David Fuller and Eoin Treacy's Comment of the Day
Category - General

    Leveraging Platform Synergies to Break Adoption Barriers

    Thanks to a subscriber for this heavyweight report from Deutsche Bank focusing on payments. Here is a section:

    Although initial mobile payment developments were geared toward driving adoption and acceptance, focus has shifted to improving monetization. We believe Pay with Venmo remains a significant opportunity and conservatively estimate potential contribution to revenue growth in FY20 of ~3.5pts and given the higher transaction margins driven by cheaper funding sources (ACH, Balance), estimate potential EPS contribution of $0.28 in FY20. In addition, working capital loans to merchants and/or installment plans provided by PayPal, Square, and Alipay leveraging Big data offer high margin revenue opportunities. Providers are also emphasizing efforts on channels where adoption is easier as well as use cases which offer differentiated value propositions. Accordingly, we believe in-app and inbrowser will dominate mobile payments while in-store mobile payments will be predominantly focused on differentiated value propositions such as omni-channel support, order ahead, and offer/coupon redemption. 

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    Arizona trial thrusts autonomous Waymo cars into everyday life

    This article by Scott Collie from Atlas may be of interest to subscribers. Here is a section: 

    Waymo will be purchasing an additional 500 Chrysler Pacifica minivans to support the 100 already doing the rounds.

    The push to slot self-driving cars into the everyday reality of average Arizona families represents another significant step in autonomous driving development. Waymo has covered more than 3 million miles since its inception in 2009, and the benefits of that experience are beginning to show.

    According to reports submitted to the Californian DMV earlier this year, Waymo cars covered 635,868 miles (1,023,330 km) last year, and human drivers only needed to intervene 124 times. That's a huge improvement over 2015, where self-driving systems disengaged 341 times in just 424,331 mi (682,895 km) of testing.

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    The Biggest Stock Markets Have Not Had Such Diverse Performances Since 2008

    Here is the opening of this interesting article from Bloomberg:

    The Chinese and U.S. stock markets are going in opposite directions.

    An intensifying crackdown against leverage in Asia’s biggest economy has rocked the hither-to unflappable Shanghai Composite Index over the past week, sending it to a three-month low last session. In the U.S., the largest equity market is embracing a risk rally spurred by the French election, with the S&P 500 Index continuing to build on reflation-trade gains ignited by Donald Trump’s November victory.

    The divergence means the two markets are the least in tune since August 2008 -- just before the collapse of Lehman Brothers Holdings Inc. unleashed chaos on the global financial system.

    Chinese officials have mainly kept mainland stocks on a tight rein after routs in mid-2015 and the start of 2016 reverberated through world financial markets. Until Monday’s 1.4 percent slump, the Shanghai Composite Index hadn’t fallen more than 1 percent for 86 trading days.

    As Beijing’s focus on reducing risk in the financial system shifted from money-market tightening and reducing leverage to containing speculation and irregular trading, the two markets starting moving in opposite directions in the past month.

    The latest step by officials is targeted at entrusted investments -- read more about the deleveraging efforts here.

    In one sense, it’s a sign that investors overseas aren’t as worried about Chinese market ructions as they were in previous years -- perhaps partly thanks to underlying strength in China’s economy. Given how mainland stocks have become increasingly linked to global markets, however, the divergence may prove to be a short-term phenomenon, according to Daniel So, a strategist at CMB International Securities Ltd. in Hong Kong.

    “The Chinese government is squeezing speculation out of the market and while investors adjust, it will inevitably lag behind other parts of the world," So said.

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    Email of the day on eating insects

    Hello I keep seeing documentaries explaining that in the future in order to feed everyone more people will be eating insects, I hope they are wrong, but if it is true are there any ways to invest in this theme?

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    Inside China's Plans for World Robot Domination

    This article from Bloomberg News may be of interest to subscribers. Here is a section:

    Under a sweeping proposal called “Made in China 2025,” as well as a five-year robot plan launched last April, Beijing plans to focus on automating key sectors of the economy including car manufacturing, electronics, home appliances, logistics, and food production. At the same time, the government wants to increase the share of indigenous-branded robots in China to more than 50 percent of total sales volume by 2020 from 31 percent last year.

    Robot makers and the companies that automate will be eligible for subsidies, low-interest loans, tax waivers, and rent-free land. “Fair or unfair, you can expect Chinese companies will get a lot of preferential treatment and funding,” said Rose with Boston Consulting. “They actually have a comprehensive plan to get there. And their track record isn’t terrible either.”

    Industrial automation is crucial for China, home to an aging population and shrinking labor force. Manufacturing wages have more than doubled in the last decade. Also, younger Chinese workers, “don’t want to do repetitive work,” said James Li, President of ABB Robotics China, the local unit of Switzerland’s ABB Ltd. and one of the first robot companies to set up in China. It supplies machines that spray paint cars and man electronics assembly lines. “Robotics is hot,” said Li, who notes that local governments are investing heavily in industrial parks to develop the technology.


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    France Braces for Runoff Between Nationalism and Globalism

    Here is the opening of this topical article from Bloomberg:

    In the coming two weeks of the French campaign, Marine Le Pen’s challenge is to break through a wall of voter antipathy that she inherited from her father. Emmanuel Macron’s task is to persuade the French he has the gravitas and experience to be president.

    The far-right Le Pen and centrist Macron both took just under a quarter of the vote in a contest with 11 candidates. Now they must convince the rest of the population that they have what it takes to lead the country after the May 7 runoff.

    The next round will see two radically different visions. Macron embraces globalization and European integration, Le Pen channels the forces of discontent that triggered Brexit and brought Donald Trump to power. The runoff will also be unique in that it will be the first contested by neither of the major parties, giving Macron, 39, and Le Pen, 48, space to try to forge alliances that might have seemed unlikely until recently.

    “Marine Le Pen’s toughest job is to break the traditional glass ceiling which her father Jean-Marie also suffered from,” said Yves-Marie Cann, a pollster at Elabe. “Even if her image is better than his was, the truth remains that most voters say they don’t share her ideas and have a bad opinion of the Front.”

    Macron has still to convince voters he has the aura of a head of state and can reach out to a nation in which 40 percent of the electorate opted for anti-European extremes on both left and right. A snap Ipsos survey late on Sunday suggested that Macron, who’s aiming to be the country’s youngest head of state, would win by 62 percent to 38 percent for Le Pen, who would be the country’s first female president.

    “Macron is not yet the president the French want,” said Frederic Lazorthes, a communications consultant who was an adviser to Prime Minister Dominique de Villepin. “He needs to show that he can assume the great responsibility of a nation that is divided and convince the country that it can thrive in a globalized world.”

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