Business briefing

The daily business briefing: October 18, 2021

China's growth slows as supply crunch hurts factories, Ford to convert England engine plant to make electric-power units, and more

1

China's economic growth slows 

China's economy grew by 4.9 percent in the third quarter, the slowest in a year for the world's second largest economy, according to data released Monday. The drop from the previous quarter's 7.9 percent pace came as supply chain delays and power outages hurt factory output. A construction downturn and fallout from the coronavirus pandemic also hurt. In the first quarter of the year, the economy grew a record 18.3 percent, as overseas buyers snapped up Chinese-made goods when the winter coronavirus surge eased. China could see more "ugly growth numbers" in coming months, and that could prompt policymakers to "take more steps to shore up growth," said Louis Kuijs, head of Asia economics at Oxford Economics.

2

Ford to convert England engine plant to make electric-power units

Ford said Monday it would spend $315 million transforming a northwest England factory to produce electric-power units for cars and trucks to be sold in Europe. The automaker said the factory, which currently makes engines and transmissions for gasoline-powered vehicles, will start making the electric-power units by mid-2024, with a target capacity of about 250,000 units per year. "This is an important step, marking Ford's first in-house investment in all-electric vehicle component manufacturing in Europe," said Stuart Rowley, president of Ford of Europe. The company aims to sell only electric passenger vehicles in Europe by the end of the decade.

3

Fauci: J&J vaccine probably should have been 2 shots all along

Johnson & Johnson's single-shot coronavirus vaccine probably should always have been given in two doses, the nation's top infectious disease expert, Dr. Anthony Fauci, said Sunday on ABC's This Week. A panel of Food and Drug Administration advisers on Friday recommended emergency-use authorization for a second J&J shot to boost immunity, noting that the company's vaccine had been shown to offer less protection than the vaccines produced by Pfizer-BioNTech and Moderna. "What the advisers to the FDA felt is that, given the data that they saw, very likely this should have been a two-dose vaccine to begin with," Fauci said. The FDA advisers unanimously voted to recommend booster shots for everyone 18 and older who got the Johnson & Johnson vaccine, as early as two months after the initial shot.

4

Stock futures fall ahead of more corporate earnings

U.S. stock index futures fell early Monday after China released weak economic data ahead of another week of corporate earnings reports. Futures tied to the Dow Jones Industrial Average and the S&P 500 were down by about 0.3 percent several hours before the opening bell. Nasdaq futures fell by 0.4 percent. The three major averages are coming off their best week in months, after earnings season got off to a better start than expected, with 80 percent of the 41 S&P 500 components reporting third-quarter results so far beating earnings-per-share expectations, according to data from FactSet. The Dow and the S&P 500 jumped by 1.6 percent and 1.8 percent, respectively, on Friday. The tech-heavy Nasdaq soared 2.2 percent higher. Several high-profile companies report earnings this week, including Netflix, Johnson & Johnson, United Airlines, Procter & Gamble, Tesla, and Verizon.

5

Saks online unit prepares for IPO

Saks Fifth Avenue's e-commerce business is planning an initial public offering targeting a valuation of about $6 billion, The Wall Street Journal reported Sunday. The last time the fast-growing online business of the luxury retailer was valued, in March, the estimate was just $2 billion. The company is interviewing potential underwriters for the IPO, which could take place in the first half of next year. The stock sale would be the second part of a deal reached earlier this year to separate the booming online business from Saks' brick-and-mortar stores, which are growing more slowly. Saks and other department stores have seen a surge in online sales as the coronavirus pandemic encouraged people to shop from home.

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