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Morning business news - 19 October

Morning business news with Brian Finn
Morning business news with Brian Finn

We've already entered the final quarter of the year, meaning companies in the US have started printing out their numbers for the third quarter.

There will be a lot of focus on the figures given the volatility that has hit global stock markets in recent months.

Aidan Donnelly, a senior equity analyst at Davy, said there had been a steady deterioration in earnings forecasts over the summer months, which had impacted on market sentiment.

"There were issues with China and the steady reduction in the price of oil, all of which impacted on earnings forecasts and ultimately on sentiment," he explained.

There is also the issue of impending interest rate increases in the US. Mr Donnelly said if one was to believe what the Fed was saying, then it is on the cards.

"However, having built up so much expectation in advance of September, the market is of the mind 'fool me once, shame on you'. So, many don't believe the hike is coming."

He said one factor working in the favour of company earnings in the third quarter was the easing off in the strength of the dollar.

"The dollar had moved as high as 1.05 before the summer but came back to the 1.11 to 1.14 range and held fast there for most of the third quarter. That's good news for US companies and makes their lives easier when exporting," Mr Donnelly explained.

35 US companies reported last week with a further 118 expected to publish earnings in the coming week.

"We've a few big banks and some big names like Caterpillar, Boeing, IBM, Microsoft. We'll also hear from some consumer names like McDonalds and Coca Cola. It's a good spread this week, which should give us a better idea of underlying performance in the summer months," he said.

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Morning briefs

China's economy grew by 6.9% in the year to the end of September, according to official figures - just shy of the government's 7% annual target rate.

It was marginally higher than analysts had expected, but it was still the slowest quarterly expansion in six years.

The data will likely raise pressure on policymakers to step up stimulus measures to try to stoke growth in the world's second biggest economy.  

The latest growth figures come on the heels of a slew of disappointing data out of China. 

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Stocks in China got a lift in overnight trading - perhaps reflecting some optimism that the growth figures were better than many had expected.

US stocks are back at their pre-Black Monday levels - that was the global stock market wipeout on 25 August that followed mounting concerns over the Chinese economic story and the massive stock market crash there.

It is earnings season in the US so much focus on the performance of listed companies over the summer months.

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The identity of the next governor of the Central Bank is expected to be made known this week.

It is thought Michael Noonan might recommend a name at tomorrow's cabinet meeting.

The two front runners are the current Secretary General at the Department of Public Expenditure, Robert Watt, and Philip Lane, a professor of Political Economy at Trinity.

At this point, Mr Watt is seen as the front runner to replace Patrick Honohan, who is stepping down from the post a year earlier than his due date for retirement.

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Amazon is taking legal action against more than 1,000 people it says have posted fake reviews on its website.

The online retailer says its brand reputation is being damaged by "false, misleading and inauthentic" reviews paid for by sellers seeking to improve the appeal of their products.

It says the defendants offer false reviews for as little as $5 on a particular website and promise five-star reviews for the seller's products.