Shouty Old Men, ADP & GDP, Big Job Cuts; What's up in Markets on Wednesday

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Shouty Old Men, ADP & GDP, Big Job Cuts; What's up in Markets on Wednesday

By Geoffrey Smith -- A chaotic and largely meaningless presidential ‘debate’, strong economic data in China and Europe, a revision to U.S. 2Q GDP – and Disney and Shell (LON: RDSa ) cut thousands of jobs. Here’s what you need to know in financial markets on Wednesday, September 30th.

1. Two shouty old men

Two old men shouted at each other for a couple of hours in an effort to settle the question of who is better suited to lead the free world and the world’s largest economy.

By common consent, President Donald Trump did not succeed in pressuring his opponent Joe Biden into the kind of gaffes and brain freezes that he has made so much of on social media in recent weeks, despite interrupting him 73 times (according to CBS’s count).

Biden also failed to land any knock-out blows but, given his lead in the polls, is the likelier of the two to be satisfied with an event in which they merely cancelled each other out.

Investors learned nothing new about either candidate’s agenda, except inasmuch as Trump again stoked doubts about his willingness to accept defeat, appearing at one stage to instruct right-wing militias to “stand by” to dispute the result.

2. Big job cuts at Disney, Shell

Companies are getting more urgent and more ambitious with their cost-cutting plans as North America and Europe get ready for a full winter of Covid-19.

Walt Disney (NYSE: DIS ) said it will cut 28,000 jobs from its theme park, retail and cruise operations – many of them part-time – while Anglo-Dutch oil major Royal Dutch Shell  (NYSE: RDSa ) said it will cut up to 9,000 jobs, or 11% of its workforce, to make it fit for a sustained period of low oil prices and a possible long-term decline in demand for oil and gas.

Walt Disney shares fell 2.4% in premarket trading, while Shell stock eked out a modest gain of 0.3%, marginally outperforming the broader market in Europe.

3 Stocks set to open lower; GDP, ADP (NASDAQ: ADP ) eyed

U.S. stocks are set to open lower after a poor advertisement for American democracy reminded investors that electoral risk isn’t something reserved for emerging markets, while Disney’s job cuts pointed to tougher times ahead for the labor market.

By 6:25 AM ET (1025 GMT), Dow Jones Futures were down 231 points, or 0.8%, while S&P 500 Futures  were also down 0.7% and NASDAQ Futures were down 0.8%.

Investors are likely to take their cues later from the revision to second-quarter GDP figures, and from ADP’s monthly survey of private payrolls . In addition, there will be the market debut of cybersecurity firm Palantir, which set a reference price of $7.25 for its stock, valuing it at some $16 billion.

4. Lagarde hints ECB will follow Fed

Christine Lagarde signaled that the European Central Bank may follow the Federal Reserve in a formal commitment to let inflation run above its traditional 2% target when it concludes its review of its monetary policy strategy next year.

Lagarde’s comments came against the backdrop of some better-than-expected high-frequency data: German retail sales rose 3.1% in August and July’s figures were also revised up. French consumer spending also outperformed expectations with a 2.3% rise in August., while German jobless numbers fell modestly, in line with expectations. The euro fell 0.2% to $1.1709.

Purchasing manager data from China earlier had shown a recovery still intact, but flattening out after a sharp rebound through the summer. 

5. Oil slides ahead of stockpile data

Crude oil prices were again testing two-week lows as stock markets responded gloomily to the election debate, on the perception that a disputed result to the election may spin out the usual uncertainty that weighs on markets every four years.

By 6:25 AM ET, U.S. crude futures were down 1.2% at $38.84 a barrel, while Brent , the international benchmark, was down 1.3% at $41.01 a barrel.

Prices had failed to get much of a lift from the American Petroleum Institute’s assessment that U.S. crude stocks fell by 831,000 barrels last week, rather than the 1.4 million barrel rise that was expected. Government data are due, as usual, at 10:30 AM ET.

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