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ContentsUSA – Consumer confidence modestly down; Stocks continue to tumble; Talk of $40 oil price
UK – Stocks and bond yields down; De La Rue bucks the trend; Carnival slumps further
Continental Europe – Italian stocks continue to lead declines; Greek stocks up
Elsewhere – Indices taking turns to fall fastest
WTF – On stage with the president
Ts & Cs
The latest round of consumer confidence data has come out and it shows a remarkably modest drop. The reading for February was 130.7 compared to January’s 131.6. The expectation had been for a reading of 132.2, but that was allowing for the research period pre-dating the more severe news regarding the coronavirus.
The more accurate sense of how people are feeling is,, in my humble opinion, provided by the continued declines in the three big benchmark stock indices. The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite all closed around 3.0% lower yesterday.
Concerns are such that folk are talking about the price of oil dropping below $40over the next couple of months. The West Texas Intermediate price is hovering around $50 at the moment, having been nearer $64in early January. OPEC might step in to play around with that, but they’ll have to get agreement on supply volumes with the Russians which is never easy.
The FTSE 100 and FTSE All Share both fell by a further 1.9% yesterday. Every sector fell with basic materials (miners and the like) suffering the least after they had already been pummelled by worries over the previous day or two. Instead, it was the turn of those lucky folk in telecoms and technology who were watching value disappear from their stocks into the blue yonder.
Among the stocks, two had a stand-out day. De La Rue (the folk who print money for the Bank of England and do other clever stuff as well) closed the day 20.8% higherafter folk at JPMorgan said nice things about the company.
Not so good at Carnival. The cruise company was the biggest faller on the FTSE 100, tumbling a further 5.9% on the day. The biggest faller across the All Share Index was SIG after some senior executives suddenly decided to spend more time with their families. This is just after the company issued another profit warning. The share price tumbled by 17.9% on the day.
Investors continued to charge into government bonds sending the prices up and yields down. The benchmark 10-year Gilt yield was down to 0.52% towards the close of trading in the UK yesterday. It’s not yet at the late 2019 lows though. And, interestingly, the price of gold nudged down yesterday. But it remains at very high levels compare to recent years.
More falls across Continental Europe, but less severe than had taken place earlier in the week. The Italian FTSE MIB continues to suffer most in proportion to the number of confirmed coronavirus cases that it has. The index fell by 2.5% on the day, while the Euro Stoxx 600 and German DAX lost around 2.0% – a stand-out loss on any other day.
Is there a Greek word for Schadenfreude? If there is, you’ll be hearing it in Athens at the moment. The Greek benchmark stock index rose yesterday. The country is has had more than its fair share of blows over recent years. To be fair, it did get whallopped on Monday, but it was one of few that appears to be on the mend so soon.
There seems to be a sort of “after you” pattern developing among major indices in the Asia Pacific region.
On Tuesday the Korean and Shenzhen indices had the best of it while others suffered. That appears to have reversed this morning with those two indices leading falls with drops of 2.7% and 1.3% respectively. Other major indices have declined this morning with Australia being the other biggie (down 2.3%) but the rest have had a relatively modest start to the pain of the day.
WTF (What’s The Fact?)
On stage with the president
“Miracle on Ice” sounds like an appalling musical. Fortunately it isn’t (though it might only be a matter of time).
It is, in fact what the US sports fans call the ice hockey match that took place in the Olympic final between the US and the all-conquering USSR in 1980. Against the odds, the USA won.
Team captain Mike Eruzione was at the 40-year anniversary attended by Donald J. Trump. In fact, he accepted an invitation to join the blonde president on stage where the ex-sportsman donned a “Make America Great Again” hat.
On reflection he regretted it saying, “I just put it on. I wasn’t thinking. Maybe this shows I’m naive, shows I’m stupid. I don’t know. I don’t follow politics.”
The Republican Party response was to see if he would be available as the next presidential candidate after Trump.
Investopedia – Loads of free explanations of financial terms including some helpful videos. Not 100% accurate, but a good starting point
Guffipedia – Lucy Kellaway of the FT has collected some painful examples of corporate people disappearing up their own analogies
Guardian – Free to access website with a couple of decent columnists (e.g. Nils Pratley and Larry Elliott)
Times of India – Why use five words when 37 will do?
Daily Mail – Click it. I dare you.
FTSE All Share
Euro Stoxx 50
This is my OPINION. This is not advice. Do not base any decisions regarding investments, food or life partners on this email, spectacularly delightful though it is.
Copyright © 2020 Chris Hurst, All rights reserved.
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