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

    Email of the day on Worldwide Healthcare Trust

    This may be of interest to you and the collective.


    Disclosure: I have shares in Worldwide Healthcare Trust and am considering Biotech Growth Trust.

    The second half is Q & A which is also useful. 

    My subscription is due for renewal at end-Dec and I shall be renewing.  The comment of the day and especially your daily and weekend audios are priceless for a small investor like myself. It's hard to thank you enough.

    Very best wishes

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    The Next Phase of the V

    Thanks to a subscriber for this report from Morgan Stanley. Here is a section:

    #1: A global synchronous recovery: We expect a broad-based recovery, both geographically and sectorally, to take hold from March/April onwards. Driving this synchronous recovery will be a more expansive reopening of economies worldwide and the extraordinary monetary and fiscal support now in place. Global GDP, already at pre-COVID-19 levels (based on seasonally adjusted GDP levels), continues to accelerate and is on track to resume its pre-COVID-19 trajectory by 2Q21. We expect China to return to its pre-COVID-19 path this quarter, and the US to reach it by 4Q21.

    #2: EMs boarding the reflation train: After a prolonged period in which EMs have faced a series of cyclical challenges, macro stability is now in check. With the COVID-19 situation improving in a broad range of EMs, their pace of recovery is catching up. EM growth rebounds sharply in 2021, helped by a widening US current account deficit, low US real rates, a weaker dollar, China’s reflationary impulse, and EMs ex China's own accommodative domestic macro policies.

    #3: Inflation regime change in the US: We see a very different inflation dynamic taking hold, especially in the US. The COVID-19 shock has accelerated the pace of restructuring, creating a significant divergence between the output and unemployment paths. With policymakers maintaining highly reflationary policies to get back to preCOVID-19 rates of unemployment quickly, wage pressures and inflation will pick up from 2H21. We expect underlying core PCE inflation to rise to 2%Y in 2H21 and to overshoot from 1H22, with the risk that it happens sooner.

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    EU Fights to Save Billions in Aid as Lagarde Demands Action

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

    Hungarian Prime Minister Viktor Orban says tying “political debates” to financial issues is a form of “blackmail” against countries opposed to migration.

    Poland said this week that the provisions are a first step to forcing it to accept EU regulations on gay marriage, abortion, euthanasia and press freedoms. “It’s a means of political, cultural and ultimately economic colonization,” Justice Minister Zbigniew Ziobro said.

    Highlighting the gaping divide, Dutch Prime Minister Mark Rutte called the current rule-of-law provisions the “bare minimum.”

    German Chancellor Angela Merkel has spoken with EU leaders in recent days, including Orban and Morawiecki. In a sign there’s unlikely to be a quick fix, she described negotiations as “extremely difficult.”

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    A New UN Push Aims to Feed the World's Rabid Hunger for Carbon Credits

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

    It’s a tricky proposition, though. Offset programs are notoriously difficult to execute with confidence. REDD+, launched in 2007 to much fanfare among developing nations and UN climate negotiators, but has rarely lived up to its original excitement as developed nations failed to install carbon-pricing policies that succeed in guaranteeing demand. 

    Global demand for offsets may outstrip supply by 2025, according to a September analysis by Fitch Ratings. Many companies, including Microsoft Corp, The Walt Disney Co, and Royal Dutch Shell Plc, have already begun either buying or planning to buy offsets. Amazon.com Inc. founder Jeff Bezos this week announced $791 million in funding for 16 environmental groups, including $100 million each to organizations with strong forestry or offsets programs—EDF, World Resources Institute, and World Wildlife Fund.

    Navigating the challenges to come may require groups like Emergent to continue to act as market-making entities. Or, if markets get the boost they need from the Green Gigaton Challenge and other initiatives, “we'd be thrilled to turn off the lights, close the door,” Bloomgarden said. “Impact achieved.”

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    Rocketing Bitcoin Stakes Claim as Pandemic Refuge for Brave

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

    “Bitcoin seems to be the hedge of choice against the U.S. dollar debasement that is looming, either through more Federal Reserve quantitative easing, higher government debt or a steepening yield curve -- or all three,” Jeffrey Halley, a senior market analyst with Oanda Asia Pacific Pte, wrote in an email.

    Bitcoin’s investor base is also widening as more institutions make the jump into the asset class. Purchases or endorsements from the likes of Square Inc., Paul Tudor Jones and Stan Druckenmiller add to the mix. But its volatility -- including a furious run toward $20,000 in December 2017 followed by a bust -- make arguments for the cryptocurrency as a store of value contentious.

    Fear of missing out “is well and truly in play here, and the fact that so many big hitters are publicly declaring their positions is clearly helping,” Chris Weston, head of research at Pepperstone Financial Pty, wrote in a Nov. 18 note. “I don’t see this move as a mania or grossly over-loved just yet.”

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    Top Ten Market Themes for 2021: A Shot in the Arm

    Thanks to a subscriber for this report from Goldman Sachs which may be of interest. Here is a section:

    1.Vaccine-led Recovery to Lift Cyclical Assets
    2. Navigating the Path
    3. A Steeper Real Yield Curve
    4. Europe: Two Steps forward, One Step Back
    5. China: Forging Ahead, with Assets in Tow
    6. A New Commodity Bull Cycle
    7. EM Outperformance: More than Before, Less than Sometimes
    8. Rotations: Cyclical, North Asia in Focus but Vaccine News Key to Near Term
    9. In Search of New (and Old) Safe Havens, Hedges and Diversifiers
    10. Risks from Corona and Beyond

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    Merkel Under Fire as Virus Strategy Sparks Anger From All Sides

    This article by Arne Delfs and Raymond Colitt for Bloomberg may be of interest to subscribers. Here is a section:

    Berlin police used water cannons to break up a large demonstration near Brandenburg Gate on Wednesday. Participants - - which totaled 14,000 people, according to police -- refused to
    abide by distancing and hygiene rules, while some threw bottles and other objects.

    Pressure has been growing on German authorities, which are facing a crunch meeting next week to lay out a long-term plan to fight the pandemic. With restrictions likely to be extended and intensified, public anger and political tensions are rising.

    The demonstration was organized to oppose a law being debated by the Bundestag that would expand the government’s powers to place restrictions on the public. Critics say the measures go too far. The far-right Alternative for Germany likened the legislation to policies under authoritarian regimes.

    While the freedom of assembly must be guaranteed, social distancing and other rules to contain the spread of the virus must also be respected, government spokeswoman Ulrike Demmer said during a regular news conference.

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