Alice Woodhouse, Oliver Ralph, Harry Dempsey, Harriet Clarfelt
France on Monday reported a record 52,518 people tested positive for Covid-19 in the previous 24 hours and said a further 416 patients had died in hospital as the “second wave” of the pandemic in Europe put renewed pressure on the country’s hospitals.
The US Treasury department announced it plans to borrow $617bn by the end of the year, with another $1.1tn expected for the first quarter of 2021, in order to fund the government’s coronavirus relief measures.
Massachusetts will put harsher limits on gatherings and urge residents to stay home during overnight hours under a new set of coronavirus-related restrictions, after the state recorded a rise in cases and hospitalisations.
Angela Merkel called on Germans to abide by the latest “lockdown-light” restrictions that came into force on Monday, saying she hoped November would be a “turning point” in the spread of the coronavirus.
US factory activity posted its strongest month in more than two years, with demand gathering steam as the broader economy continued to recover from damage inflicted by the pandemic.
US household products maker Clorox raised its full-year guidance on the back of strong demand for disinfectant products during the coronavirus pandemic.
Peter Wells in New York
Texas reported its smallest increase in new Covid-19 cases and deaths in about a week on Monday.
A further 3,982 new cases were reported over the past 24 hours, down from 4,111 on Sunday and compared with 4,418 on Monday last week.
It was the smallest single-day rise in new cases since the 3,793 reported on October 25.
Texas’s health department has, for months, been adding older cases stemming from backlogs of commercial laboratories to its statewide total, although these are excluded from the daily figures.
Authorities revealed 420 such historical cases in Monday’s report, including 280 from the region around El Paso and 136 from the area around Houston.
Authorities attributed a further 20 deaths to coronavirus, down from 53 on Sunday and compared with 10 on Monday last week.
Monday figures tend to be lower than other days of the week due to weekend delays in reporting.
The number of people currently in Texas hospitals with coronavirus rose to 5,770, up from 5,691 on Sunday. That is the highest level of hospitalisations since August 19.
Alice Woodhouse in Hong Kong
Asia-Pacific stocks rose on Tuesday, tracking a strong day on Wall Street, with attention trained on the US presidential election.
Australia’s S&P/ASX 200 was up 1.3 per cent and the Kospi in South Korea added 0.8 per cent. Futures point to a 0.3 per cent rise when Hong Kong’s Hang Seng index opens later in the morning.
Japanese markets are closed for the Culture Day public holiday.
In the US on Monday, the S&P 500 closed up 1.2 per cent, steadying from its worst weekly performance since March last week. Those gains came after a strong US manufacturing report for October, which came in at its highest since 2018.
Polls compiled by the Financial Times’ election tracker suggest Joe Biden can count on at least 252 electoral college votes, while Donald Trump has 125. A candidate needs to secure 270 electoral college votes to win the presidency.
S&P 500 futures were up 0.3 per cent.
Delphine Strauss
“This virus is the great equaliser,” Andrew Cuomo, governor of New York, tweeted in March after discovering that his brother had tested positive for coronavirus. It was well-meant, but wrong.
There is historical resonance in the idea that a pandemic — killing indiscriminately and throwing economies into upheaval — might be brutally effective in levelling out social inequalities.
When the Black Death swept through Europe in the 14th century, killing around half the population, it triggered a lasting fall in inequalities in income and wealth — because unskilled labourers could command higher wages, and buy into a glut of property coming to market from noble families that had been hit.
But so far, the current crisis is having the opposite effect. Despite hopes that the shock of coronavirus could lead to a more egalitarian society, all the evidence suggests it is instead widening existing divisions — between generations and geographies, genders and ethnicities and, crucially, between white-collar remote workers and those whose jobs can only be done face to face.
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Peter Wells in New York
The US reported one of its biggest single-day jumps in coronavirus infections since the start of the pandemic, adding nearly 83,000 new cases on Monday and another rise in hospitalisations.
States reported a collective 82,895 cases on Monday, according to Covid Tracking Project data, up from 74,181 on Sunday and compared with 62,267 on Monday last week.
This is the sixth time in 11 days the US has reported a daily increase of more than 80,000 infections. The country set a single-day record of about 97,000 on Friday and has now averaged 83,565 cases a day over the past week, according to Financial Times analysis of Covid Tracking Project data.
