Asian stock markets fell sharply this morning, with Japan seeing its worst daily decline since last summer, against a backdrop of disappointing data from the US. In the US the Dow Jones fell 2.1% yesterday after a report from the Institute for Supply Management showed a marked deceleration in US manufacturing activity, to its lowest reading since last May. Volatile trading is seen as investor concern over emerging market economies.
Katie Martin, a markets editor at the Wall Street Journal in Europe, says that investors are trying to learn to live without the huge stimulus programme from the US Federal Reserve. Against this backdrop, the European Central Bank meets this week on euro zone interest rates and Katie Martin says that euro zone inflation remains too weak and too far below the ECB's target of close to 2%. Many analysts believe in order to correct this, it may be time for the ECB to make another benchmark rate cut like it did in November.
Ms Martin says that other experts believe the ECB may cut the deposit rate to bring it into negative territory, which means that banks will be charged to keep money on deposit. These could force them into lending more to consumers, which would boost consumer spending and therefore the euro zone economy in general. But this move carries risks and no-one can really predict how it would pan out. Saying that there are "no slouches at the ECB", Ms Martin says the bank will be closely watching the latest economic euro zone news, which has seen some signs of expansion in recent weeks - even in struggling economies like Greece. She says the ECB might hold back on such a radical move given the reasonably robust euro zone PMIs.
MORNING BRIEFS - UDG Healthcare has reported a "satisfactory" performance for the last three months of 2013. In an interim management statement, the company said group revenues for the three months of the end of December are ahead of the same time last year.
*** Three, the Irish mobile division of Hutchison Whampoa, says it will put up "strong and effective remedies" to the European Commission's statement of objections to its proposed €850m purchase of rival O2. Three has less than 10% of the Irish mobile market, and the acquisition of O2 would bring that up to 37.5%, behind Vodafone on 39% and ahead of Meteor's 18% share. Three Ireland said the Commission's statement was "not unexpected". Analysts say Three, which has been in the Irish market for nearly nine years, is likely to have reached the limit of what is possible through organic growth, given the small size of the Irish market, and that the only way to expand further is through acquisition.
*** More than 20% of all time spent on the internet is spent on Facebook, which has 1.23 billion users. Facebook is just ten years old today and at $61 a share, Facebook is worth $150 billion. Facebook is likely to have reached the $150 billion mark faster than any company in history - a couple of other companies may have done this during the dotcom boom, but they were not around, or worth that much for long. The company was created in a Harvard dorm in 2004 by Mark Zuckerberg who has always said Facebook's mission is "making the world more open and connected." He owns about 500 million shares in Facebook. At $61 a share, Mark Zuckerberg's stake is worth $31 billion.