Nestle raises full-year guidance after third-quarter sales beats poll

October 21, 2020

ZURICH (Reuters) – Nestle <NESN.S> raised its guidance for organic sales growth to around 3% for 2020 on Wednesday after posting better-than-expected growth of 4.9% for the third quarter driven by strong demand for pet food and health products.

The world’s biggest food group has weathered the COVID-19 pandemic better than some of its peers thanks to its broad portfolio, with resilient pet food and health businesses making up for a slump in food sales to restaurants and cafes.

For the first nine months of the year, the maker of Nescafe coffee and KitKat chocolate said its organic sales grew by 3.5%, compared to analysts’ average estimate for 2.8%, according to a company-supplied consensus.

(Reporting by Silke Koltrowitz, editing by John Revill)

After keeping low profile on campaign trail, Obama makes debut for Biden

October 21, 2020

By Trevor Hunnicutt

(Reuters) – Former U.S. President Barack Obama will make his first appearance on the campaign trail on Wednesday for Democratic nominee Joe Biden, who is locked in a tight race with President Donald Trump in crucial states 13 days before the Nov. 3 election.

Obama, who served eight years in office with Biden as his vice president, will urge supporters to vote early for Biden and other Democratic candidates in the general election at an outdoor drive-in rally in Pennsylvania’s biggest city, Philadelphia, an aide to the former president said.

Trump will head to North Carolina, another crucial battleground state where polls show a tight race, to hold a rally with supporters on Wednesday evening.

The rare public appearance by Obama, a frequent target for Trump’s attacks and still one of the Democratic Party’s biggest stars nearly four years after leaving the White House, comes at a critical time.

Biden and Trump meet in their second and final debate on Thursday night, giving the Republican an opportunity to change the trajectory of a race that Biden is leading in national polls.

Biden’s campaign manager, Jen O’Malley Dillon, has warned staff and supporters she sees a far closer race in the 17 states the campaign considers battlegrounds than is suggested by the national polls showing a consistent lead for Biden.

“As President Obama has said, this is an all-hands-on-deck moment, and he looks forward to hitting the trail in person, socially distanced, since we’re just two weeks out from the most important election of our lifetimes,” the Obama aide said, speaking on condition of anonymity.

Biden regards his birthplace of Pennsylvania, a state Democrats narrowly lost to Trump in 2016, as a bellwether he must win. The former vice president has visited the state more than any other during the general election campaign.

Trump has gained ground on Biden in Pennsylvania, according to a Reuters/Ipsos poll released on Monday, which showed the challenger leading by 49% to 45%, slightly narrower than a week earlier.

“If we win Pennsylvania, we win the whole thing,” Trump said on Tuesday night at a rally in Erie, in Pennsylvania’s northwestern corner, where he warned supporters Biden’s policies would decimate the state’s energy and manufacturing jobs.

Trump’s campaign coffers plunged as he fell behind Biden in the money race, dipping to about $63 million in the bank at the end of September after spending about $139 million during the month, according to a disclosure filed with the Federal Election Commission on Tuesday night. [L1N2HC01F]

At the end of September, Biden’s campaign had about $177 million in cash. Biden’s campaign took in $281 million during the month, more than three times as much as the $81 million Trump’s campaign raised, the disclosures show.

A month earlier, the Trump campaign reported having $121 million in cash. Biden’s campaign has yet to report its cash holdings at the close of September, but it said this month that together with the Democratic Party, it had $432 million in the bank.

MILLIONS VOTE

At least 35 million people already have cast ballots, according to the University of Florida’s U.S. Elections Project, more than a fourth of the total 2016 vote.

Trump, who has resumed a crowded schedule of campaign rallies since recovering from his recent bout with COVID-19, will appear on Wednesday night at an airport rally in Gastonia, North Carolina.

Democratic vice presidential nominee Kamala Harris also will be in North Carolina for voter mobilization events in Asheville and Charlotte.

A Reuters/Ipsos poll released on Tuesday showed Biden and Trump about even in that state, with Biden at 49% and Trump at 46%, within the poll’s credibility interval.

Obama’s appearance on the campaign trail this week fills a gap left by Biden, who has stayed at home in Delaware since Monday for meetings and preparation ahead of the debate with Trump in Nashville, Tennessee.

Obama endorsed his former No. 2 publicly after Biden clinched the contentious Democratic nomination battle. He has since attended fundraising events for Biden, and delivered a major speech on Biden’s behalf at the party convention where the Democrat was nominated in August.

In-person campaigning has been upended in 2020 by the coronavirus pandemic, which has hit the United States particularly hard and turned traditional campaign rallies into a public health risk.