The states with the biggest one-day jumps were Michigan (6,920, a record, but making up for two days of data), Illinois (6,222) and Florida (4,569), according to Covid Tracking Project data.
Testing volumes, nationally, remain at high levels following a ramp-up over the summer and meaning recent case rates may not be directly comparable with the earlier stages of the pandemic. But rising trends in other indicators continue to reveal the growing impact of the latest surge in infections.
The number of people currently in US hospitals with coronavirus rose to 48,470, the highest since August 11, from 47,520 on Sunday. Hospitalisations rose by about 54 per cent last month, from a level of about 30,800 at the end of September.
Authorities attributed a further 476 deaths to coronavirus, up from 391 on Sunday and compared with 389 on Monday last week.
Arkansas (60, but making up for two days of data), Florida (46) and Ohio (37) had the biggest single-day increases in fatalities.
Andy Bounds in Huddersfield
Liverpool will be the first city in the UK to conduct a trial of mass testing for Covid-19, with everyone living or working there eligible for a test, the UK government announced on Tuesday.
Using a new breed of tests that can give results within an hour, the government aims to control the spread of the virus and gain more data on the number of cases across the city of 500,000.
The plan to roll out widespread testing in Liverpool, which has one of the higher infection rates in the UK, comes after the UK’s daily coronavirus testing capacity passed the 500,000 mark last Saturday, the government also said.
Testing will begin on Friday, supported by the armed forces and with the co-operation of local authorities. They will use existing swab tests, as well as new lateral flow tests, which do not need to be processed in a lab, and “LAMP” technology introduced to Liverpool University Hospitals NHS Foundation Trust for NHS staff.
Read more here
Alice Woodhouse in Hong Kong
The Australian state of Victoria reported a fourth consecutive day of no new coronavirus cases as infections in Melbourne dwindle.
Victoria’s health department also reported zero new deaths as the state, which imposed strict lockdown measures to control an outbreak in Melbourne, gradually reopens.
“This is the quaddie we want for the last 4 days: 0,0,0,0,” Brett Sutton, the state’s chief health officer said in a tweet. Mr Sutton’s Twitter name includes a donut emoji to denote zero new cases.
The 14-day rolling average of cases in Melbourne now stands at 1.9. There have been two cases with unknown sources over the past 14 days.
Australia reported no new cases in the community over the weekend.
Song Jung-a in Seoul
South Korean consumer prices grew at the slowest pace in four months in October due to state subsidies for mobile bills and weak domestic consumption during the coronavirus pandemic.
The consumer price index edged up 0.1 per cent last month compared with a year earlier, slowing from a 1 per cent rise in September, according to data from Statistics Korea.
The agency attributed the sharp rise in inflation to the government’s move to provide low-income people with Won20,000 ($18) to cover mobile phone fees as part of its fourth supplementary budget designed to cushion the economic blow from the pandemic.
The government has resumed a national discount coupon programme aimed at shoring up domestic travel and the hospitality industry following success in flattening the Covid-19 curve after a sharp increase in new cases in August and September.
From Wednesday, it will issue new discount coupons of up to Won40,000 for 1m people that can be used for hotel bookings for domestic travel. Last Friday, it began to issue separate travel coupons that offer 30 per cent discounts on more than 1,000 domestic tour products. And if a person dines out three times on weekends, a Won10,000 refund will be offered on the fourth occasion.
But concerns remain that such programmes may promote social gatherings, which could increase Covid-19 infections again.
The country reported 75 new cases on Tuesday, taking the total caseload to 26,807, according to the Korea Disease Control and Prevention Agency.
Nicolle Liu in Hong Kong
Hong Kong’s leader said the territory is moving closer to reopening its border with mainland China.
Ahead of leading a team of senior officials to visit mainland China on Tuesday afternoon, chief executive Carrie Lam said one of the main issues for the four-day trip is a discussion on the resumption of quarantine-free travel between the two jurisdictions.
She said the technical preparations are already in place to allow such travel and testing fees have been reduced, but the most important factor is that the Hong Kong epidemic is controlled.
Four private laboratories commissioned by the government will provide testing services for HK$240 ($30) and certificates for travel.
Ms Lam delayed her annual policy address at the last minute in October, instead announcing a visit to Beijing to secure help from the central government. Her trip, which begins on Tuesday afternoon, will include visits to Beijing, Guangzhou and Shenzhen.
Hong Kong’s financial interconnectivity, technological innovation, the development of Chinese medicine and supporting the city as an aviation hub are on the agenda, she said.
