virus and market update ?3

12:54 30-Jun-20

To the east-west tensions you can add the FCC formally declaring Huawei and ZTE national security threats.  The impact to NOK is probably already priced in, as this is just a step in the dance I'd laid out, but another one worth mentioning.

Perhaps the note below could have waited for today, as these company specific notes are slightly more consequential... 

Resonant (barely) met its goal of shipping XBAR WiFi filter samples in June.  That puts any revenue still several months off, but each step toward revenue diversification is important.

Himax has also introduced a product that integrates its WiseEye sensor with Google's TensorFlow.  It's interesting, but I doubt it will move the needle. 

CenturyLink has a nice but equally minor win follow on order with NASA.

AES makes another, much smaller coal divestiture, while the Brazilian Development Bank looks to sell its stake in AES Tiete Energia. 

All that really matters for now is that neither east west tensions nor the pandemic are over and neither is the Fed's response.

On 6/29/20 10:16 AM, Esekla wrote:

The world passed 10M COVID-19 cases and half a million deaths over the weekend, with over a quarter of those in America.  Apple has had to re-close many of its stores and Microsoft is never reopening its own.  There have been many heroic efforts to help those who need it most, but the market being within spitting distance of all-time highs should provoke a condemnation of the federal response.  That needs to be withdrawn at some point or else nominal dollar gains won't be worth much in real value terms.

In such an environment, it will probably help companies like Resonant and ExOne to be added to Russell indexes, but I don't care other than viewing it as an opportunity to continue tapering my equity exposure.  It's been years since I've had any position in EMAN and the company raising capital through share sales will continue to keep me away.  Similarly, GMLPP continues to be the only way I'm willing to take further risk on Golar, as hard-hit Brazil expands its natural gas production with help from Shell.  I wouldn't be surprised to see th Golar bonds remain stressed until quarterly redemption begins in September.

Most of Europe (excluding Sweden) seems to legitimately be doing better on the virus front and Nokia's new CEO will start a month earlier than planned.  The company also got an expected €400M 5G win in Taiwan, which does nothing to alter my wait for a better price stance on NOK.  Vodafone is more interesting to me at current prices, especially after reports that Google may take a 5% stake in its Indian business, which continues to bleed subscribers to competition.

As with Thursday's note, none of this matters much to the market yet.  Invest cautiously.