(CNN) – Asian markets opened lower after the Dow dropped 268 points and the S&P hit an eighth-month low, following similar tumbles in Europe.
It doesn’t augur well for the start of what some claim is the year’s most important trading day.
Several factors have sent global markets down in the past 24 hours: weak economic data from Japan, including a rise in unemployment; softening consumer confidence in the U.S.; and a report that suggests the white-hot Chinese economy is cooling. London's FTSE and Frankfurt's Xetra Dax both closed down more than 3 percent Tuesday. The Paris CAC 40 closed down more than 4 percent.
There’s also new concern over European banks which are due to repay part of a $540 billion loan to the central bank on Thursday.
“It’s almost a butterfly effect,” Savanth Sebastian, equities economist with Commonwealth Bank, told CNN’s Colleen McEdwards. “This host of negative data is certainly taking its toll.”
It’s a tough run-up for today, June 30 – end of the first half of the year, and a day that some say presages how the market will finish the year. “Historically the way the market finishes tomorrow is the way we finish the year,” Alan Valdes of DME Securities told CNN’s Alison Kosik in New York on Tuesday. “If we finish tomorrow on the down, we could be in for a tough year ahead.”
Sebastian points out that there is double-digit growth for a lot of Asian countries; the weaker euro has improved exports out of Germany and that despite the ups and downs the United States is still in recovery.
Still, if the past is any indication, stock performance at the end of the first half will set the tone for the next six months. Markets across Asia opened down: At 10 a.m. Hong Kong time, the Tokyo’s Nikkei 225 was down 2.13 percent, Hong Kong’s Hang Seng Index down 1.27 percent, and S&P/ASX 200 index in Sydney was down 1.77 percent.
(CNN) –Lara Farrar’s story on how foreigners are being hired to portray executives and fake employees makes me mindful that the biggest break I have ever gotten in my career was from being a foreigner in Japan.
In 1997, I was living in rural Kumamoto Prefecture in Japan, teaching English as a second language to high school students in the small town of Hitoyoshi.
The instant celebrity of being a foreigner there was sometimes maddening. Children would run up to you and shout, “How are you?” – as if they were throwing pebbles at an animal to see how it would react. Or when old people followed me around a supermarket – curious what foreigners ate, I guess.
But mostly – I’ll admit it – the attention was cool. People would go out of their way to make you feel special, and local journalists would do stories on you. It was on the strength of one of those stories that my life was forever altered. An article mentioned I used to be a newspaper reporter in the U.S., and that attracted the attention of a radio producer for RKK Kumamoto.
He came to our school and sat down with the school’s top administrators and my supervisor and spoke with me at length. There was an awkward pause, and I turned to my supervisor for the translation: “He wants you to join a weekly radio talk show to give an American’s impressions of living in the countryside of Japan. But first he wants to get a sense of how good your Japanese is.”
“I guess he knows now,” I cracked, bursting into laughter that no one else joined. At the time, my Japanese could barely get me in and out of a restaurant.
So began my strange odyssey of learning how to speak Japanese by talking on a live radio show every week. I would prepare a five-minute segment, learn it in Japanese, and pray to God my co-hosts wouldn’t ask me any questions. Often those prayers weren’t answered.
For the first six months when I headed to the remote location where we did our show, I often fantasized of my car rolling off the side of the road – anything to prevent me from getting on the air and making a fool of myself again. But I slowly got the hang of it, and continued to do the program for two years.
More importantly, my language skills improved to the point where I was eventually hired by The Wall Street Journal Asia as a feature writer in 2000 – a gig I would have never gotten were it not for the skills I picked up from the radio show. Which is a gig I never would have gotten unless I was a foreigner living in the countryside of Japan.
New figures show Japan's job market has taken a hit.
The unemployment rate in the world's second largest economy rose to 5.2 percent in May – up from 5.1 percent in April. That may be hurting confidence among Japanese consumers, as household spending fell 0.7 percent.
Goods rolled out of Japan's factories at a slower pace in May. Industrial production fell a tenth of a percent in May compared to April.
(London, England) Ascot is literally a festival of colors – especially under clear skies as we enjoyed during the start of the racing fixture. Women want to outsmart their counterparts by balancing style with uniqueness as they unveil their latest hats. Men sport their top hat and tails and add their creative touches with bright neck wear.
