It’s manufacturing PMI day. From 8.15 a.m. GMT (3.15 a.m. ET) onwards, data provider Markit will publish estimates of growth in the manufacturing sectors of Spain, Italy, France, Germany, Greece, the UK, and the Eurozone as a whole in December.
5.The UK’s economy will slow further in 2018 as business investment remains on hold, interest rates creep up, and indebted consumers curb their spending, according to more than 100 leading economists. The majority of economists who took part in the Financial Times annual predictions survey agreed that inflation would start to recede this year, after last year correctly forecasting it would rise sharply.
6.The Co-op has confirmed plans to open 100 new stores across the UK this year, creating an estimated 1,600 jobs, as part of a continued drive to expand its footprint across the country. The Telegraph reports that the retailer is spending more than £160 million on new store launches, with more than 20 set to open in London, 10 in Wales, and 18 in Scotland.
7.Funding Circle, the UK’s biggest peer-to-peer lending platform, is preparing to hire advisers to oversee a £1 billion-plus London flotation. Sky News has learnt that the company has told investment banks that it will hold a beauty parade towards the end of the first quarter of 2018, with a listing possible as soon as the late autumn.
8.There is a 40% likelihood that Apple will acquire Netflix now that US President Trump’s corporate tax cut has been passed, according to Citi analysts Jim Suva and Asiya Merchant. The cut in corporate taxes, along with a one-time allowance for companies to repatriate cash stored overseas without a major tax hit, will give Apple a much larger cash warchest to buy new companies.
9.Uber is considering rolling out a subscription model for its food delivery service, UberEats, according to one of the company’s UK executives. The Uber subsidiary, which is on course to do $US3 billion (£2.2 billion) in sales this year according to a document seen by The Financial Times, has already been experimenting with subscriptions.
10.The rise in the value of bitcoin could be adding 0.3% to Japanese GDP growth, according to Nomura analysts Yoshiyuki Suimon and Kazuki Miyamoto. In a recent note to clients, they argued that the “wealth effect” on Japanese bitcoin holders is likely to spur consumer spending that will have a measurable effect on GDP.
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