Wall Street soars as Biden edges ahead

Biden

Wrapping up

Well that just about sums up almost 21 hours of live blogging by our London and San Francisco teams. It's been an exciting, coffee-fuelled run and still the wait continues as to which candidate will be the 46th US president.

Markets have let go of earlier volatility, relaxing in the knowledge that a "Blue wave" hasn't materialised and it'll be a tight race between Joe Biden and the incumbent Donald Trump.

We'll be back at midnight with a fresh blog to guide you through happenings in the US. 

Here are some of the day's top stories to keep you going in the meantime:

Thanks for joining! 

US markets rally to close

US markets have followed Europe's lead, discarding earlier turmoil and replacing it with rallying share prices.

Here's how Wednesday has shaped up:

  • S&P500: +2.5pc to $3,453.69
  • Dow Jones: +1.6pc to $27,912.60
  • Nasdaq Composite: +3.7pc to $11,570.81

Big tech stocks led much of the day, with the NYSE FANG+TM index, which includes major FAANG stocks like Apple and Amazon, jumped 4.3pc. Investors tried to find stocks that would thrive no matter the outcome, and a divided Congress is expected to curb efforts to tax the tech giants.

Bitcoin rallies on uncertainty

World's largest cryptocurrency Bitcoin rallied as much as 3.8pc to to $14,265, its highest level since January 2018, over an uncertain outcome in the US election.

Peer coins, including Dash and Litecoin, also advanced. The Bloomberg Galaxy Crypto Index gained more than 4% at one point.

“The longer that we don’t have a president technically and the longer that we don’t have agreement among the population is positive for crypto,” said David Tawil, president of ProChain Capital, quoted by Bloomberg.“If the courts are forced to get involved, volatility (and fear) will reign for a while. Add all this to the fact that crypto has been performing incredibly well this year -- better than gold and stocks -- crypto is going to gain and gain a lot of believers.”

FCA takes on the EU

The UK's financial watchdog hit out at the EU as it announced that British investors will be allowed to keep trading shares on European exchanges, even if the UK does not strike a deal with the bloc before the end of the year. 

It says the EU is failing to recognise that UK and European rules are 'the most equivalent in the world'.

My colleague Michael O'Dwyer reports:

The Financial Conduct Authority (FCA) threatened to ditch the EU’s financial rulebook, known as Mifid, if Brussels does not allow UK firms to retain full access to its markets. The watchdog said the temporary transitional permission, which will apply until March 31 2022, will avoid market disruption and ensure open markets and competition between financial centres. 

Narrow lead for Biden in critical states

Joe Biden took narrow leads over Donald Trump in two critical Midwestern states. Mr Trump continued to complain he was being robbed of victory.

In Michigan, Biden led by 32,000 votes of about 5 million cast and in Wisconsin, Biden led 20,000 votes out of 3.2 million cast. His campaign said it expects to declare victory on Wednesday afternoon, and the former vice-president plans to address Americans later today.

The Democratic hope (and expectation) for a “blue wave” have been stumped. Now they're hoping to scrape together enough for a win...

Uber shares rocket after California victory  

Uber has shot up 14pc to $40.81 in New York, trading to a nine-month high. Shares in Lyft, meanwhile, are up 11.5pc.

Why? Traders are banking on tech stocks likely to do well whatever the presidential outcome. But there is more to it...

My colleague James Titcomb explains:

Companies including Uber, Lyft and takeaway app DoorDash spent millions in California promoting a measure that would exempt app-based drivers from new laws classifying gig economy workers as employees, and it appears to be money well spent.

The measure - known as Prop 22 - has succeeded. The news may also clear the way for DoorDash to proceed with a long awaited IPO.

The news is important for the companies not only in California but across the US, since the Golden State is often a precursor to regulation elsewhere in the US.

However, Uber continues to face a legal battle in the UK over its treatment of drivers as “contractors” rather than employees. The Supreme Court is due to give a verdict on a long running legal battle by the end of the year.

Biden gains most ever votes

Joe Biden is up to 69.9 million votes as of 12:10pm in New York on Wednesday, according to NPR.

That means he has surpassed Obama's record for the most votes of anyone who has ever run for president.

Voda and Three price hikes

Mobile Networks Vodafone and Three are hiking customer prices, sneakily announced as all eyes are on the US election.

Meanwhile, Three is close to a €10bn (£9bn) sale of its European mobile masts to a Spanish infrastructure giant. 

My colleague Ben Woods has more:  Three owner nears £9bn mast sale to Spain’s Cellnex 

The bulls are back

"Tensions surrounding the situation have faded, especially now that President Trump has been less aggressive in relation to how the postal voting situation could play out," said David Madden, Market Analyst at CMC Markets UK

"Dealers have gotten over the initially political uncertainty and the bullish sentiment from earlier in the week is in play."

Europe markets on a high

Europe markets have had a solid run on Wednesday, driven by healthcare.

London's FTSE 100 rose 1.5pc to 5,883.26. Astrazeneca, which said it had started an accelerated review of its potential coronavirus vaccine, led the gains with a 6.6pc boost.

A round up around the continent: 

  • Paris' CAC 40: +2.2pc
  • Italy's Milan benchmark: +2pc
  • Germany's DAX: +1.9pc
  • Spain's Madrid Stock Exchange: +0.3pc

Backing bonds

US 10 and 30-year yields are continuing to sink, with investors backing bonds in a tighter-than-expected presidential race.

