1 US manufacturing, construction slip (BBC) US
manufacturing shrank by the greatest amount for six years in December. Slowing
growth overseas, a stronger US dollar and low oil prices all weighed on factory
production, according to the Institute for Supply Management. Production on the
ISM index slipped from 48.6 in November to 48.2. Any number below 50 indicates
factory activity is contracting.
The US data coincided with data showing a decline in
Chinese manufacturing that spooked global markets on Monday. Separately,
figures from the construction spending painted a similarly gloomy picture. Construction
spending slipped for the first time in a year and a half, according to the Commerce
Department, falling 0.4% in November. The drop is the biggest since June 2014.
Previous construction spending data from January
2005 to October 2015 was also revised by the government after a
"processing error" was revealed. The corrected data indicates
construction spending over that period was not as strong as initially reported.
October 2015 spending grew by just 0.3%. Experts say the correction may cause
analysts to revise down their construction spending estimates for 2016.
2 GM invests $500m in Lyft (The Guardian) General
Motors and ride-hailing company Lyft are forming an unprecedented partnership
that could help them beat their rivals to the self-driving future. Lyft said
that GM invested $500m in the company as part of a $1bn round of fund-raising.
GM gets a seat on Lyft’s board and access to the
three-year-old company’s software, which matches riders with drivers and
automates payments. It also becomes a preferred vehicle provider, with the
chance to get many more people behind the wheel of a Chevrolet, Buick, GMC or
Cadillac.
San Francisco-based Lyft gets the expertise of a
108-year-old automaker with decades of experience in making connected and
autonomous vehicles. Detroit-based GM also has an enviable global reach; it
sells almost 10m cars each year in more than 100 countries. Lyft operates in
190 US cities, and it recently formed partnerships with ride-sharing services
in China and India.
Together, the companies plan to open a network of US
hubs where Lyft drivers can rent GM vehicles. That could expand Lyft’s business
by giving people who don’t own cars a way to drive and earn money through Lyft.
It will also give GM a leg up on competitors like Daimler AG and Ford Motor Co,
who are developing their own ride-sharing services.
In the longer term, GM and Lyft will work together
to develop a fleet of autonomous vehicles that city dwellers can summon using
Lyft’s mobile app. Partnering with GM could give Lyft a boost over its
arch-rival, Uber Technologies Inc, which is working on its own driverless cars.
Lyft co-Founder and president John Zimmer and GM
president Dan Ammann say the two companies began serious discussions about
three months ago. Following its latest round of fundraising, which also
included a $100m investment from Saudi Arabia’s Kingdom Holding Co,
privately-held Lyft set its value at $5.5bn. The company expects revenue of
around $1bn this year. By comparison, GM is valued at $53bn and earned $153bn
in revenue in 2014.
But neither company can afford to rest. Uber’s value
could soon surpass GM’s, and newcomers like Apple and Google are also eager to
disrupt the traditional auto industry. “We see the world of mobility changing
more in the next five years than it has in the last 50,” Ammann said.
3 Saudi Arabia, Iran put Middle East on the boil
again (Dawn) Iran has accused Saudi Arabia of using an attack on its embassy as
a pretext to sever ties in a diplomatic crisis deepening their often violent
struggle for influence across the Middle East. Saudi Arabia cut ties with Iran
on Sunday and fellow-Sunni Bahrain followed suit on Monday, two days after
Iranian demonstrators stormed the Saudi embassy in Tehran in protest at
Riyadh's execution of a senior Shia cleric.
The United Arab Emirates also downgraded its ties
with Iran, as the dispute between the region's top Sunni and Shia powers
rippled across the region, driving up oil prices and threatening to widen the
Middle East's sectarian divide.
After a furious response in Shia communities
worldwide to the Sunni kingdom's execution of Shia Muslim cleric Nimr al-Nimr,
Saudi Foreign Minister Adel al-Jubeir accused Iran of creating “terrorist
cells” among the kingdom's Shia minority. Iran retorted that Riyadh had used
the embassy incident and an similar attack on its consulate in the Iranian city
of Mashhad as an “excuse” to stoke tensions.
Oil prices rose almost two per cent, overcoming
economic weakness in Asia, as the two big petroleum exporters traded insults
and tensions spilled into other crude producers such as Iraq. Stock markets
across the Gulf dropped sharply, led by Qatar which fell more than 2.5 per
cent, with geopolitical jitters outweighing any benefit from stronger oil.
The tensions threatened to derail efforts to end
Syria's five-year-old civil war, where Saudi Arabia and other Gulf Arab powers
support rebel groups against Iran-backed President Bashar al-Assad.
Saudi Arabia executed Nimr and three other Shias on
terrorism charges on Saturday, alongside dozens of Sunni jihadists. Shia Iran
hailed him as a “martyr” and warned Saudi Arabia's ruling Al Saud family of
“divine revenge”.
The Yemeni government announced a curfew in the port
city of Aden, a beach-head for Saudi and UAE forces waging war on the Shia
Houthi group that controls much of the country. A ceasefire collapsed on
Saturday.
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