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

    Wall Street analysts keep one-upping each other to be biggest bull on red hot Nvidia

    This article from CNBC highlights some interesting psychological activity evident in the market right now. Here is a section:

     

    Wall Street is falling over itself to have the most bullish call on Nvidia, the market's best performing stock in the past year. 

    Right after Citi Research raised its Nvidia price target to a street high of $180 Thursday morning, another analyst decided to one-up its peer with a higher price target for the semiconductor company.

    Bank of America Merrill Lynch analyst Vivek Arya told investors to buy the Nvidia shares, citing the large opportunity in the artificial intelligence market Thursday evening:

    "NVDA is trading at a premium multiple, but the momentum could persist given: (1) Only 17% ownership by large-cap active US managers (vs. large-cap semi comps 25%-39% ownership; (2) Potential expanding ownership by Softbank vision fund, per media reports; and (3) Scarcity value as the only proven way to gain exposure to nascent AI/machine learning trend which could be a 10-20x growth opportunity. This weekend's E3 gaming show typically marks start of 2H seasonal strength."

    SoftBank Group bought a $4 billion stake in Nvidia, according to a Bloomberg News report last month.

    Arya raised his price target for Nvidia to $185 from $155, representing 16 percent upside from Thursday's close. He now has the highest price target on the company out of 34 analysts, according to FactSet.

     

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    Renault plans foray into energy market with mega battery

    This article by Christoph Steitz and Edward Taylor for Reuters may be of interest to subscribers. Here is a section:

    Large batteries can help stabilize the primary reserve electricity market, which is responsible for ensuring the grid has at least 50 Hertz. Carmakers can also earn money competing with conventional power stations to guarantee the provision of electricity during periods of high demand or volatility.

    "We forecast the combined market for electric passenger vehicles, electric buses and battery storage to increase eight-fold to over $200 billion by 2020, a five-year compound annual growth rate of more than 50 percent," Berenberg analysts said.

    With about 4 million electric cars expected to be on the roads by 2020, vehicle manufacturers looking at ways to recycle batteries, including Tesla, which already sells everything from solar panels to batteries and electric cars.

    Daimler, BMW, Volkswagen and China's BYD Co Ltd are also exploring so-called second-life storage projects with batteries.

    That includes partnerships such as the recent collaboration between BMW and Vattenfall, in which the luxury automaker will deliver up to 1,000 lithium-ion batteries to the Swedish utility for storage projects this year.

    "What will end up happening is that BMW and Daimler will ... become utilities themselves," said Gerard Reid, founder of Alexa Capital LLP, a corporate advisor in the energy, power infrastructure and technology sectors.

    "They use Vattenfall now because they need to learn but I think the amount of batteries coming back will be so big that I think they'll end up engaging directly with the end customer themselves. And they've got the brand name to do that."  

     

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    Email of the day on monthly Index constituent performance data:

    Hope you are well. I have a question : Where can I get, for any chosen stock market, the percentage of the number of shares whose prices have risen, fallen, remain unchanged, for each calendar month in the last 12 calendar months? Is it available for free in the Bloomberg website somewhere?

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    With Leaders Like This, Britain Should Panic

    Here is the opening of this sadly accurate comment on the UK General Election campaign by Clive Crook for Bloomberg:

    The U.K. election has been a contest of inadequates.

    At a time when the U.K.'s most pressing need is for competent leadership, it's saddled with two of the most bungling party leaders in living memory. Even a well-run government would struggle to control the short-term damage likely to be inflicted by Brexit. Whatever happens in Thursday's vote, there's no prospect of a well-run government by Friday. On this evidence,  exaggerating how much trouble Britain is in would be hard.

    Prime Minister Theresa May called this snap election -- after suspending a law requiring fixed-term parliaments -- because she was sure of a huge win. She had every reason to think so. Jeremy Corbyn is an unreconstructed old-school leftist and every Tory's dream of a Labour Party leader. His own parliamentarians wanted to ditch him but were overruled by the party's wider membership. May duly started with an immense lead. Over the succeeding weeks, Corbyn's shambles of a Labour Party came much of the way back.

