US stocks, oil rebound on strong consumer data

Updated 10 November 2012
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US stocks, oil rebound on strong consumer data

NEW YORK: US stocks and crude oil prices rebounded yesterday on news that US consumer sentiment rose to the highest level in more than five years in November, offsetting fears a looming “fiscal cliff” and Europe’s sputtering economy may send the world into recession.
Nonetheless, world shares are set for their worst weekly performance since June, depressed by Europe’s debt troubles and $600 billion in automatic tax hikes and spending cuts to start in January if the US Congress fails to act.
The surprisingly strong survey showing consumers felt more optimistic about employment prospects and the outlook for the economy led US stock prices and crude oil to turn higher in early trading.
“It was better than expected and the market seems to like it. It is a positive note, but the backdrop remains negative with a lot of negative sentiment. Still, we could be oversold enough that this could launch a rally,” said Steve Sosnick, equity-risk manager at Timber Hill/Interactive Brokers Group in Greenwich, Connecticut.
The Dow Jones Industrial Average was up 24.65 points, or 0.19 percent, at 12,835.97. The Standard & Poor’s 500 Index was up 6.73 points, or 0.49 percent, at 1,384.24. The Nasdaq Composite Index was up 20.69 points, or 0.71 percent, at 2,916.27.
US crude futures edged up 21 cents at $85.30 at barrel, while Brent futures were up 28 cents to $107.53 a barrel.
The euro dropped to a two-month low against the US dollar and could extend losses as fears mounted that the euro zone’s debt crisis and deteriorating economic conditions could drag on global economic growth.
The euro was down 0.2 percent at $1.2716, and was seen vulnerable to further losses. The dollar index rose 0.2 percent to 80.983.
Better-than-expected Chinese economic data for October, which pointed to a modest rebound in the world’s second-largest economy, failed to stem yesterday’s declines.
The MSCI world equity index was up 0.1 percent at 323.92. It has lost more than 2 percent since Monday and looked set to close yesterday with a decline steeper than any other week since June. Gold hit a three-week high of $1,738.66 an ounce before pulling back slightly.
Prices of safe-haven US Treasuries extended their gains for the week after the US election on Tuesday raised fears that Washington’s politicians may struggle to find a compromise to cut the budget deficit before nearly $600 billion of spending cuts and tax increases kick in early in 2013. Markets are also watching the US debt ceiling, which must be raised to avoid a government shutdown.
The benchmark US Treasury 10-year note fell 5/32 in price, the yield at 1.6352 percent.
In Europe, falling industrial output in France, Italy and Sweden and a warning from a German ministry that the country’s economy — Europe’s largest — was expected to slow further in the fourth quarter and the first three months of next year rattled investors.
The FTSE Eurofirst 300 index of top European shares was up 0.04 percent at 1098.18.


Toyota captures data goldmine in $1 billion Grab bet

Updated 3 min 36 sec ago
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Toyota captures data goldmine in $1 billion Grab bet

  • Grab already monitors driving behavior through its app to increase ride safety, sending emails about speed and braking, for instance, to its drivers
  • Toyota and Grab will be able to use the data for possible collaboration on data-driven services such as vehicle diagnostics and customized insurance plans based on driver usage
TOKYO/SINGAPORE: By pumping $1 billion into ride-hailing firm Grab, Toyota Motor stands to gain a passenger-side view of tens of thousands of cars across Southeast Asia, tracking how fast they drive, how far they travel and the time they spend stuck in traffic.
The Japanese automaker said it aims to install its TransLog driving recorder devices into Grab’s fleet of lease cars to access the data on driving patterns that will be crucial to its push into the nascent mobility-as-a-service industry.
“Only ride-hailing companies have good, extensive data on usage, so automakers want to be connected with that,” said Egil Juliussen, director of research for automotive infotainment and advanced driver assistance systems at IHS Markit.
Grab already monitors driving behavior through its app to increase ride safety, sending emails about speed and braking, for instance, to its drivers, such as Singapore’s Rennu MaHajjan.
“With this system, it keeps me in check,” said MaHajjan, 57.
It will get even more vehicle data with Toyota, which has been harvesting data through TransLog since 2016 in sales and trials with taxi firms and car-hailing operators including Grab. The data gives Toyota insight into fleet management as it develops services including futuristic concepts such as pay-per-use mobile restaurants.
The latest deal, announced last week, gives Toyota access to a single pool of vehicles which potentially eclipses all others. That will allow it to capture a volume of data that would be difficult to collect from private cars which are only used for under 5 percent of any given day, often on routine commutes.
In return, Grab will be able to expand services such as food delivery and digital payments using Toyota’s $1 billion investment — the biggest by a traditional automaker in a ride-sharing app maker.
The deal reflects how automakers are clamoring for access to ride-hailing firms’ extensive user bases through a spate of partnerships, as they compete with technology companies to develop autonomous cars and next-generation transport services.
Toyota’s vision of such services includes convoys of shuttle bus-sized, self-driving multi-purpose vehicles used, for instance, as pay-per-use mobile restaurants and hotels, which the automaker plans to develop and customize for retail customers.
“There’s data about the car, and then there’s also data about the service — how many customers drivers have, what’s the average mileage, where the rides are concentrated,” said Juliussen. “Having that picture in all the major (Southeast Asian) cities, that becomes very valuable.”
Toyota and Grab will be able to use the data for possible collaboration on data-driven services such as vehicle diagnostics and customized insurance plans based on driver usage.
The data will also help Grab maintain efficiency in fleet maintenance as it expands deeper into Southeast Asia where it operates in over 200 cities. It has said it wants build the region’s largest car rental fleet by the fourth quarter of 2018.
“Vehicle maintenance costs, insurance costs, these are bread-and-butter issues for ride-hailing drivers,” said Chua Kee Lock, chief executive of Vertex Venture Holdings in Singapore, an early Grab investor.
Industry experts said Toyota could expand its data service to more mobility firms such as Didi Chuxing, Uber Technologies Inc. and Amazon.com Inc, with which it has separate partnerships.
“This partnership with Toyota will keep Grab’s platform ‘sticky’ and give drivers less incentive to switch to competitors,” said Chua. “This is Grab’s edge over the long-run.”