Inflation - There's None (Apparently)

2021 news Feb 11, 2021

Published by Anthony Di Pizio

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So Many Questions

Yesterday, the US Bureau of Labor Statistics (BLS) released its monthly Consumer Price Index (CPI) inflation data, which showed a 1.4% year-over-year rise in prices. This was slightly weaker than the 1.5% expected, signaling that inflation still remains muted. 

Though, if you watch financial news or monitor finance chatter on various social networks, you will see mounting questions about this data in contrast to the recent face-ripping rallies in various commodity prices. Lumber, for example, has been a hot topic as futures prices reach an all-time high of $950 - about 100% higher than the February 2020 pre-pandemic peak. 

How does a rise in lumber futures translate to the real world? Well, it is estimated that the run has added $16,000 in additional build cost to a traditional single family home (CNBC). It's statistics like these that make investors...

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As Vaccinations Climb, Play the Long Game

2021 news s&p500 Feb 03, 2021

Published by Anthony Di Pizio

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2021 - The Full Year Picture

Despite any short term market turbulence, there is a consensus for a higher S&P500 benchmark index by the end of 2021. At the moment JP Morgan holds a Street high target of 4,400 which represents a more than 15% gain from yesterday's close. What feels more important though is the minimum target of 3,800 held by both Citi and Bank of America - which is exactly where we are today. (Source: CNBC Market Strategist Survey)

Irrespective of all the uncertainty, it appears even the most pessimistic of the major banks on Wall Street expect stock prices to remain buoyant for the year. There is no doubt any shot we have at reaching some of the more lofty S&P500 targets will be predicated on a resolution to the COVID pandemic. 

As we watch vaccine programs roll out globally, we think there is cause for optimism that by mid-year, we'll be living under...

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2021 - Two growth sectors to watch

2021 news Dec 14, 2020

Published by Anthony Di Pizio

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Starting Fresh

Like most of you, we look forward to welcoming the new year and leaving behind the craziness of 2020. With vaccines now being distributed in most major developed countries, we anticipate the return of economic growth and more normalised financial market conditions. 

We want to turn our attention to 2021 and leave you with two underdeveloped but powerful sectors we're watching.

1. Agritech

Agriculture is primed for a shakeup. It has mostly been left behind by the technology boom and whilst farms are more productive now than in the past, there has never been a better time to transform the industry. 

Traditionally, farming has required mass amounts of land and water at a minimum, plus additives for crop protection and allowances for seasonal disruptions caused by unfavorable weather. 

We're closely...

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Rotation, Rotation, Rotation!

news s&p500 Nov 23, 2020

Published by Anthony Di Pizio

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What A Ride

US markets recently made all time highs (S&P500) much to the surprise of many participants. With the sheer scale of the disruption caused by the COVID-19 pandemic, many investors expected to wait years before seeing broad stock market returns again.

They managed to find some positivity among the chaos, though, discovering a plethora of companies which may have actually fared better in the new stay-at-home economy. By now we're all familiar with the incredible stories of Zoom or Peloton, for example.

The list of innovative, or potentially adaptive companies grew so large that CNBC personality Jim Cramer formed the 'Cramer COVID-19 Index' back in April. He managed to put forward ~US$11 trillion worth of companies which could be expected to outperform in this new world. 

Outperform they did. Measured from the market bottom in...

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COVID-19 Inactivated by SPL7013 Nasal Spray - Scripps Research Institute

asx news Sep 14, 2020

Published by Anthony Di Pizio

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How It Works

This news by StarPharma Holdings (ASX:SPL) hit the market today. The below is a direct quote from the announcement:

''New data generated at Scripps Research Institute in the US shows that Starpharma's antiviral nasal spray active (SPL7013) is virucidal, inactivating more than 99.9% of SARS-CoV-2, the virus that causes COVID-19''

Note that SPL7013 is also referred to as astrodrimer sodium. 

This appears to have confirmed the company's assumptions from prior testing:

The potency of SPL7013 was evident when used either before or after the exposure of cells, meaning the nasal spray could be used either before or after exposure to the virus. 

