News updates from October 29: UK daily Covid cases hit record high, US stocks notch best month of 2021, Eurozone growth accelerates to 2.2% – Financial Times

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Today’s top headlines:
US Covid hospitalisations dip below 50,000 for first time in three months
FDA authorises Pfizer’s Covid vaccine for kids aged 5 to 11
Microsoft reclaims title of most valuable public company after Apple
Exxon to launch $10bn share buyback as energy rally boosts profits
Huawei sales sink 38% as tensions with US take their toll
Peter Wells and Mamta Badkar in New York, Leke Oso Alabi, Adrienne Klasa and Oliver Ralph in London, and William Langley in Hong Kong
Michael Pooler in São Paulo
Brazilian stocks entered a bear market, after investors took fright at the possibility the government will circumvent a spending cap to fund extra welfare payments.
The Ibovespa equity index closed down 2.1 per cent on Friday. That took its total losses to more than a fifth since their record high in early June, passing the threshold level that traditionally defines a bear market.
President Jair Bolsonaro’s push to boost welfare handouts ahead of elections next year has led to growing concerns about the public finances among analysts.
To help pay for the expanded programme, a bill is under discussion in Congress to free up around $16bn in next year’s budget.
The draft legislation would alter a constitutional fiscal ‘ceiling’ that limits expenditure increases in line with inflation, at the same time as delaying the payment of certain judicial debts.
Peter Wells in New York
The number of US Covid-19 hospitalisations dropped below 50,000 for the first time in three months, in a further sign the country is bringing its latest wave of the pandemic under control.
There were 49,710 patients in US hospitals being treated for Covid-19, according to a Financial Times analysis of data released on Friday by the US Department of Health and Human Services.
That is the first time hospitalisations have been below 50,000 since July 30. It represents a drop of more than half since levels above 103,000 were reached between late August and early September in the wake of the Delta variant-fuelled summer wave of Covid-19.
With just days to go before the end of October, there are signs the US may be in better shape than it was 12 months ago. At this time last year, when coronavirus cases were rising in the Midwest – presaging the deadly winter wave – hospitalisations hovered around 53,000.
More than 419m vaccine doses have been administered in the US since the start of the rollout in December 2020, according to data on Friday from the Centers for Disease Control and Prevention. Almost 58 per cent of the US population has been fully vaccinated.
Vermont, Rhode Island, Connecticut and Maine are the four states to have fully vaccinated more than 70 per cent of their populations. Thirteen states are yet to reach a mark where at least 50 per cent of their residents are fully vaccinated: West Virginia, Idaho and Wyoming the lowest of the bunch and still under 44 per cent.
The US has averaged almost 68,200 new Covid-19 cases a day over the past week, according to CDC data. That is down about 58 per cent from the summer high rate of more than 161,900 a day in early September and compares to a rate of about 78,200 in late October last year.
Over the past week, the US has averaged 1,086 deaths a day, which is down from a summer high rate of 1,857 a day in mid-September. In late October last year, daily deaths were approaching 900.
Harriet Clarfelt in London and Joe Rennison in New York
Wall Street stocks staged a late rally to retrace early losses on Friday and post their best monthly performance of the year, despite disappointing results from Apple and Amazon reviving questions about labour shortages, supply squeezes and, in turn, persistently high inflation.
The blue-chip S&P 500 and tech-heavy Nasdaq Composite fell in morning trading, but both indices steadied in the early afternoon. A late surge in the final 30 minutes of trading left the indexes up 0.2 per cent and 0.3 per cent respectively, both notching new record highs.
In earnings reports delivered after the closing bell on Thursday, Apple and Amazon missed analysts’ expectations. Apple posted revenues of $83.4bn for the fiscal quarter ending in September, up 29 per cent, but slightly below consensus estimates as supply constraints hampered growth. The iPhone maker’s net profits beat forecasts.
Meanwhile, Amazon warned that labour challenges and rising costs would dampen earnings for the rest of the year, as it delivered third-quarter sales of $111bn — below the $112bn projected by analysts.
The muted end to the month quieted what had otherwise been a roaring period for US equities, with both the S&P and Nasdaq notching their best monthly performance this year at around a 7 per cent gain each.
US stocks had in the previous session on Thursday closed at record highs, helped by a series of strong earnings updates from large companies including machinery group Caterpillar, which is perceived as an economic bellwether, along with positive numbers earlier in the week from Microsoft and Alphabet.
Read more on today’s market moves here
Jamie Smyth in New York
The US Food and Drug Administration has authorised the use of the BioNTech/Pfizer Covid-19 vaccine for children aged 5 to 11 years, paving the way for the US to become the first country in the world to green light the jab for younger children.
The agency said the emergency use authorisation was based on a “thorough and transparent” evaluation of safety and efficacy data, which showed the vaccine was 90.7 per cent effective at preventing Covid-19 in children within the age group.
Advisers at the Centers for Disease Control and Prevention will meet next week to discuss further clinical recommendations and guidelines for a proposed nationwide roll out of jabs to the 28m children in the US between the ages of 5 and 11 years.
Janet Woodcock, acting FDA commissioner, said the comprehensive and rigorous evaluation of the data pertaining to the vaccine’s safety and effectiveness should help assure parents and guardians that the vaccine meets the agency’s high standards.
“As a mother and a physician, I know that parents, caregivers, school staff, and children have been waiting for today’s authorisation. Vaccinating younger children against Covid-19 will bring us closer to returning to a sense of normalcy,” she said.
The Pfizer jab for children aged 5 through 11 is administered in “kid-sized” doses which are a third of the size of jabs for people aged 12 years and over. The vaccine is administered in two jabs three weeks apart.
Arash Massoudi and Kaye Wiggins in London and Erika Solomon in Berlin
German media group Axel Springer is preparing to spin out and list its online jobs portal StepStone in Frankfurt, hoping to fetch as much as a €7bn valuation for the unit in a stock market debut slated for the first half of next year.
Privately held Axel Springer has appointed Rothschild as its IPO adviser and is in the process of interviewing banks to lead the offering, according to people with knowledge of the matter.
Axel Springer said it would not comment on speculation, while StepStone said it was constantly reviewing options to further its growth.
The planned listing is the latest step in the evolution of the German media group since it was taken private in 2019 by buyout group KKR and pension fund CPPIB in conjunction with its major shareholder Friede Springer and the company’s chief executive Mathias Döpfner.
