Stock market investors are finally facing up to global turmoil

Early declines signalled acknowledgment of US-China trade war and other events

Stock market investors’ ability to ignore big geopolitical events is legendary. Give them a whiff of lower interest rates and most big-picture troubles can be relegated to the status of passing worries. In the absence of cheaper money, however, the story can be different. Tuesday’s early declines, which were really a continuation of a losing run that has lasted for most of October, marked a moment when investors were obliged to acknowledge that, yes, some global forces look genuinely alarming.

First, the trade war between China and the US is having an impact that US companies can count. Caterpillar, the manufacturer of earth-moving equipment, said the full-year whack from higher steel and aluminium prices will be about $100m (£77m).

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Global markets take fright at cocktail of geopolitical risks

US/China trade dispute, US interest rates, Brexit and Italy’s budget spook investors

Wall Street and European stock markets followed Asian shares lower on Tuesday, as investors around the world took fright at the increasingly fractious global geopolitical outlook.

Investors are growing increasingly worried about a cocktail of risks that could act as a significant drag on the world economy. Potential headwinds include the trade dispute between the US and China, rising US interest rates, the fallout from the death of the Saudi journalist Jamal Khashoggi and the budget dispute between the EU and Italy.

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Caterpillar shares fall after disappointing earnings forecast

Investors had been expecting upward revision of profit per share outlook

Caterpillar Inc disappointed investors on Tuesday by not raising its 2018 earnings forecast again, raising fears that the heavy-duty equipment maker may be signalling a slowdown despite posting better-than-expected quarterly profits.

The stock was last trading down 8% before the opening bell, weighing on the overall US stock market. The Dow Jones Industrial Average, which includes Caterpillar, was set to open down about 400 points.

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European shares hit 22-month low as a ‘thick blanket of risk’ shrouds markets – business live

Rolling coverage of the latest economic and financial news, as shares slide in Asia and Europe

Saudi Arabia still expects to sign tens of billions of dollar of deals at its investment conference, despite those high-profile withdrawals following Jamal Khashoggi’s death.

Reuters explains:

Saudi Arabia brushed off an outcry over the killing of journalist Jamal Khashoggi and went ahead on Tuesday with an investment conference boycotted by Western political figures, leading international bankers and company executives.

Speaking at the opening session, prominent Saudi businesswoman Lubna Olayan said the killing of the Washington Post columnist was “alien to our culture” and voiced confidence that the kingdom will “emerge stronger”.

We’re live-blogging president Erdoğan’s speech on Jamal Khashoggi’s death, here:

Related: Jamal Khashoggi death: Erdoğan to address Turkish parliament – live

WSJ reporter Rory Jones says the Saudi investment conference is underway – despite scores of big names pulling out.

No sign of Crown Prince Mohammed bin Salman yet at @FII2018 and @SoftBank’s Masayoshi Son is no longer speaking. Event kicked off with heads of Saudi, UAE and Russian sovereign wealth funds. Moderator acknowledges #Khashoggi, calling his killing “alien” to Saudi culture

The high-profile pull-outs from the FII include JP Morgan’s Jamie Dimon, the head of the IMF, Christine Lagarde, Glencore chairman Tony Hayward and many more – even Uber’s boss, Dara Khosrowshahi, despite the PIF’s $3.5bn investment in his company. Separately, Richard Branson has suspended the Gulf state’s $1bn investment in his space project, Virgin Galactic.

Rarely have so many business leaders been seen running in the same direction, in this case away from Saudi Arabia at speed.

Boycotting Saudi FII? This chandelier studded ballroom at Riyadh’s Ritz-Carlton looks packed. I had to push my way in. No sign of MBS so far.

In another blow to Saudi Arabia, Japanese billionaire Masayoshi Son has abandoned plans to speak at its Future Investment Initiative (FII), which started today.

Michael Amon of the Wall Street Journal reports that Son may still be present, but he won’t be on the stage.

BREAKING: Softbank’s Masayoshi Son won’t speak at FII, event spokesman says. He could show up on the sidelines.

Son is arguably Saudi Arabia’s closest foreign investment partner. His cancellation came long after other CEOs abandoned ship and shows how serious the #khashoggi crisis is for Saudi.

Saudi Arabia’s stock market has also dropped in early trading, down 1.2%.

Traders will be worrying about Riyadh growing isolation following Jamal Khashoggi’s murder, and the prospect of Turkey releasing the “naked truth” about the killing later today.

