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Contents Click on the links below to get to the stuff you really really want. USA – Mixed corporate results, fading likelihood of a financial deal before the election and another vaccine trial hiccup all sent investor confidence and stocks down (#USA) UK – Worries over Brexit are sending the pound down and up; Banks, travel and leisure companies under pressure (#UK) Continental Europe – Efforts to tackle rising virus cases and outlook concerns for chipmaker pulled stocks down (#Europe) Elsewhere – Chinese authorities intervened to support companies (#Elsewhere) WTF – Five signs that you hate working from home (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
It started as a positive day in the US, as investors reversed some of the previous day’s losses on hopes that corporate results would be positive. They were mixed, with Bank of America and Wells Fargo disappointing, while fellow big bank, Goldman Sachs, delivered way more profits than had been expected for the third quarter of 2020.
As the day wore on, there was more negative news. Pharmaceutical giant, Eli Lilly, reported that it has paused a trial of its Covid-19 antibody after what it described as a “potential safety concern”. That adds to worries raised by Johnson & Johnson’s trial in which a patient has fallen ill and lays bare the reality of how long it takes to develop a vaccine from scratch.
On top of that, the chances of US politicians agreeing a stimulus package before the 3 November election appeared to fade. And, finally, the latest round of housing data suggested that the demand that had built up during lock-down measures might have been released as demand for mortgages and home loans fell.
So down went the S&P 500 by 0.7% on the day. Minerals and oil prices staged a minor recovery helping to lift related companies, but pretty much every other industrial sector fell.
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UK
Brexit negotiations are having an increasing influence on investor sentiment in the UK. The process seems to be optimism-discussion-disagreement-pessimism, repeat. The pound fell in early trading yesterday as folk began in pessimistic mood due to a lack of progress in negotiations which was compounded by worries over the latest employment data which disappointed.
As the day wore on, concerns eased which allowed the value of the pound to rise. That had its usual effect on the export-focused companies on the FTSE 100; it closed the day 0.6% lower. Banks continue to be under pressure with the prospects of sustained low if not negative interest rates (which ruin profits they would otherwise make on lending). Travel and leisure companies also continued to suffer.
The mid-cap FTSE 250 index, being less affected by movements in currency, closed the day 0.3% higher as miners, technology and utilities companies led gains.
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Continental Europe
The latest surge in virus cases on the continent added to concerns over Brexit and the US. France has announced stricter measures and Germany warned of economic risks.
In corporate news, microchip maker, ASML, delivered decent profits but warned of a difficult outlook, so its share price fell. The only sector that posted much of a gain was utilities, which tends to become more popular (or less unpopular) when investors have worries about the near-term outlook.
The Euro Stoxx 50 closed 0.2% lower, while the German DAX managed to inch up by 0.1% on the day led by a jump in the share price of Delivery Hero. The competitor to Deliveroo has become more attractive to investors now that Deliveroo itself has posted decent earnings and is mulling an initial public offering i.e. being listed on a stock exchange.
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Elsewhere
Stocks across the Asia Pacific region are largely down at the time of writing. With little positive news to react to and US stocks setting the standard of declining, there wasn’t much to prevent stock prices from falling.
Perhaps for this reason, Chinese authorities intervened in markets once again by offering $74 billion in one-year loans to help companies through taxes that are due next week.
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WTF (What’s The Fact?)
Five signs that you hate working from home
1. You look up terms on Google such as “I hate working from home” 2. You bore your soon-to-be-ex-friends by repeating that you hate working from home 3. You hate working from home 4. You crave the psychological uplift from social interaction while harbouring the fear of missing out which you turn into an acronym, FOMO, to sound trendy when next speaking to colleagues you hate but who have enough time to gossip because they don’t really do much (think Cindy in HR and the like) 5. You come up with unnecessarily long and convoluted explanations of your feelings 6. You lose the ability to count to five
Here are some unusually serious suggestions from me (I love working from home). 1. Walk to “work” – before you start work, walk for 20 minutes or around the block, but get outside first. That creates a mental break between home and work as well as getting the blood flowing and some fresh(ish) air. 2. Timetable your day for work tasks and when you are having lunch/ stopping work. Block out the lunch break in your diary and take it. 3. Include a phone call each day that is work-related, but with someone whose company you enjoy. It doesn’t have to be more than five minutes, just enough to have that social interaction (use a face-to-face app if you can). If you already have a meeting with someone like that, then so much the better. 4. Have music or a radio station playing that doesn’t distract, but does create a less empty atmosphere. 5. Stop telling people that you hate working from home and, instead, ask people what they do to make working from home enjoyable/ rewarding/ more productive. 6. Get the laundry done while you’re working so that it doesn’t impinge on your evenings of weekends.
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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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