World News – CA – Turbulent markets as Covid-19 restrictions tighten – Business Live


Continuous coverage of the latest economic and financial news, as fears of further lockdowns hit travel and hotel businesses

Goldman Sachs profits jumped 94% last quarter, to $ 3.5 billion from $ 1.8 billion a year ago

Although activity slowed in July-September compared to April-June, the bank’s income was still almost 30% higher than in the third quarter of 2019

Net revenues were USD 1078 billion for the third quarter of 2020, 30% more than the third quarter of 2019 and 19% less than the second quarter of 2020

Increase over Q3 2019 reflects higher net revenues across all segments, including significant increases in asset management and global markets The operating environment continued to recover in the third quarter of 2020 following the impact of the COVID-19 pandemic earlier in the year, as global economic activity rebounded significantly from a sharp decline in the second quarter, market volatility declined slightly and monetary policy and budget has remained accommodating

As a result, global equity prices have risen and credit spreads have tightened from the end of the second quarter of 2020

Despite the worst recession in decades, the number of UK businesses taken into administration has almost hit an all-time low in the past three months

The accounting firm KPMG has calculated that 246 companies were put into administration in the third quarter of 2020, the lowest level since the fourth quarter of 2015

This suggests that the government’s unprecedented support programs have kept businesses afloat This includes the holiday program, business rate relief, tenant protection and large loan programs, medium and small businesses

Blair Nimmo, head of restructuring at KPMG in the UK, says the aid has been a ‘vital lifeline’ for businesses, but that lifeline may soon be pulled out

« The question remains whether the can is just thrown in the road We know that as support regimes start to dissipate and loan repayments, tax arrears and rents start to mount, cash flow will again come under heavy pressure

As it stands, the moratorium on lease lapses ends on December 31, so it could be a very difficult start to the year for those who have delayed paying rent so far « 

And this morning, the head of the European Central Bank suggested that it could potentially adjust its stimulus program for corporate bond purchases

Right now, she doesn’t consider whether a company is helping solve the climate crisis or making it worse when it buys debt as part of its efforts to protect the economy But could that change?

The European Central Bank will review a key rule requiring it to buy corporate bonds in proportion to their amounts outstanding, given the market’s ‘inability’ to reflect climate change risks, the president said on Wednesday from the ECB, Christine Lagarde

« In the face of what I call market failures, (there is) also a question we need to ask ourselves as to whether market neutrality should be the real principle in driving our purchasing program. ‘active,’ Lagarde said at a UN event

« I’m not passing judgment that it shouldn’t be that way anymore, but that justifies the question and it’s something we’ll be doing as part of our review of the strategy »

Christine Lagarde discussing the role of # central banks in the fight against the # pandemic through # social bonds and keeping #climate in the foreground E #Europe must play a key role! picTwittercom / KisDtA8xDU

« There is not enough funding to go in the green direction… we are missing two thirds of the funding we need » Very happy to welcome Christine Lagarde, president, @ecb at # GRT2020 « L ‘Europe plays a key role Over 40% of green bonds denominated in euros « @Lagarde picTwittercom / a3ne5zW0S0

« There are calls for more intervention to correct market failures Regulators have a role to play More must be done and we must appreciate what is and what is not » Christine Lagarde, President, @ecb speaking at # GRT2020 picTwittercom / wiQWw9MNJU

Sam Miley, an economist at the Center for Economics and Business Research, warns that industrial production in the euro zone may soon start to fall again (having only increased modestly in August)

« The outlook for industrial production remains fragile as the winter months approach Given their reliance on broader economic conditions, the recovery of industrial sectors in the euro area could be significantly hampered by the recent emergence of a second wave of coronavirus infections and the re-application of restriction measures

As such, we will probably see a few months of decline in industrial production this winter, or at the very least, a further slowdown in the monthly growth rate « 

The statistical agency Eurostat reports that industrial production in the euro area increased by 07% in August compared to July