(Reporting by Trevor Hunnicutt in New York and John Whitesides in Washington; Editing by Colleen Jenkins, Jonathan Oatis and Gerry Doyle)

Seven more people handed over to judge in probe on French teacher’s murder

October 21, 2020

PARIS (Reuters) – Seven more people, including two underage minors, were handed over to a judge overnight as part of the ongoing investigation into last week’s murder of French teacher Samuel Paty, said an official from the French anti-terrorist prosecutor’s office.

Paty was beheaded on Oct. 16 in broad daylight outside his school in a middle-class Paris suburb by an 18-year-old of Chechen origin. Police shot the attacker dead.

Investigators say the teenager had sought to avenge his victim’s use of caricatures of the Prophet Mohammad in a class on freedom of expression. Muslims believe that any depiction of the Prophet is blasphemous.

The murder shocked France, and carried echoes of the attack five years ago on the offices of satirical magazine Charlie Hebdo, after the magazine had also published cartoons of Prophet Mohammad. Public figures called the killing an attack on the Republic and on French values.

A national tribute in honour of Paty will be held at Paris’ Sorbonne university on Wednesday.

(Reporting by Jean Terzian; Additional reporting by Sudip Kar-Gupta; Editing by Michael Perry)

Analysis: Google antitrust case to turn on how search engine grew dominant – experts

October 21, 2020

By Paresh Dave and Jonathan Stempel

OAKLAND, Calif./NEW YORK (Reuters) – The U.S. government’s antitrust case against Alphabet Inc’s <GOOGL.O> Google appears strong, but could face an uphill battle from a business-friendly judiciary that may question whether a free search engine beloved by consumers has actually left them worse off, several legal experts said.

Google was accused in the long-anticipated lawsuit filed on Tuesday of harming competition in internet search and search advertising through distribution agreements and other restrictions that put its search tool front and center whenever consumers browsed the web.

To win, the U.S. Department of Justice must prove that Google gained or maintained monopoly power through abusive conduct, or something beyond competition on the merits.

Several legal experts said Google’s alleged misconduct appears similar to allegations the government leveled in the 1990s against Microsoft Corp <MSFT.O>. That landmark case was settled in 2002, and a consent decree required the maker of the Windows operating system to stop retaliating against computer makers that used non-Microsoft software.

Rebecca Haw Allensworth, a professor at Vanderbilt Law School, said the Justice Department appeared wise to offer credible and narrow arguments in its 59-page complaint.

“They are not jumping on the bandwagon of we have to restructure antitrust law for tech,” she said. “They are sticking to the existing law.”

Eleven U.S. states joined the government’s lawsuit, and New York Attorney General Letitia James said her state and six others may soon file their own lawsuit.

Experts said the federal government is unlikely to back away from the case, and in fact might press harder, if Democrat Joe Biden wins the presidency over Republican incumbent Donald Trump in the Nov. 3 election.

Google is expected to argue that the government overestimated the company’s power by defining its market too narrowly.

But some experts said Google’s ubiquity makes the case more likely to hinge on whether its dominance stems from consumers preferring it to rivals, or whether the Mountain View, California-based company steered them away from those rivals.

“We know Google has a large share of that market,” said John Lopatka, a law professor at Pennsylvania State University. “The question is why.”

Shubha Ghosh, a law professor at Syracuse University, said the government alleges Google is blocking more consumer-friendly search engines, such as ones that do not collect user data to personalize ads, from gaining popularity. But he said Google could argue simply that its search engine was effective at generating results that consumers want, and was “not meant to be exclusionary.”

Or, as Lopatka put it: “It could say, we were an admired scrappy firm and we did really good work, and that’s why we became as dominant as we are.”

Skyrocketing prices often show that customers have been hurt by anticompetitive behavior.

But Google provides its search services for free, adding to the Justice Department’s challenges.

“The trend in judicial doctrine in Supreme Court decisions involving dominant firms has been to give big companies broad freedom to choose business strategies they prefer,” said William Kovacic, a law professor at George Washington University and former chair of the Federal Trade Commission. “If you’re a plaintiff, including a government plaintiff, that’s hard to overcome — not impossible, just very difficult,” he added.

Experts said that even if the Justice Department proved Google was a monopoly and abused its monopoly power, a court might struggle to fashion measures to improve competition in searches.

“Making a search engine isn’t easy,” said Chris Sagers, a law professor at Cleveland State University. “It seems extraordinarily unlikely any other firm is going to challenge Google meaningfully.”

(Reporting by Jonathan Stempel and Paresh Dave; Editing by Greg Mitchell and Leslie Adler)

World trade rebounding slowly, outlook uncertain: U.N. report

October 21, 2020

GENEVA (Reuters) – The value of global trade is set to fall by 7% to 9% in 2020 from the previous year, despite signs of a fragile rebound led by China in the third quarter, a United Nations report said on Wednesday.

No region was spared by an estimated 19% year-on-year plunge in world trade in the second quarter, as the COVID-19 pandemic disrupted economies, the U.N. Conference on Trade and Development (UNCTAD) said.

