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Contents Click on the links below to get to the stuff you really really want. USA – Euphoria over more vaccine results, despite record virus case numbers; Entertainment, leisure and oil up; Bonds steadier (#USA) UK – Hopes of a Brexit deal; Travel and leisure stocks rise sharply (#UK) Continental Europe – Rises more modest (#Europe) Elsewhere – Decent Chinese data run its course, stock moves more normal (#Elsewhere) WTF – The other four seasons (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
Euphoria over vaccine results held sway yesterday, despite a further daily record of 184,000 new virus cases in the US. Moderna’s prospective vaccine has recorded a success rate of 94.5%, we’re told, and everyone is sick and tired of lockdown restrictions. Up on rumour and down on fact is the equally tired adage that could be applied at the moment. Stocks are up, but administering the vaccine will take months (assuming any vaccine gets fast approval).
Stocks in the US rose again and have pushed the main indices to net gains for the year, though much of that has been driven by stratospheric rises in technology stocks. The difference now is that investors are piling back into the stuff that suffered the most during the lockdown. Entertainment, leisure, oil and financial stocks have all risen sharply as vaccine news has emerged. At the same time, technology and food delivery stocks have fallen behind.
The S&P 500 closed 1.2% higher yesterday as a result, while the demand for and prices of lower-risk rated bonds only eased off slightly. Bond yields have risen (they move in the opposite direction to a bond’s price) since vaccine news started to emerge, and bond investors now appear to want to see how long it’s going to be before virus cases start to fall and lockdown measures can be eased.
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UK
There were hopes that a Brexit deal could be done, sending some of the more optimistic investors to buying UK assets, sending the value of the pound up relative to other currencies. But, as elsewhere, the big news was more to do with virus vaccines.
The FTSE 100 and FTSE 250 added 1.7% and 1.8% respectively on the day as financial, leisure and travel stocks all rose sharply on hopes of a post-Covid-19 world. Banks did well as prospects of a more normal economic and financial environment seemed possible, while oil prices rose on hopes of rising demand due to higher industrial production.
The rising stocks were those that had done badly during the lockdown (Whitbread, Cineworld, Carnival) and the fallers were those that had outperformed (Ocado, Just Eat). The demand for and prices of bonds remained relatively steady as bond investors copied their US counterparts, awaiting more solid news that virus numbers would stop their rise.
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Continental Europe
Stock price rises were more modest across the continent where the Euro Stoxx 50 and German DAX added 1.0% and 0.5% respectively. They followed much the same patterns as elsewhere with the likes of Airbus, Total and Eni rising while Delivery Hero fell.
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Elsewhere
Some decent Chinese industrial data came in yesterday which helped the mood across global markets. But that has run its course and stock moves are looking far more normal this morning. Chinese and Korean stock indices are down, while others are up. No moves warrant any particular comment from my perspective.
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WTF (What’s The Fact?)
The other Four Seasons
You’re probably aware that Rudy Giuliani held a press conference at the wrong “Four Seasons” (on the day that Biden was confirmed election winner). Instead of the plush hotel, someone in the presidential office booked the backlot of a suburban landscaping company of the same name.
The landscaping company responded beautifully by putting some merchandise up for sale on its webiste:
Note that they’ve sold out!
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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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