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Contents Click on the links below to get to the stuff you really really want. USA – Optimism of stimulus package and Biden spending lifted dollar and non-tech stocks (#USA) UK – Rising dollar and potential oil production cuts lifted FTSE 100; Wetherspoons down; Brexit – no progress (#UK) Continental Europe – Lockdown restrictions up, but already priced-in; Stocks up on positive corporate results (#Europe) Elsewhere – China passes export restriction laws; Rest of Asia Pacific stocks largely up (#Elsewhere) WTF – Why do I do this to myself? (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
Optimism of a stimulus package was back up again, sending the value of the dollar up as folk hoped for a brighter near-term outlook. Countering that was the rise in virus cases with Florida reporting the most cases since August. Florida’s senator has been a proud supporter of Trump and his approach to the virus, so this doesn’t bode well for the Republicans in this state.
Technology companies had a bad day as folk considered the possibility that the virus might be at its worst now with the thinking being that tech stocks have done really well during the lockdown. If Biden wins, which appears increasingly likely, then a massive spending package is more likely to be introduced, and that could help a broad range of companies, making them increasingly attractive at the moment.
The combination of ups and downs in different sectors left the S&P 500 closing at much the same price it started the day, while the demand for and prices of lower-risk rated bonds fell as folk saw more potential gains to be made in stocks.
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UK
The rising value of the dollar (making the pound relatively cheap) gave the FTSE 100 a big lift, as did talks between OPEC and other major oil-producing nations over the possibilities of reducing production to bring the price of a barrel up from its painfully low level.
That sent the FTSE 100 up by 1.5% on Friday while the more domestically focused and less oil-heavy FTSE 250 nudged down a touch. The notable mover of the day was pub chain, Wetherspoons. It sank by 19.4% on the day following the release of its financial year earnings or, rather, losses. The chain’s owner, Tim Martin, has been a vocal supporter of Brexit, so he’ll be looking forward to 2021 when he gets his wish and can start to rebuild after a very difficult year for all leisure and entertainment businesses.
Talking of Brexit, the negotiations are dragging on without much progress to speak of, if there had been, they’d be speaking of them. So we wait to see how this works out. The deadline is 31 December, but the reality is that a deal of sorts needs to be agreed by early November if it’s to be put through before the year end. If something can be agreed, the uncertainty hanging over the UK economy would be reduced and the pound would probably rise again. Here’s hoping.
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Continental Europe
Lockdown restrictions continue to be ratcheted up with Italy considering its tightest restrictions now that the country’s infection rate appears to be rising again at an alarming speed.
The effects of this had already been priced into stocks and bonds (i.e. stocks had gone down in price and lower-risk rated bonds had gone up). So stock prices were actually up on Friday as the downward momentum might have gone too far.
Also, there were some positive corporate results that lifted sentiment. Apparently, we’ve all been buying loads of luxury stuff during the lockdown, and that’s boosted the share prices of LVMH Moet Hennessy, pushing its share price up by an impressive 7.3%. Daimler’s results were also surprisingly good, while food manufacturer, Danone, dropped by 3.4% after its chief financial officer was booted out as part of the company’s restructuring programme.
The underlying momentum was positive though, sending both the Euro Stoxx 50 and German DAX up by around 1.6% on Friday.
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Elsewhere
China passed some laws on Saturday that were, to all intents and purposes, a tit-for-tat against US trade restrictions. The Chinese have restricted exports that, they reckon, might otherwise compromise national security. Believe the efficacy of that if you will. The point being that the Sino-US spat drags on. Chinese stocks are down this morning quite possibly as a result.
The rest of the region has registered a minor rebound as stimulus hopes rise alongside the prospects of a more financial pro-active Biden administration in the White House.
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WTF (What’s The Fact?)
Why do I do this to myself?
Remember “Why don’t you?”, the BBC TV kids programme from way back? If you don’t, be happy. If you do, you’ll forgive me for having it pop up my mind this morning.
For some reason I was thinking recipes, and this programme came into my mind. The “recipes” on this low-budget, well-intentioned but generally irritating programme were laughable.
They had to be easy enough for a kid to construct without cutting their own hand off or frying their sister. So, simple construction it was.
Here’s a gem from good old YouTube: series 10, show 4, 1979. “Now it’s time for today’s recipe. This is ‘Cheese and ham snacks’. All you need are ham and cheese slices and cocktail sticks”
You can work out the rest. Unfortunately, they didn’t end up using a fellow child-presenter as an acupuncture ham-and-cheese-hedgehog.
But wait, there’s more:
“I’m doing the same sort of thing but this is cheaper because I’m using brown bread instead of cheese”
Yes, their idea of a recipe was a f****** ham sandwich.
Why the hell don’t you go off and do something less boring instead?
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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’re unable to recognise the devil’s ear wax when you see it, then you’re on your own.
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