With the race looking tight, traders' hopes for a Biden fiscal spending package are fading. 

The yield on the 10-year Treasury briefly touched 0.9pc on Tuesday evening — hitting the highest level since June.

Just before midday on Wednesday in New York, it was at 0.8pc.

Xi calls for global cooperation

Chinese president Xi Jinping called for global cooperation in the middle of the US presidential election results rolling in. Xi and Trump's relationship has been rocky, characterised by an ongoing and bitter trade war.

“Covid-19 is a stark reminder that all countries are in a community with a shared future. No one can stay immune in a major crisis,” he said in a video address to the China International Import Expo in Shanghai. 
“We need to join hands rather than throw punches at each other. And we need to consult rather than slander each other, bearing in mind the common interest that binds us all.”

Xi used the event in 2018 to announce plans for a Nasdaq-style stock board in Shanghai, now the Star Board. This week Jack Ma's Ant Group's listing was pulled.

Read more about it: 

US tech rallies as a safe bet 

Tech stocks are boosting US market gains, even as the winner of the presidential election is up in the air. Investors could be banking on companies that will do well either way, as a "Blue Wave" failed to materialise and the race remains tight.

The New York Stock Exchange's FANG+TM Index, which has the core of FAANG stocks, jumped 3.5pc in late morning trading. Leading the S&P 500's major indexes was information technology and healthcare.

The CBOE volatility index, a measure of short-term volatility, slipped to a two-week low. It spiked to a four-month high in the run up to the election.

Elsewhere (and interestingly) stocks seen as likely winners from a Biden presidency - like infrastructure, renewable energy and marijuana - lost as much as 8pc. 

Update on indices by 11am NY time:

  • S&P500: +2.8pc
  • Nasdaq: +3.9pc
  • Dow Jones: +2pc

Handover 

That was brief stint from me, but (after getting some sleep) my colleague Louise Moon is ready to steer you through the rest of the afternoon and evening.

Thanks for following!

British investors allowed to trade on EU exchanges post-Brexit

British investors will be allowed to continue trading shares of companies listed on European stock exchanges even if the UK does not strike a so called equivalence deal with the EU before the end of the year. 

My colleague Michael O'Dwyer writes:

The Financial Conduct Authority (FCA) said the temporary transitional permission, which will apply until March 31 2022, will avoid market disruption and will ensure open markets and competition between financial centres. 

Nausicaa Delfas, who heads the FCA’s international unit, said the move would ensure UK investors can trade on the best possible trading terms. 

She said: “We want to preserve freedom for issuers from all jurisdictions to choose where and how to raise capital to support their business activities.”

The FCA is taking a more liberal approach than the EU, which is allowing European investors to buy and sell European shares on UK exchanges only in limited circumstances. 

Ms Delfas criticised the EU’s approach. She said: “At the end of the transition period, the UK’s and EU’s regimes will be the most equivalent in the world, but as it stands this has not been recognised by the EU.” 

Provident Financial says it's on course to ride out a second lockdown 

Doorstep lender Provident Financial said it was on course to ride out a second lockdown prompting analysts to predict an upturn in fortunes as unemployment rises. 

My colleague Michael O'Dwyer reports:

Provident, which lends at high interest rates to people on low incomes and without a strong credit rating, said bad debts remained stable and that fewer customers than expected were taking payment holidays. 

The company said its balance sheet was robust and that it was on track to meet expectations for the current year. 

Malcom Le May, the firm’s chief executive, said: “We remain vigilant for possible economic shocks, including those caused by further local and national lockdowns. Such measures will inevitably have an impact on customer expenditure patterns and loan origination.”

Provident has been hit hard by the pandemic, reporting a £28m loss in the first six months of the year and all but ceasing new lending during the first lockdown. Lending in its home credit division remains at 60-70pc of normal levels. 

A surge in job losses could hurt customers’ ability to repay loans but it has so far proven more resilient than its rivals. 

Its smaller competitor Non-Standard Finance was forced to deny in June that it was on the brink of going bust and Amigo, the guarantor lender, said this week it will not be able to restart lending until 2021. 

Their struggles, coupled with a rise in the number of people struggling to pay the bills, could boost business for Provident. 

Analysts at Jefferies said: “Unlike some peers, [Provident] will be in business after the pandemic, and will likely emerge into a bigger addressable market with fewer competitors.”

Wall Street pops at the open 

US stocks have opened firmly in the green, driven by a rally in tech shares, as Joe Biden pulls ahead in the election count.

Credit: Bloomberg 

Biden's odds drop as he takes lead in Michigan 

It's not so much a blue wave as a very slow-moving ripple, but Biden has taken the lead in Michigan by a few thousand votes. 

His odds to win are now 1/4 – the lowest level ever on the Betfair Exchange – meaning he has a 78pc chance of victory. 

Handover

Time for me to hand over to my colleague Simon Foy. Thanks for following along today!

Lloyds plans to cut 1,000 jobs

Lloyds Banking Group, Britain’s biggest high-street lender, has unveiled new plans to axe another 1,000 roles as it continues to slash costs. 

My colleague Lucy Burton reports:

The bank, which revived its restructuring plans in September after temporarily freezing any redundancies at the start of the pandemic, told staff on Wednesday that it was cutting 1,070 roles but creating 340 new ones.  

