Germany said Friday that it registered zero growth in the final three months of 2019, driven in part by continued weakness in its manufacturing sector. The country’s statisticians had predicted a modest rise.
“The impact from the coronavirus on the Chinese economy is likely to delay any rebound in the manufacturing sector as it at least temporarily disrupts supply chains,” Carsten Brzeski, chief German economist at ING, told clients Friday. “Stagnation, with a risk of a technical recession, currently looks like the only dish served,” he continued.
The big picture: The world’s fourth largest economy, and Europe’s biggest, had a feeble 2019 amid weak global auto sales, the US-China trade conflict and the prospect of a disorderly Brexit. The spread of the new coronavirus means that it won’t start off 2020 in better shape.
Similar fears spring up when looking elsewhere in Europe. GDP for the eurozone grew by just 0.1% in the last three months of 2019, according to data published Friday.
“The [eurozone] economy should be about to turn a corner, but the coronavirus now means that [the first quarter] could well be a write-off,” said Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics.
That’s drumming up chatter that the European Central Bank could push interest rates further into negative territory or boost its monthly bond purchases when it meets next month — unconventional policies that President Christine Lagarde just started to review.
Judge blocks Microsoft from starting Pentagon cloud contract
Why it’s important: The order, issued Thursday, turns up the heat on the US government as it defends against a formal protest filed by Amazon over its handling of the contract process, my CNN Business colleague Brian Fung reports.
The backstory: Amazon alleges that Trump exercised undue influence over the Defense Department as it weighed competing bids from Microsoft and Amazon for the lucrative cloud computing project, known as the Joint Enterprise Defense Infrastructure, or JEDI.
Amazon has cited Trump’s tweets as evidence that the president wanted to deny Amazon the contract out of a personal animosity toward CEO Jeff Bezos.
The US escalates its crackdown on Huawei
What happened: The US government charged the company with racketeering and conspiracy to steal trade secrets in a new indictment unsealed Thursday, supplementing charges lodged against the company a year ago. The United States previously alleged that Huawei committed bank fraud and violated economic sanctions against Iran.
Huawei pleaded not guilty to the initial charges, and claimed Thursday that the US government is seeking to “irrevocably damage Huawei’s reputation” for competitive reasons.
The takeaway: Despite a US-China truce and present focus on the coronavirus outbreak, the groundwork for tensions between the world’s two biggest economies to flare up again has been set.
- US retail sales for January post at 8:30 a.m. ET.
- The University of Michigan survey of consumer sentiment follows at 10 a.m. ET.