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Contents Click on the links below to get to the stuff you really really want. USA – Optimism sent stocks up last week; Biden’s financial package going through Congress; Bond prices falling steadily (#USA) UK – Negative travel and leisure data; Stocks up generally though; Economy likely to shrink further in first quarter of 2021 (#UK) Continental Europe – Stocks up but political squabbles not helping (#Europe) Elsewhere – China powers on (#Elsewhere) WTF – Happy Valentine’s (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
Stock prices have been riding the wave of optimism over the past week. US stocks are hitting more record highs and oil prices are burgeoning as investors bet on an economic recovery driven by vaccine success.
Some of the unloved stocks during the past year have come back into favour, hence. the Dow Jones Industrial Average is up to new highs. But the tech-heavy Nasdaq Composite is up a ridiculous 55% so far this year. I don’t see how that’s sustainable.
In fact, there are a few signs that I find quite worrying at the moment. Hoards of retail investors piling into stuff that they don’t really understand, then getting upset when the trading platforms shut them out for, what I think is in many cases, their own good.
Meanwhile, Biden’s financial support package is making its way through Congress. Folk will have to twiddle their thumbs while this happens before become over-excited again in a month or two’s time.
For a more sober view, I turn once again to the bond market. The demand for and prices of lower-risk rated bonds has been falling fairly steadily since July of last year. This pattern needed a few months for it to become clear, but it has led bond yields on the benchmark 10-year Treasury (US government bond) up from around 0.5% to more than 1.2% today.
In other words, investors are moving money into higher-risk investments, namely stocks. As a result, the prices of lower-risk bonds are falling, and that pushes their yields higher. We’re still a long way below the 3% highs of 2018, but that’s to be expected bearing in mind everything that’s happened over the past year or two. In other words, bond prices and yields are reflecting a more considered outlook, as they tend to.
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UK
Despite some negative data for travel and leisure companies on Friday, stocks had a pretty good week in the UK last week. The FTSE All Share added 1.7% over the week as the optimism I referred to in the US section took hold.
The reality is that it’s going to take a few months before all the hopes can start to become reality. In the meantime, we can look forward to more economic contraction (4% in the first quarter of 2021 according to the spods at the Bank of England), and loads more virus cases.
If the vaccines work and the virus doesn’t mutate too quickly into deadly new forms, then the lockdowns can be lifted gradually as herd immunity comes through. This should not be confused with herd mentality, that’s what nutters in Washington DC get up to.
For now, the UK economy is about one tenth smaller than it was before the pandemic. When you consider that annual growth has been between 1.5% and 2.5% for many a year, that’s one heck of a hit.
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Continental Europe
As elsewhere, stocks were up across the Continent. The political machinations that the UK experienced leading to Brexit are manifesting themselves in various countries in the EU. The European Central Bank is doing what it can to support economic stability and growth, but there’s only so much you can do to keep your car on the straight and narrow if the kids arguing in the back pull out baseball bats to determine who started it.
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Elsewhere
As you can see from the chart further down this glorious page, Chinese stocks as measured by the CSI 300 have been rocketing upwards of late. They are being bounced around a fair bit by the ongoing tensions with the US, and by some mixed economic data. But the Asia Pacific region in general was able to impose more draconian measures to stifle the spread of the virus (once it admitted the existence of the virus). And that has been paying off lately.
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WTF (What’s The Fact?)
Happy Valentine’s
The Baron of Bangladesh shared this with me the other day. I felt it worthy of inclusion.
St. Valentine, a bishop in the time of the Roman Empire before Christianity, had been accepted by Constantine, was said to have performed secret weddings against the Emperor’s will, and eventually got caught and fell foul of the law, such that it was.
Before his execution, he fell in love with the gaoler’s daughter, and on his last night on Earth wrote her a note which he signed, “Your Valentine”.
After that, of course, he was beaten to death with clubs and had his head cut off, on February 14th.
Valentine’s Day still stands as a stern warning against the dangers of marriage.
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Numbers
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Links
Investopedia (www.investopedia.com/dictionary/) – Loads of free explanations of financial terms including some helpful videos. Not 100% accurate, but a good starting point Guffipedia (ig.ft.com/sites/guffipedia/) – Lucy Kellaway of the FT has collected some painful examples of corporate people disappearing up their own analogies Guardian (www.theguardian.com) – Free to access website with a couple of decent columnists (e.g. Nils Pratley and Larry Elliott) Times of India (timesofindia.indiatimes.com) – Why use five words when 37 will do? Daily Mail (www.theatlantic.com/magazine/archive/2016/07/the-war-on-stupid-people/485618) – Click it. I dare you.
Back to Contents (#Contents)
———————————————————— IMPORTANT This is my opinion. Yes I read a lot and share what I’ve read with you, but this content remains my opinion. It’s NOT advice. If you take my advice – don’t take my advice. Any decisions you make about investments, your hairstyle or whether or not to eat marzipan are entirely at your own behest. If you’re unable to recognise the devil’s ear wax when you see it, then you’re on your own.
————————————————————
============================================================ Copyright © 2021 Chris Hurst, All rights reserved.
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Contents Click on the links below to get to the stuff you really really want. USA – Stock rally peters out; Amazon slumps; Oil up; Industry picking up (#USA) UK – Services output and jobs data down; GSK down on CureVac partnership (#UK) Continental Europe – Bayer finally reaches Roundup settlement (#Europe) Elsewhere – US rumours of Chinese trade blacklist (#Elsewhere) WTF – Let’s play Guess the News Story (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
The stock rally that had been pushing stocks up, recovering from last week’s shenanigans, ran out of steam yesterday.
In the US, the tech-heavy Nasdaq Composite closed close to its starting point after Amazon’s share price slumped. The tech giant is set to lose its creator, chief and Dr. Evil look alike, Jeff Bezos. His megalomania can now switch to hijacking nuclear weapons and holding the world to ransom.
Meanwhile, oil prices got a boost from Saudi Arabia and its pals saying that they would allow the glut of oil remaining from the lockdowns to be consumed before pumping more excess into the stockpiles.
