Comment of the Day
Video commentary for February 2nd 2022
A link to this today's video commentary is posted in the Subscriber's Area.
Some of the topics discussed include: stock market bounces looks tired, Amazon reports tomorrow, bond yields at a major decision point, Dollar eases, gold steadies, energy prices remain firm,
Mega-cap Influence
This note from a Bloomberg blog helps to put today’s price action into perspective.
Alphabet Inc (NASDAQ:GOOG).’s brisk rally on Wall Street on Wednesday is giving a boost to the Nasdaq 100 Index, still reeling from last month’s selloff in tech stocks. Shares in the Google parent are surging after it announced a stock split and posted quarterly sales and profit that topped analysts’ projections, signaling the resilience of its advertising business. The gains in Alphabet shares -- the third biggest stock on the Nasdaq 100 with a weighting of 7.4% -- account for most of the rise on the index on the day.
My view - Apple warned about its ability to fulfill orders before Christmas and subsequently was able to beat that projection. The share jumped on the news but guidance was for slower growth in Q2.
Eoin's personal portfolio: short reopened
One of the questions subscribers as most often is how to find details of my open trades. To make it easier I will simply repost the latest summary daily until there is a change.
Euro-Zone Inflation Unexpectedly Hits Record, Pressuring ECB
This article from Bloomberg may be of interest to subscribers. Here is as section:
Euro-area inflation unexpectedly accelerated to a record, overshooting expectations by the most in at least two decades and heaping pressure on the European Central Bank to pare back pandemic stimulus more quickly, like its counterparts in the U.S. and the U.K.
Consumer prices jumped 5.1% from a year ago in January, up from 5% in December. The median estimate in a Bloomberg poll of 44 economists saw a reading of only 4.4% and none predicted inflation gaining pace.
The euro climbed 0.3% against the dollar to $1.1305 while German bonds pared gains to leave the 10-year yield one basis point lower at 0.03%.
While slowing in Germany and France, the euro zone’s two biggest economies, the spike in energy costs pulled price growth higher across the 19-member currency bloc as a whole. It was more than a percentage point higher than analysts predicted in Italy, where it accelerated to 5.3%.
Stripping out energy and other volatile components like food, core inflation was 2.3%, down from last month’s 2.6% reading.
My view - Energy prices are a multiple of where they were a year ago. That’s hitting everyone’s wallet. The issue is particularly worrisome in Europe where natural gas inventories are extremely low and consumption taxes are high. An even bigger crisis has been avoided only by virtue of winter weather being relatively warm of late.
India Plans Record Borrowing to Fund Modi's Growth Ambitions
This article from Bloomberg may be of interest to subscribers. Here is a section:
That plan will require borrowing a record 14.95 trillion rupees ($200 billion) to bridge the shortfall, much higher than the 13 trillion rupee consensus, as revenues from divestments are slow to materialize.
“While the fiscal expansion is expected to be pro-growth, the heavy supply is expected to worry the bond markets,” said Upasna Bhardwaj, an economist with Kotak Mahindra Bank Ltd.
Indian bonds fell, with the yield on benchmark 10-year notes rising by as much as 21 basis points. Stocks traded 1.5% higher, paring earlier gains of as much as 1.8%.
The looser spending puts India on track to post one of the deepest budget deficits among major economies as nations spend their way out of the pandemic-induced downturn.
My view - The 2022 state elections are India’s equivalent of the mid-term elections in the USA. Four of the largest population states will hold elections. This will both influence the government’s majority and reflect public sentiment following the abandonment of the farm reforms. This article from the Hindustan Times may also be of interest.
The Chart Seminar 2022
With global vaccination rates rising, the prospect of anti-COVID pills on the horizon and the promise of travel restrictions being dropped, it is time to start thinking about venues for The Chart Seminar in 2022.
Please drop sarah@fullertreacymoney.com a line if you would be interested in attending an event next year, as well as your preferred location.
At present I am looking at a late May date for a London seminar and I am open to other times and locations subject to demand.
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