Your free daily email from Fuller Treacy Money
Comments of the Day
20 August 2020
Video commentary for August 19th 2020
Eoin Treacy's view
A link to today's video commentary is posted in the Subscriber's Area.
Some of the topics discussed include: Dollar steadies, Bond yields rise, commodities firm, stocks pause at psychological levels, precious metals decline.
Email of the day on investing in 5G
good morning Eoin I enjoy every morning your briefing - thanks! could you guide me to an ETF which invests in the most promising companies benefitting from 5 G technology development? thanks, and greetings from Switzerland.
Eoin Treacy's view
Thank you for this question which may be of interest to subscribers. With an infrastructure build on the scale of what is necessary to get up and running with 5G the first moves were the infrastructure companies. South Korea was first to launch a nationwide network and China followed last year. Europe and the USA are lagging significantly. Latin America and Africa are even farther behind.
HSBC Tells Bank of England Now Is Not the Time for Optimism
This article by Paul Gordon for Bloomberg may be of interest to subscribers. Here is a section:
Haldane has said Britain’s economic bounce back from the coronavirus-induced recession is looking V-shaped so far. Not all his colleagues on the Monetary Policy Committee seem comfortable with that view though -- Silvana Tenreyrohas warned of a likely flattening off later in the year and Governor Andrew Bailey has said there are a “lot of hard yards” ahead.
A compilation of forecasts published by the U.K. Treasury on Wednesday also showed a gloomy shift among economists. The average prediction for 2020 is now a 10% contraction, versus 9.2% in July.
Martins now reckons the British economy will shrink more than 10% this year, and still be almost 5% smaller than its pre-virus level by the end of next year. That’s somewhat more downbeat than the BOE’s projections.
Still, she’s not forecasting any more monetary easing by the BOE just yet, saying further fiscal stimulus from the government is more likely. If the BOE does need to act, as most economists believe, she predicts more bond-buying, easier loans for companies, and potentially another cut to the 0.1% benchmark interest rate.
Eoin Treacy's view
The UK administration was caught flatfooted by the onset of the coronavirus. As with other late-acting countries, the early resistance to a lockdown contributed to widespread community spread. It means the recovery will be inhibited by the need to tackle large numbers of potential infection vectors. However, there will be a recovery. That will be achieved either by communities learning to live with the virus, a vaccine or community immunity.
The ecommerce surge
This article by Benedict Evans may be of interest to subscribers. Here is a section:
Both the UK and (today) the USA have given official statistics on how ecommerce and retail have changed during lockdown. The headline numbers are pretty dramatic. The UK went from 20% ecommerce penetration to over 30% in two months, and the USA from 17% to 22%.
This spike partly reflects a shift in the denominator: digital increased while sales at most physical retail declined, except for groceries. This effect was much stronger in the UK, where lockdown was much deeper. Even so, absolute US ecommerce sales rose 32% in Q2. Interestingly, though, absolute UK ecommerce has continued to accelerate even as the lockdown has eased (the UK’s monthly ecommerce numbers make this visible, where the quarterly US reporting makes it harder to tell.
Eoin Treacy's view
The lockdowns have been a golden opportunity for ecommerce brands to capture market share. It’s also likely that they will be able to hold that gain once consumers become accustomed to having their purchases delivered.
The primary concern is how much more they can grow beyond the current percentage of the market? There is no doubt that anyone who was thinking of buying online has now done so at least once. Being cooped up at home for months leads to all manner of experimentations and online shopping has certainly benefitted.
Eoin's personal portfolio: last updated on August 11th
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.