The move comes three months after the company agreed to buy Politico for nearly $1bn, part of the company’s ambition to push into the US media market and build on its earlier acquisition of Business Insider.
Read more on Axel Springer’s plans for StepStone here
Harriet Clarfelt and Joe Rennison
Wall Street stocks retraced their declines from earlier in the session when disappointing results from Apple and Amazon revived questions about labour shortages, supply squeezes and, in turn, persistently high inflation.
The S&P 500 and the Nasdaq Composite edged down in morning trading but both indices steadied in the early afternoon, inching into positive territory.
The early moves came after Apple for Amazon missed analysts’ revenue expectations on Thursday.
Europe’s Stoxx 600 share index closed 0.1 per cent higher, while government bond markets were choppy after significant volatility on Thursday afternoon in the wake of the European Central Bank’s meeting.
Germany’s two-year Bund yield rose 0.03 percentage points to minus 0.60 per cent on Friday as investors bet the ECB would lift rates next year. Ten-year Italian bond yields rose 0.12 percentage points to 1.17 per cent, bringing the increase over the past two days to around 0.23 percentage points. This marked the heaviest sell-off in the country’s benchmark bond since the nation’s Covid-19 crisis in spring 2020.
Read more on the day’s market moves here
Kate Beioley in London
City law firm Mishcon de Reya has been fined £25,000 for allowing payments to agents involved in football transfer deals to be routed through its client bank account.
On Friday, the Solicitors Disciplinary Tribunal ruled that Mishcon had broken rules that prevent law firms from being used like banks. Former partner Liz Ellen did not commit any violations, it found.
Mishcon admitted at the start of the case that it had allowed sums of money to be paid to third parties involved in player transfers via its client account in four cases, but initially denied wrongdoing in relation to a fifth transaction. All money passing through firm accounts must relate to legal services.
On Friday, Andrew Spooner, chair of the tribunal panel said five payments between 2011 and 2013 had breached the banking facility rule and that the tribunal “did not accept that the payment of monies by [Mishcon] was a necessary part of the legal services provided”.
The ruling relates to work Mishcon’s sports team did around a decade ago.
Mishcon’s barrister Chloe Carpenter QC told the panel on Friday that the firm accepted there was “no reason for the funds to be paid into its client account”. She told the panel that Mishcon had reported itself to the regulator in 2017, adding there had been “an unwitting breach by the firm of the rule against acting as a banking facility”.
Mishcon “very much regrets and apologises”, she said.
Read more about Mischon’s fine here
David Sheppard, Energy Editor
Gas prices in the UK and continental Europe tumbled by as much as a fifth on Friday on further signs Russia will increase exports to the region after restricting supplies for months.
Russia’s state-run gas exporter Gazprom said on Friday it had hit its target for filling domestic storage two days after President Vladimir Putin ordered the company to start filling its European storage facilities. The intervention comes after allegations from some analysts that Moscow has stoked an energy crisis by holding back supplies.
The UK benchmark day-ahead contract dropped by almost 20 per cent to £1.39 a therm after trading at record levels above £2 a therm for most of October.
While prices are still roughly three times the level of the start of the year, the sell-off will provide much-needed relief to energy-intensive industries and boost hopes that the drag from gas prices on economies will not be as bad as first feared. Concerns about inflation have also been heightened by the gas price surge, increasing pressure on central banks to consider raising interest rates.
While traders cautioned that prices could quickly head higher again if additional Russian supplies do not materialise in November, they said the signals from Moscow had been enough to stall the months-long rally.
Read more on the move in gas prices here
Harriet Clarfelt in London
Wall Street stocks drifted lower on Friday, echoing losses in Europe, after disappointing results from Apple and Amazon revived questions about labour shortages, supply squeezes and, in turn, persistently high inflation.
The S&P 500 index slipped 0.3 per cent in late-morning trading, while the tech-heavy Nasdaq Composite fought back to be flat after dropping 0.5 per cent at the open.
The moves came after Apple for Amazon missed analysts’ revenue expectations on Thursday.
US stocks closed on Thursday at record highs, helped by a series of strong earnings updates from large companies including machinery group Caterpillar, which is perceived as an economic bellwether, along with positive numbers earlier in the week from Microsoft and Alphabet. Microsoft on Friday surpassed its Silicon Valley rivals to become the largest company in the world.
But data on Friday showed that US consumer spending softened in September, and the core personal consumption expenditure (PCE) price index — the Federal Reserve’s preferred measure of inflation – rose 3.6 per cent in September year on year, broadly in line with projections.
The Stoxx Europe 600 share index edged down 0.1 per cent in afternoon dealings, as data showed that annual inflation for the eurozone quickened to 4.1 per cent in October.
Read more on the day’s market moves here
Nicholas Megaw and Joe Rennison in New York
Microsoft regained its crown as the most valuable publicly listed company in the world on Friday, surpassing Apple shares that slumped in morning trading following a weak third quarter earnings update from the maker of iPhones and Mac computers.
Microsoft’s 0.7 per cent gain in early morning trading in New York on Friday lifted its market valuation to $2.44tn. Apple slid 3.5 per cent, taking its market cap to $2.41tn. 
Microsoft reported this week that its revenues soared in the third quarter, aided by a pandemic-fueled surge in cloud computing resulting from a shift to remote working. The company’s quarterly revenue grew 22 per cent, its largest gain since 2014.
Apple, however, missed analyst forecasts in results released after markets closed on Thursday evening, as chip shortages and factory disruptions due to the coronavirus pandemic hit production.
Read more about how Microsoft regained its title here
Harriet Clarfelt in London
Wall Street stocks fell on Friday, echoing losses in Europe, after disappointing results from Apple and Amazon reignited questions about labour shortages, supply squeezes and, in turn, persistently high inflation.
The blue-chip S&P 500 index and the tech-heavy Nasdaq Composite both dropped 0.5 per cent at the open, having closed the previous session at record highs.
Friday’s declines came after Apple and Amazon both missed analysts’ expectations on Thursday. In an earnings report delivered after the closing bell, Apple posted revenues of $83.4bn for the fiscal quarter ending in September, up 29 per cent but slightly below consensus estimates as supply constraints hampered growth. The iPhone maker’s net profits beat forecasts.
