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| Halloween rally drives Wall Street higher after month of scary losses - business live | |
| (35 minutes later) | |
| There’s a Happy Halloween spirit on the New York stock exchange, as the final trading day of a brutal October kicks off. | |
| The Dow Jones industrial average has leapt by 251 points, or 1%, to 25,125. That’s on top of Tuesday’s 400-point leap, and might cheer spirits on Wall Street. | |
| But it won’t fix October’s bad losses on its own. | |
| Stocks open higher, but Dow still on pace for 5% loss in October https://t.co/7qxovqoBsq pic.twitter.com/9cuxIZQbTb | |
| The Nasdaq index has surged by 1.6%, as technology stocks rally. | |
| Facebook shares have jumped by 5%, as investors show they like last night’s results from the social network giant. | |
| General Motors have surged by 6%, after beating profit and revenue estimates today. | |
| European markets are still sharply higher, as traders prepare for Wall Street to open.... | |
| Global stock markets is up 0.6% already today, thanks to gains in Asia and Europe. | |
| The MSCI All Country World Index has risen to 481.03 points, up from 478 last night. | |
| But October has still been a pretty horrific month for stocks. The ACWI ended September at 524 points, meaning it has lost over 8% this month. | |
| In points terms, this looks like the biggest destruction of value since the financial crisis of 2008. | |
| In percentage terms, it looks like the worst month since May 2012 (when the ACWI fell from 328 points to 297, down 9.4%). | |
| The US president reckons shares are going up again today... | The US president reckons shares are going up again today... |
| Stock Market up more than 400 points yesterday. Today looks to be another good one. Companies earnings are great! | Stock Market up more than 400 points yesterday. Today looks to be another good one. Companies earnings are great! |
| Boom! The FTSE 100 just nudged a new three-week high after a strong morning’s trading. | Boom! The FTSE 100 just nudged a new three-week high after a strong morning’s trading. |
| Britain’s blue-chip index is now up 113 points, or almost 1.67%, at 7153 points, as traders try to shake off their October blues. | Britain’s blue-chip index is now up 113 points, or almost 1.67%, at 7153 points, as traders try to shake off their October blues. |
| Mining groups such as Antofagasta and Glencore are among the top risers, along with equipment rental firm Ashtead and banking group Standard Chartered (after its strong results this morning). | Mining groups such as Antofagasta and Glencore are among the top risers, along with equipment rental firm Ashtead and banking group Standard Chartered (after its strong results this morning). |
| Retailers are struggling, though, after Next reported slower growth this morning. | Retailers are struggling, though, after Next reported slower growth this morning. |
| Remember: The FTSE 100 started the month over 7,500 points, so it’s still down 5% this month alone. | Remember: The FTSE 100 started the month over 7,500 points, so it’s still down 5% this month alone. |
| Connor Campbell of SpreadEx says traders are hoping for peace in the global trade wars: | Connor Campbell of SpreadEx says traders are hoping for peace in the global trade wars: |
| The unspooked celebrations continued on Wednesday, the markets wringing all they can from Donald Trump commenting on Tuesday that a ‘great deal’ with China is on its way, undoing some of the renewed trade war fears that had hit on Monday night. | The unspooked celebrations continued on Wednesday, the markets wringing all they can from Donald Trump commenting on Tuesday that a ‘great deal’ with China is on its way, undoing some of the renewed trade war fears that had hit on Monday night. |
| With basically every major sector in the green – spare a thought for Next, languishing at the bottom of the index following its latest high street woes – the FTSE could jump more than 100 points as the day progressed. | With basically every major sector in the green – spare a thought for Next, languishing at the bottom of the index following its latest high street woes – the FTSE could jump more than 100 points as the day progressed. |
| That lifted it above 7150 for the first time in 3 weeks, the index scraping off the top layer of October’s losses while coming nowhere close to mounting a full on recovery. | That lifted it above 7150 for the first time in 3 weeks, the index scraping off the top layer of October’s losses while coming nowhere close to mounting a full on recovery. |
| Another reason for optimism: Canada’s economy expanded by 0.1% in August, a better performance than expected. | Another reason for optimism: Canada’s economy expanded by 0.1% in August, a better performance than expected. |
| *CANADIAN ECONOMY EXPANDS 0.1% IN AUGUST VS. FORECAST UNCHANGED | *CANADIAN ECONOMY EXPANDS 0.1% IN AUGUST VS. FORECAST UNCHANGED |
| *CANADIAN GROSS DOMESTIC PRODUCT GROWS 2.5% FROM YEAR AGO | *CANADIAN GROSS DOMESTIC PRODUCT GROWS 2.5% FROM YEAR AGO |
| Newsflash: American companies took on staff at a healthy pace this month. | Newsflash: American companies took on staff at a healthy pace this month. |
| US firms created 227,000 new jobs this month, beating expectations of 189,000 fresh hires. | US firms created 227,000 new jobs this month, beating expectations of 189,000 fresh hires. |
