Category Archives: News

Thematic Reads: Week of January 27, 2020

Thematic Reads: Week of January 27, 2020

Each week Team Tematica consumes a voracious amount of content as we look to stay on top of the latest data and mine it for tailwind and headwind signals for our 10 investment themes.

Aging of the Population
The global demographic shift towards a more senior population


Cleaner Living
Growing demand for items that claim to be better for you and the planet:


Digital Infrastructure
The Buildout and upgrading of our Networks, Data Storage Facilities, and Equipment


Disruptive Innovators
Business models designed to transform an entire industry and leap-frog over incumbents.


Digital Lifestyle
The increasingly digital landscape that now underpins the entire consumer experience.


Guilty Pleasures

The products and services people will consume no matter the economic environment.


Living the Life

Those things that bridge the gap between want and ability at every socioeconomic level.


Middle-Class Squeeze

Consumers trading down when and where possible or looking to stretch the disposable dollars they do have.


New Global Middle Class

Areas around the world where rising disposable incomes are driving demand for a host of products and services.


Safety & Security

Reflecting the evolving needs across individual, cyber, corporate and homeland security.



What Else We Are Loving

Other reads, experiences, products, services and the like that we enjoyed so much this past week we just had to share

  • This coming Sunday will be the game… THE game that will capture global attention as the San Francisco 49ers square off against the Kansas City Chiefs in Super Bowl LIV. And as much as we will be watching the game and its outcome — 75 experts surveyed by ESPN have the Chiefs favored over the 49ers (48-27) with the most common predicted final score of 31-27 — team Tematica will, of course, be watching the commercials, sampling adult refreshments and, of course, eating wings. This very well could include sampling the new Old Bay hot sauce from McCormick.

 

Disclosures

Daily Markets: The 737 Max Crisis Hits Boeing’s Earnings

Daily Markets: The 737 Max Crisis Hits Boeing’s Earnings

As your authors commented to each other when discussing yesterday’s market rebound following the coronavirus inspired sell-off on Monday – “that didn’t last long!”  The Nasdaq 100 lead the rebound, gaining 1.6% on the day with the Nasdaq Composite a close second, up 1.4%. The S&P 500 and Dow Jones Industrial Average rose 1.0% and 0.7% respectively and the CBOE S&P 500 Volatility Index (VIX) fell 10.7%. Helping fuel the rebound were a number of high-profile December quarter earnings reports that delivered better than expected results, but in some cases offered a cautiously optimistic outlook as managements continue to assess the impact to be had from the virus – see Stocks to Watch below.  

The number of confirmed coronavirus cases in China approached 6,000 with total deaths reaching more than 130, prompting the Hong Kong Hang Seng fell 2.8% to a seven-week low on the first day of trading after the Lunar New Year holiday. China’s financial markets will remain closed until next Monday after authorities extended the Lunar New Year break by three days as they grapple with the worsening virus that has now recorded more cases than SARS. The People’s Bank of China reiterated plans to use its tools to ensure liquidity once the interbank market reopens on Feb. 3. And as the number of reported coronavirus cases continues to grow, we can add the United Arab Emirates to that list as the first cases of the virus were reported earlier today. 

The Trump administration is reportedly considering a temporary ban on all flights from China to the U.S., and…

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Disclosures

Daily Markets: Despite Earnings, Investors Remain Focused on Spread of Coronavirus

Daily Markets: Despite Earnings, Investors Remain Focused on Spread of Coronavirus

Despite the accelerating velocity for the current earnings season, markets remain focused on the rapidly spreading coronavirus which has surpassed 4,500 cases in China and led China to restrict travel to Hong Kong as the death toll tops 100. Some 60 million are under travel restrictions in China, and select countries, including Indonesia and the Philippines, have restricted Chinese tourists. Outside of China, there are more than 60 confirmed cases, including ones in the US, Australia, France, and Germany. The US Centers for Disease Control and Prevention raised its travel precautions for China to its highest level, and at last count it is monitoring 110 possible coronavirus cases across 26 states.ADVERTISING

The escalation weighed on equity markets yesterday, leading the Dow Jones Industrial Average to fall 1.6%, its biggest one-day drop since October. The S&P 500 fell 1.6% as well extending its 2-day decline to 2.5% and the Nasdaq Composite dropped 1.9%, its worst day since August. As of yesterday’s close the Dow, NYSE Composite and the Russell 2000 were all in negative territory for the year. Year to date, at up 2.5% as of last night’s close, the Nasdaq 100 is the strongest performer of the major domestic equity indices, the Nasdaq Composite was up 1.9% and the S&P 500 up 0.4%. The CBOE S&P 500 Volatility Index rose over 25% yesterday and is now up 32.3% year-to-date.