Which left production 72% less than a year ago, highlighting the economic damage caused by the pandemic

Demand for capital goods used to produce other goods and services (such as machinery, equipment and vehicles) actually declined in August, indicating a cautious outlook on the economic outlook

In the euro area in August 2020, compared to July 2020, the production of durable consumer goods increased by 68%, intermediate goods by 31% and energy by 23%, while the production of capital goods and non-durable consumer goods fell by 16%

Germany recorded a 2% year-on-year drop in production in August, with France down 73% from August 2019

Sky News reports that a partial bailout deal for UK restaurant chain Gourmet Burger Kitchen (GBK) is near

As part of this plan, they say, tycoon Ranjit Boparan would take 35 of GBK’s outlets, saving around 650 jobs

But that would still mean hundreds of jobs lost, as GBK has more than 60 locations in the UK

Boparan restaurants have reportedly escaped competition from new owners of rival GBK’s burger chain, Byron, to strike a deal

The deal will be the latest in a series of deals that have reshaped the UK casual dining industry since the onset of the coronavirus crisis

Current GBK owner Famous Brands, based in South Africa, had indicated that he would not provide additional funding to support the UK operation which, before the pandemic, operated from 62 outlets and employed nearly 1,300 people

Exclusive: The mogul who built one of the UK’s biggest restaurant empires is set to add the Gourmet Burger Kitchen chain to his portfolio; I understand that Ranjit Boparan will buy GBK via pre-pack administration, saving 35 sites and 650 jobs https: // tco / gbkZ4Xm7rI

Boparan restaurant group has experienced a busy pandemic In May, they bought the Carluccio brand and 31 restaurants in a deal that saved more than 800 jobs but lost an additional 1,000 jobs

The International Energy Agency has warned that demand for oil is slowing with increasing Covid-19 infections

In its latest monthly report, the IEA warns that the recent increase in cases threatens to block a resumption of crude demand:

The trajectory of Covid-19 infections is sharply on the rise in many countries and governments are tightening restrictions on the movements of their citizens This certainly raises doubts about the strength of the anticipated economic recovery and therefore the outlook growth in oil demand

This means that it may take until 2023 for prices to return to $ 50 a barrel, he adds:

The long term does not encourage producers much; the curve shows prices not reaching $ 50 / bbl until 2023 In truth, those who wish to tighten the oil market are considering a moving target

Brent crude started 2020 at around $ 65 a barrel, but is currently changing hands at just $ 42 – after briefly dropping below $ 20 in April

Online fashion firm ASOS is also benefiting from the pandemic, with revenues quadrupled last year

She made £ 142million in pre-tax profit in the 12 months leading up to August 31, up from £ 33million a year earlier

But ASOS shares are down 6% as it warns its target market of young consumers faces a disrupted « economic outlook and lifestyles »

In other words, the 20-year-olds have fewer opportunities for social engagement and are also on the front line of Covid-19 job cuts

I am delighted with the improvements we have made this year, but we still have a long way to go to continue our progress

Although the lives of our customers in their 20s may not return to normal for some time, ASOS will continue to engage, respond and adapt as one of the few truly global leaders in online fashion retail »

Distribution and outsourcing company Bunzl saw an 8% increase in underlying sales, due to « continued growth in sales of products related to Covid-19, such as masks, sanitizers, gloves and disinfectants « Its shares are up more than 5% this morning

As did Just Eat, the takeout operator, after seeing a 46% jump in orders in the last quarter and predicting a busy winter, saying:

Order growth accelerated from the previous quarter, leading to a widening competitive gap in key countries including the UK and Canada Australia was the fastest growing country faster, registering market share gains with triple-digit order growth in the quarter

Italy’s FTSE MIB is going against the trend, however, up 03% after its government imposed new restrictions – but insisted it didn’t want a nationwide lockdown

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Italian Prime Minister Giuseppe Conte on Tuesday imposed new restrictions on gatherings, restaurants, sports and school activities in an attempt to slow the spike in new coronavirus infections

