A messy Presidential debate probably didn't swing the dial either way for undecided voters. That leaves Biden on track for the Presidency if polls are to be believed.
Two online companies suited to the COVID era - Boohoo (LON:BOOH) and 888 Holdings (LON:888) - reported a sharp rise in earnings today.
China factory output continued to expand in September. ADP data is out later today.
DAY AHEAD
Today we’ve had three different China September manufacturing reports and earnings from two UK winners in the pandemic Boohoo and 888 Holdings- later we have US ADP (NASDAQ:ADP) employment data.
It’s not clear the presidential debate will have some big sway on markets across Wednesday. It’s been described as the worst debate ever and most will probably agree it won’t have swung the dial in either direction. American political moderates and undecideds are left with a difficult choice after those performances.
China has reported its official, NBS and Caixin manufacturing PMI data. The official survey showed out expanding faster than expected but the private surveys showed a expansion but at a slower pace than expected. Overall China’s domestic economy is holding up but the fate of its manufacturing sector- most of which is exported rests with a global economy that is plateauing after a multi-month recovery. Still all the surveys show Chinese factories continue to expand output.
As usual ADP employment data sets us up for Friday’s payroll report. Economists are forecasting a pickup in employment change in September to 648,000 from 428,000 in August.
Boohoo.com reported a 50% rise in sales in second-half results. The solid earnings follow some turbulent moves in the share prices with a 50% plunge followed by a 15% spike in the last few days after a report confirmed sweatshop conditions at some UK factories it sourced its clothes from. The relief was because the firm didn’t appear to know about it. It’s still not such a good look after the online clothing retailer reported blowout earnings last time around amid a surge in internet shopping.
In changing its suppliers, Boohoo faces the tricky decision of moving overseas to keep costs down -which means a more complicated supply chain - also open to abuse- which will probably upset some customers who liked supporting local manufacturing - or staying in the UK with higher costs and the implied higher prices and/or lower margin from doing so. Given the 80% surge in US revenues and big push overseas, the decision will probably be to move its factories overseas.
Also of note- 888 Holdings lifted its guidance and boosted its dividend after a big 130% profit jump in pre-tax profits. 888 is a beneficiary of the jump in online gaming during the pandemic. Bookies have garnered extra attention this week since the Caesars $3.7billion offer for William Hill. These earnings will only add to speculative interest in 888 as a takeover target.