Business

Morning Market Roundup: Greek Contraction, Japanese Slowdown, Google Layoffs

Here’s what’s important in the business world this morning

Greece: The Greek statistical authority says the country’s deep recession has eased slightly, although the economy still contracted 6.2 percent in the second quarter from the same period last year.

In the first quarter, the contraction was 6.5 percent.

No quarterly figures were provided in the figures published Monday.

Debt-crippled Greece has been in recession for five years, and the cumulative shrinkage is expected to reach 20 percent at the end of this year. The government has said the recession could exceed seven percent in 2012.

Google: Google said Monday that it will cut about 4,000 jobs at its Motorola Mobility wireless phone business and will close or consolidate about one-third of Motorola’s 90 locations.

The reductions represent about 20 percent of Motorola Mobility’s 20,000 employees, and two-third of the job cuts will take place outside of the U. S. The company said Monday that Motorola Mobility has lost money in 14 of the past 16 quarters.

Google said the changes are intended to make the unit profitable, but warned that investors should expect the business’ revenue to fluctuate over the next few quarters.

Google said it also will shift Motorola Mobility’s focus from simple wireless phones to more profitable devices.

The restructuring will cost Google about $275 million in severance costs, which will largely be recognized during the third quarter. The company also expects to book an unspecified amount in restructuring charges, mostly in the third quarter.

Japan: Japan’s economy grew at a slower-than-expected annualized rate of 1.4 percent in April-June, adding to worries over the global outlook, as consumer spending flagged following a rebound from last year’s earthquake and tsunami disasters.

The protracted crisis in Europe took a heavy toll, also, as feeble demand hit Japan’s export sector.

Although the pace of growth dropped sharply from a revised 5.5 percent in the previous quarter, the economics minister, Motohisa Furukawa, struck an upbeat tone, saying in a statement that the economy “continues in an uptrend, led by domestic demand

Stock Futures: Stock futures were mixed Monday after a report from Japan showing slower-than-expected economic growth.

There had been hopes that China would roll out stimulus measures over the weekend after Beijing released terrible industrial and retail numbers Friday. That did not happen.

Dow Jones industrial futures fell 15 points to 13,157 and the broader S&P futures slipped 1.1 points to 1,401.30. Nasdaq futures were flat at 2,721.50. By the end of trading Monday, with no action apparent, Hong Kong’s Hang Seng fell 0.3 percent. Japan’s Nikkei 225 fell marginally to close at 8,885.15.

The lack of growth globally is pushing U.S. corporations to cut costs to offset the slow growth, or decline, in net income.

Follow Becket Adams (@BecketAdams) on Twitter

The Associated Press contributed to this report.

Comments (8)

  • lukerw
    Posted on August 13, 2012 at 3:00pm

    These are some bad times… and in Bad Times… Economic Systems spiral down ward.,, as lies spiral up ward!

    Report Post » lukerw  
  • Rothbardian_in_the_Cleve
    Posted on August 13, 2012 at 11:01am

    Continued…

    he was building a gold based African Monetary Union that would create continental currency and set the stage for the dollar to no longer hold reserve status. We can’t have that…so now he’s dead. But, China has seen the playbook and are now doing their own plan. Which leads us to Europe. When the EU goes nipples up the cascade of losses will be catastrophic. The amount of CDO/CDS on that pile of toilet paper (bunds…yeah I know, not bonds) is probably 100X real value. That’s going to be brutal. So essentially, we are seeing a perfect storm that makes 08/09 look like a picnic. You have banking and sovereign defaults in Europe with political tinder ready to blow. The BRIC’s are not as strong as we thought and seem to be signalling recession. The US is signalling recession. There is uber pressure (politically) on the dollar and the print button fix seems off the table. Yikes.

    So, if Romney wins he inherits a recession and EVERYONE lines up to lay it on his feet politically. He will be powerless to enact an agenda and will be a one term POTUS. If Obama wins, he inherits a recession but has no political risk at that point and uses executive orders and the “crisis” to take over everything. It is lose-lose for Obama opposition and win-win for the progressives.

    Report Post » Rothbardian_in_the_Cleve  
  • Rothbardian_in_the_Cleve
    Posted on August 13, 2012 at 10:54am

    I hate to break it to all of you GOP’ers, but a new bout of recession is coming no matter who wins this election. If you look at inventory data, real estate prices (particularly in China, that’s scary), global demand, unemployment, consumer confidence and then look at some of the Fed (yes I know) indexes like the NY manufacturing and the VA consumption models….well, it’s already underway. The equity markets have been like soma for the uneducated. As central planners monetize debt and pump liquidity onto bank balance sheets it has to go somewhere. Bank’s investment portfolios are over 50% of assets in some cases. Combine that with a short selling ban and you no longer have a free market…just manipulation to create false senses of security. Despite the upward trend in the market, look at the volumes. They simply aren’t there. This is a paper tiger rally.

    Did you see the article in WSJ regarding Chinese investments in Africa? Africa has been a dollar haven for decades. In fact, given current monetary policy we manage to export our inflation there through the purchase of raw materials. Well, the Chinese have made a point to try an replace the dollar with the yuan. Most direct investment in Africa is Chinese at this point. Now the governments are playing ball. Many are demanding oil and commodity trades in their native currencies. In fact, most don’t know it, but the reason we killed Gahdaffi was because he was building a (continued)

    Report Post » Rothbardian_in_the_Cleve  
    • jacobstroubles
      Posted on August 13, 2012 at 12:14pm

      it will unlikley be a resession..at least in the terms that most americans unerstand..it will be a total and complete world wide reset. ressission will hardly cover the tip of the ice bert that’s about to surface!

      Here’s the playout:
      Late Friday Afternoon..(EST), oh say about 3 to 4pm..in the cloak of Friday afternoon darkness, cause they know everyone is planning their weekend..activities of foootball or hoops and beer drinking, the press the reset button..Monday morning..will arrive, it will be a beautiful crisp sun shinning georgous morning, but yet a river of tears will be flowing in the streets..cause the ATM’s will be locked down..bank doors wont be open.. and a whole string of financial things will have taken place.

      Here’s current quote from the thing that resides in the wh:
      “I will not rest until every American who is ready and able finds a job.”

      Yes..there are hundreds of $7.65 hour paying jobs! What’s wrong with all of you?
      Why dont you want to work for those companies? They have work for you.

      So what if gas is going back up (again) to $4.00/gal +..and it takes $70.00/week, to fill up your
      tank, just to get to work and that only leaves you with $210 week to pay for rent and food?
      You’re too fat anyways, you can cut back on food, Keep your house at 85+ in summer/55 in winter.
      Wear a sweater and keep your tire inflated properly & save $5.00 a year!

      Are ya ROFL’ing yet? Probably not..

      Christians..ready yoruselves Rapture/

      Report Post »  
  • watersRpeople
    Posted on August 13, 2012 at 10:25am

    This is going to be a right wing versus left wing election, because by the time we get to the election much of the center and independence will have lost interest.

    Report Post »  
  • watersRpeople
    Posted on August 13, 2012 at 10:14am

    Here’s the thing. The Founding Fathers were only able to create the U.S because they cared about much larger things than the economy. Think about the lack of rods in place then, and all the rods in place now. Now even the ones who claim they are enlightened mostly just care about the economy. You aren’t going to be able to undo the damage.

    Report Post »  
  • Sandy
    Posted on August 13, 2012 at 10:03am

    Ummm, didn’t Google get stimulus money and hire people in 2009…………

    Report Post » Sandy  

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