Markets cheered as US jobs figures beat expectations latest updates
The number of jobs added beat expectations despite pressure from a General Motors strike
: US added 128,000 jobs in October, smashing expectations of a slowdown
Economy shrugged off major drag from 46,000 striking General Motors workers who counted among unemployed
Manufacturing sector remains in agony as production downturn continues
Brexit stockpiling offsets fall in new orders
Factories continue to shed staff amid uncertainty
Pound hovering under $1.30 after softer dollar gives it a midweek boost
October was sterlings best month in since the financial crash
Global heavyweights eye massively-undervalued pound as the fog clears in Westminster
Russell Lynch:Christine Lagarde is not in Kansas any more as she takes over at the struggling European Central Bank
Just in: Google is set to buy wearable tech-maker Fitbit in a deal worth $2.1bn. My colleagueJames Cookreports:
Fitbits stock jumped more than 30pc on Monday following a report that Google had made an offer to purchase the firm. Trading was briefly suspended due to the leap in its share price.
In recent years, Fitbit has struggled to compete with Apple which entered the wearables market in 2015 with its Apple Watch product.
Fitbit announced earlier this year that it was seeking a buyer following four years of declining sales following a disastrous public listing in 2015. Its share price dwindled from almost $50 at its peak to just $4 a day before reports of Googles potential acquisition.
Google said that it expects the transaction to close in 2020.
James Park, co-founder and chief executive of Fitbit, said:
Google is an ideal partner to advance our mission. With Googles resources and global platform, Fitbit will be able to accelerate innovation in the wearables category, scale faster, and make health even more accessible to everyone. I could not be more excited for what lies ahead.
The offer was initially reported by Reuters on Monday.
The US President has welcomed the jobs report, but appears to have completely made up the number of jobs added.
The total added including adjustments, if we look over both October AND September, was 308,000.
But in terms of jobs added that arenewin these figures, the most generously you can phrase it is 218,000 added: 128,000 in October, plus a 44,000 upwards adjustment to September, plus the 46,000 GM workers (corrected to include GM workers).
Wow, a blowout JOBS number just out, adjusted for revisions and the General Motors strike, 303,000. This is far greater than expectations. USA ROCKS!
Exxon Mobil became the latest oil giant to feel the sting of weak oil prices and falling margins in the chemicals business this week, reporting a nearly 50pc plunge in profits for the third quarter.
The largest US oil producer which is currently facing a number of lawsuits for misleading investors over the risks of climate change saw its quarterly earnings fall to $3.17bn, down from $6.24bn a year earlier.
As it faces two seperate lawsuits for misleading investors over the potential cost of climate change, the oil giant today said its profits plunged by nearly 50%.
It joins the likes of BP and Shell, who also posted dreadful earnings this /lxqa4TYWt2
Alongside the October expectations beat, the adjustment to Septembers figures (from 136,000 jobs added to 180,000) really stands out.
The Bureau of labor Statistics, which gathers the data, noted the impact from the General Motors strike, with the number of employed workers in the auto and parts manufacturing sectors falling by 42,000.
Federal employment also slipped by 17,000, as workers engaged in temporary employment as part of the 2020 Census finished up their work.
Payroll employment rises by 128,000 in October; unemployment rate changes little at 3.6%
The jobs data was distorted by the General Motors strike, one of the biggest this century, but the number of jobs created was quite a bit higher than expected. This appears to back up the Feds comments on Wednesday night about the economy being in decent shape and its shift in policy stance.
🇺🇸Strong US jobs growth despite soft indicators like PMI employment has indicated otherwise.
TheFedhawks will use this as an argument for not easing further. One more jobs report ahead of the m/RRBLFyWk7L
Danske Bank Research (@Danske_Research)November 1, 2019
Golidlocks figures suggest Federal Reserve can hold off on further rate cuts
The numbers show a 36,000 jobs drop in the manufacturing sector that will be largely down to the roughly 46,000 General Motors workers who went on strike (but is, for the sake of the records, the worst drop in a decade).