As reports indicate the coronavirus continues to spread…

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Daily Markets: As Coronavirus Expands, So Do Investors’ Worries

Daily Markets: As Coronavirus Expands, So Do Investors’ Worries

Investors are starting the week off with itchy fingers as they look to assess the growing impact of the coronavirus. As we write today’s Daily Markets note, roughly 2,800 people in China have been infected and 80 killed by the disease, and infections also reported in Europe and the US.  In response, Hong Kong has shut its schools until Feb. 17 to help prevent the virus from spreading further and China has locked down 17 cities. Yesterday the US’s Centers for Disease Control and Prevention (CDC) announced another case in the US bringing the total to 5 but per the CDC there are more than 60 patients under investigation for possible infection in over 20 US states. One of the main concerns is how the outbreak will impact China’s Lunar New Year holiday season that spans Jan. 25- Feb. 8, but as the virus spreads so too are investor concerns over what the potential impact could be in other parts of the world and on the global economy.  Also stoking investor worries, five Katyusha rockets were fired at the Green Zone in Baghdad last night, one directly hitting the U.S. Embassy building. 

All of the above has given rise to a risk-off mood in equity markets today. In Asia, most markets are closed for the Lunar New Year, but Japan’s Nikkei…

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Daily Markets: Coronavirus Escalation Forces Companies To React

Daily Markets: Coronavirus Escalation Forces Companies To React

Despite a rough start yesterday, the major US equity indices managed to close little changed after the World Health Organization (WHO) calmed rising fears around the coronavirus coming out of China. The WHO’s declaration that coronavirus is not a global emergency helped travel stocks such as American Airlines (AALand United Airlines (UAL) rebound. In contrast to the WHO, however, yesterday the Centers for Disease Control and Prevention (CDC) escalated its health warning to a level 3.

Overnight things coronavirus continued to escalate and as we write today’s Daily Markets note, there are 875 confirmed cases with reported deaths now totaling 26, and all but two of China’s 31 provinces and municipalities reporting cases of the virus. In response, China has instituted travel restrictions that will affect at least 20 million people across 10 cities. The big concern here is how the outbreak will impact China’s Lunar New Year holiday season that spans Jan. 25- Feb. 8. The restricted travel is likely to hit consumer-related activity hard during the holiday season, and we are already starting to see companies such as Walt Disney (DIS) take action while others, like Remy Cointreau (REMYY) are warning over the potential impact to their business – we discuss both below. Until the virus is contained, we suspect the ranks of companies taking action and issues warnings will only grow in size as will the impact on China’s economy in the current quarter.

The Shanghai market was closed for the first day of the Lunar New Year festival…

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Disclosures:

Daily Markets: Coronavirus Uncertainty Weighs on Global Stocks

Daily Markets: Coronavirus Uncertainty Weighs on Global Stocks

Despite a rather volatile session yesterday, stocks ended basically flat but well off their intraday highs. That said, the Nasdaq 100 is up nearly 40% YoY and up nearly 120% over the past four years. While many are comparing today’s markets to those of the late 1990s, your authors included, the Nasdaq 100 rose over 600% in the 4-years leading up to the dotcom bust – a much wilder rise than this time around. 

Turning to today, which sees the expanding coronavirus outbreak and response taking center stage, Asian equities finished the trading day lower, led by China’s Shanghai Index that fell 2.8%. Reports indicate that besides halting travel from Wuhan, the city where the new coronavirus first appeared, Chibi and Huanggang will be quarantined and Beijing announced that all public gatherings planned for next week will be canceled. At last count, the virus was responsible for the death of 17 people and has reportedly infected another 600 people. The travel ban, which looks to limit the expanse, comes before the Lunar New Year, the largest gift-giving holiday, and will in all likelihood crimp related spending. Later today the World Health Organization will decide on Thursday whether to declare the outbreak a global health emergency, which would step up the international response.

European indices are…

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Disclosures

Thematic Reads: Week of January 20, 2020

Thematic Reads: Week of January 20, 2020

Each week Team Tematica consumes a voracious amount of content as we look to stay on top of the latest data and mine it for tailwind and headwind signals for our 10 investment themes.