Ahead of the first race, we pause on the recommendation of one polite usher. Queen Elizabeth II and Prince Philip pass by in their carriage, and the latter acknowledges the person I am with a tip of his hat accompanied by a warm smile.
I am walking to the winner’s paddock as a guest of H.H. Sheikh Mohammed bin Rashid Al Maktoum, the Ruler of Dubai and Prime Minister of the UAE, and his wife Princess Haya. Both are avid equestrians and had 27 horses running at Royal Ascot under the Godolphin stable. His son Crown Prince Hamdan’s Philly Rainfall won the Jersey Stakes setting a course record. The family is together to collect the first trophy of the week.
My stroll with H.H. and the broader entourage including his trainer Saeed bin Surror and his manager Simon Crisford was a case of déjà vu. The previous year my wife and I were invited to the venue by a friend on the final day of racing and saw the Dubai Royal Family from a distance in the saddling paddock, nearly six months before the debt challenges of Dubai set in.
The tour around Royal Ascot followed a twenty minute interview in his private box above the finish line, the first such interview since the restructuring was completed at Dubai World.
We had a frank exchange about the concerns the International Monetary Fund has about a “persisting” recession in Dubai. “We didn’t create the recession, it happened,” says Sheikh Mohammed, “And I don’t call it a recession, I call it a challenge. And when things go wrong, a true leader comes through.”
Asked whether he sees growth in Dubai in 2010, I receive a one word response: “Yes.”
The Ruler of Dubai is in the midst of an intense race – even if some within the Emirate may not see it that way – to rebuild investor confidence. On the eve of Eid, Dubai hit the pause button on Dubai World’s debt, then spent the next quarter working out a structure between what are deemed corporate entities and the holdings of the government and its Ruler. Bankers believe a bottom has been reached, but the $6.2 billion loss of Dubai Holding Commercial Operations Group was not a real confidence builder.
Businessmen I spoke with worry about the forming of a potential continuous downward cycle on property prices. The recent stability will loosen up borrowing, which will lead to a restarting of unfinished projects and more capacity will come onto an already full property market.
As the interview progresses, I asked the Ruler of Dubai if neighboring Abu Dhabi will stand by him. “Abu Dhabi will always stand with any emirate and Dubai with any emirate.” Will additional external support be needed from Abu Dhabi? He responds by saying he is “not worried about the companies” and that the relationship “is very good between the emirates.”
But it is clear from our time in the interview and then our discussion while touring the grounds afterward that Sheikh Mohammed is eager to keep focused on the sectors that built “Brand Dubai” – trade, tourism and financial services.
Our interview came a week after Emirates Airlines ordered another $11.5 billion in new planes and a week before cargo services started at Dubai World Central Al Maktoum International. The Dubai Ruler told us that there are more plane orders to come in July at the Farnborough Air Show.
Asked why he placed a similar size order two months after 9/11, which matches his most recent strategy he replied, “You have to grab the opportunity.”
(CNN) – People in the U.S. used to rail against imported cars that are “run on rice” (read: from Japan). Now it turns out the most corn-fed cars are from two Japanese automakers: Toyota and Honda.
Cars.com in Chicago released its annual ranking of vehicles deemed most “American” based on American production, percentage of domestic parts used and American sales volume. Half of the top 10 cars are made by the Japanese automakers.
Since the 1980s Japanese automakers have cultivated production facilities within the United States to be both closer to delivery in its largest market and undercut the anti-Japanese angst that rose with the country’s global stature and competitiveness in the world markets.
The ranking comes on the heels of Toyota’s announcement that European and North American operations will be run by European and North American managers to improve cross-country communications in the wake of the wave of recalls earlier this year.
Here’s how the most “Made in America” cars stack up, according to Cars.com.
Rank Make/Model U.S. Assembly Location
1. Toyota Camry; Georgetown, Ky.; Lafayette, Ind.
2. Honda Accord: Marysville, Ohio; Lincoln, Ala.
3. Ford Escape; Kansas City, Kan.
4. Ford Focus; Wayne, Mich.
5. Chevrolet Malibu; Kansas City, Kan.
6. Honda Odyssey Lincoln, Ala.
7. Dodge Ram 1500; Warren, Mich.
8. Toyota Tundra; San Antonio
9. Jeep Wrangler; Toledo, Ohio
10. Toyota Sienna; Princeton, Ind.
Understanding cultural nuances is part of doing business anywhere in the world. I recently spoke with J.J Ngulube, the CEO of Munich Reinsurance Africa operations, about communicating across cultures.
