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Contents Click on the links below to get to the stuff you really really want. USA – Rally reversed yesterday; Small caps down, tech up; Markets closed today (#USA) UK – UK stocks down; Economy set to shrink 11% this year in total, up 5% next year (#UK) Continental Europe – Less difficult day (#Europe) Elsewhere – Stocks nudging back up (#Elsewhere) WTF – Best of the Fest (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
The rally reversed yesterday as folk considered some mixed economic news: the trade deficit widened (US buying more imports than it’s selling exports), though jobs data and durable goods orders were positive.
Small cap companies dropped in value and tech stocks rose as folk veered from “yay, it’s going to be great” to “meh, it’s going to be crap first”. That left the S&P 500 0.2% lower, while the demand for and prices of benchmark 10-year Treasuries (US government bonds) nudged up as nervousness returned to a degree.
US markets will be closed today for Thanksgiving (which folk in the UK celebrate on the 4th July). The consequence being that investors’ blood will be flowing from their brains to their guts to digest whatever bulk they’ve ingested (though some Trump acolytes will experience the balance of blood moving upwards to reach the digestive tract).
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UK
The FTSE 100’s heavy bias of financial, mining and oil stocks meant that it took more of a hit on the day than did its more mixed brethren in Europe. The UK’s blue-chip index closed 0.6% lower while the more domestically focused mid-cap FTSE 250 index lost 1.1%.
The reversal of recent, sharp rises in value stocks (banks, oil, travel, leisure) was driven partly by investors taking profits (selling after gains to lock in profits) but also by Squishy Rishi. Yes, the Chancellor of the Exchequer and probably next Conservative leader, let it be known that the economy is going to shrink in the short-term before it gets back on track to recover.
The UK economy is set to shrink by more than 11% this year while government borrowing continues to balloon as he pours money into furlough and other fiscally supportive measures to lessen the downside and prompt the recovery. As online stock broker, ADVFN, points out, “that’s the biggest contraction since 1709”. Crikey.
But UK economic growth is set to exceed 5% next year, so things do appear set for a relatively swift recovery. However, there will be some long-term damage in the form of lost companies and jobs.
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Continental Europe
Stocks across the continent were having a less difficult day. The Euro Stoxx 50 and German DAX both finished very close to the prices at which they started the day. The downward moves some companies were offset by hopes of a tanTrump-free transition of power in the US as well as the ongoing positive news about Covid-19 vaccines.
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Elsewhere
Stock prices have gently picked up again across much of the Asia Pacific region this morning. Investors are continuing to balance the next six months of lockdowns and economic impediments with the prospects of a post-pandemic world.
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WTF (What’s The Fact?)
Best of the Fest
Olaf Falafel, who claims to be Sweden’s eighth-funniest comedian, won last year’s “funniest one-liner” at the Edinburgh Fringe festival with this line:
I keep randomly shouting out ‘Broccoli’ and ‘Cauliflower’ – I think I might have florets”
Here are some of the others that were nominated: * “Someone stole my antidepressants. Whoever they are, I hope they’re happy” – Richard Stott * “What’s driving Brexit? From here it looks like it’s probably the Duke of Edinburgh” – Milton Jones * “Sleep is my favourite thing in the world. It’s the reason I get up in the morning” – Ross Smith * “After learning six hours of basic semaphore, I was flagging – Richard Pulsford * “To be or not to be a horse rider, that is Equestrian” – Mark Simmons * “I’ve got an Eton-themed advent calendar, where all the doors are opened for me by my dad’s contacts” – Ivo Graham
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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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