Meanwhile, Amazon warned that labour challenges and rising costs would damp down earnings for the rest of the year, as it delivered third-quarter sales of $111bn — lower than the $112bn figure projected by analysts.
Read more on today’s market moves here
Christine Murray in Mexico City
Mexico’s economy unexpectedly shrank in the third quarter as a resurgence in Covid cases undercut its recovery.
Mexico’s gross domestic product contracted 0.2 per cent in the third quarter compared to the prior three months, according to preliminary government data released on Friday. Economists had expected a 0.1 per cent increase in GDP.
Latin America’s second-largest economy saw its service sector hit the hardest in the three months to end-September, contracting 0.6 percent sequentially.
Nikhil Sanghani, emerging markets economist at Capital Economics said that looking forward there were several factors that will drag on the recovery including global component shortages hitting the auto sector and a US slowdown.
“The bigger picture is that the recovery will still struggle from here,” he said in a note.
Analysts expect Mexico’s economy will grow 6.2 per cent this year, and 3 per cent in 2022, according to a Bank of Mexico survey taken in September.
Mamta Badkar in New York
US consumer spending cooled in September, weighed down by the Delta variant of Covid-19 and supply chain disruptions, while a closely watched US inflation gauge remained at the highest level in three decades.
Consumer spending grew at a slower clip in September, rising 0.6 per cent, compared with the 1 per cent rise the previous month, the Commerce department said on Friday.
The slower spending accompanied a 1 per cent decline in personal incomes — the first drop in four months — following a decrease in unemployment benefits.
The spread of the Delta variant and supply-chain disruptions have damped spending by American households. Outlays were boosted by expenditure on healthcare, accommodations and at restaurants.
Spending on goods increased more modestly as purchases of food and other nondurable items was offset by a sharp drop in sales of motor vehicles and parts, as the industry grapples with semiconductor shortages.
Shortages have also fuelled a rise in inflation, with the core personal consumption expenditure (PCE) price index rose 3.6 per cent in September compared with a year ago, matching levels for the previous three months at the highest level since 1991. The index strips out volatile food and energy costs and is closely watched by the Federal Reserve.
Core PCE rose 0.2 per cent compared to September levels, compared with a 0.3 per cent rise in August. The broader gauge was up 4.4 per cent year-on-year, the highest since January 1991.
Alice Hancock in London
Royal Caribbean, the world’s second largest cruise group, has said that it expects to be profitable in 2022 even as it posted another quarter with losses of more than $1bn.
The Miami-based company said posted a $1.4bn net loss in the third quarter, compared to a $1.3bn loss in the same period last year, as a result “of the continued impact of the Covid-19 pandemic” and said that liquidity stood at $4.1bn at the end of September.
Ships are being sailed at around 44 per cent of their total capacity, Royal Caribbean said, although it reported that revenues per passenger cruise day — the number of passengers carried multiplied by the number of days ships have sailed — were up 12 per cent compared to 2019 thanks to higher spending from guests on board.
The cruise operator said it was “thoughtfully” returning ships to the waters with 40 ships from its 61 strong fleet now sailing. It expects to have 50 in operation by the end of this year.
Jason Liberty, Royal Caribbean’s chief financial officer, said that as cases had reduced, demand had come “surging back”.
He added that “although there are many uncertainties going forward regarding Covid-19, as well as cost and supply chain pressures, we continue our pathway forward and anticipate positive cash flow for the group by spring of 2022 and generating positive earnings for the full year 2022.”
Bookings for 2022 were “within historical ranges and at higher prices than 2019”, Royal Caribbean said.
Ryan McMorrow in Beijing
Sales at Chinese technology group Huawei sank 38 per cent in the third quarter, capping a week that saw the founder’s daughter Meng Wanzhou return to her post after almost three years stuck in Canada.
Huawei’s business has been decimated since Washington added it to its trade blacklist in 2019 and gradually tightened the screws over alleged national security concerns.
The US sanctions have denied Huawei key components and software needed to make smartphones and run other business lines, shrinking its product line.
The Shenzhen based company’s deteriorating business outlook leaves a tall task for Meng, the company’s presumed heiress and chief financial officer.
The company reported third-quarter revenue of Rmb135.4bn ($21.2bn), down 38 per cent from a year earlier. It took in Rmb446 for the first three quarters, down 32 per cent year-on-year. Huawei said its net profit margin stood at 10.2 per cent for the period.
Guo Ping, Huawei’s rotating chair, said the results were in line with forecasts. “While our [consumer] business has been significantly impacted, our B2B businesses remain stable,” he said.
Meng returned to the office on Monday, after agreeing to a deferred charges deal with the US last month over allegations of violating its sanctions against Iran.
Videos on social media of Meng’s return showed Huawei employees packed into the office to celebrate her entrance with hugs, applause and dancing.
Justin Jacobs in Houston
US oil supermajor ExxonMobil says it plans to launch a $10bn share buyback program next year after surging crude and natural gas prices lifted third-quarter profits to their highest level since 2017.
The share repurchases are part of Exxon’s efforts to return the influx of cash from rising fossil fuel prices to shareholders. On top of the $10bn share buyback, which the company said would take place over 12 to 24 months, it also lifted its quarterly dividendfrom $0.87 a share to $0.88.
Exxon’s third-quarter profit of $6.8bn beat analyst estimates and marked a sharp reversal from last year’s steep losses, which forced the company to take on billions in debt to maintain its dividend payout.
The company said $5.2bn in free cash flow in the quarter covered capital spending and the dividend while allowing it to pay down debt.
Darren Woods, the company’s chief executive officer, said there was “more work to do” but that there had been “significant progress repositioning the company to deliver sustainable, long-term value for our shareholders.”
Oliver Barnes
UK Covid-19 infections have hit the highest level recorded in the pandemic, surpassing the January peak, according to the most comprehensive official survey of infection rates.
An estimated 1.27m people had coronavirus in the week ending October 22, according to the Office for National Statistics, up nearly 9 per cent on the week before and higher than the early January peak when 1.22m infections were recorded in a single week.
But hospital pressures remain far below January levels. In January, there were nearly 40,000 Covid patients in hospitals across the UK at one time. The figure now stands at just below 9,000.
The ONS infections survey offers the most accurate snapshot of the pandemic, but the data lags daily case data by a week.
Since Sunday, daily case figures across the UK have been falling, suggesting the booster campaign and the school half-term break were restraining infection rates.
