Archives of “May 3, 2019” day

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Charlie Munger and Warren Buffett. Two peas in a pod.

  
Analysis, Education

They even sound alike

They even sound alike
Watching Charlier Munger and Warren Buffett give a casual interview on CNBC, reminds you that keeping things simple is often better than getting complicated.
Munger and Buffett humbly commented that:
  • I don’t have a lot of areas of expertise but stick close to those I understand
  • We don’t try to jump over 7 foot bars just 1 foot bars that are easy to step above
  • Other people who are very intelligent have isolated patches of massive stupidity. We just avoid those. It is a simple formula.
  • We don’t think that we can analyze 90% of the businesses
Munger also added
  • “What is interesting to me is that Trump is right on some things”
However, he refused to elaborate.
The other thing of note, if you closed your eyes, you could not tell who was talking. They sound and talk in a very similar tone and fashion.
They also have a lot of fun together.
They are two peas in a pod.

European shares end the session modestly higher

  
Analysis, Global Indices

German Dax +0.4%.  France’s CAC, +0.1%.

The major European stock indices are ending the session with modest gains. The provisional closes are showing:
  • German DAX, +0.4%
  • France’s CAC, +0.1%
  • Britain’s FTSE, +0.3%
  • Spain’s Ibex, +0.5%
  • Italy’s FTSE MIB, +0.24%
For the week, the results were mixed:
  • German DAX, +1.0%
  • France’s CAC, -0.3%
  • Britain’s FTSE, -0.8%
  • Spain’s Ibex
  • Italy’s FTSE MIB, +0.2%

Eurozone April preliminary CPI +1.7% vs +1.6% y/y expected

  
  Analysis

Latest data released by Eurostat – 3 May 2019

  • Prior +1.4%
  • Core CPI +1.2% vs +1.0% y/y expected
  • Prior +0.8%
The notable thing about the report here is that the core reading jumps to a six-month high as it rebounds strongly in April. But as highlighted earlier, there is an upside bias already built into the report due to Easter seasonality so I would brush this aside to that and wait on May and June readings before coming to a conclusion whether or not inflationary pressures are seen to be sustainable.
EUR/USD is barely moved on the report here despite the positive beat as this is very much expected since Tuesday. Price holds at 1.1163, still in a narrow range on the day.

ICYMI: JP Morgan on Global manufacturing growth …. lacklustre

  
Analysis, Economy

JP Morgan global manufacturing PMI for April  – the one line summary is:

  • Global manufacturing growth remains lacklustre as international trade flows contract again
The data was published overnight (hence the ICYMI), came in at 50.3 in April,
  • from 50.5 in March
  • April’s results is the lowest since June 2016
JPM comments:
  • “The global manufacturing sector remained subdued at the start of the second quarter, with the PMI barely above the 50.0 mark and rates of expansion in output and new orders still lackluster and well below long-run trend levels. 
  • In particular, the capital goods sector PMI underscores that business capex remains stalled. International trade flows remain a significant drag on the manufacturing sector. New export business has now decreased for eighth successive months.”
JP Morgan global manufacturing PMI for April  - the one line summary is:

Gold – here is who is buying less (and why there is a surplus in the market)

  
Analysis, Gold / Silver

Latest data from the World Gold Council, quarterly report for Q1 2019:

Council estimates global central banks purchased 145.5t of gold in 1Q19
(up 68% y/y but, but down on the 165.6t purchased in 4Q18 … note that a peak of 253t in 3Q18)
  • other sectors (includes jewellery and ETF investment) slowed, demand down 17% q/q  to 1,060t in 1Q19
Gold supply down  4% q/q to 1,150t
Adds ING analysts:
  • leaving the market with a net surplus of 90t in 1Q19
Latest data from the World Gold Council, quarterly report for Q1 2019:
—
The World Gold Council (this from their site):
  • is the market development organisation for the gold industry. Our purpose is to stimulate and sustain demand for gold, provide industry leadership, and be the global authority on the gold market. 
Just so you know, right?

US Chamber of Commerce officials says US-China are in ‘endgame’ of negotiations

  
  Analysis

US Chamber of Commerce official

  • US and China continue to make progress on a range of issues
  • Business community believes getting a US-China trade deal sooner is better than getting no deal in long term
The earlier report about an ‘impasse’ in talks has faded, because it was speculation (as I warned). That said, it’s not like the Chamber of Commerce has a seat at the negotiating table so this is just informed speculation.

US stocks close lower but well off the lows

  
Analysis, US Market

Beyond Meat IPO helps to save the day

The US stocks were moving lower in the US morning session, but an IPO for Beyond Meat which was priced at $25, opened at $46 and move sharply higher from there (trading up 163% on the day at $64.90).
Now a small-ish IPO does not make a market, but it did take some of the sting out of the declines which saw the Dow down about -250 points at the lows. It is ending with half those losses.  The Nasdaq is down for the 3rd day. The S&P and Dow are down for the 2nd day.
The numbers at the close are showing:
  • The S&P index -6.21 points or -0.21% at 2917.51. The low reached 2900.50 (nice round number)
  • The Nasdaq fell -12.867 points or -0.16% at 8036. The low reached 7976.
  • The Dow fell -122.35 to 26307. The low reached 26180.36.
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