November 6th – The BESA Times

Twenty-fifth Edition - Sunday, November 6th

Every week, a complete snapshot of what happened around the world in the past week

Notable Headlines

US wage growth accelerates at fastest pace since 2009, extending its record private sector hiring strip. According to data released by the Bureau of Labour Statistics, 161,000 jobs were created in October and 44,000 combined during August and September. A rise of 2.8 per cent in average hourly earnings was registered, adding supporting elements towards Federal Reserve for a rate increase in following months. A group of labour market indicators are now more solid, including the unemployment, which is now around 4,9 per cent, lower than October 2004, 2008 and 2012, but still higher than October 2000, the month before George W. Bush won his first presidential elections.

According to recent polls, Hillary Clinton’s lead over Donald Trump has narrowed, rising anxiety among global investors causing the quickest surge into cash since 2013 as the longest sell-off in the benchmark S&P 500 since the financial crisis took place, driven by money managers. According to fund flows tracked by EPFR, money market funds, which represent a proxy for cash, soaked up more than $36 bn. Generally speaking, US presidential race between Clinton and Trump has stimulated market volatility, which is not expected to decline since Tuesday, November 8th, date of the election, is becoming extremely close.

Google keeps fighting their antitrust battle with the European Union (EU), defending itself against charges of anti-competitive behavior in online search shopping and advertising. In particular, the US tech group accused the EU of misunderstanding economics and law, arguing that the commission defined the online shopping market too narrowly. On the other side, the EU is worried that Google used some contract terms in order to restrict market competition and ease its dominance. On Thursday, Google forwarded a reply to the charges relating its shopping search and AdSense system, which receipt was acknowledged by the commission. The Google cases have wider consequences for the tech sector, because the commission is struggling with the challenge of concluding these probes in a effective and rapid manner, which is crucial for fast-moving sectors.

What to remember of last week's news?

The highest inflation level since July 2014 registered in the Eurozone, still remaining under 1 per cent, far away from the targeted 2 per cent level. The result came after European economy grew 0.3 per cent during third quarter, which is the first entire one after Britain voted to leave the EU in June and represents a really important signal for the Eurozone.

A numerous series of earthquakes hit central Italy, registering on Sunday October 30th the most powerful shock since 1980, with a magnitude of 6.5. This devastating earthquake fortunately left none killed, mainly because it arrived only a few days after two back-to-back quakes strongly damaged buildings and forced people to abandon their houses and towns were evacuated. At least 3,000 people had been left homeless. Many historical buildings and monuments were destroyed by quakes, especially in Norcia, the epicentre of the most devastating one.

On Saturday, November 5th, in Athens will take place the first EU-Arab World summit, with the aim to encourage debate on economic and political co-operation among the connected crises of civil war and migration all over the Mediterranean Sea. The initiative was taken by the Greek government, and will bring together EU leaders with official and representatives of governments and corporations from northern Africa, the Levant and the Gulf states. Notable speakers will include the prime ministers of Greece, Lebanon and Palestine.

Understand in pictures...

What do negative-yielding bonds mean and who is interested in buying them? Here you will find a simple way to understand why investors are still interested in this particular kind of financial products.

A week in the financial markets

Our Homemade Article

Crude oil prices: at a rebound? by Larissa Valentina Chanduvi Kozlova for BESA

What to expect for next week?

On Tuesday, the 8th of November, US presidential election will take place: the forty-fifth US president will be elected. Last pools reveal that Hillary Clinton’s advantage on Donald Trump declined, mostly because of recent emails scandal emerged. Uncertainty will be the protagonist of this election and financial markets are showing such anxiety, generating strong volatility.

The following week will be a really important one for Chinese economy. On Tuesday November 8th the Chinese government will announce the Trade Balance, which represents an important benchmark to generate expectations on country’s economic growth. The following day the annual CPI (Consumer Price Index) will be revealed: it is at the base of the calculation of the annual Inflation rate.

Did you know?

That Sting has announced he will concert to reopen Bataclan theatre in Paris on November 12th, on eve of Paris attacks anniversary (2015, November 13th), when 130 people remained killed in the French capital. The former frontman of the Police, said that he had agreed to play again in Bataclan, the first time was in 1979 with Police, “first, to remember and honour those who lost their lives in the attack a year ago, and second to celebrate the life and the music that this historic theatre represents”. Before Sting accepted to play, Bataclan struggled to attract big name to perform there and, in particular, many French musicians invited to perform at the reopen event declined, because they felt not comfortable with expressing their music in the same place where many innocent people lost their lives.