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

    Rivian Tops Tesla Gains In Premarket Trading: What's Powering EV Stock Higher?

    This newswire item may be of interest. Here is a section: 

    Kelley Blue Book sales data gathered from the state Registry of Motor vehicle showed registrations of 8,145 Rivian vehicles in the first quarter, analyst Chris Pierce said, citing information from Cox Auto’s first-quarter 2023 “Industry Insight Calls.” This compares to the consensus estimate of 7,167 vehicles, he added.

    The analyst also noted that first-quarter used vehicle data showed that fewer used Rivian vehicles were on sale relative to Lucid Motor Group (NASDAQ:LCID) and Ford Motor Co.’s (NYSE:F) Lightning EV pickup truck, which is a direct competition to Rivian’s R1T pickup truck.

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    White Sugar Rises for Third Day on Lackluster Thai, India Crops

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

    Buyers are facing difficulties building up stockpiles as crops in several regions have been poorer than expected. Low fertilizer application in Thailand, excessive rains in India, and dryness in Europe, Mexico and parts of China led to several downward revisions to supply estimates.

    In Thailand, the world’s fourth biggest grower, all but 5 of 57 millers already stopped crushing due to a lower-than-expected harvest, the Thai Sugar Millers Corp. said. Egypt and Algeria recently announced measures to restrict sugar outflows from the countries.

    Crop issues removed 4 million metric tons from world trade flows in the first quarter of this year, StoneX analyst Ricardo Nogueira wrote in a report. Such volumes would be crucial to help ease current tightness in global supplies, especially since it will take time before a large output from Brazil can reach destinations. 

    However, Brazilian supplies may not bring much relief to the refined sugar market, said Michael McDougall, managing director at Paragon Global Markets. The country is the world’s top supplier of raw sweetener, but its production of refined is small.

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    Logic, Magic, And the Outlook For Retail Stocks

    This article from Barron’s may be of interest to subscribers. Here is a section: 

    Investors are worried about a potential recession, but you have said that discretionary retail spending is already in a recession. How do you expect it to unfold?

    It seems that in the past few months, we've seen a consumer-discretionary recession. The consumer still has money, but you don't need a new big-screen TV if you bought one during the Covid pandemic, or new outerwear if you bought a new coat last year as people started going out again.

    We are seeing consumers return to prepandemic behaviors -- things we were talking about 10 years ago, such as shopping close to need, shopping during events, looking for promotions. The problem, which has been consistent but sequentially improving, is that inventories can't adjust that fast. Also, when stimulus dollars were flowing, consumers weren't that price-sensitive because they had money in their pockets. Now the sensitivity has increased.

    Is inflation now semipermanent?
    I think so. Prices will stick, and there might be disinflation, but there won't be deflation. We are at a new level because of labor; we will see some relief in freight and the average unit cost of some ingredients, but labor costs will be sticky. Apparel has been problematic, because the price of shirts basically has stayed the same for a decade. A little bit of inflation is healthy, but this level has been wreaking havoc in demand trends. Your food cost at Walmart was up by a midteens percentage [in recent months]. That's a good indicator of how the whole country is faring.

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    Sweden Wrestles With an Economic Crisis Built at Home

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

    Sweden has long fallen short on its constitutional pledge to provide an affordable place to live for all of its 10.4 million people, but until recently that was masked by the growing economy which had helped disguise flaws in the system. 

    The shortage of affordable accommodation is hitting recruitment. The Stockholm Chamber of Commerce reported last year that three out of four heads of human resources said the housing situation was making it harder for their firms to hire new staff. 

    Rents are negotiated annually by landlords and the tenants association. Advocates say the system helps create a rental market in Stockholm where teachers, police officers, street cleaners and other public sector workers can afford to live alongside bankers, software developers and government officials. Yet supply hasn’t kept up with demand for decades. Average waiting times for a rent-controlled apartment is now 9.2 years, but can stretch up to 20 years in some parts of the capital.

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    Santander launches a blockchain-based foreign exchange service that uses Ripple's technology

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

    Santander’s blockchain-powered foreign exchange platform is currently live in four different countries — Spain, the U.K., Brazil and Poland. A wider roll-out is expected in coming months, the bank said.

    Innoventures, a $200 million fintech, or financial technology, venture capital fund set up by Santander, was one of a number of investors to participate in Ripple’s first round of funding in 2015.

    Ripple has struck partnerships with multiple banks and other financial institutions, including Santander. Banks are less keen to use the firm’s digital currency XRP, but earlier this year two money transfer firms, MoneyGram and Western Union, announced projects involving the cryptocurrency.

    On Wednesday, Ripple invested $25 million into a fund started by Blockchain Capital, a venture capital firm dedicated to blockchain.

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    Banking Crisis Raises Concerns About Hidden Leverage in System

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

    Fund managers are also concerned. A systemic credit event poses the biggest threat to global markets, and the most likely source of one is US shadow banking, according to a survey of investors published last week by Bank of America Corp.

    The US government’s top financial regulators signaled in February that they would consider whether any nonbank firms merit tougher oversight as systemically important institutions. 

    The Financial Stability Oversight Council will put “nonbank financial intermediation” back on the table as a priority for 2023, according to a statement from the Treasury Department. The Federal Reserve, the Federal Deposit Insurance Corp. and the Financial Stability Board declined to comment for this story. 

    European Central Bank Vice President Luis de Guindos warned in an interview with Business Post published on the ECB website Sunday that nonbanks “took a lot of risks” during the era of low interest rates and potential vulnerabilities “can come to the surface” as monetary policy changes. 

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    Binance, CEO Sued by US Derivatives Watchdog for Violations

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

    The agency said that Zhao, Lim, other senior managers failed to properly supervise Binance’s activities and took steps to violate US laws, including instructing American customers to use virtual private networks, or VPNs, to obscure their location and directing “VIP customers” with US ties — often institutional market participants — to open Binance accounts under the name of shell companies. 

    In its complaint, the CFTC also said Binance’s own documents for the month of August 2020 showed that the platform earned $63 million in fees from derivatives transactions, and that about 16% of its accounts were identified as being held by US customers.

    Documents
    The CFTC alleged that the company intentionally destroyed documents. At the same time, Binance makes frequent use of the encrypted messaging app Signal to communicate with US customers, at Zhao’s instruction, the agency said.

    Since at least 2021, the CFTC has been probing Binance over whether it failed to keep US residents from buying and selling crypto derivatives. CFTC rules generally require platforms to register with the agency if they let Americans trade those products.

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    EU Moves Toward Zero-Emissions Cars After German Deal on E-Fuels

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

    E-fuels, made using renewable energy and carbon dioxide captured from the air, aren’t seen as a viable solution for the vast majority of cars, given their high cost and current lack of availability. Instead, the bulk of carmakers in the region are expected to remain focused on battery-powered vehicles.

    “We see e-fuels as a useful addition to the existing fleet of combustion engines and for special applications such as emergency vehicles or limited series, the Porsche 911 for example,” Volkswagen said in a statement. Europe’s biggest carmaker said that it remained committed to the electrification
    of its fleet.

    The deal, announced on Saturday, was enough for Germany to drop its opposition to the proposal.  A push by the country’s pro-business FDP party, the junior member of Chancellor Olaf Scholz’s governing alliance, for the commission to come forward with more assurances on e-fuel cars had delayed a vote earlier this month.

     

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