As Hurricane Matthew moves north towards Florida, thousands of coastal residents have fled inland to avoid possible flooding and power outages that could affect more than a million people. For investors, the storm is an unwelcome reminder that a single storm can create billions of dollars in damages and interrupt commodity supplies. According to the U.S. National Weather Service, the storm has the capability to disrupt transport and basic services in the region for many weeks. On Wednesday, Florida Governor Rick Scott announced that the storm may spur the largest evacuation in the state’s history. Meanwhile, the hurricane has rampaged through the Caribbean. Matthew slammed Haiti, one of the most economically fragile states in the Western Hemisphere, with rescue workers still unable to calculate the human toll from the storm. Critically, Matthew has also delayed a presidential election that interim President Jocelerme Privert had pledged to settle unrest in a nation that has waited since 2015 for a new leader.
Initial claims fall near record low. U.S. Department of Labor data released today indicated that the second fewest number of recently unemployed workers in more than 40 years sought benefits last week. Total claims registered at 249,000 versus consensus economists’ forecasts for 256,000. The Department of Labor will releases the September employment situation report tomorrow, with indications that the job market remains robust, making a Federal Reserve rate hike likely before year’s end.
Guterres voted UN Secretary General. António Guterres is on track to become the UN’s next secretary general, replacing South Korean Ban Ki-moon. Guterres, 67, had served as prime minister of Portugal for seven years as well as a stint as the UN High Commissioner for Refugees, a role that drew accolades from world leaders. The UN Security Council gave Guterres strong backing yesterday and is expected to bring him before the 193-nation UN General Assembly today. Guterres began his career as a professor of electrical engineering but became a career socialist politician during the early 1970s, a tumultuous time for Portugal as it shed a four-decade old authoritarian regime.
Blackstone to sell Chinese IT firm. The Wall Street Journal, citing unnamed sources, today reported that private equity giant Blackstone Group was preparing to sell Chinese outsourced IT provider Pactera Technology International in a deal valued at roughly $675 million, or approximately a 50 percent return on the price the fund manager paid as lead investor in a 2014 takeover. The buyer in the transaction is a division of Chinese conglomerate HNA Group.
Theranos to lay off staff and close labs. Embattled medical diagnostic company Theranos announced yesterday that it will shutter its blood-testing facilities and lay off approximately 340 workers following regulatory sanctions and ongoing investigations. The company founder and CEO, Elizabeth Holmes, was barred from the clinical-testing industry for two years in July by the Centers for Medicare and Medicaid. According to Holmes’ statement on the company website, the firm will now focus on next-generation testing equipment that is currently in the development stage.
Meeting among EU nations advocating tax on trading. Leaders from ten members of the European Union are convening today in Luxembourg to renew discussions of a tax on financial transactions. In the aftermath of the credit crisis, a transaction levy, particularly on swaps and other derivatives, was proposed as an offset to the systemic risk presented by capital markets. Austrian Finance minister Hans Jörg Schelling will lead the discussion.
