FTSE 100 suffers worst month since March
Mixed outlook for US tech giants hits Wall Street
Europe’s summer economic rebound beats expectations
Eurozone GDP rose 12.7pc in three months to end of September
Strong figures may represent a false dawn as second wave challenges rise
Time to wrap up. The FTSE appears to have closed basically flat, marking its worst month since March (and worst week since June). These were some of the day’s top stories.
Eurozone set for double dip despite third quarter rebound: Europe’s biggest economies rebounded sharply in the third quarter but are expected to shrink again as coronavirus cases rise and restrictions on businesses tighten.
British Airways owner pleads for Covid testing in wake of huge loss: The plight facing the owner of British Airways has been laid bare as it posted a €6.2bn (£5.6bn) loss in the first nine months of the year.
NatWest warns of challenges ahead despite surprise profit: NatWest Group swung to a profit in the third quarter after setting aside less cash to deal with virus-induced loan defaults, but warned of “challenging times ahead”.
House prices rise 5.8pc despite looming risk buyers will miss stamp duty deadline: The stamp duty holiday and pent-up demand after lockdown pushed 12-month house price growth to a five-year high of 5.8pc in October, new data shows.
Jack Ma’s Ant Group float attracts bids worth $3 trillion: Jack Ma’s Ant Group has attracted at least $3 trillion of orders from individual investors for its dual listing in Hong Kong and Shanghai – enough to buy JPMorgan 10 times over.
Thanks for following along today. We’ll be back on Monday – have a great weekend!
Marriott hack fine cut to £18m
The Marriott hotel group has been fined £18.4m by the Information Commissioner’s Office (ICO) over a 2014 hack which saw records of 339 million guests stolen by hackers.
My colleague James Cook reports:
The fine is a significant reduction from the initial £99.2m fine that the ICO announced last year.
Hackers broke into the database of Starwood Hotels in 2014 and stole information including email addresses, phone numbers, passport information and loyalty programme numbers of guests. Seven million records in the breach related to people from the UK, the ICO has said.
Marriott bought the Starwood group in 2016 and the breach was only discovered in 2018, four years after the hackers had accessed the systems.
The fine only covers the period from 25 March 2018 when new GDPR rules came into effect. The ICO reduced the final fine because of the steps the company took to deal with the incident as well as the impact of the coronavirus pandemic on the business.
Oil extends losses
After a sharp drop yesterday that took its price beneath $37 per barrel for the first time since May, Brent crude has narrowly extended its losses today amid rocky trading:
With just over an hour of trading left, European equities remain moderately in the red. Wall Street is having a worse time as tech stocks drag.
Walmart pulls guns from shelves ahead of US election
Walmart has removed guns and ammunition from its shelves as it prepares for the possibility of civil unrest or looting following Tuesday’s US presidential election.
My colleague Joe Curtis reports:
The move is designed to protect customers and employees amid rising tensions as voters choose between Donald Trump and Democrat challenger Joe Biden to be their next president.
“We have seen some isolated civil unrest and as we have done on several occasions over the last few years, we have moved our firearms and ammunition off the sales floor as a precaution for the safety of our associates and customers,” a Walmart spokesman said.
Walmart sells guns and ammunition in around half its 5,000 stores around the US and will continue to do so upon request, it added.
The retailer made a similar move in June at the height of widespread protests over the death in custody of unarmed black man George Floyd.
Wall street opens lower
US stocks have dipped at the open, with the Nasdaq taking the hardest hit and heading for its own worst week since March.
PwC commits to keeping offices
PwC has committed to retaining all its office space despite the rise of home working during the pandemic.
My colleague Ben Gartside reports:
The big four accountant’s UK chairman, Kevin Ellis, said that while hybrid working was here to stay, he believed the office would remain a key part of working life.
"The pandemic has accelerated changes to working patterns, bringing things forward by three or four years. Hybrid working is here to stay, and therefore the office will remain a key part of working life.”
Wall Street set for fall
European markets are currently moderately in the red, with that worst week since March title looking locked in currently.
There’s just over half an hour until the US open – currently, futures trading is posting toward a sharp drop on Wall Street in the wake of last night’s mixed tech results. The S&P 500 is currently set for a 0.7pc drop, while futures on the tech-heavy Nasdaq are down 0.9pc.
Exxon sinks to $680m loss
Oil giant ExxonMobil has warned it could take up to $30bn in writedowns on its natural gas assets after posting a historic loss.
