Chinese market crash, Middle East tensions have US and European stock markets rattled
Morning Brief: The Boston Globe has staff help deliver newspapers as change in third party distributor leads to thousands of subscribers not receiving their papers this past week
The stock markets in the US are set to open sharply lower today after a collapse of the Chinese stock market, combined with continued Middle East tension have investors rattled. The Dow is currently down 320 points in pre-market trading, while the NASDAQ is down nearly 100 points.
The Shanghai sock market fell nearly 7 percent today after manufacturing data showed a continuing slowdown in the economy. Trading was halted after the market fell 5 percent, but trading resumed and the sell-off continued, trigging a final shutdown of trading for the day.
Chinese markets had recovered a fair share of their losses from late August when the Shanghai market had fallen to 2,927. The market had rebounded to trade above 3,600 before today’s sell-off. The market, even with trading halted, was still above that August low, closing at 3,296.
European markets reacted by opening sharply lower, especially in Germany where the DAX is currently trading down over 4 percent, losing over 480 points. The FTSE 100, French CAC and FTSE Italia are all more than 2 percent down today.
Contributing to the nervousness is the fact that tensions in the Middle East are rising from Saudi Arabia’s execution of 47 people on New Years, including a leading Shia Muslim cleric. Iran condemned the killing of Sheikh Nimr al-Nimr and violence that followed the news included the torching of the Saudi embassy in Tehran. The Saudis then reacted by cutting off diplomatic relations with Iran, withdrawing its ambassador and ordering Iranian representatives out of the country.
Update: US markets opened sharply lower with both the Dow and NASDAQ down over 2 percent in morning trading.
Metro newspapers dumped their delivery boys years ago, and though most newspaper executives would deny any connection to the decline in subscriptions, the two trends do seem related. It is, after all, harder for most people to cancel their local newspaper if they know it effects the boy next door.
But for several decades now, most metro newspapers have relied on third party contractors to home deliver newspapers. The Boston Globe, for instance, just recently changed vendors, and the move came back to bite them when thousands of subscribers began calling the paper complaining that they hadn’t gotten their newspapers.
The new vendor, ACI Media, acknowledged that they were having problems as new carriers learned their routes and which homes to drop off newspapers. Things finally got so bad that reporters and editors chipped in to deliver papers on Sunday.
“As many of you know, this week we are transitioning to a new home delivery partner, which is causing disruption to our delivery service,” the Globe said on its website today.
“We have added extra staff to our call center and are working around the clock to improve our responsiveness.”
Delivery issues remain so dire that the paper had to feature the story on its own front page, reacting to increasing frustration on the part of readers.
“The Globe has changed home delivery vendors ostensibly to “assure a higher level of delivery and customer service.” The real reason clearly is to cut costs,” one reader said in a Letter to the Editor on New Year’s Day. “I had no problem with the previous delivery provider; my paper was delivered promptly by 6 a.m. every day. So far, the new delivery provider has failed to deliver any papers four days running.”
Digital device makers, including Apple and Samsung, raised prices on their devices in Germany at the New Year due to a new copyright deal between the consumer electronics companies and content producers. The deal raises prices on such devices as iPhones and iPads a little under 1 percent. According to the AP, the deal includes back payments for cell phones sold after 2008, and tablets sold after 2012.
Apple has also reopened its App Store for new and updated app deliveries by developers. The first few updates came through this weekend, including an update for CBC News which includes bug fixes.
TNM is saddened to report that the Apple App Store opens 2016 in the same sorry state it closed 2015, 2014 and 2013. Subcategories of Magazines & Newspapers, the category that replaced the Newsstand, remain unmaintained and broken, and the iTunes store continues to be a mess (the “Browse” mechanism, found at the bottom of the desktop version of iTunes, has not worked in years, for instance).
I tend to cheer on Bay Area sports teams, so Stanford’s dismantling of Iowa in the Rose Bowl brought me New Year’s Day cheer (though I have friends who are Iowa supporters, and it was nice to see them in the Rose Bowl for the first time in many years). But I don’t know what brought more good feelings, that Stanford won, or that Carly Fiorina once again made a fool of herself.
Fiorina, widely considered the worst CEO in the history of US business, was (inexplicably) a Stanford grad. She is also running a Presidential campaign… about as successfully as she ran HP.
Before Friday’s bowl game Fiorina decided to play politician and try to get another one or two Iowans to supporter in the upcoming Iowa caucuses:
Love my alma mater, but rooting for a Hawkeyes win today. #RoseBowl
— Carly Fiorina (@CarlyFiorina) January 1, 2016
The move did manage to get her some attention, though probably not the kind she wanted.
But after such a poor display of pandering, and the blow-out by Stanford, Fiorina tried to back pedal, claiming that she was just kidding.
“Can’t a girl ever have a little bit of fun?” Fiorina said on CNN on Sunday. “That was a tongue-in-cheek tweet that the people of Iowa understand.”
Sure they do Fiorina, running a tongue-in-cheek campaign for President.