Despite a low infection rate in Hong Kong, the current social-distancing measures will remain in place for another week.
The city has reported daily caseloads in the low single digits for weeks.
Since removing lockdowns in the spring, mainland China has recorded a series of city-level outbreaks. Health authorities have isolated cases, traced contacts and rolled out mass testing to limit the spread of the virus.
Hudson Lockett and Thomas Hale in Hong Kong
Asian companies and governments have tapped international bond markets at a record pace this year, with borrowers in the region rushing to take advantage of demand from yield-starved investors.
Issuers in Asia, excluding Japan, have sold $354bn worth of dollar bonds in the year to date, up 13 per cent from a year ago and a record high for the period, according to data from Refinitiv.
The figures are a sign that borrowers in Asia, where default rates remain low, are benefiting from a wave of loose monetary policy in Europe and the US to combat the economic havoc wrought by the pandemic.
The rush of bond sales has been driven in part by a surge of corporate issuance from China, where the country’s economic recovery from the virus has caught the attention of global investors eager for returns.
“The hunt for yield has enabled corporate borrowers in Asia to lock in favourable rates,” said Haitham Ghattas, head of capital markets for Asia Pacific at Deutsche Bank. “We’re as busy as we’ve ever been over the summer months” and autumn.
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Alice Woodhouse in Hong Kong
Australia’s central bank cut interest rates to a record low and announced a A$100bn ($70.3bn) bond-buying programme as it moved to cushion the blow from the pandemic.
The Reserve Bank of Australia cut its cash rate to 0.1 per cent from 0.25 per cent, as forecast by economists, and said that given the outlook, it did not expect to raise rates for at least three years. The bank said it would not raise interest rates until inflation was “sustainably” in the 2 to 3 per cent range.
Philip Lowe, RBA governor, said the bank would purchase A$100bn of government bonds with maturities of about 5 to 10 years over the coming six months.
“The board will keep the size of the bond purchase programme under review, particularly in light of the evolving outlook for jobs and inflation. The board is prepared to do more if necessary,” Mr Lowe said.
The Australian dollar weakened as much as 0.4 per cent against the dollar in response to the policy decision.
The RBA also reduced its target for the yield on three-year Australian government debt to around 0.1 per cent, adding that it would buy bonds in whatever quantity to meet that target.
Australia entered its first recession in 28 years in the June quarter thanks to the pandemic. A recession is defined as two consecutive quarters of contraction.
Mr Lowe raised growth forecasts for Australian economy. The RBA now expected about 6 per cent growth in the 12 months to June 2021, up from 4 per cent previously and 4 per cent growth in 2022. The country’s unemployment rate is expected to peak at 8 per cent, not the 10 per cent previously forecast.
“The RBA didn’t disappoint when it cut interest rates and launched quantitative easing today. And even though it turned more optimistic about the economic outlook, we suspect it will expand its government bond purchases beyond the planned six months,” Marcel Thieliant, senior Australia and New Zealand economist with Capital Economics, said.
Alice Woodhouse in Hong Kong
Vietnam’s prime minister said Covid-19 is expected to cost the country 200,000bn dong ($8.6bn) in budget revenue.
Despite local success in controlling the spread of coronavirus — Vietnam has reported less than 1,200 infections — the country’s borders remain closed, cutting off tourist dollars.
Under normal conditions, Vietnam welcomes around 21m tourists each year, accounting for $60bn in revenue, according to the report on a government website.
Prime Minister Nguyen Xuan Phuc announced the estimate on Monday, adding that his government would continue to maintain vigilance against the pandemic.
Leila Abboud and Victor Mallet in Paris
Many European shopkeepers reluctantly accepted the need to close during the coronavirus lockdowns in the spring, but the second round of shutdowns in the autumn is proving a more difficult pill to swallow for bookstore owners, florists and hairdressers from Italy to Ireland — and harder for governments to enforce.
France’s small traders, backed in some cases by their local mayors, have complained about the injustice of the measures imposed by Emmanuel Macron’s government from last Friday, arguing the restrictions on shops favoured big chain stores and online retailers such as Amazon.
They were further enraged by Amazon’s launch of a premature “Black Friday” sale, supposed to be on November 27, which prompted remonstrations from the French finance ministry and a promise from Amazon to stop publicising the presale.