On Thursday, 39,482 Covid cases were recorded across the UK, down 24 per cent from the same day last week.
The government has come under mounting pressure to implement ‘Plan B’ measures including compulsory mask-wearing and working from home to stop Covid and flu straining the NHS over winter.
But the recent fall in daily cases has raised hopes that the measures may not be necessary.
A person close to government decision-making on Tuesday told the FT on Tuesday that things were “now going in the right direction”.
Justin Jacobs
Surging global oil and natural gas prices propelled Chevron’s third-quarter profits to their highest level since early 2013.
The California-based oil and gas producer’s third-quarter net income was $6.1bn, clearing Wall Street estimates of $4.1bn, according to data compiled by S&P Global Market Intelligence.
The $6.7bn in free cash flow generated in the quarter was the highest ever quarterly figure for the company.
“Third-quarter earnings were the highest since first quarter 2013 largely due to improved market conditions, strong operational performance and a lower cost structure,” said Mike Wirth, Chevron’s chief executive.
The company said it was focused on using the bumper profits to pay down debt and return cash to shareholders, rather than increasing spending on new oil and gas production.
“We paid dividends of $2.6bn, reduced debt by $5.6bn, and repurchased $625m of shares during the quarter,” said Wirth.
The company said its capital spending was down nearly a quarter through the first nine months of the year compared to last year, when a deep industry downturn inflicted huge losses on the company and forced it to take on billions of dollars in debt to pay its dividend.
The low spending combined with multiyear highs for crude prices and record high natural gas prices around the world boosted the company’s earnings.
Chevron’s shares were up more than 2 per cent in pre-market trading on the surge in profits.
Peter Wells
Personal consumption expenditure: The PCE index is the Federal Reserve’s preferred measure of inflation, and the latest data will be closely followed ahead of the central bank’s policy meeting on November 3. The core PCE index, which excludes volatile components such as energy and food, is expected to have risen 0.2 per cent in September following a 0.3 per cent increase in August, according to a Refinitiv poll of economists. That should push the year-on-year increase to 3.7 per cent.
Big Oil: Investors will be watching just how well the recent jump in oil prices to seven-year highs has played out for ExxonMobil and Chevron, which both report earnings before Wall Street’s opening bell. Exxon is expected to report net income of more than $6.5bn, a level not reached since 2016, according to Refinitiv. Chevron’s net profit is expected to come in at more than $4.2bn, also its highest level in years.
US earnings: Newell Brands, the company behind Sharpie marker pens and Sunbeam appliances, reports before the bell, as does Colgate-Palmolive. They are set to join a growing list of companies shedding light on the strength of consumer demand and the impact of supply chain disruption. Royal Caribbean Cruises is expected to report a leap in revenue for its third quarter, when it was able to begin sailing in the US again after a lengthy hiatus during the pandemic.
Consumer sentiment: The University of Michigan’s reading on consumer sentiment is expected to hold steady at 71.4 in October, unchanged from its preliminary reading for the month. Consumer sentiment is thought to have been damped in recent weeks and months by rising inflation, which is eroding purchasing power, however some economists believe a historically high savings rate could still fuel spending sprees.
Mexico GDP: Economic growth in Mexico is forecast to have increased 6 per cent on an annualised basis during the three months to September quarter, moderating from 19.6 per cent pace three months earlier, according to Refinitiv.
Colombian interest rates: Colombia’s central bank is expected to increase its benchmark borrowing rate by 0.25 percentage points to 2.25 per cent, keeping it in a group of Latin American economies that are ratcheting up rates in an effort to tame inflation. The Banco de la República’s board in late September announced the first interest rate increase since 2016.
This post has been amended to reflect that the University of Michigan’s consumer sentiment data was an update to its preliminary reading.
Neil Hume
Glencore is set for another year of bumper profits from its trading arm on the back of strong demand for raw materials as economies rev up after the pandemic crash.
In a third-quarter production report, the Switzerland-based group said earnings from its “marketing” business were set to exceed the top end of its $2.2bn to $3.2bn guidance range.
Last year the division reported record earnings before interest of $3bn as it took advantage of an unprecedented drop in oil prices to scoop up cheap barrels of crude and sell them in the futures market for a profit.
Commodity prices have surged this year as economies reawaken while energy shortages in China and Europe have helped to drive up the price of natural gas and thermal coal, which is burnt in power stations to generate electricity.
Glencore is the world’s biggest exporter of seaborne thermal coal, which soared to a record above $250 a tonne in September before easing to around $200.
Tyler Broda, analyst at RBC Capital Markets, said the strong performance of Glencore’s trading arm had been expected given tight commodity markets.
However, he said the update would soothe investors as wild price swings — particularly in gas markets — triggered large payments on derivatives positions used by trading houses to hedge physical business.
“Considering that extreme commodity price volatility can cause hedges to disconnect, this positive affirmation should, however, reassure the market,” Broda said.
Martin Arnold
The eurozone’s economic rebound from the pandemic gathered pace in the three months to September, as growth in the bloc accelerated to 2.2 per cent from the previous quarter.
The increase in gross domestic product among the 19 countries of the euro area was higher than the 2 per cent expected among economists polled by Reuters, and an improvement on the 2.1 per cent growth rate in second quarter.
However economists expect that supply chain bottlenecks and surging energy prices that have held back factory production and are pushing up inflation to weigh on euro area growth in the final three months of 2021.
Inflation in the bloc rose to a new 13-year-high of 4.1 per cent in October, according to a flash estimate published by Eurostat on Friday.
The rise was driven by a 23.5 per cent increase in energy prices, while food, alcohol and tobacco prices rose 2.2 per cent, industrial goods were up 2 per cent and services increased 2.1 per cent.
The surge prices has put pressure on the European Central Bank to start winding down its exceptional stimulus measures. ECB president Christine Lagarde said on Thursday that inflation was likely to remain high for longer than initially expected, though she still predicted it would fall below the central bank’s 2 per cent target by 2023.
The eurozone has lagged the global economy’s recovery from the pandemic over the past year. But it has started to close the gap since the bloc’s growth rate exceeded that of the US and China for the second successive quarter in the three months to September.
Valentina Romei
UK consumers turned more cautious in September despite savings still holding above pre-pandemic levels and subdued credit, while mortgage approval remained relatively strong.
