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Contents
Click on the links below to get to the stuff you really really want.
USA – Oil storage filling more slowly than feared; Tech stocks down; US trade deficit up
UK – Stocks up on easing of restrictions hopes; Bonds still in demand; CBI teaches us how to suck eggs
Continental Europe – Stocks up; UBS and ABB post big profits; Wirecard being too creative?
Elsewhere – Australian stocks up on easing of lockdown
WTF – Tweedledum and Tweedledummer
Links
Numbers
Ts & Cs
USA
Oil storage facilities are not filling as rapidly as had been feared. That pushed the price of oil up, but stocks were down across most sectors in the US. The S&P 500 closed 0.5% lower, while the tech-heavy Nasdaq lost 1.4% in value.
Facebook, Alphabet/ Google, Amazon and Netflix all had a tough day. They’ve been relatively successful during the lockdown, so easing lockdown restrictions might harbinger the return of bricks and mortar competitors. This appeared to be borne out by the rises in share prices of shopping mall and hotel groups such as Simon Property Group and Wynn respectively.
In macroeconomic terms, the US has taken a general hit from the measures to contain the virus. Its exports have fallen, leaving the country’s trade deficit at $64.2bn for March, more than 7% higher than the previous month. That’ll give Trump something else to blame foreigners for.
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UK
In the UK, investors were largely focusing on what would benefit from an easing of lockdown measures. The FTSE 100 and FTSE 250 added 1.9% and 2.1% respectively. BP was a notable mover. Despite oil prices having fallen through the floor this year, the oil major announced that it would be maintaining its dividend and oil prices rose yesterday. So its shares got a double-whammy of positivity to leave it 2.6% higher on the day. That leaves it a mere 31% down on the year. Noice. Financials also gained as they stand to revive their businesses should the lockdown be alleviated Lloyds, Barclays and RBS added between 8.9% and 7.0%.
I like bond investors. They are not so easily swayed from day to day. In fact, over the course of the month, they have been modestly increasing their holding of bonds because they’re not convinced that we’re out of the woods yet. The yield on the benchmark 10-year Gilt (UK gov’t bond) has worked its way down from around 0.32% at the beginning of the month to below 0.29% yesterday.
The Confederation of British Industry came out with data that we already knew: retailers have suffered their biggest fall in sales since the financial crisis over a decade ago. That’s a bit like saying that last night’s drinking binge and super-spicy curry had sub-optimal consequences this morning.
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Continental Europe
Stocks on the continent were performing in very similar fashion to their UK brethren. The Euro Stoxx 50 and German DAX added 1.7% and 1.3% respectively. The share prices of Swiss bank UBS and compatriot engineering company, ABB, rose after both posted better-than-expected profits (UBS profits were up 40% for the quarter).
By contrast, that old chestnut, Wirecard, which was bouncing around all over the place before Covid-19, took another plunge. The numbers police (KPMG auditors) appear to have uncovered rather too much creativity on the part of the money moving company. Still, it gives us something else to talk about.
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Elsewhere
Australia’s stocks led the way this morning. The S&P/ASX 200 closed 1.5% higher as folk concentrated on the forthcoming lifting of lockdown restrictions. The rest of the Asia Pacific region is cautiously optimistic with stock prices noodling around but not really doing much.
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WTF (What’s The Fact?)
Tweedledum and Tweedledummer
Yesterday, Trump hosting his lackey, Florida governor Ron DeSantis. Their Ronald and Donald press conference was everything everyone expected: lots of mutual praise, few facts.
Ronald did say this about his state’s reopening process, “we’re going to do it in a very thoughtful, measured and data-driven way”. It was almost as if Ronald is seeing that hitching himself to Donald so flagrantly, isn’t going to be paying dividends at one of the next two general elections.
But ever helpful during the press conference, Trump suggesting banning visitors to Florida from Brazil. DeSantis pulled back on that, preferring to have them tested before boarding flights. Trump then added, “You ever want to ban certain countries? You let us know.”
Then they kissed passionately.
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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.