Exxon is confronting one of its biggest crises since Saudi Arabia began nationalizing its oilfields in the 1970s. The company lost $680 million, or 15 cents a share, during the third quarter, compared with the 25-cent per-share loss forecast in a Bloomberg survey of analysts. The shares fell 1.2pc in pre-market trading.
That was in stark contrast to Chevron Corp., which disclosed a surprise profit despite a gloomy outlook and the lowest crude and gas output in more than two years. European supermajors Total SE, Royal Dutch Shell and BP also turned in better-than-expected third-quarter performances.
Blindsided by the economic fallout from the Covid-19 pandemic, Exxon Chief Executive Officer Darren Woods abruptly ditched an ambitious rebuilding effort and imposed widespread job cuts that are unprecedented in Exxon’s modern history.
If Exxon goes ahead with the write-down in Q4, the up to $30 bn impairment would be one of the largest ever in the oil industry, perhaps second to Conoco's $34bn writedown in 2009 (under CEO Jim Mulva) that included ~$25 bn from the Burlington Resources deal in 2005 | #OOTT
— Javier Blas (@JavierBlas) October 30, 2020
Mexican economy grew 12pc in third quarter
Mexico’s GDP rose by 12pc in the third quarter, adding to the growing list of strong summer rebounds.
Agriculture-linked industries drove much of the growth, with industrial and services sectors remaining weaker year-on-year.
The country recently conceded its death toll is higher than previously admitted. President Andrés Manuel López Obrador has been criticised for shunning face masks and encouraging Mexicans to break social distancing guidelines.
Jack Ma’s Ant Group draws $3 trillion in bids for float
Jack Ma’s Ant Group has attracted at least $3 trillion of orders from individual investors for its dual listing in Hong Kong and Shanghai – enough to buy JPMorgan 10 times over.
My colleagues report:
Bidding was so intense in Hong Kong that one brokerage’s platform briefly shut down after becoming overwhelmed by orders. Demand for the retail portion in Shanghai exceeded initial supply by more than 870 times.
The stampede is fueling predictions of a first-day pop when Ant is due to start trading on Thursday, even as skeptics warn of risks including the US election, tightening regulations in China and rising Covid-19 infections worldwide.
The Chinese fintech behemoth’s $35bn (£26bn) float represents a major vote of confidence in a company that could end up shaping the future of global finance. It also underscores the ability of Chinese firms to attract huge amounts of capital without tapping American markets, a win for Beijing as it tries to reduce its vulnerability to the threat of US financial sanctions.
Read more: Jack Ma’s Ant Group float attracts bids worth $3 trillion
Eurozone GDP reaction: ‘Bittersweet’
Responding to this morning’s eurozone GDP reading, Bert Colijn from ING says it is a “bittersweet result”, adding:
The current level of economic output is far more interesting than the growth rate. At -4.3pc, below the peak in GDP of 4Q19, the rebound has still left a very significant gap to close. At levels of output, much below pre-Covid-19 levels and with new restrictive measures on the economy, concerns about second-round effects are growing.
This means that the focus will now turn to how adequate fiscal responses will be to counter the long-term effects of new partial lockdowns.
Daniel Bergvall from SEB said there are growing signs of weakness in the fourth quarter:
[These] numbers reflect the past as the present situation has clearly deteriorated going into Q4 as Covid-19 infections are gaining pace and countries are introducing new lockdown measures. Even if the current strategy is different from what we saw during the spring they will put a clear downward pressure on growth in the near term.
After choppy trading, European stock markets remain slightly in the red. The FTSE 100’s come under slightly more pressure as the pound pushes higher.
Here are some of the day’s top stories from the Telegraph Money team:
Nervous savers turn to safe deposit boxes – but supply is disappearing: Consumers’ options for wealth storage are shrinking as the spectre of negative interest rates looms.
NS&I forced to hire as savers face huge delays in accessing their pots: National Savings & Investments has been forced into a hiring spree as savers rushed to pull money from the state-backed institution following a raft of rate cuts.
Heir hunters reunite long lost inheritance with family just months before 30-year expiry: Heir hunters have reunited with its true owners the lost legacy of a 72-year-old Londoner who died without leaving a will, after almost three decades of fruitless searching.
House prices hit new record high
The stamp duty holiday and pent-up demand after lockdown pushed 12-month house price growth to a five-year high of 5.8pc in October, new data shows.
My colleague Melissa Lawford reports:
The average British home cost £227,826 this month, a jump of 0.8pc from September, according to Nationwide building society’s house price index.
Homes now cost £12,458 more than they did a year ago. But experts have warned activity could stop “sharply” and pries could fall.
Robert Gardner, of Nationwide, said that the outlook for the market remained “highly uncertain” as unemployment rose and Britain’s economic recovery slowed.
