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Global markets were mostly higher on Monday, and Wall Street was poised for a rebound when trading begins, as pandemic-wary investors looked toward the U.S. presidential election on Tuesday and several economic updates later in the week.
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The benchmark Stoxx Europe 600 was 1 percent higher in late-morning trading, while the DAX index in Germany gained 1.6 percent. In Japan, the Nikkei finished 1.4 percent higher, while the Shanghai Composite in China was flat.
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Futures for the S&P 500 predicted a 0.9 percent gain at the start of the session on Monday. That would be a turnaround: Last week was Wall Street’s worst since March, as rising pandemic cases, new shutdowns and a sell-off in large technology stocks dragged the major benchmarks lower.
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Oil, though, tumbled at the start of trading on Monday, amid continuing concerns that new business lockdowns announced in recent days will damp economic growth even further. Brent crude futures hit $35.74 a barrel — the lowest price in nearly six months — before recovering later in the day.
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The coming week will bring several major developments: The presidential election, the latest assessments from the Federal Reserve and Bank of England (both on Thursday), and then the Labor Department’s report on job growth in October (on Friday).
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In Britain, business leaders are calling for additional government support after a new lockdown for England was announced Saturday by Prime Minister Boris Johnson. Pubs, restaurants and most retail shops must close beginning Thursday through at least Dec. 2, although the plan must still be approved by Parliament. The government’s furlough program, which provides up to 80 percent of employee salaries and was scheduled to expire on Nov. 1, will be extended another month.
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The new measures are “a real body blow” for British business, the leader of the Confederation of British Industry, Carolyn Fairbairn, told Sky News on Sunday. Helen Dickinson, chief of the British Retail Consortium, called it “a nightmare before Christmas.”
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Ryanair, the big discount airline based in Dublin, reported a half-year loss of 197 million euros ($230 million), compared with a profit of €1.2 billion last year, and an 80 percent drop in passengers. But the carrier noted the closure of other no-frills airlines would “create opportunities” in the years ahead, and its stock was up 3 percent.
Economists are expressing concern over how the World Bank and International Monetary Fund have failed to support less-affluent countries through the pandemic.
Despite promises this year by these two deep-pocketed organizations to help poorer countries through the pandemic, funds have been slow to materialize.
The World Bank has doubled its lending over the first seven months of 2020 compared with the same period last year, but it has been slow to distribute the money, according to research from the Center for Global Development. Of the $280 billion lent out by the I.M.F., only $11 billion has been sent to low-income countries.
Economists are warning that immense relief is required to prevent humanitarian catastrophes in poorer countries, and to ensure that the 60 percent of the world that is classified as an emerging market by the I.M.F. does not incur lasting damage.
If no serious steps are taken, the pandemic could push 150 million people into extreme poverty by next year, the World Bank has warned, the first increase in two decades.
“A lost decade of growth in large parts of the world remains a plausible prospect absent urgent, concerted and sustained policy response,” concluded a recent report from the Group of 30, a gathering of international finance experts.
Whether you’re pulling for four more years or a new occupant in the Oval Office, you may be feeling anxiety how the election results might affect your wallet. But it’s no time to act rashly when it comes to personal financial decisions, writes the “Your Money” columnist Ron Lieber.
Mr. Lieber spoke to financial planners who had, in previous careers, worked in government jobs under both Republicans and Democrats. They offered a few helpful pointers:
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Hold off on any major decisions. “Emotions are really good at raising questions and really bad at answering them,” said Zach Teutsch, a financial planner in Washington. It’s true in life, and it’s certainly true with financial decisions. Try not to make any big ones anytime soon.
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Don’t overestimate change. It’s easy to overestimate how much change is possible in the first year of any presidential term, especially for things that can hit you squarely in the wallet, like taxes, retirement rules or health care. It would be foolish to, say, fundamentally alter your retirement savings strategy in anticipation of a change to some or another tax rule.
