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Sunday scaries

Written by Maria Julia Pieraccioni, associate 
Edited by Adam Shaw, associate partner
29 October 2021

Good morning,

Before it was known for trick-or-treating and bobbing for apples, Halloween was a Celtic festival known as “Samhain”, a day that celebrated endings and beginnings. More specifically, in the Celtic case, it marked the end of the summer harvest and the beginning of winter—a de facto new calendar year.
 
It is fitting, therefore, that the G20 summit in Rome this year should fall during Halloween weekend. With COP26 just days away, this G20 summit may very well be a turning point, both for the continuity of diplomatic relations and the commitment of the world’s 20 largest economies to curbing climate change. In a speech delivered in Paris a week ago, COP26 president Alok Sharma put it in unequivocal terms: “the response of the G20 will quite simply be, make or break”.
 
The heat is on.
 
The overarching theme for the Italian presidency of the G20 this year has encompassed three pillars: “people, planet and prosperity”. Unsurprisingly the global economy and global health, climate change and the environment, and sustainable development are all on the agenda. Within these three working sessions, the G20 will touch upon issues such as equitable access to vaccines, energy prices, international taxation, global preparedness for future pandemics, but also the need to increase their commitments to meet the Paris Agreement goals and accelerate progress towards the Sustainable Development Goals. Considering the G20 represent 80% of global GDP and create 80% of global gas emissions, the summit may very well fall into finger pointing and apologias.
 
However, the likelihood of the summit being greenwashed greatly diminished earlier in the month, as Russian president Vladimir Putin, Japan’s prime minister Fumio Kishida, and Mexican president Andres Manuel Lopez Obrador announced they would definitely not attend the summit. Russia is dealing with a sudden and dangerous spike in Covid-19 cases, while Kishida must remain in Japan because of the general elections held on 31 October. Three days ago, Chinese president Xi Jinping announced he will not make the trip to Rome but will send his foreign minister instead.
 
Sources told Reuters that “the absences would not compromise the chances of making good progress at the summit”. However, that awaits to be seen, after an unsuccessful meeting of G20 energy and environment ministers in Naples in July. At that meeting, ministers failed to reach a unanimous agreement on ending fossil fuel subsidies and phasing out coal power, with the Italian government asking leaders to try and bridge those differences in Rome.
 
While the absence of China and Russia will perhaps mean more smooth sailing for the countries present, it will also do little to bring them into the “climate fold”. And that, I reckon, is one for the Sunday scaries.

News

The UK transport secretary, Grant Shapps, has announced the remaining seven countries on England’s Covid travel red list will be removed from next Monday. However, Shapps remarked that the traffic light system itself will be continuously reviewed and updated, rather than being discarded completely.
 
The British Medical Association (BMA) and the government have reached a resolution over face-to-face appointments in England. GPs had threatened industrial action over the government’s plans to force them to see any patient who demands an appointment in person. The BMA claimed that government had made “significant concessions”.
 
During its annual Connect event to reveal its latest innovations, Facebook announced it will move away from device-related services and into a new “metaverse”. These plans include heavily investing in virtual reality and augmentation of its existing apps’ features. The company also announced that it is rebranding to Meta, although the individual platforms – Facebook, Instagram and WhatsApp – will retain their existing brands.

Business and economy

President Biden has announced he reached a framework agreement with Democratic leaders on his economic agenda, in an effort to progress his $1.75 trillion spending package. The new terms scale back the president’s ambitious plans; however, Biden noted, “that’s what compromise is. That’s consensus. And that’s what I ran on.” (£)
 
Christine Lagarde, head of the European Central Bank, reaffirmed the ECB’s position that a rise in interest rates will be unnecessary, as price pressures will ease as we move into 2022. Lagarde recognised that inflation has dominated policy discussion in recent months but affirmed the ECB’s view that inflation in the eurozone will remain below the 2% target in the coming year. (£)
 
The chief executive of Royal Dutch Shell has warned that a break up of the company would not make “any positive difference” to the energy sector’s climate transition plans. US hedge fund Third Point, led by Daniel Loeb, has acquired a $750m stake in the company, with Loeb calling for its divisions to be split up.

Columns of note

The pressure on the Chinese real estate market bubble is eerily reminiscent of the same pressures that led to Japan’s 1990s economic collapse, argues Robin Harding in the Financial Times. While Harding shies away from pinpointing Evergrande as the catalyst to an inevitable systemic collapse, he does draw considerable comparisons between the two East Asian economies. The most important similarity between 1990s Japan and China today seems to be that a “certain kind of growth has reached the end of the line”. In Harding’s own words, “in both cases, a development model based on extremely high levels of investment and accumulation of physical assets hit the point of diminishing returns”. (£)
 
Elsewhere, Poland’s supreme court risks creating one of the biggest crises in European membership since Brexit, argues David Aaronovitch in The Times. At the beginning of the month, Poland’s supreme court ruled that Polish courts superseded EU ones, going against one of the basic tenets of EU membership. Aaronovitch outlines the hypocritical attitude of populist member states such as Poland and Hungary, which, despite this ruling and arguing against many EU tenets, are keen to remain members of the bloc. As the biggest recipients of EU funds, Poland and Hungary may soon learn the hard way that you can’t have your cake and eat it too— “them the rules!”. (£)

Cartoon source: The New Yorker

Markets

What happened yesterday?

