And finally, European stock markets have ended the day higher.

The FTSE 100 has, for the moment, shrugged off the new English lockdown. It has closed 77 points higher at 5654, recovering from last week’s six-month lows.

As predicted at the start of trading, though, travel firms, retailers and pub chains had a rough session. JD Sports was the worst performer, down 6.7%, while car seller Auto Trader lost 3% and Next lost 1.6%.

Banks were also under pressure, with NatWest down 3%.

Surprisingly, oil companies ended the day among the risers. BP and Royal Dutch Shell both jumped over 4%, as crude prices rebounded from their earlier lows.

The jump in factory activity in the US, Germany and China last month may have boosted optimism about the global economy, even though new Covid-19 restrictions are expected to force the UK and eurozone to shrink again this quarter.

Associated British Foods also ended the day 1.4% higher, despite predicting that lockdowns will cost it £375m of lost sales.

European markets also made a good start to November, with Germany’s DAX and France’s CAC both gaining around 2% today after heavy falls last week.

Wall Street is still comfortably higher too, with the Dow Jones industrial average up 445 points or 1.7% at 26,947.

Here’s our round-up of today’s stories:

Goodnight. GW

American factories also had a good October.

The US manufacturing PMI has risen to 53.4, from 53.2 in September, signalling that growth picked up a little. It’s the strongest reading since January 2019.

That follows the acceleration at eurozone factories last month, and the steady growth in the UK and Canada.

Factory bosses reported that output expanded at a faster rate, following a rise in new orders.

It suggests America’s economy began the fourth quarter of 2020 quite well, but the rising Covid-19 cases in the US, and globally, could threaten that recovery.

Chris Williamson, chief business economist at IHS Markit says:

“With clues being sought as to whether the economy can sustain its recovery after rebounding from lockdowns, the rise in the PMI in October is encouraging news. It’s inevitable that the pace of economic expansion will weaken after the surge seen in the third quarter, but the strength of the PMI hints at a recovery for which the underlying trend continues to strengthen at the start of the fourth quarter.

Producers of investment goods such as business equipment and machinery are leading the upturn in a welcome sign of rising business confidence and corporate investment, but it was worrying to see consumer goods producers report weakened order book growth, reflecting rising virus-related worries.

Going forward, much will naturally depend on the extent to which the economy can remain open and functioning in the face of rising virus case numbers.”

The New York stock markets has opened higher, on the final day of trading before the presidential election day.

Wall Street is shaking off its own grim October, having just posted its worst week since March.

The Dow Jones industrial average has gained 328 points at the start of trading, up 1.2%, to 26,829 points.

The broader S&P 500 index is also up 1.2%, while the tech-focused Nasdaq has gained 1%.

Millions of American have already voted, of course, and the opinion polls give Joe Biden a solid lead. FiveThirtyEight suggest a Democrat win around 90 times out of 100.

But markets have been surprised before (eg in 2016, and the EU referendum), so we may well not get a clear result on Wednesday.

Matthew Cady, Investment Strategist at Brooks Macdonald, says a delay could leave markets unsettled.

This week, the long wait is over. Tuesday 3 November is US election day, but that date is less significant this year, as record numbers of US citizens have already chosen to vote early either in person or by post. According to the US Elections Project as of 1 November, some 92m Americans (equivalent to two thirds of the total votes counted in the 2016 US election) have already cast their ballots. Despite the current Democrat lead in the polls and betting odds, such predictions have been wrong before, and there is still a risk that the US election outcome may not be known for some days if the votes end up being contested in one or more key US swing states.

Some states are allowing the counting of late postal ballots, for example, by 3 days and 9 days after election day respectively in the case of swing states Pennsylvania and North Carolina. Normally, a state usually requires ballots to arrive on election day in order to count, but following legal rulings, this time for some states it means that ballots need only be postmarked by election day or the day before and can still be counted if they arrive within the allotted time after election day. This suggests that for a very close-run result in some states, postal votes might be the deciding factor and counting those in the days following 3 November could well leave markets unsettled.

The boss of Britain’s biggest airport group, MAG, has hit out at the government for its “shocking” neglect of the aviation and travel industry, and accused the prime minister of “effectively shutting down his business” via Twitter.

