Morning Market Roundup: Toyota Profits Triple, G-20 Talks EU Debt, Election not Affecting Markets … Yet
Here’s what’s important in the business world this morning:
Toyota: Toyota’s quarterly profit tripled, driven by a recovery from natural disasters, and the company raised its full-year earnings forecast Monday despite a sales slump in China.
Toyota Motor Corp., on track to regain the crown of world’s No. 1 automaker this year, reported a July-September net profit of ¥257.9 billion ($3.2 billion) compared with an 80.4 billion profit a year earlier. The result was better than the ¥238 billion ($3 billion) quarterly profit forecast by analysts surveyed by FactSet.
Japan’s top automaker raised its profit forecast for the full fiscal year through March 2013 to ¥780 billion ($9.8 billion) from ¥760 billion ($9.5 billion).
It had a profit of 283.5 billion yen the previous fiscal year when Toyota’s car production was hammered by the tsunami disaster in northeastern Japan and flooding in Thailand.
Quarterly sales improved 18 percent to ¥5.4 trillion ($67.6 billion) as the demand for Toyota vehicles picked up across all major regions, including North America, Europe, Japan and Asian nations other than China.
It now expects to sell 8.75 million vehicles for the full business year through March 2013, up by more than a million vehicles compared to the 7.35 million vehicles sold the previous year.
G-20: Finance ministers and central bank governors from the world’s leading economies met in Mexico on Sunday amid growing fears over the global impact of Europe’s debt crisis and the stalemate over a fiscal plan in the United States.
The two-day meeting of G-20 financial officials in Mexico City, coming just ahead of U.S. elections and shortly after the annual IMF and World Bank meeting in Tokyo, lacked key players such as U.S. Treasury Secretary Timothy Geithner and Brazilian finance chief Guido Mantega.
Although recent financial talks have focused on the debt crisis in Europe, especially in Greece and Spain, some delegates in Mexico expressed concern over the fiscal situation in Washington.
Mexican finance minister Jose Antonio Meade said that among the issues dealt with at this meeting will be “the fiscal cliff” in the United States, where a package of spending cuts and tax increases are set to take effect unless Congress acts by Jan. 1.
The closed-door meeting will be the last organized by Mexico in its role as president of the G-20 in 2012.
HSBC: HSBC, Europe’s biggest bank by market value, has set aside a further $1.15 billion to cover potential U.S. fines for failing to stop money-laundering in its Mexican unit and to compensate its UK customers for mis-selling payment protection insurance.
The provisions were announced Monday alongside a 52 percent fall in third-quarter net profit to $2.5 billion compared to $5.2 billion a year earlier.
HSBC shares were down 2.2 percent at 612.5 pence in midmorning trading in London.
The bank raised its total provision arising from the U.S. money-laundering investigation by $800 million to $1.5 billion, though it warned that the cost could be much higher. It also set aside an extra $353 million to compensate U.K. customers, raising the total estimated cost for payment protection insurance to $1.8 billion.
Markets: Oddly enough, markets on Monday have paid little attention to the looming U.S. presidential election and instead are focusing on renewed EU concerns.
In Europe, the FTSE 100 index of leading British shares was down 0.6 percent at 5,827 while Germany’s DAX fell 0.7 percent to 7,312. The CAC-40 in France was 0.9 percent lower at 3,460.
Wall Street was poised for a flat opening, with both Dow futures and the broader S&P 500 futures unchanged.
Two votes in Parliament this week could well determine if the cash-strapped country stays in the euro.
On Wednesday, Greek lawmakers are expected to vote on a €13.5 billion ($17.3 billion) austerity package that is required by international creditors for the release of the next batch of the country’s bailout funds. Without the cash, Greece faces bankruptcy.
If, and when, the package of spending cuts and tax increases is passed, lawmakers will have to approve the 2013 budget. That vote is penciled in for Sunday.
The Associated Press contributed to this report.
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