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Latest news
Democrats have been pushing for $2.2tn in new spending
Donald Trump has thrown talks between Democrats and Republicans on fresh stimulus for the US economy into confusion as the White House continues to face questions on whether it has done enough to tackle the virus both inside the administration and in the country at large.
Just a day after leaving hospital with Covid-19 the president broke off negotiations with congressional Democrats on a new US aid package, triggering a sell-off in the US stock market.
A few hours later he appeared to backtrack and made appeals for lawmakers to approve help for the airline industry, small business and direct government payments to individuals worth up to $1,200.
The uncertainty followed an intervention by Jay Powell, chair of the Federal Reserve, who argued for additional fiscal support for the US economy.
“Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses,” said Mr Powell in a speech to the National Association for Business Economics on Tuesday. “By contrast, the risks of overdoing it seem, for now, to be smaller.”
Larry Kudlow, the top White House economic adviser, on Wednesday said there was a “low probability” that Congress would agree with Donald Trump’s call for a series of piecemeal stimulus measures before November’s election.
The talks are being led by Steven Mnuchin, the US Treasury secretary, and Nancy Pelosi, House speaker. Democrats have been pushing for $2.2tn in new spending, whereas the Trump administration had been willing to go up to $1.6tn.
Mr Trump’s handling of the virus, which has killed more than 210,000 people in the US, has been one of the main reasons for his poor performance in national polls against Democratic rival Joe Biden. In surveys conducted since last week’s presidential debate and Mr Trump’s admission to hospital, Mr Biden’s lead has been growing, especially with independents, as the president doubles down on his attempt to minimise the pandemic.
Tonight Mike Pence, vice-president, and Kamala Harris, Democratic vice-presidential nominee, will go toe-to-toe in their one and only debate of the election campaign. Here are five things to watch. Follow the debate live with Swamp Notes on the FT.com homepage from 7pm ET.
Markets
Wall Street stock markets opened higher on Wednesday, recovering the late losses in the previous session caused by Donald Trump’s surprise intervention in talks between Democrats and Republicans over more help for the US economy. The S&P 500 and the tech-focused Nasdaq both gained about 1.2 per cent.
Foreign investors have become net sellers of emerging market stocks and bonds in recent weeks, following a period of capital inflows after the panic selling that gripped markets in March. The changing conditions mean that EM central banks that raised interest rates in response to the start of the pandemic will find it harder to do so again. The number of banks lowering rates shrank to a trickle in September, after a wave of loosening in the second quarter of the year, according to a Financial Times analysis of monetary policy in 25 developing countries.
Central banks became net sellers of gold in August for the first time in a year and a half, in the latest indication that demand for the metal is slowing following a record-setting rally. Global central banks sold a net 12.3 tonnes of gold over the month, according to estimates published on Wednesday by the World Gold Council. The latest data reflect the pullback of some major buyers as countries free up resources to deal with the coronavirus crisis.
Business
The first trials of a digital health pass that certifies airline passengers are Covid-free will begin this week in a push to reopen international travel fully after nearly nine months of disruption. United Airlines and Cathay Pacific Airways will test the CommonPass on routes linking travel hubs including London, New York, Hong Kong and Singapore from Thursday. CommonPass aims to create the first globally recognised proof that a passenger has tested negative for the virus before a flight, using a digital certificate downloaded to a mobile phone.
Bruno Pavlovsky, president of Chanel’s fashion division, insisted “the show is the best way to present the collection”, after this week’s catwalk display at Paris Fashion Week. Chanel, along with rivals LVMH-owned Louis Vuitton and Dior, went ahead with live shows despite the reintroduction of restrictions on bars and cafés in the French capital.
Mass entertainment has been hit hard by coronavirus. Shut entirely in the first months of the pandemic, some cinemas, theme parks and attractions have been able to reopen. But they are operating with reduced capacity, and guests that do come are spending less. Are we ever going to go out to have fun again? asks Brooke Masters.
Global economy
The coronavirus pandemic has put millions more across the developed world out of work than official unemployment statistics suggest. More than 25m people in the euro area and the US are officially unemployed, according to figures published last week. But economists say the true number of people who have lost work because of the pandemic is far higher.
Fortunes of the world’s billionaires have soared to record levels during the pandemic. Their collective wealth hit $10.2tn this summer, exceeding the previous high set in 2017, according to an annual study from Swiss bank UBS. The total number of billionaires reached 2,189, up from 2,158 in 2017. “Fortunes are polarising as business innovators and disrupters deploy technology to be among the leaders of today’s economic revolution,” said the report.
The world economy will perform better than feared at the height of the coronavirus pandemic, but warned the head of the IMF, the “calamity is far from over”. Speaking ahead of next week’s virtual IMF and World Bank annual meetings, Kristalina Georgieva urged nations not to withdraw economic support early and to plan for a protracted recovery period because “there is the risk of severe economic scarring from job losses, bankruptcies, and the disruption of education”.
Get in touch
How is your workplace dealing with the pandemic? And what do you think business and markets — and our daily lives — will look like after lockdown? Please tell us by emailing covid@ft.com. We may publish your contribution in an upcoming newsletter. Thanks
The essentials
Women have tended to bear the brunt of childcare in this pandemic and are facing huge anxieties over job security and their finances. We asked three experts to give their tips on how to handle the pressures of working from home during this health crisis. “It is the whole sense that if there is domestic work to be done, it is not falling evenly. That was always true, but you could leave home and go and shut the door on it, and now you cannot,” said Sue Unerman, chief transformation officer at MediaCom.
Read more in our Women in Business special report.
Final thought
Bespoken’s drinks are made from a base alcohol or by modifying existing aged spirits
A Silicon Valley-based start-up plans to take on the $500bn global spirits industry with the launch of what it calls a “Nespresso machine” for whisky. Bespoken Spirits claims its proprietary technology can reduce the traditional barrel-aged process of producing whisky “from decades to days”. The launch received a frosty reception from the Scotch Whisky Association, which said it would take legal action against any product “that claims to compete with Scotch whisky as ‘whisky’ but fails to meet the legal requirements of the country of sale”.
Source: Economy - ft.com