The future of house prices would depend "heavily on how the pandemic and the measures to contain it evolve as well as the efficacy of policy measures implemented to limit the damage to the wider economy,” Mr Gardner said.
Eurozone grew record 12.7pc in third quarter
The eurozone economy solidly beat expectations for third-quarter growth, expanding a record-breaking 12.7pc in the third quarter.
The jump – which followed an 11.8pc decline in the previous three months – follows stronger-than-expected readings for all the bloc’s biggest economies as they bounced back from spring lockdowns.
European leaders won’t celebrate for long, however: the latest indicators for eurozone growth have turned negative, new lockdowns loom and European central Bank president Christine Lagarde has warned the outlook for November is especially grim.
European stocks head for worst week since March
It looks like things are going to be pretty touch-and-go with European markets today – the continent’s top indices are wobbling either side of flat, caught between poor sentiment and those expectation-beating GDP readings.
As things stand, the benchmark Stoxx 600 is set to drop 5.8pc this week, slightly worse than the 5.7pc fall seen in mid-June. Unless conditions improve, this is set to be the worst week since March.
Italy smashes expectations with 16.1pc growth
Italy’s economy grew a mighty 16.1pc in the third quarter, beating expectations solidly.
After becoming the first European country to suffer a widespread outbreak of the virus, Italy’s economy shrank 13pc in the second quarter, a large measure of which has now been recovered.
But like so many other European countries, it is now gripped by a second wave which has cast a shadow over the prospects for a continued recovery:
German growth beats expectations
Germany has joined the string of expectation-beating third-quarter GDP readings, with growth of 8.2pc during the third quarter.
Following beats for Spain and France (and Italy, which I’ll get onto shortly), it now looks certain that the eurozone will have beaten growth expectations in the third quarter. The real challenge now is the fourth, particularly the grim November that looms.
Germany, which contained its first virus wave effectively, was comparatively lightly hit in the second quarter. However, having imposed a ‘light’ lockdown for the coming month, it looks like Europe’s biggest economy could face a double-dip output fall.
FTSE flattens out
The FTSE 100 has pulled back some of its early losses, and is now only slightly down – although prices seems pretty volatile. London’s blue-chips are being given a slightly boost by a weaker pound, while NatWest is leading risers.
Spanish output jumps 16.7pc in third quarter
Spain’s economy grew 16.7pc in the third quarter, continuing the trend of record-breaking growth readings we expect to see this morning.
The rebound, which followed 17.8pc fall in second quarter, beat expectations for 13.5pc growth but is likely to be weaker than other major countries given Spain’s reliance on the battered tourism industry.
As with other readings, the figures offer a snapshot of a lost world in which restrictions were being eased and economic activity was rubber-banding back. Now, with tighter restrictions in place and a surge in case numbers, the outlook is much more bleak.
Bloomberg Intelligence’s Maeva Cousin said:
The country’s reliance on tourism, which has been decimated by the pandemic, has proved a major liability in this crisis and will continue to weight on Spain’s prospects until a vaccine is found.
Big tech round-up
It was a big night for Big Tech, with all of America’s top technology firms except Microsoft issuing results at the same time. Here are our stories:
Amazon reveals 200pc increase in profit as shoppers move online in crisis: Amazon has revealed a 200pc leap in profits as several Silicon Valley titans posted increases in sales, in a sign that the economic havoc caused by the pandemic has done little to slow their rise.
Facebook shrugs off advertising boycott to post fastest growth since before coronavirus: Facebook has shrugged off the impact of this summer’s massive advertising boycott, posting its highest year on year revenue growth and its biggest profit since before the pandemic.
iPhone sales fall by a fifth after new Apple smartphones delayed: Sales of Apple’s iPhone fell by 21pc in the last three months after the company delayed the release of its latest handsets, although the tech giant’s total sales grew thanks to record revenues from its Mac computers.
Google bounces back from search advertising slump with sales jump: Google parent Alphabet has bounced back from a sharp advertising decline earlier this year, beating Wall street estimates to bank $11.2bn (£8.6bn) in profit for the third quarter of 2020.
IAG sinks to €6.2bn loss
The owner of British Airways has sunk to a €6.2bn pre-tax loss loss for the first nine months of the year as the pandemic crushed demand for air travel.
My colleagues report:
IAG made a profit of €2.3bn for the same period last year.
The FTSE 100 group said Covid has had a material impact on the global airline and travel sectors since late February and there were “no immediate signs of recovery”.