This is our conversation about how he, as a Zimbabwean, does business with fellow Africans across the continent.
J.J Ngulube: There’s a lot of unwritten business rules and this varies from West Africa to East Africa even within.
Robyn Curnow: Like what?
JN: How you communicate. For example when somebody says 'yes.' When a West African says 'yes' you have to understand what that means.
RC: What does it mean?
JN: Is it 'yes I hear what you are saying?' Is it 'yes I agree?' Or is it 'yes I’m politely agreeing but I’m not happy with what you’re saying' ?
RC: So, it basically means no?
JN: Exactly. So even that 'yes,' you have to be able to interpret and body language is everything. It’s so easy for a non-African to go away thinking ‘I met those guys and they agreed with everything I said.'
This exchange is a wonderful description of the perils of doing business in a foreign land where language and cultural barriers can make all parties feel very confused about the outcome of a conversation.
Have you ever walked out of meeting thinking you had achieved one thing and realized later that you had agreed to something completely different?
I would love to hear your stories.
(CNN) – Toyota Motor Corp. is moving aside Japanese managers in Europe and North America in favor of local managers.
The move comes in the aftermath of Toyota’s recall saga earlier this year, when millions of cars around the world were pulled due to a variety of problems ranging from faulty brakes to issues with stuck accelerators. The Thursday announcement coincided with Toyota President Akio Toyoda’s first meeting with shareholders since the recalls.
The company was widely criticized for not being able to effectively communicate the separate problems which were cropping up in North America and Europe. Toyoda promised to give regional markets more of a voice in global operations.
“The aim is to put in place management structures capable of more rapidly and accurately grasping local conditions and identifying local needs,” a statement released Thursday said. “Taking both a medium- and long-term view, (Toyota) has long fostered local personnel in overseas markets.”
Here’s how the shake-up looks:
Toyota Motor Europe:President Didier Leroy (formerly Tadashi Arashima)
Toyota Motor Manufacturing, Texas, Inc.: President Chris Nielsen (formerly Kenji Fukuta)
Toyota Motor Manufacturing, Indiana, Inc.: President Norm Bafunno (formerly Kazumori Oi)
Europe Toyota Motor Manufacturing Turkey Inc.: President Orhan Ozer (formerly Tamer Unlu)
Toyota Motor Manufacturing Poland: President Carl Klemm (formerly Kenji Manabe)
At Toyota Motor Manufacturing operations in Kentucky and Canada, the current presidents (Steve St.Angelo and Real C. Tanguay, respectively) were promoted to newly created positions of chairmen, and Wil James and Brian Krinock were named new presidents.
(CNN) – Kevin Rudd’s sudden loss of his own party’s backing as Prime Minister of Australia seems to fly in the face of conventional wisdom that has ruled politics since Bill Clinton successfully stumped for U.S. president in 1992 on the back of this slogan: It’s the economy, stupid.
In the midst of the storm clouds that have surrounded the global economy during the “Great Recession,” the Australian economy has been a ray of light.
Australia never fell into recession. Rudd was widely credited for successfully steering the nation through the credit crisis, thanks in no small part to its commodities-rich trade with China and other emerging economies.
As recently as six months ago, CNN’s Stan Grant reports, Rudd enjoyed record approval ratings for a sitting prime minister.
Two major culprits, both of which have a deep impact on business in Australia: The failure of his emissions trading proposal – which would have introduced tougher cap and trade policies for industrial polluters – and a 40 percent “supertax” planned on mining companies.
A once passionate advocate of reducing global emissions, his softening on the issue upset his environmental base. His support of mining taxes, naturally, upset the nation’s powerful mining interests (at the close of trading in New York, shares of both Rio Tinto and BHP Billiton were up more than 2 percent on the news of a possible leadership shakeup).
Rudd’s inability to steer these two measures created doubt within his own Labor Party that he could successfully lead them to victory in upcoming elections.
Moreover, it appears Rudd alienated the supporters closest too him, who saw him as controlling and mercurial in his leadership style.
Which goes to show that its not always “the economy, stupid,” when it comes to politics. Instead it appears Rudd forgot that other maxim of politics, coined by former U.S. Speaker of the House Thomas “Tip” O’Neill: All politics is local.
It’s a lesson for executives, too: If you don’t have the support of those around you, you don’t have any support at all.
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