There were some signs of an industrial pick-up in the US, but it’s all a bit tentative and hopeful at the moment. But the general expectation is that things will, slowly, get better from here on in, notwithstanding the odd bout of awful data. That helped to lower demand for the benchmark 10-year Treasury (US gov’t bond), sending its price down and its yield up to 1.13% (remember it was down to 0.51% in April).
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UK
The FTSE 100 and FTSE 250 finished in modestly positive territory yesterday. They had been doing better before US markets opened and sent a bout of doubt across the water.
Domestic macro-economic data provided the biggest drag though. Services output and jobs data both delivered a slug of negative sentiment. This isn’t too much of a surprise though, as the latest lockdown takes its toll on, well, everything.
Perhaps the most significant individual stock mover was GlaxoSmithKline. The pharmaceutical giant has teamed up with CureVac to spend €150 million collaborating on a vaccine to combat emerging variants of Covid-19. That didn’t impress investors, and down went GSK.
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Continental Europe
Gains for stocks were similar on the continent where the Euro Stoxx 50 and German DAX closed 0.1% and 0.3% up on the day. A piece of sort-of-good news came about for Bayer, which has reached a $2 billion deal to meet all legal claims in the US over cancer related to its weedkiller, Roundup.
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Elsewhere
Stocks across the Asia Pacific region are largely down this morning. As well as the rally having petered out, Biden’s nominee for commerce secretary, Gina Raimondo, has made some comments regarding a trade blacklist that could target Chinese companies.
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WTF (What’s The Fact?)
Let’s play Guess the News Story
So here’s the photo from this morning’s paper…
Now is the story: a – Woman accused of hogging bubble-gum for outfits b – Miss Essex arrives in style c – Victoria Beckham denies confusing hiring a “body double” with “double body” d – Folk at Heathrow queue for hours to get past Immigration and hack photographer was nowhere near the event so he supplied a photo of a woman not wearing much
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Links
Investopedia (www.investopedia.com/dictionary/) – Loads of free explanations of financial terms including some helpful videos. Not 100% accurate, but a good starting point Guffipedia (ig.ft.com/sites/guffipedia/) – Lucy Kellaway of the FT has collected some painful examples of corporate people disappearing up their own analogies Guardian (www.theguardian.com) – Free to access website with a couple of decent columnists (e.g. Nils Pratley and Larry Elliott) Times of India (timesofindia.indiatimes.com) – Why use five words when 37 will do? Daily Mail (www.theatlantic.com/magazine/archive/2016/07/the-war-on-stupid-people/485618) – Click it. I dare you.
Back to Contents (#Contents)
———————————————————— IMPORTANT This is my opinion. Yes I read a lot and share what I’ve read with you, but this content remains my opinion. It’s NOT advice. If you take my advice – don’t take my advice. Any decisions you make about investments, your hairstyle or whether or not to eat marzipan are entirely at your own behest. If you’re unable to recognise the devil’s ear wax when you see it, then you’re on your own.
————————————————————
============================================================ Copyright © 2021 Chris Hurst, All rights reserved.
Want to change how you receive these emails? You can ** update your preferences (funnymoney.us4.list-manage.com/profile?u=09a51282c76deb2dc44653051&id=dcc3fa0043&e=f68b7163ab&c=3f1cbcb33e) or ** unsubscribe from this list (funnymoney.us4.list-manage.com/unsubscribe?u=09a51282c76deb2dc44653051&id=dcc3fa0043&e=f68b7163ab&c=3f1cbcb33e) .

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Contents Click on the links below to get to the stuff you really really want. USA – Democrats press ahead with stimulus plan, boosting investor hopes; Tech stocks up most; Manufacturing data positive (#USA) UK – Silver pushed up by retail herd; Broad stocks up on stimulus news; Oil down, miners up (#UK) Continental Europe – Stocks prices up sharply; Delivery Hero down (#Europe) Elsewhere – Stock price upward march continues (#Elsewhere) WTF – Bojo’s new hairstyle (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
We’re back to the new normal after last week’s Gamestop nonsense. The Democrats are pressing on with their budget, and that includes the $1.9 trillion support and stimulus package, despite appeals from Republicans to make it smaller.
This progress shifted investor focus across the US and beyond, sending stocks up yesterday. The S&P 500 added 1.6% while the tech-heavy Nasdaq Composite jumped by 2.5%. Tech stocks are still in favour as we face more months of health and financial misery at the hands of the pandemic.
There was some positive macro-economic news as well. The purchasing managers’ index for manufacturing was up to a rip-roaring 60.5 in December and not much below that in January at 58.7. I’d normally expect to see that number between 45 and 55, where above 50 denotes expected expansion, and below 50 expected contraction. So things appear to be getting back to normal, but I’m fully expecting more turbulence at least until April.
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UK
While the Gamestop retail investors have been locked out of investing in Gamestop, they’ve turned their attention to silver, which has shot up in price as a result. The brokers will be loving this because they’re making a packet on retail investors who pay far higher commissions (by percentage) than do their institutional counterparts.
But the real news is, as usual, from the US where the stimulus package seems more imminent. That has given investors a boost all over the place (as in all over the world not all over the investors, well, not necessarily). In the UK, the FTSE 100 and FTSE 250 both added more than 0.8% yesterday. Technology and oil stocks were down but all the other sectors were up.
Mining stocks were notable gainers as the latent recovery would be a blessed relief for them once it gets going and drives demand for minerals back up.
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Continental Europe
Gains in continental stock prices were more substantial than their UK peers thanks to a smaller oil sector which, therefore, was less of a drag on prices. The Euro Stoxx 50 and German DAX both added 1.4% on the day. Delivery Hero nudged down, doing its current job of letting me know what the sentiment is among investors during the lockdown era.
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Elsewhere
Yesterday’s upward march in stock prices continued across the Asia Pacific region. The stimulus news did its thing sending major benchmark indices up by between 1.2% in Hong Kong to 2.7% in India at the time of writing.
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WTF (What’s The Fact?)
