India GDP growth slows to five-year low at 5.8%. Unemployment rate at 45-year high.

 

India GDP growth slows to five-year low at 5.8%. Unemployment rate at 45-year high. Union Budget to be presented by the newly-appointed Finance Minister Nirmala Sitharaman on July 5. US Donald Trump terminates preferential trade status for India under GSP. US Justice Department is planning an antitrust investigation into Google.

  

Moving on to the top Business news today:

 

 MODI 2.0 

India GDP growth slows to five-year low at 5.8%. Unemployment rate at 45-year high. Union Budget to be presented by the newly-appointed Finance Minister Nirmala Sitharaman on July 5.

Strike One: India’s GDP rate slowed to five-year low of 5.8% in Q4 FY2018-19, due to poor performance in agriculture and manufacturing sectors.

 

The Central Statistics Office also revealed that GDP growth during FY2018-19 stood at 6.8% vs 7.2% in the previous fiscal.

 

This slump in growth raises the question whether the RBI will provide a monetary stimulus to the slowing economy in its monetary policy review on 6 June, ahead of the budget to be presented on 5 July.

 

Strike Two: Unemployment rate in India rose to 6.1% during FY2018-19. As per data released by the Ministry of Labour and Employment, 7.8% of all employable urban youth in India are jobless, while the percentage for the rural was 5.3%. 

 

In Other News..: Union Budget will be presented by the newly-appointed Finance Minister Nirmala Sitharaman on July 5. The Economic Survey will be released on July 4.

 

The Interim Budget for the year 2019-20 was presented by then Finance Minister Piyush Goyal on February 1, 2019.

 

A Champion for Sputtering Causes: The allotment of the Ministry of Micro and Small Enterprises in Prime Minister Narendra Modi’s new Council of ministers to Nitin Jairam Gadkari, in addition to the road transport and shipping portfolio, is not surprising. Read this article to understand why giving Gadkari the MSME ministry may be a most inspired decision by the re-elected Modi government.

 

 TRADE   

 
US President Donald Trump terminates preferential trade status for India under GSP. US begins collecting higher tariffs on Chinese goods arriving by sea.
 
 
This is It!: US President Donald Trump on Friday terminated India’s designation as a beneficiary developing nation under the key Generalized System of Preference (GSP) trade programme with effect from June 5, 2019.
 
 
“I have determined that India has not assured the United States that India will provide equitable and reasonable access to its markets,” Trump said in a statement on Friday.
 
 
Previously: Trump had earlier in March announced that the US may terminate India’s designation as a beneficiary of the GSP, which allows $5.6bn worth of Indian exports to enter the US duty free.
 
 
Indian officials have raised the prospect of higher import duties on more than 20 US goods if Trump drops India from the program.
 
 
Hit Hard!: The US has begun collecting higher, 25% tariffs on many Chinese goods arriving in US seaports.
 
 
Zoom Out: US President Donald Trump imposed the tariff increase on a $200bn list of Chinese goods on May 10, but had allowed a grace period for sea-borne cargoes that departed China before that date, keeping them at the prior, 10% duty rate.
 
 
The tariff increase affects a broad range of consumer goods, and intermediate components from China including internet modems and routers, printed circuit boards, furniture, vacuum cleaners and lighting products.
 
 
 
 COMPANIES 
 
UberEats reports 4% fall in commission Y-o-Y. Oppo overtakes Apple and Samsung to be the most innovative premium handset brand.
 
 
Shrinking Margins: Ride-hailing giant Uber, in its Q1 results reported that commission earned by its food delivery arm UberEats dropped 4% on a YoY basis, half of which was attributed to increased investments in its India food ordering unit where it competes with bigger rivals such as Swiggy and Zomato.
 
 
Uber announced its Q1 results on Thursday and reported a loss of $1bn on a $ 3.1bn revenue.
 
 
A Pleasant Surprise: Oppo Mobile India, the local subsidiary of China’s BBK Electronics, has emerged as the most-preferred innovative handset brand in the premium segment, beating the likes of Apple and Samsung, as per an independent study conducted by the analyst firm CyberMedia Research.
 
 
The findings are rather surprising given that Oppo does not feature among the most-selling premium smartphone brands in the country. Presently, Samsung tops the chart, in terms of volume of premium devices shipped, Chinese brand OnePlus is the second-largest player in the INR25,000-INR50,000 price band, followed by Apple.
 
 
However, the young consumers (roughly between 15-25 years of age) surveyed said that Oppo’s constant focus on camera prowess and its long-lasting batteries remained at the top of their mind.
 
 
 
 TECH 

US Justice Department is planning an antitrust investigation into Google.
 
 
We Are Being Watched: The US Justice Department is planning an antitrust investigation into Alphabet’s Google related to its search and other businesses.
 
 
The Federal Trade Commission (FTC), which shares antitrust authority with the Justice Department, previously conducted a broad investigation of Google but closed it in 2013 without taking action, though Google made some voluntary changes to certain business practices.
 
 
The report comes amid discussion from politicians and the public about whether large technology companies should be broken up.
 
 
What You Need to Know: Google has faced antitrust pressure in the past.
 
 
Repeat Offender: Other than its settlement with the FTC in 2013, the tech giant had in 2010 received an antitrust complaint from the European Commission regarding ranking of shopping search results and ads, which resulted in Google being fined $2.7 billion in 2017.
 
 
Ten weeks after Facebook pledged to fight vaccine misinformation, such content remains widely available across its platforms. Facebook as of this week is still running paid ads for a prominent antivaccination group that suggests unethical doctors have conspired to hide evidence of harm vaccines do to children. A deep dive into the matter here.
 
 
 MARKETS 

Yield on the benchmark 10yr government bond dips to a near 18-month low.
 
 
Record Low: The benchmark 10yr government bond yield dipped to a near 18-month low to close at 7.03% on Friday, the lowest level since December 7, 2017, on back of better fiscal numbers and possible sharper rate cuts in the current fiscal. 
 
 
The dip is also likely to have been driven by the declining crude oil prices and global yields on the back of rising concerns in the global economy.
 
 
Global Turmoil: Stocks and bond yields around the world fell on back of US President Donald Trump’s tariff threat to Mexico wherein he said that the US will impose a 5% tariff on all Mexican imports from June 10, and duties of up to 25% will be added in the coming months if Mexico does not take action to “reduce or eliminate the number of illegal aliens” crossing into the US.
 
 
This has also called into question US’s already fraught trade negotiations with China.
 
 
Experts are split on what this means for the stock market, and what could come next in this uncertainty-laden landscape. Here are four of their takes on the development.
 
 
 
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