All things considered…thats a strongpayrollsreport
Slight miss on the MoM wages only notable downside
A goldilocks report,Fedwill stay on hold, should support risk assets
Goldilocks for risk that one you feel. ISM could undo it later
US futures trading has pushed upwards on those numbers, suggesting Wall Street will advanced solidly at open. European equities have also extended their gains.
S&P 500 futures rise after payrolls number beats expectations
Another Goldilock-ish US jobs report. NFP +128k vs 85k exp., AHE +0.2% MoM vs +0.3% MoM expected. UR at 3.6% vs 3.6% exp up from 3.5%.pic.twitter.com/eVGeTv0rtX
Holger Zschaepitz (@Schuldensuehner)November 1, 2019
General Motors workers carried out a 40-day strike that ended October 25
Just in:US jobs figure for October has smashed expectations, with 128,000 jobs added versus expectations (per Bloomberg) of 85,000, while Septembers figures were adjusted upwards by 44,000.
As a reminder, those figures will have included a major hit from striking General Motors workers who count as unemployed because they are not on the payroll after a 40-day walkout by the car manufacturers staff.
Deputy Economics EditorTim Wallacehas a full report on this mornings manufacturing activity reading. He writes:
A surge in stockpiling before the now-cancelled Brexit deadline of October 31 helped stem a slump in manufacturing last month, providing short-lived relief for an industry battling a global slowdown.
Activity edged down month on month, according to the purchasing managers index, a closely watched survey of businesses.
The PMI recorded a score of 49.6, the highest score since April, and just below the 50 level that signifies growth.
Heres a reminder of how much shares have sagged at the challenger bank, which recently dropped out of the FTSE 250, and swung to a loss in the third quarter.
My colleaguesLucy BurtonandSimon Foyreported last month:
The troubled lender, which is fighting to rebuild confidence following a major accounting gaffe earlier this year that left investors nursing huge losses, swung 2.2m into the red for the three months to September 30 compared to a 15.1m profit a year earlier.
Metros chief executive Craig Donaldson also hinted at a wider overhaul by telling investors the bank is now evaluating its future plans to strike a balance between growth and costs.
He did not go into further detail about what options are on the table, but said the board would have a fiduciary duty to discuss any approaches by potential buyers.
Here are some of the days top pieces from the Telegraphs Money team:
Ill have to pull my kids out of private school: the tax reforms that could leave you 30pc worse off
It has never been better for women at work heres what we need to do next
Victim of a scam? Heres why you might be more likely to get your money back
Metro Bank shares jump after Standard speculates over Lloyds takeover
Shares in Metro Bank are up nearly 13pc currently, following speculation in the Evening Standard that the high-street lender may draw takeover interest from Lloyds.
Is Lloyds lining up a bid for troubled Metro Bank? The City rumour machine reckons it might be, noting that such a deal would be welcomed by the regulator, said to be concerned by Metro Banks declining financial position.
The recent departure of chairman and founder Vernon Hill could clear the way for a rescue bid from Lloyds Banking Group, which yesterday reported a 97% plunge in third-quarter profits
It notes that Metros depressed share price would make it a bargain grab for the bigger bank. Metro and Lloyds both declined to comment to the Standard.
Another twist in the UK fintech bank saga:a number of Tesco branches have banned the use of Monzo cards in their stores after months of complaints from customers, my colleagueJames Cookreports. He writes:
The issues began in July when Monzo customer started complaining of being charged twice for purchases at Tesco self service tills.
A Monzo employee claimed on its forum earlier this month that the issue was with Tescos payments systems and had since been resolved.
However, complaints on social media continue and some Tesco branches still display signs asking customers not to use Monzo cards.
Monzo cards banned at some Tesco branches after months of complaints from shoppers
Who do you think should be the next Bank of England Governor?
Some interesting voting intention polling (which should, as ever, be taken with a substantial pinch of salt) from YouGov, which has found that the Conservatives command a massive majority of support from people who voted Leave in 2016.
That is likely to be encouraging for Boris Johnson if tensions between him and Brexit Party leader Nigel Farage flare up, but also shows how divided things have become. Theres still everything to play for, it would seem.