Charlie Cornish, the chief executive of the group which includes Manchester and London Stansted airports, said airports would be forced to act quickly to secure their future following the virtual ban on international travel.

MAG is planning to lay off 900 staff. Cornish said urgent government support was now needed to prevent more job losses in an industry which had been buffeted by “chaotic changes in policy” throughout the pandemic.

No dedicated package of support has been given to aviation, despite early indications from the chancellor that specific measures would be considered.

Cornish said there had been no warning or discussion with the industry about the travel ban, adding:

“Given the huge impact on the hundreds of thousands of people working in the aviation and travel industry, it is shocking that the prime minister didn’t consider the shutdown of international travel worthy of mention… [but] symbolic of the way government has neglected UK aviation and the role it plays our economy from day one of this pandemic.

“It is clear they have not understood, or even tried to understand, what the impact of this latest decision will be, let alone put in place measures to help the industry cope with the tough times ahead.”

Last week the Airport Council of Europe warned that almost 200 airports across the continent were in danger of going bust in the winter.

The new Covid-19 restrictions being imposed in Europe means the UK and the eurozone will shrink this quarter, Goldman Sachs has warned.

The Wall Street bank predicts that economic growth will be hurt by the closure of non-essential shops, restaurants and bars. It also fears the restrictions could last into early 2021.

This would reverse the recovery seen over the summer, when the eurozone grew at its fastest pace on record (after the worst slump ever).

Reuters has the details:

Goldman Sachs sharply cut Europe’s fourth quarter economic forecasts on Monday as a surge in COVID-19 cases led to major countries announcing partial nationwide lockdowns for November.

The U.S. investment bank said it expects the euro area’s real gross domestic product (GDP) to shrink 2.3% in the fourth quarter, a sharp reversal from its earlier projection of 2.2% growth.

Similarly, it cut UK GDP growth forecasts to minus 2.4% from a 3.6% expansion it had earlier expected.

“Looking ahead, we assume that the new restrictions will last for three months before they are gradually rolled back starting in February,” Goldman Sachs economists wrote in a note to clients.

British factories couldn’t keep pace with their German rivals last month.

Data firm Markit has reported that the recovery in the UK manufacturing sector slowed in October.

Although output and new orders kept rising, consumer goods makers reported a slowdown.

This pulled the UK manufacturing PMI down to 53.7 in October, from 54.1 in September. That shows growth, but much below the 58.2 seen in Germany.

Worryingly, UK factories continued to cut jobs - even though export demand rose last month.

Rob Dobson, Director at IHS Markit, explains:

“October saw the UK manufacturing recovery continue, albeit with the upturn losing momentum amid ongoing lockdown measures and signs that growth could weaken further in coming months after Brexit-related stockpiling.

The main drag was a fall back into contraction for the consumer goods industry, blamed in part on lockdowns and falling demand as virus worries intensified among households.

There was positive news on the export front, with new orders from overseas rising to the greatest extent in over two-and-a-half years. However, a significant contribution to the improvement in exports came from a temporary boost of Brexit stock building by EU clients, which was evident in one-in-four companies that reported higher exports. “The outlook for the remainder of the year has therefore become increasingly uncertain, with risks tilted to the downside. While most companies maintain a positive outlook, with three-fifths of manufacturers expecting output to rise over the coming year, concerns about near-term risks posed by the pandemic, changes to COVID restrictions and related stimulus measures, plus Brexit anxieties, continue to fog the future.”

Ryanair will not refund customers who are now banned by the English lockdown from flying abroad this month.

Ryanair CEO Michael O’Leary says Ryanair customers affected by the new curbs can reschedule flights.

But they will not get their money back, as its flights are still operating and being used by people travelling for work, and for essential reasons.

O’Leary told BBC Breakfast that:

If the flights are operating there won’t be any refunds, although they will be available to avail of our change policy. We allow people to change their flights timings to flights on later dates if necessary

If the flight is operating, there won’t be any refunds. If the flight is cancelled, under government directions, they will be entitled to a refund.

Q: Doesn’t that go against government advice? It doesn’t seem very fair on the passenger....

O’Leary reiterates that if a flight is operating, there isn’t a refund, adding:

If the government wants to provide refunds to passengers themselves, they should feel free to do so.

Here’s a clip of the interview:

Just in: German factories have just enjoyed their strongest boom in new orders in at least 24 years.