However Unite, the union, said the decision to cut roles was “shameful” given how hard staff had worked during the pandemic and Lloyds' bumper third quarter results last week. It has urged the bank to freeze its plans. 

The lender said last week that pre-tax profits reached more than £1bn for the three months to September, almost double City estimates following a boom in home lending and a much smaller than expected provision for soured loans.

Philly Enquirer reporter: Path open for Biden victory in PA

Jonathan Tamari from Pennsylvania’s Philladelphia Inquirer tweets:

Coming up tomorrow: Early BoE decision and Sunak statement

Two updates on the UK stimulus front:

  • The Bank of England has shifted its Monetary Policy Committee decision to 7am. It had previously been scheduled for noon.
  • Chancellor Rishi Sunak will make a statement to the Commons on spending.

US private payrolls change majorly misses estimates

The US added 365,000 private payrolls last months, according to ADP, falling well short of expectations for the a 643,000 increase.

The figures bodes poorly ahead of Friday’s labour market report, and suggests a rebound in hiring has lost pace.

Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said:

The labor market continues to add jobs, yet at a slower pace. Although the pace is slower, we’ve seen employment gains across all industries and sizes.

Market moves

Just over halfway through the European market session, equities have hit day highs. The pan-continental benchmark Stoxx 600 rose as much as 1.2pc.

Newsnight’s Lewis Goodall tweets:

Hundreds of thousands of ballots still be counted in Michigan

CNN reporter Betsy Klein tweets: 

To reiterate, that remains good for Joe Biden, who is likely to pick up up more mail-in and absentee ballots based on current trends. 

Democrat candidate wins in key Michigan district

More good news for Joe Biden – Michigan Capitol news source MIRS says Rep. Elissa Slotkin has been re-elected as congresswoman for  Ingham County with a 52,000 vote margin.

The district is seen as a bellwether, and if those results are echoed in the Presidential vote, could let Mr Biden close the narrow, 12,000 vote gap between him and Donald Trump across the state. On top of that, results for Detroit are still coming in, and remain very favourable to the Democrat.

John Lewis cuts 1,500 jobs

John Lewis is swinging the axe on another 1,500 jobs at its head office as it battles to restore profitability and streamline its business. 

My colleague Laura Onita reports:

The employee-owned firm expects to save £50m from the latest round of cuts, as it looks to save £300m a year by 2022. 

The move comes four months after it said eight of its 50 department stores would never reopen following the first lockdown, affecting 1,300 roles. The mutual has around 80,000 staff. 

It also announced that finance director Patrick Lewis, who was in the running for the chairman role that ultimately went to Dame Sharon White, will leave at the end of the year after a 26-year tenure. 

Mr Lewis is the only member of the original founding family still working in the business; his great grandfather established the first John Lewis store. 

Wisconsin Democrat chair: We’ve won the state

The chair of the Democratic Party of Wisconsin tweets: 

Krugman: Republican Senate win is bad news

Nobel prize-winner Paul Krugman has weighed in on the state of play. He’s pretty pessimistic about the prospect (as currently look likely) of a Joe Biden presidency with a Republican-controlled Senate.

Retailers face £6.8bn bill for second lockdown

A person walks past a social distancing sign near the High Street in Winchester, Hampshire Credit: Andrew Mathews/PA Wire

The second national lockdown in England is expected to cost non-essential retail outlets £6.8bn, according to research from Retail Economics. 

My colleague Simon Foy reports:

The new restrictions, which will come into effect from Thursday and last until at least Dec 2, will hammer the industry as it moves into the key Christmas period, the consumer insights company said.

To compound matters, pent-up demand in December could leave shoppers queuing for hours when stores reopen. 

Nicholas Found, a senior consultant at Retail Economics, said: “With Christmas around the corner, this couldn’t have come at a worse time for retailers.

“While some consumers will choose to hold off spending this month, pent-up demand in December could leave shoppers grappling queues both on- and offline given social distancing in warehouses, delivery capacity and restrictions on shopper numbers in store.”

Detroit vote comes in strongly for Biden

Voting is coming in for Detroit, the biggest city in Michigan. New York Times reporter Kathy Gray says the numbers look good for Biden, who is pulling in more than 90pc of the city’s vote with almost half the ballots counted:

US set for narrow gains at open

US shares are set to make narrow gains at the open, with futures trading just about in positive territory after a rocky few hours that saw prices shift sharply in both directions. 

Michigan absentee vote coming in now

Bloomberg reports that the Lansing absentee ballot is starting to come in now. That’s the Michigan state capital, which means the count is likely to favour Joe Biden (who has been performing better in absentee and mail-in votes, as well as urban areas).

NYT reporter: Biden a favourite across key votes

An interesting thread of tweets from New York Times election wonk Nate Cohn, wrapping up the situation in some of the key battlegrounds:

Dollar edges down as Biden path looks more possible

The dollar has weakened over recent minutes as Joe Biden’s victory chances grow. If the Democrat clearly passes 270 Electoral College votes, that would allow him to declare victory and possible ease market jitters. Still, it’s incredibly tight, and we might we be waiting until Thursday for a clear outcome.

Nevada goes to sleep

Nevada has reportedly paused its vote count overnight. Given it’s just before 3am there, this tweet by the state’s electoral officials suggests we’ll be waiting *at least* six hours to hear more from there.

