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| Markets stage Halloween rally after a month of scary losses - business live | Markets stage Halloween rally after a month of scary losses - business live |
| (35 minutes later) | |
| It’s a grim day for UK butchers chain Crawshaw Group. | |
| The supplier of sausages, chops, joints and pies is falling into administration. This puts 600 jobs at risk across 54 stores, which could close unless a buyer can be found. | |
| My colleague Julia Kollewe explains: | |
| The Yorkshire-based company, which was founded in 1954, has been talking to investors over the past month but has failed to raise the funds it needed. | |
| It expects to appoint administrators later on Wednesday who will then try to find buyers for the business and its assets. Crawshaw has 42 high street stores and 12 factory outlet stores across the Midlands and the north of England. | |
| Full marks to the Bond Vigilante’s team at M&G, who have produced some spooktacular charts today. | Full marks to the Bond Vigilante’s team at M&G, who have produced some spooktacular charts today. |
| The first shows the remorseless march of US student debt, which has tripled over the last decade. | The first shows the remorseless march of US student debt, which has tripled over the last decade. |
| Laura Frost, fixed interest investment specialist at M&G, says this debt burden can undermine the wider economy. | Laura Frost, fixed interest investment specialist at M&G, says this debt burden can undermine the wider economy. |
| “US Federal Reserve (Fed) Chairman Jerome Powell recently warned about the ever-increasing amount of US student debt outstanding: “You do stand to see longer-term negative effects on people who can’t pay off their student loans. It hurts their credit rating, it impacts the entire half of their economic life.” Student debt also impacts the overall economy: as graduates seek to repay their loans, they are forced to make concessions to their financial consumption, leading to an ever-growing drag on the economy. They buy fewer goods and services and are delayed in joining the housing ladder, with many choosing (or having) to rent instead. On top of this, student debt sees the highest 90+ day delinquency rate of all US consumer credit.” | “US Federal Reserve (Fed) Chairman Jerome Powell recently warned about the ever-increasing amount of US student debt outstanding: “You do stand to see longer-term negative effects on people who can’t pay off their student loans. It hurts their credit rating, it impacts the entire half of their economic life.” Student debt also impacts the overall economy: as graduates seek to repay their loans, they are forced to make concessions to their financial consumption, leading to an ever-growing drag on the economy. They buy fewer goods and services and are delayed in joining the housing ladder, with many choosing (or having) to rent instead. On top of this, student debt sees the highest 90+ day delinquency rate of all US consumer credit.” |
| Readers of a nervous disposition should take a deep breath, before looking at the next chart -- the interest rate on longterm US bonds. After falling steadily for decades, it’s started going up! | Readers of a nervous disposition should take a deep breath, before looking at the next chart -- the interest rate on longterm US bonds. After falling steadily for decades, it’s started going up! |
| Frost explains why it matters: | Frost explains why it matters: |
| “The long-end of the US Treasury market has often been described as a giant anaconda: it draws little attention as it sleeps most of the time, but the minute it wakes up, everybody around shakes. US 30-year bonds don’t bite, but their moves can be as poisonous as they basically determine millions of mortgage rates, as well as the price that governments and companies around the world pay for debt. | “The long-end of the US Treasury market has often been described as a giant anaconda: it draws little attention as it sleeps most of the time, but the minute it wakes up, everybody around shakes. US 30-year bonds don’t bite, but their moves can be as poisonous as they basically determine millions of mortgage rates, as well as the price that governments and companies around the world pay for debt. |
