Man Utd's own goal
Profits reversed
Just weeks after floating on the New York Stock Exchange, Manchester United has reported a shortfall in profits compared with last year. A failure to advance deep into the Champions League competition meant that revenues fell by 3.3 per cent to £320m in the year to June, producing a loss of £4.7m against a profit of £12m in the previous year. Both match day revenues and television income fell after the failure to qualify from the European Champions League group stages. A huge new sponsorship deal with General Motors begins to kick in during the current year, but success on the pitch remains of paramount importance.
Inflation nation?
US QE3 fears
Some economists are expressing concern that the latest round of quantitative easing announced by the US Federal Reserve last week will fuel inflation while doing little else to boost the weakened US economy. Bond investors pushed the 'break-even' rate, a key indicator of forward inflation expectations, to its highest level since 2006 following the QE3 announcement. Some fear that the Federal Reserve is now concentrating on improving employment and propping up the economy and will tolerate a higher rate of inflation if it has to. And the surge in the price of oil over recent weeks will likely lead to higher inflation anyway.
See: QE to have little effect in US
China crisis
Japanese spat
The diplomatic spat between China and Japan has escalated as they face off over the disputed Senkaku archipelago of islands. Protests against Japanese interests in China escalated early this week, forcing Japanese businesses in China, including the likes of Canon, Honda, Nissan and Fast Retailing to shut down their operations temporarily, which prompted significant falls in their share prices on the Nikkei225 index. A mooted attack on Japanese bond markets or restriction on the supply of rare earth metals could further hurt the Japanese economy. On Wednesday, the Bank of Japan upped its asset purchase programme by a further $78bn.
Back to work
Lonmin agreement
Troubled South African platinum miner Lonmin has finally struck an agreement with miners' unions to end the bloody standoff at its Marikana mine. The five-week dispute has cost the lives of 45 protestors and has spread unrest to other mines in the country. But Lonmin workers were expected back underground at Marikana on Thursday after agreeing to come back in return for a one-off fee coupled with a pay rise of up to 22 per cent. While there was a certain amount of relief over the end to the strike, Lonmin has yet to update investors on what the increased wage offer will mean for its cash costs.
Food fears
Prices up
The drought conditions that blighted parts of the northern hemisphere during the summer have already led to a rise in food prices, but a further crisis threatens to push prices even higher next year, according to research from Rabobank. The rising cost of keeping livestock is forcing farmers to slaughter pig and cattle herds in huge numbers, with the number of herds being 'liquidated' expected to continue rising in the first half of 2013. The upshot will be an initial glut of meat followed by a shortage, which will lead to a 14 per cent leap in food prices next year. The US cattle herd is already at its lowest level since 1973.
Car sales slump
Euro woe
Automotive sales in Europe are at a low ebb. Earlier this week, Ford reported a 29 per cent slump in its European sales compared with last year, prompting chief executive Alan Mulally to say that European market conditions were a "real concern". Car sales across continental Europe have been falling month-on-month for the whole year, with August registering the worst monthly sales for 22 years. The only European market to buck the trend is the UK, where sales have been resilient, and the US is seeing growing sales, too. Ford is not alone in suffering in Europe with BMW, Fiat, Renault and Peugeot-Citroen all reporting significant falls in sales.