The latest measures marked the second time in a week that the government has tightened its measures, although on the whole they remain less severe than those of other European countries like Great Britain and Spain, where infection rates are much higher

« We must avoid plunging the country into a general lockdown, the economy has started to move fast again, » Conte said at a press conference

Shares of travel and hospitality companies fall as London Stock Exchange begins trading

Jet engine maker Rolls-Royce is FTSE 100 top feller, down 45%, with British Airways parent company IAG losing 4%

Among small businesses, the Cineworld movie chain lost 46% – it was forced to temporarily shut down its UK and US locations last week

Stephen Innes, chief global markets strategist at axi, says ‘dreaded’ fall / winter coronavirus outbreak threatens recovery

Extreme risk is the way lawmakers are handling this outbreak, and the way consumers are interacting remains the wild card Although a return to draconian containment measures is unlikely, the most significant threat to economic recovery is fear of the virus, not necessarily soft lockdowns or restrictions on social gathering

It’s fear that could keep people squatting in their apartments until the curve flattens or the vaccine is available And that could seem like a significant slowdown for the economy

Johnson and Johnson have delivered reality test to markets, after temporarily halting clinical trials of its Covid-19 vaccine Emphasis is on temporary, however, and trials will more than likely resume quickly

It does, however, highlight the realities of vaccine development, even in an accelerated Covid-19 environment Again, the pessimism will most likely be short-lived and will have as much to do with prolonged short-term positioning and then a radical change in the race to develop a Covid-19 vaccine

Hello and welcome to our continued coverage of the global economy, financial markets, euro area and business

Covid-19 fears weigh again in financial markets today, as rising infections push governments to consider new, tougher restrictions to fight the pandemic

Overnight, the number of infections worldwide topped 38 million, and cases continue to rise sharply In France, President Emmanuel Macron is expected to make an important announcement regarding additional national lockdown measures more late in the day

The Dutch government yesterday ordered a partial lockdown after seeing cases increase, with Prime Minister Mark Rutte warning: « It hurts, but it’s the only way »

Rutte’s plan includes closing bars and restaurants and limiting the size of social gatherings

We also expect Northern Ireland to announce far-reaching new restrictions on Covid-19 in an attempt to contain skyrocketing infection rates

The measures will likely include the closure of many businesses and schools and new restrictions on gatherings over several weeks, which amounts to a partial lockdown

In the UK, the new three-tier system that will put Liverpool (to begin with) in tight restrictions begins today just as the whole issue is polarizing Westminster

The opposition Labor Party is pushing for a two-week ‘breaker’ lockdown to slow the virus, while backbench Tory MPs threaten to rebel against existing plans, including the cover-up 10 p.m. fire

Markets are also losing confidence in hopes of rapid medical solution to crisis Overnight, US pharmaceutical company Eli Lilly and Co has suspended clinical trials of its COVID-19 antibody treatment due to ‘a security problem

Earlier in the week, Johnson & Johnson suspended his Covid vaccine trial due to ‘unexplained illness’ of a participant

Such delays are common practice in a medical trial – which is why it normally takes several years to bring vaccines to the market

But it’s a red flag for all investors who casually thought that the worst of the crisis could be behind us

On Tuesday, Johnson & Johnson announced that she was on hold her trial of vaccine candidate covid vaccine due to unexplained illness in participants Eli Lilly & Co announced later on Tuesday that it was also suspending its clinical trial of its anti-covid antibody treatment for safety reasons, drastically lowering US stocks

While it’s common to see pauses in vaccine trials, it boils down to the fact that at best it might take longer for a vaccine to be deployed and at worst trials will be suspended Either way, this is not good news for risk sentiment in the markets

Let’s not forget that it’s only fall, which means winter could be really long as governments struggle to control the spread of the virus These measures could quickly derail the already fragile economic recovery

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News from around the world – CA – Markets edgy as Covid-19 restrictions tighten – Business Live



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