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Contents Click on the links below to get to the stuff you really really want. USA – Virus cases are surging again; Mnuchin undermining Fed’s ability to support financial markets; Tech stocks up (#USA) UK – Virus… Travel and leisure down… Oil down (#UK) Continental Europe – Sandwich delivery up, aircraft manufacturers down (#Europe) Elsewhere – Korean and Japanese prime ministers warn of rising virus cases (#Elsewhere) WTF – Liz and Philip (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
Investor optimism has been retreating from Monday’s vaccine-driven highs as virus cases surge and more lockdown measures seem likely. Add to that the impasse over further stimulus and we’re back with technology and sandwich-deliverers going up and most other stocks going down.
Secretary of State, Steve Mnuchin, has demanded that the Federal Reserve to return money that remains unused from its pandemic lending programme. By removing the source of money that has sustained businesses, Mnuchin is either being spectacularly ignorant or trying to sabotage the in-coming administration.
Meanwhile, tech stocks were on the up, and they form a big chunk of the S&P 500, hence it closed 0.4% higher. Stocks were kept up to an extent by more positive news about vaccines, but jobs data were less helpful. The Department of Labor’s jobless claims numbers rose to 742,000, above the expected 710,000. On the other hand, secondary jobs claims fell but remain at 6.4 million.
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UK
Rising virus cases drove investor sentiment in the UK yesterday. Travel and leisure companies were heading down while food retailers headed up. Cineworld was reported to be considering a form of financial administration so that it could ride out the lockdown. That sent its stock price down by as much as 15% during trading.
Demand for oil appeared likely to fall, hence Shell, BP and the like dropped. Troubled carmaker, Aston Martin, sank by 12.3% on the day, it’s been looking vulnerable since before the pandemic and has had a torrid time.
Macro-economic data added to the misery. Retail sales were lower than expected and public finances are carrying colossal debt.
The demand for and prices of lower-risk rated bonds continued to nudge steadily up. But bond investors didn’t seem overly surprised by the bad news, just slightly more cautious.
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Continental Europe
Once again, continental European stocks appeared to follow similar trends to their UK counterparts. The entire scenario can be summed up with these two stock moves: Delivery Hero rose by 3.8% while MTU Aero Engines fell by 2.6%.
If you’re interested, the Euro Stoxx 50 and German DAX both dropped by 0.9% on the day.
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Elsewhere
Virus contagion is a rising concern across the Asia Pacific region once again. The prime ministers of both Japan and South Korea were urging their citizens to be vigilant, while Hong Kong’s health chief noted that that corner of China had probably entered a new wave of cases.
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WTF (What’s The Fact?)
Liz and Phil
Philip – “I offended him, and I offended him, and him…” Liz – “No, not him you didn’t dear” Philip – “Didn’t I?” Liz – “No. That’s the one you ran over dear.” Philip – “Oh yes. Happy days.”
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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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============================================================ Copyright © 2020 Chris Hurst, All rights reserved.
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