US ECONOMY & POLITICS

U.S. new home sales unexpectedly fall in September – Reuters, 10/26/20

• Sales of new U.S. single-family homes unexpectedly fell in September, but the housing market remains supported by record low interest rates.
• The Commerce Department said on Monday new home sales fell 3.5% to a seasonally adjusted annual rate of 959,000 units last month.
• August’s sales pace was revised down to 994,000 units from the previously reported 1.011 million units.
• Economists polled by Reuters had forecast new home sales, which account for about 14% of housing market sales, rising 2.8% to a rate of 1.025 million units.

Senate likely to confirm Barrett to U.S. Supreme Court, cementing conservative majority – Reuters, 10/26/20

• The Republican-controlled U.S. Senate is expected on Monday to confirm President Donald Trump’s nominee, Amy Coney Barrett, as the next justice to the Supreme Court, a move that will tilt the country’s highest court further to the right for years to come.
• With Republicans controlling the chamber 53-47 and no indication of an internal revolt against the conservative appeals court judge succeeding liberal Justice Ruth Bader Ginsburg, Barrett looks almost certain to take up a lifetime appointment on the bench over universal Democratic opposition.
• No nominee to the Supreme Court has ever been confirmed by the Senate this close to a presidential election, with more than 58 million ballots already cast ahead of Election Day on Nov. 3.

U.S. early voting tops 60 million as historic pace continues – Reuters, 10/26/20

• More than 60 million Americans have cast ballots in the U.S. presidential election with eight days to go, a record-breaking pace that could lead to the highest voter turnout in over a century, according to data from the U.S. Elections Project on Monday.
• Overall, Democrats hold roughly a two-to-one advantage in early voting numbers.
• The high level of early voting has led Michael McDonald, the University of Florida professor who administers the U.S. Elections Project, to predict a record U.S. voter turnout of about 150 million, representing 65% of those eligible to vote, the highest rate since 1908.
• U.S. voters have already cast more early votes during this presidential campaign than they did in all of 2016 when they passed the 47 million mark earlier this month, data shows.

Four in ten supporters of Biden, Trump would not accept election defeat – Reuters, 10/26/20

• More than four in ten supporters of both President Donald Trump and his Democratic challenger, Joe Biden, said they would not accept the result of the November election if their preferred candidate loses, Reuters/Ipsos poll found.
• The survey, conducted from Oct. 13-20, shows 43% of Biden supporters would not accept a Trump victory, while 41% of Americans who want to re-elect Trump would not accept a win by Biden.
• Smaller portions would take action to make their displeasure known: 22% of Biden supporters and 16% of Trump supporters said they would engage in street protests or even violence if their preferred candidate loses.
• The latest Reuters/Ipsos poll shows Biden leads Trump by 8 percentage points nationally: 51% of likely voters say they are backing the Democratic challenger while 43% are voting for the president.
• Biden also is ahead in Wisconsin and Michigan, but the race appears to be much closer in other battleground states including Pennsylvania, Florida, Arizona and North Carolina.

China’s purchases of U.S. farm goods at 71% of target under trade deal: U.S. – Reuters, 10/26/20

• China has substantially increased purchases of U.S. farm goods and implemented 50 of 57 technical commitments aimed at lowering structural barriers to U.S. imports since the two nations signed a trade deal in January, the U.S. government said on Friday.
• In a joint statement, the U.S. Trade Representative’s (USTR) office and the U.S. Department of Agriculture (USDA) said China had bought over $23 billion in U.S. agricultural goods to date, or about 71% of the target set under the so-called Phase 1 deal.
• The report showed outstanding sales of U.S. corn to China were at an all-time high of 8.7 million tons, while U.S. soybeans sales for marketing year 2021 to China were at double the levels seen in 2017.
• U.S. exports of sorghum to China from January to August 2020 totaled $617 million, up from $561 million for the same period in 2017, it said.
• In addition to these products, USDA expects 2020 sales to China to hit record or near-record levels for other U.S. agricultural products including pet food, alfalfa hay, pecans, peanuts, and prepared foods.

EUROPE & WORLD

Europe Imposes New Covid-19 Restrictions as Second Wave Accelerates – Wall Street Journal, 10/25/20

• Europe’s second wave of the coronavirus pandemic is accelerating, forcing countries to impose ever-more social-distancing rules in a bid to avoid a return to full-blown lockdowns.
• France announced a daily record for coronavirus infections, with confirmed infections reaching over 52,000 on Sunday, compared with nearly 84,000 confirmed cases in the U.S. on Saturday, whose population is around five times bigger.
• Italy, struggling with an explosive rise in infections, imposed the toughest restrictions on its population since ending its lockdown, including the closure of all bars and restaurants at 6 p.m.
• In Spain, the government announced a state of emergency, as it did in March, giving national authorities greater powers to impose social-distancing and emergency health-care policies.
• Detected cases have also risen strongly in the U.K., Poland and even Germany, which had until recently kept the virus under better control than other major European countries.
• So far, however, deaths from Covid-19’s second wave are a fraction of Europe’s heavy death toll in March and April. Many recently infected people have no or only light symptoms.

