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

    Amazon Turns Negative for 2021 as Higher Yields Add to Pressure

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

    The losses in market value for the companies listed in the closely watched NYFANG+ index -- which includes 10 highly liquid tech and internet stocks -- now have soared to nearly $1 trillion from their Sept. 7 highs. Tesla Inc. is the only stock in black during that period.

    The rise in yields has pressured tech names, as investors calculate that future earnings gains will be less valuable amid higher rates. The 10-year Treasury yield is currently around 1.49%, up from 1.3% on Sept. 22.

    “Yields are likely to be biased higher for the time being as the world (and monetary policy) normalizes and inflation proves more durable than hoped,” the research firm Vital Knowledge wrote in a report. While some tech investors view the decline as temporary, “we think this time is different.”

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    World's biggest clean energy project to power Singapore from Australia

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

    The Australia-Asia PowerLink project, led by Australia's Sun Cable, plans to create a mammoth "Powell Creek Solar Precinct" on 12,000 hectares (29650 ac) of arid land about 800 km (500 miles) south of Darwin. The site, chosen because it's one of the most consistently sunny places on Earth, would be home to a mind-boggling 17-20 gigawatts of peak solar power generation and some 36-42 GWh of battery storage.

    To give you a sense of scale, that's nearly 10 times the size of the world's current largest solar power installation, the 2.245-GW Bhadia Solar Park in India, and more than 30 times more energy storage than the last "world's biggest battery" project we covered in February. It's a bit big.

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    Email of the day on politically secure mining jurisdictions

    Can you please give us a an update on copper producer plays for relative strength for listings in areas of good governance? As David said, we realize we need the tailwind or bull market to be successful investors.

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    Gold Surge Looks More Flow-Based than Fundamental

    This note from a blog on Bloomberg may be of interest to subscribers.

    Gold is showing some mysterious strength and it’s hard to see why. The dollar has weakened, but not nearly enough to push bullion about 2% higher. Real Treasury yields are actually rising, which usually is enough to keep the yellow metal in check.

    It may seem like a cop out, but the culprit here is probably quarter-end flows. The last Commitments of Traders report showed hedge funds had boosted their gold shorts to near the highest since 2019. Perhaps they’re now covering and taking profits after what has been a month to forget for bullion bulls.

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    Palm Oil Ends Quarter With a Surge on Global Oilseed Shortage -

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

    Demand has soared this month ahead of a major festival season in India, the top importer. Vegetable oils are an important part of the festivities as they’re used to make local sweets, fried food and other treats. Palm oil exports from Malaysia climbed 34% in September from a month earlier, data from AmSpec Agri show, with shipments to India likely to be robust. 

    There’s also concern that the suspension of soybean crushing plants in China due to a power crunch may crimp soybean oil output and bolster demand for palm oil. “Fresh Chinese buying today ahead of the Golden Week holidays has helped the palm oil market,” said Anilkumar Bagani, research head of Sunvin Group, referring to the week-long holiday in China that starts Friday. 

    He estimates that the crush plant shutdowns in China could translate to a loss of 160,000 to 180,000 tons of soybean oil in the September-October period. This may support higher palm oil purchases given import margins are “less negative” compared with other vegetable oils, he said. 

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    Indonesia Parliament Approves 2022 Budget, Pushes Tax Reform Law

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

    Lawmakers passed the 2022 budget into law at a plenary meeting on Thursday, with state spending seen at 2,714.2 trillion rupiah, slightly lower than the 2,750 trillion rupiah set for this year. It set a faster economic growth forecast of 5.2% for 2022, while reducing its budget deficit to 4.85% of gross domestic product from a projected 5.8% this year. 

    Earlier in the day, a parliamentary commission approved a tax reform proposal that will introduce a carbon tax policy, overhaul the value-added tax system, expand income tax brackets, and offer another round of tax amnesty program. The bill will next be deliberated at the plenary level so it can be passed into law. 

    Indonesia joins its neighbors in finding solutions to improve finances as a protracted coronavirus outbreak depletes government coffers. While Thailand has been forced to raise its public debt ceiling and Malaysia weighs doing the same, Indonesia has stood by its pledge to bring its budget deficit back to 3% of GDP by 2023 by streamlining spending and expanding revenue sources.


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