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Contents Click on the links below to get to the stuff you really really want. USA – Rising virus cases and sobering comments bring stock prices back down; Positive macro-economic data; Political stand-off pushes stimulus package further off (#USA) UK – Brexit negotiations nearing break-through; Investor nervousness pushes bond prices up, stocks down (#UK) Continental Europe – Travel restrictions pulled relevant stock prices down (#Europe) Elsewhere – Japan could raise Covid-19 alert to highest level; Chinese stocks unmoved by potential rejection from US exchanges (#Elsewhere) WTF – Tim Vine line (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
The latest vaccine-fuelled rally ran out of steam yesterday as rising virus case numbers returned to centre stage. Sobering words from the head of the Federal Reserve, the US central bank, also focused minds. Jerome Powell noted that the US economy still has a “long way to go” before it fully recovers from the pandemic, while the World Health Organisation added that the vaccines still carried “many questions”.
Some positive macro-economic data came in that suggested a modicum of optimism could be appropriate: the outlook for retail sales, industrial production and builder sentiment was positive. But stock prices still retreated from the new overall record highs that they’d hit on Monday, leaving the S&P 500 0.5% lower on the day yesterday.
Meanwhile, Speaker of the House of Representatives, Nancy Pelosi and her fellow Democrat and Senate Minority Leader, Chuck Schumer, asked Senate Majority Leader, Mitch McConnell, to resume negotiations on a fiscal stimulus package. Mitch McConnell described himself as the “grim reaper” during Obama’s term of office for preventing almost every piece of legislation from proceeding through the Senate. Stephen Colbert, host of The Late Show, described McConnell as a “castrated ball-sack”. Either way, he ain’t budging, so there’s little chance of a stimulus package this year.
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UK
Brexit negotiations are reportedly nearing a break-through. That sent the value of the pound up as the prospects for the UK economy’s avoiding a trade shock seemed a little more likely.
The higher value to the pound combined with the petering out of vaccine-related enthusiasm to bring stock prices down. The FTSE 100 and FTSE 250 fell by 0.9% and 0.5% respectively with telecoms, mining and financial companies leading the declines.
Tobacco manufacturer, Imperial Brands, leapt by 7.3% after reporting a sharp rise in annual sales: people are cleverly trying to anticipate the vaccine by killing themselves through other respiratory ailments.
Investor nervousness appeared to be increasing if bond prices are anything to go by. The demand for and prices of benchmark 10-year Gilts (UK government bonds) was up, suggesting that folk wanted to park their money somewhere relatively “safe”, while further shenanigans unfolded.
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Continental Europe
Stocks were nudging around without much noticeable overall change yesterday. The Euro Stoxx 50 and German DAX ended close to their starting positions on the day as travel restrictions sent relevant companies’ stock prices down, but oil-producers were pulled up by a further rise in oil prices. Brent crude is now going for around $44 a barrel, up from the $19 that it sank to in April, but well below the $69 it touched before the crisis took hold.
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Elsewhere
Stocks in Japan were down as reports suggested that the Covid-19 alert could be raised to its highest level. Meanwhile, investors in China shrugged off news that the US Securities and Exchange Commission is pressing on with a plan that could lead to Chinese companies being ejected from US stock exchanges.
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WTF (What’s The Fact?)
Tim Vine line
I was going to post a picture comparison of Mitch McConnell and a Galapagos tortoise, but the old codger has enough to worry about already what with his habitat being depleted and rising sea levels.
So here’s a line from Tim Vine: “Our local police chief did a talk on heroin the other day. Couldn’t understand a word he was saying.”
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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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