Good morning! Here’s what you need to know in markets on Wednesday.
A worried World Bank slashed its growth forecast for the global economy Tuesday, saying advanced economies are rebounding more slowly than expected and low commodity prices continue to hurt other countries. The Bank said that the global economy should grow at just 2.4% this year, the same lethargic pace of 2015 and much slower than the 2.9% it predicted in January.
Oil is holding steady above $50. Crude settled above the level for the first time since July 2015 on Tuesday and, at the time of writing (6.35 a.m. BST/1.35 a.m. ET), Brent is up 0.16% to $51.52 (£35.39) and US crude is up 0.30% at $50.51 (£34.70).
Asian stock markets are mixed after weak data from China. Japan’s Nikkei is up 0.60% at the time of writing (6.35 a.m. BST/1.35 a.m. ET), buoyed by the strong oil price. But China’s benchmark Shanghai Composite is down 0.23% and the Hong Kong Hang Seng is down 0.24%. Data overnight showed Chinese exports declined 4.1% in May from a year earlier, compared with the expected drop of 3.6%.
Deutsche Bank CEO John Cryan says the bank “need[s] to revolutionise our business because the world has changed so much” but admits its diverse customer base makes it hard for the bank to fully embrace digital. Cryan, who became CEO of the German bank last July, appeared on a panel of business executives at the DocuSign Momentum conference in London to discuss how the digital revolution is transforming business.
Tesco will announce this week that it is offloading its interests in Turkey and Giraffe as its chief executive accelerates its exit from underperforming businesses, according to Sky News. Sky has learnt that Tesco is close to agreeing the sale of Kipa in a move that will mark a further stage in its international retrenchment following the sale or closure of its operations in China, South Korea, and the US. Migros, another Turkish-owned retailer, is understood to be the buyer of Kipa, which Tesco acquired in 2003.
UK industrial and manufacturing numbers are coming. Production figures for April are due at 9.30 a.m. BST (4.30 a.m. ET) with economists predicting a 1.5% fall in manufacturing output on this time last year and a 0.4% decline in industrial production compared to the same month last year. Both forecasts are an acceleration in the decline in both sectors.
Amazon CEO Jeff Bezos said on Tuesday that the company would invest an additional $3 billion (£2 billion) in India, boosting the company’s committed investment in the country to $5 billion (£3.4 billion). “I am pleased to announce today that Amazon will invest an additional $3 billion on top of the $2 billion investment we announced in 2014 to bring our total committed investment in India to over $5 billion,” Bezos told an event in Washington attended by Indian Prime Minister Narendra Modi, who also met on Tuesday with President Barack Obama.
Ousted LendingClub Corp CEO and cofounder Renaud Laplanche has been speaking to private equity firms and banks about financing a potential buyout of the online lender, according to people familiar with the matter. The French entrepreneur, one of the highest-profile names in the fledgling industry, left LendingClub in May after an internal probe found the company had falsified documentation when selling $22 million (£15.1 million) of loans to an investor.
The European Central Bank takes a step into uncharted territory on Wednesday when it buys bonds issued by companies, in a bid to kickstart sluggish growth and inflation in the eurozone.With key interest rates already below zero and unprecedented ECB funds sloshing around, the Bank will now cut out the banking middlemen and finance businesses either directly or by buying their debt in the bond market.
Yahoo plans to sell roughly 3,000 patents, including for its proprietary search technology, in a deal that could bring in an additional $1 billion (£690 million) to the company. The Wall Street Journal reports Yahoo has hired investment bank Black Stone IP to handle the sell-off of its patent portfolio, which includes intellectual property that dates back to 1996. Yahoo confirmed that it was exploring the sale of 3,000 patents, and a source told the WSJ that Yahoo will take bids until mid-June.
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