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Markets Rally Ahead of Presidential Debate: Live Business Updates

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The pound rose as British and European Union officials started their last scheduled round of negotiations on Monday in Brussels.
Credit…Pool photo by John Thys/EPA, via Shutterstock
  • European and Asian stock markets rose on Monday. On Wall Street, futures in the S&P 500 pointed to a gain when trading opens, after the index narrowly avoided falling into a so-called correction last week when it fell by nearly 10 percent from its recent peak.

  • “It’s a big week for politics and for the economy,” said Klaus Baader of Société Générale. The first debate in the U.S. presidential race takes place Tuesday, with Joseph R. Biden Jr. leading Donald Trump in the polls. The New York Times also published details from more than two decades of Mr. Trump’s tax records. An update on the American labor market will be released on Friday.

  • The Stoxx Europe 600 rose 1.6 percent on Monday, In Germany, the DAX gained 2.6 percent, and in France, the CAC 40 climbed 1.7 percent. Benchmark indexes in Japan, South Korea and Hong Kong closed a little more than 1 percent higher on the day.

  • The pound jumped more than 1 percent against the dollar and the euro as the last scheduled round of talks between Britain and the European Union on their post-Brexit trade relationship began in Brussels.

  • Shares in Great Portland Estates, a central London property developer, rose 10 percent after a filing published late Friday showed the U.S. private equity group KKR had bought a stake in the company.

  • Uberjumped more than 8 percent in premarket trading after a British judge approved an 18-month license to continue operating in London.

  • HSBC shares rebounded after Ping An, a Chinese insurer, increased its stake in the British bank. Deutsche Bank and Standard Chartered were also among the stocks rising the most in Europe on Monday morning.

  • Shares in William Hill, a British bookmaker, fell more than 11 percent after the company said it was in “advanced” talks with Caesars Entertainment to be taken over by the U.S. casino company for 2.9 billion pounds, or $3.7 billion.

“Back in March, we all thought demand would be back, we wouldn’t need support beyond this time,” Doug Parker, the chief executive of American Airlines, said on Sunday.
Credit…Saul Loeb/Agence France-Presse — Getty Images

Doug Parker, the chief executive of American Airlines, said on Sunday that if Congress did not extend a payroll support program to airlines this week, then 100,000 aviation professionals would be out of work on Oct. 1.

“Back in March, we all thought demand would be back, we wouldn’t need support beyond this time,” Mr. Parker said in an interview on the CBS public affairs show “Face the Nation.” “Unfortunately, that hasn’t been the case.”

Airlines have been battered by the coronavirus outbreak, as business travelers — who made up an estimated 10 percent of all passengers on the major airlines but generated about half the airlines’ revenue — continue to work remotely and stay away from unnecessary air travel.

American Airlines said on Friday that it would take a $5.5 billion loan from the Treasury Department as part of funding made available to carriers through the government’s economic stimulus plan, and that it expected the loan to grow to $7.5 billion next month. United Airlines is expected to take out a loan of similar size, though Southwest Airlines and Delta Air Lines declined the funding. But that is separate from the payroll support program.

Mr. Parker said in the interview that American Airlines had seen “gradual improvement,” but that revenue was still expected to be down by 65 percent in the fourth quarter, which was a “big problem.”

“A vaccine certainly would be really helpful,” he said. “But in between there, having quarantines go away, having companies bring people back into the office, returning to work, those types of things have a huge impact on the need for air travel.”

Francesca Gemma, an Amazon employee in Passo Corese, near Rome.
Credit…Gianni Cipriano for The New York Times

Amazon has been one of the biggest winners in the pandemic as people in its most established markets — the United States, Germany and Britain — have flocked to it to buy everything from toilet paper to board games.

What has been less noticed is that people in countries that had traditionally resisted the e-commerce giant are now also falling into its grasp after retail stores shut down for months because of the coronavirus.

The shift has been particularly pronounced in Italy, which was one of the first countries hard hit by the virus. Italians have traditionally preferred to shop in stores and pay cash. But after the government imposed Europe’s first nationwide virus lockdown, Italians began buying items online in record numbers.