📢The last time the Conservatives won a majority, a Brexit-ier party took 12.6% of the vote📢
The UKs broadcasters appear split on the topic of Bank of England Governorship. Minouche Shafik was named as the preferred choice by the BBC, but Sky economics editor Ed Conway says there arestill several candidates in the running:
Contrary to what some are reporting , Im told by sources close to the process that it hasnt yet been narrowed down to one candidate. A final decision has NOT yet been taken. Id take any stories on who its going to be with a massive pinch of salt
Ed Conway (@EdConwaySky)November 1, 2019
Economist: PMI reading shows manufacturing sector is in recession
The UK manufacturing sector has seen successive slowdowns
Ruth Gregory, from Capital Economics, says the PMI figures suggest the UK manufacturing sector is in recession. She writes:
While the manufacturing PMI recovered in October from Septembers extremely weak level, it is still consistent with a recession in the manufacturing sector.
Ms Gregory adds that the downturn may spur the Bank of Englands Monetary Policy Committee which is expected to hold rates when it meets next week to go for a cut next year:
Overall, it seems likely that the manufacturing sector has remained a drag on GDP growth at the start of the fourth quarter. And with the other sectors showing little growth, we are expecting the economy to expand by no more than 0.2pc-0.3pc q/q in the next few quarters.
Admittedly, the MPC still looks set to stand pat at its meeting next Thursday. But if Brexit is delayed again beyond 31st January, and the economy remains weak as we expect, then we still think that the Bank of England will cut rates perhaps by 25bp in May 2020.
KPMGs Stephen Cooper has called those manufacturing PMI figures (see 9:33am update) proof of an ongoing uncertainty horror show for Britains factories. He said:
UK manufacturers will see todays PMI figure as more trick than treat, as stockpiling in anticipation of an October Brexit flattered the numbers, which remain in negative territory. Looking East, Chinese manufacturers are seeing a ray of unexpected sunshine in the form of better than expected Chinese PMI data which boosted Asian markets. We could do with a similar uptick in the UK and Europe, as continued job losses and falling investment paints a gloomy picture.
Brexit continues to weigh down on confidence in the sector, as does the global economic backdrop but perhaps the result of the upcoming UK general election will help alleviate some of this.
Looking ahead, manufacturers need to keep an eye on sterling and exchange rates, and they should also continue to manage their cost base and working capital carefully.
Reuters Andy Bruce has taken an interesting look at the crucial stockpiling element:
Worth noting that although the rate ofstockpilingin todays UK manufacturing PMI isnt as strong as early 2019, its still higher than anything recorded other G7 country 👇pic.twitter.com/tbFquEGyEX
Andy Bruce (@BruceReuters)November 1, 2019
Farage gives Johnson two weeks to ditch deal or face battle for Brexit seats
Nigel Farage is currently launching the Brexit Partys campaign
In Westminster, Nigel Farage is launching the Brexit Partys general election campaign.
He has given Boris Johnson an ultimatum: drop the current Withdrawal Agreement Bill and push for a Brexit based on a free-trade agreement, or face competition for the hardline pro-Leave group in the December vote.
Nigel Farages is making an impossible ask of Boris Johnson
Hes asking him to junk his deal, which is the centrepiece of the Conservative manifesto, and go for an FTA instead
Hes given him until Nov 14 to accept his offer
Farage gives the Tories two weeks to accept his offer to reject the withdrawal agreement and he will stand down (seems unlikely)
He notes 150 seats in this country are Leave constituencies that arent going to vote Tory that would suit the Brexit party.
Johnson has two weeks to accept his terms: abandon his deal and go for a simple free trade agreement.
Tom Newton Dunn (@tnewtondunn)November 1, 2019
General election latest news: Nigel Farage launches Brexit Party campaign as Tories reject electoral pact
The markets seem unmoved by Mr Farages statements so far, with the pound holding steady at $1.295.