| The 30-year Treasury yield has remained within the support and resistance level shown for over 30 years, rallying 6% over the period and giving investors a long bull run. Does the recent breach through this level mean that the anaconda is beginning to stir?” | The 30-year Treasury yield has remained within the support and resistance level shown for over 30 years, rallying 6% over the period and giving investors a long bull run. Does the recent breach through this level mean that the anaconda is beginning to stir?” |
| Finally, a picture that might scare Donald Trump - it shows how US central bankers have struggled to maintain full employment, without triggering a recession. | Finally, a picture that might scare Donald Trump - it shows how US central bankers have struggled to maintain full employment, without triggering a recession. |
| Frost explains: | Frost explains: |
| “With US unemployment at rock-bottom levels and the stock market at near record highs, the Fed has begun hiking rates in an attempt to engineer a soft landing: it wants to slow the economy enough to avoid an overheating, but not so much that it causes a recession. | “With US unemployment at rock-bottom levels and the stock market at near record highs, the Fed has begun hiking rates in an attempt to engineer a soft landing: it wants to slow the economy enough to avoid an overheating, but not so much that it causes a recession. |
| How many times over the past 70 years has the Fed successfully managed to do this and return unemployment (green line) back up to its natural level (blue line) without a recession ensuing (vertical bars)? You’ll be scared after counting…” | How many times over the past 70 years has the Fed successfully managed to do this and return unemployment (green line) back up to its natural level (blue line) without a recession ensuing (vertical bars)? You’ll be scared after counting…” |
| The slump in Red October has dragged many global stock markets into negative territory for this year. | The slump in Red October has dragged many global stock markets into negative territory for this year. |
| Here’s a selection of the best and worst performers in 2018: | Here’s a selection of the best and worst performers in 2018: |
| Bovespa Stock Index (Brazil) +9.7% | Bovespa Stock Index (Brazil) +9.7% |
| NASDAQ 100 +6.5% (US) | NASDAQ 100 +6.5% (US) |
| Dow Jones Industrial Average (US) +0.6% | Dow Jones Industrial Average (US) +0.6% |
| S&P 500 +0.3% (US) | S&P 500 +0.3% (US) |
| Nikkei 225 (Japan) -3.7% | Nikkei 225 (Japan) -3.7% |
| CAC 40 (Paris) -4.5% | CAC 40 (Paris) -4.5% |
| FTSE 100 (UK) -7.3% | FTSE 100 (UK) -7.3% |
| DAX Xetra (Germany) -11.4% | DAX Xetra (Germany) -11.4% |
| Hang Seng (Hong Kong) -16.5% | Hang Seng (Hong Kong) -16.5% |
| SSE Composite (China) -22.3% | SSE Composite (China) -22.3% |
| But there’s still time for a turnaround. | But there’s still time for a turnaround. |
| Russ Mould, investment director at AJ Bell, says: | Russ Mould, investment director at AJ Bell, says: |
| The markets are racing ahead following a very good session last night in the US where the S&P, Nasdaq and Dow Jones all posted gains in excess of 1.5%. | The markets are racing ahead following a very good session last night in the US where the S&P, Nasdaq and Dow Jones all posted gains in excess of 1.5%. |
| “It’s now the turn of European and Asian stocks to join the rally with the FTSE 100 shooting up 1.5% in early trading on Wednesday and Japan’s Nikkei 225 index jumping 2.2%. | “It’s now the turn of European and Asian stocks to join the rally with the FTSE 100 shooting up 1.5% in early trading on Wednesday and Japan’s Nikkei 225 index jumping 2.2%. |
| “The latest rally means the S&P, NASDAQ and Dow Jones are all back in positive territory for the year. The only other major index to share this status is Brazil’s Bovespa index, up 9.7% so far this year. | “The latest rally means the S&P, NASDAQ and Dow Jones are all back in positive territory for the year. The only other major index to share this status is Brazil’s Bovespa index, up 9.7% so far this year. |
| “The upturn in the market is positive for investors, although the main UK indices still have some way to go before they get back into the black. The FTSE 100 is currently down 7.3% year-to-date, and the FTSE 250 down 8.7%. | “The upturn in the market is positive for investors, although the main UK indices still have some way to go before they get back into the black. The FTSE 100 is currently down 7.3% year-to-date, and the FTSE 250 down 8.7%. |
| Michael Hewson, chief market analyst at CMC Markets, says markets may be turning the corner, after a rough October: | Michael Hewson, chief market analyst at CMC Markets, says markets may be turning the corner, after a rough October: |