Households deposited an additional £9.4bn with banks and building societies in September, according to data from the Bank of England. The September flow was higher than the £8.9bn monthly average between April and August 2021.
UK consumers reigned in spending in September as concerns over the country’s economic outlook hit consumer confidence, fueling fears of a slowdown in the recovery from the pandemic.
Individuals borrowed £0.2bn, on net, in consumer credit in September, below the pre-pandemic average borrowing. The annual growth rate for all consumer credit “remained weak”, the Bank said.
In contrast, data on the housing market remained robust. Approvals for house purchases fell less than expected to 72,600 in September, from 74,200 in August and remains above pre-February 2020 levels.
The data indicates the housing market will remain strong even after the Stamp duty discount ended in October. The duty would apply again to most mortgages approved in September.
The housing market was supported by low mortgage rates, which in September fell to 1.78 per cent for newly drawn mortgages and to 2 per cent on the outstanding stock of mortgages, the lowest on record.
However, mortgage rates are expected to rise in the year ahead as the Bank of England increases policy rates.
Martin Arnold
Germany’s economy grew 1.8 per cent in the three months to September, a slower rate than expected and a deceleration from the previous quarter that leaves Europe’s largest economy short of its pre-pandemic output level.
Germany’s economic growth for the third quarter was below the 1.9 per cent it achieved in the second quarter, and far slower than the 2.2 per cent quarter on quarter expansion anticipated by economists polled by Reuters.
The federal statistical office said the economy had been driven by “higher household consumption expenditure”, adding that overall output remained 1.1 per cent below the level of the fourth quarter 2019, before the pandemic hit.
Severe supply chain bottlenecks and surging energy prices were blamed for the weaker showing, which have already prompted the German government to slash its growth forecast for the year.
The government said earlier this week that it expected 2.6 per cent growth this year, down from an earlier forecast of 3.5 per cent, while it raised its prediction for 2022 growth from 3.6 to 4.1 per cent.
Many of Germany’s large carmakers and their suppliers have had to put production on hold because of shortages of many products from semiconductors to metals, keeping industrial production in the country below pre-pandemic levels.
Peter Altmaier, the German economy minister, said on Wednesday that the country’s economy would rebound to pre-pandemic levels by the end of March next year, one quarter later than expected.
Valentina Romei
The Italian economy expanded by more than expected in the third quarter, narrowing the gap with pre-pandemic levels.
Italy’s GDP rose 2.6 per cent in the three months to September following a 2.7 per cent rebound in the previous quarter, official data showed.
The performance was stronger than the 2 per cent growth forecast by economists polled by Reuters.
The gap with the output produced in the fourth quarter 2019, before the pandemic, narrowed to 1.3 per cent. That is a smaller gap than in Spain but behind France, which nearly returned to its pre-pandemic levels in the third quarter.
Presenting the government’s 2022 budget, Italian Prime Minister Mario Draghi said on Thursday that the economy “will grow this year by more than 6 per cent, probably well above.” This would be the fastest pace since 1976 as the country rebounds from its largest economic downturn since the second world war.
Detailed results will only be available with the second release of the GDP, but the statistics office noted that growth came from both services and manufacturing, with positive contributions from both domestic demand and net exports. 
Revising Italy’s outlook from stable to positive, rating agency S&P said last week that “drivers of Italy’s buoyant growth include high vaccination rates, elevated private savings, improving business and household confidence, generous EU funds, and rebounding tourism.”
Economists have warned that Italy’s economic growth will slow in the final quarter as the effects of the reopening wane, supply chain disruption keeps a lid on demand, and rising energy prices threaten household disposable incomes, particularly of the poorest people.
Harriet Clarfelt
European stocks fell on Friday after disappointing quarterly results from Apple and Amazon reignited questions about labour shortages, supply squeezes and, in turn, persistently high inflation.
The Stoxx Europe 600 index ticked down 0.3 per cent in early dealings, even as fresh data showed France’s economic growth had topped expectations, expanding 3 per cent in the three months to September against consensus forecasts of 2.1 per cent. London’s premium FTSE 100 index also lost 0.4 per cent in morning trades.
The moves in Europe’s equity market came after Apple and Amazon both missed analysts’ expectations on Thursday. In an earnings report delivered after the closing bell, Apple posted revenues of $83.4bn for the fiscal quarter ending in September, up 29 per cent but slightly below consensus estimates as supply constraints hampered growth. The iPhone maker’s net profits beat forecasts.
Meanwhile, Amazon warned that labour challenges and rising costs would dampen earnings for the rest of the year, as it delivered third-quarter sales of $111bn — lower than the $112bn figure projected by analysts.
Futures tracking Wall Street’s blue-chip S&P 500 fell 0.5 per cent, while those following the tech-heavy Nasdaq 100 index slipped 0.8 per cent. Wall Street stocks closed at new record highs in the previous session, helped by a series of strong earnings reports from behemoths including machinery group Caterpillar, widely perceived as an economic bellwether, along with positive numbers earlier in the week from Microsoft and Alphabet.
Richard Milne, Nordic and Baltic Correspondent
Shares in Volvo Cars rose by 10 per cent as the Chinese-owned premium carmaker made its stock market debut after a long and bumpy drive to being listed.
Volvo’s Chinese owner Geely, which will still own about four-fifths of the carmaker, was forced last week to convert its vote-heavy shares into normal stock after protests from potential Swedish investors.
The company was also pushed to launch its listing at the lower end of its price range. It had previously cancelled an attempt to list in 2018 due to trade tensions between the US, Europe and China.
Volvo’s shares rose from their starting price of SKr53 to SKr58.15 in early trading on Friday, an increase of 9.7 per cent.
Volvo will raise SKr20bn ($2.4bn) through the IPO, which could rise to SKr23bn if an overallotment option is exercised in full, It is planning to use most of the funds for its push into electric vehicles as part of its pledge to stop selling petrol cars by 2030.
David Sheppard
UK energy regulator Ofgem is to consult on changes to the price cap that governs household energy bills, the body said in a letter Friday, after record wholesale gas and electricity prices pushed a large number of suppliers out of business.
Ofgem said that the “unprecedented” rise in energy prices this year had “changed the perception of risk and uncertainty in this market” and required the method of assessing the price cap to be reviewed.
“In order to protect the interests of consumers, we must ensure that the regulatory frameworks, including the price cap, fully reflect the costs, risks and uncertainties facing the supply companies we regulate,” Ofgem said.