“I am not satisfied with what I’ve heard.

We’re going to get to the bottom of it.”

#CrownPrince meets with the U.S. Secretary of the Treasury and stresses the importance of Saudi-US strategic partnership, where it holds an important role in the future in line with the Kingdom’s #Vision2030

To make clear @stevenmnuchin1 cancelled his speaking engagement at Saudi investment conference. He is in Saudi (as part of 6 country Middle East trip) visiting the Terrorist Financing Targeting Center and having meetings in preparation for Iran sanctions.

In his meeting with the Saudi Crown Prince, @stevenmnuchin1 addressed combating terrorist financing, implementing Iran sanctions, Saudi economic issues and the Khashoggi investigation.

Mike van Dulken of Accendo Markets points out that the US stock market fell yesterday, helping to trigger today’s losses in Asia and now Europe.

The negative opens come after Asia’s rally cooled, retracing Monday’s jump amid fresh fears about global trade, geopolitical tensions and the US midterm elections.

Wall Street added to downbeat sentiment with banks and financials leading the slide as worries mount over the strength of earnings from the remainder of corporates set to report.

Boom! As feared, European stock markets have slumped to their lowest point in almost two years.

Germany’s DAX dropped 1.35% in early trading, France’s CAC and Spain’s IBEX both lost 1%, and Italy has shed 0.8%.

Geopolitical tensions, Italian budget woes and the ongoing standoff between the European Commission and Italy are making investors nervous. Given that there is no solution about the trade war between the US and China stand is making things a bit more arduous today.

We need to have a solution to the Italian budget. Investors are going to keep a close eye on the European Commission’s decision today about the Italian budget. The commission may end up doing something which is unprecedented- it may ask Italy to revise and resubmit its budget. It is widely expected that the commission is going to have a negative opinion about the budget, but the question is if Italy will be ready to comply with the request?

Ouch. Britain’s blue-chip stock index has fallen close to an eight-month low at the start of trading.

The FTSE 100 is down 51 points, or 0.8%, at 6991, close to its lowest level since April

Today’s selloff has pushed stocks across Asia to the brink of a bear market (more than 20 percent off their recent highs.

MSCI Asia Pacific Index has dropped to its lowest since May 2017, with losses across the region.

Among the steepest decreases were in Japan, Hong Kong and China, where shares had had the biggest jump in more than two years Monday.

Global equities as measured by the MSCI World Index face their worst month since August 2015. S&P 500 Index futures declined 1% and Euro Stoxx 50 contracts opened more than 1% lower, indicating the rout will spread to U.S. and European markets. The yen gained and gold ticked higher.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

The US dollar outperformed on Monday on the back of Italy and Brexit risk while the mere utterance of a protracted equity correction remains a highly sensitive topic that investors fear could morph from a wall of worry into a towering wall of pain.

Risk aversion continues to permeate every pocket of the markets whether triggered by President Trump’s latest tweets on immigration or the blustery headwinds from Riyadh to Rome; markets remain shrouded in a thick blanket of risk.

Related: EU expected to seek revision of Italy’s draft budget

Offenders Will Be Punished

Related: Business titans fight shy of Saudi’s trillion-dollar charm offensive

European Opening Calls:#FTSE 7005 -0.54%#DAX 11427 -0.84%#CAC 5025 -0.57%#MIB 18818 -0.78%#IBEX 8751 -0.63%

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China’s stock market surges on stimulus hopes – business live

Rolling coverage of the latest economic and financial news, as the Shanghai stock market leaps by over 4%

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

“Any words and practices that negate and weaken the private economy are wrong.

Supporting the development of private enterprises is the Party Central Committee’s consistent policy.

Chinese stocks rallying hard as Beijing’s verbal support reverberates through markets:

China H-Shares +3.1%
Hang Seng +2.2%
Shanghai Composite +4.1%
CSI 300 4.4%
ChiNext Index +5.7%

Asian shares bounced higher on Monday, as Chinese stocks extended their rebound for a second straight session, pulling European futures higher in the process.

Beijing’s pledge of support for the economy is overshadowing geopolitical concerns over Saudi Arabia, Italy and Brexit.

