Most Recent Audio: 16 January 2019

David Fuller and Eoin Treacy's Free (Abbreviated)
Comment of the Day

The more detailed Subscriber's Comment of the Day becomes available for public access after 4 months.

Click HERE to see the most recent free Subscriber's Comment from 16 October, 2018

January 16 2019

Commentary by Eoin Treacy

Video commentary for January 16th 2019

Eoin Treacy's view

A link to today's video commentary is posted in the Subscriber's Area. 

Some of the topcis discussed include: consistency of the Dow Jones' chart, bank earnings, investors seem to have adopted a wait and see approach to Brexit, individual emerging markets outperforming, China quiet, Tin and palladium clearly outperforming while aluminum is trending down, Dollar remains firm, differrence between now and 2016 is the Fed is tightening. discussion of the origins of populism.

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January 16 2019

Commentary by Eoin Treacy

Pound Holds Steady as U.K. Government Wins No-Confidence

This article by Charlotte Ryan for Bloomberg may be of interest to subscribers. Here it is in full:

With May successfully seeing off the immediate threat to her government, she now has to turn her attention to plan B, which could involve bringing the divorce deal back to another vote. She invited rival parties to start talks following the Wednesday vote.

“The pound fallout should be contained as the prime minister is safe from a leadership contest,” Kamal Sharma, head of Group-of-10 currency strategy at Bank of America, wrote in a note before the confidence vote. “There is scope for sizable pound appreciation once the political risk premium is priced out.”

The U.K. currency has weakened about 14 percent since the result of the June 2016 Brexit referendum, and analysts in a Bloomberg survey see scope for a rally to $1.34 if a divorce deal is finally agreed on.

Eoin Treacy's view

There are three primary interested parties in Theresa May’s new appetite for cross party talks. Some Conservatives want no deal but the majority do want a deal. The Labour Party wants to be in power so it will not endorse a fresh referendum while there is any chance the government will fall; triggering a general election which it hopes to win. The smaller Liberal Democrats, Scottish Nationalists and Plaid Cymru want a second referendum which they believe the Remain side will win. Meanwhile Theresa May probably still wants her deal to make its way through Parliament.

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January 16 2019

Commentary by Eoin Treacy

Morning Tack - "Valuations?!"

Thanks to a subscriber for this report by Jeffrey Saut for Raymond James which may be of interest. Here is a section:

Eoin Treacy's view

A link to the full report is posted in the Subscriber's Area. .

In last night’s video I shared this graphic of where the major markets are trading relative to their historic P/Es since 1990. The depth of the pullback seen to date has led to a P/E contraction which has contributed to demand as bargain hunters stepped in.

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January 16 2019

Commentary by Eoin Treacy

BofA and Goldman Crush Earnings, Lifting Bank Sector Stocks

This article by Felice Maranz for Bloomberg may be of interest to subscribers. Here is a section:

Earnings per share beat on higher fees and lower taxes, Morgan Stanley analyst Betsy Graseck wrote in a note, with the bank’s net interest margin beat showcasing that BofA’s “asset sensitivity is coming through.” Trading fees and investment banking topped her estimates as well, and she sees BofA generating “strong positive operating leverage, even in a weak revenue environment” -- which isn’t priced into its stock.

Goldman’s fourth-quarter net revenue, investment banking revenue and equities sales and trading revenue all topped estimates. The bank’s release highlighted the highest net revenues in financial advisory since 2007.

Goldman’s results weren’t all positive, though, as FICC and equities sales and trading revenue missed, its investment banking transaction backlog dropped from the end of the third quarter while questions about 1MDB will likely hang over the bank.

JMP’s Devin Ryan said in a note that “relief” for Goldman’s shares is “warranted following disproportionate pressure over the past year.” He also sees Goldman’s slide deck presentation with more detail around the quarter as likely to be “much appreciated by investors and viewed as a sign that the firm is moving toward a greater level of transparency.” He’s listening for color on 1MDB on the call, which started at 9:30am, though he’s “not expecting much.” CEO David Solomon has so far said, “We apologize to the Malaysian people.”

Eoin Treacy's view

The S&P500 Banks Index dropped abruptly in December and has rebounded to unwind about two thirds of the decline. It is now within striking distance of the trend mean which represents the first area of potential resistance. A higher reaction low and sustained move above the trend mean will be required to question the overall downward bias. There is no doubt the relief rally seen to date is encouraging but a great deal of technical damage has been done and even in a best-case scenario it will take time to repair.

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January 16 2019

Commentary by Eoin Treacy

Transcript of the Subscriber's video on January 15th

Eoin Treacy's view

There was a lot of talk about yesterday and the video ran to almost 40 minutes. That has resulted in a transcript of more than 5000 words which is about double the transcript for the 14th.

Here is a link to the unedited version and the edited version. Sarah has kindly volunteered to edit the transcript. Here is her feedback from doing so today.

That has taken considerably longer to do today. A good few hours.

The problems are:

The software doesn’t always put a full stop or comma in and without punctuation, it’s going to be a difficult read.

It also doesn’t recognise the difference between Rupee and Rupiah, which might be corrected, but if it doesn’t “learn” to recognise it, it could be a confusing read for subscribers!

It doesn’t recognise context so there/their/they’re pretty much all need correcting. Also, we’ve/we’re.

I imagine it’s almost impossible to speak as you do, without a script, and not um and ah, but when you do, the software inserts “at” so you can imagine how many there were to correct.

I am actively trying to educate the system to adapt to my speech but with little success yet. I plan on pursuing this experiment till the end of the week and then we will make a judgement on whether to persist. However, if it takes multiple hours to edit a transcript, that is simply not something we are able to justify.

 

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