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Comments of the Day
27 April 2021
Video commentary for April 26th 2021
A link to today's video commentary is posted in the Subscriber's Area.
Some of the topics discussed include: upside key reversal on bitcoin confirms near-term support, stocks steady, Dollar eases, China weighing on tech, shipping rates breakout, copper at new decade high.
Email of the day - on the world after COVID:
In today's article on the long-term consequences of Covid no mention was made on the long-term impact of robotisation. In the short-term there may well be a shortage of workers in some areas but in the long term this will probably be offset by more mechanisation.
Thank you for this email which may be of interest to the Collective. Mechanisation is an inexorable trend and we have ample examples of how many labour-intensive jobs have been outsourced to robots. The challenge with this trend is it is accelerating and is something that the whole world will need to adjust to.
Container Shipping Insights The 'mega' trend to continue
Here is a section from a JPMorgan report focusing on shipping costs.
Global liners are stepping up de-carbonization efforts and experimenting with alternative fuels
To achieve the industry target, many global liners such as A.P. Moller Maersk (viewed an industry bellwether) are stepping up de-carbonization efforts, recently unveiled plans to fast-track its de-carbonization efforts, with a target to put the world’s first vessel powered by carbon-neutral fuel into operation in 2023, seven years ahead of its original schedule. Specifically, Maersk will install its smaller feeder vessels (capacity of around 2,000 TEUs) with dual fuel technology, power them using alternative fuels including methanol (produced from plant waste) while retaining the option to use VLSFO if necessary. Maersk is also currently experimenting with other alternative fuels including ammonia. Looking ahead, Maersk targets to operate more methanol-fueled vessels in the future and expects methanol and ammonia to emerge as more viable future fuel options.
Adoption of new technology and alternative fuels will take time to achieve commercial feasibility. There are inherent limitations towards adopting alternative fuels. Referencing remarks made by Mr. Morten Bo Christiansen (Maersk head of de-carbonization), methanol has the potential to reduce CO2 emissions by up to 15% vs conventional marine fuels while enjoying other advantages including having well-established infrastructure and manageable vessel retrofitting cost. Having said that, methanol has inherent limitations including low energy density and certain safety-related challenges. With respect to ammonia, Maersk expects ammonia to be an ideal replacement from a net zero carbon perspective, but overall technology capability remains at a nascent stage and no vessels today are equipped to utilize this fuel type. Maersk also takes a contrarian view compared to its peers and does not view Liquefied Natural Gas (LNG) as a viable alternative, given its upstream and onboard emissions.
The IMO 2020 regulations on emissions for the global shipping sector took more than a decade to agree and finally to implement. That was emblematic of an era when there was some commitment to reducing emissions but no real sense of urgency and where industry lobby groups were given priority. Today, the situation could not be more different. Shipping companies see the future of regulation and taxation and expect to be able to pass on green premiums to customers. That will put an additional cost on everything and represents an even bigger tax on global activity than an oil price spike because it is permanent in nature.
China Widens Internet Crackdown With Meituan Monopoly Probe
This article from Bloomberg may be of interest to subscribers. Here is a section:
China’s government has expanded its antitrust crackdown beyond Jack Ma’s technology empire, launching an investigation into suspected monopolistic practices by food-delivery behemoth Meituan.
The State Administration for Market Regulation announced the investigation, which began recently, in a statement Monday. The antitrust watchdog is looking into alleged abuses including forced exclusivity arrangements known as “pick one of two.” The company said it will actively cooperate with the probe and step up efforts to comply with regulations. Its businesses are currently operating normally, it added in a statement.
Meituan has prospered by gamifying the online review and social media sector. They provide concrete rewards for participation with the app and that can include anything from being able to skip the line at popular restaurants to discounts. As a result, the company has been one of the primary leaders of the domestic Chinese tech scene and growth of the social media ecosystem. That success has now attracted the attention of the government which effectively limits its growth.
Eoin's personal portfolio: breakeven stop triggered
Eoin Treacy's view
One of the most commonly asked questions by subscribers is how to find details of my open traders. To make it easier I will simply repost the latest summary daily until there is a change.
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