FTSE 100 sways further in the red; Wall Street to open lower after chaotic presidential debate

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  • FTSE sheds 14 points
  • Wall Street to open lower
  • TSB, Shell axe jobs

12.40pm: Low start at Wall Street

FTSE 100 was down again at midday, shedding 14 points to 5,882.

Wall Street is also expected to open lower after the chaotic presidential debate between Donald Trump and Joe Biden, while the market keeps anxiously waiting for a COVID-19 plan.

“These events are often overplayed for their importance and that’s particularly true in an election year when the undecided vote is so small,” said Craig Erlam at OANDA.

“It’s hard to pick a winner, I think we’re all losers as far as that debate is concerned, but Biden went into the debate clearly ahead in the polls and I’d be amazed if last night changed anything. I guess he technically wins by default.”

On schedule we also have the ADP employment report for September, forecast to show 649k new entries.

However, the August reading fell short at 428k “and as such could do so again”, noted Michael Hewson at CMC Markets.

“Economic uncertainty has increased in the last few weeks despite a rise in US consumer confidence, and while today’s numbers could be a leading indicator for Friday’s payrolls report, there has been little correlation in recent months.”

The US second quarter GDP is expected to fall by 31.7% annualised, with personal consumption the main drag, tumbling 34.1%.

11.50am: TSB, Royal Dutch Shell in latest round of job cuts

FTSE 100 trimmed its losses before lunch, dipping only 2 points to 5,895.

TSB and Royal Dutch Shell PLC (LON:RDSB) were the latest major UK firms to announce job cuts.

The bank is to close 164 branches, a third of its estate, costing around 900 redundancies.

TSB said it is part of a three-year strategy to cut costs and stay competitive, while it is adapting to the growing online banking trend.

Meanwhile, Shell confirmed it is cutting between 7 to 9,000 roles to save US$2-2.5bn annually by 2022, with around 1,500 of the staff who are leaving taking voluntary redundancy.

The stock was flat at 958.2p nearing midday.

11am: Former Sainsbury’s boss to lead COVID-19 test and trace scheme

FTSE 100 turned red again in late morning, slipping 15 points to 5,882.

Mike Coupe, who was boss at big grocer Sainsbury’s (LON:SBRY) until last May, was appointed as director of COVID-19 testing as part of the test and trace scheme.

He is replacing Sarah-Jane Marsh, who quit to go back to her role of chief executive of Birmingham Women’s and Children’s NHS Foundation Trust.

Later on Wednesday, Prime Minister Boris Johnson is scheduled to hold a conference on COVID-19 in Britain after new daily cases reached 7,143 on Tuesday.

He will address frustration over confusing local lockdown rules in the North of England, which has been met by opposition even within his own party.

9.55am: GDP fall revised down

FTSE 100 tentatively entered the green with a 2-point rise to 5,900 in mid-morning.

Estimates for the UK gross domestic product (GDP) in the quarter to June were revised up to a 19.8% fall from a 20.4% decrease as previously forecast.

It is still the largest quarterly contraction in the UK economy since quarterly records began in 1955 and marked the second consecutive quarterly decline after a fall of a revised 2.5% in the previous quarter.

Compared with the same quarter a year ago, the UK economy fell by a revised 21.5%, according to the Office for National Statistics.

“The bulk of the pain of the second quarter’s slump in GDP had been borne by the government rather than households and businesses,” economists at Capital Economics commented.

“But with the recovery already flattening off, fiscal support fading and the full scale of the fallout in unemployment yet to be felt, that will change in the second half of 2020.”

“The renewed COVID-19 restrictions will probably mean that GDP stagnates in Q4, leaving economic activity marooned 5.5% short of its pre-crisis level. And the risk now is that renewed containment measures send the recovery into reverse.”

8.55am: Lacklustre start after presidential debate

The FTSE 100 made negligible progress as the market shrugged in a collective ‘meh’ to the first US presidential debate.

While it was good, knock-about fun, the face-off between Messrs. Trump and Biden offered nothing more than a ‘shut, man’ from the latter. Sandpit stuff.

“A messy presidential debate probably didn’t swing the dial either way for undecided voters,” said Jasper Lawler of London Capital Group.

“That leaves Biden on track for the presidency if polls are to be believed.”

On the market, a strong showing from online fashion group Boohoo (LON:BOO), one of the Covid beneficiaries, wasn’t enough to support the share price, which fell 2.4% after better than expected interim results.

The figures also came with an uplift in full-year forecasts, which also appeared to be priced in by the market.

