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Contents Click on the links below to get to the stuff you really really want. USA – Close election results send investors into defensive and tech stocks; Mixed macro data (#USA) UK – Investors largely positive despite US election confusion; Royal Mail and Big Yellow upgraded (#UK) Continental Europe – Positive sentiment as investors reverse Biden bets (#Europe) Elsewhere – Broad gains (#Elsewhere) WTF – Completely irrelevant (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
The US election is proving to be far closer than the polls predicted, nothing new there. What is new is having one of the candidates wanting to stop counting if he’s ahead, that’s quite novel.
Investors were taking this confusion in their stride, allowing for legal shenanigans and a delayed result. The immediate economic implications include the delay of a stimulus package, so investors are focusing back on technology and defensive sectors (ones that don’t go up and down as much during ebbs and flows of sentiment or expectation).
The tech-heavy Nasdaq Composite jumped by 3.9% while the more mixed S&P 500 added 2.2% on the day. Meanwhile, the demand for and prices of lower-risk rated bonds continued to rise, sending yields down. That left the benchmark US 10-year Treasury yield (US government bond) a touch lower after sharper falls on Tuesday.
Meanwhile, the macro-economic data that came in were mixed. Mortgage and second-charge applications rose, which could suggest some health in the housing market, but also a need to find cash to sustain finances while the pandemic continues to blight the economy. At the same time, private sector employment numbers disappointed and the outlook for the services sector looked positive but not as upbeat as it had one month earlier.
This time next week, things ought to be clearer (notwithstanding legal challenges).
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UK
Investors remained determinedly positive yesterday in the UK. The FTSE 100 and FTSE 250 both added 1.7% as technology and defensive sectors, such as healthcare and tobacco manufacture, led gains. Banks and miners had a tougher day as the long-awaited US financial stimulus package appeared likely to be longer-awaited.
Royal Mail and Big Yellow both had a good day after they were upgraded by JPMorgan. Marks and Spencer also made up some of its lost ground from Tuesday, when it announced its first loss in goodness-knows-how-long. The clothing retailer has been struggling to reinvent itself for a decade or two and not had much luck. But there might just be signs that it’s beginning to make progress.
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Continental Europe
Much as the UK, folk were reversing the trades they’d placed in anticipation of a robust Biden victory in the US. The potential of that had led folk to invest in companies that had been left behind during the pandemic. But, with the election turning out to be much closer than expected, folk were putting money back into tech and defensive stocks.
The general mood was remarkably positive, if overall stock moves were anything to go by. The Euro Stoxx 50 and German DAX both closed around 2.0% to the good as most sectors were on the up.
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Elsewhere
Stocks across the Asia Pacific region are up fairly consistently this morning. From Australia to India, gains of around 1.4% have been registered with one or two variations either side of that number. Once again, it’s the defensive stocks that have gained the most as the US election confounds expectations.
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WTF (What’s The Fact?)
Completely irrelevant
I don’t know about you, but I needed to see a blonde with limited intelligence doing something entertaining and heart-warming. This is a video of a labrador puppy watching cartoons.
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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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