We might well hear Wisconsin’s results before then, and Georgia also might come out before than. That means that, possibly, we could get a provisional result by late afternoon/early evening London time.

Betting odds point to Biden victory

For what they’re worth, betting odds now suggest a Joe Biden victory is more likely.

Nevada looks incredibly tight

Nevada, which Democrat strategists had been hoping to hold, looks incredibly tight currently. Joe Biden is only slightly ahead, with just a few thousand votes in it. Jon  Ralston, editor of the Nevada Independent, says the result won’t come out “tonight” (it is 2:35am in Nevada). A lot of mail-in ballots have yet to be counted.

Money round-up

Here are some of the day’s top stories from the Telegraph Money team:

Wisconsin may need three more hours

Wisconsin’s elections director, Julietta Henry, says all the votes from Milwaukee County are now in, and the final count should emerge in about three hours.

Betfair’s estimate of the likelihood of a Donald Trump victory has sunk in recent minutes, briefly dropping below 50pc from a figure as high as 70pc earlier.

Joe Biden takes lead in Wisconsin

As promise, more on Wisconsin, where challenger Joe Biden has taken a slim lead according to reports in recent minutes. 

The Democrat is ahead by only a few thousand votes, but if he wins the state will have a clear path to an electoral victory.

If he wins Wisconsin and Nevada (where he is also leading) and flips Michigan, he will clear the magic 270 mark in Electoral Collegee votes.

Bloomberg notes that if Mr Biden wins any two of Michigan, Wisconsin, Pennsylvania and Georgia, Mr Trump will lose the Electoral College vote count.

Market moves

European equities have steadily risen today, and have hit a new high in recent minutes (this graph is delayed by about 15 minutes) on reports Joe Biden has taken a lead in Wisconsin. More on that in a second… 

European composite PMIs compared

Here’s how composite PMI readings look across Europe’s biggest economies: 

As some strong-posted lockdown rebounds, only Germany and the UK’s private sectors registered growth in October. 

UK services sector suffers slowdown

The UK’s services sector lost steam more quickly than originally feared last week despite a continued activity expansion.

The services PMI came in at 51.4 versus a “flash’ estimate of 52.3, where the growth threshold is 50. The composite gauge, a weighted balance of services and manufacturing, was 52.1 versus an estimate of 52.9.

 IHS Markit, which gathered the data, said:

October data pointed to a much weaker rise in business activity across the UK service sector, with the rate of expansion the slowest for four months. There were also signs of a sharp reversal in demand conditions, with new work falling for the first time since June. Survey respondents in the hospitality, transport and leisure sectors widely commented on an adverse impact from tightening restrictions on trade due [Covid-19].

Here are some key findings:

  • Growth was often linked to a continued recovery in business operations after the national lockdown period during the second quarter of 2020 and the restart of work on delayed projects
  • In contrast to the upward trend for business activity, latest data indicated a drop in new orders for the first time since June
  • Reduced volumes of new business resulted in lower backlogs across the service economy in October
  • Employment numbers decreased for the eighth consecutive month in October, which was primarily linked to redundancies in response to shrinking revenues during the pandemic
Credit: IHS Markits/CIPS

Tim Moore, economics director at IHS Markit, said:

October data indicates that the UK service sector was close to stalling even before the announcement of lockdown 2 in England, with tighter restrictions on hospitality, travel and leisure leading to a slump in demand for consumerfacing businesses.

This was only partly offset by sustained expansion in areas related to digital services, business-tobusiness sales and housing market transactions

Wisconsin result coming up

Reports from the US than Wisconsin’s outcome should be coming up in about half an hour as – amazingly – it will take that long to upload the ballot results.

Final PMI reading: Eurozone economy was steady last month

The Eurozone’s economy was steady last month as gains in manufacturing were offset by a slowdown in services-sector activity, according to the final purchasing managers’ index reading.

The composite PMI gauge for the bloc (a weighted balance of activity change in services and manufacturing) came in at 50 – exactly on the no-change level. Finalised services readings across the top economies came in stronger than the ‘flash’ estimates, although the services slowdown is widespread.

 IHS Markit, which gathered the data, said:

In line with recent developments, the headline index masked the continuation of a two-speed economy in October. Manufacturing output growth was sustained, and to the strongest degree in over twoand-a-half years. In stark contrast, service sector activity contracted again, deteriorating to the greatest degree since May. 

Here are some key highlights:

  • Germany was the only nation to register an expansion in private sector activity, with growth reaching a three-month high
  • All other nations registered contractions in activity since the previous month with Spain registering by far the sharpest fall, followed by France. Italy and Ireland recorded marginal declines in activity
  • For the first time in four months, levels of incoming new business declined as strong gains in manufacturing new work were more than offset by weakness in services
  • By country, job losses were recorded across all nations, with the sharpest reduction seen in Spain
  • A fifth successive monthly increase in input costs was indicated during October

Chris Williamson, IHS Markit’s chief business economist, said:

The eurozone’s economic recovery stalled in October as containment measures were stepped up to fight second waves of COVID-19 infections. Service providers have been hit especially hard, led by intensifying weakness in consumer-facing sectors such as hospitality, offsetting the brighter news seen in manufacturing during the month.

