Beijing is crushing the last vestiges of liberty in Hong Kong. There’s not much anyone can do. It won’t help trade relations with the US.
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Contents Click on the links below to get to the stuff you really really want. USA – Death toll exceeds 100,000; “good chance” of vaccine by end of year; Investors focusing on positives; Stocks up (#USA) UK – Financials, telecoms and oil companies up; House builders and healthcare down (#UK) Continental Europe – Same pattern; Spain faces “very difficult” rescue package talks (#Europe) Elsewhere – Beijing passes oppressive legislation for Hong Kong (#Elsewhere) WTF – Truth from fiction (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
The US death toll from Covid-19 has breached 100,000. The usual number of deaths each week in the US has ranged between around 50,000 and 58,000 over the past three years. Since February 2020, the weekly number has been between 60,000 and 74,000 according to the US Center for Disease Control and Prevention. It’s those “excess deaths”, as they are called, that are the problem.
The much respected lead medical advisor to the US government, Dr. Anthony Fauci (also much derided by the country’s erstwhile dictator for relying on evidence rather than drinking bleach) had some positive comments the other day. He noted that there was a “good chance” that a vaccine might be deployable by November or December. Before we get too excited, note that he’s couching his phrase with two qualifiers, “chance” and “might”, and that the vaccine could be deployable i.e. ready to be mass produced and distributed. That would take weeks at best.
Nonetheless, it is relatively positive news and investors have shown that they are keen to grab on to any bit of positive news at the moment, despite the rising tensions between the US and China, and some regions that have lifted lockdown restrictions showing a rise in virus cases.
So with those bleach-tinted spectacles firmly in place, investors drove stock prices up for a second consecutive day. The S&P 500 closed 1.5% with tech stocks (which have performed well during the lockdown) lagging the gains. The companies that have done the worst during the pandemic performed the best again yesterday with the likes of travel leisure companies among the highest risers.
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UK
Stocks across different regions are moving in similar fashion at the moment as pretty much everyone watches the same developments: virus cases, vaccine development, US-China relations and oil prices. It must be said, though, that investors are keen not to miss out on stock price recoveries, and that is leading to a focus on potential good news and away from rumbling problems, such as the ego-fest going on between Trump and Xi.
So up went stocks. The FTSE 100 and FTSE 250 both closed around 1.2% higher yesterday with financials, telecoms and oil & gas companies among the biggest risers. They’ve all had a drubbing lately and, therefore, have the biggest perceived potential for recovery in the form of price rises.
Tech and healthcare stocks, which have fared well during the crisis, didn’t keep up with the gains. Neither did house builders which are facing a tough time as folk hunker down in the face of a recession and unknowable personal circumstances making house sales much much harder to come by.
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Continental Europe
Pretty similar story on the continent. Financials and manufactured goods for export had a good day with banks and car-makers leading the gains.
The geographically broad Euro Stoxx 50 and German DAX gained 1.7% and 1.3% respectively, while Spain’s Ibex 35 excelled with a 2.4% gain as folk there focus on the lifting of restrictions rather than more bitter news such as Nissan’s decision to close its Barcelona plant or the “very difficult” talks that the Spanish leadership expects in order to arrange a rescue package with the European Union.
Talking of which, Italy’s MIB just about nudged up 0.3%. But its debt and political problems are such that it is presenting the entire European project with a major challenge. It needs cash in order to maintain debt payments so as not to default and knock swathes of value off Italian pensions which could lead to it leaving the euro. Fun and games then.
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Elsewhere
There has been a spike in virus cases in South Korea, but it was fairly minor and folk are worried about other things, namely China.
Beijing has approved the legislation to crush liberty in Hong Kong. The laughable “one country, two systems” moniker that was bandied around leading up to the handing back of Hong Kong to the Chinese in 1997 can now be seen for what it always was. Stocks in Hong Kong dropped by 1.0% before confirmation came through, so they could fall further tomorrow.
Stocks in Taiwan dropped the most this morning. The Taiwan 50 fell by 1.9% as folk assessed the potential drop in demand for computer components as tech stocks adjust to the new normal.
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WTF (What’s The Fact?)
Truth from fiction
A friend and fellow-writer sent me something yesterday. It is a computer-generated transcript of a conversation. The amusing part of it is how inaccurate and yet profound, the phrase is that the computer incorrectly transcribed. What was actually said was along the lines of the pressure on care homes in the UK at the moment. Here is what the computer-generated transcribing software interpreted it as:
“And truth be told, we’ve got some thousands of blondes who are currently in care homes. Some are being looked after under a parked attorney because that they’ve lost lost capacity cycling.”
You can’t argue with that.
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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.
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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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