Overview of TOP weekly news

The creation of new jobs in the private sector has been disappointing

The ADP index, which tracks job creation, significantly disappointed expectations. Based on this, the recovery in the US labour market in August may appear to have exhausted its strength. According to a report released by ADP, the private sector created only 428,000 new jobs in a month. According to analysts’ consensus forecasts, this is less than half of the 950,000 expected. This report may create significantly worse expectations of the official report on labour market developments for August, which is due out on Friday.

Performance of ADP index in U.S. (Source of the graph: Investing)

Schlumberger is leaving the business

Halliburton will become the only global provider of shale finishing oil wells. This is because Schlumberger has reached an agreement with its smaller competitor, Liberty Oilfield, to hand over its hydraulic fracturing activities to the US and Canada in exchange for a 37% stake in the company.

“The transaction is consistent with Schlumberger CEO Olivier Le Peuch’s statement that the company does not need its fracturing assets and his strategy to make Schlumberger a less asset-laden company and to license its technologies to other companies,” said Kurt Hallead, an analyst at RBC Capital markets.

Performance of Schlumberger’s value (Source of the graph: Investing)

The emerging threat of “zombie” companies

Speaking at a conference in Frankfurt, Christian Sewing, CEO of Deutsche Bank, said: “Europe is in danger of suffering its greatest weakness again. We can do relatively well against the symptoms of the crisis. But we are adapting more slowly to the new normal state. ”He said Europe would lose competitiveness with the United States and other countries if it continued to expand state aid to protect the economy from a coronavirus pandemic.

Mr Sewing reiterated the warning that keeping companies afloat by government subsidies prevented “creative destruction,” a process described by economist Joseph Schumpeter in which insolvent companies pave the way for healthier newcomers.

The interest is the contrast between Europe’s response to the pandemic and the US response, which he said was “less successful in managing the virus,” but companies “have already adapted much more radically.”

Ikea plans to make further investments in ecology

Ingka Group, which owns most of IKEA’s stores, plans to spend a third on renewable energy, a third on shares in innovative start-ups and a third on increasing the sustainability of its stores and warehouses, said CFO Juvencio Maeztu. Over the next 12 months, € 600 million is to be invested in sustainability. Because the world’s largest furniture brand has a positive impact on the climate in its value chain by 2030.

To reach the 2030 target, emissions must fall to around 21 million tonnes. In the fiscal year to August 2019, emissions were reduced for the first time, by 4% to 25 million tonnes of CO2 equivalents.

IKEA is composed of several companies. In addition to its retail operations, Ingka Group, a franchise of Inter IKEA, also invests in start-ups, renewable energy, forests and real estate.

Tesla is trading in electricity again

Tesla has recently obtained a license that will allow the carmaker to trade electricity in Western Europe, and the company has also conducted customer surveys in Germany on the potential use of Tesla’s electricity in their cars.

Despite Tesla’s refusal to comment on the issue, analysts believe the move could pave the way for the company – probably with one or more partners – to take over established services in Germany, Europe’s largest electricity market and the heart of cars.

Performance of Tesla’s value (Source of the graph: Investing)

Watch this week:

Thursday, September 3, 2020

The United States will publish the ISM non-manufacturing PMI index for August. A slight decrease of 1.1 points to 57 points is expected.

The second major report from the United States will be the development of initial applications for unemployment benefits. A slight decrease to the level of 950 thousand applications is expected.

Friday, September 4, 2020

The eurozone will publish the month-on-month development of retail sales in July. Analysts expect growth to grow at 3.3% from 2.7% last month.

Source of the text: Investing, Zerohedge, Financial Times, Reuters, Tradingview

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