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Remember why you invest in the first place. Stocks can lose a lot of value in a short period. But over decades, they tend to deliver enough growth to allow you to achieve long-term goals, like being able to retire and live off the money. That, however, happens only if you have the courage (and discipline and leftover income) to save regularly and don’t yank money out when you think something scary is going to happen.
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Safeguard money you know you’ll need soon. If you have money in stocks that you will need in the next few years, you should rethink that — but not because of what could happen on Tuesday or because of the way politics or policy might affect the markets. It’s simply better to put money you know you’ll need soon into something less volatile.
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Consider charity. If the stock market has been good to you — from the Obama administration into the Trump administration — maybe there is some money left over for others whose paths have been rockier.
You may have heard that Tuesday is Election Day in the United States. Here’s a look at the timing of results. (The New York Times will be hosting a live, four-hour broadcast of “The Daily” starting at 4 p.m. Eastern). Believe it or not, there are other things happening …
It’s another big week for corporate earnings, with a quarter of S&P 500 companies opening their books. Noteworthy reports include PayPal on Monday; Saudi Aramco on Tuesday; Qualcomm on Wednesday; Alibaba, AstraZeneca, General Motors and Uber on Thursday; and Marriott and Toyota on Friday. (Watch for unexpected announcements from companies looking to bury bad news amid the electoral distractions.)
On Thursday, economists expect the Federal Reserve to leave interest rates the same, but provide clues about the strength of the recovery. The same day, the Bank of England may introduce new stimulus measures as lockdown begins and Brexit (remember that?) looms.
Ant Group, which raised more than $34 billion in the biggest initial public offering on record, begins trading in Hong Kong on Thursday. (It’s not clear when trading will begin in Shanghai.) Based on the rush to buy shares in the Chinese fintech giant, it could be a frenzied first day.
The U.S. jobs report on Friday is expected to show a gain of 600,000 jobs in October, the fourth consecutive month of slowing growth in payrolls, which remain more than 10 million lower than before the pandemic.
Voters in California will decide on a dozen ballot initiatives this election cycle, some of which could have profound implications for business. The state is by itself the world’s fifth-largest economy, and can set regulatory standards that signal how policy winds will blow in the rest of the country.
So it’s worth paying attention to the local political tides, even with the focus on the White House. Some $650 million has been spent on California ballot propositions this election cycle, in what David McCuan of Sonoma State University calls “the second most expensive political exercise in the free world.”
The DealBook newsletter looks at three initiatives that could be consequential for companies beyond California’s borders:
Prop. 15: Tax most large commercial and industrial properties based on market value, instead of purchase price. The Chan-Zuckerberg Initiative, Mark Zuckerberg’s family foundation, gave more than $6.3 million in support, noting that a tenth of landowners would pay more than 90 percent of the tax. The California Chamber of Commerce opposes it, arguing that it would harm small businesses and lead to higher food and energy prices. California capped property tax increases in the 1970s, inspiring similar moves elsewhere; if the initiative passes, local governments desperate for revenue could follow the state’s lead once again.
Prop. 22: Make app-based drivers independent contractors. A consortium of gig companies — including DoorDash, Instacart, Postmates and Uber — has spent more than $200 million to support the proposition, which would allow the companies to avoid classifying their drivers as employees. The fight already serves as a harbinger of wider debates about the flexibility and security of gig work. The Biden campaign cites California’s approach as a model.
Prop. 24: Expand privacy laws and create a state data protection agency. Backers of the plan include the former Democratic presidential candidate Andrew Yang, Mayor London Breed of San Francisco and the real estate tycoon Alastair Mactaggart. Big Tech is mostly quiet about it, but some lawyers for Google and Quora individually signed a letter opposing the initiative. Critics complain that the proposal puts the onus on individuals to opt out and might turn privacy into a luxury item. It would codify an existing law “riddled with problems,” says Eric Goldman, a co-director of the High Tech Law Institute at Santa Clara University.
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