1. U.S. Futures Climb as Oil Touches Five-Month Low
Equity markets started Monday with gains as investors prepared for a crucial week spanning the U.S. election and a Federal Reserve meeting. Futures on the S&P 500 climbed 1% following last week’s sharp selloff. Equity benchmarks across Europe and Asia were also higher, and investors took comfort in data that showed strength in China’s economic expansion. The picture wasn’t uniform across markets. Oil prices touched a five-month low after Libya accelerated production and the U.K. joined other European countries in toughening travel restrictions.
Futures on the S&P 500 Index increased 1% as of early morning New York time.
The Stoxx Europe 600 Index surged 1.4%.
The MSCI Asia Pacific Index jumped 1.1%.
The MSCI Emerging Market Index increased 0.8%.
2. UK Locks Down as COVID-19 cases pass 10 lakhs
Prime Minister Boris Johnson ordered England back into a national lockdown after the United Kingdom passed the milestone of one million COVID-19 cases and the second wave of infections threatened to overwhelm the health service. The UK, which has the biggest official death toll in Europe from COVID-19, is grappling with more than 20,000 new coronavirus cases a day and scientists have warned the “worst case” scenario of 80,000 dead could be exceeded. In some of the strictest restrictions in the UK’s peacetime history, people will only be allowed to leave home for specific reasons such as education, work, exercise, shopping for essentials and medicines or caring for the vulnerable. Essential shops, schools, and universities will remain open, Johnson said, and while elite sports will continue, amateur sports for adults and children will be asked to stop. Pubs and restaurants will be shut apart from for takeaways. All non-essential retail will close.
3. Ant Group Trades over 50% Premium in Hong Kong Grey Market
Institutional investors are buying Ant Group Co.’s shares at a 50% premium, signalling the Chinese fintech giant is poised to soar in its debut this week following the world’s largest initial public offering. Billionaire Jack Ma’s Ant IPO has become the most anticipated in years, attracting at least $3 trillion in orders for its dual listing in Hong Kong and Shanghai ahead of its trading debut on Nov. 5. The stampede for shares is fueling predictions of a first-day pop, even as skeptics warn of risks including the U.S. election, tightening regulations in China and rising Covid-19 infections worldwide.
4. Strong China factory data show domestic demand driving recovery
China’s manufacturing activity kept up its steady expansion from a deep slump caused by the coronavirus pandemic. The main reason for the growth has been domestic demand as Chinese people spent on travel, leisure and shopping for consumer goods, helped by a long public holiday in October. But export activity remains weak, with analysts saying the continuing coronavirus pandemic in China’s main overseas markets of the United States and Europe is likely to suppress demand there for some time. The latest figure was the highest since January 2011. It had plunged to a historic low in March as most of China’s economy shut down to control the spread of the coronavirus.
5. Ryanair posts first summer loss in decades; cuts winter forecasts
Ireland’s Ryanair posted a loss for its key summer period for the first time in decades on Monday and said it may have to cut capacity further this winter as the second wave of COVID-19 infections sparks fresh lockdowns across Europe. Europe’s largest low-cost airline said COVID-19 restrictions pushed passenger numbers down 80% in the six months to Sept. 30, when it typically makes most of its annual profit. The airline, whose chief executive Michael O’Leary in September described the upcoming winter as a “write-off”, declined to forecast profit for the full financial year ending March 31, but said it expected a second-half loss greater than the first. Ryanair reaffirmed plans to fly 3.8 crore passengers this financial year compared with the 15 crore of the same period last year.
6. Italy Considers National Curfew: Government Still Divided
Italy’s government is opting for targeted regional restrictions amid the latest surge in Covid-19 cases, in a bid to avoid a new nationwide lockdown. Regions with the highest transmission levels will be subject to tougher curbs under a new three-tiered system, Prime Minister Giuseppe Conte said Monday. These will come on top of new nationwide measures including a night-time curfew. The newest plan includes shutting down museums across the country and closing shopping malls on weekends. The government will also impose movement restrictions to and from the hardest-hit regions.
7. China Issues Fresh Warning to U.S. in Spat Over Journalist Visas
China issued a new warning to the U.S. over journalist visas, after accusing the Trump administration of giving Chinese media staff new travel documents that would expire in a matter of days. Some Chinese journalists in the U.S. were notified last week that their long-delayed visa applications had been approved, Foreign Ministry spokesman Wang Wenbin told a regular briefing Monday in Beijing. China had expressed its concerns and demands through diplomatic channels made clear that it would take “firm countermeasures” should Washington continue with its “political persecution and suppression against Chinese journalists,” he said.
8. Hong Kong’s Retail Weakness Persisted in September
Hong Kong retailers continued to struggle in September even as other sectors in the economy, notably exports, started showing stronger signs of recovery. Retail sales by value fell 12.9% from a year earlier, according to a government report. The business environment of the retail trade will remain challenging in the near term, as inbound tourism is unlikely to see a swift rebound and the labour market is still under pressure. Sales across most categories continued to drop, led by purchases of food and alcoholic drinks, jewellery and electrical goods. Supermarket sales rose, along with department stores, motor vehicles, furniture, books and newspapers.
9. Xinjiang Covid Outbreak Is China’s Biggest Since Summer
A testing blitz in China’s far west region of Xinjiang uncovered the country’s worst Covid-19 outbreak since the summer, even as authorities said all infections have been found. Authorities in the region — the epicentre of Beijing’s crackdown on ethnic Muslim Uighurs — reported six new so-called asymptomatic infections on Monday. Xinjiang’s tally since the outbreak began with the detection stands at 57 infections and 223 asymptomatic cases, Xinjiang’s health commission reported. Nine people are in “severe condition,” authorities said. The new cases emerged after China tested millions of people across the region last week.
10. World’s Top Hedge Fund Soars 275% With Bets on China Schools
Between January and September, QQQ Capital Management posted gains of 275%, making it the top hedge fund in the world, according to Eurekahedge data. QQQ says assets under management rose to about $1 billion last month, with most of the money coming from Qian, its founder. The gains have come with concentration risks that many fund managers would balk at: QQQ has more than a third of its assets invested in Chinese education companies. While those stocks had soared this year, they’ve been hit with concerns about regulatory crackdowns and allegations of accounting fraud, and one has plunged in recent weeks amid downgrades from analysts.