It is all about China today whereby stimulus hopes lifted sentiment across the FX markets and helped traders to offset geopolitical and trade concerns. AUDUSD rebounded from this morning dip. Eyes on the GBPUSD as PM plans to announce that EU withdrawal is 95% settled. #AUDUSD

Related: Italian bank fears expected to grow after debt downgrade

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Cost of living squeeze eases as UK inflation falls to 2.4% – business live

Cheaper meat and chocolate helped ease the cost of living last month

British retailers are gritting their teeth at the prospect of even higher business rates.

They are due to rise next year in line with today’s inflation reading, meaning an extra £180m total bill according to the British Retail Consortium.

“These figures confirm that the retail industry, which is under significant pressure from public policy and a consumer and technology-led transformation, will face yet another eye-watering rise in business rates next April. The burden of the current business rates system, which is in urgent need of reform, is leading to store closures and hindering the successful reinvention of the retail industry.

“Ministers need to act to address this £180m increase in retailers’ already unsustainable business rates bill, along with other public policy burdens which retailers are struggling to absorb the cost of.

Any inflation is bad news if your benefits are capped:

NB September’s inflation figures are used to uprate benefits, so a smaller increase than expected this year. And working age benefits remain frozen, so that’s an effective 2.4% real terms cut…

The @ONS announced today that UK inflation is 2.4%. There’s a freeze on most working-age benefits, so rising prices will effectively cut the benefits of around 10.4 million households by an average of £150 per year in 2019–20. This saves the Exchequer £1.6 billion.

The Resolution Foundation thinktank agree that households should welcome today’s inflation data (even though it shows energy bills are rising).

Resolution are hopeful that real wages will accelerate in the coming months:

CPI is currently 2.4%, CPIH 2.2%. Somewhat faster than expected falls in inflation today good news for households

Nevertheless falling inflation is a boon for wages. Real wages boosted by today’s figures and could be on to reach 1% by end of the year.

At 2.4%, Britain’s CPI inflation has fallen to a three-month low. It hasn’t been lower since March 2017.

Thanks to the Triple Lock, Britain’s state pension will rise by £4.25 per week next year (assuming the government doesn’t ditch it).

Financial expert Paul Lewis has all the details:

State Pension will rise in April using the ‘triple lock’ – highest of: 2.5%; Average earnings KCA3 May-July (revised) published 16/10 was 2.6%; CPI inflation for September published 17/10 was 2.4%. So will rise 2.6% ie £4.25/week on New SP and £3.25 on basic. Extras rise by 2.4%.

If correct full New State Pension will rise from £164.35 to £168.60 a week and full single basic state pension from £125.95 to £129.20 a week. Many get more or less than these amounts. Pension credit would be £166,25 single and £253.85 couple if those rules used.

Other benefits which rise by CPI inflation will increase by 2.4% so for example DLA/PIP highest rate up £2.05 to £87.65 a week. Carer’s Allowance up £1.55 to £66.15 a week. All to be confirmed of course when announcement is made in a month or two.

Here’s what it means for pensioners, and those saving for a pension:

Expected figures for 2019:

Some instant reaction to the fall in UK inflation:

UK inflation slows more than expected in September to 2.4%. Good news, in that it helps relieve the squeeze on real incomes. Will it be enough to make the Bank of England hold off on further rate hikes?

Our monthly inflation figure shows CPIH fell 2.2% in September 2018. Commenting on the figures, our Head of Inflation Mike Hardie said:

Very decent news for consumers & #BOE as #UK #consumer #price #inflation dipped to 2.4% in September from August’s 6-month high of 2.7%. Core inflation down to 1.9% (2.1%). Follows consumer purchasing power benefiting from regular earnings growth rising to 3.1% in 3 months to Aug

Chocolate prices contribute to lower inflation – finally some economic news I can get on board with

Falling inflation is good news for households across the UK.

Yesterday we learned that basic pay jumped by 3.1% per year in the three months to August, the fastest growth since the financial crisis.

Inflation drops to 2.4% from 2.7%. Yesterday wage growth hit a ten year high of 3.1%. This will go some way to unwinding the decade long incomes squeeze. @ONS

As explained earlier, this inflation rate will also dictate pension entitlement increases across the state sector.

It means:

Breaking: Britain’s inflation rate fell to 2.4% in September, weaker than expected, and down from 2.7% in August.

That means the State Pensions will rise by 2.6% under the Triple Lock next April, because average earnings in the last year (+2.6%) have grown faster than inflation.

In other news, IMF chief Christine Lagarde has become the latest big name to pull out of Saudi Arabia’s big investment conference.

