Tuesday, 27 September 2016

Come and meet us at the London Investor Show!

Do you want to come and hear for free some thoughts about what investment themes will influence your portfolio in 2017?  Then come along to the London Investor Show on Friday 14th October.


You can read all about the London Investor Show here but there are three key opportunities for you, for free to take specific advantage of. 

First, come and hear me speak just after the show opens at 9.35am

TEN BIG INVESTMENT THEMES FOR THE NEXT 12 MONTHS
Speaker: Chris Bailey, Financial Orbit


Drawing on his experience of 20 years in the fund management industry, Chris Bailey of Financial Orbit will discuss the ten big global investment themes that will impact your portfolios over the next year.  Covering asset allocation, sector selection and even individual share level insights, Chris will take you on a whistle stop tour of the global financial markets to help you prepare your portfolios for the opportunities and challenges ahead as well as answering your questions and addressing your concerns in a free for all Q&A session.

Second, come and meet me and the rest of the team and talk about your investment concerns at the Financial Orbit stand at the London Investor Show.  Ask about whatever is on your mind...and for everyone who comes to the stand and provides their contact details you can pick up your limited edition free gift

Third, do all of this for free by using the special offer I have negotiated for any readers of this message.  

Anyone can book a complimentary ticket to the London Investor Show, saving them 25GBP on the door.  The code is "FINORBIT" - this code should be entered into the box asking for a voucher code at the foot of the registration page (which can be accessed here). 


It is going to be a fascinating day on the 14th October - looking forward to see as many of you as possible there! 

Sunday, 25 September 2016

Stories we should be thinking about

Ahead of the new working week here are a few finance and related stories to be thinking about.

Macro matters:

After last week's Federal Reserve and Bank of Japan non action (and fairly positive market reaction - all nicely summarised here by @kurterozde)...all eyes on the OPEC meeting in Algeria.  However don't get your hopes up...



(h/t @chigrl)

Actually my personal view is that oil prices are going up...but as always it depends a lot on demand from China: 

Meanwhile fascinating to see this on the impact of lower oil prices on the US economy...


...no wonder US rates are not normalising soon although I feel it is likely they will edge up in December: 

Reflecting this 'new normal' sentiment towards the US equity market remains suppressed...

 
(h/t @TopdownCharts)

...but of course as with a compressed insider transactions ratio caution can be bullish: 
Really good on the failure of the Asian pivot under the Obama Presidency:

Obama’s impotence has intensified questions in Japan and elsewhere about the credibility of the American security umbrella, encouraging nationalists who argue that Tokyo should re-arm in earnest – or even deploy its own nuclear weapons. But their main concern is not North Korea – it is China.

(h/t @jiabaochina)

Chat that Germany is becoming exasperated with the UK negotiating stance over Brexit (link here)...and also with a QE extension inevitable exasperation with the ECB/Mario Draghi is also building (link here). Fun times in Europe...at least the euro is weakish...
(h/t @planmaestro)

Want to guess which is the top overnight visitor destination city?  Maybe it might surprise you...

(h/t @tradegovukASEAN)

Apparently we just lived through the hottest summer in recorded history...And possibly the hottest in “thousands of years.” (link here

With statistics like this and general technological advances just maybe the rise of autonomous cars is inevitable (link here)

The average vehicle is used only 4% of the time and parked the other 96%


Sector and companies: 

Why do companies go bust?  Imminently due debt is the biggest reason...

(h/t @NoonSixCap)

Anticipated FY16 S&P 500 earnings growth almost nothing now...although of course the hopes for FY17e are still for double digit growth...

Zero Hedge highlighted the rather firm price/revenue ratio of the S&P 500 constituents...


As Goldman Sachs announce Asian job losses, is it the end of the suitcase banker? "Mainland securities companies occupy seven of the top 10 positions in advising on Hong Kong initial public offerings this year" (link here)

Nice report here on a stock that is in my Financial Orbit Stocks preferred list: 

Marriott International closed Friday morning on its $13 billion acquisition of Starwood Hotels & Resorts Worldwide, bringing together its Marriott, Courtyard and Ritz Carlton brands with Starwood's Sheraton, Westin, W and St. Regis properties.

In total, 30 hotel brands now fall under the Marriott umbrella to create the largest hotel chain in the world with more than 5,800 properties and 1.1 million rooms in more than 110 countries. That's more than 1 out of every 15 hotel rooms around the globe.


Marriott now eclipses Hilton Worldwide's 773,000 rooms and the 766,000 that are part of the Intercontinental Hotels Group family, according to STR, a firm that tracks hotel data.

Is Twitter about to be taken over?  I do own a few in my pension fund as I love the 'realtime, context rich news':

I also own shares in Carnival which is benefiting from this structural theme...


