Add one more piece of pessimistic news to that coming from economic research firms in Europe. The Ifo Institute issued its latest data on Germany:
The Ifo Business Climate Index for industry and trade in Germany continued to fall in June. Although assessments of the current business situation brightened somewhat after deteriorating significantly last month, companies reported far lower expectations with regard to their six-month business outlook. The German economy fears the growing impact of the euro crisis.
The measurement of the current “climate” dropped modestly to 105.3 in June from 106.9 in May. But the forward-looking “expectations” measure fell to 97.3 from 100.8 in May. If the German economy is the best hope for a regional recovery, that hope already has ended.
New Nintendo 3DS
Nintendo, which has lost considerable ground to Microsoft (NASDAQ: MSFT) and Sony (NYSE: SNE) in the game console business, released another machine as part of its comeback attempt. Nintendo says it will have a new versions of its handheld 3DS on sale next month. Improved features will include a new double-sized screen, 4GB SD memory card and better image resolution. The handheld will retail for $325. The product appears to be part of a movement throughout the handheld electronics industry (which includes e-readers, tablets and game consoles) to offer a larger screen and more memory. This is just another step toward pushing laptops into oblivion.
Moody’s Bank Downgrades
Many analysts said that the Moody’s downgrade of banks reflected circumstances that the capital markers already realized. The downgrades, therefore, were largely useless. But the reaction to the rating changes by Moody’s were very different on both sides of the Atlantic. U.S. bank shares rallied after the close yesterday. JP Morgan (NYSE: JPM) and Citigroup (NYSE: C) rose slightly. Morgan Stanley (NYSE: MS), which suffered the sharpest cut, was up nearly 4% at one point after hours. In the UK and Europe, Barclay’s (NYSE: BCS) dropped more than 2% at today’s open. Deutsche Bank (NYSE: DB) and Credit Suisse (NYSE: CS) where down almost 2%. Investors may perceive that the major difference between the U.S.-based banks and those in Europe is the extent to which either group has exposure to troubled eurozone debt, which could be written down sharply if the financial problems in the region worsen. The UK and EU banks have more jeopardy in this area than American ones do.
Douglas A. McIntyre