This follows the international outcry over the disappearance and apparent murder of journalist Jamal Khashoggi.

“The Managing Director’s previously scheduled trip to the Middle East region is being deferred.”

Related: Khashoggi: Trump defends Saudi Arabia as Pompeo heads to Turkey

Over in the City, the pound has dipped a little to $1.316 as traders watch for Brexit developments.

Theresa May is heading to a crunch meeting with fellow EU leaders tonight, where she will try to make progress on the sticky issue of the Irish backstop.

Related: Theresa May appeals to EU to keep Brexit door open

UK Prime Minister Theresa May is heading to Brussels today with no breakthrough related to the Brexit talks in her bags and will instead ask the EU leaders to keep working towards a solution.

What’s interesting however is that even though we’ve seen no progress, the pound is trading with a positive bias since the beginning of the week. There’s only one way to read this: everyone who’s bearish regarding a “no deal” Brexit is already short sterling and the only ones dipping their toes in the market are the short-term speculators hoping for a positive resolution.

Legendary frontman of @TheWho, Roger Daltrey, says touring bands will cope after Brexit, and any problem is “nothing that can’t be solved” but Brussels is a “gravy train soaking us dry” #r4today

Investment service Hargreaves Lansdown have released a very useful note on public sector pensions.

Since 2015 Public Sector Pensions have moved to using Career Average Earnings as opposed to final salary pensions.

This basically means that each year members ‘bank’ their accrued pension and this is uprated in-line with the previous September’s inflation.

‘With inflation outstripping wage growth, there is a risk that public sector workers could find their overall pay distorted towards their life after work. Saving for a pension is important, but so too is having enough to put food on the table and pay the bills.

Continued periods of goods going up more in price than the rise in wages could create even bigger challenges.’

Good morning, and welcome to our rolling coverage of the financial markets, the world economy, the eurozone and business.

Millions of UK pensioners and public sector workers, and thousands of businesses around the country, will be affected by new inflation figures being released today

The State Pension will rise in April using the ‘triple lock’. That is the highest of: 2.5%; Average earnings KCA3 for May-July (revised) published today which was 2.6%; CPI inflation for September (published tomorrow). So at least 2.6% ie £4.25/week on New SP and £3.25 on basic.

Business rates – which essentially serve as specific property taxes for resident businesses – could go up by as much as 819.23 million in England if the headline rate of inflation remains unchanged at 2.7%, according to real estate advisor Altus Group.

It said 209.76 million would be paid by the ailing retail sector, which has seen a number of players go bust in recent month amid higher costs and lower consumer spending.

Related: Wall Street posts biggest gains in seven months as markets roar back – as it happened

Related: Netflix shares soar as it announces 6.96m new members

It’s going too fast. Because, you looked at the last inflation numbers, they’re very low.

#UPDATE President Donald Trump reignited his controversial criticism of the central bank, calling the Federal Reserve his “biggest threat”

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Australian shares fall amid market jitters over oil, trade and rates – business live

Financial markets are set for a nervous start to the week amid continuing US-China trade tensions and concern about rising US borrowing costs. Follow all the action live

Saudi stocks tumble on fallout from Khashoggi disappearance
UK: forecasts say economy could see worst year since crash
Theresa May vulnerable as Brexit talks on knife-edge

Greg McKenna, the independent market strategist, says the markets narrative has been hijacked by the Saudi pushback and Brexit but reckons it’s a close call on what direction things will take.

This is what he says in his morning note:

Much water to flow here especially for the Pound and oil prices. Looking back to Friday though and while stocks in the US rallied into the close it was a messy day and hardly a convincing bounce. Is it the bottom? Many think so and the medium-term charts recovered to hold channel bottoms. But we’ll see.

Good morning and welcome to the Guardian business live blog.

We’re firing up a bit earlier than usual today because it looks like being an interesting session in Asia Pacific markets.

APAC Opening Calls:#ASX 5824 -1.03%#NIKKEI 22523 -0.83%#HSI 25693 -0.29%#NIFTY 10477 +0.09%#CSI300 3161 +0.37%

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Saudi shares tumble on fallout from journalist’s disappearance

Markets rise in Abu Dhabi and Dubai; Trump issues threats of ‘severe punishment’

Saudi Arabia’s stock market tumbled in early Sunday trade on concerns about relations with the international community following the disappearance of a a Saudi journalist.

Meanwhile markets in Abu Dhabi and Dubai rose.

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