So why have companies like Next, M&S and Primark had shabby UK clothing retail sales?  I liked this in this weekend's Financial Times


Good news for Boeing versus Airbus: 



Ouch...look at that evolution of the Deutsche Bank market cap: 


And finally...

The rise of the smartphone...
(h/t @khalidHamdan0)

...meanwhile this feels familiar!




Have a good week 

Sunday, 18 September 2016

Stories we should be thinking about

Ahead of the new working week here are a few finance and related stories to be thinking about.

Macro matters:

Not the greatest week in global markets...



(via www.dshort.com)

In Europe the Bratislava summit was the big political event of the last few days but apparently 'the controversial issues driving the political debate in many member countries were left aside' (link here)

Meanwhile showing continued pan-European migration angst: 'a group of Central European EU members known as the Visegrad Four is ready to veto any Brexit deal that would limit people's right to work in the UK, Slovakian PM Robert Fico says' (link here)

And reflecting these issues Mrs Merkel is likely to face some pressures in the latest German state election being held this weekend: 


Apparently 'Asset managers intend to cut their analyst research budgets by 30 per cent, heaping more pain on the investment banking industry that has already been forced to make thousands of people redundant on the back of falling profitability' (link here - however including a paywall)

Certainly there is too much commodity research out there which is not value-added and/or simply expensive (neither point can be made against the Financial Orbit research outputs I would argue!)  Additionally though the fund management industry is changing. To show this here are a couple of fascinating insights from massive investors. First this from Larry Fink of Blackrock: 

Putting this into practice is the firm’s risk-mitigation platform, Aladdin, which enjoys a ubiquity within the firm — it tracks everything from bond trades to head count — that evokes HAL 9000, the sentient computer in the movie “2001: A Space Odyssey.” Some employees even use Aladdin as a verb, as in, “Has the new portfolio manager been Aladdinized yet? (link here)

And then some complementary insights from quant fund AQR: "We need active management but whether you are getting a good deal is a separate question. Index [investing] is raising a competitive force. On average fees have been too high." (link here). 

I am a strong supporter of active management but certainly acknowledge that unless it is performing and/or good value for money people correctly will wonder if they should bother...

Based on where the Labor Day polling was, Clinton should be a gimme for the US Presidency: 


Still political fears are still impacting general business confidence: 


Look how 'certain cities in America are better for upward mobility' 


Good news that the 'People's Bank of China surveys showed the business confidence index rising to 51.2% in the third quarter. That was 2.2 percentage points higher than in the second quarter'

Not so good news though that global trade appears to be rolling over: 


(as i have talked about before latent protectionism is a real double negative for the global economy)

Interesting to see that even with a continuation of limited short-term earnings growth...

... higher valued areas are still favoured.  The only parts of the market that are actually generating growth?
Or winners from the recent historic ever lower bond yield run...which of course makes the bump up of yields in recent weeks so supportive of sector rotation... 
(h/t @kurterozde)

Sector and companies: 

'Investors haven't been hurt not owning banks for the past five years. It is unlikely that they will be hurt not owning them five years from now either' (link here).  Maybe...but my gut feel is that selected financials are beneficiaries of rotation...and it really would not take much to get a sector bounce/bump from here: 

Burberry will unveil its first ever “see now, buy now” show at London Fashion Week on Monday, heralding a new era for the industry in which fans can get their hands on "seasonless" items immediately after they are presented on the runway (link here

Gold watchers should be all over the Denver Gold Forum agenda and webcasts over the first part of the week (link here) (h/t @MarkBrant1KM)

As per Seeking Alpha, 'Yum Brands (YUM +0.2%) names who it expects to comprise the board of directors at Yum China.Seven of the nine directors will be independent from the company. Primavera Capital Group founder Fred Hu is slated to serve as non-executive chairman of the Yum China Board. The Yum China distribution is expected to occur on October 31'.

Wow, look at the world's largest company evolution...from a little bit of tech to a lot: 


And the cheapest electrical vehicle from a cost per mile of battery range perspective is: 


And finally...

Well can you identify them?

(h/t @rshotton) 

Next year will be a decade since 'screen time' led the way.  I cannot say I am too surprised: 


Have a good week 

Friday, 16 September 2016

Listen to a recording of the latest Financial Orbit webinar


And if you missed yesterday’s Financial Orbit Macro and Stocks webinar…

You can listen/watch at this link:


If you would like a copy of the presentation then please send me an email at chris.bailey@financialorbit.com

Wednesday, 14 September 2016

Free event notification: Financial Orbit Macro and Stocks webinar (3pm Thurs 15th September)

Want to know my latest macro thoughtsbest global stocks to buy and the most compelling trades that I see at the moment?

If so, participate in the latest Financial Orbit webinar on Thursday 15th September at 3pm London time (10am ET). Click this link to join the webinar, listen in and - if you wish - ask questions on macro issues, individual stock matters...or anything else that matters. 

If you would like to be sent a reminder email invite please email me directly. 

