FT News Briefing Wednesday, June 26
Jun 26, 2019
Jay Powell highlights rising risks to global growth, stirring investor caution. AbbVie's bid for Allergan faces backlash, illustrating the challenges ahead. FedEx warns that economic slowdowns and trade tensions will hinder its performance. Meanwhile, digital banking upstarts are emerging in Hong Kong, posing a threat to HSBC's long-standing dominance. The competitive landscape is shifting, raising questions about the future of traditional banks in the region.
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Fed Rate Cut Expectations
- U.S. stocks experienced their largest drop in nearly a month after Federal Reserve officials discussed the economic outlook.
- Fed Chairman Jay Powell warned of decreased business confidence due to trade tensions and hinted at a likely interest rate cut in July.
FedEx Forecasts Decline
- FedEx, considered an economic bellwether, anticipates a decline in earnings for the fiscal year 2020 due to global economic slowdown and trade uncertainty.
- These lowered expectations follow a slowdown in China and weaker global trade, impacting FedEx's performance.
AbbVie's Allergan Acquisition
- AbbVie's $63 billion acquisition of Allergan, the maker of Botox, was met with investor disapproval, causing AbbVie's shares to drop over 16%.
- This acquisition aims to strengthen AbbVie's portfolio as its top-selling drug, Humira, faces patent expiration and increased competition.