월스트리트저널 읽기 - China Economic, Airline Stocks, Soybean Dollars etc.

MONDAY, SEPTEMBER 18, 2023

 

◈ China Economic Woes Rival Japan's, or Worse(중국의 경제적 어려움은 일본과 비슷하거나 더 나쁘다)

 

Starting in the 1990s Japan became synonymous with economic stagnation, as a boom gave way to lethargic growth, declining population and deflation.

 

Many economists say China today looks similar. But in many ways its problems are more intractable than Japan’s. China’s public debt levels are higher by some measures than Japan’s were and its demographics are worse. The geopolitical tensions that China is dealing with go beyond the trade frictions Japan once faced with the U.S.

 

“China’s policy responses so far could put it on track for ‘Japanification,’ ” said Johanna Chua, chief Asia economist at Citigroup. She believes China’s overall growth prospects could be slowing more sharply than Japan’s.

 

China today and Japan 30 years ago share many similarities, including high debt levels, an aging population and signs of deflation.

 

During a long postwar economic expansion, Japan became an export powerhouse that American politicians and corporate executives worried would be unstoppable. Then in the early 1990s, real estate and stock market bubbles burst and the economy hit the skids.

 

◈Whatever the Strike's Outcome, Musk Wins(파업의 결과가 어떻든 머스크가 승리한다)

 

More than two days into the United Auto Workers strike against the Detroit automakers, one thing is clear: Elon Musk has already won.

 

And the billionaire tycoon isn’t even involved.

 

Musk won before the strike began early Friday. He won before negotiations started two months ago. From the get-go, General Motors, Ford Motor and Chrysler parent Stellantis were expected to spend more on wages because of the union’s pressure. The question is just how much of an increase, and so far their offers haven’t pleased the union, igniting this past week’s work stoppage.

 

Whatever happens, more money surely will be spent. Any wage increase further advances Tesla’s already tremendous cost advantage in EVs over its older U.S. peers, which are contending with generations of legacy expenses while trying to steer a costly transition to electric from gas-powered vehicles.

 

◈ M&A Deal Success Is Coin Flip(M&A 성공은 동전던지기)

 

Does M&A work? The latest research says it’s a tossup.

 

Business-school students are often taught that successful mergers and acquisitions are a long shot. One influential Harvard Business Review article, dating from 2011, says a range of studies show roughly 70% to 90% of deals fail to create value for the buyer.

 

And many investors worry that takeovers are more reliably lucrative for investment banks—which LSEG says earned some $13.1 billion in M& A fees in the first half of this year—than for the acquiring companies and their shareholders.

 

But more recent research from academics and consultants puts the success rate closer to even. Companies that do frequent smaller deals, as well as making bigger bets, tend to outperform, advisers say. That is because they hone their ability to identify targets, integrate those businesses and reap the intended financial benefits.

 

◈ Technology Sector Pressed(기술 부문 압박)

 

Technology stocks have powered the 2023 market rally and become increasingly expensive in the process.

 

Now, a growing expectation that the Federal Reserve will keep interest rates higher for longer threatens to stifle the trade, potentially dimming the outlook for indexes like the S& P 500 that are heavily influenced by tech.

 

That is because investors’ yearslong enthusiasm for tech shares was fueled not just by innovation at software and hardware companies but also by ultralow interest rates that made the future profits promised by those companies especially valuable.

 

◈ Cheap Fares Squeeze Airline Stocks(저렴한 운임으로 인해 항공사 주식이 압박됨)

 

U.S. travelers are paying less to fly and airline stocks are taking a hit.

 

Airlines that focus on domestic flights are being squeezed as Americans embrace travel to Europe over vacations closer to home. Airfares across the industry were down 13.3% in August from a year ago, marking the fifth straight month of declines, according to federal data that is weighted toward domestic flights. The weakening demand comes just as airlines are facing surging jet fuel prices and rising labor costs.

 

Doubts over whether carriers will be able to raise fares to offset mounting expenses have their stocks in retreat: The U.S. Global jets exchange-traded fund, which tracks the industry, gained 5.4% this year on a postpandemic bump but is down 19% from its recent high in July. American Airlines' stock is down 29% from that peak, while Southwest Airlines is down 24%. The S&P 500 is up 1.5% over the same period.

 

◈ China May Dodge Deflation After All(중국은 결국 디플레이션을 피할지도 모른다)

 

Economic data still hints at a bottom rather than a strong rebound, however, so it will probably be a near miss China’s economy appears to have survived its near miss with a damaging bout of consumer-price deflation—for now.

 

After a grim June and July, China’s main August economic data, released Friday, contained clear hints of improvement. The news from the critical housing sector, which is mired in a protracted slump, was less encouraging: Price falls accelerated in lower-tier cities. But growth in retail sales accelerated to 4.6% from a year earlier, from just 2.5% in July. Unemployment ticked down marginally. And the past few weeks have witnessed a flurry of measures to support lending: Easier terms for second-time mortgage borrowers, and a big cut to banks’ reserve-requirement ratios on Thursday.

 

All of this makes a protracted fall in consumer prices—which could trap China in a 1990s Japan-like cycle of falling prices and ultra- thrifty consumers—less likely.

 

◈ Fitness Investors Are Sweating(피트니스 투자자들이 땀을 흘리고 있다)

 

Investors hit the gym on Friday, and not in a good way.

 

Companies that help people sculpt their physiques had diverging fortunes during the Covid-19 emergency. Those offering in-person exercise, like Planet Fitness, experienced an immediate crisis when social gathering became a decidedly unhealthy thing to attempt.

 

Meanwhile, Peloton, Nautilus and others that sell home fitness equipment had too much business to handle. There was even a tidy profit to be made by buying and then reselling bulky items such as dumbbells and exercise bikes.

 

The pattern reversed dramatically after vaccines became available. Planet Fitness shares hit a record in November 2021, while equipment makers were forced into painful price cuts and distribution deals and saw their shares plunge. But 2023 has been an equal-opportunity disaster for fitness- related companies and it might have to do with a different type of shot: the weekly injections that make it possible for people to lose dramatic amounts of weight.

 

◈ Battle for Soybean Dollars On U.S. Farms Heats Up(미국 농장들의 대두 달러 전쟁이 가열되고 있다)

 

There is a new king of soybeans on the American farm— for now.

 

For years, one company dominated the roughly 80 million acres of soybeans planted in the U.S. after Missouri-based Monsanto revolutionized farming with seeds genetically engineered to tolerate the weedkiller Roundup. Bayer, the German agriculture and pharmaceutical company, became the top crop-seed maker after its 2018 acquisition of Monsanto.

 

A rival agriculture company, Corteva , has been flexing its muscles since it was spun out of DowDuPont in 2019. It has pulled ahead with new biotech soybeans that the company says now make up more than half the market.

 

Together, Bayer and Corteva sell roughly 70% of all corn and soybean seeds planted in the U.S., up from about 40% two decades ago, according to the U.S. Department of Agriculture.

 

The companies are in hot competition for the billions of dollars that farmers spend each year on seed-and-chemical combinations designed to combat hard-to-kill weeds. Bayer and Corteva also make hundreds of millions of dollars licensing to other seed suppliers the genetic technology that enables crops to resist specific weedkillers.

 

In the U.S. market for soybeans— the nation’s second-largest crop by acreage—the companies’ acts of rivalry have ranged from pitching individual growers at farm shows to fighting over patents in court.

 

 

오늘도 경제신문으로 세상을 봅니다.