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US Q3 GDP bounce exaggerated by soyabeans and deflator
Q3 US GDP was “better than expected” at +2.9% and according to Capital Economics, “confirms that the economic recovery has regained some of the momentum lost with last year” and ..”As such leaves the Fed firmly on track to raise interest rates in December” Well there you have it, the consensus view from economists! […]
Continue readingAT&T confirms $107.5 agreed offer for Time Warner Inc – GrowthRater NPV of $102 ps incl 50:50 completion assumption
The initial flurry of newswire headlines (*1. see end of article) seemed to focus on the offer price of $107.50 per Time Warner share, with the narrative that AT&T was overpaying. I disagree. The bid is sensibly pitched. The issue markets should be focusing on instead, is whether the bid will ever reach completion in […]
Continue readingUS reported Federal deficit of -$587bn dwarfed by cash deficit of over -$1.4tn
If you haven’t noticed, there is an entire industry of well funded professional spin doctors out there whose business is to present their clients performance in the very best possible light. Whether those clients are corporates trying to game an advantageous cost of capital or a Government claiming to be able to walk on economic […]
Continue readingeBay – Closing long position with gain of +30% (+28% relative: +60% annualised)
eBay long positioned closed at $31.9 ps to crystallise a >+30% absolute and +28% relative gain (vs the S&P500) since we added the stock to the GrowthRater portfolio, just over 5 months ago at $24.5 ps (http://growthrater.com/ebay-added-growthrater-model-portfolio-close-price-24-49/). Annualised, that represents a return of +65% on the trade and +60% on a relative basis against the […]
Continue readingSeptember US non-farm payrolls fall short of expectations – again
The headline seemed so authoritative (“U.S. nonfarm payroll job growth seen pushing case for Fed hikes”) and coming from Reuters as well! http://www.reuters.com/article/us-usa-economy-idUSKCN1270BP Unfortunately, notwithstanding coming off a weak August, September’s non-farm payroll additions of +156k (and +167k for the private sector) fell short of the +175k predicted from Reuters survey of economists. So does […]
Continue readingTesco investors O/D on the Recovery Effervescent Powder
Back in 2013, consensus forecasts were predicting operating margins for FY14 and FY15 in excess of 5% and which in less than a couple of years had more than halved to little more than 2.2%. It is perhaps not surprising therefore that after almost -£8bn of restructuring and impairment charges across FY14 & FY15 and […]
Continue readingBrexit sitzkrieg
Over three months on from the Brexit vote and the World still turns and UK economic activity has been largely unaffected, with August retail sales up +6.2% YoY and September data showing UK consumer confidence index returning to pre-referendum levels (GfK) and UK manufacturing PMI (Markit) hitting 55.4, the highest level since May 2014. Lower […]
Continue readingUS state tax receipts fall by -2.2%; hardly a prelude for a Fed rate increase!
Sometimes the ‘facts’ are difficult to reconcile, particularly when these are government statistics. For Yellen this has included maintaining the fiction that all is well with the US economic recovery, but not so good that the Fed should take its foot off the monetary accelerator. Along with other market commentators we monitor the monthly data […]
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