What’s happening: The latest reading of the IHS Markit Composite Purchasing Managers Index for Europe, which tracks the manufacturing and services sectors, came in at 50.1 for September, a low for three months.
As manufacturing activity exploded, the service sector began to contract again as concerns over Covid-19 cases intensified.
Chris Williamson, chief business economist at IHS Markit, said the data indicates the recovery “stagnated” this month and warned of a “two-tier economy” with manufacturing and services shrinking. leading in opposite directions.
Other economists have also expressed concern. The data, they said, clearly showed the impact of rising infections and new government restrictions.
“This supports our view that the consumer recovery should level off, or even reverse, as rising virus cases, growing job losses and uncertainty over the coming months reduce spending,” a- she said in a research note.
Coming soon: UK data showed the rate of expansion eased from August. PMI data for the United States, due later Wednesday, should also show that growth in the services sector edged down in September.
Tesla is coming for Volkswagen. Can it be successful?
CEO Elon Musk laid out ambitious plans for Tesla ( future at the company’s highly anticipated Battery Day event. )
The highlight: Musk promised that a $ 25,000 Tesla would be available in about three years due to technological advancements that would cut the cost of batteries in half. It would be much cheaper than any car made by Tesla so far, reports my CNN Business colleague Peter Valdes-Dapena.
Just as important was Musk’s promise to make 20 million vehicles a year, more than all passenger vehicles sold in the United States last year. The Volkswagen Group, the world’s largest automaker, sold 11 million vehicles worldwide in 2019.
Producing cars on this scale would certainly help justify Tesla’s position as the most valuable automaker on the planet. Right now, the company is worth $ 395 billion even though it produces a small fraction of vehicles from competing Toyota and Volkswagen, which unveiled its ID.4 electric SUV on Wednesday.
But investors – who helped push the share price higher in anticipation of the event – had hoped for a quicker timeline for cheaper batteries. Stocks are down nearly 6% in pre-market trading after falling a similar amount on Tuesday.
“The vertical movement of the stock over the past year sets the stage for investors to expect immediate results,” Gene Munster of Loup Ventures told clients. “What they got instead was a [three]annual plan. ”
Remember: Musk has a habit of breaking his promises sometimes, if not at all. Years ago Tesla promised a $ 35,000 electric car, the Tesla Model 3, but it was only available at that price for a short time and encountered big production problems at first.
Increased Nike digital selling power
Pedestrian circulation at Nike ( stores still haven’t recovered from the pandemic, but a boom in online sales is taking the company’s shares to new highs. )
The sportswear company reported revenue for its last quarter on Tuesday that exceeded Wall Street expectations. One key factor: An 82% increase in digital sales, reports my CNN Business colleague Clare Duffy.
“Nike is recovering faster thanks to accelerating brand dynamics and digital growth, as well as our continued focus on normalizing supply and demand in the market,” said CFO Matt Friend in a statement.
Friend told analysts demand for the Nike app jumped 150% in the quarter.
The big picture: Retail brands with a strong online presence, like Nike and Walmart, are doing much better than those that hadn’t made big investments before the pandemic hit. It could widen the industry’s gap between the haves and have-nots as bankruptcies pile up.
Investor Insight: Nike stock, which has gained 15% this year, is up nearly 13% in pre-market trading and could start the day with an all-time high.
The latest purchasing managers index reading for the United States is released at 9:45 a.m.ET.
Also today: Federal Reserve Chairman Jerome Powell continues his testimony to Congress at 10 a.m. ET.
Coming tomorrow: How many Americans first filed for unemployment benefits last week?