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Contents Click on the links below to get to the stuff you really really want. USA – Rising contagion numbers indicate more lockdown measures; Financial stimulus not much nearer; Vaccine hopes eroded by other news; Tech stocks up, others down (#USA) UK – Investors desperately hoping that Brexit negotiations will avoid no-deal; Pound and FTSE 250 up; Financial and house builders up (#UK) Continental Europe – Spanish retailer Inditex leads broad stock price rises (#Europe) Elsewhere – China bans Australian imports; Japan imposes travel restrictions (#Elsewhere) WTF – Tiny little mix (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
Virus contagion numbers are, to quote Bloomberg, “rampaging” across the US. It would appear that it hasn’t gone away “like a miracle”, which is more than a shame. And that has led investors to worry about the likelihood of increased lockdown measures, leading to more economic pain to add to the human misery.
Talks over a financial stimulus plan are dawdling and don’t seem to be making a huge amount of progress. The current administration seems to have decided to abrogate itself of responsibility by fiddling on the golf course while Rome burns, so to speak.
These factors eroded the positive start to trading yesterday which had been triggered by hopes of vaccine distribution. By the end of trading it was an all-too-familiar pattern of stocks that have done well during the lockdown rising in price and others falling. Hence the tech-heavy Nasdaq Composite added 0.5% on the day, while the broader S&P 500 dropped by 0.4%.
The demand for and prices of bonds didn’t move much. The yield on the benchmark 10-year Treasury (US government bond) held its position just below 0.9% reflecting a partial recovery from the lows of March and August, but still way off the more “normal” levels last seen in December of 2019, i.e. nearer 2.0%.
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UK
The unique joy that is Brexit continues to stagger into the house at 3am, reeking of liquor, before proceeding to vomit on the cat and collapse on the dining room table. Meanwhile, its parents have given it yet another extra day or two to get its act together before being kicked out.
While that increasingly tiresome story repeats itself, lockdown measures have been ratcheted up in southeast England. So the vaccine cannot come soon enough. Optimistic investors tried to extract some positive from the fact that the UK-EU Punch-and-Judy show was being extended for more encores; the thinking being that the concentrated efforts might lead to the UK avoiding a no-deal Brexit and the economic and regulatory shock that that would bring.
The pound nudged up as a result. That had its usual effect of pulling share prices on the export-focused FTSE 100 down by 0.2%, while the domestically focused FTSE 250 added 0.7% on the day.
Financial and house builder stocks all benefited from the Brexit hopes, while retailers were up following reports that Frasers might do a deal to salvage the odd bit of Debenhams. Don’t hold your breath on that one.
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Continental Europe
Stocks were a little more consistent on the continent. The Euro Stoxx 50 added 0.5% with most sectors posting gains. Consumer goods, financials, consumer services and telecoms all rose with Spanish retail group, Inditex, leading gains with a 4.0% jump after hitting its sales targets.
The German DAX didn’t do as well. It had the classic lockdown look: Delivery Hero rose by 4.7% while MTU Aero Engines fell by 0.1%. The overall German index closed the day 0.3% lower.
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Elsewhere
It’s been a fairly eventful start to the week across the Asia Pacific region. Australia made a legitimate nut of a complaint about China, hence China characteristically grabbed the nearest sledge hammer to pulverise said nut. In other words, China has imposed an import ban on Australian goods. That sent Australia’s coal price plummeting.
Meanwhile, China’s economic recovery continues apace, helped by the latest injection of cash into its financial system in the form of cheap loans.
Elsewhere, stocks in South Korea and Hong Kong were down, while Japan’s Nikkei 400 dropped by 0.4% after the government imposed travel restrictions.
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WTF (What’s The Fact?)
Tiny Little Mix
One of the chavvy clones in one of the formulaic girl bands has left that girl band so there are now just four clones in Little Mix.
I actually saw them perform on an episode of the Graham Norton show and, to be fair, they weren’t too bad. I doubt that they write a word or a note of what they perform, but that kind of adds credence to the complaint from Chantalle or Ferrari or Ford Mondeo, or whatever her name is, that the pressure is too much. It’s not a musical journey, it’s a cycle of rehearsals, studio, performance… of someone else’s instructions, i.e. a never-ending business trip, and that would wear anyone down.
So Ashleigh has decided to hang up her false eyelashes, scrub down to her last four layers of foundation and face Dagenham alone (except on Friday nights, when she’ll be with Candice, ‘Chell, Page, Stacey and Tyler (and Becks if she absolutely must come)). She’ll now have more time to get her dermal-filler chops around the usual balanced diet. Shares in Chicken Cottage have nudged up since the news.
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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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