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

    Bitcoin Based-Memecoin Surge Seen Driving Binance Anxiety

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

    These Bitcoin-based tokens are queuing up along with regular Bitcoin transactions to be processed by miners. One of the most popular such coins, which are also known as BRC 20 tokens, is Ordi. Its market capitalization has reached more than $500 million since its recent introduction. 

    “The high network fees have been caused by the en-masse minting of BRC-20 token,” said Jaime Baeza, founder and managing partner at digital asset hedge fund ANB Investments.  Until recently, memecoins and NFT collections such as Bored Apes and CryptoPunks were predominately based on Ethereum and served as a catalyst that helped to make that platform the world’s most commercially important blockchain.

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    Platinum investors are finally taking note of South Africa's power problems

    This note from Heraeus may be of interest to subscribers. Here is a section: 

    Platinum ETFs saw heavy buying at the end of April from South Africa based funds. Year-to-date regional inflows into platinum funds in South Africa (+333 koz) are the standout when compared to the US (-107 koz), the UK (-18 koz) and Switzerland (-17 koz). Net flows have been positive every month this year so far, as South African investors are more acutely aware of the electricity supply issues being faced by PGM producers. Total global holdings stand at 3.3 moz, up from 3.0 moz at the beginning of the year, although that was down 1 moz from the peak level of holdings in July 2021.

    These investors bought into the recent price rally and hope for more. The platinum price had risen more than 20% since late February before the recent correction. Supply issues in South Africa (~75% of mined supply) are well documented. The regularity and severity of load-shedding in 2022 was unparalleled, with the situation unlikely to improve significantly during 2023. Load-shedding resulted in the build-up of above-ground stocks of unrefined PGMs last year and could lead to an estimated loss of ~250 koz of platinum production this year as the Southern Hemisphere winter begins to bite. Available first-quarter results of major South African PGM miners all cite load-shedding as impacting refined output to some degree.

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    Copper Mine Flashes Warning of 'Huge Crisis' for World Supply

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

    Take not just Chile, with its revisions to fiscal policies for miners, but Peru, a country long considered crucial to the next wave of copper production, where the mining sector has been battered during lengthy social unrest. Rio in late March agreed to sell a controlling stake in its Peruvian mine La Granja to First Quantum.

    “What the market never predicted was how difficult South America would become,” said Radclyffe. “The uncertainty out of both Chile and now ongoing in Peru, that’s just added an extra level of complexity that the market never expected, and that hasn’t really been resolved.”

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    Bolivian Bonds Jump After Senate Approves Bill to Monetize Gold

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

    The country has burned most of its international reserves and recently faced difficulties to pay for fuel imports. The central bank stopped publishing reserves data in early February, when they stood at about $3.5 billion, out of which $2.6 billion was gold, suggesting only the precious metal is left.

    While the Arce administration says the ability to operate with its gold in markets will halt the “low liquidity” Bolivia is going through, opposition lawmakers criticized the bill by saying it’s not a structural solution to the current economic crisis.

    Senator Silvia Salame called it a “patch” to allow Arce’s administration to stabilize the country’s situation until the 2025 presidential elections.

    Finance Minister Marcelo Montenegro said the gold reserves will be replenished by buying the commodity from local producers
    in bolivianos.

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    Lilly's fortunes rise on back-to-back success for Alzheimer's, obesity drugs

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

    Eli Lilly is at the forefront of two of the pharmaceutical industry’s hottest fields, and it’s paying off for the Indianapolis company’s investors.

    Over the past year, Lilly’s valuation has climbed nearly 50% to exceed $400 billion, a few percentage points’ swing away from eclipsing Johnson & Johnson as the world’s largest drugmaker by market capitalization. It’s worth nearly as much as Pfizer, Bristol Myers Squibb and Moderna combined, despite earning less than one-third as much revenue as J&J or Pfizer in 2022.

    Lilly’s skyrocketing stock price is largely due to two drugs: the diabetes and weight loss treatment Mounjaro, and the experimental Alzheimer’s treatment donanemab. Investors and Wall Street analysts expect both to become blockbusters in large markets with few established competitors.

    On Wednesday, results from a large clinical trial of donanemab in people with mild Alzheimer’s showed treatment slowed cognitive and physical decline by 35% versus a placebo, sending Lilly shares higher by nearly 7%. 

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    Bank Rout Rages On With Fed Cut Wagers Mounting

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

    In such a stressful scenario, some lenders have been trying to assuage investors — with little to no avail.

    PacWest Bancorp tumbled 43% even after saying core deposits have increased since March and confirming it’s in talks with several potential investors. Western Alliance also pared losses, but was down 31% despite its denial that the firm is exploring strategic options including a possible sale of all or part of its business.

    “Obviously a rough day today — we’re having the latest flare-up in what is slowly becoming a crisis of confidence in the regional-banking sector here in the United States,” said Jim Smigiel, chief investment officer at SEI. “We have recommended additional cash allocations out of equities for our clients.”

    That said, Smigiel and a myriad of market observers don’t see the parallels being made in what we’re going through today versus the 2008 financial crisis.

    “Some of the differences are obvious — that was a credit crisis, this is not a credit crisis,” he noted. “This is more of an asset-ability-management issue and, of course, some of the ancillary effects of hiking interest rates 500 basis points in a very, very short period of time. But it doesn’t take away from the fact that this is the market testing the weakest hands in the sector and really continuing to do that as we’re seeing today.”

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    Money isn't Enough: getting Serious About Precious Munitions

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

    Finally, the Department of Defense should, as Julia van der Colff argued in these pages, consider rapidly fielding “second tier” precision munitions that take advantage of existing technologies to provide large quantities of minimum-capability weapons at reduced costs. Next-generation stealth, sensor, and precision capabilities are key to competing with China in the long run, but these simpler munitions could be more easily (and cheaply) produced in the volumes necessitated by great-power conflict. Combined with unmanned munitions carriers and teamed with manned strike platforms, second-tier weapons could be essential to providing the volume of effects required by these other concepts. As Russia’s use of Iranian drones in Ukraine has shown, not every target requires an exquisite precision munition. Unlike ventilators during the COVID-19 pandemic, the Department of Defense should not wait until a crisis to explore and test these designs.

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    Molson Coors' bigger bets on marketing pay off as sales grow

    This article from Industry Dive may be of interest. Here is a section: 

    Molson Coors cited marketing initiatives as one reason for its strong Q1 results in a company blog post. A strong premionization program is named as another highlight.

    The alcohol company’s Q1 sales grew 5.9%, its eighth consecutive quarter of growth, for a total of $2.35 billion. On a call with analysts, executives said the company will increase marketing investments this year compared to 2022 to support further growth.

    Core brands Coors Light and Miller Lite each saw double-digit revenue growth in the first quarter, with executives saying that the brands benefited from a Super Bowl ad campaign, the company’s first in 30 years. Independent research shows the positive sales trend for these brands is accelerating in Q2 while a major competitor, Bud Light, takes a big sales hit.

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