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Macro

Janus Henderson - Going with the Flow in Life, Not Investing - By Gregory Kolb, CFA


Key Takeaways

  • For equity investors, “going with the flow” can lead to significant losses when momentum in the market suddenly shifts, as it did in December.
  • To minimize this risk, we believe it is important to consider valuation, corporate leverage ratios and other fundamentals when investing.
  • We also favor portfolio diversification and believe select pharmaceuticals, consumer staples and utilities could provide resilience in the face of economic weakness today.

A good friend once gave me some very helpful dating advice: “Just go with the flow.” You’ve found someone special. Now relax, accept things as they are and see what the other person wants to do. While this notion will be obvious to many people, it was perspective-changing for me. And happily so, as I am now more than 11 years into married life.

Going with the flow will not be found in finance textbooks. Perhaps it doesn’t sound technical enough. Momentum is probably the closest factor proxy. For many investors, it simply means buying what has been working. Financial market results at the end of 2018 demonstrate the risk to this approach. As the smoothly rising equity market suddenly became a sharply falling one, stocks in general were very weak and both non-U.S. and value outperformed.

Markets can turn on a dime and are unforgiving. Going with the flow can leave you nursing losses and wondering what happened. It is challenging, particularly in the circumstance, to keep emotions in check and thoughts clear. Investors would do well to better ground their approach instead of merely floating along with the recent trend.

We think one way to ground your investment approach is to consider the downside risk of an investment before the upside potential. How much money could be lost in a realistic negative scenario for the company? This approach can help during good times to identify and attempt to avoid the most sizeable drawdown risks. Conversely, in more bleak environments, having a clear view of realistic downside scenarios can provide the confidence to buy when the market is overwhelmed with selling.

Recent market turbulence also highlights the importance of maintaining a balanced portfolio. We favor portfolios with many different drivers of cash flows, book values and valuation multiples that underlie the individual securities held. Sustaining some losses is much more manageable in the context of a well-diversified portfolio where not all stocks are losing badly and, perhaps, (ideally) some are even gaining. We believe select pharmaceuticals, consumer staples and utilities can play a balancing role in portfolios today by offering resilience in the face of economic weakness.

To learn more about how Perkins’ views the risk of “going with the flow” in investing and how investors might take a viewpoint independent from the market, click here to read the full February 2019 Perkins CIO Outlook.

MSCI World ex USA Index reflects the equity market performance of global developed markets, excluding the U.S.
 

MSCI World Growth Index reflects the performance of growth stocks from global developed markets.
 

MSCI World Value Index reflects the performance of value stocks from global developed markets.
 

S&P 500® Index reflects U.S. large-cap equity performance and represents broad U.S. equity market performance.
 

Index performance does not reflect the expenses of managing a portfolio as an index is unmanaged and not available for direct investment.
 

Perkins Investment Management LLC is a subsidiary of Janus Henderson Group plc and serves as the sub-adviser on certain products.

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Originally Posted on February 21, 2019

The opinions and views expressed are as of the date published and are subject to change without notice. They are for information purposes only and should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation to buy, sell or hold any security, investment strategy or market sector. No forecasts can be guaranteed. Opinions and examples are meant as an illustration of broader themes and are not an indication of trading intent. It is not intended to indicate or imply that any illustration/example mentioned is now or was ever held in any portfolio. Janus Henderson Group plc through its subsidiaries may manage investment products with a financial interest in securities mentioned herein and any comments should not be construed as a reflection on the past or future profitability. There is no guarantee that the information supplied is accurate, complete, or timely, nor are there any warranties with regards to the results obtained from its use. Past performance is no guarantee of future results. Investing involves risk, including the possible loss of principal and fluctuation of value.

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Janus Henderson Investors and is being posted with Janus Henderson Investors’ permission. The views expressed in this material are solely those of the author and/or Janus Henderson Investors and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


22856




Macro

Schroders - Are Investors Too Pessimistic on European Shares? - By Emma Stevenson


Some European markets seem priced for recession, but economists still forecast growth for the region in 2019.

European equities had a tough 2018 with the benchmark MSCI Europe index falling 10.6% over the year. Trade wars, reduced support from central banks and slower economic growth were among the factors that saw higher risk assets such as equities fall out of favour.