    Why? Bizarrely, Brexit has almost nothing to do with it. Labour isn't challenging the referendum result, partly because so many of its own supporters want out of the European Union; and its position on how to manage Brexit is as vague as the Tories'.

    Labour's remarkable traction during the campaign also wasn't because Corbyn came up with a compelling election manifesto and sold it pretty well. Quite the opposite: Content and marketing were fully as bad as the Tories could have wished. Nationalize this, nationalize that, make higher education free, pour resources into every kind of public service, and no we aren't quite sure what all of this will cost.

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    U.K. Heads for Hung Parliament as May Election Gamble Fails

    Here is the opening of this report from Bloomberg:

    Britain’s political future was thrown wide open after a shock exit poll indicated that Prime Minister Theresa May might not win a majority after Thursday’s general election, casting doubt over her political future just days before Brexit negotiations were due to begin. 

    The pound fell to the lowest since April after the BBC and other broadcasters said May’s Conservative Party is on course to win just 314 seats in the 650-strong House of Commons. That’s down from the 330 she held before calling the snap election seven weeks ago and less than the 326 needed for a majority. Jeremy Corbyn’s Labour Party will win 266 seats, compared with 229 before the election, according to the joint exit poll. 

    Such polls have generally been reliable, although political leaders on both sides immediately said it’s too early to read too much into it. The first two results from northeast England indicated that Labour is not doing as well as the exit poll suggested.

    Investors are balking at the prospect of another round of political turmoil less than a year after Britain voted to leave the European Union. While May could still win a majority, attention will turn to her future after the decision to call an early election and strengthen her mandate backfired. She will now need to decide whether to resign or try to form a new government. Another election is also a possibility.

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    No One Has Ever Made a Corruption Machine Like This One

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

    By Odebrecht’s admission in U.S. District Court in Brooklyn last December, Structured Operations doled out some $788 million in bribes in Brazil and 11 other countries, securing more than 100 contracts that generated $3.3 billion of profit for the company. Odebrecht and petrochemicals affiliate Braskem SA agreed to pay $3.5 billion in fines to Brazil, the U.S., and Switzerland tied to the activities of the division in Miami and beyond. It’s the biggest corruption-related fine ever levied on a company, eclipsing a $3.16 billion fine in Brazil tied to corruption allegations against another target of the Car Wash probe, Brazilian beef giant JBS SA.

    For decades, Odebrecht has cultivated a certain corporate lore. It goes something like this: The company’s ascent to the upper ranks of the world’s engineering and construction companies came from an obsession with hard work, expertise, and customer service. Top executives imbibe the teachings of the company’s founder, the late Norberto Odebrecht, via his three-volume guide to best practices, the Odebrecht Business Technology system. But last Dec. 13, when Emílio Odebrecht, Norberto’s 72-year-old son, took a seat before a microphone in a 1970s-era attorney general’s building in Brasília, Brazil’s capital, he described a family empire built on graft.

     

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    Veggie Burgers Go Mainstream with Bloody Impossible Burger

    This article by Jen Skerritt and Deena Shanker for Bloomberg may be of interest to subscribers. Here is a section:

    While alternatives to meat won’t replace the real thing, more companies are investing in the industry and reformulating recipes so consumers can’t tell the difference, said Kenneth Shea, a food analyst at Bloomberg Intelligence in Skillman, New Jersey.

    “Consumers, more and more, think in terms of sustainability,” Shea said. “They’re looking to eat more plants as opposed to red meat due to the perceived health benefits.”

    While most consumers want to keep eating meat, they’re becoming more informed about the consequences on the environment and sustainability. It takes about 15,000 liters (3,963 gallons) of water to produce 1 kilogram (2.2 pounds) of beef, compared with 1,600 liters for a kilo of wheat, according to estimates from the Water Footprint Network. 

    “Clean meat” production requires far less land and water than conventional meat, requires no antibiotics, and eliminates the environmental repercussions of animal waste and contamination during runoff, according to a report from Washington-based non-profit The Good Food Institute.
    Still, most Americans don’t want to sacrifice taste.

    “They’re hungry for a solution,” Beyond Meat’s Brown said. “It’s up to science and our efforts to get it to the point where it’s completely indistinguishable from its animal equivalent.”

     

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