Wednesday, 6 January 2016

Financial Orbit wrap 06/01/16

Five sentences or graphics which sum up the Financial Orbit output over the last 24 hours across the website, twitter account and anything else thought about...

1. Today's Financial Orbit Macro (contact me if you would like to go on the distribution list) included a number of interesting charts including...

Ben Bernanke on currency wars – interesting read (link here)


I think the key chart is the one below – which shows the extremity of the US dollar move far better than just the DXY alone (as it is a ‘broad index’ and not very euro/yen centred).  This is what theme 1 is all about…dollar fade helps most – and it is justified. 


2. Today's Financial Orbit Stocks (again, contact me if you would like to go on the distribution list) made the following observation about Wal-Mart:

Wal-Mart is one of the turnaround stocks on my preferred list (link here). I enjoyed this report  which mused over whether the company would ‘do a McDonald’s’ and start to turn themselves around/get a positive share price reaction.  Certainly Wal-Mart is a big online player and has big cost re-positioning scope…which is why it made my list. 


3. Today's first Financial Orbit Immediate (please contact me if you would like to go on the distribution list) discussed the European PMI services numbers at length...with the conclusion that more QE was inevitable. 

4. Today's second Financial Orbit Immediate mused on the Monsanto quarterly numbers where they highlighted strong innovation, a bottom line hit by FX...



...still challenges about trying to do the Syngenta deal but ultimately I concluded: 
At US$90/share as Monsanto was at the time of my October write-up it is a buy, here I will wait on buying more and retain my large position in Syngenta.  For longer-term investors unworried about any bid related volatility US$95 (and the multiples above) is a solid accumulation point.  I would price Monsanto at x14s EV/ebit implying a return to last summer’s trading range of the US$110s.  
5. And finally...so many interesting FOMC minutes angles:



And that pushed the dollar down...but markets took no great relief from it.  The tough start to the year continues...

As I observe on Twitter...it is all about the dollar at the moment: 

"The stronger dollar appeared to weigh on earnings growth across many sectors". Yep. Next FOMC minutes are they calling it down?

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