Software Maker SAP’s Profit and Sales Declined – Wall Street Journal, 10/26/20

• SAP, the business-software maker, on Sunday said profit and sales declined in the three months through Sept. 30, as the economic fallout of the global response to the coronavirus pandemic hit core business units.
• The Walldorf, Germany-based software maker said total revenue fell 4% to €6.54 billion, equivalent to $7.76 billion, in the third quarter, and operating profit slipped 1% to €2.07 billion.
• Cloud revenue rose 10% to €1.98 billion, and revenue from software and cloud services combined fell 2% to €5.5 billion.
• As the pandemic continues to weigh on the economy and the threat of new lockdowns arises during a resurgence of Covid-19 infections, business customers are becoming more cautious about spending and investment, affecting core business units.
• As a result of the weaker business in the third quarter and uncertainty from the pandemic, SAP cut its outlook on earnings and revenue for the full year.
• SAP said it now expects adjusted operating profit of up to €8.5 billion, down from a previous estimate of up to €8.7 billion. The company cut its revenue forecast to up to €27.8 billion, down from a previous forecast of up to €28.5 billion.

Russia’s Mail.ru third-quarter revenue jumps 19.9% helped by gaming – Reuters, 10/26/20

• Russian internet group Mail.ru on Monday reported a 19.9% rise in third-quarter revenue as lockdowns boosted gaming though growth slowed from the second quarter as restrictions eased.
• The London-listed company reported total revenue of 26.37 billion roubles ($344.90 million).
• Gaming revenue jumped 33.8%, easing from a rise of 47.7% in the second quarter.
• Advertising revenue increased 5% year-on-year with activity gradually recovering in the third quarter, it said.
• Net profit fell 19.5% year-on-year to 2.84 billion roubles.
• The company expects 2020 revenue to reach 103 billion roubles, within the range it forecasted prior to the pandemic.
• Mail.ru expects gaming revenue to grow by about 30% in 2020, as it expands the segment.

Fiat, PSA to win EU approval for $38 billion merger: sources – Reuters, 10/26/20

• Fiat Chrysler and PSA are set to win EU approval for their $38 billion merger to create the world’s No.4 carmaker, people close to the matter said, as they strive to meet the industry’s dual challenges of funding cleaner vehicles and the global pandemic.
• The green light from the European Commission would formalize the creation of Stellantis, a carmaking group that could tap hefty profits from selling Ram pickup trucks and Jeep SUVs to U.S. drivers to fund the expensive development of zero-emission vehicles for sale in Europe and China.
• The all-share merger announced late last year would unite brands such as Fiat, Jeep, Dodge, Ram and Maserati with the likes of Peugeot, Opel and DS – while targeting annual cost cuts of 5 billion euros ($6 billion) without closing factories.
• To allay EU antitrust concerns, PSA has offered to strengthen Japanese rival Toyota Motor Corp, with which it has a van joint venture, by ramping up production and selling it vans at close to cost price, the people said.
• FCA and PSA have said they hope to complete the merger in the first quarter of 2021.

Rolls-Royce seeks $2.6 billion in make-or-break share issue – Reuters, 10/26/20

• Aero-engine maker Rolls-Royce will ask shareholders on Tuesday for 2 billion pounds ($2.6 billion) in a make-or-break attempt to survive the COVID-19 pandemic, which has stopped planes flying and hammered its finances.
• At stake is the future of a company which has been at the heart of manufacturing in Britain for more than 100 years, making engines that powered World War Two bombers and still drive the country’s fighter jets and nuclear submarines.
• Investors are expected to back the rights issue, supporting CEO Warren East’s plan to cut 9,000 jobs and close factories to adjust to a lower level of demand from airline customers that fly with Rolls engines on Boeing 787s and Airbus 350s.
• Rolls accounts for 2% of all UK goods exported and is one of the country’s biggest spenders on research and development.

Bayer to Buy Gene-Therapy Firm AskBio for Up to $4 Billion – Wall street Journal, 10/26/20

• Bayer said Monday it would pay as much as $4 billion for U.S. biotech firm Asklepios BioPharmaceutical to strengthen the German company’s drugmaking arm, as Bayer continues to reel from its acquisition of crops giant Monsanto.
• The latest deal—for which Bayer will pay $2 billion now and as much as a further $2 billion based on future success milestones—is a bet on cutting-edge gene therapy, in which a functional gene is inserted to counter the effects of a disease caused by a missing or faulty gene.
• The German company’s biggest pharmaceutical acquisition since its purchase of domestic rival Schering AG in 2006 is also an attempt to tackle one of a series of challenges that has been plaguing the inventor of aspirin, especially since its 2018 acquisition of U.S.-based Monsanto.

Japan’s ANA to cut 3,500 jobs in 3 years as it anticipates prolonged virus woes: Yomiuri – Reuters, 10/24/20

• ANA Holdings plans to cut about 3,500 jobs in three years as Japan’s largest airline operator braces for its biggest-ever annual loss due to a plunge in demand driven by the coronavirus pandemic, the Yomiuri daily reported.
• The job losses are part of ANA’s broader business restructuring plan to be announced on Tuesday, as it scrambles to cut fixed costs in anticipation of a prolonged downturn in travel demand, the Yomiuri said on Sunday.
• As short-term measures, ANA is considering temporarily dispatching some of its workforce to several other firms including Toyota Motor and selling 30 of its costly wide-body aircraft, the Yomiuri added.
• Forecast to suffer a net loss of around 500 billion yen ($4.8 billion) for this fiscal year to March, ANA has turned to billions of dollars in loans and a government tourism campaign to weather the slump in air travel.

Factmonster – TODAY in HISTORY

• The First Continental Congress adjourned in Philadelphia. (1774)
• South Korean president Park Chung Hee was killed by the head of the Korean Central Intelligence Agency. (1979)
• Prime Minister Yitzhak Rabin of Israel and Prime Minister Abdel Salam Majali of Jordan signed a peace treaty in a ceremony attended by President Clinton. (1994)