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 awkward conversations over the Thanksgiving dinner table.Even as markets closed Thursday and took a half day on Friday, there was no shortage of news. Occupy Wall Street once again took focus as the country reacted to police pepper-spraying students on the University of California Davis campus.
But that wasn’t all that happened.
In a surprise revision, the Bureau of Economic Analysis lowered third quarter GDP to 2.0% from a 2.5% previous reading. An increase in imports, declining inventories and decreased state and local government spending took a bite out of the headline number. Meanwhile, personal consumption remained steady at 2.3%. The BEA noted that sales of computers and automobiles contributed 0.22 and 0.18 percentage points to GDP during the quarter.
Ratings agencies Fitch, Moody's and Standard & Poor's announced a slew of downgrades this week to sovereign nations. Hungary's credit was cut to junk by Moody's as the country looks for an IMF bailout in the next year. Belgium saw its debt lowered to AA by S&P as its economy slows. Fitch lowered a number of Portuguese banks after dropping the nation's rating. And to come, S&P announced it might lower Japan's credit rating.
A sovereign debt sale issued by Germany disappointed when the country only raised €3.64 billion, off from initial targets of €6 billion, representing the weakest demand for a German auction since the euro was launched in January 1999. Germany's central bank had to retain 39% of the issue. At the same time, the Deutsche Bundesbank lowered growth targets for the country to 0.5% to 1% for 2012, from 1.8% earlier this year.
Amid strong austerity measures in the island nation, the United Kingdom lowered its budget deficit as net outlays, excluding that to banks, from the government fell 15% to 6.5 billion pounds. The U.K. fiscal deficit will likely top $134 billion pounds through March, the country's central bank estimates. Economists have argued that cuts are stifling growth, which may now only hit 1% for this year.
HSBC flash Chinese PMI fell to a not-so-rosy 48.0, down from 51.1 in October. A reading below 50 indicates a contraction in production. That was the lowest number in 32 months, as manufacturer worries of a Chinese slow-down heightened. HSBC's output sub-index also fell to a two and a half year low of 46.7, while new orders suffered the largest decline in one and a half years.
Japanese consumer prices fell 0.1% in October, its first drop in four months. Declining global demand, even against resurgent reconstruction spending, packed a blow to the country. The drop, however, was in line with economist expectations. Household spending has dropped each month this year, and inflation measured in Tokyo fell 0.5% in November, worrying economists that the country could be heading towards another lost decade. At the same time, October exports dropped 3.7%.
Mobile giant AT&T is planning on taking a $4 billion charge off as it faces the possibility that its merger with T-Mobile will not be approved. The break off fees are made up of $1 billion in spectrum rights and $3 billion in a payment if the $39 billion take over does not close. The company also withdrew its application to the FCC in a bid to prevent proprietary data releases to the public.
Deutsche Bank may sell its global asset management division after recent regulatory changes and costs have increased pressures on the unit. In a statement that it was conducting a review of the unit, the bank said all options were being considered. Revenue in Deutsche Bank's asset and wealth management corporate division declined 7% year-on-year to €876 million during the third quarter.
In a settlement with the Department of Justice, Merck, Sharpe & Dohme agreed to pay $950 million to settle criminal charges relating to its marketing of Vioxx. As part of the agreement, Merck plead guilty to misdemeanour criminal charges. The company had faced intense criticism when it was reported that it knew of heightened risks of heart attack and stroke in patients, but did not disclose it. Before Vioxx was pulled from the market, it had annual sales of $2.5 billion, representing one of Merck's strongest revenue streams.
Three board members have resigned from Olympus, as the electronic maker faces a coming deadline to produce accounts for the period it hid losses. Ousted president, Michael Woodford, will work with the company in an attempt to avoid having its stock delisted. Woodford was fired after he exposed extraordinary fees totaling $687 million to advisors on deals.
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