Comment of the Day
18th July 2023
Eoin Treacy
Jul 19
Video commentary for July 18th 2023
A link to today's video commentary is posted in the Subscriber's Area.
Some of the topics discussed include: US banks rebound, Dow Industrials and Transportations Averages hit new recovery highs, Nasdaq-100 extends its advance, China weak, gold and oil firm even with a steadier dollar. Europe steadies.
Lilly Applies for Alzheimer's Drug Approval on Trial Data
This article from Bloomberg may be of interest. Here is a section:
That sets the stage for a potential head-to-head competition between Lilly and Eisai, along with its partner Biogen Inc (NASDAQ:BIIB)., for leadership in a market expected to rise to billions of dollars as more patients with early Alzheimer’s gravitate to the idea of preventing the loss of memories and brain function. While both drugs’ use may be held back by cost, side effects and moderate effectiveness, experts hope they’ll pave the way to more powerful successors.
Eoin Treacy's view
I spent every chance I got in my 20s diving with sharks, so I don’t scare easily. The one thing I am afraid of is losing my mental capacity. Several relations on my mother’s side of the family have suffered from the disease.
My grandmother stopped taking her blood pressure medication, as soon as she felt her mind go. She was a proud woman and decided to let nature take its course rather than be doomed to an uncertain existence as a vegetable.
It stands to reason that anyone who has witnessed how Alzheimer’s steals pieces of the mind in a relentless manner, will be in the market for anything that might slow the disease’s progression.
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United Airlines, American Airlines Earnings Due. Is The Airlines Rally Over?
This article from Dow Jones may be of interest. Here is a section:
Airline stocks United Airlines and American Airlines report second-quarter financials this week, with analysts expecting booming profits for both air carriers. The reports follow Delta Air Lines (NYSE:DAL)' recent Q2 earnings beat and full-year profit guidance increase. UAL and AAL both edged up Monday.
Wall Street predicts quarterly earnings up more than 100% for both United and American Airlines. Delta's financial report on Thursday suggested airline performance was nearing pre-pandemic levels, as air carriers see strong demand for international and domestic air travel.
Delta reported international and domestic sales jumping 61% and 8%, respectively. Delta Chief Executive Ed Bastian declared "consumer demand for air travel remains robust."
Despite the strong financial performance, Delta shares dropped nearly 3% for the week as investors took profits after the earnings report. That marked the stock's first decline in nine weeks. Collectively, the 19 stocks in IBD's Transportation-Airline industry group also slipped for the week -- for only the second time in nine weeks.
Eoin Treacy's view
Demand for travel is still strong over the summer months but the ability of airlines to meet that demand is much more uncertain. Twice in the last month my family have experienced greater than 24 hour delays with American Airlines.
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Ford Takes $3.6 Billion Hit for Following the Tesla Playbook
This article from Bloomberg may be of interest to subscribers. Here is a section:
Tesla Inc (NASDAQ:TSLA).’s script for popularizing electric vehicles — ramp up production, leverage economies of scale to lower costs and make automobiles affordable enough for a mass market — reads a lot like the one Ford Motor Co. first drew up over a century ago.
Following this game plan has paid dividends lately for Tesla. The stock has more than doubled this year, even as the carmaker has slashed prices. For Ford, taking a page out of this playbook just wiped away about $3.6 billion in market value in one day.
The maker of the best-selling F-Series announced it’s going to triple the production rate for its first electric pickup, the F-150 Lightning, which it initially planned to sell for just shy of $40,000. Like Tesla, Ford jacked up prices during a prolonged period of parts shortages and battery raw-material inflation. Now that chips are more plentiful and the cost of battery inputs including lithium and nickel have eased, Ford is lopping thousands of dollars off what it’s charging customers.
“Everyone loved it when Tesla did it,” said David Whiston, an auto analyst at Morningstar. “As long as they’re truly making improvements in production costs and input costs, then giving some of that back to the consumer makes sense.”
Eoin Treacy's view
The big bet in the auto sector is on when the Tesla cybertruck will be delivered. The company has been taking deposits for several years but with little to show in terms of a marketable product. Rumours are brewing that the first will finally be delivered at the end of this year and large scale production will begin next year.
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Eoin's personal portfolio: commodity long initiated
One of the questions subscribers ask most often is how to find details of my open trades. To make it easier I will simply repost the latest summary on a daily basis until there is a change.
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© 2023 Eoin Treacy
548 Market Street PMB 72296, San Francisco, CA 94104