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European markets slid lower on Wednesday, and Wall Street appeared poised for a fall when trading starts later in the day, as investors seemed to gravitate toward safe assets the morning after an acrimonious U.S. presidential debate.
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But the markets were not rocked by the stormy exchanges between President Trump and his rival, Joseph R. Biden Jr., in part because there were no unexpected policy announcements.
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Spot gold prices, which rose in the days preceding the debate amid concerns of shocks coming from the two candidates, reaching about $1,900 an ounce, fell back to $1,883 in the hours afterward.
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S&P 500 futures predicted a fall of about 0.7 percent when Wall Street starts trading.
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European indexes were down 0.5 to 1 percent. The benchmark Stoxx Europe 600 shed 0.2 percent. In Japan, the Nikkei fell 1.5 percent, while in Hong Kong, the Hang Seng climbed 0.8 percent.
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Oil futures were lower, with Brent crude, the global benchmark, down 0.8 percent, trading at $40.71 a barrel. U.S. 10-year Treasuries rose slightly.
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“Markets have remained calm as no policy surprises have emerged from the debate so far,” wrote Jeffrey Halley, senior market analyst at Oanda. “The uncertainty ahead of the debate has subsided.”
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“Lost in the noise of the debate,” Mr. Halley added, “China has released another impressive set of data.” China’s official Purchasing Managers Index, which covers large firms, and the private Caixin/Markit Manufacturing Purchasing Managers’ Index, which includes an important measure of smaller export-oriented companies, both released stronger than expected numbers.
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More numbers to come: On Friday, the U.S. Labor Department will release the nonfarm payroll data for September.
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With Tuesday’s drop included, the S&P 500 is down nearly 5 percent for the month of September, and about to register its first monthly decline since March. After stocks hit a record early in September, they’ve been falling as investors worried about the government’s gridlock over an economic stimulus plan.
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Negotiators have resumed talks over a coronavirus relief package as House Democrats unveiled a $2.2 trillion coronavirus relief bill that would provide aid to American families, businesses, schools, restaurants and airline workers. But no agreement has been reached. Speaker Nancy Pelosi of California and Steven Mnuchin, the Treasury secretary, have agreed to speak again on Wednesday.
More than 8,100 blazes have burned nearly four million acres across California this year. The Glass Fire that broke out this week near Napa, which is only 2 percent contained, is ravaging parts of the famous winemaking region in the middle of the harvest season, and the effects may linger long after it and other fires are extinguished.
Grapes untouched by flames can be tarnished by ash or smoke taint, and the extent of the damage is revealed only in the fermentation process. (Because red wines are fermented along with their skins, which bear the brunt of smoke taint, they are more affected than whites.) There is a testing backlog, so the extent of the taint is not yet known, Gladys Horiuchi of the lobbying group Wine Institute told the DealBook newsletter.
Most California wine grapes are sold in advance, so vineyards and wineries are negotiating to mitigate the impact of the fires, Ms. Horiuchi said. The goal is to avoid any smoke-tainted wine ever going on sale. That means, for now, drinkers are unaffected, sipping wines from prior harvests. But even if consumers don’t notice any difference in flavor or pricing down the line, behind the scenes, supply chains and longstanding industry relationships are already coming under strain.
Some wineries are offering growers reduced payments to keep them in business but avoid potentially tainted grapes, while major buyers like Constellation Brands warn that contracts could be voided for elevated taint. And wineries previously concerned about oversupply because of the pandemic’s effect on restaurant sales are looking to the bulk market to cover a potential shortfall.
The San Francisco Chronicle is keeping a running list of wineries and vineyards in Napa that have been hit by the Glass Fire, with extensive damage reported at Castello di Amorosa (although its famous castle survived), Chateau Boswell and LVMH-owned Newton Vineyard, among others.
Ben van Beurden, the chief executive of Royal Dutch Shell, said Wednesday that he was speeding up a reorganization of the company that will result in the loss of up to 9,000 jobs by the end of 2022.