With reports naming Minouche Shafik as Chancellor Sajid Javids preferred candidate to become the UKs first post-Brexit and first woman Governor, my colleaguesRussell LynchandMichael ODwyerhave taken a closer look at whos still in the running to replace Mark Carney. They write:
Ms Shafiks emergence is the latest fevered speculation on the identity of the appointment, coming days after another former deputy Harvard academic Paul Tucker was linked with the role.
If successful, Ms Shafik will have seen off eight other reported candidates in a contest with almost as many runners as a Conservative leadership contest
Dame Minouche Shafik, director, London School of Economics
Sir Paul Tucker, former Bank of England deputy Governor
Gerard Lyons, Boris Johnsons former economic adviser
Ben Broadbent, deputy Governor, Bank of England
Ben Broadbent, deputy Governor, Bank of England
Andy Haldane, chief economist, Bank of England
Andrew Bailey, chief executive, Financial Conduct Authority
You can read more about all the candidates here:
Whos still in the saddle for the Bank of England job as race enters final furlong?
Chemring manufactures products for the aerospace, defence and security markets
Shares in small-cap defence manufacturer Chemring are up nearly 4pc today, after it announced a contract win. My colleagueJasmine Cameron-Chileshereports:
Manufacturer Chemring has been awarded a new contract from the US Department of Defense, allowing it to predict that operating profit and earnings per share will be slightly ahead of expectations this year.
The news comes as a much needed boost for the company, which at the beginning of the year reported growing losses. In August last year, a fatal incident at the companys Salisbury plant killed one worker and critically injured another, forcing work at the site to stop. In January 2018, the company also revealed that it was being investigated for bribery and corruption.
Chemring employs around 2,500 people worldwide and specialises in the manufacture of high technology products to defence, security and aerospace markets. Full end of year results are expected to be announced on Dec 16.
General Motors strike expected to have hit US job growth
General Motors assembly workers and their supporters gather to picket outside the General Motors Bowling Green plant during the United Auto Workers (UAW) national strike
Coming up later today, well get the latest figures on US jobs growth, with sharp slowdown expected in October because of the General Motors strike.
Analysts polled by Bloomberg expect 85,000 jobs to have been added over the month, compared to 136,000 in September.
The 40-day strike will have hit non-farm payroll (NFP) figures because striking workers do not receive paychecks, and are counter as unemployed for the sake of the survey.
Job growth has been slowing this year, with the trade war between the US and China weighing on business investment.
The US NFP report caps off another chaotic week in the markets, one in which the Fed has cut interest rates again, the US and China have moved closer to a phase one agreement and the UK has, kind of, hopefully, maybe moved closer to leaving the EU while not actually leaving as planned.
The report is expected to be unusually weak but will be distorted by the General Motors Strike so we shouldnt read too much into it. Wed have to see a pretty appalling report to worry traders at this point, although it will be interesting to see just how quickly they start pricing in another Fed rate cut.
The former boss of Sainsburys, Justin King, has called for business rates to be halved and VAT to be increased in order to help bricks and mortar retailers against online rivals.
Speaking to the BBCs Today programme, Mr King said it was unfair that high street retailers are forced to pay the charge when internet competitors are not. He proposed a 2pc increase in VAT to plug the shortfall.
The services that those business rates pay for are used by online retailers, said Mr King.
They drive on the roads that are maintained by them, the brown cardboard boxes they deliver are collected by dustmen or taken to tips paid for by those business rates, he added.
The FTSE 100 has slightly extended its gains, as part of widespread bounce-back on European stocks.
The pound is holding small gains, but has fallen back to $1.295.
Sterling is in a pretty good place despiteGoldman Sachs suggestion to ignore the currency completely over the new few months.
Duncan Brooks, director of the Chartered Institute of Procurement & Supply, said of the figures:
A minor uplift in overall purchasing activity did little to ease the agony for manufacturing companies in October as the sector remained submerged in contraction terrain and heading for recession. Business was still restrained by the Brexit leash, as firms were subjected to the struggle against client indecision and also the downpull of a slowing global economy.