Bojo’s new hairstyle
Before
After
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Links
Investopedia (www.investopedia.com/dictionary/) – Loads of free explanations of financial terms including some helpful videos. Not 100% accurate, but a good starting point Guffipedia (ig.ft.com/sites/guffipedia/) – Lucy Kellaway of the FT has collected some painful examples of corporate people disappearing up their own analogies Guardian (www.theguardian.com) – Free to access website with a couple of decent columnists (e.g. Nils Pratley and Larry Elliott) Times of India (timesofindia.indiatimes.com) – Why use five words when 37 will do? Daily Mail (www.theatlantic.com/magazine/archive/2016/07/the-war-on-stupid-people/485618) – Click it. I dare you.
Back to Contents (#Contents)
———————————————————— IMPORTANT This is my opinion. Yes I read a lot and share what I’ve read with you, but this content remains my opinion. It’s NOT advice. If you take my advice – don’t take my advice. Any decisions you make about investments, your hairstyle or whether or not to eat marzipan are entirely at your own behest. If you’re unable to recognise the devil’s ear wax when you see it, then you’re on your own.
————————————————————
============================================================ Copyright © 2021 Chris Hurst, All rights reserved.
Want to change how you receive these emails? You can ** update your preferences (funnymoney.us4.list-manage.com/profile?u=09a51282c76deb2dc44653051&id=dcc3fa0043&e=f68b7163ab) or ** unsubscribe from this list (funnymoney.us4.list-manage.com/unsubscribe?u=09a51282c76deb2dc44653051&id=dcc3fa0043&e=f68b7163ab&c=f0b788a66a) .

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Contents Click on the links below to get to the stuff you really really want. USA – Volatile week for stocks; Media fuss over Gamestop; Economic fall-out from covid-19 seeping through; US has 25% of global virus cases (#USA) UK – Just Eat up, Rolls-Royce aircraft engines down; Gilt prices up then down last week (#UK) Continental Europe – As UK & US (#Europe) Elsewhere – Stocks recovering some of last week’s losses (#Elsewhere) WTF – Cat a tonic (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
It was a volatile time for stocks last week. Hedge funds were betting on stuff going down, as is their wont, and retail investors got together to counter the bet, before they were locked out by some trading platforms. This has created a big media fuss and, therefore, a political one as well. What conclusions can be drawn (hedge funds have more power, don’t bet on stuff if you can’t afford to lose what you’re betting) are ones that really shouldn’t be news to anyone.
The back story is really what is of more significance as far as I’m concerned. The economic fall-out from the latest lockdown measures is feeding through into hard data, and folk are having to acknowledge that the next few months are going to be painful.
In the meantime, Caterpillar, one of the bellwethers of traditional Dow Jones Industrial Index companies, beat quarterly profit estimates, as did Eli Lilly and Honeywell. But Chevron posted a chunky fourth-quarter loss.
The big number is this one: the US has now recorded more than 26 million cases of Covid-19, that’s 25% of the world’s total registered number from a country with 4% of the population.
The bottom line is that investors are nervous, and with good reason. The S&P 500 closed 1.9% lower on Friday, while the demand for and prices of benchmark 10-year Treasuries (US gov’t bonds) was relatively turbulent.
It’s one of those times when I prefer to sit back with a cup of coffee and remind myself of why I invested in what I did, and why I set up the portfolio the way I did. If I did my prep the way I should have, I’ll be OK in time.
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UK
As the US section explains, it was a fraught week for investors with larger western markets marching pretty much in unison to the same fears.
Food delivery company, Just Eat, closed 4.0% higher on Friday as its immediate prospects seemed to improve in the face of more virus and lockdown worries. At the other end of the list was Rolls-Royce, the trouble aircraft engine manufacturer. Its customers are under the cosh at the moment and it is reeling, hence the 5.4% drop on the day.
Much like their US counterparts, UK 10-year Gilts (UK gov’t bonds) were in much higher demand during the middle of the week as folk panicked over the Gamestop/ Reddit/ Robinhood fiasco. The tension eased towards the end of the week, sending the demand for and prices of Gilts back down, but the hair-trigger volatility is still lurking, so don’t be surprised to see lots of distracting price movements over the coming weeks.
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Continental Europe
There’s not much to add for the continent. It was a week of frenetic energy that didn’t really achieve much unless you’re a broker, in which case you win regardless of which way the price moves.
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Elsewhere
Things have kicked off on a more positive note this morning. Stocks across the Asia Pacific region are reclaiming some of last week’s losses. The Chinese CSI stock index trading 1.2% higher, Hong Kong and Korean stocks are 2.2% or more up, and Indian stocks have leapt by over 4.0% on the day so far.
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WTF (What’s The Fact?)
Cat a tonic
Today is, apparently, “answer your cat’s questions day”. My guess is that a cat would be asking such things as: – Why don’t you cover yourself in your own spit? – When will you next give me food? – Why do you speak to me in complex sentences and expect me to understand? – Why do you refer to me as “Cuddles” when my street name is “Knuckles McGraw”? – Do you realise that before you stroked me and picked up that sandwich, I’d covered myself in my own spit, working my way from the bottom up?
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Links
Investopedia (www.investopedia.com/dictionary/) – Loads of free explanations of financial terms including some helpful videos. Not 100% accurate, but a good starting point Guffipedia (ig.ft.com/sites/guffipedia/) – Lucy Kellaway of the FT has collected some painful examples of corporate people disappearing up their own analogies Guardian (www.theguardian.com) – Free to access website with a couple of decent columnists (e.g. Nils Pratley and Larry Elliott) Times of India (timesofindia.indiatimes.com) – Why use five words when 37 will do? Daily Mail (www.theatlantic.com/magazine/archive/2016/07/the-war-on-stupid-people/485618) – Click it. I dare you.
Back to Contents (#Contents)
———————————————————— IMPORTANT This is my opinion. Yes I read a lot and share what I’ve read with you, but this content remains my opinion. It’s NOT advice. If you take my advice – don’t take my advice. Any decisions you make about investments, your hairstyle or whether or not to eat marzipan are entirely at your own behest. If you’re unable to recognise the devil’s ear wax when you see it, then you’re on your own.
————————————————————
============================================================ Copyright © 2021 Chris Hurst, All rights reserved.