Despite the difficult global backdrop, the eurozone economy continued to expand in 2018, albeit with quarterly growth slipping to just 0.2% in each of the final two quarters of the year.

However, some European equity valuations have fallen to levels that imply we are already in a recession. The chart below compares the current price-to-earnings (P/E) ratio of the pan-European index, and individual country indices, to their P/E ratios in the last two recessions: the global financial crisis and the sovereign debt crisis.

P/E ratios are a common valuation measure and are calculated by dividing a stock market’s value or price by the earnings per share of all the companies within it. A low number represents better value.

For most countries, and the pan-Europe benchmark, valuations now are above the levels of the two very deep recent recessions, as you would expect. One exception is Italy, where political uncertainty and ever-present worries over the health of the banking sector mean valuations for the FTSE MIB are below the levels reached during the sovereign debt crisis. The other is Germany, where current valuations for the DAX are below those reached in the 2008/09 global financial crisis.

 

Azad Zangana, Senior European Economist & Strategist, says of these recessions:

“The first, the global financial crisis, is probably a once in a century event. The second, the EU sovereign debt crisis, is certainly possible again, although steps have been taken by regulators and the European Central Bank to mitigate a repeat. If Europe is currently in recession, then it is likely to be a shallower and shorter recession than the previous two. Despite this, the P/E of the German DAX is currently at just 12.3, below that of the global financial crisis. This suggests that an extreme negative scenario is priced in to German equities.”

Why would this be? Germany’s export-oriented economy makes it susceptible to worries over trade wars. While the trade war headlines have focused on the US and China, President Trump has threatened tariffs on European goods too. In addition, global supply chains are so intertwined that disruption would be felt far beyond the two main antagonists. Trade wars could impact demand from China, and likewise Brexit could disrupt the UK, another of Germany’s important export markets.

German growth was disappointing in the second half of 2018, with a contraction of -0.2% quarter on quarter in Q3 followed by flat growth in Q4. Azad Zangana says this was mainly due to temporary factors, including “supply disruptions in the autos industry due to the introduction of new car emissions tests, but also low water levels in the river Rhine stopped the shipping of raw materials to factories. We estimate that that the disruption in the autos industry is worth 0.5 percentage points (pp) alone on quarterly growth.”

We can conclude that there are plenty of risks, but does this justify the extremely low valuation levels? Azad Zangana argues not: “We are not forecasting a recession for either Germany or the eurozone in 2019, which prompts us to be more positive on European risk assets than the market.”

The Schroders Economics Team is forecasting growth of 1.6% for the eurozone in 2019 and 1.7% in 2020. For Germany, the forecast is for 1.4% and 1.6%, respectively.

 

Martin Skanberg, fund manager, European equities, says: 

“We do not invest on a country basis but, rather, look for stock-specific mispriced opportunities. What is clear is that some parts of the European stock market fell to what we believe to be oversold levels at the end of 2018.

“Some economically-sensitive sectors are trading at very low P/E levels, whereas many defensive shares are at record highs. The share prices of many companies in sectors such as autos and auto parts, or packaging, now appear to be pricing in an extremely pessimistic scenario.”

As an example, the automobiles & components sector is currently trading on a price-to-earnings ratio of 6.7x. This compares to 22.2x for the beverages sector, which is often perceived as a defensive safe haven for investors when economic times are tough (data source: Thomson Reuters DataStream, as at 14 February 2019).

Skanberg adds that broader economic growth is not the only driver of share prices: “Another driver can be restructuring, whereby companies take self-help measures to deliver growth and/or a share price uplift irrespective of the general market environment. Restructuring stories such as cost cutting, improved returns to shareholders and business simplification can be powerful tools to create shareholder value.”  

As ever, even when shares appear very cheap, it’s impossible to say with certainty that the market will start to value them more highly. Immediate attention will now be on Brexit and the trade wars. These and other issues could continue to prove disruptive for equity markets but such disruption may already be factored into prices. 

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Originally Posted on February 20, 2019

Please remember past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested.