Aging of the Population
The global demographic shift towards a more senior population


Cleaner Living
Growing demand for items that claim to be better for you and the planet:


Digital Infrastructure
The Buildout and upgrading of our Networks, Data Storage Facilities, and Equipment

 


Disruptive Innovators
Business models designed to transform an entire industry and leap-frog over incumbents.


Digital Lifestyle
The increasingly digital landscape that now underpins the entire consumer experience.


Guilty Pleasures

The products and services people will consume no matter the economic environment.


Living the Life

Those things that bridge the gap between want and ability at every socioeconomic level.

 


Middle-Class Squeeze

Consumers trading down when and where possible or looking to stretch the disposable dollars they do have.


New Global Middle Class

Areas around the world where rising disposable incomes are driving demand for a host of products and services.


Safety & Security

Reflecting the evolving needs across individual, cyber, corporate and homeland security.

 



What Else We Are Loving

Other reads, experiences, products, services and the like that we enjoyed so much this past week we just had to share

  • After the 2019 year-end holidays, Tematica’s Lenore Hawkins decided to get herself a late Christmas present of the reMarkable tablet, and to put it mildly, she is loving it!. As an avid notetaker and a chronic traveler, this device is utterly perfect. First off, the sensation really is as close to writing on paper as possible, but it is even a wee bit better as rather than using an eraser when my handwriting inexplicably goes off the rails, a simple tap on “undo” and that wayward writing never even happened. Notes can be organized into notebooks and folders, all are synced in the cloud, and for those who are so inclined, it can translate written notes into typed text. The wonderful device allows the obsessive note-taker to have all their notes with them, wherever they go, while only taking along one very light device. It also allows for annotation of PDF documents, what more could one want? Lenore sums it up this way, “This one is definitely a winner for me.”.
Daily Markets: Taking Stock of Earnings and The Coronavirus

Daily Markets: Taking Stock of Earnings and The Coronavirus

The major US equity indices all closed in the red yesterday on the news that the Center for Disease Control identified the first case of coronavirus in the US – a traveler from China was diagnosed in Seattle. Shares of Wynn Resorts (WYNN) and Las Vegas Sands (LVS) lost 6.2% and 5.3% respectively on concerns that the increasingly global outbreak could negatively impact international travel. Following reports China has taken steps to contain the coronavirus, Asian equities finished the trading day higher. At the same time, however, Chinese officials announced that more than 400 cases of the new coronavirus have now been identified with the death toll hitting nine, and the virus is “adapting and mutating.” We suspect we have not heard the last of this and we expect investors will closely monitor coronavirus developments to be had and assess implications for airline, gaming, hotel, and other travel-related companies. The World Health Organization is expected to issue a formal statement on the matter later today. 

The US Senate will hear opening arguments in President Donald Trump’s impeachment trial today, followed by several days of presentations. So far the market has been completely disinterested as President Trump makes the rounds at the World Economic Forum in Davos. In interviews this morning, President Trump shared trade talks with the EU have begun and he would be “very surprised” if he had to implement auto tariffs; he expects to announce a “middle-class tax cut” over the next 90 days but acknowledges Republicans will need to win back the House in 2020 to pass that initiative, and his administration is developing a healthcare plan. 

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Disclosures

Daily Markets: Virus-Related Concerns in China Weighing On Markets

Daily Markets: Virus-Related Concerns in China Weighing On Markets

Coming off the Martin Luther King holiday for which the US markets were closed yesterday, shares in Hong Kong led losses in Asia after Moody’s cut its rating for the city from Aa2 to Aa3 on Monday; there are also concerns over a new strain of coronavirus in China just as Lunar New Year holiday travel heats up. As we write today’s Daily Markets note, nearly 300 people have been diagnosed globally, with the vast majority in China, and the death toll in China has climbed to six. The World Health Organization will meet tomorrow to discuss whether to declare the outbreak an international public health emergency. Those concerns have rippled across global markets with European equities trading off and US equity futures pointing to a lower open.

Thanks to the MLK holiday, we have a shortened trading week ahead, but that doesn’t mean there’s any less going on over the next four days. Between impeachment, the World Economic Forum (WEF), upcoming Brexit and economic data and earnings season, investors are likely to have their hands full. Speaking at the WEF today, President Trump commented phase two China trade talks with begin shortly and tariffs will remain in place during those negotiations. Also at the WEF, US Treasury Secretary Steven Mnuchin said the Trump administration would propose a new middle-class tax cut later this year.

Today’s economic calendar …

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Disclosures