The Weekly Rundown

	At Friday’s Close	Weekly Change
Dow Jones	28,336	-1.0%
S&P 500	3465	-0.8%
Nasdaq Composite	11,548	-1.6%
FTSE 100	5,860	-1.0%
Euro Stoxx 600	363	-1.5%
Gold	$1,905/Troy oz	+0.1%
WTI Crude	$39.85/Barrel	-2.1%

Headlines

• Coronavirus cases are on the rise. In the USA, the daily case average has risen by more than 16% on a week-over-week basis to nearly 55,000. Europe saw 97,000 cases per day, up 44% from the prior week. 
• AstraZeneca has resumed its coronavirus vaccine trial, which was suspended in September after a participant fell ill.
• Rishi Sunak extended the Job Support Scheme by announcing a reduction in employer contributions for furloughed workers, which is expected to amount to £11 billion in additional support over the next 6 months.
• Deutsche Bank expects a no-deal Brexit to cost the UK 1.1% of GDP in lost trade, while a Canada-style trade agreement would cost 0.6%. 85-95% of that loss is expected to be due to non-tariff barriers. 

Economy and Central Banks 

• China’s GDP grew 4.9% YoY in Q3, primarily fuelled by industrial growth. This represents a strong increase from the 3.2% growth in Q2 and from the historic decline seen at the start of the year when China’s economy shrunk for the first time in 40 years by 6.8%. 
• The UK services PMI fell to 52.3 in October, down from 56.1 in September, indicating a slowdown in the recovery for the sector that makes up ⅘ of the UK economy. Manufacturing growth also slowed with its PMI falling to 53.3 in October from 54.1 in September.
• Credit scores, on average, are at their highest ever. However, this is typically a lagging indicator for the health of the broader economy.

• According to a BoE survey, between 8% and 13% of people in the UK were holding more cash at home. Withdrawals have fallen, but deposits have fallen further, increasing notes in circulation. Stockpiling of cash can be used by companies and individuals as a store of value and a contingency plan. 
• Andrew Bailey said that negative interest rates are “probably better in a nascent economic recovery”, raising speculation that the move may be implemented. BoE had previously asked banks for information on their readiness for negative rates. The MPC next meets on 5 November.

Finance and Markets

• Corporate debt sales are 70% higher than this time last year. Despite this, benchmark yields for speculative rated company bonds are down from their March highs of 11.4% to 5.2%.
• UBS exceeded Q3 expectations of $1.55 billion, with net income rising 99% to $2.1 billion. This was primarily due to asset sales gains of over $900 million. After the huge quarterly earnings increase, UBS decided to set aside $2.5 billion to return to shareholders for next year.
• Barclays’s £1.2 billion Q3 pre-tax profits, mostly due to increased IBD revenues, were more than double consensus estimates.
• Goldman Sachs is expected to pay a $2.8 billion settlement for the 1MBD scandal. This settlement fine represents nearly two-thirds of a year’s profits, however, NYSE: GS rallied on the news.

Tech

• Andrea Coscelli, head of the CMA, has stated that he will take action against Google and Facebook if the UK government does not within one year.
• The DoJ has launched a complaint against Google for its payments to Apple to be the default browser and contractual arrangements to ensure primacy on Android phones. However, some antitrust experts argue that this is an open commercial arrangement and could prove a difficult case for the DoJ to win.
• Netflix reported lower than expected Q3 earnings. Analysts initially forecasted that Netflix would receive 2.5 million new subscribers however they received 2.2 million new subscribers this quarter. The stock NASDAQ: NFLX traded down 5.71% on the news.
• Intel agreed to sell part of its memory and storage business to South-Korean chipmaker SK Hynix for $9 billion.

Companies

• Tesla earnings rose to $331 million in Q3, with revenue at $8.8 billion and car deliveries up 54%. Tesla reiterated its goal of delivering 500,000 cars this year. This has been Tesla’s 5th consecutive quarterly profit, raising its likelihood of being added to the S&P 500. 
• UK dividend payments in Q3 2020 were 49% lower than Q3 2019. ⅔ companies cut or altogether scrapped their dividends. Banks accounted for ⅓ of the fall, after enacting the BoE request to suspend payments.
• The Multinational Oil & Gas company ConocoPhillips is betting on a significant recovery of oil with plans to acquire Concho Resources for $9.7 billion