Important Information: This communication is marketing material. The views and opinions contained herein are those of the author(s) on this page, and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. This material is intended to be for information purposes only and is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. It is not intended to provide and should not be relied on for accounting, legal or tax advice, or investment recommendations. Reliance should not be placed on the views and information in this document when taking individual investment and/or strategic decisions. Past performance is not a reliable indicator of future results. The value of an investment can go down as well as up and is not guaranteed. All investments involve risks including the risk of possible loss of principal. Information herein is believed to be reliable but Schroders does not warrant its completeness or accuracy. Some information quoted was obtained from external sources we consider to be reliable. No responsibility can be accepted for errors of fact obtained from third parties, and this data may change with market conditions. This does not exclude any duty or liability that Schroders has to its customers under any regulatory system. Regions/ sectors shown for illustrative purposes only and should not be viewed as a recommendation to buy/sell. The opinions in this material include some forecasted views. We believe we are basing our expectations and beliefs on reasonable assumptions within the bounds of what we currently know. However, there is no guarantee than any forecasts or opinions will be realised. These views and opinions may change.  To the extent that you are in North America, this content is issued by Schroder Investment Management North America Inc., an indirect wholly owned subsidiary of Schroders plc and SEC registered adviser providing asset management products and services to clients in the US and Canada. For all other users, this content is issued by Schroder Investment Management Limited, 31 Gresham Street, London, EC2V 7QA. Registered No. 1893220 England. Authorised and regulated by the Financial Conduct Authority.

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Schroders and is being posted with Schroders’ permission. The views expressed in this material are solely those of the author and/or Schroders and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


22859




Macro

Real Vision - Let The Markets Do The Talking (w/ Ron William) | Expert View


Ron William, founder of RWA, discusses market behavior and the value of using cycles for making decisions.

 

Originally Posted on February 20, 2019

Real Vision is a subscription-based video channel (SVOD) helping you invest like a pro. 

Most of the content is long form (30-90 minutes) and includes exclusive in-depth interviews, macro-theme documentaries and deep dive analysis from the world's smartest hedge fund managers, geopolitical analysts and investors. There is also a mix of shorter content (10-15 minutes) which features fully explained trade ideas from the smartest professionals on Wall Street.

www.realvision.com

Real Vision has carved out a reputation for delivering deep-dive analysis and expert opinion from the world’s leading experts in their fields - helping it achieve a ‘World Class’ NPS score of 63 and a rating of ‘5 Star Excellent’ on Trust Pilot..

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Real Vision and is being posted with Real Vision’s permission. The views expressed in this material are solely those of the author and/or Real Vision and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


22857




株式

Interactive Brokers - The U.S. Week Ahead (Feb 25-Mar 1)


On the Corporate Front: AMC’s Earnings Could Be Challenged By Netflix

While economic activity in the week ahead will be rife with updates, including the pace of fourth-quarter GDP growth, personal income and spending, as well as a fresh ISM Manufacturing PMI, investors will also be keeping an eye on corporate earnings as the season winds down.

The earnings calendar will be lined with discretionary sector companies such as Shake Shack (NYSE: SHAK), Home Depot (NYSE: HD), Macy’s (NYSE: M), L Brands (NYSE: LB), TJX Companies (NYSE: TJX), J C Penney (NYSE: JCP) and AMC Entertainment Holdings (NYSE: AMC).

The retailers’ quarterly results fall against a backdrop of December’s retail sales plunge, as well as further deterioration in consumers’ confidence at the start of 2019. However, preliminary data in the University of Michigan’s Index of Consumer Sentiment showed an uptick in February, which reflected the end of the partial government shutdown, as well as a more fundamental shift in consumer expectations due to the Fed's pause in its tightening of monetary policy.


 

Investors may glean further insights into the Federal Reserve’s policymaking decisions when Fed chair Jerome Powell delivers his two-day semi-annual testimony to Congress beginning Tuesday, February 26.

Furthermore, the recent resurgence of risk appetite appears to have been bolstered by reported progress in U.S.-China trade talks.

Bill Baruch, president of Blue Line Futures, noted that “the market is focused on an accommodative Fed and the headlines that exacerbate such without really caring to understand why they may want to be accommodative in the first place.

“Instead, the market is focused on an agreement to agree on what must be achieved in order to make an agreement between the U.S. and China on trade.”

Baruch highlighted that the market has “gone straight up for nearly two months, now investors and portfolio managers find it easy to cling to gains and throw caution into the wind, ‘who needs protection’. Never mind the fact that the VIX is at the lowest level since October 5th.”

