Comment of the Day
Video commentary for July 4th 2022
A link to today's video commentary is posted in the Subscriber's Area.
Some of the topics discussed include: immuno-oncology stocks suggests judicious bargain hunting is underway, oii remains firm, European natural gas surges, stocks markets steady, bonds quiet.
Woman given one year to live is now cancer-free after experimental treatment
This article from the Independent may be of interest to subscribers. Here is a section:
When she found out the cancer had spread to her lungs, chest bone and lymph nodes, she was given one year to live.
David spent the following six months undergoing chemotherapy, and had a mastectomy in April 2018. This was followed by 15 cycles of radiotherapy which cleared her of cancer.
However, the cancer returned in October 2019 when scans showed multiple lesions throughout David’s body.
David then decided to take part in a clinical trial where she was given experimental medicine combined with immunotherapy drug Atezolizumab, which she has injected every three weeks.
After two years on the trial, the mother-of-two has been declared cancer-free once again.
My view - Roche acquired Genentech in 2009. Atezolizumab is the fruition of that merger and continues to make its way through clinical trials.
Immuno-oncology went through a significant bull market in 2016/17 as the promise of curing cancer looked realizable for the first time. The difficulty of creating a one-size-fits-all solution resulted in much of the enthusiasm being squeezed out of the sector. Nevertheless, the results are impressive even if the scalability is not a panacea.
Biden Might Soon Ease Chinese Tariffs, in a Decision Fraught With Policy Tensions
This article from the Wall Street Journal may be of interest to subscribers. Here is a section:
Mr. Biden himself has said in recent weeks that he is considering a tariff cut, noting that the levies were introduced by the previous administration.
The U.S. and China signed a trade deal in 2020, but the U.S. kept most levies on Chinese imports as a means to ensure compliance with the accord's provisions, including promises to increase purchases of U.S. goods.
Beijing has fallen far short of that purchase commitment.
Ms. Tai, who was appointed by Mr. Biden, has repeatedly defended the tariffs as a useful tool in confronting China over its trade practices.
"The China tariffs are, in my view, a significant piece of leverage, and a trade negotiator never walks away from leverage," Ms. Tai told a Senate subcommittee meeting on June 22.
China has long pressed the U.S. to ease the tariffs, contending they hurt both countries.
"With inflation rates running high across the globe, the U.S. needs to lift all the additional tariffs imposed on China, as this will serve the interests of businesses and consumers and benefit both countries and the world at large," Chinese Foreign Ministry spokesman Wang Wenbin said at a June 15 press conference.
My view - The Biden administration is panicking about inflation if they are truly considering removing sanctions on China. The one hallmark of this government has been the continuity of policy with regard to China so a change would likely be viewed by markets as positive and particularly so for China since they would be under much less pressure to comply with trade agreements.
Iran Slashes Cost of Its Oil to Compete With Russia in China
This article from Bloomberg may be of interest to subscribers. Here is a section:
Russian exports to China surged to a record in May, with the OPEC+ producer overtaking its cartel ally Saudi Arabia as the top supplier to the world’s biggest importer. While Iran has cut its oil prices to remain competitive in the Chinese market, it’s still maintaining robust flows, likely in part due to rising demand as China eases strict virus restrictions that had crushed consumption.
“The only competition between Iranian and Russian barrels may end up being in China, which would work entirely to Beijing’s advantage,” said Vandana Hari, founder of Vanda Insights in Singapore. “This is also likely to make the Gulf producers uneasy, seeing their prized markets taken over by heavily discounted crude.”
My view - An emerging disparity between the price of oil available outside of NATO and within NATO is not sustainable over the long-term. Eventually, that arbitrage will close. In a short-term scenario, Europe will economise, everywhere else will do whatever is necessary to boost supply. That would mean building pipelines, offshore drilling and relaxation of environmental concerns. At the same time, alternatives like new nuclear will need to be unabashedly championed. Without that concerted effort, a long-term scenario is industrial capacity will migrate to where energy is cheapest. That would gut Europe’s export model.
Eoin's personal portfolio: half stock market short position closed at a profit June 30th 2022
One of the questions subscribers ask 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.