US bond yields drop as uncertainty rises

Yields on US Treasuries – which move inversely to prices – have dropped steadily overnight as nervous investors piled into bonds. Here’s how the yield on a generic 10-year bond has moved:

FTSE flattens out 

The FTSE 100 has quickly flattened out after a sharp drop at the open. The pound is offering some support to London’s blue-chips, but it also appears the mood has calmed slightly.

Barclays: Bonds more vulnerable than equities on uncertain outcome

Strategists at Barclays say bonds looks more vulnerable than equities as markets react to the inconclusive US election result. They write:

Equities rebounded in the last two days, but are still lower than their level of two weeks ago, likely due some remaining uncertainty around the US election result, as well as worries over the 2nd Covid wave. This may thus leave them slightly less vulnerable to a dragged out election result and the possibility of a dispute in the next few days/weeks.

Bond yields on the other hand continued to rise into the election, and therefore may have further to fall in the short run as investors rush to safer assets over the period of heightened uncertainty. Early price action is indeed showing a sharp fall in US yields and an unwind of the ‘blue wave’ trade.
Credit: Bloomberg/Barclays Research

They added:

The disputed 2000 election result could provide a roadmap for asset returns in the short term. Post the 2000 election, where there was no clear winner for several weeks, markets turned risk-off until the Supreme Court ended the vote recount on 12 December and declared George W. Bush President.

Both US and European Equities fell by about 10% and VIX moved up initially, although we note it was at far lower levels than today’s elevated level of 36. Nevertheless, with markets pricing in a higher chance of a Biden win ahead of the elections and given the fragile economic backdrop, actual results so far being unclear may further accentuate market jitters.
Credit: Bloomberg/Barclays Research

BMW sales rebound

Robots on a MINI production line near Oxford Credit: TOLGA AKMEN/AFP/Getty Images

BMW has rebounded strongly in the third quarter as the German luxury carmaker recovered from coronavirus lockdowns which caused the automotive market to stall in the previous period.

My colleague Alan Tovey reports:

The company said rising demand in China helped drive deliveries up by 8.6pc worldwide, with 675,592 cars handed over to customers. This was a record high for a quarterly result, and includes deliveries of the company’s Mini and Rolls-Royce marques.

Revenues slipped 1.4pc to €26.3bn but pre-tax profit rose by 10pc to €2.5bn. 

Cost efficiency and cash management were attributed to the improvement, but BMW warned demand in all markets is likely to be lower this year because of Covid-19. As a result, it forecast that annual profits could still be zero.

BMW also said that all four of its German car factories will be building electric vehicles “in the foreseeable future”, a move it said would allow the company to “safeguard capacity utilisation in the long term and therefore also the high level of employment at its plants in Germany”.

Pennsylvania’s governor: We will count every vote

Tom Wolf, the Governor of Pennsylvania – which is looking increasingly likely to be key to this election – tweets:

Full report: M&S drops into red amid clothing collapse

My colleague Simon Foy has a full report on Marks & Spencer’s interim results. He writes:

Marks and Spencer swung to a loss for the first time in its 94 years as a public company as it warned of “significant uncertainty” ahead due to the pandemic and Brexit.

The struggling retailer posted a £87.6m pre-tax loss for the six months to Sept 26, compared to a £159m profit for the same period last year. Revenue fell almost 16pc to £4.09bn. 

M&S’s clothing and home business was hammered during the crisis, with sales down by more than two-fifths.

European stock markets open lower

Stocks have opened sharply lower in Europe as the US election result remains on a knife edge.

Credit: Bloomberg TV

When to expect results from the remaining states

Bloomberg has rounded up how things stand in the states that have yet to count their absentee ballots:

  • Wisconsin: Milwaukee is likely to complete its count of absentee ballots around 3 a.m. local time, County Clerk George Christenson said.
  • Pennsylvania: Philadelphia is expected to resume reporting on mail- in ballots at about 9 a.m. on Wednesday. State officials say a final result should be ready “within days.”
  • Michigan: “I’m confident we’ll have more of an update for Detroit in Highlights the morning,” said Secretary of State Jocelyn Benson, who added she expects the full tabulation of every vote in Detroit to be complete by late Wednesday.
  • Georgia: Wednesday morning should bring more clarity on the Peach State’s results.
  • North Carolina: State officials have said they expect 97% of the vote 225 to be tallied heading into Wednesday morning hours.
  • Nevada: State officials have said that final results would not be available until several days after the election, per NBC. 

US futures hit session lows as pound extends losses

Futures trading on the S&P 500 and Dow Jones has continued to deteriorate, with both hitting their lowest levels of the day.

Meanwhile, the dollar is continuing to strengthen amid a global risk-off move. That’s hitting the pound (which should, in turn, offer some support to the FTSE 100):

Biden wins Arizona

The AP says Joe Biden has won Arizona, the first state which the Democrat challenger has managed to flip. It was seen as a key battleground.

Chinese services activity gains steam

Services-sector activity in China has gained pace amid a rise in new orders, according to the latest Caixin purchasing managers’ index.

The gauge came in at 56.8, easily clearing the no-change threshold of 50. 

Caixin said:

Notably, the rate of growth was the second-fastest since August 2010 (after June 2020). Business activity has now risen in each of the past six months, to signal a sustained recovery from the Covid-19 related drops in activity seen earlier in the year.  

