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Contents Click on the links below to get to the stuff you really really want. USA – Virus concerns and mixed corporate results send stocks and bond yields down (#USA) UK – Stimulus hopes lift stocks and pound; House builders up on potential extension of government assistance (#UK) Continental Europe – Indices mostly flat as negatives balance positives (#Europe) Elsewhere – Japan down on Fitch note; Rest up on stimulus hopes (#Elsewhere) WTF – Major irritation (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
Bit of a nondescript day in the US yesterday where virus concerns and some mixed corporate results outweighed hopes over the prospective stimulus package. Perhaps the most telling indicator was bond yields: the demand for lower risk stuff has moved up as folk move gently back out of higher-risk rated investments such as stocks.
That the left the yield on the benchmark 10-year Treasury (US government bond) back below 0.6%, and sent the S&P 500 dow by 0.6% on the day.
Disappointing results came in from McDonald’s, 3M and Harley-Davidson, while Pfizer shares rose after making positive noises about its virus vaccine trial.
As for that stimulus package, we can all sit back and watch the bun-fight between Republicans and Democrats that will ensue before anything is approved.
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UK
Stock moves were fairly modest across Europe as well. In the UK, the pound was up as hopes of more stimulus lifted the outlook for the UK economy. That optimism was also reflected in modest stock price gains. The export-focused FTSE 100 added 0.4% while the more domestically focused (and less affected by the value of the pound) FTSE 250 managed a 0.7% rise.
Warnings of a second wave of infections sent folk into lower-risk stocks i.e. defensive ones, such as utilities. Consumer goods also did OK on the day after their recent moderate improvement in sales of DIY and groceries in particular following lockdown restrictions being eased…though those restrictions might be about to reimposed.
House builders had a great day. The likes of Persimmon, Barratt, Berkeley and Taylor Wimpey all posted robust gains after reports that the government’s help-to-buy scheme could continue beyond the current December deadline.
Industrial and mining companies had a tougher time. Both sectors fell as worries for overall economic outlook seemed a little less rosy.
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Continental Europe
The house-building factor and positive consumer goods numbers were missing from continental stocks yesterday. As a result, the Euro Stoxx 50 and German DAX both finished flat, i.e. close to their starting prices.
Banks recovered some of the losses they’d posted a day earlier and that sent the Spanish Ibex 35 up by 1.1% thanks to BBVA and Santander being part of those moves and a big factor on the Spanish benchmark index.
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Elsewhere
Rating agency, Fitch, has lowered its outlook rating for Japan while major electronics exporter, Canon, posted disappointing quarterly results. The Nikkei 400 dropped by 1.2% earlier today.
The Federal Reserve (US central bank) has added another three months to most of its lending programmes, and that provided a modest positive for Asian investors to mull. Hence the benchmark indices in China, Hong Kong, South Korea and Taiwan are all trading higher this morning.
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WTF (What’s The Fact?)
Major irritation
One of the more hard-working, low-profile and genuine members of the British royal family has hit the headlines. No, she’s not marrying a US-based actor; she isn’t talking to plants; she’s not making one solitary trip into a minefield (she’s done hundreds of things like that when the cameras were not on her), nor is she having a spat with her half-brother.
The sort of gob-smacking event that gets her into the newspapers is very telling. Flying tipping is “a major irritation”.
When Charles heard about this his response was “Woah there”, but it turned out he was breaking Camilla in. Prince Edward has yet to find someone to read the story to him, Andrew was at the STD clinic so he didn’t hear about it, and Philip’s comments are too offensive to re-print.
“What did that nasty brother of mine do to you?”
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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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