Market update: Investors buy RWE, EON and Tesla, Theresa May tries to look strong

13 Mar

by Mihály Tatár


Good Morning!


  • The trading week started in a slow fashion on Monday, with traders carefully waiting for today’s US inflation data (SPX -0.13%, Nasdaq +0.36%, DAX +0.58%, Nikkei +0.58%, EURUSD 1.2330). Investors were spending the time by buying RWE (+9%) and E.ON (+6%)according to the excited analysts, the traditional utility model has just been killed, with E.ON focusing purely on energy networks and retail consumers while RWE only on renewable assets – , and Tesla (+6.6%), with Musk’s well-advertised self-driving auto and Mars-exploration plans squeezing short sellers big time. Trump was quite busy, too: The US President blocked the hostile takeover of chip-maker giant Qualcomm by Singapure-based Broadcom – this would have been a 117 billion USD (!) deal, and the new message is clearly that ’high-tech is not for sale’, especially if the buyer is Chinese. Trump also had the time to tell the EU that Secretary of Commerce Wilbur Ross will be talking to them on unfair farm and manufacturing tariffs – prompting the EU to talk about ’resisting bullies’. (Personally I hope the EU stops trying to gain an identity by opposing Trump at every and each occasion – it will only end badly and on the whole globe only the EU thinks it is in the same leage as the US.) Theresa May accused Russia of the chemical weapon attack using the military grade nerve agent, threatening with ’retaliation’. (It seems the retaliation will fall somewhere between removing the broadcasting license of the Russian RT television and preventing Russian sport officials from attending World Cup – Putin must be trembling from fear now and Thatcher is spinning in her grave. Russian assets didn’t even react – the issue would only turn serious if Berlin joined in and called for some sanctions or the US would come in and talk about shutting down Russian SWIFT access, for example.)


  •  Bloomberg notes that banks by now are panicking about the quasi banks that technology firms created (’picture a bank that lends 1 billion USD to small businesses, holds 150 billion USD in corporate bonds, runs the world’s largest money-market fund, offers mobile payments and credit cards’ – you just described Amazon, Apple, Google and Alibaba) – and are calling in financial regulators ’to extend their reach’ to companies and level the playing field, sometimes even lobbying against fintech startups, to be regulated as banks (as it happened with PayPal spin-offs).


  • It’s not just Europe that faces a demographic nightmare: While Japan’s case is well known – and privately, no geopolitial strategist believes the country will be relevant 50 years from now -, South Korea is also panicking about the speed of its population loss (working age population will drop from 37 million to 27 million(!) by 2050), with labour shortages already present in every sector of the economy. (No, robots won’t help keeping the pension system and competitivness alive.)


Have a nice day,



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