Shell’s (LON:RDSA) decision to cut 9,000 jobs was greeted by ever-pragmatic investors as a positive, with the shares advancing 2%.

Caterer Compass Group (LON:CPG) ebbed 4% lower after warning of the potential impact of a second-wave of lockdowns on its business.

6.35 am: Slow start predicted

The FTSE 100 is expected to start lower on Wednesday as investors struggled to swallow a fiery presidential debate between Donal Trump and Joe Biden on Tuesday night.

Spread-betters at IG are expecting the FTSE 100 will open around 22 points down after ending Tuesday’s session 30 points lower at 5,897.

The sometimes chaotic exchange between the two candidates involved multiple clashes over the state of the US as well as several personal barbs from both Trump and Biden against the other, but while some commentators have dubbed the debate as exhausting it was mostly bereft of any policy announcements that may have surprised markets.

However, prior to the debate, uncertainty seemed to dominate Wall Street’s session on Tuesday, with the Dow Jones Industrial Average closing 0.48% lower at 27,452 while the S&P 500 dropped 0.48% to 3,335 and the Nasdaq fell 0.29% to 11,085.

In Asia, investors seemed to still be digesting the outcome of the clash between Biden and Trump, however upbeat manufacturing data from China made the picture more mixed in Wednesday’s session, with Japan’s Nikkei 225 down 1.07% while Hong Kong’s Hang Seng was up 1.15%.

On currency markets, the pound was down about 0.11% at US$1.284 against the dollar, although UK GDP data due later today could provide some catalysts for movement.

Around the markets:

Sterling: US$1.284, down 0.11%

Brent crude: US$40.66 a barrel, down 0.9%

Gold: US$1,891 an ounce, down 0.34%

Bitcoin: US$10,743, up 0.51%

6.45 am: Early Markets: Asia / Australia

Asia-Pacific markets were mixed today as investors reacted to China’s manufacturing activity data for September.

China’s official manufacturing Purchasing Managers’ Index (PMI) for September came in at 51.5 as compared to 51.0 in August.

Analysts were expecting the PMI to come in at 51.2 in September. PMI readings above 50 signal expansion from the previous month, while those below 50 signal contraction.

Mainland Chinese stocks fell, with the Shanghai composite down 0.42% while Hong Kong’s Hang Seng index advanced 0.64%.

Japan was lower, with the Nikkei 225 dipping 1.43% and Australia’s S&P/ASX 200 fell 1.88%.


Proactive Australia news:

Bardoc Gold Ltd (ASX:BDC) has increased confidence in the 1-million-ounce production target at its namesake flagship project by way of an updated resource estimate with 64% of the resource now included in the measured and indicated categories.

Marvel Gold Ltd (ASX:MVL) has confirmed the success of its transition to gold explorer by delivering an upgraded mineral resource for the Tabakorole Gold Project in Mali, West Africa, with 910,000 ounces grading 1.2 g/t.

Kingston Resources Ltd (ASX:KSN) has received further strong results from the Kingsley prospect which confirm continuity of mineralisation at the Livingstone Gold Project in Western Australia.

Highfield Resources Ltd‘s (ASX:HFR) wholly-owned Spanish subsidiary Geoalcali SLU is securing a Joy miner bolter from Komatsu to play a key role in developing the Muga Potash Project in Spain.

GTI Resources Ltd (ASX:GTR) has received encouraging indications from recent aircore drilling at Niagara Gold Project in Western Australia with quartz veining intersected in a number of drill holes at predicted positions.

Emyria Ltd (ASX:EMD), formerly Emerald Clinics Ltd, has signed an agreement with Zelira Therapeutics Ltd (ASX:ZLD) to collect data from patients treated with insomnia drug Zenivol(TM) through Emyria’s specialist clinical services.

Elementos Ltd (ASX:ELT) (OTCMKTS:ELTLF) (FRA:9EM) is poised to benefit from rising demand for tin as consumer electronics rebound strongly when global economies recover and new and disruptive technologies continue to drive consumption of the metal.

Marvel Gold Ltd (ASX:MVL) is making steady progress in its repositioning as a Mali-focused gold explorer after working hard to assemble an attractive exploration portfolio during the 2020 financial year.

Twenty Seven Co Ltd (ASX:TSC) has revealed several areas worthy of follow-up exploration during its due diligence work on potential new projects in WA’s Goldfields with the Mt Dimer Gold Project proving particularly encouraging.

Moho Resources Ltd (ASX:MOH) has expanded its ground holding at East Sampson Dam gold prospect within the Silver Swan North Project near Kalgoorlie, Western Australia, to 103 square kilometres.

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