“The price cap methodology includes a range of mechanisms to allow suppliers to recover uncertain costs based on what was considered reasonable at the time. We will consult on whether these existing mechanisms should be adjusted in light of the increased costs and risks facing suppliers.”
Ofgem said it would publish the consultation in November setting out the options and its preferred position, with a decision expected in February ahead of the next price cap review.
“This would allow us to implement any changes in the forthcoming price cap period (from 1 April 2022), if appropriate to do so,” Ofgem said.
The government has said there will be no change to the amount consumers pay before April, with the price cap set at £1,277 per average household, despite the cost of wholesale gas and electricity rising well above that level. But the price cap has been predicted by industry analysts to rise steeply in April, potentially by several hundred pounds.
Tom Wilson in London
Energy group Eni said it was fast tracking the development of a newly discovered gas field in west Africa, as it reported better than expected profits in the third quarter driven by high fossil fuel prices.
Adjusted net profit climbed 54 per cent from the second quarter to €1.4bn, “the highest in recent years”, the company said.
“In the first nine months strong cash generation and careful cost management has freed up more than €4bn of free cash flow, more than enough to cover the whole dividend and buyback for 2021,” said chief executive Claudio Descalzi in a statement.
While Eni said it was focused on speeding up its decarbonisation plans, it also pledged to accelerate the development of the Baleine Propsect gasfield in Ivory Coast, in an increasingly rare commitment by a European energy major to build a new hydrocarbons project.
Eni said the project will supply gas to the domestic market in Ivory Coast and would be designed to have net zero emissions from inception, in what it described as a first for the oil and gas industry.
Oil and gas production grew 6 per cent from the second quarter to 1.7m barrels of oil equivalent per day, with output forecast to reach 1.8m boe/d in the final three months of the year.
Valentina Romei
The momentum of Spain’s economic recovery from the pandemic slowed in the third quarter and remained well below pre-pandemic levels.
GDP rose 2 per cent in the three months to September compared with the previous quarter, faster than the 1.1 per cent increase in the previous quarter but slower than the 2.7 per cent forecast by economists, official Spanish data showed on Friday.
Output in hard-hit sectors including retail, transport and hospitality rose 7.9 per cent, following the rebound in tourism, an important source of economic revenues.
Spain’s manufacturing and construction also expanded for the first time this year.
However, household consumption slipped after the strong rebound in the previous quarter despite the country’s high rates of Covid-19 vaccinations.
The Spanish economy was still 6.6 per cent below pre-pandemic levels at the end of 2019. This contrasts with neighbouring France, which has now nearly recovered to pre-pandemic levels, and the US and China, whose economies have already passed their levels before the first restrictions.
Spain’s economic outlook, like that of other countries, has been clouded by supply chain disruptions and rising energy prices. In October, consumer inflation hit their highest rate in nearly 30 years, threatening living standards and consumer spending.
Leke Oso Alabi
The number of UK companies in significant financial distress has fallen as the economy has recovered, according to data published on Friday by insolvency specialist Begbies Traynor.
The number of companies reporting financial difficulties fell by 14 per cent to 562,550 in the third quarter compared with the previous three months of 2021.
Begbies Traynor’s red flag alert, which measures the health of small and medium-sized companies in the UK, said the fall was down to rising corporate revenues, as pent-up customer demand has fuelled a boom in consumption.
However, the surge in county court judgments against companies — a bellwether for future insolvency — was a cause for concern.
Begbies Traynor said CCJs rose 139 per cent in the three months to October when compared to the same period last year.
“The fall in significant financial distress is welcome news and provides some breathing space for hard hit businesses,” said executive chair Ric Traynor.
“However, I remain concerned that trading conditions will deteriorate for many companies as supply chain issues affect output and input costs,” he added.
Traynor said the challenges, combined with more aggressive creditor action signalled by the rise in CCJs, demonstrated that companies were taking a tougher line to recover debts.
Siddharth Venkataramakrishnan
Profits at NatWest tripled in the third quarter, as demand for mortgages grew and the bank released provisions taken at the height of the pandemic to cover bad debts.
The state-backed bank reported pre-tax profits of £1.1bn in the period, up from £355m in the third quarter of last year and 60 per cent ahead of analysts’ forecasts.
Revenues of £2.8bn beat consensus by a more modest margin of 6 per cent, and were up 15 per cent from last year.
Chief executive Alison Rose said that the company had “continued to deliver a strong operating performance” in the quarter, “growing in key areas and accelerating our digital transformation to improve customer experience and make our business more efficient.”
NatWest announced a release of £242m of provisions taken to cover losses in the worst of the pandemic, reaching £949m for the year to date. Rose said that there had been “limited signs of default across our book.”
She added that the company has bought back £402m of its shares to date, over half of the £750m buyback which it announced at its half-year results.
Its common equity tier one ratio, an indicator of capital strength, rose 0.5 percentage points year on year to 18.7 per cent, significantly above its required level.
Mortgages played an important role in the results, with £2.5bn of mortgage growth in the third quarter. Several UK banks have reported a continued boom in lending despite the end of the stamp duty holiday in September.
Anna Gross in Paris
Losses at Air France-KLM fell sharply in the third quarter thanks to strong summer travel demand in countries that have opened their borders as the pandemic eases, the airline said on Friday.
The company posted a net loss of €192m in the period between July and September, a significant improvement on the €1.5bn lost in each of the two previous quarters, although still well below the €366m profit it made in the third quarter of 2019, before the pandemic. Analysts had expected a €318m net loss this time around.
The airline reported capacity usage at 66 per cent of pre-pandemic levels in the third quarter.
“The Air France-KLM group had a good summer season thanks to the reopening of many countries,” said chief executive Benjamin Smith. “For the first time since the beginning of this Covid-19 crisis, the Q3 results show a positive operating result which encourages us to continue our efforts.”
But, he added, “the Covid-19 crisis is not yet over”, pointing out that “important continents such as Asia remain mainly closed”.
The company’s operating profit came in at €132m, above consensus expectations of a €195m loss, although still well below the €900m made in 2019.
The company’s results were helped by the performance of the group’s low-cost company Transavia, which saw a strong recovery in demand for leisure traffic, particularly from the Netherlands and France to destinations such as Greece, Spain and Portugal.
