For those of you who would like to take advantage of our Luck O' the Irish SALE but prefer not to make payments online, you are welcome to send us a check or money order in the amount of $114.12 for a 3-year AD-FREE Premium Service Bundle or $190.20 for a 5-year Bundle. Make checks or money orders payable in US funds to "Investor Village" and send to: Investor Village, P.O. Box 2958, Marrero, LA 70073.
As many of you know, we operate on the honor system around here. So, in closing out our Luck O' the Irish SALE, we wanted to advise those of you who plan to pay by check or money order that you can send a PM to Admin informing us of your intention. We will then upgrade your account for 7 days, allowing you to enjoy our ad-free premium service now and giving you a reasonable amount of time to get your payment in.
This is a semi-private group. You are free to browse messages, but you must be a member of this group to post messages. Join This Group
Group: Canadian Blue-chip Industrial Forum
/ Message Board / Read Message
The ECB increased interest rates for the first time in 11 years this morning in an attempt to cool rampant inflation in the euro zone. The central bank surprised markets by pushing its benchmark rate up by 50 bps bringing its deposit rate to zero, surpassing economist estimates of a 25 bps hike. The market seems to now expect the unexpected in terms of jumbo hikes, with markets remaining flat this morning. Now, what to (un)expect from the Fed next Wednesday, that’s the big question.
Stocks rose in a volatile session yesterday as investors parsed the latest corporate news and the potential for geopolitical risks in Europe. The S&P 500 posted its first back-to-back gain in almost two weeks, with advances in tech and consumer discretionary stocks offsetting declines in defensive sectors, utilities, and health care. The TSX ended the day higher after investors processed the latest inflation figures. Despite CPI rising 8.1% year-over-year in June, the numbers were slightly less than the median estimate among economists.
There’s been a lot of political disruption, and the latest is in Italy. Mario Draghi resigned as Italy’s Prime Minister, delivering his decision to President Sergio Mattarella Thursday morning. The three coalition allies withdrew their support for his government, shattering the unity which had propelled him into office in February 2021. This could put Italy on course for snap elections as soon as early October. The former ECB chief managed to keep the euro together at the height of the sovereign-debt crisis but failed to keep Italian political parties in line, just as the euro-zone grapples with a new energy and inflation crisis.
China wants to attract foreign capital to its financial markets and is now courting European companies to raise funds on the country’s stock exchanges. Overseas firms backed by Chinese investors are among the first candidates being considered, with German forklift maker Kion Group AG studying the possibility of selling depositary receipts on a Chinese exchange through the program. The link is meant to be a two-way road, allowing companies on both sides to sell shares through the program, though so far, it’s only been used by Chinese-listed companies to raise funds on overseas exchanges. Still, China’s Covid Zero policies and concerns over the economic effects of renewed lockdowns have somewhat dimmed the market’s prospects.
It’s hot, everywhere. In an effort to fight global warming, President Joe Biden will announce executive action to confront climate change, including plans to steer federal funds to heat-ravaged communities, though he’s holding off for now on an emergency decree that would allow him to utilize sweeping powers. The president will outline the steps he’s taking at a shuttered coal-fired power plant in Massachusetts, vowing that he won’t allow a congressional impasse on climate legislation to put off urgent action to slow rising global temperatures.
Senate Democrats are high on a bill today that would federally decriminalize, regulate, and impose taxes on cannabis products. The bill faces significant obstacles in the chamber after a draft version was circulated last year. The Cannabis Administration and Opportunity Act would remove marijuana from the list of drugs covered by the Controlled Substances Act and eliminate federal prohibitions in states that have legalized it for individuals aged 21 and older. However, states would retain control over whether production and distribution are allowed.
Diversion: We’d all rather be at a waterpark right now, hope this helps.
The Tactical model
(% equity weight)
Our tactical fund is designed to complement your existing holdings to minimize portfolio volatility. To learn more, please click here.
