Comment of the Day
Video commentary for September 26th 2022
A link to today's video commentary is posted in the Subscriber's Area.
Some of the topics discussed include: Pound rebounds from intraday low but Gilt yields close at their highs, pressure mounting on the Bank of England to act. gold weaker as the Dollar strengthens, Renminbi tests its lows, Treasury yields breaking out. stocks susceptible to further weakness as corporate profits and leveraged loans come under pressure.
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Email of the day on batteries and the challenge of commodity supply
Congrats on your opinion on a larger correction and acting on it with put purchases.
Last week Double Line presentation had a chart that showed the performance of equity and the different credit subclasses, Ags., EM, HY, ClOs and so forth. Showed the large move by equities compare to credit over the same time period. It made me wonder how much further the equity correction can go.
You often follow interesting companies, you mention EQNR from Norway. have you ever looked a Freyr. It is also Norwegian and is involved in batteries. During the last days because of a report on its possible growth it had a huge move , but during this correction it may be a good opportunity, let me have your thoughts. Based on your comments how much the market has already priced in the EVs maybe it is not a good idea.
The move on copper is not a good signal
Trust all is well for you and your family
My view - Thank you for these well wishes and questions which may be of interest to the Collective. Of my nine different long-dated put positions, the only one not in profit is Tesla and yet that is the one I have the greatest hopes for. They all have maturities in 2024, but I expect the point of maximum pessimism will arrive while they still have some time value.
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Email of the day on Apple's ability to outperform
Many thanks for the latest weekly video, which sets out the bearish case for investment at the moment. In today's FT there is an article about Apple's latest iPhone. The author claims that sales projections for the latest Pro version of the iPhone suggest that the company will earn record -breaking revenues from its sales , which account for 50% of its business. In addition, it suggests that there might be a future monthly package that combines the iPhone, Apple Music and iCloud. Could Apple stand out against the overall bear market?
My view - Thank you for this topical question which may also be of interest to other subscribers. Just ask yourself how often you change your phone? For me at least, it is when the battery starts losing charging capacity. That’s usually every 3 years.
The new iPhone 14 costs $999 and the Pro version costs $1099. If amortised over 2 years, it works out at around $45 a month which can be lowered further if you have an old phone to trade in. So, for many people it will be a question of whether the new phone has sufficiently enhanced features to justify the added monthly expense.
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Keep Calm and Carry On?
This article from Allegra Stratton at Bloomberg may be of interest. Here is a section:
Traders, analysts and politicians looking for a soothing balm had been surprised on Sunday to hear Kwarteng’s commitment “more is to come.” Sterling dropped further and then, while the UK was sleeping, its currency tumbled in Asian markets — to £1.03 to the dollar, something former Treasury officials I know didn't think they’d ever see.
And so, even though the pound pared its losses slightly, the Bank of England came under huge pressure to do something. Anything.
A likely whopping 100 basis-point hike in November was already priced in. By Monday this climbed to 200 basis-points — four times the size of its last hike — and a call for an extraordinary extra session hastily arranged for this week. By lunchtime, there was a rumour of a BOE statement within hours, possibly including a extra bonus rate hike.
In the end this didn’t materialise and all we got was the emollient tweet featured at the top of this email. Most agree the Bank will raise rates again — hammering household mortgage repayments in a period already billed as the worst winter in living memory (something former minister Jim O’Neill weighed in on today, calling the Budget “naive.”)
My view - The Pound is accelerating lower so it is reasonable to question when it will find a sustainable low. The tail on today’s candle suggests a low of at least near-term significance so we may get some steadier action. However, the question of how the downtrend will eventually end is unanswered.
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Speaking Engagements - World Money Show October 2022
I have agreed to speak at The World Money Show in Orlando on October 30th.
The Chart Seminar London November 21st and 22nd 2022
We are living through fast moving markets so the next venue for The Chart Seminar will be November 21st and 22nd this year in London.
In the meantime, if you have any questions, would like to attend, or have a suggestion for another venue please feel to reach out to Sarah at sarah@fullertreacymoney.com.
The full rate for The Chart Seminar is £1799 + VAT. (Please note US, Australian and Asian delegates, as non-EU residents are not liable for VAT). Annual subscribers are offered a discounted rate of £850. Anyone booking more than one place can also avail of the £850 rate for the second and subsequent delegates.
Eoin's personal portfolio: precious metals loss taken September 23rd 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.
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