Quick points on Trump’s court challenge claim

Plenty of questions swirling over Donald Trump’s stated plan to go to the Supreme Court to stop further vote counting. Here are a few important points to note on that front:

  • The uncounted ballots will largely be from mail-in votes, and are expected (based on polling) to favour Joe Biden more than Mr Trump (who is expected to have done better in in-person voting)
  • Several states have laws that do not require them to count all votes on election day
  • Mail-in votes that are postmarked before election day are still valid, even if they are received after election day

In a nutshell…

European stock futures extend losses

The Stoxx 50 is now down 1.8pc in futures trading, extending its losses.

Trump finishes speaking 

After a forgettable speech by Mike Pence, Donald Trump has left the East Room.

In case the significance of that speech was lost on anyone, the president:

  • Falsely claimed he had won the election
  • Accused his opponents of fraud
  • Said he would go to the Supreme Court in an attempt stop further vote counting

By any measure, this is seismic: the US President has called for a huge sweep of ballots to be discounted. In particular, this would affect millions of early votes, which polling has suggested may predominantly be for Joe Biden.

Trump: This is a fraud

And there it is. The President says “this is a fraud on the American public”, claiming he was getting ready to win the election, adding “frankly we did win this election”.

He says “we want the law to be used in a proper manner”, saying he will go to the Supreme Court in a effort to stop further vote counting.

Mr Trump adds: “frankly, we did win this election”.

His comments are pushing US stock market futures lower.

Trump: ‘Tremendous’ lead in Pennsylvania

Donald Trump also claims he is winning Pennsylvania and Michigan. He says the Republicans have had a “big night”.

Trump alleges disenfranchisement, claims NC/GA victories

Donald Trump says “millions and millions of people voted for us tonight, and a very sad group of people is trying to disenfranchise that group of people, and we won’t stand for it”, without citing evidence for the latter claim.

He says, without evidence, that he has won North Carolina and Georgia.

Trump speaks

The incumbent President has begun speaking (video in 7:06am post).

Trump campaign says Democrats trying to steal election

My colleague Ben Riley-Smith tweets:

Election in the balance: analysts react

Europe is waking up the prospect of a protracted post-election miasma: we’re still a long way off knowing who the nest President of the United States will be. The only certainty is uncertainty: the ‘blue wave’ has failed to materialise and the Republicans look set to hold the Senate.

Lauri Hälikkä, a foreign exchange strategist at SEB, said:

The final US election result is not expected before Friday, but already now we can say that the race has once again turned out to be much tighter than the polls have been suggesting during the past months.

President Trump is in the lead in many battleground states which has flipped betting odds in favor of Mr Trump. A blue sweep is getting less likely which has had an immediate impact on the markets, with yuan weakening, the dollar strengthening and oil prices increasing. 

Richard Buxton, from Jupiter Asset Management, adds:

Any suggestion that the outcome could be contested by either the Trump or Biden campaigns is likely to be viewed dimly by investors, and could give way to a period of renewed volatility in equity and currency markets.

It is important to point out that, at the time of writing, a Biden win is still not “off the cards,” although it seems highly probable that, even if Biden does win the presidency, it will be by a smaller margin than many had forecast.

Trump speaking shortly

We have a video feed from the East Room of the White House now. Donald Trump should be speaking shortly. If he echoes his tweeted claim that there is an ongoing attempt to steal the election, this could be a huge moment for US politics. 

M&S beats revenue expectations but suffers first loss

Quick corporate flash from the UK: Marks & Spencer has beaten analyst expectations with first-half revenues of £4.09bn, versus an estimate of £3.99bn. 

That’s a 15.8pc drop compared to the same period last year. The high street stalwart made a £87.6m statutory loss before tax, its first-ever loss as a listed company.

Chief executive Steve Rowe said:

In a year when it has become impossible to forecast with any degree of accuracy, our performance has been much more robust than at first seemed possible. 

We’ll have more on those results later.

Things get weird…

Shares in Shenzhen-listed company Wisesoft, the Chinese name of which (“Chuan Da Zhi Sheng”) sounds like “Trump wins big” to Mandarin speakers have popped up as much as 9.8pc today, echoing a 6.4pc jump after the election result back in 2016.

European stocks extend losses

Futures contracts for Europe’s Stoxx 50 – an index of the continent’s biggest companies – are trading down 1.2pc currently, extending their losses and pointing to a weak start for the continent’s indices at the open in just over an hour.

Georgia in play as race tightens

Another interesting contest is Georgia, a typically reliable state for the Republican Party. Based on current counting, Donald Trump is slightly ahead, but the state has – remarkably – sent its poll counters home, meaning counting has been paused.

At present, Joe Biden is just 118,000 votes behind, and the areas yet to be counted include the suburbs of Atlanta – seen as likely to lean Democrat.

One outcome can be ruled out: a draw

One quirk that has emerged in recent minutes: due to the way Nebraska counts electoral college votes (on a district-by-district basis), a victory for Joe Biden in the state’s 2nd Congressional District means the likely maths for a dead tie is apparently no longer possible. It could still happen, but would require fairly bizarre results from here.

NBC: Trump speaking in next half an hour

Broadcaster NBC says Donald Trump expected to give remarks from the East Room of the White House in the next half an four. The President isn’t famed for his punctuality, so we’ll have to wait and see when he shows up. Markets will be watching closely, particularly for signs that the President is lining up a legal challenge over tonight’s results, following his (unsubstantiated) claims of foul play.