Want to change how you receive these emails? You can ** update your preferences (funnymoney.us4.list-manage.com/profile?u=09a51282c76deb2dc44653051&id=dcc3fa0043&e=f68b7163ab) or ** unsubscribe from this list (funnymoney.us4.list-manage.com/unsubscribe?u=09a51282c76deb2dc44653051&id=dcc3fa0043&e=f68b7163ab&c=5c2d4920aa) .

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Contents Click on the links below to get to the stuff you really really want. USA – Stimulus package set for delay; Tech stocks up again; Worries over asset prices (#USA) UK – Lockdown restrictions hit travel and leisure; Bond prices up (#UK) Continental Europe – Slower vaccine distribution and more restrictions sink stocks (#Europe) Elsewhere – Stocks down on stimulus delay (#Elsewhere) WTF – People finally united (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
Word has it that Joe Biden’s stimulus package won’t get pushed through until March. That rather put a dampener on the recent run of asset price rises, as did voices from the banking sector suggesting that asset prices had risen too far and were set for a fall.
That combo slowed but didn’t stop asset prices in the US, but sure didn’t help stocks outside the world’s largest economy. The S&P 500 added 0.4% while, yet again, the tech sector posted gains as folk anticipated more revenues during the latest lockdown.
As an investor, it’s worth noting that a handful of US tech giants (Amazon, Apple, Alphabet and some beginning with other letters) have hit stratospheric highs, much of which seem inflated. More industrial companies have been catching up, but smaller companies less so. It’s an imbalance of price rises, but one that could lead to quite a downturn in tech stocks and, therefore, confidence, which would feed a broader adjustment…at least until that stimulus package gets pushed through.
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UK
Stocks across Europe were dealt a blow by the latest US prognostications (not to mention mutations of the virus taking more victims). Lockdown and travel restrictions did it for travel and leisure stocks in the UK where the FTSE 100 and FTSE 250 dropped by 0.8% and 1.2% respectively. British Airways owner, IAG, was down along with Rolls-Royce engineering, Tui (the one with the irritating adverts with the gappy-toothed woman), easyJet, Wizz and Carnival.
The relatively swift roll-out of the vaccine in the UK helped to alleviate some concern among investors, but the general outlook was not great for the near-future. That sent the value of the pound down which, as usual, provided a boost for the FTSE 100 on the day.
Bond investors were in sombre mood. The demand for and prices of lower-risk rated bonds was up as investors sought perceived “havens” in which to park money. That send yields down leaving the benchmark 10-year Gilt (UK government bond) sharply lower on the day.
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Continental Europe
As mentioned in the UK section, the roll-out of vaccines has not been as swift as that of the UK (yep, the UK finally seems to have done something moderately well during the pandemic). On top of that, increased movement restrictions appear likely to be enforced across the Continent.
As a result, the Euro Stoxx and German DAX closed 1.4% and 1.7% down respectively. The two companies that provide a bellwether on the virus-affected stock movements were doing their bellwethery thing yesterday: MTU Aero Engines sank by 5.1% while Delivery Hero added 0.4%.
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Elsewhere
Stocks across much of the Asia Pacific region had been boosted by hopes of US stimulus. With those hopes being frustrated by the apparently likely delay, stocks have dropped this morning. The range of falls is fairly substantial with the Chinese CSI 300 and Korean Kospi by falling by around 2.0%.
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WTF (What’s The Fact?)
People finally united
After a few years of disharmony, aggression and disappointment, people have been united in celebration over some truly positive news…
…Keira Knightley has said she won’t do any more nude scenes.
Back to Contents (#Contents)
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Links
Investopedia (www.investopedia.com/dictionary/) – Loads of free explanations of financial terms including some helpful videos. Not 100% accurate, but a good starting point Guffipedia (ig.ft.com/sites/guffipedia/) – Lucy Kellaway of the FT has collected some painful examples of corporate people disappearing up their own analogies Guardian (www.theguardian.com) – Free to access website with a couple of decent columnists (e.g. Nils Pratley and Larry Elliott) Times of India (timesofindia.indiatimes.com) – Why use five words when 37 will do? Daily Mail (www.theatlantic.com/magazine/archive/2016/07/the-war-on-stupid-people/485618) – Click it. I dare you.
Back to Contents (#Contents)
———————————————————— IMPORTANT This is my opinion. Yes I read a lot and share what I’ve read with you, but this content remains my opinion. It’s NOT advice. If you take my advice – don’t take my advice. Any decisions you make about investments, your hairstyle or whether or not to eat marzipan are entirely at your own behest. If you’re unable to recognise the devil’s ear wax when you see it, then you’re on your own.
————————————————————
============================================================ Copyright © 2021 Chris Hurst, All rights reserved.
Want to change how you receive these emails? You can ** update your preferences (funnymoney.us4.list-manage.com/profile?u=09a51282c76deb2dc44653051&id=dcc3fa0043&e=f68b7163ab) or ** unsubscribe from this list (funnymoney.us4.list-manage.com/unsubscribe?u=09a51282c76deb2dc44653051&id=dcc3fa0043&e=f68b7163ab&c=662ff45619) .

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Contents Click on the links below to get to the stuff you really really want. USA – Contagion rates up; Stock rises halted; Tech stocks up again (#USA) UK – Stocks down, led by Rolls Royce and oil companies; Gilts steady (#UK) Continental Europe – ECB provides no further stimulus this month; Tech and sandwich deliverers up, oil down (#Europe) Elsewhere – Hong Kong lockdown hits stocks; Taiwan tech stocks up (#Elsewhere) WTF – Christine LaFrench (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
The virus contagion rates rage on, bringing the need for more lockdown measures to try to slow the death rate and take pressure off the health services. That was the global story yesterday and it applied just as much to the US as anywhere. Biden came up with his strategy to curtail the pandemic, warning that things would get worse before they get better.
The virus-led mood killer stopped the stock rise in the US, leaving only the tech-heavy Nasdaq climbing as investors anticipated another round of good fortune for the companies that have done well during the previous lockdowns.
The latest macro-economic data didn’t really move the mood one way or the other. Jobless numbers are mooching about while the Philadelphia Federal Reserve’s manufacturing index jumped, but from a low point. But it did hit its highest level in three months suggesting that manufacturing might be inching back to normality. The final set of data came in the form of homebuilding, and those numbers were fairly positive.
