Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

Only two more to go

Written by Sabina Kadić-Mackenzie, associate partner
Edited by Kevin Pringle, partner
30 September 2020

Good morning,

And we’re off.
 
With just over a month to go it is, finally, starting to feel like an election campaign.
 
Last night, Donald Trump took on his Democratic challenger, Joe Biden, in the first presidential debate in the race for the White House.
 
The 90-minute debate was, perhaps, a litmus test of what political discourse has become in the United States, and elsewhere, in recent years. Akin more to a slanging match than rational and informed argument, slurs from both sides appeared conveniently crafted to fit the limits of 280 characters, rather than to inform people about the issues.
 
The two candidates frequently talked over each other, with Trump accused of trampling on decorum and interrupting so often that Biden eventually snapped at him: “Will you shut up, man?”
 
The question is, who won?
 
It certainly wasn’t the US electorate, who failed to get answers – or even basic fact checking – on the issues that matter most.
 
Recent polls show that the economy is top of mind for American voters and that Trump edges Biden on that issue, but we got little detail on jobs and the recovery. Trump made his familiar argument about the need to reopen the country quickly, before reverting to what the BBC described as a “chaotic” debate that moderator Chris Wallace couldn’t control.
 
With weeks to go until election day on 3 November, Biden is currently polling ahead of the president in key battleground states, although his lead is narrowing. He leads in Pennsylvania and Wisconsin, where Trump won by the slimmest of margins in 2016 and the race is even closer in Arizona, a state that only one Democratic presidential candidate has won in the past 70 years.
 
Nationally, Biden appears at an advantage. Older, white voters in particular, a group that helped Trump to victory in 2016, have shown signs of disapproval towards the president’s handling of the pandemic, and they won’t have necessarily been reassured by last night’s performance.
 
Investors too are getting jittery as the answer to the most pressing question of the night – whether Trump will accept the results of the election even if he loses – was left unanswered, fuelling market volatility bets.
 
Ahead of the debate, one in ten American voters said they remained undecided. If they were hoping to be convinced otherwise by the two men seeking the highest office in the land during the debate, they may have been left disappointed. Whether they will be any more satisfied by the two further debates to come remains to be seen.

News

Prime minister Boris Johnson has apologised and said he ‘misspoke’ when asked to clarify details of new tighter coronavirus restrictions in north-east England. A new rule, making it illegal for households to mix indoors, including in pubs, came into force at midnight yesterday. However, Johnson was unable to answer when asked if residents in the north east could still meet others from different households outside.

Education secretary Gavin Williamson has confirmed that measures will be put in place to ensure that university students in England will be able to return home for Christmas. However, some students may have to self-isolate at the end of term, which would involve face-to-face teaching ending early if necessary.

The Welsh government announced last night that four more areas of Wales are set for a local lockdown. From 6pm on Thursday, people will not be allowed to enter or leave Denbighshire, Flintshire, Conwy and Wrexham without a reasonable excuse, such as travel for work or education.

Business and economy

According to Lloyds Business Barometer, London businesses were among the most confident in the country in September as sentiment across the UK has reached its highest level since the beginning of the pandemic. Business confidence in London was up nine points during September to minus four per cent, according to the survey’s findings.

Revised figures by ONS show the UK economy fell 19.8% in the second quarter. While ONS’s reading on the UK’s second-quarter contraction points to figures slightly less than the 20.4% initially expected, it represents the worst drop on record. (£)

In a joint letter, more than 100 hospitality firms have warned the prime minister that unless more is done to help the sector, many businesses will not survive the winter. Led by trade associations, businesses have written to Boris Johnson saying that the new 10pm curfew has “made this fight to survive even harder” and called on the government to review the restriction every three weeks.

Columns of note

Covid-19 has hit the fossil fuel industry hard and the shift to renewables is inevitable – the sector, after all, has long been in terminal decline. Under the pseudonym of Matt Craigan, a fossil fuel worker writes in The Guardian, calling on government for retraining and the creation of long-term green jobs to facilitate the transition.

In the Financial Times, pro-democracy activist Joshua Wong argues that, with Hong Kong still functioning as the gateway of global capital flowing into China, foreign companies and governments maintain the leverage to call for human rights protection. As local voices are silenced, he urges the world to continue speaking up for Hong Kong.

