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Contents Click on the links below to get to the stuff you really really want. USA – Stocks battered by latest virus numbers; Financial deal closer; Housing data positive; Bonds steady (#USA) UK – British officials consider diluting Johnson’s Brexit legislation; Pound up, FTSE 100 down (#UK) Continental Europe – US worries pull stocks down gently (#Europe) Elsewhere – Chinese data revive domestic stocks; Rest of region mixed (#Elsewhere) WTF – Crossroads (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
Stocks took a battering in the US yesterday as virus cases rose. The S&P 500 closed 1.6% lower on the day, reflecting a broad drop in stock prices. Bond investors were, as is so often the case, rather more circumspect. The demand for and prices of low-risk rated US bonds remained fairly steady because nothing much has changed – the increase in virus cases was predictable.
In more interesting news, Speaker of the House of Representatives, Nancy Pelosi, noted that the differences between her Democratic party and the Republicans were narrowing, making the possibility of a financial stimulus package before the election a slightly greater possibility. The point here is that Biden has a large and growing lead in the polls, so his folk don’t need to compromise as much. So there might not be a package until after the election.
There was some positive macro-economic news out of China as well as upbeat housing sales and construction data on the domestic US front. But it was all about the virus numbers yesterday and the potential for more loss of life and the consequences of further lockdown measures, should those be imposed.
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UK
Micheal Gove and Boris Johnson have both heaped blame on the European Union for not agreeing to Johnson’s unilateral rewrite of the Brexit agreement. Time is running out for a deal and the EU is conveying its determination to stick with the deal that had been negotiated. Gove said that trade negotiations were “effectively ended” which put the cat among the clich és, sending the pound and stocks down.
Now, we’re seeing comments that “British officials” are prepared to water down Bojo’s legislation. In other words, Bojo and Gove promised continued free trade with the EU when campaigning for Brexit or election, and now they might have to recognise that when you leave a club you can’t tell that club what the rules are for non-members.
The prospects of losing our biggest export and import trade partner by far have sent the value of the pound down since 2016. Yesterday, it picked up a little on hopes that a trade deal might, just might, be reached.
Whether it will… who knows. But, in the meantime, the rising value of the pound pulled the FTSE 100 down 0.6% for the usual reason (you must know by now). While the FTSE 250 eked out a 0.2% rise on the day.
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Continental Europe
Stocks across the continent posted gentle downward movements yesterday. Financial stocks were up, but healthcare, utilities and oil had a tougher time. Worries over the US virus numbers and financial stimulus package, and Brexit concerns all contributed to a familiar sense of worry.
The Euro Stoxx 50 and German DAX dropped by 0.1% and 0.4% respectively.
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Elsewhere
Chinese stocks largely reversed Monday’s losses with their tech companies posting the highest gains (they were the biggest losers yesterday). The mood was helped by more economic data suggesting that China was recovering fairly quickly and consistently from the ravages of the virus and related lockdown measures.
The rest of the region is more mixed as folk try to work out what will happen with virus cases and stimulus packages.
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WTF (What’s The Fact?)
Crossroads
Did you know that Britney Spears was in Crossroads? Unfortunately, she was in the 2002 Hollywood film rather than the 1970s Birmingham soap opera. Shame. I’d love to have seen a love tryst between Britney, Benny the cleaner and one of the paper-thin walls just before it keels over.
The TV series became a byword for cheap production values, making it the slightly desperate tramp among soap operas. I’ve set you up nicely for the punchline about Britney Spears now.
Instead, I shall mull the idea of Spears shooting her first video, the decidedly dodgily titled, “Hit me baby one more time”, in the Crossroads Motel. Ideally to the theme tune of the soap opera.
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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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