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UK
UK stocks were blighted by the additional news that the European Central Bank didn’t appear to be doing much to offer further stimulus (see Continental Europe). The FTSE 100 and FTSE 250 both closed 0.4% lower yesterday with tech companies and sandwich deliverers among the risers: Sage, Just Eat and Ocado topped gains on the FTSE 100 after adding between 4.0% and 5.0% on the day.
Rolls-Royce was back down again as continued its bouncing around while folk try to work out how much peril it’s in. BP and Shell were also following the oil price down after stockpiles were shown to be higher than expected in the US.
Bonds have been pitching around for a few months as investors guess how long and how much more pain there is to endure before the UK economy gets back up and running properly again. The yield on the benchmark 10-year Gilt (UK government bond) has been trading at around 0.3% since Biden won the Senate, and that seems to have allayed political uncertainty fears that were sending bond yields all over the place in November and December. Things are slowly sorting themselves out it what I take from this.
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Continental Europe
About the European Central Bank. Well, Christine Lagarde stepped up to the microphone (see WTF) and more or less said that “a lot of uncertainty about the pandemic” remains. No merd. Thanks Christine. She then went on to outline that the ECB was not adding further to its additional quantitative easing announced in December nor reducing interest rates for the time being. Commentators seemed a bit piqued at this, but they’re already doing loads at the ECB, and they want to see how effective those measures are as the run through the system. So it seemed fairly reasonable to me.
Investors also seemed fairly sanguine as the Euro Stoxx 50 and German DAX only nudged down a touch. Sector moves were predictable: tech stocks were up while oil stocks dropped. Delivery Hero was, of course, the highest riser on the DAX, adding 3.6% on the day.
Back to Contents (#Contents)
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Elsewhere
Hong Kong’s stocks have been battered following the announcement of a lockdown there. This will be to combat the virus, but the Beijing authorities might be accused of using it as a cloak for more nefarious activities as well.
Taiwan’s tech-focused stocks are up sharply this morning, while stocks across the rest of the region are not faring so well.
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WTF (What’s The Fact?)
Christine LaFrench
Christine Lagarde, Governor of the European Central Bank, was doing her “Hi ham zee most French personne hin ziss room” thing yesterday. She’d just stepped out of the kitchen and forgotten to take the tea towel off her shoulder. Quelle femme.
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Links
Investopedia (www.investopedia.com/dictionary/) – Loads of free explanations of financial terms including some helpful videos. Not 100% accurate, but a good starting point Guffipedia (ig.ft.com/sites/guffipedia/) – Lucy Kellaway of the FT has collected some painful examples of corporate people disappearing up their own analogies Guardian (www.theguardian.com) – Free to access website with a couple of decent columnists (e.g. Nils Pratley and Larry Elliott) Times of India (timesofindia.indiatimes.com) – Why use five words when 37 will do? Daily Mail (www.theatlantic.com/magazine/archive/2016/07/the-war-on-stupid-people/485618) – Click it. I dare you.
Back to Contents (#Contents)
———————————————————— IMPORTANT This is my opinion. Yes I read a lot and share what I’ve read with you, but this content remains my opinion. It’s NOT advice. If you take my advice – don’t take my advice. Any decisions you make about investments, your hairstyle or whether or not to eat marzipan are entirely at your own behest. If you’re unable to recognise the devil’s ear wax when you see it, then you’re on your own.
————————————————————
============================================================ Copyright © 2021 Chris Hurst, All rights reserved.
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Contents Click on the links below to get to the stuff you really really want. USA – Stock prices hit new records; Mortgage applications drop suggests short-term trouble; Bond yields have steadied (#USA) UK – Stocks and pound up on another uncertainty being removed; Inflation up but still very low (#UK) Continental Europe – Stocks up with Daimler’s upgrade lifting car makers (#Europe) Elsewhere – Stocks up on more stimulus and lower dollar hopes (#Elsewhere) WTF – First visit (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
Stocks climbed to new records in the US yesterday as folk latched onto the latest musings from Janet Yellen and co about more fiscal stimulus. The inauguration of a new and uniquely dull president also seemed to settle concerns over political turbulence.
But there are still concerns over the near term with mortgage applications being the latest source of data suggesting that the US economic recovered is stalling. On top of that, stock prices, especially in the technology sector, are at incredibly high price/earnings ratios. In other words, they’re mighty expensive. I would not be buying the likes of Tesla right now as it has risen ridiculously high in my opinion.
For a more sober view of the landscape I turn, as I so often do, to the world of bonds. So grey, it could have been elected president. The demand for and prices of benchmark bonds have steadied after some recent shuffling about. Folk have expressed their optimism for a post-pandemic world, but now we need to get there. Yields on benchmark 10-year Treasuries (US government bonds) have dropped a little and are trading relatively steadily at around 1.08. That’s a good deal higher than the pre-vaccine levels, but way off the pre-pandemic highs of around 2.0%.
Back to Contents (#Contents)
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UK
While Biden was sworn in and Trump sworn at, UK investors were jumping on board for the “ding dong the witch is dead” jamboree. The FTSE 100 and FTSE 250 closed 0.4% and 1.4% higher. The value of the pound also rose, reflecting hopes that the UK economy would benefit from various uncertainties being slowly chalked off (avoiding no-deal Brexit, US political stability, delivery of US financial stimulus).
As we know and love, the FTSE 100 is full of companies that generate most of their revenue overseas, so a higher value to the pound creates a short-term knock on sales or profits, and that brings their share prices down.
On the macro-economic front, inflation was up from 0.3% in November to 0.6% in December, despite the latest lockdown measures. Clothing and transport costs appear to have been the driving forces of the rises. The target rate is 2.0%, and I can’t see the Bank of England fretting too much if it exceeds that while the economy is getting back on track (and huge debts are eroded by inflation).
Back to Contents (#Contents)
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Continental Europe
Stocks on the continent were similarly boosted by the general feel-good factor. The Euro Stoxx 50 and German DAX both closed 0.8% higher on the day with technology and consumer goods stocks leading gains. Daimler got an upgrade from HSBC following its delivery of efficiency and an improved outlook. That pulled various other car producers up as well.