This round of antiviral testing comes after promising announcements from the company in both...

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Trump's Growing Momentum

news politics Sep 08, 2020

Published by Anthony Di Pizio

We write about interesting stuff impacting the markets.

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The Premise

Having worked in the financial markets for over a decade now, I was very active in the lead up to, during and after the 2016 election. I watched equity futures crash in fear of Trump's shocking, impending victory only to rocket to new highs once the money realised what his administration meant for tax policy and business regulations. 

Few people saw a Trump presidency in 2016, and few people feel that America could re-elect him (morally) in 2020. You could say they see it as unconscionable. The reality is though, despite all of the headwinds he's facing, he has still managed to generate more enthusiasm than Biden and is likely to win this race. 

To visually depict Trump's present momentum, I'll use the below chart which is one of my favorites

Full credit to RealClearPolitics -...

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The Wedge That Stopped The S&P500

news s&p500 Sep 05, 2020

Published by Anthony Di Pizio

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An Intriguing Setup

We're not advocates for technical analysis as an investment strategy. In fact, we consistently caution people against making decisions based purely on charts.

However, every now and then a setup hits our screens that forces us to really pay attention. 

Interestingly, in August-September of 2016 the S&P500 began rolling over as election uncertainty weighed, and declined steadily until Trump's victory. We all remember what happened after that, but here's a refresher:

This upper trend line has kept price capped for 4 years. Now, it's an expanding wedge, the lower bound of which began to form in January of 2018. It (sort of) marked the bottom of the COVID-19 pandemic selloff back in March, which is yet another...

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The US Dollar Has Bottomed

foreign exchange news Sep 04, 2020

Published by Anthony Di Pizio

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Setting The Stage

To understand our point of view, it's important you read our previous post on this topic which we'll be referencing throughout this article. It was the basis of our prediction for EURUSD to rally from 1.08 to 1.20 back in May (ie, extreme USD weakness). Now, it's time to go the other way.

We established that over the last ~12 years, the USD has strengthened significantly despite interest rates steadily declining for the entire period. You might remember this chart overlaying the US Dollar Index with US 10 Year Yields since 2008:

What you're looking at is a +33% appreciation in the dollar despite interest rates falling about 84% over the same period. This is a longer term view, but in this update we're going to zoom in and look at the events following May 2020.

The Fed

When the Fed announced a renewed stimulus program in March to deal with COVID, the dollar...

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Opyl Announces AI Powered COVID-19 Clinical Trial Forecaster

asx news Sep 03, 2020

Published by Anthony Di Pizio

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The contents of the below article do not represent an endorsement of the company by ADS Capital or its associates. 

The News

Melbourne, Australia based Opyl (ASX:OPL) today announced that its Artificial Intelligence (AI) software can make ''probability of success'' predictions on the likelihood of a vaccine or therapy succeeding in clinical trials. They have focused this announcement on COVID-19 but says the software may be used for any clinical trial.

The company claims to have run software tests investigating the 475 registered COVID-19 clinical trials currently underway and:

  1. Has identified the two vaccine candidates most likely to succeed
  2. Determined that at least one antibody therapy has the best probability of success in Phase III trials
  3. Therapies show a much...
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Does PointsBet’s New Deal Warrant A $2 Billion Valuation?

news Sep 03, 2020

Published by Anthony Di Pizio

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CMC Markets

NBC Sports + PointsBet

US broadcaster NBC has agreed to make PointsBet Holdings (ASX:PBH) the official betting partner of its sports division, NBC Sports, with rights to various platforms across the network. Important deal points:

  • NBC currently has the largest sports audience in the US with 184 million viewers
  • PBH committed to spending US$393 million over 5 years on marketing with NBC, offset by an NBC equity subscription plus options to be (potentially) exercised
  • NBC takes on a 4.9% shareholding in PBH, with 66.88 million additional options maturing in 5 years
  • NBC has some key asset rights expiring in 2022, including NFL and English Premier League (EPL)

At face value, this deal is groundbreaking and it's not surprising PBH shares rose from $7.50 to $14.00 the day of the announcement,...

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