Chris Bailey
Founder, Financial Orbit Limited

Email: chris.bailey@financialorbit.com


Twitter: @financial_orbit

Sunday, 11 September 2016

Stories we should be thinking about

Ahead of the new working week here are a few finance and related stories to be thinking about.

Macro matters:


What a Friday and as Fast FT noted the "VIX...shot up by almost 40% on Friday in its biggest jump since the late-June Brexit vote sent global markets reeling"

(h/t @MktOutperform) 

Friday was the first time after 42 sessions that S&P 500 trades in a trading range of more than 1.5% after the longest stretch since 1964...


...but the bond markets fell off sharply too as observed by the aforementioned @MktOutperform: 

'5th time in history $SPY & $TLT both down >1.6% on same day (since $TLT launched in July '02)...'

Yes, it was not a good day for bonds either...


...as that little bit of inflation (lapping higher energy prices etc.) feeds into the system...


...among other service sector focused aspects: 
(h/t @Mark_J_Perry, @DominicScriven) 

Well both asset classes are not exactly cheap...
(h/t @WorthWray) 

Now the question is...on a pullback do you buy the higher bond yield friendly rotation areas (financials, commodity, industrial) as the traditional bond proxy / dividend heavy areas are rather expensive...?

My gut is that you do.  Of course as @Callum_Thomas notes such a VIX uplift is not seasonally strange...

...although the next iteration is - after a difficult month or so - an ultimately higher equity market: 


Now that sounds much better for alpha than beta to me...and if you are a bond investor, check who owns your bonds...not everyone has that flow of recycled domestic flows as say a Japan does: 

So even though it feels like a time to know your investments, don't be scared of being global either.  Home bias may be holding back your returns even if the earnings sources from 'domestic' listed companies in markets like the UK are inherently very international:

Let's move onto a few other issues.  A very nice cartoon in the Weekend FT summarises the labyrinth style Brexit negotiations...

...meanwhile it is fair to include that London house prices may prospectively be a bit under pressure: 

Did you listen/watch Thursday's press conference from the European Central Bank? Well it was not particularly exciting...but take a look at when the next expected Eurozone rate rise is anticipated to be:
(h/t @jsblokland)

Super piece on supply side evolutions in China: "officials... lamenting a lack of enthusiasm at all levels"(link here and h/t @jiabaochina)  Hmm...

Meanwhile there is some evidence that the China is trying to circumnavigate some aluminium trade restrictions: 

Otherwise...I was shocked by this: 

'The melting of the Arctic ice cap last week accelerated to one of the fastest rates ever seen, with more than 46,000 square miles lost in one day — three times the usual rate.
Scientists have confirmed that surging temperatures and violent storms have ripped apart the floating ice so its area has plummeted to the second lowest ever recorded — with a week of melting still to go. The 46,000 square miles of ice lost over September 6-7 is almost the area of England' (link here - although there is a paywall). 

Meanwhile 'Bill Gates is no longer the richest person in the world, at least for now. The Microsoft founder has been outstripped by Amancio Ortega, the famously frugal Spanish founder of clothing chain Zara, according to the Forbes real-time billionaires list. Mr Ortega’s net worth was said to have increased to $78 billion, overtaking Mr Gates’ estimated net worth of $77.4bn' (link here)

And penultimately in this section: 'Driverless cars have the potential to be a win-win, for drivers and the economy as a whole' according to this report here


Wow, look at the lead Israel has in the drone business (link here):



Sector and companies: 

Not too much earnings growth in the US market anticipated in 2016...but as normal next year is anticipated to be different:
Apparently a “$70 tonne move in coking coal prices in since the beginning of July has added $3bn to Billiton's mark-to-market earnings”


British luxury brand Burberry has cut Hong Kong and mainland prices of its leather handbags by up to 20 per cent in a low profile move, as the pound depreciates in the aftermath of Brexit (link here).  Just sounds like global price arbitrage to me...


Container shipping rates are cruising up as the Hanjin bankruptcy has caused some supply chain imbalances...


...and a really fascinating Disney insight: 
(h/t @PlanMaestro) 

Time for natural gas prices to lift off? (link here).  Would be not too inconsistent with my general thoughts that energy prices/inflation are going up...

(h/t @seeitmarket)



And finally...

I like being born in an unfashionable month:


(h/t @YouGov)

Meanwhile, do you agree with this list?

And if you like this mix of macro charts and company/sector insights don't forget to apply for the week-long trial of Financial Orbit Macro and Financial Orbit Stocks...and if you are interested in success and not doubt...



...then put this in your diaries:

Confused about markets? Want some new stock ideas? Our next & Stocks is on Thurs 15th at 3pm UK/10 ET. Registration details to follow in the next 24 hours on www.financialorbit.com but if you want to book a place/get sent directly the registration details please just email me at chris.bailey@financialorbit.com

Have a good week