Even now, as Italy has done better than most places to turn the tide on the virus and people return to stores, the behavioral shift toward e-commerce has not halted. People are using Amazon to buy staples like wine and ham, as well as web cameras, printer cartridges and fitness bands.

“The change is real, the change is deep and the change is here to stay,” said David Parma, who has conducted surveys about shifting consumer behavior in Italy for Ipsos in Milan. “Amazon is the biggest winner.”

With unemployment about 9 percent nationwide — and closer to 20 percent in areas of southern Italy — many are eager for Amazon to expand.

When Francesca Gemma graduated from college in 2016, Amazon was the only company hiring in her area. She now works at an Amazon fulfillment center picking hundreds of products from the shelves every hour so the goods can be shipped to customers.

“On the first day the muscles of my legs felt like I had done a marathon, I couldn’t climb up the stairs,” she said. “It’s not for everyone, but it’s a job.”

Iris Ohyama was the first to accept a government subsidy to shift production from China to Japan. More than 1,600 companies have since applied for the $2.3 billion program.
Credit…Noriko Hayashi for The New York Times

Japan is providing millions of dollars in subsidies to manufacturers and holding discussions with India and Australia about improving their regional supply chains as the country aims to diversify its supply chain out of China.

But it has been walking a fine line with Beijing and insisted the efforts are not aimed at any specific nation.

Japan, the world’s third-largest economy after the United States and China, has provided $23 million in government subsidies to domestic manufacturers like the household goods company Iris Ohyama as part of its onshoring effort.

Its approach has contrasted with the United States, which has taken a more aggressive stance toward Beijing. Still, both countries are finding it difficult to reduce their reliance on China, with its inexpensive and well-trained work force and infrastructure.

“In one sense, the Japanese government tried to expand the room for business cooperation with China, but as the most important ally of the U.S. in the Asia-Pacific, Japan must follow American strategic trends,” said Masayuki Masuda, a senior fellow at Japan’s National Institute for Defense Studies.

That means “trying to keep a balance between China and the U.S.,” he said. “If we restrict normal business activities with China, the damage would be very big. So, where is the red line?”

Aaron Seyedian runs a housecleaning business in Washington, D.C., and owes nearly $14,000 in back premiums for his employees. “I don’t know how we’re going to pay them next summer,” he said.
Credit…Ting Shen for The New York Times

Tens of millions of people could lose their job-based insurance by the end of the year, said Stan Dorn, the director of the National Center for Coverage Innovation at Families USA, a Washington consumer group. “The odds are, we are on track to have the largest coverage losses in our history.”

Thousands of small businesses that had always expressed difficulty in providing employee health insurance under the Affordable Care Act are now in far worse trouble because of the pandemic. Hopes have also dimmed for another federal aid package before the presidential election, which could provide badly needed funding for businesses that continue to struggle.

Not only are businesses shedding workers, with the nation’s unemployed numbering roughly 13.6 million, but employers are cutting expenses like health coverage, and projections of rising numbers of uninsured have grown bleak.

Estimates vary, but a recent Urban Institute analysis of census data says at least three million Americans have already lost job-based coverage, and a separate analysis from Avalere Health predicts some 12 million will lose it by the end of this year. Both studies highlight the disproportionate effect on Black and Hispanic workers.

“There is this expectation that we are going to see big losses in employer-based coverage,” said Sara R. Collins, a vice president at the Commonwealth Fund, a nonprofit group that studies health care.

Some of these individuals will be able to qualify for Medicaid or sign up for an Obamacare plan. “There is still a safety net that wasn’t there 10 years ago,” Ms. Collins said.

But others may not be so lucky. That net is fraying, and some employers whose states have allowed them to defer payments for such bills as insurance premiums, are worried they won’t be in better shape next year.

Engineers at a Beijing factory built by Sinovac to produce the vaccine. 
Credit…Wang Zhao/Agence France-Presse — Getty Images

Chinese officials are trying to inoculate tens of thousands, if not hundreds of thousands, of people with unproven coronavirus vaccines outside of the traditional testing process, shocking global health experts and raising concerns around harmful side effects and issues of consent.