Back to Contents (#Contents)
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Elsewhere
Stocks across the Asia Pacific region are leaping merrily through the meadows of happiness as the prospects of more financial stimulus emanating from the US and a lower value to the dollar generally make their prospects worthy of delight.
Back to Contents (#Contents)
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WTF (What’s The Fact?)
First visit
There are betting sites offering odds on which country Biden will visit first. He claims to be Irish in the way that only fully fledged US citizens seem to insist on doing.
Regardless, I’m looking forward to when he, the oldest US president, meets Queen Elizabeth, the oldest British monarch. The two of them can be wheeled out for a game of dominoes and a glass of sherry if they behave.
Liz would appear to be the oldest living head of state at the moment (I say “appear to be” because I’ve not verified the facts, not because she looks slightly cadaverous – that’s Biden’s gig).
The second-oldest resigned last year: one Mahathir Mohamad, the geriatric would-be dictator of Malaysia. He banned me and a bunch of my colleagues from visiting Malaysia in the 1990s because one of our colleagues had published the truth about graft in a section of the Malaysian government. It was a bit like being told that you can’t visit Hemel Hemstead. You don’t really lose a great deal of sleep over it.
Apparently Peterborough is more boring despite, the Mirror says in its defence, “it having a sizeable population”. Prisons have sizeable populations, but that doesn’t attract me to become a resident.
Anyway, Biden’s in and still seems to be breathing.
Back to Contents (#Contents)
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Links
Investopedia (www.investopedia.com/dictionary/) – Loads of free explanations of financial terms including some helpful videos. Not 100% accurate, but a good starting point Guffipedia (ig.ft.com/sites/guffipedia/) – Lucy Kellaway of the FT has collected some painful examples of corporate people disappearing up their own analogies Guardian (www.theguardian.com) – Free to access website with a couple of decent columnists (e.g. Nils Pratley and Larry Elliott) Times of India (timesofindia.indiatimes.com) – Why use five words when 37 will do? Daily Mail (www.theatlantic.com/magazine/archive/2016/07/the-war-on-stupid-people/485618) – Click it. I dare you.
Back to Contents (#Contents)
———————————————————— IMPORTANT This is my opinion. Yes I read a lot and share what I’ve read with you, but this content remains my opinion. It’s NOT advice. If you take my advice – don’t take my advice. Any decisions you make about investments, your hairstyle or whether or not to eat marzipan are entirely at your own behest. If you’re unable to recognise the devil’s ear wax when you see it, then you’re on your own.
————————————————————
============================================================ Copyright © 2021 Chris Hurst, All rights reserved.
Want to change how you receive these emails? You can ** update your preferences (funnymoney.us4.list-manage.com/profile?u=09a51282c76deb2dc44653051&id=dcc3fa0043&e=f68b7163ab) or ** unsubscribe from this list (funnymoney.us4.list-manage.com/unsubscribe?u=09a51282c76deb2dc44653051&id=dcc3fa0043&e=f68b7163ab&c=21e5852d49) .

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Contents Click on the links below to get to the stuff you really really want. USA – Tech stocks led gains after Yellen mooted more financial stimulus to come; Big banks posted more big numbers (#USA) UK – Virus cases and slowing US recovery soured investor sentiment; Stocks nudged down; Rolls-Royce and HSBC UP (#UK) Continental Europe – Extended lockdowns drove sentiment negativity; Investors moved cash into defensive sectors; Italy political spat looks likely to be resolved (#Europe) Elsewhere – Prospects of more US stimulus lifted regional stocks (#Elsewhere) WTF – Afore ye go (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
After taking a day off to commemorate Martin Luther King Day, the US stock markets caught up yesterday and did so in style. The tech-heavy Nasdaq led gains, adding 1.5% on the day, while the more mixed S&P 500 rosed by a more modest 0.8%. The prospects for more stimulus relief, in addition to the near-two trillion dollar package already mooted, appeared on the cards after former governor of the Federal Reserve and Biden’s nominee for Treasury Secretary, Janet Yellen, said “Right now, with interest rates at historic lows, the smartest thing we can do is act big”.
There was also some positive news on the corporate side of things. Bank of America’s quarterly profits beat expectations and, everybody’s favourite bunch total bankers, Goldman Sachs, posted its highest profit in a decade.
Today is inauguration day for Joe Biden. Here’s hoping it goes smoothly without any lunatics causing violence or worse.
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UK
UK stocks didn’t have such a good day. Folk were waiting to hear what Janet Yellen had to say (see US section) and that came after UK trading hours. Stocks didn’t move around too much with this wait-and-see element, but the general concern over rising virus cases and the US economic recovery appearing to slow down (see last week’s jobless numbers) kept the mood negative. The FTSE 100 and FTSE 250 both closed no more than 0.2% lower.
Merger and acquisition activity is rising with stock prices and interest rates low (cheaper borrowing to buy undervalued companies). Reports that Rolls-Royce’s ITP Aero business was being bid on by three private equity firms pushed Rolls-Royce up by 0.6% on the day. HSBC’s stocks rose after the bank’s chairman said that the company hoped to resume dividend payments asap. And airlines were up as folk started to speculate that holiday bookings would rise in the summer after six months of vaccination programmes.
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Continental Europe
Stocks nudged down overall on the continent as well. It was a fairly even split between industrial sectors either up or down leaving the Euro Stoxx 50 and German DAX both 0.2% lower on the day. Extended lockdowns were the main driver of misery, and that pushed investors into “defensive” stocks (ones that does rise and fall as much) such as telecoms and healthcare.
Over in Italy, the latest internal government spat looks as though it’s not going to come to much. Various extreme parties on the left and right of the political spectrum have been trying to unseat Giuseppe Conti’s coalition government. That sent investors into a bit of a panic, worrying that Italian bonds might default as extremists insist on ridiculous spending and revenue plans. But with boring Conti appearing likely to hang on, the bonds appear less risky and their prices have risen again.
