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ContentsUSA – Correction time as stocks continue to slump; Sharp rise in virus cases outside China spooks investors
UK – Stocks slump; Leisure, travel and basic materials worst-hit; Hard-line Brexit negotiations not helping; Bond yields drop
Continental Europe – As UK and US
Elsewhere – Same
WTF – Not the time to panic
Links
Numbers
Ts & Cs |
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| USA
“Correction” is the euphemistic term being used at the moment. In layman’s terms, it’s a 10% drop since the most recent peak.
Well look how correct all those indices are now. I bet loads of investors are wandering around proudly brandishing Tip-ex.
The jump in coronavirus cases outside of China has spooked people. The implications are that people can’t work, supply or buy stuff. And that puts a big old dent in sales and profits, never mind the rather more important issue of people dying and families being devastated.
Trump has someone else to blame for stuff once again. No doubt he’ll invite the virus to a live Q&A with him on Fox News.
In the meantime, the rest of us are watching as stocks do their thing of tanking every so often. The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite are all down by around 4.5% on just yesterday’s trading.
But it’s OK, California has 200 test kits.
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| UK
It’s a consistent message this morning. UK stocks were dipping into correction territory yesterday. The FTSE 100 sank 3.5% on the day while the mid-cap FTSE 250 slumped by 4.1%, “it’s biggest one-day drop since June 2016” CityAM cheerfully reports.
Leisure, travel and basic resources were worst hit, just like everywhere else. Energy companies were particularly badly hit as the price of oil, I say it, tanked.
Meanwhile, the hard-line approach that the UK government is taking with Brexitnegotiations “heaped further pressure on domestic equities” CityAM adds.
Lower-risk rated stuff had a better time of it. People are piling into bonds with the 10-year Gilt yield tumbling to below 0.5% after having been at around 0.65% just a couple of weeks ago,, and approaching 0.9% in late December.
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| Continental Europe
What can I tell you? Stuff is down. The year-to-date losses of note are as follows: Euro Stoxx 500 -6.4% German DAX -6.6%, French CAC -8.1% and the Italian FTSE MIB is down 3.1%. What fun.
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| Elsewhere
It’s continuing in the Asia Pacific region as well. 3.0% or higher losses are par for the course this morning in China, Japan, Korea and Australia.
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| WTF (What’s The Fact?)
Not the time to panic
This could become a pandemic, but that’s not the time to panic.
These things happen – SARS and MERS are other examples of coronavirus outbreaks that have occured over the past 17 years.
It doesn’t help that some Chinese people decide to chow down on bat-fritter, but what can you do? There are still examples around the world of cannibals (surely worse), and they have all sorts of health problems (granted not a severe as the consequence for the people they eat).
The point being, we’ve had crises before and we’ll have them again. The virus is tragic for anyone affected by its worst ravages. But, as investors, we’re dealing with money. And the most important things in life are:
1. Coffee
2. Time
3. Coffee
4. Health
5. Coffee
6. Coffee
7. Relationships (coffee allowing)
So there.
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| Links
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.
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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 are too stupid to recognise the devil’s ear wax when you see it, then you’re on your own. |
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