8: 59 AM EDT, August 10, 2011 by Ari Levy
Aug. 10 (Bloomberg)--from soft drinks producers to watch companies and automakers to cable TV providers, companies worldwide see weak consumer demand.
PepsiCo Inc's chief executive officer, said companies must have increased demand for their products before they start will put money to work on enlargement. Watchmaker Fossil Inc. predicted disappointing profit because of reduced consumer spending, and Honda Motor Co. said that the possibility of delayed car purchases can lead to a revised forecast. Cablevision Systems Corp. said customers subscriptions fall. "You got to stimulate the growth of demand, "said Indra Nooyi, CEO of purchase, New York-based PepsiCo, in an interview. "Until we encourage primary consumption, the money will continue to sit on the sidelines."The companies warnings Follow a reduction to the U.S. rating on 5 August and a two-week loss in global stock markets as investors stocks in favor of gold and treasure chests dumped. With three European countries demanded bailouts, is concern about the dwindling supply and rising unemployment. Said yesterday a report confidence of small businesses fell in July for the fifth consecutive month as the sales outlook dimmed.The default &-poor 500 Index has fallen 13 percent since July 22, including a dive 6.7% on 8 August, in the largest decline since December 2008. The Stoxx Europe 600 Index that piece fell 15 percent, and the MSCI World Index of shares has lost 14 percent.Honda, decrease of the GMThe two days ago came after S & P-stripped us of the AAA rating, down to AA + for the first time. The Federal Reserve yesterday responded by vowing to keep interest rates near zero through mid-2013, sparking a rally that more than two-thirds of & the S P 500 's previous day loss erased.For the third-largest car manufacturer Honda, Japan, and General Motors co., the largest in the US, the unrest are hurting their results. Honda said yesterday that a prolonged decline in u.s. stocks to a decline in consumption will lead, and GM said its forecast for 2011 U.s. vehicle sales could be in danger. "Consumer confidence is pretty vulnerable right now, "said Don Johnson, GM's Vice President of u.s. sales, in a presentation. "With the recent volatility in the stock market, we know that is a concern that we really need to look closely."Car manufacturers are not alone. Profits and forecasts of fossil, Cablevision and satellite tv provider Dish Network Corp. yesterday analysts ' estimates, sending their stocks lower even as the market rose. Cablevision and other cable providers are reporting subscriber losses amid a sluggish economy and competition from online video rivals.Consumer SpendingU. S. consumer spending from April to June showed the smallest gain since the second quarter of 2009, the economy in a recession, according to a report by the Commerce Department on 29 July when. Who have contributed to the second quarter economic growth which was analysts estimates, as gross domestic product rose at a 1.3% annual growth in the period. "The consumer is very tired and their mood is not looking too promising, "said Chris Christopher, an economist at IHS Global Insight in Lexington, Massachusetts. "We need an increase in the wages and raising the employment rate, but that companies have to see that there is increased consumer spending."Some private companies that were looking to tap the public markets amid a rise in the share sales slow down their offerings. Sunnyvale, California-based InvenSense Inc., a maker of software used in consumer electronics, postponed the IPO, as well as Shanghai based Cathay Industrial Biotech Ltd. and Seattle-based community lender HomeStreet Inc. IPOs DelayedMore than $ 1.5 billion of offerings are pushed back in the past week, threatens to derail what was ready for the best year for IPOs since 2007. "There's definitely going for an increase in the bar on the quality of companies that want to be able to make public, "says Sunil Dhaliwal, a partner at Battery Ventures in Boston. "The capital markets in the EU remains still care about fantastic opportunities, fantastic stories, but they are sure to get a lot less about marginal stories."Even before the U.S. downgrade, Europe was a sovereign-debt crisis. Greece, Ireland and Portugal are expelled aid from the European Union, Spain and Italy and saw borrowing costs rise from last month.Europe, U.S.The scarcity of jobs is to contribute to the crisis. While unemployment in the us than 9 percent for the past four months, Spain is more than double the rate of 20.9%. Presented that a big enough challenge for the U.S. downgrade, said Millan Alvarez-Miranda, CEO of Unipapel SA, Spain's largest maker and distributor of paper products. "We were all concerned about the so-called double-dip recession, but thought that Europe and the US would be able to avoid it, "said Alvarez-Miranda in an interview."Now, nobody knows what is going to happen. The situation seems to be out of control. "Not all corporate executives are so concerned. Some say that the decline in the market presents a buying opportunity and are taking the possibility of redemption of shares. Fluor Corp., the largest publicly traded American construction company, and of Japan Softbank Corp. told investors that they are buying back stock.Huntsman Corp. CEO Peter Huntsman said he spent $ 1.1 million of his own money to buy the shares of the Houston-based chemical maker, and consumer products company Jarden Corp. of Rye, New York, said, the board approved a $ 500 million repurchase program.Business-to-Business Companies that sell to companies are also more optimistic than those who depend on consumers. Santa Clara, Calif.-based Intel Corp., which chips used in data centers in addition to personal computers sells, profiting as customers upgrade their infrastructure, said Chief Financial Officer Stacy Smith. Rackspace Hosting Inc., providing web-based servers and storage space for other companies offers, is still as customers migrate to cloud computing, said Lew Moorman, head of the strategy. And unlike three years ago, when some investment banks failed and others stopped lending, this decline in the market is not crippling the economy, he said.Executives said they are seeking a resolution that will restore the demand from consumers and businesses to spend, even if the u.s. Government will adjust to the loss of her at the highest level credit rating inspire.As a result of the downgrade, "we could see interest rates up, that we could see higher borrowing costs for companies, which are all bad for economic growth and employment," Nooyi said Aug. 6 in an interview with Bloomberg Television Willow Bay on the BlogHer Conference in San Diego. "So, we have to do."--With the help of Willow Bay in Los Angeles; Craig Trudell and Lee Spears in New York; Douglas MacMillan and Ian King in San Francisco; and Manuel Baigorri in Madrid. Editors: Kevin Miller, Cesca Antonelli.
Contact the reporter on this story: Ari levy in San Francisco at alevy5@bloomberg.net
Contact the editor responsible for this story: Tom Giles on tgiles5@bloomberg.net
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