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Elsewhere
Stocks are up across the Asia Pacific region. More stimulus means more demand for their goods and it also tends to send the value of the dollar down, which is good news for countries that have borrowings in dollars (most of them). The tech-heavy Taiwan 50 led the gains this morning, but they’re pretty solid across the main stock indices.
Back to Contents (#Contents)
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WTF (What’s The Fact?)
Afore ye go
Today, the unique tenure of Trump’s presidency comes to an end. So I’ll have to start laying into the next guy. For now, here’s a gem to send him off in good stead. During an intelligence briefing, his unique command of geography led to him pronouncing Nepal and Bhutan as, “nipple” and “button”. Farewell, Donald, and thanks for everything.
Back to Contents (#Contents)
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Links
Investopedia (www.investopedia.com/dictionary/) – Loads of free explanations of financial terms including some helpful videos. Not 100% accurate, but a good starting point Guffipedia (ig.ft.com/sites/guffipedia/) – Lucy Kellaway of the FT has collected some painful examples of corporate people disappearing up their own analogies Guardian (www.theguardian.com) – Free to access website with a couple of decent columnists (e.g. Nils Pratley and Larry Elliott) Times of India (timesofindia.indiatimes.com) – Why use five words when 37 will do? Daily Mail (www.theatlantic.com/magazine/archive/2016/07/the-war-on-stupid-people/485618) – Click it. I dare you.
Back to Contents (#Contents)
———————————————————— IMPORTANT This is my opinion. Yes I read a lot and share what I’ve read with you, but this content remains my opinion. It’s NOT advice. If you take my advice – don’t take my advice. Any decisions you make about investments, your hairstyle or whether or not to eat marzipan are entirely at your own behest. If you’re unable to recognise the devil’s ear wax when you see it, then you’re on your own.
————————————————————
============================================================ Copyright © 2021 Chris Hurst, All rights reserved.
Want to change how you receive these emails? You can ** update your preferences (funnymoney.us4.list-manage.com/profile?u=09a51282c76deb2dc44653051&id=dcc3fa0043&e=f68b7163ab) or ** unsubscribe from this list (funnymoney.us4.list-manage.com/unsubscribe?u=09a51282c76deb2dc44653051&id=dcc3fa0043&e=f68b7163ab&c=d077dd179a) .

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Contents Click on the links below to get to the stuff you really really want. USA – Stocks down last week; Inflation news positive but retail sales down; Banks deliver decent numbers (#USA) UK – UK economy shrank more than previously estimated in November, services sectors worst-hit; Handful of companies had a bad Friday (#UK) Continental Europe – Stocks down; French government blocks takeover of Carrefour; Other big merger goes ahead (#Europe) Elsewhere – Chinese lockdown sinks oil prices; Chinese stocks up this morning, rest of region down (#Elsewhere) WTF – Lonely men in the lockdown explore alternatives (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
A week carrying both nervousness and hope ended with stocks going down as macro-economic data provided more reason to expect a tough few months before the stimulus package and vaccine programmes take effect.
Inflation among wholesalers grew slightly (a good thing because the country needs inflation but doesn’t want it to rise too quickly), but retail sales numbers disappointed. The decline in November was revised down from 1.1% to 1.4%.
Banks reported positive earnings, with JP Morgan, Wells Fargo and Citigroup all matching or beating expectations. But that wasn’t enough to lift the S&P 500 on Friday, it dropped by 0.7%.
Now we wait to see if the inauguration goes through without anyone taking pot-shots at Joe Biden or Kamala Harris.
Back to Contents (#Contents)
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UK
The situation in the UK wasn’t any better. Macro-economic news showed that the UK economy shrank in November by 2.6% compared to one month earlier. The decline was focused on business areas that depend on face-to-face interaction i.e. services. And that’s bad news for an economy in which services account for around two-thirds of the numbers. However, the country would appear to be narrowly avoiding a double dip recession (i.e. two bouts of recession in quick succession).
Nevertheless, the FTSE 100 and FTSE 250 closed 1.0% and 0.8% lower on Friday. Among the companies having a bad day were Petrofac, Babcock, Hilton Food, Wood Group, Vesuvius and Bodycote. Petrofac has a former employee being investigated by the Serious Fraud Office, Babcock’s profits were thumped down by its ailing aviation business, Hilton Food has seen one of its institutional investors look to sell a near-10% stake, and the others all got broker downgrades.
As an investor, I’m now wondering how bad the macro-data will get before the good stuff (vaccine roll-out and Biden’s financial stimulus) kick in. I don’t expect January to be a good month.
Back to Contents (#Contents)
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Continental Europe
Stocks on the continent were down even further, with the Euro Stoxx 50 and German DAX losing 1.1% and 1.4% respectively on Friday. All the usual stuff that we’re familiar with at the moment: virus numbers, lockdown implications, hope that the European Central Bank will be supported by governments through fiscal action (spending and tax).
Meanwhile, there’s a bunch of merger and acquisition activity going on. Canada’s Couche-Tard (no, I didn’t make that up, and yes you do have to be careful when pronouncing it) has ditched its $20 billion takeover plan for France’s retailer, Carrefour. The French government appeared to dislike this deal.
One deal that has gone through apparently, is that of Fiat Chrysler and PSA. The new. group has spent tons of money paying some marketing “gurus” called Sebastian and Siobhan to come up with a ridiculous new corporate name. The marketing people have delivered, the new group will be called Stellantis, thus hiding the established brand names of all three companies but salving somebody’s ego on the various boards of directors.
So what? Well, it’s worth looking out for merger and acquisition targets if you have extra investment money beyond your standard portfolio. borrowing is very cheap at the moment and stock prices outside of US tech giants are suppressed. You need to do your homework though. I’d still favour companies with decent cash-flows and a strong balance sheet.
Back to Contents (#Contents)
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Elsewhere
China’s lockdown has already taken effect on the world economy. The price of oil sank on Friday, hardly surprising as China is the world’s biggest consumer thereof. Also, the re-emergence of US-China tensions halted a rally in Chinese stocks last week.
As for this morning, stocks in China and Hong Kong have staged a bit of a recovery, while the rest of the Asia Pacific region is off to a poor start to the week.
Back to Contents (#Contents)
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WTF (What’s The Fact?)
