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Contents Click on the links below to get to the stuff you really really want. USA – Rebound in consumer confidence ignored as presidential debates begin (#USA) UK – Bailey casts doubt on economic recovery and won’t rule out negative interest rates; Stocks down, pound down, oil prices down (#UK) Continental Europe – Low inflation, interest rates and bond yields (#Europe) Elsewhere – Japanese and Australian stocks down (#Elsewhere) WTF – Read my lips (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
Everyone was waiting to see what insults and lies the two old men of US politics were to throw at each other during yesterday evening’s first of three presidential debates. Meanwhile, concerns over virus cases reaching horrible milestones seemed to outweigh hopes of more financial stimulus being delivered quickly.
That nudged the general mood to the negative, sending two-thirds of the stocks listed on the S&P 500 down. It closed a fairly modest 0.5% lower, while the demand for lower-risk rated investments, such as government bonds, rose sending their prices up and their yields down.
Consumer confidence rebounded in September, but that might take a week or two to feed through to “harder” data such as actual sales. But it was a nothing-major-day really, all in anticipation of politics and jobs numbers to come.
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UK
The FTSE 100 was on a pretty similar course to the one that US stocks were to follow later in the day. The index lost 0.5% of its overall value on the day, while the more domestically focused FTSE 250 didn’t benefit from the falling value of the pound and, therefore, posted a larger 1.1% decline.
If you’re interested, the value of the pound fell relative to other currencies after the, yet-to-be-convincing Governor of the Bank of England, Andrew Bailey noted that the economic recovery might not be as swift as had been hoped and, therefore, would not rule out the use of negative interest rates (I’m pretty sure I’ve explained this a couple of times, but drop me a line if you want to go over it again).
There was a notable drop in oil price which didn’t help oil majors. It was driven by concerns that overall global production appeared to be facing a worse downturn than had been expected.
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Continental Europe
Much the same but less bad.
The German economy appears to be doing less badly than some of its near neighbours, despite inflation in Europe’s economic powerhouse being lower than might be preferred. If inflation is low, so are interest rates generally speaking because low interest rates constitute a major tool used to lift inflation.
And low interest rates lead to low bond yields, so German government bonds were at their lowest levels for some weeks reflecting continued high demand during what can fairly be described as the midst of the crisis.
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Elsewhere
Stocks in Japan and Australia took a dive this morning. This followed last night’s cantankerous US presidential debate and news that Disney would be making 28,000 workers redundant. The debate confirmed that Trump would not accept a defeat in the polls, which doesn’t bode well for anyone.
With various holidays kicking in across the region, stocks in southeast Asia were nudging up gently where markets were open as folk concentrate on more local issues and prospects.
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WTF (What’s The Fact?)
Read my lips
Nookie Bear and Orville were entertainment staples of the 1970s and 1980s. Indeed, there were quite a few ventriloquists who looked as though they had never come to terms with cooking their own food and dressing themselves of a morning.
These days we have Nina Conti who places masks on audience members. To be fair, that was funny at first, but is wearing a bit thin now. There’s also Jeff Dunham with puppets that appear to have been taken from the cast of South Park.
But who can forget the genius of Peter Brough and his puppet, Archie Andrews. You really couldn’t see Brough’s lips move at all, largely because he was on the radio. I kid you not.
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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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