The smartphone market highlights how companies are responding very differently to the economic slowdown. Samsung is adding features such as ‘foldables’. But Apple is building services business to provide annuity revenue for the future.
Chemicals and the Economy
Asia’s debt crisis starts to approach its endgame as the yen continues to tumble
Last week, the Japanese yen fell through the US$ : ¥150 level for the first time since 1990. It has now fallen by nearly 50% against the US$ in the past two years. The currency is behaving as if Japan were a 3rd world country – whereas it is actually the 3rd largest economy in the world. Clearly, something is very wrong.
Existential crisis? Growth opportunity? Catalyst for restructuring? Decarbonization challenges the chemical industry and its customers
Essentially, the industry is at a crossroads.
It now needs to move forward, and accelerate the move to create new circular business models. There is a once-in-a generation opportunity to build a completely new future, based on closer relationships with its downstream stakeholders, including brand owners and waste companies.
Central banks start to lose control of interest rates, and housing markets feel the pain
US 10-year interest rates are the world’s benchmark “risk-free” market. And as the chart shows, their yield has risen from 3.25% on 4 June to peak at 4.88% on Friday. Prices move inversely to yield. So that means prices have fallen 50% in 4 months.
Companies must be bold and transform, as paradigm shifts reshape the business world
The paradigm shifts are already starting to impact most businesses. China is also changing, and will no longer power global growth. So there are no ‘Business as Usual’ options for the future. Instead, companies have to develop new business models for today’s New Normal world.
Bond market downturn reaches “The End of the Beginning” as traders realise rates will be ‘higher for longer’
300+ years of Bank of England data shows that interest rates are typically inflation plus 2.5%. At today’s level, this would imply – US rates would be 3.7% + 2.5% = 6.2%: Japan would be 3.2% + 2.5% = 5.7%: Eurozone rates would be 5.3% + 2.5% = 7.8%; UK rates would be 6.7% + 2.5% = 9.2%
Energy markets could be heading towards a new crisis
It’s too soon to talk of an actual energy crisis. But as the charts showing Brent oil and European natural gas prices confirm, it is certainly time to start planning for the possibility: Oil prices have recently risen 25%. And Europe risks gas shortages if there is a cold winter
US interest rate rises start to threaten the housing market bubble
Most Americans can’t qualify for a mortgage today with prices and interest rates at generation-highs. Yet housing starts average a post-2007 record of 1.5m/month. Logic therefore suggests the US housing market could be heading for a repeat of the 2008 crisis
Asia’s debt crisis edges nearer, as Japan’s interest rates rise and China’s property bubble bursts
Bubbles are great fun while they last. But they are much less fun when they burst. For the past 20 years, central bank stimulus has created some of the largest bubbles ever seen. But now, led by developments in Japan and China, they are bursting
Europe’s chemicals market highlights move into recession, and risk of future deflation
The chemical industry is now starting to warn us of a new risk. Europe is already suffering from a cost of living crisis. And people simply can’t afford to pay even higher prices for energy. At a certain point, therefore, demand may simply collapse, and usher in deflation
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