Video commentary for February 12th 2020
A link to today's video commentary is posted in the Subscriber's Area.
Some of the topics covered include: Markets pricing in monumental Chinese stimulus, Wall Street at new high, Europe breaking out, China remains firm, Euro weak, gold steady, oil steadies.
All Your Favorite Brands, From BSTOEM to ZGGCD
This article by John Herrman for the New York Times may be of interest to subscribers. Here is a section:
Almost half of top Amazon sellers — those selling more than $1 million in the U.S. — are in China; about a third of Amazon’s Chinese sellers overall are estimated to be in Shenzhen. (This according to Marketplace Pulse, which tracks e-commerce marketplaces.)
Amazon shuttered its Chinese store, Amazon.cn, in 2019, after it failed to crack a market dominated by domestic giants like JD and Alibaba.
But it has been much more successful in recruiting Chinese entrepreneurs to sell abroad, opening “cross-border e-commerce parks,” where sellers can get assistance with logistics, branding, and navigating Amazon’s platform. For the last five years, the company has also hosted summits for Chinese cross-border sellers. Last year’s conference, held in Shanghai, was attended by more than 10,000 sellers, many of whom see, in Amazon, an alternative to increasingly saturated domestic platforms like Taobao.
A seller in America might start with a brand idea and need to figure out how to get it manufactured; a seller connected to a factory in China’s manufacturing capital needs to figure out how to sell to Americans, which Amazon has been working hard to facilitate.
The vast majority of household and personal use products sold in Wal-Mart, Amazon, Target and elsewhere are manufactured in China. Most of the electronics, clothing, and jewellery in stores come from Guangdong. The majority of paper bags, nuts and bolts, toys and other small items come from Zhejiang which is just outside the quarantine area. Manufacturing is also spread over the rest of the country. That suggests the ability of companies to fulfil orders is going to be spotty if they don’t get back to work soon.
BP Sets Bold Agenda for Big Oil With Plan to Eliminate CO2
This article by Laura Hurst for Bloomberg may be of interest to subscribers. Here is a section:
For BP to survive the energy transition in a world that’s gradually falling out of love with oil, it will need to make big investments in new sources of clean energy, ensure cash keeps flowing from its fossil fuel assets, while also funneling generous returns to investors. It’s a tricky balancing act that its closest peer Shell is already struggling to master.
BP’s commitment to do all this while still boosting free cash flow and shareholder returns is “really the key challenge,” said RBC Capital Markets analyst Biraj Borkhataria.
The company announced structural changes alongside its emissions target. Looney will dismantle its upstream and downstream businesses and reorganize them into an entity made up of 11 new teams that will be more integrated and focused.
“For us the statement represents a step change in terms of vision for the company and one that moves the group toward the biggest reorganization and modernization in at least two decades, if not a century,” analysts at Barclays said in a note. “The magnitude and radical nature of this shift should not be underestimated.”
The trend of public opinion relating to climate change has put most conventional energy companies in a bind. They have been the subject of vitriol from the green lobby for as long as I can remember but that was manageable when the environment was not an election issue. Today, the situation could not be more different. Wild fires, everywhere, droughts, floods, extinction angst and teenagers lecturing world leaders all point to a very hostile backdrop for oil, gas and coal companies.
Zombie Crypto Coins Beat Bitcoin During This Year's Resurgence
This article by Olga Kharif for Bloomberg may be of interest to subscribers. Here is a section:
“There appears to have been a large mass of early investors (including many VC firms) who have a vested interest in seeing some of these tokens reach a certain price point so they can realize their gains or break even,” said Sid Shekhar, co-founder of London-based market tracker TokenAnalyst. “As such, with the overall market rally, there are definitely select institutional players who are effectively spurring price action.”
Bitcoin has tended to rally ahead of halvenings (the occasions when the reward for minting a new block halves). Even though there are any number of arguments about the sustainability of bitcoin’s first mover status it remains the biggest crypto market and all others tend to move in a high beta nature relative to it.