Lonely men in the lockdown explore alternatives
“OK Trevor, you’ve won the bet. You can come back out now.”
Back to Contents (#Contents)
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Links
Investopedia (www.investopedia.com/dictionary/) – Loads of free explanations of financial terms including some helpful videos. Not 100% accurate, but a good starting point Guffipedia (ig.ft.com/sites/guffipedia/) – Lucy Kellaway of the FT has collected some painful examples of corporate people disappearing up their own analogies Guardian (www.theguardian.com) – Free to access website with a couple of decent columnists (e.g. Nils Pratley and Larry Elliott) Times of India (timesofindia.indiatimes.com) – Why use five words when 37 will do? Daily Mail (www.theatlantic.com/magazine/archive/2016/07/the-war-on-stupid-people/485618) – Click it. I dare you.
Back to Contents (#Contents)
———————————————————— IMPORTANT This is my opinion. Yes I read a lot and share what I’ve read with you, but this content remains my opinion. It’s NOT advice. If you take my advice – don’t take my advice. Any decisions you make about investments, your hairstyle or whether or not to eat marzipan are entirely at your own behest. If you’re unable to recognise the devil’s ear wax when you see it, then you’re on your own.
————————————————————
============================================================ Copyright © 2021 Chris Hurst, All rights reserved.
Want to change how you receive these emails? You can ** update your preferences (funnymoney.us4.list-manage.com/profile?u=09a51282c76deb2dc44653051&id=dcc3fa0043&e=f68b7163ab) or ** unsubscribe from this list (funnymoney.us4.list-manage.com/unsubscribe?u=09a51282c76deb2dc44653051&id=dcc3fa0043&e=f68b7163ab&c=82d3e8b8cc) .

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Contents Click on the links below to get to the stuff you really really want. USA – Jobs data puncture optimism sending stocks and bond yields down (#USA) UK – Tesco leads positive corporate news to lift stocks (#UK) Continental Europe – Chinese economic data lift hopes and stocks (#Europe) Elsewhere – Chinese virus case rise stymies stock price rises (#Elsewhere) WTF – Siegfried and Roy no more (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
Jobs data came in yesterday to puncture the general optimism that Biden’s prospective $2 trillion stimulus package had wrought earlier in the week. The S&P 500 closed 0.4% lower, with tech stocks having a slight less bad day as people looked to the turbulence of the coming months before the vaccines are spread widely enough to close the pandemic down.
Unemployment surged with initial claims rising by 181,000 over the week-ending 9 January. That took the total number of initial unemployment claims to 965,000, much worse than the expected fall to 775,000.
While stock prices were falling, the demand for and prices of lower-risk rated bonds rose, sending the yield on the benchmark 10-year Treasury (US government bond) down from 1.18% to 1.09%. But it’s still above the 1.0% mark, so the general level of stress has lifted somewhat. It’s now a case of waiting for the lockdown to be unnecessary.
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UK
Corporate news and hopes of stimulus from the US lifted stocks across Europe.
In the UK, the FTSE 100 and FTSE 250 both climbed by 0.8% on the day. Tesco stuck to its annual guidance after a boost in sales over Christmas kept it on course to match or beat the previous financial year’s profits.
Taylor Wimpey also stated that it was on course to deliver profits in line with expectations, despite the troubles at fellow house builder, Persimmon, earlier this week. Other companies chiming in with happy noises included Dunelm and Just Group. Back to Contents (#Contents)
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Continental Europe
On the continent, the Euro Stoxx 50 and German DAX added 0.7% and 0.4% respectively yesterday. Positive economic data coming from China helped to lift the mood, despite the Asian giant’s resurgence of virus cases.
Back to Contents (#Contents)
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Elsewhere
Exports from China grew in December as the expectations of more lockdown restrictions worldwide increased demand for the country’s goods. But that wasn’t sufficient to lift stocks across the Asia Pacific region. The expectations of US stimulus have largely been priced in, while the worries over Chinese virus cases have increased.
Back to Contents (#Contents)
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WTF (What’s The Fact?)
Siegfried and Roy no more
Siegfried Fischbacher has joined his partner in entertainment, “Roy” Uwe Ludwig Horn in the great kitty litter in the sky. The two of them had legendary status as large-scale entertainers but were best known for performing on stage with lions and tigers. This led to Roy being acted by one lion, leaving him largely wheelchair bound afterwards. He died last year of coronavirus-related illness.
Amazing though they might have been, the one memory I have is when the following photo was shown on “have I got news for you” to which Paul Merton chimed in with, “the tiger’s thinking, ‘shouldn’t I be orange and they be white?'”
Back to Contents (#Contents)
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Links
Investopedia (www.investopedia.com/dictionary/) – Loads of free explanations of financial terms including some helpful videos. Not 100% accurate, but a good starting point Guffipedia (ig.ft.com/sites/guffipedia/) – Lucy Kellaway of the FT has collected some painful examples of corporate people disappearing up their own analogies Guardian (www.theguardian.com) – Free to access website with a couple of decent columnists (e.g. Nils Pratley and Larry Elliott) Times of India (timesofindia.indiatimes.com) – Why use five words when 37 will do? Daily Mail (www.theatlantic.com/magazine/archive/2016/07/the-war-on-stupid-people/485618) – Click it. I dare you.
Back to Contents (#Contents)
———————————————————— IMPORTANT This is my opinion. Yes I read a lot and share what I’ve read with you, but this content remains my opinion. It’s NOT advice. If you take my advice – don’t take my advice. Any decisions you make about investments, your hairstyle or whether or not to eat marzipan are entirely at your own behest. If you’re unable to recognise the devil’s ear wax when you see it, then you’re on your own.
————————————————————
============================================================ Copyright © 2021 Chris Hurst, All rights reserved.
Want to change how you receive these emails? You can ** update your preferences (funnymoney.us4.list-manage.com/profile?u=09a51282c76deb2dc44653051&id=dcc3fa0043&e=f68b7163ab) or ** unsubscribe from this list (funnymoney.us4.list-manage.com/unsubscribe?u=09a51282c76deb2dc44653051&id=dcc3fa0043&e=f68b7163ab&c=d837cf1ceb) .