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Contents Click on the links below to get to the stuff you really really want. USA – Negative jobs data eclipsed by rising tech stocks; Nasdaq hits new record; Investors still buying bonds (#USA) UK – Rising pound, ex-dividend stocks and mining results all sent stocks down (#UK) Continental Europe – Financial and oil companies led declines (#Europe) Elsewhere – Chinese rebound continues; Talks with US might resume; Taiwan stocks down (#Elsewhere) WTF – Try this (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
Confidence had been sent slightly awry yesterday when disappointing jobs data came in, but folk in the US continue to buy stocks in the handful of huge technology firms (Apple, Amazon, Google, Microsoft, Facebook, Netflix, Twitter). Their view seems to be that if the lockdown continues, these firms continue to benefit while their bricks-and-mortar competitors are throttled; if a vaccine is found then these firms will have taken so much market share that the future is rosy for them anyway.
Thanks to thinking along those lines, the tech-heavy Nasdaq Composite jumped 1.1% to a new all-time record high yesterday. The more broadly based S&P 500 nudged up by 0.3%, reflecting how skewed the US stock market is at the moment.
While stocks hit highs, bonds remain very much in demand, especially after the Federal Reserve (equivalent to the Bank of England) repeated the need for more government-led financial stimulus. Demand for and prices of benchmark 10-year Treasuries (US government bonds) rose again yesterday taking their yields steadily lower from the recent mini-peak of 0.72% triggered by the issuance of loads of 30-year bonds by the government. This extra supply is being absorbed and the natural order of things returned.
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UK
Stocks reversed the previous day’s gains yesterday as the pound nudged up in value relative to the dollar. Exporters were back down, but so was everything else on a day in which investors were digesting the gloomy comments from the Federal Reserve. Also, being a Thursday, a few companies’ shares went ex-dividend which sent their stock prices down for a few days.
Miners had a particular difficult day (they tend to bounce around a lot, which makes them an “exciting” stock to hold if you have no heart issues). Antofagasta posted a large fall in profits for the first half of 2020. This had a knock-on effect across the sector, sending fellow miners down as well.
Miners and exporters form a big part of the FTSE 100, so it closed the day 1.6% lower. The more domestically focused FTSE 250 has a much smaller mining community, so it only dropped by 0.5%.
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Continental Europe
As was the case in the UK yesterday, Continental European stocks dropped across the board but with a narrower range of falls. Financial and oil companies led the more modest declines leaving the Euro Stoxx 50 and German DAX 1.3% and 1.1% lower on the day.
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Elsewhere
Stocks across much of the Asia Pacific region are up after comments from the Chinese trade department that talks with the US will resume soon. Whatever that means in reality remains to be seen. Meanwhile, the rebound in the Chinese economy continues apace. The benchmark indices in China and India are up by 0.8% at the time of writing, with larger gains posted in Hong Kong and South Korea.
Taiwan is the outlier. Its benchmark index slumped by 3.0% this morning as chipmakers fell out of favour, and those are the heart of the Taiwan 50 index.
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WTF (What’s The Fact?)
Try this
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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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