Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
We start with some breaking news – Cinema chain Cineworld has just announced it is temporarily suspending operations at all of its 536 Regal theatres in the US and its 127 Cineworld and Picturehouse theatres in the UK.
It’s taken the move following the lack of new films to draw in audiences, including the twice delayed new James Bond instalment (which has been pushed back to next year).
These closures will impact approximately 45,000 employees, says Cineworld, which employs around 5,500 people in the UK.
In a statement to the City, Cineworld blamed “an increasingly challenging theatrical landscape and sustained key market closures” due to the COVID-19 pandemic.
So with major films delayed, it simply can’t provide enough compelling new films to attract filmgoers.
As major US. markets, mainly New York, remained closed and without guidance on reopening timing, studios have been reluctant to release their pipeline of new films.
In turn, without these new releases, Cineworld cannot provide customers in both the US and the UK – the company’s primary markets – with the breadth of strong commercial films necessary for them to consider coming back to theatres against the backdrop of COVID-19.
The closures will begin on this Thursday (the 8th October).
News of the closures broke yesterday, sparking anger among staff that they learned of the plan through the newspapers.
The latest delay to the next James Bond film was the final blow to Cineworld, which wrote to government ministers warning the industry has become “unviable” without major blockbusters to lure customers to the big screen again.
More details to follow….
Cars and services companies are also on the agenda today, as investors also watch Walter Reed military medical center for the latest on Donald Trump’s health.
September is usually a very strong month for UK car sales, as driver scramble to buy a new licence plate to impress the neighbours. But last month, sales slumped by 4% as the coronavirus crisis continued to hit demand.
Figures due at 9am are expected to show that fewer than 330,000 new cars were sold in September, which would be the lowest in over 20 years.
That would intensify concerns that the UK economy is struggling as it faces a tough winter, with many commuters still working from home – and others fearing for their jobs.
We also get the final healthcheck on service sector companies in September, from data firm IHS Markit. It’s expected to show that service growth slowed in the UK and the US last month, and lurched into reverse in the eurozone.
Stock markets in Europe and the US are on track to open higher following signs that president Trump’s health is improving. There have already been gains in Asia-Pacific markets overnight including a 2.5% surge on Australia’s ASX index.
The latest word from Washington is that Donald Trump “has continued to improve” since Saturday, after contracting Covid-19, and could be released as early as Monday.
Last night Trump said he was receiving ‘great reports’ from his doctors, before taking a trip to see the crowd outside Walter Reed – a move blasted as astoundingly irresponsible by one emergency medical physician at the site.
Trump was helicoptered to Walter Reed on Friday night (after Wall Street had closed), less than a day after reporting his positive test, and has received a series of treatments, from an experimental cocktail of antibodies to the steriod dexamethasone.
So there’s some confusion over his health, which will keep the markets on edge today.
- 9am BST: UK car sales for September
- 9am BST: Eurozone service sector PMI report for September
- 9.30am BST: UK service sector PMI report for September
- 10am BST: eurozone retail sales for August
- 2.45pm BST: US service PMI for September