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What to watch: US election jitters lift dollar, historic M&S losses

·Finance and policy reporter
·3-min read
Pound and US dollar banknotes. Photo: Dado Ruvic/Reuters
Pound and US dollar banknotes. Photo: Dado Ruvic/Reuters

Here are some of the top business, market, and economic stories you should be watching today in the UK, Europe, and around the world.

US election: European markets swing as Trump prematurely claims victory

European markets swung sharply as the US election result went down to the wire on Wednesday, with Donald Trump’s premature claims of victory rattling investors.

Neither candidate yet has the 270 electoral college votes needed to win. Trump’s claims of victory and unsubstantiated fraud allegations briefly spooked financial markets worldwide, ratcheting up uncertainty over the outcome and fears of political unrest. It came after his Democrat rival Joe Biden had himself said he was “on track to win this election.”

The president’s comments immediately hit European and US stock futures and oil shortly before European markets opened, boosting demand for government bonds. But losses were quickly pared back.

WATCH: Trump falsely claims US election victory but Biden also predicts win

The FTSE (^FTSE) in London, which tumbled 1.1% at the open, was trading 0.3% higher in mid-morning trading. Germany’s Dax (^GDAXI), down 1.9% as the trading day began, and France’s CAC 40 (^FCHI) were also trading higher, up 0.2% and 0.5% respectively.

S&P 500 and Dow futures had also both dipped on Trump’s comments before recovering. The S&P 500 (ES=F) was up 0.9%, the Dow Jones (YM=F) up 0.2%, and the tech-heavy Nasdaq (NQ=F) leapt 2.9% at around 5am eastern time in the US.

Major battlegrounds that have been called for Trump include Florida, while Arizona has been called for Biden by the Associated Press. Biden has 238 while Trump has 213.

Stock markets were mixed in Asia overnight. The Hang Seng Index in Hong Kong (^HSI) lost 0.2%, but China’s SSE Composite Index (000001.SS) gained 0.2% and Japan’s Nikkei 225 (^N225) leapt 1.7%.

Pound slides as US election uncertainty strengthens the dollar

Uncertainty over the US election result and alarm over Trump’s comments boosted demand for the dollar as a safe haven asset on Wednesday.

Greenback strength sent the pound down 0.7% against the dollar (GBPUSD=X) in mid-morning trading in Europe. The euro was also down 0.3% against the dollar (EURUSD=X).

“We're seeing some risk aversion, with the dollar being favoured, along with other haven currencies like the yen and swissy,” said Craig Erlam, senior market analyst at OANDA Europe.

“Gold, the traditional safe haven, is once again not benefiting from the uncertainty. The stronger dollar is naturally weighing on the yellow metal, reaffirming its safe haven position.

“Oil is seeing some profit taking on the back of two strong days, as the market prepares for an OPEC+ response to lockdowns in Europe. A stronger dollar is probably contributing to this as well which may persist in the near term.”

Source: Yahoo Finance
Source: Yahoo Finance

Marks & Spencer falls to its first loss in almost 100 years

Marks & Spencer (MKS.L) has fallen to its first loss in almost 100 years as a result of the COVID-19 pandemic.

The stalwart retailer said on Wednesday it made a pre-tax loss of £87.6m ($113.7m) in the six months to 26 September. M&S made a loss after tax of £71.6m. Revenue fell 16% to £4bn.

The performance heralds the business’s first loss as a public company. Marks & Spencer was founded in 1884 and went public in 1926.

Ahead of the results, city analysts had predicted half-year losses at M&S could be as high as £95m, although the consensus forecast was a loss of £59m. M&S made a profit of £176m in the first six months of its last financial year.

Chief executive Steve Rowe said the recent performance was “much more robust than at first seemed possible” thanks to “the resilience of our business and the incredible efforts of my M&S colleagues.”

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