The government is injecting three possible vaccines into workers who are considered essential, as well as other people. The vaccines are in Phase 3 trials, which are mostly being conducted outside China in people who are closely tracked and monitored. It is not clear if China is taking those same steps for people getting shots in the country, or if recipients have been fully warned about the risks of taking unapproved vaccines.

Chinese vaccine makers and state-owned companies have asked people taking vaccines to sign nondisclosure agreements that prevent them from talking to journalists.

“My worry for the employees of the companies is it may be difficult for them to refuse,” said Dr. Kim Mulholland, a pediatrician at the Murdoch Children’s Research Institute in Melbourne, Australia, who has been involved in the oversight of many vaccine trials, including those for a Covid-19 vaccine.

A senior Chinese official said this month that a vaccine could be made available to the public as early as November.

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The Trump campaign celebrated a growth record that Democrats downplayed.

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The White House celebrated economic growth numbers for the third quarter released on Thursday, even as Joseph R. Biden Jr.’s presidential campaign sought to throw cold water on the report — the last major data release leading up to the Nov. 3 election — and warned that the economic recovery was losing steam.

The economy grew at a record pace last quarter, but the upswing was a partial bounce-back after an enormous decline and left the economy smaller than it was before the pandemic. The White House took no notice of those glum caveats.

“This record economic growth is absolute validation of President Trump’s policies, which create jobs and opportunities for Americans in every corner of the country,” Mr. Trump’s re-election campaign said in a statement, highlighting a rebound of 33.1 percent at an annualized rate. Mr. Trump heralded the data on Twitter, posting that he was “so glad” that the number had come out before Election Day.

The annualized rate that the White House emphasized extrapolates growth numbers as if the current pace held up for a year, and risks overstating big swings. Because the economy’s growth has been so volatile amid the pandemic, economists have urged focusing on quarterly numbers.

Those showed a 7.4 percent gain in the third quarter. That rebound, by far the biggest since reliable statistics began after World War II, still leaves the economy short of its pre-pandemic levels. The pace of recovery has also slowed, and now coronavirus cases are rising again across much of the United States, raising the prospect of further pullback.

“The recovery is stalling out, thanks to Trump’s refusal to have a serious plan to deal with Covid or to pass a new economic relief plan for workers, small businesses and communities,” Mr. Biden’s campaign said in a release ahead of Thursday’s report. The rebound was widely expected, and the campaign characterized it as “a partial return from a catastrophic hit.”

Economists have warned that the recovery could face serious roadblocks ahead. Temporary measures meant to shore up households and businesses — including unemployment insurance supplements and forgivable loans — have run dry. Swaths of the service sector remain shut down as the virus continues to spread, and job losses that were temporary are increasingly turning permanent.

“With coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower,” Paul Ashworth, chief United States economist at Capital Economics, wrote in a note following the report.

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Black and Hispanic workers, especially women, lag in the U.S. economic recovery.

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The surge in economic output in the third quarter set a record, but the recovery isn’t reaching everyone.

Economists have long warned that aggregate statistics like gross domestic product can obscure important differences beneath the surface. In the aftermath of the last recession, for example, G.D.P. returned to its previous level in early 2011, even as poverty rates remained high and the unemployment rate for Black Americans was above 15 percent.

Aggregate statistics could be even more misleading during the current crisis. The job losses in the initial months of the pandemic disproportionately struck low-wage service workers, many of them Black and Hispanic women. Service-sector jobs have been slow to return, while school closings are keeping many parents, especially mothers, from returning to work. Nearly half a million Hispanic women have left the labor force over the last three months.

“If we’re thinking that the economy is recovering completely and uniformly, that is simply not the case,” said Michelle Holder, an economist at John Jay College in New York. “This rebound is unevenly distributed along racial and gender lines.”

