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Contents Click on the links below to get to the stuff you really really want. USA – $2 trillion stimulus package likely; Trump administration backs down on China tech; Bond yields up sharply (#USA) UK – Stocks down on corporate news; Persimmon leads falls; Bonds still in demand (#UK) Continental Europe – Bayer leads modest gains (#Europe) Elsewhere – Chinese virus cases stymie stock gains; Rest of Asia lifted by Biden’s stimulus package (#Elsewhere) WTF – Unfashionable (#WTF) Links (#Useful) Numbers (#Numbers) Ts & Cs (#Ts+Cs)
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USA
While folk in Congress were busy impeaching Trump again (it would have to get a two-thirds vote of approval in the Senate which would require 17 Republican senators to back the vote), Biden was preparing his stimulus package. It’s going to be $2 trillion, if the rumour mill is to be believed. That amount is consistent with what Democrats have been pushing for for months.
With virus numbers still rising, it was the tech sector that fared best on the day. The Nasdaq Composite rose by 0.4%, helped by news that the US administration would not be pressing ahead with its latest threats to bar Chinese tech companies from trading in or with the US.
The final bit of good news was that inflation nudged up in December. It moved from 0.2% to 0.4% over the month. This is still way below the targeted 2.0%, but a move away from 0% is welcome at the moment as that would mean people holding back on purchases as they wait for prices to fall, putting a lid on overall spending and company revenues.
The demand for and prices of lower-risk rated bonds have dropped now that the focus has shifted to recovery, encouraged by the Democrats winning control of the Senate and, therefore, the ability to push through their higher spending packages. As a result, the benchmark 10-year Treasury (US government bond) yield has jumped from around 0.9% to 1.1%, the first time it’s been about 1.0% since March.
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UK
Stocks in the UK didn’t have anything pushing them generally up. Investors focused on news from individual corporates, and not too much of it was positive, so down went overall stock prices.
The FTSE 100 and FTSE 250 closed 0.1% and 0.5% lower respectively. The falling value of the pound helped the FTSE 100’s exporters, with utilities and healthcare companies posting reasonable gains on the day. By contrast, every sector of the FTSE 250 closed lower.
House builders had a tough day, led down by Persimmon which reported a drop in full-year completions. Just Eat posted a rise in revenues but a fall in profit margins. It’s share price subsequently fell as investors appeared to be cashing in on gains they’d made on holding that stock.
In fixed income, unlike its US counterpart, the 10-year Gilt (UK government bond) is still in demand as investor try to fathom how long it’s going to be before the post-Brexit and post-pandemic combo settle down. The yield remains bouncing around between 0.2% and 0.3%.
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Continental Europe
Stocks across the continent had a slightly better day. With fewer impediments than their UK brethren, the Euro Stoxx 50 and German DAX were able to crawl up by around 0.1% on the day.
Utilities and healthcare stocks led gains with Bayer, leading gains on both indices. The pharmaceuticals and agro-chemicals giant jumped by 4.5% yesterday after its latest push to get three new drugs to sell big (and replace two whose sales are ailing).
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Elsewhere
Virus cases are officially on the rise in China, sending stocks there down this morning. The CSI 300 is trading almost 2.0% lower on the day, despite the stand-down from US politicos regarding Chinese tech companies.
Stocks across much of the rest of the region were up though, reacting positively to news of Biden’s likely financial stimulus package.
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WTF (What’s The Fact?)
Unfashionable
Halima Aden is, the internet assures me, a supermodel. She’s also a Muslim and noted as the first “hijab-wearing supermodel” (again, I credit the internet for this priceless morsel).
Apparently she’s quitting the fashion industry because it’s not compatible with her religion. That’s the coke-snorting, alcohol-quaffing and selling through sex-appeal industry she’s referring to.
Maybe it’s just the general BS. To that end, here are some of the top excuses that models give for not showing up to photographer, John Gress, lists on his YouTube video:
– I’ve been in a terrible accident – My grandfather died (again) – My mother is unwell – I have Covid – My quarantine body isn’t ready yet – I lost my phone – My dog got sick – I’m dog-sitting today, can I bring the puppy (45 minutes after the shoot was due to start)
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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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