“What we want is not just aid money,” said Francis Palombi, who heads the Confederation of French Traders. “We want above all to open, open, open!”
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Anjli Raval in London
Saudi Aramco stuck with its bumper $18.8bn dividend despite a 45 per cent drop in earnings triggered by the coronavirus pandemic.
The kingdom’s state energy giant reported a third quarter net income of $11.8bn, down from $21.2bn in the same period in 2019.
This compares with a company-compiled analyst consensus forecast of $10.6bn.
“We saw early signs of a recovery in the third quarter due to improved economic activity,” said chief executive Amin Nasser.
Yet lower crude prices, a fall in oil demand and weaker refining margins depressed earnings in the three months to September 30.
Mr Nasser warned of “headwinds” facing global energy markets and the need to be prudent with spending.
Saudi Arabia’s biggest revenue earner cut capital spending in the three-month period to $6.4bn from $8.1bn.
David Keohane in Paris
Surging trading revenue and lower than expected bad loan provisions propped up BNP Paribas in the third quarter, helping France’s biggest bank to beat profit estimates.
BNP said on Tuesday morning that net income fell 2 per cent compared with the same period last year to €1.9bn, by comparison to the €1.5bn predicted by analysts. Revenues were flat at €10.9bn.
Revenues at the investment bank rose 17.4 per cent over the same period last year to €3.4bn, with fixed income, currency and commodity trading revenues up 36 per cent and equity trading revenues up 21.4 per cent.
BNP said more companies were looking to raise equity and bond financing in order to strengthen their balance sheets. It added that there had been a “good performance in equity derivatives”, particularly in the US.
BNP has tried to take advantage of some banks pulling back from lending due to the impact of the coronavirus and low rates in its home market, extending its balance sheet to try to become the dominant force in European investment banking.
“The economic recovery was gradual in the third quarter and occurring with differentiated momentum from one region, and one sector, to another,” said BNP.
The lender’s cost of risk, which reflects provisions for potential defaults, came it at €1.2bn, 47 per cent up on the same period last year, but down over the previous quarter and below expectations of €1.5bn.
BNP’s common equity tier 1 ratio — a key indicator of balance sheet strength — stood at 12.6 per cent at the end of the quarter, up 20 basis points and ahead of expectations of 12.35 per cent.
The bank has also placed 50 per cent of its profits aside as it waits to be allowed to restart dividend payments which were curbed by regulators pushing to build up capital in the face of the pandemic.
BNP maintained its forecast that full-year profit would be down 15 to 20 per cent. In the first nine months of the year, profits fell 13.4 per cent.
Jonathan Eley in London
Associated British Foods said there would be no final dividend in respect of the year to September 2020 after profits at Primark fell by three-fifths and the fashion chain was hit by a second wave of lockdowns.
The company did not declare an interim dividend either.
Primark said on Monday that the closures would cost around £375m of lost sales, markedly less than the £600m a month that the first wave of lockdowns cost.
Group pre-tax profit fell by 40 per cent to £686m, with increases in profit at the sugar, agriculture and ingredients businesses failing to offset the decline at Primark.
At the start of the year, the fashion chain had been expected to deliver £1bn of operating profit for the first time in its history. Instead, it made just £362m, down from £969m last year.
There was no explicit financial guidance for the coming year, though the company did say that it expected Primark’s full year sales and profit to be higher despite the current shutdowns across much of Europe.
The group’s sugar business is also expected to deliver a higher profit in the coming year.
Ayla Jean Yackley in Istanbul
Turkish consumer prices rose at an annualised rate of 11.89 per cent in October, the state statistics office said on Tuesday, as the lira’s rapid decline during the coronavirus pandemic kept inflation in double digits.
The lira has lost about 40 per cent of its value against the dollar this year, making it the world’s worst-performing currency, according to Bloomberg. The weak currency has driven up the cost of imports that Turkey needs for its manufacturing sector.
Investor worries about Turkey, especially as tensions ratchet higher between president Recep Tayyip Erdogan and traditional western allies over a series of conflicts in the Middle East and the Caucasus, have driven the currency to a record low.
Mr Erdogan’s pressure on the central bank to keep interest rates low and encourage a credit boom has also eroded investors’ faith. Turkey’s policy rate is 10.25 per cent, which means investors can expect a negative return on lira-denominated assets after inflation.
The central bank last week was forced to raise its year-end CPI forecast to 12.1 per cent from a previous 8.9 per cent, but it kept its benchmark rate on hold at its last rate-setting meeting on October 22. The lira has lost 7.9 per cent of its value since.