Fox: Several states won’t be called today

Fox News is reporting that four states – Georgia, Wisconsin, Michigan and Pennsylvania – are not likely to be called this morning (remember the US is five hours behind the UK currently).

That appears to confirm that we are on track for a protracted, messy outcome from a markets perspective. Investors had hoped for clarity – it doesn’t look like they’re going to get it.

ING: Financial markets set for more volatility

Chris Turner, global head of markets at ING, says currency markets have been sent into a spin by the outcome so far:

One of the few things clear so far is that we are not going to see a Democrat landslide win as polls had suggested. That has wrong-footed an FX market which was positioned for some clarity.

He warned confusion could continue for some time, with warnings that counting in Pennsylvania and Michigan, the former of which looks like a crucial state, could take a long as until Friday to finish due to high levels of mail-in voting. That could boost the dollar further and send investors to safe-haven currencies, such as the Japanese yen.

How the FTSE 100 has shifted overnight

It’s been a rollercoaster morning already for the FTSE 100, which is currently set to open slightly lower following the night’s events.

Futures contract prices deteriorated overnight as it became clear no ‘blue wave’ had materialised, before jumping again on signs Donald Trump may have secured a surprise victory. As things stand, the mood is slowly souring as investors accept that we might be waiting a while for a full result.

AP says Trump has won Texas

The Associated Press projects Donald Trump has won Texas, a crucial battleground state that the Democrats had been pushing hard to win.

Twitter explains Trump warning

Twitter says it has placed a warning on Donald Trump’s tweet baselessly accusing Democrats of trying to steal the election (see 6:04am update). It has taken similar steps at other points in the campaign when the President has shared false information:

The President has reposted his earlier tweet, fixing the Poles/polls type but leaving the main claim intact:

Voting closes in Alaska

Polls have closed in Alaska, the easternmost part of the US, meaning no Americans are currently voting.

Trump accuses Democrats of trying to steal election as Biden says ‘We’re gonna win this’

With the election outcome still far from clear at the time of going to pixel, both main candidates have recently spoken out, with a remarkably different tone.

Donald Trump has accused the Democrats of trying to steal the election, without citing any evidence. Here is a screenshot of his tweet, which appears to have since been deleted:

Credit: Twitter

 Joe Biden, meanwhile, has told supporters that an outcome could take a while to arrive, but that he expects to win.

Handover

I’m handing over to my colleague Louis Ashworth in London, who will pick up the blog from here and bring you the latest market reaction to the election, as well as breaking business news in London.

Asian markets update

In Tokyo, the Nikkei 225 is up around 2pc, while Hong Kong's Hang Seng and the Shanghai Composite is trading roughly flat.

Investors have taken something of a pause in trading: no clearer picture has emerged in the last couple of hours, with the election still apparently on a knife edge.

Alibaba is trading 7.5pc down in Hong Kong after yesterday's shock news that fintech spinoff Ant Group's mammoth listing has been suspended by Chinese regulators.

Uber on the ballot in California

Away from the markets, today's election also sees a potentially defining vote for Uber in California. Voters have been deciding on Proposition 22, a ballot measure that would exempt drivers for ride-hailing and delivery apps from a gig economy law that would treat drivers as employees.

Uber, Lyft and delivery app DoorDash have been putting more than $200m into supporting the measure. Defeat would be a major blow, potentially seeing the apps cut their operations in the state, and meaning tougher gig economy crackdowns across the US.

It is early days, but Proposition 22 is leading in initial results, with 59.8pc of votes.

Protests against Uber and Lyft last year Credit: Bloomberg

 

Volatile trading as investors unwind Biden bets

In the run up to Tuesday's election, the smart money had been on a Biden victory and a Democrat majority in the Senate. With that very much in the air, market activity is now as much about unwinding those trades as much as investors laying bets on a Trump victory.

As well as US bond yields dropping, stock futures are rising - partly because a lower chance of a Biden victory means a lower chance of America's biggest companies such as Google and Facebook being broken up.

Here's the state of US futures:

  • S&P: +1.73pc
  • Nasdaq: +3.54pc
  • Dow: +0.8pc

US treasuries drop as Trump picks up pace

US bond yields have dropped as traders anticipate a much closer race than they had just a couple of hours ago.

Lower yields can be read as a sign that the picture is shifting towards Donald Trump: a Biden presidency was expected to mean more spending, and thus more borrowing.

A clean Democrat sweep also increased the likelihood of a big stimulus to counter the economic downturn caused by coronavirus.

Handover

I'm handing over to my colleague James Titcomb, who is on the ground in San Francisco. Stay tuned for updates as the results roll in. Thanks for joining!

A quick tally  

Donald Trump has won: Louisiana, North Dakota, South Dakota, Wyoming, Nebraska, Arkansas, Oklahoma, Tennessee, Mississippi, Alabama, South Carolina, West Virginia, Kentucky and Indiana.

Joe Biden has won: Vermont, New York, Delaware, Rhode Island, New Jersey, Massachusetts, Maryland, Illinois, Delaware, Virginia, New Mexico and Connecticut.

 

Rush to close deals before election 

Companies announced a record $143.1bn of mergers and acquisitions globally in the past seven days, rushing to complete transactions before this contentious election, reported Bloomberg.

This is the highest for any week before a US presidential vote since Bloomberg started collecting data. It is more than double the tally before the 2016 election.

