Adam Vettese, UK Market Analyst at eToro, has provided his daily commentary on traditional and crypto markets for November 13, 2020.
Value names that had been on the receiving end of a boost following Pfizer’s Monday vaccine news fell back on Thursday, with the S&P 500’s energy sector down 3.4% and the financial sector down by 1.7%. However, in the first four days of the week value stocks made up some ground against their growth counterparts. BlackRock’s iShares S&P 500 Value ETF gained 3.8% between last Friday’s close and yesterday, while the iShares S&P 500 Growth ETF lost 1.1%.
Dominating headlines on Thursday evening was the news that President Trump has signed an executive order banning US investors from holding shares in companies that could have exposure to the Chinese military. In total, more than 30 Chinese firms are affected, including China Mobile and China Telecom, which both have listings on the New York Stock Exchange.
Overnight, following a mild pullback in US equity indices, shares across Asia also dipped, with the Nikkei down 0.5% in Japan, and Hong Kong’s Hang Seng off 0.3%. The former remains within touching distance of its year-high nonetheless, with investors reacting favourably to vaccine news and the US election result in the last week.
Gold, which has paused for breath after a 25% plus rally this year, also rose to $1,876 overnight.
Disney’s streaming service has 73 million paying members
All of the three major US stock indices fell by around 1% on Thursday, with all 11 of the S&P 500’s sectors in the red. Healthcare and consumer staples stocks held up best, with the sectors down 0.4% and 0.2% respectively. Of the Dow Jones Industrial Average’s 30 constituents, 26 ended the day lower, with none of the remaining four adding more than 1%. At the bottom of the pile were Intel and Boeing, which lost 3% apiece.
One company in the spotlight was Disney, which delivered its latest quarterly earnings update on Thursday. The firm’s share price initially jumped by 6% in after-hours trading following the report, which included a much smaller loss than anticipated, and positive news on the growth of the company’s Disney+ streaming service. At the end of the last quarter, Disney+ had 73 million paid subscribers. The stock’s gains were tempered back to a 3% gain after the company’s earnings call with analysts, in which it said it will not pay its semi-annual dividend in January.
- S&P 500: -1% Thursday, +9.5% YTD
- Dow Jones Industrial Average: -1.1% Thursday, +1.9% YTD
- Nasdaq Composite: -0.7% Thursday, +30.5% YTD
FTSE 100 ends eight-day, 14% winning streak
Both the FTSE 100 and FTSE 250 were in the red on Thursday, after the former delivered gains for eight trading days straight. Over those 8 days, the index gained more than 14%, bringing it back from a more than 30% year-to-date loss. Rolls Royce, HSBC and Sainsbury’s all weighed heavily on the index, with losses on Thursday of 8.6%, 3.9% and 3.3% respectively.
Investors had UK Q3 GDP data to digest on Thursday. While the figures showed that the UK economy grew by a record 15.5% in Q3 from Q2, the rebound was not as large as was hoped. GDP also only increased by 1.1% in September, the last month of Q3, pointing to a slowing recovery even before England went into its latest lockdown. That is likely to lead to an economic contraction once more in Q4.
- FTSE 100: -0.7% Thursday, -16% YTD
- FTSE 250: -0.2% Thursday, -11.8% YTD