| Asia markets managed to close out the month of October and post their second consecutive day of gains in what has been a pretty poor month for equity markets in general. | Asia markets managed to close out the month of October and post their second consecutive day of gains in what has been a pretty poor month for equity markets in general. |
| This rebound could well be down to some end of month position adjusting, however there have been some indications in the past few days that we might be starting to see a bit of a short term base, with most of the bad news already priced in to some extent. | This rebound could well be down to some end of month position adjusting, however there have been some indications in the past few days that we might be starting to see a bit of a short term base, with most of the bad news already priced in to some extent. |
| American’s can’t get enough of Halloween, so Wall Street is eager to join today’s rally. | American’s can’t get enough of Halloween, so Wall Street is eager to join today’s rally. |
| Here’s the pre-market calls from CMC Markets: | Here’s the pre-market calls from CMC Markets: |
| Dow Jones is expected to open 136 points higher at 25,010 | Dow Jones is expected to open 136 points higher at 25,010 |
| S&P500 is expected to open 18 points higher at 2,700 | S&P500 is expected to open 18 points higher at 2,700 |
| The FTSE 100 is continuing to push higher. It’s now up 115 points, or 1.6% to 7150. | The FTSE 100 is continuing to push higher. It’s now up 115 points, or 1.6% to 7150. |
| Nearly every sector is up, led by manufacturers, energy firms, tech stocks and banks: | Nearly every sector is up, led by manufacturers, energy firms, tech stocks and banks: |
| Here are the top risers on the Footsie this morning | Here are the top risers on the Footsie this morning |
| However, this still leaves the FTSE 100 nursing a 5% loss for October (it started the month at 7,510). | However, this still leaves the FTSE 100 nursing a 5% loss for October (it started the month at 7,510). |
| Despite today’s Halloween rally, global markets are still on track for their worst month since the financial crisis. | Despite today’s Halloween rally, global markets are still on track for their worst month since the financial crisis. |
| Figures calculated earlier this week showed that $8 trillion had been wiped off global stocks in October. | Figures calculated earlier this week showed that $8 trillion had been wiped off global stocks in October. |
| Trade wars, the slowdown in China, tensions in the eurozone and Brexit have all encouraged investors to ditch risky stocks. | Trade wars, the slowdown in China, tensions in the eurozone and Brexit have all encouraged investors to ditch risky stocks. |
| Naeem Aslam of Think Markets says: | Naeem Aslam of Think Markets says: |
| Smart money is running for the hill and this was the message which October brought for the global equity market. Global stocks lost over $8 trillion in October, a headline which suits the best on the Halloween day. | Smart money is running for the hill and this was the message which October brought for the global equity market. Global stocks lost over $8 trillion in October, a headline which suits the best on the Halloween day. |
| Investors are refusing to be spooked on Halloween, says Connor Campbell of SpreadEX: | Investors are refusing to be spooked on Halloween, says Connor Campbell of SpreadEX: |
| With October containing as much red as the goriest of slasher flicks, the markets oddly chose to rebound on what would have been an entirely calendar-appropriate day to continue the month’s trading horrors. | With October containing as much red as the goriest of slasher flicks, the markets oddly chose to rebound on what would have been an entirely calendar-appropriate day to continue the month’s trading horrors. |
| Building on Tuesday’s gains, the FTSE shot up 1.3% after the bell, allowing the index to cross 7100 for the first time in 3 weeks. It benefited from the market-wide shift in sentiment, which itself came despite further evidence that the trade war is hurting the Chinese economy, as the country suffered a slide in manufacturing activity. | Building on Tuesday’s gains, the FTSE shot up 1.3% after the bell, allowing the index to cross 7100 for the first time in 3 weeks. It benefited from the market-wide shift in sentiment, which itself came despite further evidence that the trade war is hurting the Chinese economy, as the country suffered a slide in manufacturing activity. |
