Click here to view this email in your browser (mmmmaven.com/daily-market-update-dmu/)
Sign Up Here (mmmmaven.com/dmu-sign-up/) for Free to the DMU Email me to provide feedback
Contents Click on the links below to get to the stuff you really really want. USA – US stocks up despite rising tensions with China; Trump predicts worsening virus scenario; Bond investors more bearish (#USA) UK – Government appearing resigned to no-deal Brexit; Stocks down (#UK) Continental Europe – International influences sink European stocks (#Europe) Elsewhere – Mixed movements (#Elsewhere) WTF – Animal farm (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
————————————————————
USA
US stocks closed higher yesterday despite heightening tensions with China. The latest move involves the White House ordering the Chinese consulate in Houston to close. This sparked the usual rhetoric and will probably lead to a tiresome tit-for-tat response of US outposts being closed on Chinese territory. Why people can’t just admit that all consulates and embassies are used as centres for espionage strikes me as somewhat childish.
Meanwhile Trump warned that the pandemic was likely to “get worse before it gets better”. He’s been blaming Democrat run states for failing to implement appropriate measures, but that argument doesn’t wash when Republican states that have followed his lead are watching cases rocket – think Florida and Texas.
Development of a treatment is progressing though. Pfizer and BioNTech are working together on a vaccine and their stars have risen as well as aligned after the US government said it would spend a couple of billion dollars acquiring the first 100 million doses of an effective vaccine from them.
But the hopes of a support package continued to lift sentiment during trading to leave the S&P 500 0.2% up on the day. After the market closed, Tesla announced some very positive quarterly numbers, and that provided a shot in the arm for tech companies that could play out today.
Meanwhile, those bond investors remain unconvinced by hopes and rhetoric. The demand for and prices of low-risk rated government bonds have risen again as these folk appear to have identified what Trump is only just cottoning on to. That sent the yield on the benchmark 10-year Treasury (US government bond) below 0.6% for the first time since April. It’s been hovering around between 0.6% and 0.7% for most of the interim, but there are just too many negative factors in play at the moment to start taking on more risk as far as these bond investors are concerned.
Back to Contents (#Contents)
————————————————————
UK
Things were much worse in the UK yesterday after the Daily Telegraph reported that the UK government appears resigned to not achieving a trade deal with the European Union. The time is ripe for cynics on both sides of the argument. Pro-Brexit voters could argue that the EU is demonstrating ever closer financial harmony and federalism as it clambers to help its member countries recover from the virus and lockdown. Pro-Europe voters can argue that the other side is using the Covid-19 economic disaster as a smokescreen to push a really bad Brexit deal through.
Either way, a no-deal scenario will create considerable uncertainty for a service-based economy (that of the UK) hoping to have World Trade Organisation rules apply from January. The WTO focuses mainly on physical goods and is currently impotent because the US won’t support its governing body.
So down went stocks yesterday with the FTSE 100’s export-focused members suffering more than their most domestically focused siblings in the FTSE 250. The two indices dropped by 1.0% and 0.2% on the day.
Back to Contents (#Contents)
————————————————————
Continental Europe
Investors across the continent were mulling the various negative factors playing out in Anglo-Saxon markets. The comb of rising virus cases, uncertainty over the US support package, rising tensions between the US and China and the prospect of a no-deal Brexit all took their toll on investor confidence and stock prices. The Euro Stoxx 50 and German DAX closed 1.0% and 0.5% lower on the day.
Back to Contents (#Contents)
————————————————————
Elsewhere
Trading across the Asia Pacific region has been mixed this morning. Worries over the latest episode in the US-China spat were at the forefront of thinking, sending Chinese and Japanese stocks down. Taiwanese stocks jumped as they followed late news of positive stuff happening among their tech clients in the US.
Back to Contents (#Contents)
————————————————————
WTF (What’s The Fact?)
Animal farm
I can’t remember which leader Kim Jong-Un is, his dad and grandfather were “Dear” and “Great”, so let’s refer to the current incumbent as the “Fat Leader”.
Well, the Fat Leader brought his genius to a chicken farm being built near Pyongyang. According to North Korea’s state media reported by the Associated Press network, he has called for “improvements to what he described as an outdated poultry industry”.
The chickens were lined up and inspected.
One chicken was overheard saying “buckoff” which the Fat Leader took as a criticism of his flawless leadership. That chicken was muscled away to a chicken “re-education” programme in the North of the country. According to am-Nest-y International, the foul fowl will be incarcerated with an unknown number of other American-fascist-running-dog-chickens all of whom are being taught to look and taste more like tofu.
When questioned, the remaining chickens at the inspected farm all agreed that that chicken had eaten seed in a fascist manner, and they’d never trusted it. They all committed to being more modern and chickeny, and to provide a really good Sunday roast even if it kills them.
Back to Contents (#Contents)
————————————————————
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 are too stupid to recognise the devil’s ear wax when you see it, then you’re on your own.
————————————————————
============================================================ Copyright © 2020 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=730823bc45) .