Chief executive Luis Gallego said the €1.9bn operating loss including exceptional items relating to fuel hedges and restructuring costs at BA and Aer Lingus.
‘These results demonstrate the negative impact of Covid-19 on our business but they're exacerbated by constantly changing government restrictions,” he said.
Read more: BA owner sinks to huge loss
European markets drop again
After a pause for breath yesterday, European market are once again tumbling today, with the pan-continental Stoxx 600 down 0.8pc as virus fears hit miners and car manufacturers.
If these losses holds, it will make for five days of successive drops.
France record records third-quarter growth
France’s economy grew by a record-breaking 18.2pc in the third quarter, as activity rebounded in the face of widespread stimulus and easing restrictions.
The jump – which marks the first in a string of eurozone GDP figures to be released this morning – is a record for three-month growth, and follows a 13.7pc drop over the previous quarter. It leaves France’s economy 4.3pc smaller than in September 2019.
The figure is something of a false dawn, representing the absolute peak of France’s output recovery, which latest indicators suggest may have lost steam somewhat over recent weeks amid soaring case numbers and new restrictions.
Yesterday, European Central Bank President Christine Lagarde warned the bloc faces a bleak November, and is at risk of slipping back into recession.
ING economist Charlotte de Montpellier said:
French GDP growth figures for the third quarter are like a ray of sunshine that pierces the clouds for a short moment on a rainy autumn day: they remind us nostalgically of the heat of summer, but do not allow us to forget that current realities are much less pleasing. France has entered its second dip and the prospects for a significant recovery in 2021 are darkening sharply.
NatWest swings to profit but warns of looming challenges
NatWest Group swung to a profit in the third quarter after setting aside less cash to deal with virus-induced loan defaults, but warned of “challenging times ahead”.
My colleague Simon Foy reports:
The bank, which remains 62pc state-owned after a £46bn bailout during the 2008 financial crisis, posted a £355m pre-tax profit for the three months to September, beating analyst estimates of a £75m loss.
Last year, the bank made an £8m pre-tax loss for the same period.
Previously known as Royal Bank of Scotland, NatWest factored in a further £254m provision for expected bad loans, compared to its forecast of £628m. Full-year provisions for bad loans would be at the lower end of its £3.5bn to £4.5bn range.
It comes after rivals Lloyds, Barclays and HSBC also set aside less cash for bad loans in their third quarter updates this week compared to earlier in the year.
Agenda: FTSE set for another day of pain
Good morning. The FTSE 100 is set to open firmly in the red as virus cases continue to surge in the West and investors jitters over next week's US presidential election enveloped markets.
There was also fresh concerns about the outlook for technology giants.
5 things to start your day
1) Amazon reveals 200pc profit gain as shoppers go online in crisis: Several Silicon Valley titans posted sales gains, in a sign that the economic havoc caused by coronavirus has done little to slow their rise.
2) Most public sector audits by Grant Thornton below standard: Five out of six major public sector audits by Grant Thornton were not up to scratch last year, according to a leaked review seen by The Telegraph.
3) Second lockdown 'will destroy hospitality and the high street': Businesses urged the Government not to follow France and Germany back into nationwide restrictions, after millions spent on Covid safety.
4) BT CFO scorned for ‘messy communication’ as shares fall: A seemingly positive update obscured signs of tougher trading for its core consumer business, swinging shares violently at the end of the day.
5) Facebook ignores boycott with fastest growth since pre-Covid: The social media giant returned to its previous booming revenues, suggesting a huge hate speech boycott did little to dent its bottom line.
What happened overnight
Asian stocks sank on Friday as investors looked ahead to next week's US presidential election and weighed the chances of economic stimulus from Washington and Europe.
Benchmarks in Tokyo, Hong Kong and Seoul all retreated. Shanghai swung between gains and losses.
The Nikkei 225 in Tokyo fell 0.8pc to 23,147.14 and the Hang Seng in Hong Kong lost less than 0.1pc at 24,580.22.
The Shanghai Composite Index was down 0.1pc at 3,269.45 at midday after the ruling Communist Party said it will transform China into a self-reliant "technology power" as a feud with Washington hampers access to high-tech components.
The Kospi in Seoul retreated 1.2pc to 2,298.96 and Sydney's S&P-ASX 200 was 0.3pc lower at 5,945.20.
India's Sensex opened up 0.4pc at 39,906.14. New Zealand, Singapore and Bangkok retreated.
Coming up today
Corporate: Glencore, IAG, NatWest Group (Interim); ConvaTec Group Plc (Trading statement)
Economics: GDP third quarter (eurozone, Germany, France, Italy, Spain), personal income and spending (US)