Lockdown measures to curb the coronavirus outbreak, which has killed 10,402 people in Turkey, shrank gross domestic product by about 10 per cent in the second quarter.
Inflation was in line with the forecast of 11.9 per cent in a Reuters poll of economists.
The lira hit a new record low on Tuesday of 8.455 to the dollar.
George Hammond in London
Housebuilder Crest Nicholson has upped its profit target and plans to reinstate its dividend, with the rebound in the housing market leading to a faster than expected recovery for the company.
Shares in the company shot up 20 per cent to £2.60 when the market opened on Tuesday.
The FTSE 250 builder said in a trading statement on Tuesday that it would resume payments alongside its half year results in 2021, having suspended them when coronavirus forced construction activity and home sales to stop earlier this year.
Since that hiatus in the housing market, which lasted from March until May, activity has returned at a quicker rate than most expected. Crest’s pre-tax profits for the 12 months ended October 31 are set to be at the top of a £35-45m range the company had previously guided.
That would still represent a significant fall from 2019’s results, when the company’s pre-tax profits were £103m.
The company said that the government’s stamp duty holiday and the release of pent-up demand when the housing market reopened were factors in the speedy recovery, and also pointed to a shift in buyer preferences caused by the pandemic, with more people looking to work from home.
Peter Truscott, Crest’s chief executive, said “the introduction of another national lockdown will undoubtedly bring fresh challenges, but we welcome the Government’s support to maintain construction activity and for the housing market to remain open for business.”
George Steer in London
Weir Group signalled that demand for its manufactured mining kit strengthened towards the end of the third quarter, helped by the continued resilience of prices for precious metals through the pandemic.
The ongoing crisis meant the group was not, however, in a position to publish full year guidance while overall ore production levels remained below pre-pandemic volumes.
Excluding the impact of the group’s £100m Iron Bridge project in the autumn of 2019, the Scottish group’s orders were down 11 per cent year on year in the third quarter. Underlying orders in the company’s mineral business were down 5 per cent, while orders fell by 24 per cent at mining tools maker Esco.
The company’s share price remained largely unchanged.
Jon Stanton, chief executive, said: “Mining markets remained relatively robust in the third quarter and while Covid-19 continued to impact ore production levels and customer decision making, there was a strengthening in demand towards the end of the period.”
Weir underlined its focus on mining on Thursday by announcing the addition of two mining veterans to its non-executive board of directors.
Srinivasan Venkatakrishnan, the former boss of AngloGold Ashanti, one of the world’s largest gold producers, and Ben Magara, who served as chief executive of Lonmin, a platinum producer, will join Weir from January 2021.
In October, the FTSE 250 group sold its struggling oil and gas business to Caterpillar for £314m in cash in order to focus on the manufacturing of mining kit, the bulk of which is used to extract copper, gold and iron ore, as well as lithium and other battery metals.
Harriet Clarfelt in London
Regus operator IWG pointed to signs of a brighter future as a growing shift towards hybrid home-office working fuelled a pick up in demand for its serviced offices in the third quarter.
The group pointed to “clear evidence of increasing interest in flexible working” – which was translating into an improvement in sales – as businesses consider their employees’ ongoing working practices, the potential for future pandemics and the need to retain liquidity.
That helped sales activity to pick up during the summer months, but this was tempered by the loss of clients and the dampening effects of the crisis on service revenue – an area which usually constitutes more than a quarter of sales.
The group said that it has been caught “in the eye of this global crisis” as city centres have emptied and small businesses have cut costs by shifting to full-time home working, resulting in this year being “the toughest challenge” since its inception more than three decades ago.
Third-quarter revenues across all of IWG’s open centres dropped by 5.5 per cent at constant currencies to £574m. Total turnover including closed sites declined by a more pronounced 10.2 per cent to £583m.
But at the same time, steps taken to cut expenditure pushed the group into a net cash position of £10.9m, compared with net borrowings of £301m a year earlier. IWG said it was on schedule to deliver £200m of cost savings.
To date, IWG has offered financial support to the tune of £80m to customers struggling during the pandemic, including rent deferrals. It expects this figure to rise to roughly £100m by the year-end, as a second lockdown in England is likely to sway its customers away from commuting to its offices.
Shares in IWG climbed by 8 per cent in early trading.
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