1. S&P 500 Drops 2%, Europe Sinks to Five-Month Low
U.S. stocks dropped and European equities tumbled to a five-month low as rising coronavirus infections and tougher lockdowns added to worries about the economic hit from the pandemic.
The S&P 500 Index fell about 2% as earnings rolled in amid a surge in Covid-19 hospitalizations, especially in the Midwest. The Stoxx Europe 600 Index sank as much as 3% after German Chancellor Angela Merkel proposed closing bars and restaurants for a month to curb the spread of the virus. Auto and real-estate shares saw the steepest declines. The VIX Index, a measure of U.S. equity volatility, climbed to the highest level since June.
The S&P 500 Index dropped 2% as of early morning New York time.
The Stoxx Europe 600 Index decreased 2.9%.
The MSCI Asia Pacific Index fell 0.3%.
2. Europe fixates on tougher virus control measures
Losses accelerated across European stock markets on Wednesday, with the benchmark STOXX 600 tumbling to its lowest level since late May on fears of a new national lockdown in France and tighter curbs elsewhere to combat a surge in coronavirus cases. The pan-European STOXX 600 index fell 2.9%, while Germany’s DAX and France’s CAC 40 plunged 3.3% and UK’s FTSE 100 dropped 2.2%. The French government has been exploring a new, national lockdown from midnight on Thursday, albeit a slightly more flexible one than the two-month shutdown that began in mid-March. President Emmanuel Macron will give a televised address later on Wednesday, his office said. Meanwhile, German Chancellor Angela Merkel wants to close all restaurants and bars from November 4, while the British Prime Minister Boris Johnson is under pressure to implement a new lockdown.
3. Boeing to Cut 7,000 More Jobs in Airline Market’s ‘New Reality’
Boeing is deepening job cuts as a global pandemic and prolonged grounding of the 737 Max jetliner squeeze the planemaker’s finances. An additional 7,000 jobs are slated for elimination by the end of next year, bringing the total workforce reduction made through retirements, attrition and layoffs to 30,000 people, Boeing said in an email Wednesday after reporting earnings. The company had 160,000 employees at the start of the year before the coronavirus pandemic gutted air travel and airplane sales.
4. Hedge Funds That Planned for U.S. Election Chaos See a Blue Wave
For hedge fund managers, preparations for chaos in the U.S. elections are giving way to strategies to capitalize on a sweeping Democratic victory. Just six days away from final voting, several top funds see former Vice President Joe Biden winning the presidency as well as the possibility of a so-called blue wave in which Republicans also lose control of the Senate. Asset managers UBS O’Connor, Harvest Volatility Management and MKP Capital Management — with a total of more than $12 billion in assets — say the odds are that President Donald Trump will be unseated, and they have embraced an array of strategies from buying value stocks to betting on commodities to cash in on the outcome.
5. Saudi Arabia Plans to End ‘Kafala’ Labor System
Saudi Arabia is set to announce major labor reforms that could effectively end its controversial “kafala” system for foreign workers, a news outlet close to the government reported. Foreign employees will no longer require their work sponsor’s permission to change jobs, travel abroad or leave the country permanently. The new rules are scheduled to be unveiled as early as next week and will come into effect from the first half of 2021. In response to the report, the kingdom’s Ministry of Human Resources and Social Development said it was “working on a number of initiatives to organize and develop the labor market, and will announce them when they’re ready.” The ministry is set to hold a press conference next week to outline reforms to “increase the competitiveness, attractiveness, and flexibility of the Saudi labor market in accordance with international standards”.
6. Facebook, Twitter, Google CEOs will defend law protecting tech platforms before U.S. Senate panel
The chief executives of three large tech companies will defend a law protecting internet companies before a Senate panel on Wednesday – a topic that has split U.S. lawmakers on ways to hold Big Tech accountable for how they moderate content on their platforms. Facebook’s Mark Zuckerberg, Twitter’s Jack Dorsey and Google’s Sundar Pichai will tell the committee chaired by Republican Senator Roger Wicker that Section 230 of the Communications Decency Act – which protects companies from liability over content posted by users – is crucial to free expression on the internet.
7. Countries with low GDP, poor sanitation had lower COVID-19 death rate
Countries with poor hygiene and sanitation and low quality of water supply seem to have had lower COVID-19 Fatality Rates (CFR) compared to richer countries which do well on these parameters, Indian researchers have found. But they also cautioned that it does not mean that poor hygienic conditions are desirable. Rather, the findings can lead to exploration of “immune training with possibilities of microbiome therapies”, said Dr Shekhar Mande, Director General, Council of Scientific and Industrial Research (CSIR).
8. Rich nations try to take the reins at OECD, the world’s globalisation clubhouse
The OECD acts like an auditor for globalization, shaping policies and setting standards in areas from taxation to trade and education. It’s currently running contentious negotiations over digital taxes that are on the brink of imploding into a transatlantic trade war. Angel Gurria retires next year as Secretary General of the Paris-based Organisation for Economic Cooperation and Development, and the U.S. is proposing President Donald Trump’s Deputy Chief of Staff, Christopher Liddell, as a successor. Member countries have until Nov. 1 deadline to put forward a candidate. Liddell faces competition from European candidates on the other side of that issue, including former EU trade commissioner Cecilia Malmstrom. The race to fill a role at the heart of world economic policy making is turning into a new battleground for the future of globalization.
9. WTO set to make recommendation on their next leader
A group of World Trade Organization ambassadors is set to make a recommendation on Wednesday on who should lead the Geneva-based trade body. Nigerian former finance minister Ngozi Okonjo-Iweala and South Korean trade minister Yoo Myung-hee are the two remaining candidates to succeed Roberto Azevedo, who stepped down at the end of August. The winner will become the first woman to head the global watchdog in its 25-year history.
10. UK: young, non-white people likelier to lose jobs
Twice as many young and non-white British workers have lost their jobs after going on leave of absence compared with the average, largely because they are more likely to work in sectors hit hardest by the coronavirus pandemic, a study showed. The Resolution Foundation think-tank said 19 percent of workers aged 18-24 and 22 percent of ethnic minority staff had lost their jobs, compared with 9 percent of employees overall. Job losses were most common in the hospitality and leisure sectors and for those whose work was already insecure before the crisis – categories in which younger and non-white workers more commonly find themselves in the United Kingdom.