Global trade recovered somewhat in the third quarter, when it was estimated at about 4.5% less than in the same period a year ago, the agency said in its latest update.

“Trade in home office equipment and medical supplies has increased in Q3, while it further weakened in the automotive and energy sectors,” UNCTAD said. Growth in the textiles sector was also strong.

Its preliminary forecast put year-on-year growth for Q4 2020 at 3% less, but the report said that uncertainties persisted due to how the pandemic would evolve.

If the pandemic resurges in coming months, that could lead to a deteriorating environment for policy-makers and sudden increase in trade restrictive policies, it said.

China’s exports rebounded strongly in the third quarter after falling in the early months of the pandemic, and have posted year-on-year growth rates of nearly 10%, UNCTAD said.

“Overall, the level of Chinese exports for the first nine months of 2020 was comparable to that of 2019 over the same period,” it said.

Chinese demand for imported products recovered following a decline in Q2 2020, contrary to other major economies, it said.

Earlier this month the World Trade Organization (WTO) upgraded its forecast for trade in goods due to improvements from June and predicted a drop of 9.2% for 2020.

But it saw a more muted rebound in 2021, with further lockdowns from a second wave of COVID-19 infections posing clear risks.

(Reporting by Stephanie Nebehay; Editing by Gareth Jones)

Analysis: Rating agency scrutiny raises stakes for U.S. election process

October 21, 2020

By Ross Kerber and Kate Duguid

BOSTON/NEW YORK (Reuters) – As Americans go to the polls, some of the more influential observers of the election process will be the agencies that determine the country’s credit rating.

The country’s nearly top-notch, coveted rating is partly a reflection of the dollar’s status as the world’s reserve currency and the fact that the roughly $20 trillion U.S. Treasury market is the largest and most liquid in the world.

Yet two of the three major U.S. credit agencies, Fitch Ratings and Moody’s Investors Service, which give the United States their top rating of AAA and Aaa respectively, are watching the election and have said that anything other than a smooth handover or retention of power could cause concern.

The third major agency, Standard & Poor’s, rates the country’s long-term debt at AA+, just below the highest grade, partly on fiscal concerns. S&P has also cited political disagreements as a constraint on its ratings.

“If we don’t have a clear election result after election day we’re going to watch the process very closely,” said William Foster, Moody’s senior credit officer.

Fitch analyst Charles Seville said in a recent report https://www.fitchratings.com/research/sovereigns/drawn-out-us-presidential-election-scenario-highlights-governance-risks-12-10-2020 that the agency will also monitor the election for usual scenarios amid the rise of mail-in voting and logistical challenges at polling places. He wrote the current high grade is contingent on processes “for the transfer of power that are broadly accepted and executed.”

Asked about potential election uncertainty this year, a spokesman for S&P said its current thinking was reflected in its April 2 report, which cites partisanship as a rating constraint.

The focus on the process of the Nov. 3 national and state elections comes as U.S. President Donald Trump has offered a mixed message on whether he would cede power if he loses. 

So far the agencies have maintained their U.S. ratings despite the economic devastation and fiscal stress caused by the COVID-19 pandemic.

LITTLE SHORT-TERM IMPACT

Relegating the United States to a lower-tier credit rating or adding a negative outlook might not be an immediate blow to the value of U.S. Treasury debt, investors said.

Justin Hoogendoorn, head of fixed income strategy for Piper Sandler, said that a downgrade would likely have little impact at least in the short run on investors’ perception of Treasuries as a safety play.

When S&P lowered its long-term U.S. rating by one notch in 2011 over a widening deficit and higher debt levels, Treasuries rallied as investors bought them as safe-haven assets.

Should Moody’s, Fitch or both join S&P in a downgrade of the U.S. rating, it would effectively mark the end of the country’s long run as a triple-A credit, and while Treasury prices themselves may hold up, it could roil riskier assets as occurred in August 2011.

The long-running tensions of that time, including a congressional fight over the debt ceiling, damaged the perceived safety of U.S. bonds. The credit-default swap on the benchmark 10-year Treasury note <USGV10YUSAB=R>, which measures the cost to insure U.S. government debt, in August 2011 had roughly doubled from a year prior.

Other countries have seen sanguine reactions. Late on Friday, Moody’s lowered the United Kingdom’s sovereign debt rating to Aa3 from Aa2, yet the yield on the benchmark 10-year gilt <GB10YT=RR> ended Monday lower at 0.171%.

“We don’t think delayed election results will cast any doubts on the viability of the largest sovereign bond market in the world,” said Charlie Ripley, senior investment strategist for Allianz Investment Management. 

One reason to expect tame bond behavior is an expectation that the U.S. Federal Reserve would step in to suppress volatility.