Sarah White in Paris
A jump in equity trading revenues helped BNP Paribas beat profit forecasts in the third quarter, offsetting a weaker showing from its fixed income and rates business, as the French lender launched a €900m share buyback plan. 
France’s biggest listed bank posted a 32 per cent rise in net income from a year earlier to €2.5bn, beating analyst expectations of €2.2bn. That also marked a 29 per cent rise versus 2019 levels. 
The lender has benefited from lower provisions against bad loans in recent quarters, after it booked higher charges when the coronavirus pandemic hit in 2020, and its cost of risk dropped by over 40 per cent from a year earlier. An economic turnaround after lockdowns lifted and government programmes to help stave off small business bankruptcies also boosted its retail banking division. 
 “BNP Paribas’ results are solid and confirm the potential for growth beyond the rebound that has already occurred,” chief executive Jean-Laurent Bonnafé said. 
In its investment bank, BNP Paribas’ performance was more mixed. A dealmaking boom boosted its fee income and echoed gains at US peers, but earnings fell in some parts of its trading business. Revenue in the division was up 6.4 per cent year on year to €3.6bn.
The bank said activity was weaker in rates and foreign exchange trading, with revenues in its fixed income, commodities and currencies unit down 28 percent compared to the third quarter of 2020. 
Its equities business shone, with equity and prime services revenue up 79 per cent to €835m on the back of strong derivatives volumes and contributions from Exane, the investment company it took over this year. 
Martin Arnold in Frankfurt and Leila Abboud in Paris
France’s economic rebound from the pandemic gathered pace in the three months to September as the eurozone’s second-largest economy achieved faster than expected growth of 3 per cent, according to data released on Friday.
The rise in French gross domestic product was higher than the 2.1 per cent growth expected by economists polled by Reuters. It also outstripped the country’s 1.1 per cent growth in the previous quarter after the lifting of coronavirus lockdowns prompted the start of a rebound.
Having lagged behind the global economy’s recovery from the pandemic in the past year, the eurozone is expected to close the gap with third-quarter growth of 2 per cent when GDP figures are released for the bloc later on Friday — outstripping both the US and China.
On Thursday, the US reported third-quarter GDP growth of 0.5 per cent from the previous quarter, while China had already said its economy grew 0.2 per cent in the same period.
However, China’s economy rebounded above its pre-pandemic level last year and the US did the same in the second quarter, while the eurozone is only expected to clear that level by the end of the year.
Economists worry that the supply chain bottlenecks and surging energy prices that have held back factory production and are pushing up inflation will also weigh on euro area growth in the final quarter of 2021.
The French national statistics agency said its initial estimate of 3 per cent growth in the third quarter meant the economy was close to regaining its pre-pandemic level.
“It’s an exceptional result,” Bruno Le Maire, French finance minister, told France Info. “This performance will allow us to get back to the level of economic activity that we had before the pandemic. It means that France is on the right track. The country is recovering quickly and strongly.”
Leke Oso Alabi in London
EU: A flash estimate of eurozone inflation will be released on Friday. Eurozone inflation rose to its highest level for 13 years in September, lifted by soaring energy costs. This month, economists expect disruptions to the global supply chain to propel eurozone inflation higher, to 3.7 per cent.
Third-quarter GDP: Germany, France and Italy publish economic growth figures for the three months to the end of September. The eurozone economy bounced back from its pandemic-driven downturn at the start of the year with faster than expected growth of 2 per cent in the second quarter. It was the first time the bloc outpaced growth in the US and China since the pandemic started.
UK: The Office for National Statistics will publish the Blue Book, a full set of economic accounts including gross domestic product and employment estimates. The Office for Budget Responsibility has upgraded its economic growth forecasts for 2021 significantly to reflect the improved recovery made possible by the widespread availability of Covid-19 vaccines.
Earnings: Air France-KLM releases its results for the third quarter on Friday. The airline hailed the “first signs of recovery” following the easing of coronavirus travel restrictions, narrowing its losses before interest, tax, depreciation and amortisation to €248m in the second quarter of the year.
William Langley in Hong Kong
China’s economic planning agency said there was space for prices of coal in the country to fall further, following several days of plummeting prices.
In reporting its preliminary findings from surveys into China’s coal producers, the National Development and Reform Commission said coal production costs in the country were “substantially lower than current spot prices”.
The announcement is the latest from the NDRC in recent days as it seeks to rein in coal prices, which have rocketed in recent weeks, compounding power shortages.
Last week the NDRC said it had summoned coal producers to hear its views on their production costs and the “reasonable” price of coal, warning them that those seeking “excessive profits” would be met with “severe penalties”.
A second meeting followed this week, with the NDRC and coal producers discussing how to limit excessive price rises.
The NDRC also said it would send inspection teams into coal mines, storage locations and transit points, maintaining a “zero tolerance” approach to those “regions and companies that have not strictly implemented the requirements for coal supply and price stability”.
The most traded thermal coal contract on the Zhengzhou Commodity Exchange fell as much as 9.9 per cent on Friday, to a low of Rmb960 ($150) per tonne, the lowest price in more than six weeks, according to data from Refinitiv.
Hudson Lockett in Hong Kong
Yields on Australian sovereign bonds surged to seven times their intended level after the Reserve Bank of Australia failed to defend its yield target on Friday, adding to expectations the central bank could soon abandon the programme in the face inflationary pressures.
Markets pushed the yield on the April 2024 note to more than 0.7 per cent on Friday, blowing past the central bank’s targeted level of around 0.1 per cent as it opted not to step in. Yields move inversely to bond prices.
Economists had predicted the RBA could drop its yield targeting programme as early as Tuesday, when the central bank’s monetary policy board is scheduled to meet.
David Plank, head of Australian Economics at Australia and New Zealand Banking Group., said the central bank’s decision to not intervene was “implicit confirmation” it will abandon the programme.
“They’ve obviously decided not to bother making the effort today given that on Tuesday they’re probably going to announce an end to it anyway”, he said, adding that a stronger-than-expected reading on consumer inflation published on Thursday had helped to force the RBA’s hand.
The consumer price index reading showed core inflation, the central bank’s preferred measure, breaking into its target range of 2 to 3 per cent for the first time since 2015.
The absence of RBA intervention sent shockwaves through the country’s sovereign bond market on Friday, as yield on the country’s 10-year bonds jumped 0.11 percentage points to 1.955 per cent, the highest level since April 2019.
