Nissan Shares Plunge Over 10% Following Disappointing Results and Production Cuts

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Shares of Nissan Motors dropped as much as 10.12% on Friday, hitting a four-year low, after the company posted disappointing quarterly results and announced plans to cut global production capacity by 20%.

In its second-quarter results for the period ending in September, Nissan reported a net loss of ¥9.3 billion (approximately $62 million), a stark contrast to the ¥190.7 billion profit recorded in the same quarter last year. Operating profit fell nearly 85%, plunging to ¥31.9 billion, while revenue dropped by 5% to ¥2.99 trillion.

The company also revised its full-year financial outlook downward, lowering its revenue forecast to ¥12.7 trillion from ¥14 trillion and slashing its operating profit projection to ¥150 billion, down from ¥500 billion.

In response to the challenging situation, Nissan announced plans to reduce its workforce by 9,000 employees and implement cost-cutting measures. These efforts include rationalizing its asset portfolio and focusing on capital expenditure and research and development. The company is targeting a reduction of ¥300 billion in fixed costs and ¥100 billion in variable costs for the 2024 fiscal year.

Additionally, Nissan’s board decided not to issue an interim dividend and scrapped the year-end dividend forecast. CEO Makoto Uchida will voluntarily forfeit 50% of his monthly compensation from November, with other executives also opting for pay cuts.

Nissan’s sales volume for the first half of its fiscal year declined by 1.6%, with 1.6 million units sold. The company aims to return to profitability and positive cash flow by fiscal year 2026, even with annual sales of 3.5 million units.

 

Treasury Yields Drop as Investors Evaluate Economic Outlook Post Fed Rate Cut

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On Friday, U.S. Treasury yields fell as investors assessed the Federal Reserve’s recent rate cut and its implications for the economic outlook. The yield on the 10-year Treasury dropped approximately three basis points to 4.3131%, while the 2-year Treasury yield fell over three basis points, settling at 4.1849% as of 3:43 a.m. ET. Treasury yields, which move inversely to prices, respond in basis points—each representing 0.01%.

The drop in yields followed Thursday’s announcement by the Federal Reserve of a 25-basis-point rate cut, bringing the target range to 4.50%-4.75%. The move, while anticipated, marked a continuation of the Fed’s gradual rate-reduction approach, which began with a 50-basis-point cut in September.

Investors closely examined Fed Chairman Jerome Powell’s comments in the post-meeting press conference for hints on future policy direction. Powell reiterated the Fed’s commitment to a flexible approach, stating decisions would be made on a “meeting by meeting” basis, with no predetermined path for monetary policy. Despite recent economic pressures, Powell expressed confidence, noting he was “feeling good” about the current economic landscape.

Looking ahead, market participants are focusing on the December 17-18 Fed meeting, where the CME Group’s FedWatch tool indicates a 75% probability of another rate cut. Friday’s investor attention also turns to upcoming consumer sentiment data, which could provide further insight into economic conditions. The October inflation report, set for release next week, is also expected to be a critical indicator for future Fed actions.

 

Former Siemens CEO Reflects on Positive Business Ties with Trump, Prepares for Potential Challenges

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Joe Kaeser, chairman of the supervisory board of Siemens Energy and former CEO of Siemens, described his experience working with Donald Trump during his first presidential term as notably positive for business. In an interview with CNBC’s Annette Weisbach, Kaeser stated that Trump’s administration was “extremely receptive” to addressing business issues, creating a clear path for corporate interaction.

“If I personally, for my company at the time, had an issue to resolve, his administration was extremely receptive,” Kaeser noted. He highlighted that Trump’s policies, particularly tax cuts, were favorable for the economy. Trump’s first term included a range of tax reforms such as lower federal income tax brackets, increased standard deductions, and modifications to child tax credits, estate tax exemptions, and deductions for pass-through businesses. While some studies indicated that these tax cuts only contributed moderately to U.S. growth, Kaeser viewed the policies as broadly beneficial.

Trump’s second presidency is anticipated to follow a similar economic agenda, with priorities such as potential tariffs on imports and regulatory rollbacks. Analysts speculate that these policies could again have a significant global impact, potentially influencing international trade and markets. Kaeser reflected on Trump’s first term as predictable, describing it as “a relatively easy way of understanding what needs to be done for the companies and the countries.”

Despite the positive experiences from Trump’s first term, Kaeser remains cautious about the next term, noting that the unified Republican control across the White House, Senate, House of Representatives, and Supreme Court could have new and unpredictable effects. “I believe the jury’s out on what that means,” he said.

Kaeser emphasized the need for Germany, Europe, and other nations to be prepared for Trump’s assertive leadership style. “Typically, people like him, who have a very distinct style of leadership and reacting to different news, can only be dealt with from a position of strength,” he said. He suggested that weaker positions could face challenges under Trump’s administration.