Tesla is looking to open higher and reporting better-than-expected earnings estimates and delivering almost 254,695 units during the quarter, an increase of 27% from a year ago but below the 310,048 units in the previous quarter. CFO Zachary Kirkhorn said a 50% growth in deliveries in 2022 "remains possible with strong execution" even though the task "has become more difficult" because of the loss of output this year due to the COVID-19 shutdowns in China. Tesla says they are now on a run rate to produce 40,000 cars a week and is heading into 2023 on a 2 million run rate. On a side note, Telsa also announced it has sold 75% of its bitcoin, adding $936 million of cash to its balance sheet. It’s a rapid retreat for Tesla and CEO Elon Musk, who was a heavy crypto booster during last year’s runup, frequently tweeting about various digital currencies.
Despite missing earnings expectations, United Airlines hit a covid recovery milestone reporting its first quarterly profit, $329 million, since the pandemic began without the help of federal payroll aid, which expired almost a year ago. However, United Airlines also announced they will limit flying for the remainder of the year and curtail growth plans in 2023 to try to get a handle on flight disruptions that have roiled the industry, even as it continues to expect profits amid robust travel demand.
Bank of Montreal has agreed to buy Radicle Group Inc., a sustainability-advisory and emissions-measurement firm, to help clients that are working to reduce their environmental impacts. BMO has put an increased emphasis on helping its clients shrink their environmental footprints as part of a plan to reduce the emissions from its lending portfolio to net zero by 2050.
Australian data-services company Link Administration Holdings Ltd. has finally agreed to a new takeover offer by software firm Dye & Durham Ltd., ending on-again-off-again talks with a deal worth $1.7 billion. The new agreement could also include an additional 13 Australian cents per share for shareholders in the next year from a possible sale of Link’s Banking and Credit Management business.
Commodities
Oil prices are down significantly as traders assessed signs of lackluster U.S. gasoline demand and the return of supplies from Libya. Production in Libya now stands above 700,000 bpd, after restrictions on the country’s exports were lifted in recent days, and is is expected to return to 1.2 million bpd within seven to 10 days. Analysts are now saying that average U.S. gasoline prices may have peaked in June, as drivers cut back on spending at the pump, and are not likely to go back to that level unless there is a disruption in oil and refining operations or a spike in oil prices. The fuel’s premium over U.S. crude was more than $60 a barrel at one point in June, and is now less than half that. At the same time, retail fuel prices in the U.S. have fallen for 37 consecutive days.
Copper is lower, extending a period of shaky trading for base metals as investors grapple with a number of threats to global demand. Metals on the London Metal Exchange had clawed back some of their recent steep losses, however, prices are still at the mercy of Europe’s gas crisis, China’s property stress and rising global interest rates. Lower prices have spurred some downstream buying of copper in China but the improvement in demand is not very significant and general sentiment will remain cautious before the Federal Reserve’s policy meeting next week.
Fixed income and economics
The DXY is lower at time of writing, giving up most of yesterday’s gains after the ECB announced a larger than expected rate hike this morning. Officials hiked the main refi, marginal lending facility, and deposit facility rates all by 50 bps and twice the survey by economists. This takes the cost of financing in the region to its richest level since early 2013 with the decision based on “the Governing Council’s updated assessment of inflation risks for the effective transmission of monetary policy”. More notably in this announcement is the end of negative interest rate policy for the central bank, whom had been the only global monetary authority to dabble with sub-zero deposit rates. The EUR (which accounts for more than half the weight in the dollar weighted index) is now trading up to 1.0260 for a near two-week high against the greenback with traders now pricing in 60 bps of hikes at the September meeting. The ECB had for weeks guided markets to expect a 25 bps increase but sources close to the discussion said 50 bps was put in play shortly before the meeting as indicators pointed to a further deterioration of the inflation outlook. Officials also agreed to provide extra help to the 19-country currency bloc's more indebted nations, approving a new bond purchase scheme called the Transmission Protection Instrument (TPI) which is intended to cap the rise in their borrowing costs and limit financial fragmentation. It will be used as a measure to counter “unwarranted, disorderly market dynamics that pose a serious threat to the transmission of monetary policy”. Basically, the ECB will have the outright ability to purchase the debt of nations who see their funding costs skyrocket in abnormal times.
Chart of the day
Markets
Quote of the day
To find joy in work is to discover the fountain of youth. Pearl S. Buck