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Contents Click on the links below to get to the stuff you really really want. USA – Jobs data disappoint; Stimulus deal talks deadline; Focus on vaccine lifts stocks (#USA) UK – Brexit worries undermined stocks; Oil and miners up; Negative interest rates talked up again (#UK) Continental Europe – Oil and tech stocks led gains on Friday (#Europe) Elsewhere – Mixed (#Elsewhere) WTF – Going out (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
While Trump continued to peddle baseless claims of election fraud in Georgia, everyone else was weighing the latest jobs data with renewed talks over further US financial stimulus.
The news was not good. Virus cases have hit new records in the US and that has undermined efforts to get folk back to work. As a result, the data showed the fewest number of new jobs added in the economy for six months. Jobs provide a solid indicator of how the economy is faring and, no matter what people in the Blonde House have to say about it, the virus has not been contained effectively and it matters.
Lawmakers have set a deadline of tomorrow in which to come up with a financial stimulus deal that would apply during the current administration. Until that comes, the recovery will remain vulnerable.
Investors remained cautiously optimistic, sending the S&P 500 up by 0.9% on Friday. That takes it to a gain this year of 14.5%, a stunning factoid with the pandemic and blonde backdrop that we have. Oil and mining stocks were among the highest risers, as investors focused more on the prospect of vaccine distribution, and less on the immediate problems.
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UK
Stocks in the UK had started the day off in positive fashion before Brexit worries undermined investor confidence. Things picked up again in later trading to leave the FTSE 100 and FTSE 250 0.9% and 0.3% higher respectively.
There were mixed feelings about whether the UK and EU can finally work out a deal over one weekend that has completely eluded them for four-and-a-half years. Bojo is having to fight on several fronts simultaneously at the moment: Brexit, Covid-19 and a legal suit from one S. Claus who is alleging defamation through persistent public parodies by the prime minister.
Meanwhile, oil-related stocks continued to rise alongside miners, both of which constitute a big chunk of the FTSE 100 index. They were also among the highest movers on the FTSE 250, but aren’t so stock-McBig-Huge in that index.
The more interesting news came courtesy of Bank of England policymaker, Michael Saunders. He reckons that the base interest rates could be taken “a little below zero”. That would hammer banks and might not do much to stimulate the economy. The BoE has been testing the response to such an approach for some months but with a fairly chilly welcome from most commentators. We’ll see if they resort to it or just keep pumping loads of newly (electronically) printed cash into the system to boost inflation and, therefore, potential for growth and higher interest rates later on down the line.
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Continental Europe
European stocks nudged upwards on Friday. Oil-related and technology stocks led the Euro Stoxx 50 and German DAX to gains for 0.6% and 0.4% respectively on the day. The underlying current is one of hope: that the US stimulus package will come through, that the UK and EU can forge a deal and that vaccines will be available very soon.
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Elsewhere
Stocks across the Asia Pacific region are fairly mixed this morning as folk there are also working out what to expect next.
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WTF (What’s The Fact?)
Going out
The lockdown rules in the UK have been less than clear. So one pub in Brighton has decided to overcome the confusion about whether or not people can visit; it’s named one of it’s own beers “Substantial meal”.
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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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