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

    The next 6 months favor Cyclicals: Financials, Energy, Industrials, Tech, Materials

    Thanks to a subscriber for this chart illustrated report by Barry Bannister for Stifel which may be of interest.

    Electric cars are changing the cost of driving

    This article by Michael J. Coren for Quartz may be of interest to subscribers. Here is a section:

    It’s difficult to know how representative this data is of Teslas overall, given that Tesloop’s fleet is small, but it likely includes a large share of the highest-mileage Teslas on the road—several are nearing 500,000 miles. Finding conventional vehicles to compare is virtually impossible since most fleet cars are typically sold off after 100,000 miles.

    But the implications could be huge. Every year, corporations and rental car companies add more than 12 million vehicles in Europe and North America to their fleets (pdf). Adding EVs to the mix could see those cars lasting five times longer—costing a fraction of conventional cars over the same period—while feeding a massive new stream of used electric cars into the marketplace. Whether the future of fleets is really electric, however, depends on the data. And that’s still in short supply.  

    The promise of EVs
    Most commercial vehicle fleets still run on gasoline and diesel, David Hayward, a fleet expert with Deloitte consulting, said. But EVs are top of mind. “Everyone is excited about it and everyone wants it,” he told Quartz. “But there’s trepidation.” The potential savings are huge. Fleet owners’ biggest expenses after depreciation (44%) are fuel (22%) and maintenance and repairs (11%), according to Deloitte.  EVs could slash those by more than half.

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    Inside Amazon's plan for Alexa to run your entire life

    This article by Karen Hao for the MIT Technology Review may be of interest to subscribers. Here is a section:

    In another scenario, you might ask Alexa through your communal home Echo to send you a notification if your flight is delayed. When it’s time to do so, perhaps you are already driving. Alexa needs to realize (by identifying your voice in your initial request) that you, not a roommate or family member, need the notification—and, based on the last Echo-enabled device you interacted with, that you are now in your car. Therefore, the notification should go to your car rather than your home.

    This level of prediction and reasoning will also need to account for video data as more and more Alexa-compatible products include cameras. Let’s say you’re not home, Prasad muses, and a Girl Scout knocks on your door selling cookies. The Alexa on your Amazon Ring, a camera-equipped doorbell, should register (through video and audio input) who is at your door and why, know that you are not home, send you a note on a nearby Alexa device asking how many cookies you want, and order them on your behalf.

    To make this possible, Prasad’s team is now testing a new software architecture for processing user commands. It involves filtering audio and visual information through many more layers. First Alexa needs to register which skill the user is trying to access among the roughly 100,000 available. Next it will have to understand the command in the context of who the user is, what device that person is using, and where. Finally it will need to refine the response on the basis of the user’s previously expressed preferences.

    “This is what I believe the next few years will be about: reasoning and making it more personal, with more context,” says Prasad. “It’s like bringing everything together to make these massive decisions.”

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    Brazil Coffee Areas Seen Drier than Normal in Next 5 Days

    This note by Manisha Jha for Bloomberg may be of interest. Here it is in full: 

    Drier than average conditions are forecast across the Brazilian coffee region over the next five days, particularly in Cerrado, Marex Spectron said in emailed weather report.

    Regions of southern Espirito Santo, southeast Minas Gerais and southeast Sao Paulo are forecast to be wetter than average
    In the next five days thereafter, the whole Brazilian coffee region is expected to be wetter than average, except for the northern coffee region, which is expected to be slightly drier than normal


    Typhoon Nakri is forecast to weaken to a tropical depression before it makes landfall over central or eastern Vietnam between Nov. 10 and 11

    “It is associated with heavy rain and strong, sustained winds”

    There is an anomaly of 10 mm predicted across the Central Highland region over the next five days
    Drier than average conditions expected in the northern coffee areas
    NOTE: Vietnam Coffee Harvest Threatened by Tropical Storm: Maxar

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    China, U.S. Agree to Tariff Rollback If Trade Deal Reached

    This article from Bloomberg news may be of interest. Here is a section:

    “If China, U.S. reach a phase-one deal, both sides should roll back existing additional tariffs in the same proportion simultaneously based on the content of the agreement, which is an important condition for reaching the agreement,” Gao said.

    Such an understanding could help provide a road-map to a deal de-escalating the trade war that’s cast a shadow over the world economy. China’s key demand since the start of negotiations has been the removal of punitive tariffs imposed by Trump, which by now apply to the majority of its exports to the U.S.

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    Expedia and TripAdvisor Lead Sharp Sell-Off in Online Travel

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

    According to Piper Jaffray, “the most concerning trend” in the quarter was “the reduced efficiency of SEO,” or search engine optimization. Google, part of Alphabet Inc., is favoring its own “Hotel Finder” platform, along with paid links for search results, and this trend could require higher marketing costs.

    D.A. Davidson noted that Expedia is exploring alternatives to mitigate its “reliance on search/Google,” but wrote that it sees “no alternatives that will be able to efficiently ‘move the needle’ from a volume perspective anytime soon.” Morgan Stanley wrote that Alphabet is now the “best way to invest in travel.”

    TripAdvisor’s adjusted earnings and revenue both missed the lowest analyst estimates. The results “more than disappointed,” Jefferies wrote, reiterating its underperform rating. Analyst Brent Thill added that TripAdvisor’s preliminary 2020 outlook “is not encouraging,” in part because of “continued SEO pressure from Google.”

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