Comment of the Day
Video commentary for February 9th 2022
A link to today's video commentary is posted in the Subscriber's Area.
Some of the topics discussed include: copper firms in a dynamic manner, gold and oil steady, steel makers firm, coffee breaks out, soybeans firm, Dollar eases, stock markets extend rebounds and bond yields pause.
Ryanair CEO O'Leary Sees 'Dramatic' Jump in Ticket Sales
This article from Bloomberg may be of interest to subscribers. Here is a section:
Ryanair Holdings PLC (LSE:RYA) has seen a “dramatic recovery” in bookings over the past two weeks as the easing of pandemic travel curbs across Europe encourages people to fly again.
The Irish low-cost carrier’s planes are flying about 75% full and could reach 90% of capacity by the peak of the summer high season, Chief Executive Officer Michael O’Leary said at a briefing in Milan Wednesday.
Ryanair expects fares to remain “very low” through May before rising for summer, by which point it’s possible that a combination of strong demand and limited capacity could see them climb above pre-coronavirus levels, O’Leary said. Trends for next winter are difficult to predict, he said.
My view - Most people are hungering for a traditional vacation. I know I am. As the omicron variant flares out, demand for travel and other opening-up sectors is likely to continue to improve. There have been several times when it looked like a full recovery was possible, only for a new variant to pop up and create delays. The good news is the last one was much less serious, albeit much more transmissible, than its forerunners. That suggests the bounce back in demand will be stronger this time.
Russia, China agree 30-year gas deal via new pipeline, to settle in euros
This article from Reuters may be of interest to subscribers. Here is a section:
Russia already sends gas to China via its Power of Siberia pipeline, which began pumping supplies in 2019, and by shipping liquefied natural gas (LNG). It exported 16.5 billion cubic metres (bcm) of gas to China in 2021.
The Power of Siberia network is not connected to pipelines that send gas to Europe, which has faced surging gas prices due to tight supplies, one of several points of tension with Moscow.
Under plans previously drawn up, Russia aimed to supply China with 38 bcm of gas by pipeline by 2025.
The new deal, which coincided with a visit by Russian President Vladimir Putin to the Beijing Winter Olympics, would add a further 10 bcm, increasing Russian pipeline sales under long-term contracts to China.
My view - Exporting gas is not Russia’s biggest money spinner but it creates reliance that is priceless from a geopolitical perspective. More than doubling gas exports to China might be described as an alliance of autocrats but the reality is China needs energy. That’s not an equal partnership even if the long-term pricing structure is competitive. Russia is building a network of dependency right across the Eurasian continent that will give it a lot of leeway to push for concessions in other areas.
EU rolls out a red carpet for TSMC and other semiconductor giants
This article from the South China Morning Post may be of interest to subscribers. Here is a section:
The European Union announced a blueprint on Tuesday to make one-fifth of the world's microchips, saying it was "open for business" to semiconductor giants from Taiwan and other industry leaders.
The European Chips Act provides at least Euro42 billion (US$48 billion) by 2030 in public and private sector capital behind an ambitious plan to effectively double the bloc's chip production, to 20 per cent of the global supply of semiconductors, the tiny processing units that will power the industries of the future.
Currently, the bloc produces 10 per cent of the world's supply, few of which are considered to be cutting-edge.
My view - $20 billion from Intel, $38 billion from Taiwan Semiconductor, $40 billion from Taiwan Semiconductors this year represents a massive increase in potential supply of both chips and memory.
Los Angeles Port Sees Chance to Ease Ship Backlog by Summer Peak
This article from Bloomberg may be of interest to subscribers. Here is a section:
Seroka said he agrees with the chief executive of a major container line, A.P. Moller-Maersk A/S’s Soren Skou, who told Bloomberg TV in a separate interview earlier that ocean shipping should start to normalize in the second half of the year. Maersk, which handles almost one-fifth of the world’s container traffic, said it sees a 2%-4% expansion in the market this year, with a strong first half followed by an uncertain outlook after that.
My view - Supply chain disruptions forced companies to front load orders in the hope they could get enough inventory in to avoid future bottlenecks. That put upward pressure on both shipping rates and prices to consumers.
Eoin's personal portfolio: short reopened February 2nd 2022
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.
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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