In an interview published on Shell’s website, Mr. van Beurden said the company needed to be reshaped to meet its targets of net zero carbon emissions by 2050. At the same time, Shell is under pressure to cut costs because of lower demand for oil and gas because of the coronavirus pandemic.
Europe’s major oil companies, including Shell, Total and BP, are shifting under pressure from society and government to reduce emissions in order to tackle climate change.
Mr. van Beurden said the job cuts would help Shell shed up to $2.5 billion in operating costs. He said that 1,500 people had already left the company on voluntary redundancy packages this year. Shell has about 83,000 employees.
By 2050, Mr. van Beurden said, Shell’s business lines would differ markedly from today. He said that Shell would still sell some oil and gas but that its products by midcentury would be “predominantly low-carbon electricity, low carbon biofuels,” as well as hydrogen and other “solutions.” The company is expected to present more details of its plans in February.
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Disney said it would eliminate 28,000 theme park jobs in the United States, or about 25 percent of its domestic resort work force. About 67 percent of the layoffs will involve part-time jobs that pay by the hour. However, executives and salaried workers will be among the laid off. Disney’s theme parks in California and Florida employed roughly 110,000 before the pandemic. The job cuts, which will come from both resorts, will reduce that number to about 82,000.
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JPMorgan Chase has agreed to pay close to $1 billion as part of settlements to resolve charges that it had manipulated markets for U.S. government bonds and precious metals. The settlements announced on Tuesday — which include a deferred prosecution agreement with the Justice Department — stem from charges that JPMorgan bankers placed artificial orders for futures contracts.
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The Treasury Department said Tuesday that it had completed loans for seven passenger airlines, drawing from the $25 billion set aside for the industry under the March stimulus law known as the CARES Act.
“The payroll support and loan programs created by the CARES Act have saved a large number of aviation industry jobs, and kept workers employed and connected to their health care, during an unprecedented time,” Treasury Secretary Steven T. Mnuchin said in a statement. “We are pleased to conclude loans that will support this critical industry while ensuring appropriate taxpayer compensation.”
In exchange for the loans, the airlines are subject to requirements like limiting executive compensation, refraining from stock buybacks and issuing warrants or equity to the federal government. The recipients are Alaska Airlines, American Airlines, Frontier Airlines, JetBlue Airways, Hawaiian Airlines, SkyWest Airlines and United Airlines.
American announced last week that it had completed a $5.5 billion loan from the Treasury, but expected that to rise to $7.5 billion after the agency reallocates funding set aside for other carriers, like Delta Air Lines and Southwest Airlines, that declined the loans. That amount, $7.5 billion, is the maximum any airline will receive, the Treasury said.
Tens of thousands of airline workers are bracing for a wave of furloughs that could begin as soon as Thursday, when a ban on broad layoffs that was a condition of federal aid comes to an end. The cuts will be painful, but they could have been worse.
For months, airlines have asked employees to volunteer for pay cuts, extended leaves, buyouts or early retirement in order to help preserve as many jobs as possible. Tens of thousands signed up.
Steven Ray Littles II, a young Delta flight attendant, took a buyout because he didn’t want to leave his future to chance. Mike Stoica, a mechanic at American Airlines, decided to do the same to secure health care benefits for his wife. Tina Jackson, a 56-year-old reservations agent at Alaska Airlines, retired early so that she might help save a colleague’s job.
“When something happens to one of us, it happens to all of us,” she said.
The industry had hoped to avoid, or at least delay, this reckoning and its chances seemed good. Workers in recent weeks had successfully lobbied lawmakers to renew the $25 billion in payroll assistance that they provided passenger airlines under the CARES Act in March, garnering bipartisan support in Congress and the president’s approval. But broader talks stalled.
There is still a chance that a bill may pass, but the parties remain far apart on a price tag.
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