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Good morning. Germany extended a job preservation program, Hurricane Laura is poised to become a roof-ripping storm and Spain’s prime minister has rejected implementing a new lockdown. Here’s what’s moving markets.
Germany extended a program that’s kept millions of people from losing their jobs to help Europe’s biggest economy recover from the coronavirus crisis. Chancellor Angela Merkel’s coalition agreed to provide job-preserving subsidies until the end of 2021 that pay the bulk of paychecks and allow companies to hold on to workers during an economic shock. The news came after a report Tuesday showed German companies have turned slightly more optimistic that the road to recovery will continue.
Spanish Prime Minister Pedro Sanchez rejected a new national lockdown to contain the virus, putting pressure instead on regional authorities to come up with a response to the nation’s resurgent coronavirus outbreak. The U.K. government made another U-turn as English children over the ages of 11 will now be required to wear face masks in schools in high-risk areas. And in Asia, a story of infections at a Starbucks in South Korea may support the case for wearing face coverings.
Hurricane Laura is poised to become a roof-ripping Category 3 storm when it comes ashore along the Texas-Louisiana coast this week, threatening to inflict as much as $18 billion in damages on the region and keep some of America’s largest oil refineries shut for months. Laura’s winds were forecast to peak at 120 miles (193 kilometers) per hour as the storm comes ashore late Wednesday or early Thursday, according to the National Hurricane Center. It’s set to be the first major system to hit the Gulf Coast since Michael in 2018. Oil held at a five-month high, while catastrophe insurers on the Lloyd’s of London market will have an eye on the damage bill.
Cloud and software stocks may get a boost in Europe after Salesforce.com Inc. topped analysts’ quarterly revenue and profit estimates, signalling that many corporate customers have responded to the pandemic and economic slump by upgrading critical technology systems to bolster their businesses. The stock soared 13% in after-hours trading. Elsewhere, Hewlett Packard Enterprise Co. gave an outlook for earnings that was better than Wall Street was projecting, indicating that the server maker’s extensive cost cuts are paying off.
We’ll get France consumer confidence and U.S. durable goods data, while Bank of England Chief Economist Andy Haldane and the European Central Bank’s Isabel Schnabel are due to speak. Elsewhere, watch earnings reports from real estate investor Aroundtown SA and construction group Eiffage SA. European stock futures are showing small gains.