Video commentary for September 9th 2019
A link to today's video commentary is posted in the Subscriber's Area.
Some of the topics discussed include: Germany's recession risk and potenital for disappointment from the ECB. the unreliability of Chinese data, Wall Street steady, Pound firm but FTSE weak, gold eases, silver extends pullback,
China Says Growth Is Fine. Private Data Show a Sharper Slowdown
This article by Mike Bird and Lucy Craymer for the Wall Street Journal may be of interest to subscribers. Here is a section:
SpaceKnow tracks about 6,000 industrial locations in China and analyzes data on night-light luminosity and infrared bands—indicators of heat produced by electricity or factories—from about half those sites roughly every two weeks. It produces a proprietary index that has become a leading Chinese PMI indicator used by hedge funds, central banks and policy makers, said CEO Jeremy Fand.
“You can see factories suddenly go quiet, giant subdivisions, huge construction projects just get halted,” said Mr. Fand. In August, SpaceKnow’s index pointed to a slight expansion, coming close to official figures that analysts said reflected a pickup in production before more U.S. tariffs came into effect.
Mr. Fand said the company is also working on a project for a U.S. government agency that is trying to analyze the impact of U.S. tariffs on China’s economy and certain industries.
Last December, U.S. exchange operator Nasdaq Inc. bought an alternative-data business called Quandl Inc. Bill Dague, a data scientist leading alternative research at Quandl, has traveled to China in recent months to hunt for new data sets for clients.
“Because it is so hard to get data out of China, demand has surpassed supply,” he said, adding that escalating U.S.-China tensions have made domestic data vendors less willing to share information with U.S. companies.
Nothing is ever as it seems in China. Investors were willing to look past that fact while the economy was posting world-beating growth. With the expansion slowing investors now have a clear incentive to do whatever is necessary to find accurate data on both the quality and quantity of the economic expansion.
A Wide Range of Testing Results on an Excellent Lithium-Ion Cell Chemistry to be used as Benchmarks for New Battery Technologies
Thanks to a subscriber for this report which may be of interest to subscribers. Here is a section from the introduction:
We present a wide range of testing results on an excellent moderate-energy-density lithium-ion pouch cell chemistry to serve as benchmarks for academics and companies developing advanced lithium-ion and other “beyond lithium-ion” cell chemistries to (hopefully)exceed. These results are far superior to those that have been used by researchers modelling cell failure mechanisms and as such, these results are more representative of modern Li-ion cells and should be adopted by modellers. Up to three years of testing has been completed for some of the tests. Tests include long-term charge-discharge cycling at 20,40 and 55°C, long-term storage at 20,40 and 55°C, and high precision coulometry at 40°C.Several different electrolytes are considered in this LiNi0.5Mn0.3Co0.2O2/graphite chemistry, including those that can promote fast charging. The reasons for cell performance degradation and impedance growth are examined using several methods. We conclude that cells of this type should be able to power an electric vehicle for over 1.6 million kilometers (1 million miles) and last at least two decades in grid energy storage. The authors acknowledge that other cell format-dependent loss, if any, (e.g. cylindrical vs. pouch) may not be captured in these experiments.
The potential electric vehicles with modern battery chemistries to run for upwards of 1,000,000 miles range is a serious gamechanger. That is particularly true for the haulage sector where diesel’s longevity and fuel efficiency have been unchallenged for decades.
ECB Needs a Bazooka to Validate Richness of Bund Valuations
This note by Tanvir Sandhu for Bloomberg may be of interest to subscribers.
Concerns about ECB underdelivering keeps the pressure on bunds. A wide range of possible outcomes from Thursday’s meeting slants towards near-term profit taking of very rich valuations.
ECB speakers have been trying to dial back the extreme easing expectations priced by markets to give Draghi some room to surprise, but the hurdle still remains high
Policy makers will need to be aggressive on rates and keep the future path suppressed otherwise a modest depo rate cut risks seeing EUR rates continue to sell off in the near-term given the impact of the lower bound on the curve
From a macro valuation perspective there is room to sell off (with fair value of -0.43%)
Setting the path to go deeply negative on rates and lifting the buying limits on any QE announcement to make it scalable is key to seeing bunds extend the rally in the short term; however, positioning for a disappointment via options is still worth looking at given the difficulty for Draghi to engineer a dovish surprise
The ECB has quite a dilemma in front of it. The short end of the yield curve is sporting negative yields for just about all sovereigns. However, when we look at the shape of the yield curve for individual countries, compared to the Eurozone as a whole, we get two very different pictures.
Eoin's personal portfolio precious metal trading position profit taken September 5th 2019
Eoin Treacy's view
One of the most commonly asked questions by subscribers is how to find details of my open traders. In an effort to make it easier I will simply repost the latest summary daily until there is a change. I'll change the title to the date of publication of new details so you will know when the information was provided.
2019: The 50th year of The Chart Seminar
The London Philharmonic Orchestra is holding a concert in David’s memory on October 5th October at the Royal Festival Hall. There is a reception between 5.30 and 6.45 in the Foyle Pavilion, Level 3, Green Side and subscribers are well to join David’s family there for light refreshments. Following the reception, we will move to the Beecham Bar, Blue Side, Level 5 for a short talk by Tim Walker, Chairman of the LPO.
If you wish to attend the concert as well, which includes a performance of Elgar’s Cello Concerto by the Young Musician of the Year, it begins at 7.30 and you may book tickets (£67) by telephone on 020 7840 4242 quoting the code Fuller Concert.
Since this is the 50th year of The Chart Seminar we will be conducting the event on October 3rd and 4th to coincide with the memorial on the Saturday.
In the meantime, if you have any questions, would like to attend, or have a suggestion for another venue please feel to reach out to Sarah at [email protected]
The full rate for The Chart Seminar is £1799 + VAT. (Please note US, Australian and Asian delegates, as non-EU residents are not liable for VAT). Annual subscribers are offered a discounted rate of £850. Anyone booking more than one place can also avail of the £850 rate for the second and subsequent delegates.