Elsewhere on the corporate front, a long list of attendees is slated to attend the 2019 Morgan Stanley Technology, Media & Telecom Conference, which is scheduled to be held from February 25-28 in San Francisco at the Palace Hotel. Firms set to gather at the conference include Microsoft (NASDAQ: MSFT), NVIDIA (NASDAQ: NVDA), Facebook (NASDAQ: FB) and AT&T (NYSE: T).

 

Coming attractions

Among the thick crowd of companies awaiting to announce earnings in the week ahead, AMC Entertainment Holdings is set to deliver its Q4’18 results.

The Kansas-based exhibitor could face some headwinds from the disruption of streaming video services such as Netflix (NASDAQ: NFLX) and Amazon Prime (NASDAQ: AMZN), which have been generally stealing younger generations away from the movie theater experience.

 

 

Netflix, for example, tacked on 8.8 million global paid memberships during Q4’18, well-above its stated estimate of 7.6 million. The company posted 1.5 million new subscribers in the U.S. and 7.3 million new international subscribers.

Moreover, the film slate in 2018 appeared to have mixed results in terms of ticket sales. According to Box Office Mojo, while October’s gross revenues exceeded the prior year by nearly 77.5% -- based largely on the success of Venom – they suffered in November and December, as the likes of The Grinch and Aquaman competed with titan tentpoles Thor: Ragnarok and Star Wars: The Last Jedi in the same year-ago months, respectively.

In its Q3’18 report, AMC posted admissions revenues that were about unchanged at US$751.4m compared to US$753.5m for the same period a year ago – mainly due to an 8.6% surge in attendance at its U.S. theatres in the same year-ago quarter.

Although total revenues increased, AMC suffered US$100.4m in net losses, an increase of US$42.7m from Q3’17.  Included in the losses was a US$54.1m non-cash expense as a result of an increase in fair value of its new derivative liability related to convertible notes, which the company said will be marked to market quarterly, going forward.

AMC had attracted a US$600m investment private equity giant Silver Lake in the form of 6-year 2.95% convertible notes. The company pegged the proceeds from these notes to buy back roughly 24m shares from Chinese film production company Wanda and issue a US$1.55 per share special dividend to its shareholders.

As part of its debt reduction strategy, and to comply with China’s federal foreign ownership policy, Wanda had recently shed a third of its stake in AMC.

Adam Aron, CEO of AMC, also pointed out his company has been benefiting from its packaged/discount promotional programs AMC Stubs and AMC Stubs A-List, which it launched in late June 2018.

Aron said AMC Stubs members make up more than 40% of its U.S. clientele, enabling AMC to develop data analytics to exploit moviegoing habits and histories.

Together with its A-List program, Aron added that its membership base already translates to US$120m of annual recurring revenue for movie admission ticket buying at AMC theatres, “even before considering the continued growth in membership and revenue that is surely ahead of us.”

However, the success of the discount program may be somewhat foreboding for Q4’18 earnings, given the gloomy retail sales report for December.

Ward McCarthy, chief financial economist at Jefferies, characterized the data as “truly dreadful pretty much across the board.

“Taken literally, this data release would indicate that the consumer sector collapsed in December.  This release is such an outlier and so incongruous with the general trend in consumer spending, holiday consumer sales reports and holiday seasons consumer credit data that it does raise suspicions of data reliability.” 

McCarthy added that the results were “sufficiently weak that it will no doubt fire-up the fear-of-recession anxieties that have percolated so many times this cycle. 

“From the Fed standpoint, it will also make policymakers more conformable that the ‘patient’ approach to rate policy is appropriate, and it could influence policymakers in making decisions about the appropriate size of the balance sheet, which is an ongoing process.”

While December retail sales sorely disappointed analysts’ expectations, registering the largest month-over-month drop since 2009, it would not be surprising to see a drop in box office receipts as moviegoers spent fewer dollars at the door and perhaps subscribed to streaming service such as Netflix.

AMC is set to unveil its Q4’18 earnings results Thursday, with analysts’ generally expecting the company to earn US$0.17 per share compared to US$0.26 in the same year-ago quarter.

In the meantime, select the Event Calendar option in the IBKR Trader Workstation for a full list of U.S. and global corporate events and earnings, dividend schedules, economic data, IPOs and more.

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The author does not hold any positions in the financial instruments referenced in the materials provided.

