Photo: edkohler via Flickr
Don’t blame yourself if you missed a few key things this week. Even with one eye on CNBC and the other on your Bloomberg terminal, it’s likely you’d only remember the job announcements.Unemployment declined to 8.5% from an upwardly revised 8.7% reading in November. Payrolls expanded by 200,000, topping estimates by 54,000.
At the same time, manufacturers added 23,000 new jobs, verse an expected increase of 6,000. Public sector layoffs also came in below forecasts, at 12,000 in December.
A day earlier initial claims beat economist predictions and Challenger layoffs fell to a six-month low for the same period.
But that wasn’t all that happened.
The Hungarian government has announced it is in talks with the International Monetary Fund for an emergency loan after it failed to raise needed capital over several auctions. E.U. and IMF leaders have distanced themselves from Hungary after it passed a new law that could reduce the independence of Hungary's central bank. Yields on Hungary's 10-year debt have peaked over 11%, while the country's currency has fallen to an all-time low this week. Adding to the nation's woes, Fitch Ratings downgraded its debt obligations to junk on Friday.
Factory orders in Germany fell at the greatest rate in three years, as the European economy continued to weigh on the nation's output. Orders fell 4.8% from October, well below expectations for a 1.8% decline. Two institutes that advise German Chancellor Angela Merkel revised 2012 forecasts lower for the country last month, with expectations for 0.5% GDP growth in the new year.
Chinese home prices declined for the fourth-straight month this week, falling an additional 0.25% in December. SouFun, China's largest real estate website, noted prices dipped in the 10 largest provinces, including Shanghai and Beijing. At the same time, Chinese Premier Wen Jiabo struck an ominous chord about the economy.
European inflation declined to 2.8% in December from 3.0% the month prior, in line with economist estimates. Lower inflation is expected to help lower ECB borrowing costs. A Markit Economics purchasing manufacturers index also showed an improving picture for the region, rising to 48.3 from earlier estimates of 47.9 for December. However, a reading below 50 indicates contraction.
Federal prosecutors accused three Swiss bankers of helping U.S. taxpayers hide $1.2 billion in assets. The indictment said top management at Wegelin & Co., Switzerland's oldest private bank, was aware of the actions as the company tried to capture business lost by UBS as the IRS began investigations. Many of those taxpayers repatriated their accounts following an agreement between the Swiss and American governments.
Eastman Kodak shares were battered this week after the Wall Street Journal reported the company was readying to file for bankruptcy. Kodak executives are at work securing $1 billion in financing to continue operations, but faces insolvency if it is unable to find a lender this or next month. During the last fiscal quarter, Kodak reported cash on hand fell to $862 million from $1.4 billion in September 2010.
Global aluminium producer Alcoa has announced it will cut smelting capacity by 12%, or approximately 531,000 metric tons. Plant closures will hit Texas and Tennessee in the U.S. Alcoa is targeting the reductions to reduce excess supply in the market and boost margins, after aluminium prices slumped 27% from highs in 2011.
Yahoo has hired Scott Thompson, the president of PayPal, as its new CEO. Thompson was an unexpected choice. He was the chief technology officer of PayPal before he was promoted to lead the company in 2008. Thompson has said he does not have an opinion on display advertising, which is Yahoo's chief product. Even though he has a strong technical background, Jefferies downgraded the search and e-mail company.
Barnes & Noble surprised investors when it announced it was considering spinning off its Nook digital business. The company lowered its guidance at the same time, saying fiscal 2012 revenue would be in the range of $7.0 to $7.2 billion. Analyst expectations were for $7.3 billion. Barnes & Noble also forecast greater losses for the year.
The Royal Bank of Scotland, may lay off as many as 10,000 employees as it shifts its strategy away from riskier products including its investment bank. Cuts will focus around RBS's equity unit, which has underperformed larger peers this year. An RBS spokesperson confirmed to Business Insider that the bank planned on shrinking, but could not comment on the size of the headcount reduction. RBS's capital markets unit currently employs some 19,000 employees globally.