Doesn't sound like much, does it? But any talk of being allowed to fire someone sets the labor unions off; yesterday was the 10th anniversary of the assassination of Marco Biagi, a government adviser on labor law, who was gunned down outside his home during a debate about an overhaul of the same labor laws; then-Prime Minister Silvio Berlusconi backed down.
Article 18 of the Italian labor code bans dismissals without just cause; it is almost impossible to dismiss someone on purely economic grounds, and it is apparently difficult to even do so on disciplinary grounds. An employee can bring an action against an employer that would force employers to rehire them and compensate them if they can demonstrate they were unfairly released.
The law applies to companies with more than 15 employees, so companies are afraid to expand.
Unemployment in Italy is "officially" at 9.2 percent in January, but there are other reports that more than 30 percent of 18-to-24-year-olds are unemployed, and only about 57 percent of Italians have a job.
1) Global markets have been weaker overnight as a BHP Billiton executive, speaking in Australia, said that iron ore demand from China would be slowing down. Ian Ashby, president of BHP's iron ore division, said demand for iron ore will drop "to single digits, if it is not already there."
Commodity currencies such as the Australian dollar weakened against the U.S. dollar. Copper also fell.
This remark, made at a conference, may have been a bit overinterpreted. According to UBS, Chinese iron ore imports have been growing 24 percent on an annual basis from 2000 to 2010...astonishing growth! You cannot have 24 percent annual growth forever, at some point the "base effect" kicks in — the numbers keep getting larger and larger — and demand has to slow down. Import growth slowed to 11 percent in 2011.
Very few people in attendance at this conference picked up on the other comments from Ashy: That BHP is going full steam ahead with expansion plans. Importantly, they have access to relatively low-cost iron ore.
2) Tiffany shares climb 4.2 percent pre-market after the high-end jeweler provided upbeat 2013 earnings guidance and reported fourth-quarter revenues in line with the Street’s view. Tiffany sees 2013 earnings per share of between $3.95 and $4.05 a share, with worldwide sales rising about 10 percent. Analysts expect earnings of $3.93 a share, with sales rising roughly 7 percent. The retailer's fourth-quarter earnings came in lower-than-expected due to a higher tax expense and weak holiday sales.
3) Michael Kors Holdings rises 4 percent pre-open after the retailer raised its earnings forecast and said same-store sales are up nearly 36 percent in the current quarter amid strong demand for luxury goods. Kors upped fourth-quarter earnings per share guidance to between $0.14 and $0.16, versus analysts’ $0.13 estimate. The apparel company’s fourth-quarter revenue outlook of $350 million to $360 million brackets the Street’s $358 million expectation.
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