By James Langton
(October 18 – 09:00 ET) – The U.S. the September Consumer Price Index came in up 0.5% on the headline and 0.3% on the core rate (excluding food and energy). Economists were expecting a 0.4% increase in the headline rate and 0.2% on the core, although some headline estimates ran as high as 0.6%. U.S. stock futures are down deeply in response to that news and a follow through selloff in overseas markets in response to earnings news.
Later today Cleveland Federal Reserve Bank President Jerry Jordan speaks at an economic and investment outlook conference in Pittsburgh, San Francisco Fed President Robert Parry gives an economic outlook address at the Milken Institute’s annual State of the State conference in Los Angeles, and U.S. Treasury Secretary Larry Summers addresses the annual meeting of the Conference Board in New York. It’s not expected that the Fed will do anything to bail out recent trading.
In Canada, the Monthly Survey of Manufacturing for August was released showing manufacturers’ shipments rose for the third time in four months, led by demand for high-tech products from the electrical and electronic products industry. Shipments increased in 14 of the 22 major manufacturing groups, representing 66.2% of total shipments. Shipments rose in six of the provinces.
In Europe markets are sliding sharply after a heavy selloff in Asia. Tech stocks are leading the way after IBM hit its earnings target but missed its sales target and suggested slower sales ahead. IBM and Intel are both being widely downgraded. European stocks are being led south by names such as Alcatel, and Nokia.
The FTSE is down 104 points to 6,099. The CAC 40 has dropped hardest falling 174 points to 5,893. The DAX is off 124 points to 6,407.
Overnight in Asia tech shares tanked. The Nikkei closed down 468 points to 14,872. The Hang Seng was off 415 points to 14,458.
In other business news, Chase Manhattan Corp. reported its third-quarter profit fell 19% on losses in its portfolio of investments in start-ups. Kodak says its profit will miss forecasts. Ford profit is down 16% on its Explorer debacle.
In M&A news, Allianz AG is buying Nicholas-Applegate Capital Management LP for as much as US$2.2 billion.
In other news, AEterna Laboratories reported a profit of 7¢ a share in the quarter ended on September 30. A year ago it reported a loss of 7¢ a share .
Janna Systems Inc. is reporting third quarter revenue increased by 245%, EBITDA increased by 374% and net earnings for the quarter were 10.8¢ a share, compared to 8.1¢ a share during the same period a year ago.