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Pound Jumps After Farage Promises Not to Contest Tory Seats

The currency’s focus on politics above all else was once again on show Monday, as the pound barely reacted to U.K. GDP growth, only to move close to 1% on the political developments.

Deloitte - Pound Jumps After Farage Promises Not to Contest Tory Seats

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Comments of the Day

12 November 2019

 

 

Video commentary for November 11th 2019

 

Eoin Treacy's view

A link to today's video commentary is posted in the Subscriber's Area. 

Some of the topics discussed include: stock makets steady but China / Hong Kong pull back sharply, commodities ease, Treasuries pull back, cyclicals turning to outperformance. 

 

 

Pound Jumps After Farage Promises Not to Contest Tory Seats

This article by Charlotte Ryan for Bloomberg may be of interest to subscribers. Here is a section:

The currency’s focus on politics above all else was once again on show Monday, as the pound barely reacted to U.K. GDP growth, only to move close to 1% on the political developments. Strategists had said a coalition between the Brexit Party and the ruling Conservatives could have been the worst outcome for the pound, as Farage’s lawmakers would likely seek a more distant relationship with the EU and even push for a no-deal Brexit.

Still, though the news is positive for the U.K. currency, it’s not “a game changer,” according to Rochester. Even if the Conservatives were to keep all of their seats from last time, that would still mean a hung Parliament, and the Brexit Party still plans to stand in seats which were won by the opposition Labour party last time.

 

Eoin Treacy's view

Splitting the Conservative vote is the biggest risk to a market friendly outcome to the UK election. With the Brexit Party instead deciding to focus on Labour seats that removes a barrier to a Johnson majority. There is no doubt he is a divisive figure but he is also a personality that many voters can identify with. That increases the potential the next Parliament with deliver a much-needed majority.

 

 

The next 6 months favor Cyclicals: Financials, Energy, Industrials, Tech, Materials

Thanks to a subscriber for this chart illustrated report by Barry Bannister for Stifel which may be of interest.

 

Eoin Treacy's view

I have some sympathy with the view that when everyone is short, the risk of a short covering rally greatly increases. That’s particularly true if Saudi Arabia succeeds in encouraging OPEC to further reduce supply to bolster the valuation of Saudi Aramco ahead of the IPO.

 

 

Electric cars are changing the cost of driving

This article by Michael J. Coren for Quartz may be of interest to subscribers. Here is a section:

It’s difficult to know how representative this data is of Teslas overall, given that Tesloop’s fleet is small, but it likely includes a large share of the highest-mileage Teslas on the road—several are nearing 500,000 miles. Finding conventional vehicles to compare is virtually impossible since most fleet cars are typically sold off after 100,000 miles.

But the implications could be huge. Every year, corporations and rental car companies add more than 12 million vehicles in Europe and North America to their fleets (pdf). Adding EVs to the mix could see those cars lasting five times longer—costing a fraction of conventional cars over the same period—while feeding a massive new stream of used electric cars into the marketplace. Whether the future of fleets is really electric, however, depends on the data. And that’s still in short supply.  

The promise of EVs
Most commercial vehicle fleets still run on gasoline and diesel, David Hayward, a fleet expert with Deloitte consulting, said. But EVs are top of mind. “Everyone is excited about it and everyone wants it,” he told Quartz. “But there’s trepidation.” The potential savings are huge. Fleet owners’ biggest expenses after depreciation (44%) are fuel (22%) and maintenance and repairs (11%), according to Deloitte.  EVs could slash those by more than half.

 

Eoin Treacy's view

The original electric vehicles that entered service about ten years ago have some of the lowest resale values and steepest depreciations of any car. Meanwhile the Tesla Model 3 was the car with the least depreciation of any vehicle this year. That is a function of both supply and built up demand but the success in limiting the erosion of the battery’s charge potential has reversed the economics of the electric vehicle market. If a car can comfortably drive 500,000 miles with little to no maintenance, other than tyres, the only limitation is range. Right now, a Model 3 has about a 300 miles range which more than enough for most people. My SUV will do around 480 miles on the highway to a tank but probably closer to 200 in the stop/go of the city so the range issue is less of an issue today.

 

 

Eoin's personal portfolio: precious metals long initiated

 

Eoin Treacy's view

One of the most commonly asked questions by subscribers is how to find details of my open traders. In an effort to make it easier I will simply repost the latest summary daily until there is a change. I'll change the title to the date of publication of new details so you will know when the information was provided.

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