This affected new order intakes which fell for a sixth sequential month as the second Brexit deadline loomed into view. Domestic clients packed up and went home without placing orders, leaving the sector to survive on a handful of stockpiling purchases from clients in the EU.
Naturally this had a heavy impact on job creation as manufacturing firms cut jobs for the seventh month in a row and at one of the fastest rates for a decade. Companies have lost faith in their ability to weather the ongoing storms, reining back spending where they can. As the manufacturing sector remains in the twilight zone, wondering whether to stock or de-stock, hire new staff, look for new business or batten the hatches once again, it looks like a scary end to the year.
Ongoing uncertainties surrounding Brexit, the economic outlook and the political situation continued to weigh on the UK manufacturing sector during October. Output and new order inflows contracted, leading to further job losses. Firms also ramped up stock-building and purchasing activity in the lead-up to the (postponed) October Brexit departure date.
They note that the data was gathered for the October 11 to October 28 period, meaning it is all from before the Brexit extension was confirmed.
The downturn in manufacturing production continued, although the rate of contraction slowed. Firms reported that weaker inflows of new business, especially from the domestic market, had led to a further scaling back of output. This was partly offset by manufacturers who raised production to build-up stocks in advance of the October Brexit deadline.
New orders decreased, while factories continued to shed workers.
The manufacturing downturn continued at the start of the final quarter as uncertainties surrounding Brexit, the economic outlook and domestic politics all took their toll.
However, the underlying picture looks even darker than even these disappointing headline numbers suggest, as output and new orders fell despite short-term boosts from stock-building activity in advance of the October 31 Brexit deadline, which included a rise in exports as clients in the EU sought to mitigate supply risk.
Just in:Activity in the UKs factories continued to slow down in October, but was better than expected.
Purchasing managers index activity data for October gave a score of 49.6, where a reading above 50 indicates growth. Analysts had expected 48.2
Michael Brown (@MrMBrown)November 1, 2019
Questor: How wed invest through a Corbyn government
Jeremy Corbyn launched Labours campaign yesterday
Does a possible Corbyn government represent an existential threat to Questors portfolio?
Thats the question the Telegraphs investment column has set out to answer today. Questor editorRichard Evanswrites:
Well have to await the partys manifesto for details of its latest plans for these businesses but previous indications about its intentions can only mean pain for shareholders.
Jeremy Corbyn could be at No 10 in six weeks time. This is Questors response
Minouche Shafik has previously been deputy governor of the Bank of England
Anew frontrunner in the heated field of possible replacements for Bank of England Governor Mark Carney?
The BBC reports Egyptian-born Dame Minouche Shafik, director of the London School of Economics, is the Governments current favourite to take the hot seat at Threadneedle Street.
Mr Carneys replacement is likely to be announced after the outcome of Decembers election, with the Canadian set to leave on January 31.
NEW: told that Minouche Shafik is THIS govts preferred candidate for next Bank of England Governor. No announcement this side of election – cos it would be politically messy but if (a big if) this government secures majority – Egyptian born Minouche is current favourite.
Dame Shafik, a former deputy governor at the bank, once said she would a wise owl if she were in charge of rate-setting (as opposed to a hawk or dove).
Crude steel output at Russian miner Evraz fell during the third quarter, with the group blaming the decline on lower volumes, disruption caused by scheduled repairs, and weaker demand at its North American sites.
The FTSE 100 companys shares are off about 1pc this morning after releasing the figures in an update to the City. Total steel sales were flat quarter-on-quarter overall.
This mornings profit warning has put a big dent in Lookers shares, which are down about 16pc currently, having fallen as much as 30pc.
On the FTSE 100, Auto Trader is leading fallers possibly due to investor nerves about the car-sales sector.
TP ICAP, the biggest inter-dealer broker in the world, said its revenue jumped over the third quarter as market nerves led to an increase in trading.
It warned, however, that global uncertainties could impact its transaction volumes during the rest of the year, holding its current guidance.
Revenue for the three months to the end of September was 17pc higher than during the same period last year.
Overall, the business delivered strong growth in Q3, benefitting from more volatile market conditions.