That’s according to the latest survey of purchasing managers from data firm Markit.

It reports that new business at German manufacturers surged in October at the fastest rate since data collection began in 1996 (a good year for German footballers too, I recall...)

Factory bosses also reported that production jumped, while new orders slowed.

This has lifted the German manufacturing PMI to 58.2 in October, showing strong growth, and the fastest rise since March 2018.

This would normally be a reason to celebrate. But the new lockdown restrictions being imposed in Germany threaten to halt the recovery, with manufacturing optimism falling.

Phil Smith, associate economics director at IHS Markit, explains

“Manufacturing in Germany continued to bounce back strongly in October. The standout data point was the survey’s measure of new orders, which reached an all-time high on the back of a revival in demand both domestically and internationally.

Less positively and perhaps a sign that growth could be about to slow as more firms get back to pre-COVID levels of output, we saw the first setback to manufacturing expectations for seven months in October. It comes amid rising numbers of coronavirus cases in Europe, and the increased threat of renewed disruption to supply and demand that comes with it.

Shares in UK travel companies, retailers, pub chains and hotel operators have fallen sharply at the start of trading on the London stock market.

They’re all suffering from the impact of the new English lockdown rules.

British Airways parent company, IAG, is the top FTSE 100 faller, down 6.3%, following the ban on holidays abroad or within the UK. Budget airline easyJet has dropped by 5.5%.

Hotel operator Whitbread, which owns Premier Inns, has fallen 3.7%.

High street shopping chains JD Sports (-5.8%) and Next (-2.7%) are also suffering from the imminent closure of non-essential stores, which will hammer the lucrative pre-Christmas trading.

AB Foods have fallen 3% after warning that the lockdown will wipe out £375m of sales across Europe.

Pub chains are also feeling a hangover from Boris Johnson’s Saturday night announcement, with JD Wetherspoons slumping 7% and Mitchells & Butler down 5.6%.

Retail analyst Nick Bubb says high street retailers are “reeling” from the news that non-essential shops will have to close again on Thursday.

A year ago, with all the Christmas TV ads kicking off, the worry was what the upcoming General Election on Dec 12th would do to High Street spending in November…

A year on and the worry now is how the shock closure of non-essential shops in November will affect Christmas spending plans and how on earth Online retailers will cope with the surge in demand…

While high street retailers struggle, online grocer Ocado has just hiked its profit forecasts.

It told the City that trading at its retail arm (which moved to offer M&S food this year) remains strong:

Ocado continues to see high demand as consumers migrate to online grocery in record numbers. Sales are in line with the trends reported in the Third Quarter although growth rates reflect the seasonality of the quarter.

As a result of this strong performance, Ocado Group today announces that it expects full year EBITDA for the group to be over £60m, versus previous guidance of over £40m.

Ocado is also buying two robotic technology companies - Kindred Systems, “an advanced piece-picking robotics company”, for $262 million and robotic arm designer Haddington Dynamics Inc for $25 million.

Tim Steiner, CEO of Ocado, says these firms will improve Ocado’s automated warehouse technology, and potentially help it move beyond the groceries business.

Given the market opportunity we want to accelerate the development of our systems, including improving their speed, accuracy, product range and economics.

I am delighted to be welcoming Kindred Systems and Haddington Dynamics to the Ocado group, as we believe they have the capabilities to allow us to accelerate delivery, innovate more, and grow faster. I am also excited by the opportunity to enter new markets for robotic solutions outside of grocery that is demonstrated by Kindred Systems’ robust growth, with existing customers such as Gap and American Eagle across the general merchandise and logistics sectors.”

Clothing retailer Primark has warned that the lockdowns being introduced in parts of Europe will hit its sales in the run-up to Christmas.

In a statement to the City, owner Associated British Foods warned that more than half its stores will soon be temporarily shuttered - once England’s lockdown is introduced.

This means the company is facing lost sales of £375m, as outlets in other areas including France and Wales are already shuttered.

ABF explains:.

As of today, all Primark stores in the Republic of Ireland, France, Belgium, Wales, Catalonia in Spain and Slovenia are temporarily closed, which represent 19% of our total retail selling space. The announced period of closure varies by market. The UK Government announced its intention to close non-essential shops in England for one month from 5 November to 2 December. Assuming that this will be passed by the UK Parliament on 4 November, 57% of our total selling space will be temporarily closed from 5 November.