The G.D.P. report released Thursday doesn’t break down the data by race, sex or income. But other sources make the disparities clear. A pair of studies by researchers at the Urban Institute released this week found that Black and Hispanic adults were more likely to have lost jobs or income since March, and were twice as likely as white adults to experience food insecurity in September.

The financial impact of the pandemic hit many of the families that were least able to afford it, even as white-collar workers were largely spared, said Michael Karpman, an Urban Institute researcher and one of the studies’ authors.

“A lot of people who were already in a precarious position before the pandemic are now in worse shape, whereas people who were better off have generally been faring better financially,” he said.

Federal relief programs, such as expanded unemployment benefits, helped offset the damage for many families in the first months of the pandemic. But those programs have mostly ended, and talks to revive them have stalled in Washington. With virus cases surging in much of the country, Mr. Karpman warned, the economic toll could increase.

“There could be a lot more hardship coming up this winter if there’s not more relief from Congress, with the impact falling disproportionately on Black and Hispanic workers and their families,” he said.

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Ant Challenged Beijing and Prospered. Now It Toes the Line.

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As Jack Ma of Alibaba helped turn China into the world’s biggest e-commerce market over the past two decades, he was also vowing to pull off a more audacious transformation.

“If the banks don’t change, we’ll change the banks,” he said in 2008, decrying how hard it was for small businesses in China to borrow from government-run lenders.

“The financial industry needs disrupters,” he told People’s Daily, the official Communist Party newspaper, a few years later. His goal, he said, was to make banks and other state-owned enterprises “feel unwell.”

The scope of Mr. Ma’s success is becoming clearer. The vehicle for his financial-technology ambitions, an Alibaba spinoff called Ant Group, is preparing for the largest initial public offering on record. Ant is set to raise $34 billion by selling its shares to the public in Hong Kong and Shanghai, according to stock exchange documents released on Monday. After the listing, Ant would be worth around $310 billion, much more than many global banks.

The company is going public not as a scrappy upstart, but as a leviathan deeply dependent on the good will of the government Mr. Ma once relished prodding.

More than 730 million people use Ant’s Alipay app every month to pay for lunch, invest their savings and shop on credit. Yet Alipay’s size and importance have made it an inevitable target for China’s regulators, which have already brought its business to heel in certain areas.

These days, Ant talks mostly about creating partnerships with big banks, not disrupting or supplanting them. Several government-owned funds and institutions are Ant shareholders and stand to profit handsomely from the public offering.

The question now is how much higher Ant can fly without provoking the Chinese authorities into clipping its wings further.

Excitable investors see Ant as a buzzy internet innovator. The risk is that it becomes more like a heavily regulated “financial digital utility,” said Fraser Howie, the co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.”

“Utility stocks, as far as I remember, were not the ones to be seen as the most exciting,” Mr. Howie said.

Ant declined to comment, citing the quiet period demanded by regulators before its share sale.

The company has played give-and-take with Beijing for years. As smartphone payments became ubiquitous in China, Ant found itself managing huge piles of money in Alipay users’ virtual wallets. The central bank made it park those funds in special accounts where they would earn minimal interest.

After people piled into an easy-to-use investment fund inside Alipay, the government forced the fund to shed risk and lower returns. Regulators curbed a plan to use Alipay data as the basis for a credit-scoring system akin to Americans’ FICO scores.

China’s Supreme Court this summer capped interest rates for consumer loans, though it was unclear how the ceiling would apply to Ant. The central bank is preparing a new virtual currency that could compete against Alipay and another digital wallet, the messaging app WeChat, as an everyday payment tool.

Ant has learned ways of keeping the authorities on its side. Mr. Ma once boasted at the World Economic Forum in Davos, Switzerland, about never taking money from the Chinese government. Today, funds associated with China’s social security system, its sovereign wealth fund, a state-owned life insurance company and the national postal carrier hold stakes in Ant. The I.P.O. is likely to increase the value of their holdings considerably.

“That’s how the state gets its payoff,” Mr. Howie said. With Ant, he said, “the line between state-owned enterprise and private enterprise is highly, highly blurred.”