London stocks closed down slightly on Thursday, with the FTSE 100 ending the session 0.05% lower. Investor confidence took a hit after the latest policy announcement from the European Central Bank confirmed plans to avoid a rise in interest rates and GDP data from the US showed lacklustre growth in the third quarter. Sterling traded 0.4% stronger on the dollar at $1.38 but weakened 0.27% against the euro at €1.18.
 
On mainland Europe, the pan-European regional Stoxx 600 index closed the day in slight positive territory, up 0.2%, after the ECB said its pandemic emergency purchasing programme would continue at steady rate throughout the year.
 
Across the Atlantic, Wall Street stocks recovered some of Wednesday’s losses that had followed Tuesday’s record highs, with traders focusing on the positive earnings results published early in the day. The blue-chip S&P 500 closed trading up 1%, with the Nasdaq Composite following suit, up 1.4% since the day before.

What’s happening today?

Finals
Grit Real Est. 
Scancell Holdings      
Time Out        
 
Q3 Results
Natwest Grp   
Omv Petrom S           
 
Trading Announcements
Evraz  
 
AGMs
Adm Energy   
Itm Power       
Mattioli
Maxcyte (Di)  
Opg Power     
Sensyne Health.        
 
Final Dividend Payment Date
Abrdn Uk Small          
Alumasc Group          
City Lon Inv    
FRP Advisory 
Gabelli Merger           
Hargreaves Serv        
Kainos Group 
 
Interim Ex-Dividend Date
Banco Santander       

Interim Dividend Payment Date
Aberdeen Lat 
Aberdeen Sml.co       
Barr (A.G.)     
Belvoir
Caledonia Min
Christie           
Doric Nimrod  
Doric Nimrod 3           
Doric Nimrod 2           
Ediston Prprty
Essentra         
European Assets Trust          
Fidelity European Values      
Hargreaves Serv        
Henderson High Income Trust          
Hunting          
I3 Energy       
Ingenta           
Jtc Plc
Keywords Studio        
Kings Arms Yard        
Learning Technologies Group           
Lowland Inv.  
Lxi Reit           
Martin Currie Global Portfolio Trust  
Mortgage Ad  
North American          
Phoenix Spree D       
Rightmove     
RIT Capital Partners
Ruffer Inv. Co.
Schroder Income Growth Fund         
Shanta Gold   
Shires Inc.      
Twentyfour Sel           
Unite
Us Solar Fund
Us Solar Fund
Vitec   
Wynnstay       
Xpediator Plc

Quarterly Payment Date
Bmo Comm Prop.      
BMO Private Equity Trust      
Marble Point L.          
Middlefield Prf
REI     
Std Life Priv.  
Vipera
 
Special Dividend Payment Date
Barr (A.G.)     
Hargreave      
Kings Arms Yard        
 
UK Economic Announcements
(09:30) M4 Money Supply
(09:30) Consumer Credit
(09:30) Mortgage Approvals
 
Int. Economic Announcements
(07:00) Import Price Index (GER)
(09:00) GDP (Preliminary) (GER)
(10:00) GDP (Preliminary) (EU)
(13:30) Personal Income (US)
(13:30) Personal Consumption Expenditures (US)
(13:30) Personal Spending (US)
(13:30) Employment Cost Index (US)
(14:45) Chicago PMI (US)
(15:00) U. of Michigan Confidence (US)

 

Source: Financial Times

did you know?

Mount Etna has erupted so much in the last six months, it’s grown about 100 feet (30m).

(Source: @qikipedia)

Parliamentary highlights

House of Commons

Private Members’ Bills
Menopause (support and services) Bill: Second Reading
Childcare Bill: Second Reading
Animals (Penalty Notices) Bill: Second Reading
Approved Premises (Substance Testing) Bill: Second Reading
Crown Estate (Devolution to Wales) Bill: Second Reading
BBC License Fee (Abolition) Bill: Second Reading
Caravan Sites Bill: Second Reading
Green Belt (Protection) Bill: Second Reading
Climate and Ecology Bill: Second Reading
Public Sector Exit Payments (Limitation) Bill: Second Reading
General Election (Leaders’ Debates) Bill: Second Reading
Motor Vehicles (Compulsory Insurance) Bill: Second Reading
Covid-19 Vaccine Damage Bill: Second Reading
Hospitals (Parking Charges and Business Rates): Second Reading
Voter Registration Bill: Second Reading
Asylum Seekers (Return to Safe Countries) Bill: Second Reading
Planning (Street Plans) Bill: Second Reading
 
Adjournment
Improving NHS allergy services

House of Lords 

The House of Lords is not sitting and will next sit on 1 November.

Scottish parliament 

No business scheduled.

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