| Overnight, China got the shivers, as manufacturing activity fell and the yuan was fixed at a new 10-year low to the dollar. | Overnight, China got the shivers, as manufacturing activity fell and the yuan was fixed at a new 10-year low to the dollar. |
| Today’s rally is welcome, but it’s not enough to wipe out this month’s losses. | Today’s rally is welcome, but it’s not enough to wipe out this month’s losses. |
| October has been particularly bad for US investors, with the main indices falling sharply. | October has been particularly bad for US investors, with the main indices falling sharply. |
| CNBC has crunched the numbers, and explains: | CNBC has crunched the numbers, and explains: |
| After Tuesday’s comeback, the Dow is down 5.9 percent this month, still its worst performance since August 2015. The S&P 500 is off by 7.9 percent in October, on track for its worst month since May 2010. On Monday, the S&P 500 closed in correction territory, down 10.2 percent from its record. | After Tuesday’s comeback, the Dow is down 5.9 percent this month, still its worst performance since August 2015. The S&P 500 is off by 7.9 percent in October, on track for its worst month since May 2010. On Monday, the S&P 500 closed in correction territory, down 10.2 percent from its record. |
| “Obviously we’re in a correction phase of the stock market and I think investors have to realize that,” said Bruce Bittles, chief investment strategist at Baird. | “Obviously we’re in a correction phase of the stock market and I think investors have to realize that,” said Bruce Bittles, chief investment strategist at Baird. |
| “The monetary environment has changed. As you can see, even with a 10 percent change in the stock markets, interest rates have barely moved lower.” | “The monetary environment has changed. As you can see, even with a 10 percent change in the stock markets, interest rates have barely moved lower.” |
| European stocks are all jumping - fortunately not with fright. | European stocks are all jumping - fortunately not with fright. |
| Weeeee! The FTSE 100 is flying faster than a rocket. | Weeeee! The FTSE 100 is flying faster than a rocket. |
| The blue-chip index has gained 88 points, or 1.2%, to 7124, clawing back some of this month’s losses. | The blue-chip index has gained 88 points, or 1.2%, to 7124, clawing back some of this month’s losses. |
| Bank Standard Chartered is leading the charge, up 4% after reporting that profits rose from $557m to $752m in the last quarter. | Bank Standard Chartered is leading the charge, up 4% after reporting that profits rose from $557m to $752m in the last quarter. |
| Retailer Next is struggling, though, down almost 5%. | Retailer Next is struggling, though, down almost 5%. |
| Next reported that full priced shares are up 2% year-on-year, but retail sales (at its high street stores) have plunged by 8.0% in the last quarter. Online sales growth has slowed, to just +12.7% compared to +14.8% in the year to date. | Next reported that full priced shares are up 2% year-on-year, but retail sales (at its high street stores) have plunged by 8.0% in the last quarter. Online sales growth has slowed, to just +12.7% compared to +14.8% in the year to date. |
| Good morning, and welcome to our rolling coverage of the financial markets, the world economy, the eurozone and business. | Good morning, and welcome to our rolling coverage of the financial markets, the world economy, the eurozone and business. |
| It’s Halloween - a dark time of ritual, dressing-up, and trick-or-treating. But any children touring the City of London must make a special effort to scare investors; they’re well used to shocks and scares this month. | It’s Halloween - a dark time of ritual, dressing-up, and trick-or-treating. But any children touring the City of London must make a special effort to scare investors; they’re well used to shocks and scares this month. |
| October has been a torrid month for equities. Britain’s FTSE 100 has shed 6% over the last 30 days, even hitting a 22-month low last week, as global markets took a collective chilly bath. | October has been a torrid month for equities. Britain’s FTSE 100 has shed 6% over the last 30 days, even hitting a 22-month low last week, as global markets took a collective chilly bath. |
| If you really want to make a investor quiver, wave a chart showing how world markets have lose almost 8.5% this month, wiping out trillions of dollars of value. | If you really want to make a investor quiver, wave a chart showing how world markets have lose almost 8.5% this month, wiping out trillions of dollars of value. |