Cartoon source: San Diego Union-Tribune

Markets

What happened yesterday?

The end-of-month rebound in global equities evaporated, as investors were discouraged by prospects for fiscal stimulus in the US and the outlook for the coronavirus pandemic.  Oil fell below $39 in New York on renewed concern about a lack of demand. 

The S&P 500 Index fell 0.5% as of 11:53 am New York time, led by losses in energy and financial companies, after data showed New York City’s rate of Covid-19 positive tests rose above three per cent for the first time in months, and as stimulus talks ended without an agreement. Similarly, the FTSE 100 finished 0.5% lower at 5,897.5, the FTSE 250 lost nearly 200 points, 1.1% to 17,173.7.

Elsewhere the MSCI AC Asia Pacific Index was little changed as South Korean shares advanced and Hong Kong stocks fell.

The yield on 10-year Treasuries fell one basis point to 0.64% and Britain’s 10-year yield declined two basis points to 0.18%.

In company news: 

In setting out legal arguments for walking away from its former $16.6bn deal, LVMH has criticised Tiffany for having a “catastrophic” performance amid the pandemic, leaving the US jeweller with ‘dismal’ prospects. 

JP Morgan Chase has quietly settled a long-running lawsuit that accused the bank of manipulating precious metals markets with “spoofing” trades. The bank is set to pay $920m to resolve government investigations for similar alleged conduct in the precious metals and Treasury futures markets.

Google’s $2.1bn deal for Fitbit is set to be approved by the EU, after new concessions including a promise not to use the wearable company’s data to target adverts for 10 years.

Walt Disney has announced it will lay off 28,000 employees, mostly at its US theme parks. The company has cited the parks’ limited visitor capacity and uncertainty about how long the coronavirus pandemic would last as reasons for the layoffs. 

What’s happening today?

Finals
Avingtrans
Bezant Res
Bion
Innovaderma
Itaconix Plc
Premier African Minerals 

Interims
1Spatial Holdings
888 Holdings
Boohoo
Bushveld Minerals
Distrib. Fin.
Getech Grp
Minds+mach
Optibiotix Health
Quixant
S&U
Sumo Group Plc
Triple Pnt Soc
Xaar Yu Group

AGMs
Active Energy
Anglesey Mining
City of London
Clipper
Creightons
Davictus
Distrib. Fin.
Hml Hldgs
Marlowe
Mobile Tornado
Panthera Res.
Pennpetro Engy
PHSC
Powerhouse Ener
Purplebricks
Renishaw
San Leon
Scholium Group
Tekmar Group P.
Theworks.co.uk
Unision 
Volga Gas 

UK economic announcements
(00:01) BRC Shop Price Index
(07:00) Nationwide House Price Index
(07:00) Gross Domestic Product

Int. economic announcements
(07:00) Retail Sales (GER)
(08:55) Unemployment Rate (US)
(12:00) MBA Mortgage Applications (US)
(13:30) Personal Consumption Expenditures (US)
(15:00) Pending Homes Sales (US) 
(15:30) Crude Oil Inventories (US) 

Source: Financial Times

did you know

Until the mid-20th century, one of Ethiopia’s main currencies was bars of salt. Source: Qikipedia

Parliamentary highlights

House of Commons

Oral questions 
Northern Ireland 
Prime Minister’s Question Time 

Ten Minute Rule Motion 
Business standards – John Mcdonnell 

Legislation 
Non-Domestic Rating (Lists) (No.2) Bill: Second Reading 
Sentencing Bill [Lords]: All Stages 

Motion 
Motion under the Coronavirus Act 2020 relating to the renewal of temporary provisions 
Debate on Motions relating to Planning 

House of Lords 

Oral questions 
Arrangements to compensate customers whose holidays are cancelled – Lord Young of Cookham 
Use of Exposure Notifications Express in mobile telephone operating systems – Lord Scriven 
Current safety testing standards for lightweight polyethylene chest plates and concerns expressed by experts – Baroness Donaghy 

Legislation 
Immigration and Social Security Co-ordination (EU Withdrawal) Bill – report stage (day 1) – Baroness Williams of Trafford 

Scottish Parliament 

Portfolio Questions: Social Security and Older People; Finance 

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