Dow falls for a third day, dropping more than 150 points after Apple’s coronavirus warning; Europe stocks close lower as Apple warns of coronavirus revenue hit
The Dow Jones Industrial Average fell for a third consecutive day on Tuesday as investors weighed a stark warning from tech giant Apple. The 30-stock average closed down 165 points, or 0.6%. The S&P 500 dipped 0.3%. The Nasdaq Composite, however, eked out a small gain to post a record closing high. Netflix rose 1.9% and reached a its highest level since July 2018 while Alphabet gained 0.1% to eke out an all-time high. Tesla also contributed to the Nasdaq’s gains, rising more than 7%. Apple also finished the session well off its lows of the day, closing 1.8% lower.
Apple cautioned it does not expect to meet its quarterly revenue forecast, citing slowed production and weakened demand in China as a result of the coronavirus outbreak. The most valuable company in the U.S. initially said it expected to report net sales between $63 billion to $67 billion in its fiscal second quarter.
European stocks closed lower on Tuesday after Apple warned it may fall short of revenue forecasts on the back of the coronavirus outbreak, as fears over the potential economic fallout persist. The pan-European Stoxx 600 closed provisionally down by around 0.5%, with most sectors and major bourses in the red.
European semiconductors suffered the brunt of the fallout from the Apple announcement. Dialog Semiconductor and ASMI both dropped more than 4% while STMicro and AMS also declined.
HSBC reported on Tuesday that it had missed 2019 earnings expectations to record a 32.9% fall in pre-tax profit. Europe’s largest bank also announced a major overhaul that will result in 35,000 job cuts over the next three years. The firm’s London-listed shares tumbled almost 7% to the bottom of the Stoxx 600.
French rail company Alstom has agreed to acquire the rail division of Canada’s Bombardier in a deal worth up to $6.7 billion. Alstom shares slid 3% lower.
Italian bank Intesa Sanpaolo on Monday launched a 4.86 billion euro ($5.3 billion) takeover bid for domestic rival Ubi Banca. Ubi Banca shares surged 23% to lead the Stoxx 600, while Intesa added almost 2%.
Serbia issues 12-year dinar-denominated bond
In a first for the country, Serbia on Tuesday issued a 12-year dinar-denominated bond worth 7 bln dinars, Finance Minister Sinisa Mali said. "The registered demand was 73.5 bln dinars, or ten times the amount," he said at a round table on development of the capital market. Mali announced Serbia would soon get a strategy on capital market development. He said he agreed one of Serbia's public enterprises should become a listed company on the stock exchange. He recalled a 20-year eurobond worth 150 mln euros had been issued ten days ago and that the demand had also been more than good.
Ministry of Finance is preparing a capital market strategy
Serbian Finance Minister Sinisa Mali took part in the round table about the development of the capital market in Serbia, together with international partners from the World Bank, the European Bank for Reconstruction and Development (EBRD), the United States Agency for International Development (USAID) and the United Nations Development Program (UNDP). Mali said that a capital market development strategy was being prepared with the support of international institutions and that a draft should be adopted by June 2020, it is reported on the ministry's website. He pointed out that Serbia's aim was to reach a growth of 7% and reminded that systemic laws had been adopted with the goal of improving the capital market.
Out of 100 dinars of salary in Serbia, 62 dinars is paid towards tax and contributions
Besides getting paid for their work, salaries that are paid out in Serbia also cover the costs of health care, pension, possible disability allowance, the state, unemployment and others. For every 100 dinars of salary in Serbia, tax and total contributions amount to almost 62 dinars. The state has reduced the tax burden from 63% in 2017 to just over 61% this year. And it will continue to decrease it, as repeatedly announced by the Ministry of Finance. The total wage tax remains, however, one of the major weaknesses of the Serbian economy. The business community in Serbia has cited the substantial salary tax as one of the biggest causes of the shadow economy in Serbia and one of the biggest corporate burdens, according to a survey by NALED from 2014 to date.