Our estimated loss of sales for these stores, including the stores in England, for the announced periods of closure is £375m.

Fears of a double-dip Covid-19 recession have send the oil price sliding to a five-month low this morning.

Brent crude has slumped by 4% this morning to just $36.41 per barrel, as traders digest the new English lockdown - on top of the measures already imposed in Germany and France.

That’s the lowest since the end of May, when Europe was emerging from its spring lockdown.

US crude has slumped by over 4.5% so far today, on anxiety that the new Covid-19 restrictions being imposed in Europe will damage economic growth, and demand for energy.

Jeffrey Halley of OANDA explains:

Covid-19 cases continue to break records in the US in election week, with its impact only muted by the fact that 90 million Americans have voted early, including the President.

Europe continues to be of deep concern, with Britain announcing its new national lockdown lite Saturday, and by my count, Belgium, Greece, Austria and Portugal all joining them to varying degrees. The jury is still out on whether the have-your-cake-and-eat-it approach will work. The downstream effects on consumption though have manifest themselves most obviously on oil.

Oil prices were stretchered off at the Asian open today, and are still receiving treatment on the side-lines.

Michael McCarthy, chief market strategist at CMC Markets in Sydney, adds that some traders are worried that America could face new lockdown restrictions soon:

“A lot of traders are now looking at the U.S. and their rising infection rates and wondering if Europe is providing the model for what will happen in the U.S. in the coming weeks,”

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

Markets like certainty. But that affection melts away when it’s the certainty of a four-week lockdown that will derail parts of England’s economy in the run-up to Christmas.

Retailers, hospitality firms and travel companies are reeling after Boris Johnson ordered English restaurants, pubs, leisure facilities and non-essential shops to shut this Thursday. Customers won’t be allowed back in until 2nd December (and possibly later).

This will leave Britain’s FTSE 100 index of leading companies struggling to recover from the near seven-month low hit last week.

Paul Dales, chief UK economist at Capital Economics, has warned that the UK economy could shrink by 5% in November

“The economy is likely to show zero growth or even have a small decline in the fourth quarter of the year.

This has all the signs of a double-dip recession.”

This new lockdown is potentially disastrous news for struggling English retailers and food and drink outlets who have been limping along through the pandemic.

As Dame Carolyn Fairbairn, CBI Director-General, put it:

“Lockdown is a decision for government, not business, and firms share the Prime Minister’s ambition to defeat the virus, But for many businesses, a second national lockdown marks the start of a bleak midwinter.”

Helen Dickinson of the British Retail Consortium warned bluntly that the new measures would cause “untold damage to the high street in the run-up to Christmas”.

“With the right support firms will do everything possible to minimise the damage. Across the country they have already shown how resilient they can be in the face of tighter restrictions. And thanks to huge efforts by businesses to make workplaces Covid secure, more of the economy can now stay open.”

The lockdown is also going to leave more families worrying about unemployment in the run-up to Christmas, even though the furlough scheme is being resurrected for another month (too late for those already off this autumn, though).

If uncertainty is more your taste, try the race for the White House. US election day is tomorrow, but investors fear we won’t see a clear victory in 48 hours time.

Recounts and contested results seem more likely, especially with speculation that Donald Trump might try to claim the winner’s rosette while the votes are still being counted.
This is the ‘red mirage’ scenario, which would melt away if Joe Biden roared away with key states, vindicating pollsters who give him a healthy lead.

Wall Street’s primary concern is whether the next president can agree a huge new spending package with Congress, points out analyst Alastair Winter:

US investors expect, surely rightly, Mr Biden to win but can cope with a Trump second term and their main interest is the size of the inevitable fiscal stimulus (which will be determined by the party that controls the Senate).”

On the economic front, the latest purchasing manager surveys are expected to confirm that UK factory growth slowed last month, but accelerated in the US and eurozone.

That October data could soon be pretty historic, though, if European lockdowns trigger a double-dip recession......

The agenda

• 9am GMT: Eurozone manufacturing PMI for October
• 9.30am GMT: UK manufacturing PMI for October
• 2.35pm GMT: US manufacturing PMI for October