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Coronavirus, Netflix results, China growth data


The week begins with European lockdowns on investors’ minds. Germany, France, the UK, Italy, Spain and the Netherlands have all announced measures in the past week to contain Covid-19 infections.

Europe’s economy is sliding towards a double-dip recession, with economists warning that rising coronavirus infections and fresh government restrictions on people’s movement are likely to cut short the region’s recent recovery.

A number of European countries reported record new daily infection figures over the weekend.

Efforts across the continent to increase influenza vaccination rates to prevent “colliding epidemics” are also being hampered by a limited supply, as manufacturers struggle to meet demand.

Germany has ordered 26m flu vaccines ahead of the European winter, while the UK government said it aimed to vaccinate 30m people this year, more than double the 2019 figure.

In the UK Andy Burnham, mayor of Greater Manchester, is still locked in a battle with central government about moving the region into the highest level of Covid-19 alert, amid rising north-south tension on the issue.

Rishi Sunak, the UK’s chancellor, said at the weekend that he would not stand in the way if more cash is required to “get a deal over the line”.

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China keeps surprising analysts with its speedy recovery from the pandemic, underscored by its gross domestic product growth rate, which only halted in Q1 but has bounced back. The latest growth data from the country is out on Monday.

This week investors will also be busy tracking the third-quarter results of some big-hitters such as Netflix, Tesla and Barclays, the first of the big UK banks to report.


Final presidential debate

US president Donald Trump is scheduled to face Democratic nominee Joe Biden on Thursday in the last presidential debate before the election on November 3.

It is set to be a face-to-face event at Belmont University in Nashville. Kristen Welker of NBC News will be the moderator.

The end of the race is fast approaching after twists and turns including a chaotic first debate full of interruptions, which resulted in positive poll numbers for Mr Biden, who is leading the race with 51.6 per cent.

The fundraising figures for September highlight the hurdles that the president is facing compared with his rival. The Republican National Committee raised $248m, significantly less than the $383m haul reported by Mr Biden and the Democrats for the same month.

In-person voting starts in Wisconsin, Hawaii and Utah on Tuesday. Mr Trump won in Wisconsin by a small margin in 2016 but polls show the state is leaning towards Mr Biden, by six points.

Dorsey subpoena vote

US senators will vote on Tuesday on whether to issue a subpoena to Jack Dorsey, Twitter chief executive, following the social media platform’s decision to restrict a New York Post article about Hunter Biden, son of the Democratic presidential candidate Joe Biden, which it said violated its policies on hacked materials. 

Officials expect members of the Republican majority to do so, and potentially to issue one also to Mark Zuckerberg, Facebook chief executive. 

Analysts say the hearing, which has already been scheduled for Friday, will give Republican senators a chance to voice their anger towards the industry in general, following a series of moves by Silicon Valley companies that have enraged those on the right.


Elsewhere . . . 

  • Former French prime minister Edouard Philippe is set to appear before the Covid-19 inquiry on Wednesday. His house was searched by police as part of an investigation into ministers’ handling of the pandemic last week.

  • Standard & Poors will review its rating on Italy’s sovereign debt on Thursday and UK’s government debt on Friday.

  • MEPs will vote on Wednesday whether to limit the use of words such as “burger” and “steak” to branding for meat-only products.

  • Chile holds a referendum next Sunday on whether to replace the country’s constitution, which opponents say fails to protect human rights and social welfare and concentrates power within an elite. Polls suggest two-thirds of Chileans will vote for change.


Companies news and earnings

US earnings season gets further into its stride with Netflix heading this week’s cast.

Investors will be watching the streaming platform’s results on Tuesday for updates on its membership growth after a slowdown in the second quarter.

Some of the big carmakers also report this week, providing an insight into the health of the industry during the pandemic. The sector has been particularly vulnerable to disruption to its supply chain as it strongly relies on a global production network.

Volvo will issue third-quarter results on Tuesday, followed by electric carmaker Tesla on Wednesday.

Hyundai reports on Thursday with Kia Motors and Renault updating investors on Friday.

Among the big financial players, Barclays steals the scene on Friday, when analysts will discover how the pandemic has weighed on the British lender. One factor they will consider will be increased demand for problem loans as new lockdown measures come into force across Europe.

Asset manager UBS reports on Tuesday, together with Swedbank.

New York-based stock exchange Nasdaq reports on Wednesday and American Express on Friday.

Food and beverage groups such as Coca-Cola, Nestlé and Danone are also set to publish their earnings this week.

Other companies reporting include luxury group Hermès, Verizon, chipmaker Intel Corp, telecoms group AT&T, Marlboro maker Philip Morris, computing giant International Business Machines, electronics group Royal Philips, Snapchat’s owner Snap, Swedish group Ericsson, Royal Caribbean Cruises, French tyremaker Michelin, media group Vivendi and consumer giant Procter & Gamble.


Central banks

Christine Lagarde, president of the European Central Bank, is scheduled to host a virtual discussion together with chief economist Philip Lane to speak with civil society organisations about the ECB’s strategic review.

It is fairly quiet for central bank meetings. Hungary is set to keep rates on hold at 0.6 per cent on Tuesday.

Policymakers in Turkey and Israel meet on Thursday, but no change is expected. The one-week repo rate stands at 10.25 per cent in Turkey, while Israel’s base rate is at 0.10 per cent.

Russia’s key rate is also forecast to stay steady at 4.25 per cent on Friday.


Economic data

China’s third-quarter gross domestic product figures are out on Monday, when growth is set to come in at an annual rate of 5.5 per cent, up from a 3.2 per cent increase in the previous quarter.

The country’s recovery has been stronger than expected, supported by a lower number of infections during the summer and a rise in industrial activity, which in turn has driven internal demand for commodities.

Import and exports figures for September also hit records with imported goods in dollar terms surpassing pre-pandemic levels and a strong demand for electric components from outside the country.

Retail sales data for September, also out on Monday, will provide an update on consumer spending — a weak spot in the recovery, at a time when many Chinese households have remained cautious. Sales of retail goods returned to year-on-year growth of 0.5 per cent in August, after seven straight months of decline.

In the US, the housing market is benefiting considerably from ultra-low interest rates and the National Association of Home Builders is on Monday expected to report steady confidence in the sector.

Department of commerce data for September is out on Tuesday. Rises of 2.4 per cent in housing starts and 3.3 per cent in building permits are forecast.

Flash PMI surveys for October, released on Friday, are likely to offer more evidence of the Europe’s fading recovery, with services forecast to be hit much harder than manufacturing.

Elsewhere, Japanese trade data is out on Monday, UK inflation figures are set to rebound on Wednesday, in part due to the expiry of the government’s Eat Out to Help Out restaurant support scheme. UK retail sales figures are due on Friday.

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