China, in less than two generations, went from having a state-planned financial system to being at the global vanguard of internet finance, with trillions of dollars in transactions being made on mobile devices each year. Alipay had a lot to do with it.

Alibaba created the service in the early 2000s to hold payments for online purchases in escrow. Its broader usefulness quickly became clear in a country that mostly missed out on the credit card era. Features were added and users piled in. It became impossible for regulators and banks not to see the app as a threat.

ImageAnt Group’s headquarters in Hangzhou, China.
Credit…Alex Plavevski/EPA, via Shutterstock

A big test came when Ant began making an offer to Alipay users: Park your money in a section of the app called Yu’ebao, which means “leftover treasure,” and we will pay you more than the low rates fixed by the government at banks.

People could invest as much or as little as they wanted, making them feel like they were putting their pocket change to use. Yu’ebao was a hit, becoming one of the world’s largest money market funds.

The banks were terrified. One commentator for a state broadcaster called the fund a “vampire” and a “parasite.”

Still, “all the main regulators remained unanimous in saying that this was a positive thing for the Chinese financial system,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics in Washington.

“If you can’t actually reform the banks,” Mr. Chorzempa said, “you can inject more competition.”

But then came worries about shadowy, unregulated corners of finance and the dangers they posed to the wider economy. Today, Chinese regulators are tightening supervision of financial holding companies, Ant included. Beijing has kept close watch on the financial instruments that small lenders create out of their consumer loans and sell to investors. Such securities help Ant fund some of its lending. But they also amplify the blowup if too many of those loans aren’t repaid.

“Those kinds of derivative products are something the government is really concerned about,” said Tian X. Hou, founder of the research firm TH Data Capital. Given Ant’s size, she said, “the government should be concerned.”

The broader worry for China is about growing levels of household debt. Beijing wants to cultivate a consumer economy, but excessive borrowing could eventually weigh on people’s spending power. The names of two of Alipay’s popular credit functions, Huabei and Jiebei, are jaunty invitations to spend and borrow.

Huang Ling, 22, started using Huabei when she was in high school. At the time, she didn’t qualify for a credit card. With Huabei’s help, she bought a drone, a scooter, a laptop and more.

The credit line made her feel rich. It also made her realize that if she actually wanted to be rich, she had to get busy.

“Living beyond my means forced me to work harder,” Ms. Huang said.

First, she opened a clothing shop in her hometown, Nanchang, in southeastern China. Then she started an advertising company in the inland metropolis of Chongqing. When the business needed cash, she borrowed from Jiebei.

Online shopping became a way to soothe daily anxieties, and Ms. Huang sometimes racked up thousands of dollars in Huabei bills, which only made her even more anxious. When the pandemic slammed her business, she started falling behind on her payments. That cast her into a deep depression.

Finally, early this month, with her parents’ help, she paid off her debts and closed her Huabei and Jiebei accounts. She felt “elated,” she said.

China’s recent troubles with freewheeling online loan platforms have put the government under pressure to protect ordinary borrowers.

Ant is helped by the fact that its business lines up with many of the Chinese leadership’s priorities: encouraging entrepreneurship and financial inclusion, and expanding the middle class. This year, the company helped the eastern city of Hangzhou, where it is based, set up an early version of the government’s app-based system for dictating coronavirus quarantines.

Such coziness is bound to raise hackles overseas. In Washington, Chinese tech companies that are seen as close to the government are radioactive.

In January 2017, Eric Jing, then Ant’s chief executive, said the company aimed to be serving two billion users worldwide within a decade. Shortly after, Ant announced that it was acquiring the money transfer company MoneyGram to increase its U.S. footprint. By the following January, the deal was dead, thwarted by data security concerns.

More recently, top officials in the Trump administration have discussed whether to place Ant Group on the so-called entity list, which prohibits foreign companies from purchasing American products. Officials from the State Department have suggested that an interagency committee, which also includes officials from the departments of defense, commerce and energy, review Ant for the potential entity listing, according to three people familiar with the matter.

Ant does not talk much anymore about expanding in the United States.

Ana Swanson contributed reporting.

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