“In a nutshell, the Fed will again be called on by the markets,” said Omar Slim, fixed income portfolio manager, PineBridge Investments in Singapore.

Investors with doubts about the viability of U.S. assets have some alternatives in sovereign debt in other countries, such as Switzerland and Japan, said Erik Weisman, a portfolio manager at MFS Investment Management in Boston. Weisman said MFS has held internal conversations examining which countries’ debt would be an attractive safe haven.

“If you’re not feeling supremely confident that the legal system will back your claims for assets, and for Treasuries specifically, then maybe you won’t see the U.S. as the safest destination,” Weisman said.

(Reporting by Ross Kerber in Boston and by Kate Duguid in New York. Additional reporting by Scott Murdoch in Hong Kong and by Stanley White in Tokyo; editing by Megan Davies and Steve Orlofsky)

Federer pain-free and on track for Australian Open

October 21, 2020

(Reuters) – Roger Federer is practising pain-free after undergoing two knee surgeries this year and says he expects to return to the circuit at the Australian Open in January.

The 39-year-old Swiss reached the semi-finals at Melbourne Park at the start of the year but missed the rest of the season after undergoing a second arthroscopic procedure on his right knee.

“I’m on the right track,” the 20 times Grand Slam singles champion told German-language magazine Schweizer Illustrierte.

“I’m gradually coming back but I’m going to take my time and don’t want to put any pressure on myself. I will only take part in a tournament when I am 100% fit.

“At the moment, it looks like I can make my comeback at the Australian Open in January.”

While he has made significant progress in his recovery he says he is still not at the point where he can train as normal.

“Not yet, more than two hours with the racket are not possible at the moment,” said Federer, who is currently ranked fourth in the world and saw Rafa Nadal equal his Grand Slam haul with a 13th French Open title this month.

“But I’ve been working on my stamina and strength absolutely without pain for a while. There will be no further operations.”

Federer is often asked about his retirement plans but the Swiss said he would keep playing as long as he was enjoying it.

“I have been thinking about ideas for about five years,” he added. “But as long as I am having fun and it’s right for all of us, I’ll keep going.”

(Reporting by Sudipto Ganguly in Mumbai; editing by Peter Rutherford)

Former first-round pick Garnett retires

October 21, 2020

Guard Joshua Garnett, a first-round draft pick in 2016 by the San Francisco 49ers, has retired.

The Washington Football Team, his current employer, announced the move on Tuesday.

In a corresponding move, Washington added defensive end Casey Toohill to the active roster. He was claimed off waivers from the Philadelphia Eagles and cleared his mandated six days of pre-entry COVID-19 testing.

Garnett, 26, played collegiately at Stanford. Washington signed him over the summer and activated him from the practice squad for the past three games. He played the bulk of his snaps on special teams for Washington.

He appeared in 25 games (11 starts) in the NFL.

–Field Level Media

Dodgers beat Rays 8-3 to draw first blood in World Series

October 21, 2020

(Reuters) – Mookie Betts hit a home run, stole two bases and scored twice as the Los Angeles Dodgers beat the Tampa Bay Rays 8-3 to win the first game of the World Series in Arlington, Texas on Tuesday.

The favored Dodgers jumped out to a 2-0 lead in the bottom of the fourth inning when center fielder Cody Bellinger laced a home run over the right field fence.

The Rays hit back with a Kevin Kiermaier solo shot but the Dodgers then raced away, Max Muncy’s RBI double extending their lead to 8-1 by the end of the sixth.

The Rays plated two runs and threatened more in the seventh but a sharply hit ball found the mitt of Dodgers relief pitcher Victor Gonzalez, who threw to second for a double play to end the inning.

The win saw Dodgers ace Clayton Kershaw, who has struggled at times in the postseason throughout his career, throw six strong innings, allowing one run on two hits and a walk while striking out eight to earn the win.

“It’s great to get this series going with a win. That’s the biggest thing,” Kershaw said.

“It’s always important to get that first game of a series and for me personally, it’s awesome to get to pitch well in a World Series.

“I’m just thankful to get that opportunity.”

Kershaw applauded his team’s hitters, whose made Rays starter Tyler Glasnow work for every out.

“Glasnow has unbelievable stuff and for us to keep fouling pitches off, grinding it out, getting a lot of walks, getting guys on base … it’s a testament to their at-bat quality,” he said.

After a truncated 60-game season due to the COVID-19 pandemic, the best-of-seven World Series is being played entirely at the new Globe Life Field with a limited number of fans in attendance.

The Dodgers, appearing in the World Series for the third time in four years, are looking to win their first title since 1988.

The Rays are hoping to claim their first championship after coming up short in their only appearance in 2008.

Game 2 is on Wednesday.

(Reporting by Rory Carroll in Los Angeles; Editing by Peter Rutherford)