The companys share price has fallen slightly at open:
European markets have opened slightly upbeat, with the FTSE 100 recovering some of yesterdays losses.
The pound has continued to push slightly higher, and is just over $1.296.
Profit warning and leadership changes at Lookers
Phil White, the companys chairman, will act as executive chairman from Friday until a new chief executive is hired
Car dealership Lookers has warned on profits and announced a board clear-out just months after the launch of a probe by the City watchdog sent its shares crashing, my colleagueMichael ODwyerreports. He writes:
Chief executive Andy Bruce and chief operating officer Nigel McMinn will step down from the board immediately, the company said.
Lookers said that trading since mid-September had been much more challenging than expected. As a result, it warned that underlying pre-tax profits for 2019 could be 20m lower than previously forecast.
Trading in both the new car market and the higher-margin after-sales business had been disappointing, Lookers said.
Turmoil at car dealer Lookers as profits slump and bosses exit
Agenda: FTSE 100 looks to recover losses after worst day in a month
Trade war fears rattled global markets yesterday
Good morning. The FTSE 100 is set to open narrowly in the green after better-than-expected Chinese manufacturing data pushed Asian stocks higher overnight.
The UKs blue-chip index suffered its biggest drop in almost a month yesterday as a series of heavyweight falls and fears that progress in US-China trade talks may be stalling dragged on stocks.
The pound gained overnight to rise above $1.295, closing in on the highest level it reached last month. October ended as the best month for sterling since the financial crisis.
1) Plug it in?The drive to ensure Britain can charge millions of electric cars. The final part of our week-long electric vehicle (EV) series examines whether Britain is ready to meet demand for charging points.
2) The economics election scorecard:five charts showing whether Britons have had their pockets picked or lined since 2017. how has the economy performed for the man on the street since voters were last sent to the polls?
3) Italys billionaire Agnelli family arein line for a €1.4bn (1.2bn) paydayif the merger of car makers PSA Group and Fiat Chrysler goes through. The Agnellis – already worth almost €10bn – control about a third of Fiat Chrysler through their Exor investment vehicle, of which they own half.
4)Some of Britains most prominent business leaders branded Jeremy Corbyn cluelessand said he has led a narrow life after the Labour leader attacked them in an election campaign speech. Financier Crispin Odey and Sports Direct boss Mike Ashley hit back at the Labour leader when he accused them of taking advantage of the UKs corrupt system in a blistering attack on capitalism.
5) Apple faces a potential fine from French authoritiesfor allegedly breaking competition law, the tech company has revealed. Frances Autorit de la Concurrence has hit Apple with claims that its sales and distribution operations in the country are anticompetitive, the company disclosed in its annual report.
Most Asian stocks rose and European and US futures pushed higher Friday as investors weighed better-than-expected Chinese manufacturing data against uncertainty about an interim US-China trade deal.
Equities in Japan pared losses, while shares in Hong Kong and China rose after a closely-watched manufacturing gauge unexpectedly climbed. Stocks in Seoul shrugged off the latest plunge in South Korean exports.
Sentiment had weakened earlier and the S&P 500 slipped overnight after Bloomberg reported that Chinese officials have warned they wont budge on the thorniest trade issues. Negotiators are expected to hold a call Friday.
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Brexit stockpiling helps stem manufacturing decline in October
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Whos still in the saddle for the Bank of England job as race enters final furlong?
Turmoil at car dealer Lookers as profits slump and bosses exit
Christine Lagarde is not in Kansas any more as she takes over at the struggling European Central Bank
Election scorecard: five charts showing whether Britons have had their pockets picked or lined since 2017
Plug it in? The drive to ensure Britain can charge millions of electric cars
Investors in space tourism can expect a bumpy ride
Jeremy Corbyn could be at No 10 in six weeks time. This is Questors response
Billionaire Agnelli family in line for €1.4bn windfall from Fiat Chrysler-PSA merger
Business leaders hit back at Jeremy Corbyn after campaign speech attack
Global heavyweights eye massively undervalued pound as the fog clears in Westmi