| Craig Erlam of trading firm OANDA says there is fear on the trading floors: | Craig Erlam of trading firm OANDA says there is fear on the trading floors: |
| October has well and truly lived up to its chilling reputation, with stock markets around the globe suffering one of their worst months in recent memory. It’s been a wild ride for investors and there is no guarantee it’s over yet. | October has well and truly lived up to its chilling reputation, with stock markets around the globe suffering one of their worst months in recent memory. It’s been a wild ride for investors and there is no guarantee it’s over yet. |
| Markets may have recovered their early losses and some indices may even be in the green for the week but volatility has not eased and that’s a concern. | Markets may have recovered their early losses and some indices may even be in the green for the week but volatility has not eased and that’s a concern. |
| But after a month of gory red, things might be turning. | But after a month of gory red, things might be turning. |
| Wall Street rallied last night, with the Dow gaining more than 400 points. Stocks have strengthened in Asia too, with Japan’s Nikkei gaining 2% and China up nearly 1.5%. | Wall Street rallied last night, with the Dow gaining more than 400 points. Stocks have strengthened in Asia too, with Japan’s Nikkei gaining 2% and China up nearly 1.5%. |
| Thea main European markets are also up in early trading. | Thea main European markets are also up in early trading. |
| European Opening Calls:#FTSE 7099 +0.89%#DAX 11402 +1.02%#CAC 5031 +1.06%#MIB 19218 +1.15%#IBEX 8900 +1.07% | European Opening Calls:#FTSE 7099 +0.89%#DAX 11402 +1.02%#CAC 5031 +1.06%#MIB 19218 +1.15%#IBEX 8900 +1.07% |
| #FTSE100 called +65pts at 7100 after a bullish breakout from a 3-week falling channel, extending the current rebound rally pic.twitter.com/36YwTdeaV8 | #FTSE100 called +65pts at 7100 after a bullish breakout from a 3-week falling channel, extending the current rebound rally pic.twitter.com/36YwTdeaV8 |
| There are still reasons to hide under the bedsheets, though. Yesterday, we learned that eurozone growth has halved. | There are still reasons to hide under the bedsheets, though. Yesterday, we learned that eurozone growth has halved. |
| Later today we get fresh unemployment and inflation figures for the eurozone. David Madden of CMC Markets says this data could set the mood for the day, and beyond: | Later today we get fresh unemployment and inflation figures for the eurozone. David Madden of CMC Markets says this data could set the mood for the day, and beyond: |
| The stand-off between the Italian government and the EU continues. Italy’s economy grew 0.8% in the third-quarter on an annual basis, which was below the forecast of 0.9%. | The stand-off between the Italian government and the EU continues. Italy’s economy grew 0.8% in the third-quarter on an annual basis, which was below the forecast of 0.9%. |
| Matteo Salvini, Italy’s joint deputy prime minister claimed the underwhelming update is a reason the government needs to increase spending, and in turn increase the budget deficit. The Italian situation could spark another round of the eurozone debt crisis, and given that the country has the third-largest government bond market in the world, the fallout could be enormous. | Matteo Salvini, Italy’s joint deputy prime minister claimed the underwhelming update is a reason the government needs to increase spending, and in turn increase the budget deficit. The Italian situation could spark another round of the eurozone debt crisis, and given that the country has the third-largest government bond market in the world, the fallout could be enormous. |
| Dealers will be keeping an eye out for the eurozone CPI and unemployment reports which are due out at 10am (UK time). The CPI rate is tipped to be 2.2%, and the jobless rate is expected to hold steady at 8.1%. | Dealers will be keeping an eye out for the eurozone CPI and unemployment reports which are due out at 10am (UK time). The CPI rate is tipped to be 2.2%, and the jobless rate is expected to hold steady at 8.1%. |
| The agenda | The agenda |
| 10am BST: Eurozone unemployment stats for September | 10am BST: Eurozone unemployment stats for September |
| 10am BST: Eurozone inflation (flash estimate) for October | 10am BST: Eurozone inflation (flash estimate) for October |