The news service says:

The flurry of deals has been across industries. Advanced Micro Devices Inc. announced a $35 billion takeover of Xilinx Inc., helping make this year one of the busiest ever for semiconductor transactions. Then Inspire Brands Inc., the owner of Arby’s and Buffalo Wild Wings, sealed an $11.3 billion purchase of Dunkin’ Brands Group Inc. that will turn it into a fast-food giant.

US futures swing negative

S&P 500 futures have dipped into negative territory, reversing an earlier climb of 1pc.

Investors confidence over an early election decision and a Democratic victory - which had boosted markets - has waned. 

Mr Trump's performance in the polls is exceeding expectations, particularly during early counting in the bellwether state of Florida.

 

China opens up, Hong Kong down

Mainland China and Hong Kong shares seemed to lack direction on Wednesday open.

The Shanghai Composite opened by edging up just 0.07pc to 3,273.43, while the CSI 300 of large caps added 0.08pc to 4,781.45.

Across the border in Hong Kong, however, the Hang Seng dropped 0.8pc to 24,743.35.

Alibaba dragged Hong Kong, plunging nearly 10 percent after the debut of its financial unit Ant Group was suspended on Tuesday.

Hong Kong futures pointing down

Hong Kong's Hang Seng Index (HSI) futures aren't looking as rosy as the majority of Asia's positive start to the day.

By 9:20am Hong Kong time, 10 minutes before open, futures are down 1pc to 24,777.

So far in Asia:

  • Tokyo's Nikkei up 1.2pc to 23,569.14.
  • Seoul's Kospi up 0.1pc to 2,346.32.
  • Sydney All Ordinaries down 0.9pc to 6,207.80.

Live map - every state, every vote

Follow updates of the latest projections with our cracking map: 

 

Social media on disinformation alert as votes roll in

As all eyes are on Florida, the largest battleground state in terms of population, which could provide an early signal of where results are headed tonight. It has a reputation for being a bellwether: the Sunshine state's winner has become president in 13 of the last 14 elections. 

But no matter the result in Florida and elsewhere, Facebook and Twitter have vowed to stop candidates prematurely declaring victory. 

The social media companies said they would apply warning labels to posts or tweets affirming that a presidential nominee has won in individual states or the overall election, reports James Titcomb.

Tokyo opens higher

Tokyo's Nikkei 225 index opened over 2pc higher on Wednesday, tracking global market rises as polls begin to close.

Japan's benchmark was up 2pc at 23,763.75 in early trade.

Mr Trump has won West Virginia as well as Kentucky, a solidly conservative state, in the first 2020 election results. He won by a huge margin of 29.8 points four years ago, in one of his strongest performances of the night.

Meanwhile Joe Biden has won Vermont and Virginia.

US futures look set to rally again on Wednesday

US equity futures pointed to further gains after the biggest two-day rally since September, as investors speculated America would get a clear election decision and a spending bill would be delivered this year. 

December contracts on the S&P 500 added 0.7pc as of 7:25pm in New York, according to Bloomberg. It jumped 3pc in the past two days. 

Polls have started closing on much of America's East Coast, including in some key battle grounds like Georgia. Florida and Pennsylvania are still accepting votes.

Final polls taken before voting began Tuesday showed Democratic candidate Joe Biden with a solid lead over the incumbent Donald Trump, making some investors speculate there'll be a quick decision over who will win. This stemmed to remove major uncertainty. 

Stock markets bullish on Tuesday  

Europe’s main bourses all rose for a second consecutive day ahead of polls closing on Tuesday, led by the Milan exchange in Italy and followed closely by Frankfurt, Madrid, Paris and London.

The continent trailed Asia Pacific which saw a sea of green across all of the main bourses. China’s Shanghai Composite and Tokyo’s Nikkei both boosted 1.4pc, while Hong Kong’s Hang Seng index rose 2pc.

America's markets were also positive despite the election being one of the most controversial in decades. 

Polls start to close. Here we go...

Good evening. Strap in for what will hopefully be an exciting evening of watching the US presidential election unfold, as the polls start to close.

Global stock markets rallied on Tuesday, in anticipation of a win by Joe Biden. Traders are expecting the Democratic candidate to fulfil his promise on post-election economic stimulus, if victorious.

5 things to start your night of election watching

1)  Share prices on the up as traders anticipate undisputed Biden win: Global stock markets collectively ­rallied on Tuesday, as investors bet on an uncontested Democratic victory in the US presidential election.

2) Five charts that show whether Trump created the ‘greatest economy ever’: The incumbent US President is promising a strong post-Covid recovery but his economic record is patchy after the first term

3)  Facebook and Twitter on alert to stop US election candidates claiming premature victory: Companies will apply warning labels to posts declaring victory before official declarations are in amid fears of drawn out counting

4) Biggest threat to the US economy is a disputed result: Donald Trump has threatened to contest the results of the election in the case of a narrow defeat, putting Wall Street on high alert

5) Tech titans want Trump dilemma to disappear: The US President may have increased their profits, but if he wins re-election tomorrow, their companies may be torn apart.

Coming up today

Corporate:  M&S, Stobart Group (Interim results); Morgan Sindall, Provident Financial, Smurfit Kappa (Trading statements)

Economics: Composite and services PMI final reading (UK, China, Germany, France, Italy, Spain, EZ, US); ADP employment change, trade balance (US)