| Services companies led the way, expanding their payrolls by 189,000 to the total while construction and manufacturing firms both hired 17,000 new workers. | Services companies led the way, expanding their payrolls by 189,000 to the total while construction and manufacturing firms both hired 17,000 new workers. |
| That suggests the US economy remains robust, and could mean this Friday’s Non-Farm Payroll (employment report) is strong too. | That suggests the US economy remains robust, and could mean this Friday’s Non-Farm Payroll (employment report) is strong too. |
| Private payrolls gain 227K in Oct, vs 189K estimate - ADP/Moody's https://t.co/0zxBkcqnus | Private payrolls gain 227K in Oct, vs 189K estimate - ADP/Moody's https://t.co/0zxBkcqnus |
| It’s a little early for 2019 market predictions, but we’ll make an exception for this one: | It’s a little early for 2019 market predictions, but we’ll make an exception for this one: |
| 2019 market outlook. pic.twitter.com/DUbTT0cCyL | 2019 market outlook. pic.twitter.com/DUbTT0cCyL |
| It’s a Happy Halloween for carmaker General Motors, which has just smashed Wall Street expectations. | It’s a Happy Halloween for carmaker General Motors, which has just smashed Wall Street expectations. |
| GM has also raised expectations for the months ahead, which should cheer US investors. | GM has also raised expectations for the months ahead, which should cheer US investors. |
| Reuters has the details: | Reuters has the details: |
| General Motors on Wednesday posted far stronger-than-expected quarterly profit and said its full-year earnings forecast would come in at the high end of its forecast due to strong demand in North America. | General Motors on Wednesday posted far stronger-than-expected quarterly profit and said its full-year earnings forecast would come in at the high end of its forecast due to strong demand in North America. |
| The Detroit automaker reported third-quarter net income of $2.53 billion, or $1.75 a share, compared with a loss last year of $2.98 billion, or $2.03 a share. | The Detroit automaker reported third-quarter net income of $2.53 billion, or $1.75 a share, compared with a loss last year of $2.98 billion, or $2.03 a share. |
| Last year’s quarter included a charge related to Europe. | Last year’s quarter included a charge related to Europe. |
| Excluding one-time items, GM earned $1.87 a share in the third quarter, easily beating the $1.25 analysts polled by Refinitiv estimates had expected. Revenue in the quarter rose 6.4 percent to $35.8 billion, above the $34.85 billion analysts had expected. | Excluding one-time items, GM earned $1.87 a share in the third quarter, easily beating the $1.25 analysts polled by Refinitiv estimates had expected. Revenue in the quarter rose 6.4 percent to $35.8 billion, above the $34.85 billion analysts had expected. |
| A quick catch-up on the markets: | A quick catch-up on the markets: |
| Britain’s FTSE 100: Up 105 points or 1.5% at 7141, a 3-week high | Britain’s FTSE 100: Up 105 points or 1.5% at 7141, a 3-week high |
| Europe’s Stoxx 600: Up 5 points or 1.6% at 361, a nine-day high | Europe’s Stoxx 600: Up 5 points or 1.6% at 361, a nine-day high |
| Japan’s Nikkei: Closed 463 points higher at 21,920, up 2.16% | Japan’s Nikkei: Closed 463 points higher at 21,920, up 2.16% |
| China’s Shanghai Composite index: Closed 35 points higher at 2,602, up 1.35% | China’s Shanghai Composite index: Closed 35 points higher at 2,602, up 1.35% |
| The latest inflation data has given eurozone policymakers a Halloween headache. | The latest inflation data has given eurozone policymakers a Halloween headache. |
| Consumer prices across the single-currency bloc rose by 2.2% this month, the fastest rate since 2014, up from 2.1% in September | Consumer prices across the single-currency bloc rose by 2.2% this month, the fastest rate since 2014, up from 2.1% in September |
| Core inflation, which measures underlying price pressures, jumped to 1.1% from 0.9% a month ago. | Core inflation, which measures underlying price pressures, jumped to 1.1% from 0.9% a month ago. |
| That suggests the European Central Bank is right to rein in its stimulus plans, and halt bond-buying at the end of 2018. However, we learned yesterday that the eurozone economy slowed sharply over the summer -- which might mean more stimulus is needed. | That suggests the European Central Bank is right to rein in its stimulus plans, and halt bond-buying at the end of 2018. However, we learned yesterday that the eurozone economy slowed sharply over the summer -- which might mean more stimulus is needed. |
| Separately, unemployment rate across the eurozone was unchanged last month at 8.1%. That’s the joint-lowest rate in a decade, but also much higher than America (3.7%) and the UK (4%). | Separately, unemployment rate across the eurozone was unchanged last month at 8.1%. That’s the joint-lowest rate in a decade, but also much higher than America (3.7%) and the UK (4%). |
| September 2018: euro area #unemployment at 8.1%, EU28 at 6.7% https://t.co/k7ai4RJDrn pic.twitter.com/QoKd9mFERy | September 2018: euro area #unemployment at 8.1%, EU28 at 6.7% https://t.co/k7ai4RJDrn pic.twitter.com/QoKd9mFERy |
| It’s a grim day for UK butchers chain Crawshaw Group. | 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. | 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: | 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. | 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. | 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%. |