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DMU 27-Nov – Stock Rally Reversal Continued; Chinese Industrial Output Surged; UK Stocks Led Down by Utilities; Fed Indicates More Bond-Buying Soon

Posted on 27 November 202027 November 2020 by Chris Hurst

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Contents Click on the links below to get to the stuff you really really want. USA – More bond-buying “fairly soon” from the Fed (#USA) UK – Rally reversal continued; Tech up, utilities down; Unemployment set to hit 7.5%; Spending cuts mooted by Sunak (#UK) Continental Europe – Stocks flat despite German lockdown extension (#Europe) Elsewhere – Chinese industrial output surged sending stocks up (#Elsewhere) WTF – A (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
With US stock markets closed for the Thanksgiving food-fest, the main news coming out of the country centred on the release of the most recent meeting notes from the Federal Reserve (central bank, equivalent to the Bank of England).
These notes indicated that more bond-buying was on the way “fairly soon”. As is so often the case with central banks, quite what that means remains to be seen.
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UK
The reversal of the recent rally continued yesterday as the second wave of virus contagion and the effects of the lockdowns already experienced, combined to knock short-term confidence among stock investors.
The FTSE 100 and FTSE 250 closed 0.4% and 0.9% lower with the index’s tech sector adding 1.0% while the utilities sector dropped by 1.7% and house-builders sank (though this was partly due to a couple of them going ex-dividend). Oil and minerals also retreated from recent highs as folk get a little more realistic about what we have to go through before the pandemic cloud is blown over the horizon by, as yet, unmanufactured vaccine doses.
UK stocks were also hit by Squishy Rishi’s announcement that some spending cuts would be required in order to pay back the UK’s massive debts that have been built up during the lockdown measures. Unemployment is set to hit 7.5% next year, up a big old chunk from its sub-5% effective-full employment levels of late.
In short, the UK economy is lagging its European and North American counterparts, and it also has the further potential trade and regulation shock of Brexit to cope with.
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Continental Europe
Unsurprisingly, then, things weren’t as bad on the continent, despite the lockdown measures in Germany being extended. The Euro Stoxx 50 and German DAX closed the day at much the same level that they’d started the day. Rises in healthcare, chemicals and technology were offset by falls in oil, industrials and financials.
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Elsewhere
Chinese stocks were on the rise this morning after data showed that industrial activity there has surged, adding further evidence that the country’s economy is staging a fairly rapid recovery.
Stocks across much of the rest of southeast Asia followed suit, while Indian and Australian stocks were nudging downwards.
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WTF (What’s The Fact?)
Pardon me
General Michael Flynn has been “pardoned” i.e. let off, by Trump, which conveniently leaves Flynn no reason to testify further against Trump.
Also likely to be pardoned according to my research are:
Rick Gates, former campaign aid convicted under the Mueller investigation George Papadopoulos who lied to the FBI Risk Astley for not writing any of his hit Cromarty, caretaker of the haunted fairground from Scooby Doo Three chickens for looking like turkeys from a distance And Grecian 2000 for its marring of Rudy Giuliani’s face during a recent press conference.
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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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