“It’s been a wild time in the Australian bond market”, Plank said.
William Langley in Hong Kong
Asian stocks fell on Friday, after US tech giants reported disappointing after-hours earnings.
Amazon’s third-quarter figures missed expectations, with net income falling by almost half year-on-year, while Apple’s revenues were hit by supply shortages.
The news dragged futures contracts for the blue-chip S&P 500 down 0.4 per cent and the tech-heavy Nasdaq dropped by 0.7 per cent, after the index reached its first record closing high since early September.
Asian markets fell in morning trading, with Australia’s S&P/ASX 200 down 0.7 per cent, Japan’s Topix dropping as much as 1 per cent and South Korea’s Kospi losing up to 0.7 per cent.
Hong Kong’s Hang Seng index was down 0.3 per cent at the open and fell as much as 0.9 per cent in early trading. China’s CSI 300 was flat.
Dave Lee in San Francisco
Amazon revenues grew at the slowest rate in six years during the third quarter and the company warned growth would slow further still for the remainder of the year, as it contends with the mounting cost of keeping its logistics empire running at full tilt.
Overall revenues for the retail and cloud giant came in at $110.8bn for the quarter, up 15 per cent on the same period last year but its slowest rate of growth since 2015. Analysts had expected more than $111bn.
Net income fell by almost half, year-on-year, to $3.2bn. Shares fell more than 5 per cent in after-hours trading.
In its guidance for the current quarter, the company said it expected revenue growth to slow further, telling investors it expects revenues to come in 12 per cent higher than last year’s Christmas period at best, and at worst just 4 per cent.
Profits during that period could fall anywhere between zero and $3bn, the company said, compared to $6.9bn in 2020.
The pattern follows warnings issued by the company earlier in the year, when it said it would be difficult to match performance of 2020, as surges in online buying let to record-breaking earnings — the impact of which has steadied somewhat with societies reopening.
Read more on Amazon’s results here.
Matthew Rocco
Starbucks’ quarterly sales grew slower than anticipated, after a Covid-19 resurgence in China led to new lockdowns there.
The company still posted record revenues in the three months to the beginning of October, as Americans return to coffee shops with coronavirus restrictions in the rear-view mirror and vaccinations widely available.
Comparable sales in the US were up 22 per cent year on year, better than the 3 per cent increase recorded internationally. In China, they dropped 7 per cent.
Overall, global comparable sales improved 17 per cent in the fourth fiscal quarter, although analysts expected 18.5 per cent growth. Net revenues jumped 31 per cent to $8.1bn.
The results come as restaurants and retail stores in the US struggle to find and retain workers, prompting companies including Starbucks and McDonald’s to raise wages. Restaurant chains have also raised menu prices to make up for the increase in labour costs, as well as inflationary pressure coming from rising commodity prices and shipping rates.
Starbucks said this week it plans to give pay raises in late January, and hourly workers in the US will make an average of nearly $17 an hour by the summer, following a pledge by Starbucks in December of last year to raise its minimum hourly wage to $15.
Fourth-quarter net income climbed to $1.76bn from the $393m Starbucks earned in the year-ago quarter. Earnings per share hit $1 on an adjusted basis, a penny more than analysts had forecast.
Shares in Starbucks fell 2.4 per cent in after-hours trading.
Kate Duguid in New York and Harriet Clarfelt in London
Wall Street stocks closed at record levels on Thursday as traders shrugged off disappointing US economic growth data and focused on positive earnings results early in the trading day.
The technology-focused Nasdaq Composite index rose 1.4 per cent to notch its first record closing high since early September. The S&P 500 rose 1 per cent to a new peak.
A multi-day rally has been spurred along by strong corporate earnings results this week. On Thursday, this included optimism about Apple and Amazon earnings after the closing bell. Amazon ultimately missed earnings estimates. Apple had not filed by publication time.
That positive sentiment balanced out figures showing that the US economy expanded at an annualised pace of 2 per cent in the third quarter, down from 6.7 per cent in the previous three-month period. Economists polled by Refinitiv had forecast a 2.7 per cent growth rate.
Government debt yields were volatile on Thursday afternoon. Longer-dated Treasury yields were higher, with the most important moves happening in five-year yields, which reflect interest rate expectations, and seven-year yields. The five-year was last up 0.02 percentage points to 1.19 per cent and the seven-year was up 0.04 percentage points to 1.45 per cent. The spread between the five and 30-year yields, one measure of the yield curve on Thursday reached its narrowest point since the start of the pandemic.
Read more on the day’s market moves here.
William Langley in Hong Kong
Meetings: The 73rd annual Nordic Council starts in Copenhagen with an agenda including climate concern, sustainability and the involvement of young people. Also on Friday, US president Joe Biden will meet Pope Francis at the Vatican.
Economic data: Japan releases its preliminary monthly industrial production numbers and its unemployment rate on Friday.
Weekend summits: The G20 meet in Rome on Saturday and UN Climate Change Conference (COP26) opens in Glasgow on Sunday.
Election: Japan’s general election begins on Sunday. Fumio Kishida, the new prime minister, is gambling on a quick election victory to secure the public mandate and solid base to rejuvenate a stagnant economy still recovering from the Covid-19 pandemic.
Hannah Murphy in San Francisco
Facebook is changing its name to Meta, reflecting the company’s push to build a digital avatar-filled virtual world known as the metaverse as it battles a deepening public relations crisis and growing regulatory scrutiny.
Speaking at Facebook Connect, the company’s annual virtual and augmented reality conference, on Thursday, chief executive Mark Zuckerberg said Facebook was “an iconic social media brand but increasingly, it just doesn’t encompass everything that we do”.
He added: “From now on, we’re going to be metaverse first, not Facebook first.” While the company was changing its name to Meta, Zuckerberg said that the existing individual platforms and brands — Facebook, WhatsApp, Messenger, Instagram and Oculus — would not change.
Zuckerberg has ramped up investment in augmented and virtual reality as it competes with Apple and others to build the next-generation computing platform. In July he first outlined his vision to build a metaverse, which can be accessed through different devices, allowing users to shop, game and socialise.
The company said on Monday that from the fourth quarter of this year, it planned to break out results for its Facebook Reality Labs unit, which builds its AR, VR and metaverse products, from the rest of the business.
Read more on Facebook’s rebranding here.
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