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Contents Click on the links below to get to the stuff you really really want. USA – Rise in virus cases dominates sentiment; Companies reinvesting and consumer confidence OK; Microsoft posts good results; S&P down (#USA) UK – Stocks down on virus rise; Oil and mineral prices down; HSBC and BP up on decent results; Stocks down substantially overall (#UK) Continental Europe – Same as UK (#Europe) Elsewhere – Fairly benign day thanks to lower virus contagion (#Elsewhere) WTF – How not to win (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
The rise in virus cases and lack of financial stimulus agreement continued to dominate investor sentiment yesterday, repeating much of what we’ve already seen over recent days. So here’s the other news:
Companies have started to reinvest in their businesses according to the latest macro-economic data from the Department of Commerce. At the same time, house prices recorded their fastest pace of gains since 1991, but from a low pace. Nonetheless, this is a factor for inflation which the Federal Reserve will be aware of as it continues to keep interest rates low and provide quantitative easing (electronically printed new cash).
Consumer confidence remained just above the 100 mark, suggesting that there might be a net positive feeling, but only just. And the Richmond Federal Reserve’s manufacturing index beat expectations as businesses in that part of the US appear to have increased shipments and new orders.
In terms of stocks, Microsoft delivered impressive results as its cloud computing service benefited from the movement of workers to online or remote activity. That lifted the tech sector, but most other sectors were under the cosh, leaving the S&P 500 0.3% lower on the day.
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UK
Stocks across most sectors were heading downwards again yesterday as folk digested the latest virus news; it continues to be bad.
Health sector stocks did OK, but pretty much everything else didn’t. Oil and mineral prices continue to be kept down as folk anticipate lower demand and, therefore, production levels. House builders also had a tough time yesterday as investors appeared to expect Persimmon’s share price to drop and sold their stocks sending the share price down – one of those delightful self-fulfilling prophecies that you can conjure if you have enough money.
There was some respite for exporters as the value of the dollar rose, making UK exporters’ products and services effectively cheaper to buy. But that just tempered the share price falls on the day leaving the FTSE 100 (which is export heavy) 1.1% lower and the domestically focused FTSE 250 1.5% down. BP and HSBC delivered decent results, which also helped to reduce the FTSE 100’s final overall loss for the day, but it’s really all about Covid-19 right now.
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Continental Europe
It was a very similar story across the continent with oil, financial and consumer stocks leading the broad declines. The Euro Stoxx 50 and German DAX both lost around 1.0% on the day. In Germany, Delivery Hero and MTU Engines have both been whipsawing between sharp gains and losses. Yesterday was an excellent example with one firm at each end of the day’s moves: Delivery Hero up 3.4% and MTU down 3.5%.
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Elsewhere
It’s been a fairly benign start to the day across the Asia Pacific region. Their levels of virus infection don’t appear to be quite so virulent at the moment, hence Australian, Chinese and Korean stocks all posted gains.
It’s a different story in India where the Sensex is down 1.3%. The country is suffering some pretty severe contagion numbers at the moment and that has to be a factor.
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WTF (What’s The Fact?)
How not to win
Arrichion of Phigalia, a Greek pankratiast (ancient form of no-rules fighting), caused his own death during the Olympic finals. Held by his unidentified opponent in a stranglehold and unable to free himself, Arrichion kicked his opponent, causing him so much pain from a foot/ankle injury that the opponent made the sign of defeat to the umpires, but at the same time broke Arrichion’s neck. Since the opponent had conceded defeat, Arrichion was proclaimed the victor posthumously. Courtesy of Wikipedia.
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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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