The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


22863




Soft Commodities

US Global Investors - Will 2019 Be the Year of King Copper?


  • Corporate purchasing of copper-gobbling renewable energy more than doubled from 2017 to 2018.
  • Sales of electric vehicles, which use three to four times the amount of copper as traditional vehicles, are booming in China.
  • Copper miners get upgraded by the big banks.

Because of its wide availability and exceptional conductivity, copper is found in everything from consumer products to automobiles to semiconductors. Last year global demand for the red metal stood at 23.6 million tons, and by 2027, it’s projected to reach just under 30 million tons, representing an average annual growth rate of about 2.6 percent.

This phenomenal growth is attributable not just to the rise of middle class consumers. It’s also thanks to our steady rotation into clean, renewable energy such as wind and solar—which is good news for copper demand going forward.

As I’ve shared with you before, renewables require many more times the amount of copper as traditional energy sources. A typical wind farm—those that blanket whole areas of West Texas, California and some other states—can contain as much as 15 million tons of the metal.

2018 Was a Record-Breaking Year for Renewables

Whether you’re a believer in renewable energy or not, the tipping point may have already occurred. Among the fastest growing jobs in the U.S. right now are wind turbine service technician and solar panel installer, for whatever that’s worth. And according to a report by Bloomberg New Energy Finance (BNEF), corporate purchasing of renewable energy more than doubled from 2017 to 2018. Globally, companies bought 13.4 gigawatts (GW) last year, compared to the previous record of 6.1 GW in 2017. Over 63 percent of the purchasing activity occurred right here in the U.S. Facebook alone was responsible for consuming 2.6 GW of renewables, three times as much as the next biggest corporate energy buyer, AT&T.

The trend toward renewables is expected to accelerate at a white-knuckle pace for years to come. Take a look at the chart below, courtesy of McKinsey’s “Global Energy Perspective 2019.” Analysts believe that, by 2035, renewable energy will account for more than half of all power generation, as its price falls below that of coal and gas-generated energy. Fifteen years after that, nearly three quarters of total energy consumed around the world will be derived from renewable means, chiefly wind and solar.

If this is compelling at all to you, now might be an excellent time to start participating. One of the best ways, I believe, is with exposure to high-quality, well-managed copper miners as well as funds that have a large position in copper mining.

China Will Lead the Transition from Internal Combustion Engines to Electric Cars

And we haven’t even mentioned electric vehicles (EVs), which are notorious copper gobblers. As I’ve shared with you before, EVs consume between three and four times the amount of copper as traditional internal combustion engines.

China is leading the world in EV adoption and will likely continue to do so for some time. In the fourth quarter of last year, China was responsible for 60 percent of global EV sales, according to Bloomberg, which adds that the country holds half of all vehicle-charging infrastructure. By the end of last year, electric cars made up about 7 percent of total new vehicle sales in China, with a compound growth rate of 118 percent since 2011. In about a decade, the Asian country will account for nearly 40 percent of the global EV market, followed by Europe (26 percent) and the U.S. (20 percent), according to BNEF.

Not only does China have national subsidies in place, but its carmakers are also incentivized to manufacture EVs thanks to the country’s “New Energy Vehicle” credit system. The system acts as an EV quota, requiring carmakers to generate credits through the sale of electric cars. According to BNEF, this is the “single most important piece of EV policy globally and is shaping automakers’ electrification plans.”

Adding to this acceleration is the fact that China has elevated the adoption of new “Phase 6” emissions standards under its anti-pollution “Blue Sky Defense” action plan. Just as we’re seeing in parts of Europe right now, China will soon begin banning the production of the most polluting diesel engines.

Many cities in China see the writing on the wall and have already enacted restrictions on gasoline-powered vehicle sales. In 2018, Shenzhen and Shanghai collectively led the world with more than 165,000 EV sales. That’s more than Norway and Germany combined.

With demand for EVs so high, it’s little wonder that China’s copper imports climbed to 479,000 tonnes in January, the second-highest on record.

Morgan Stanley Bullish on Copper, Upgrades Freeport-McMoRan

All of this leads me to believe that 2019 could be not only copper’s year but also copper miners’ year. The price of the red metal is up about 6 percent so far in 2019, trading at close to $2.80 a pound. That’s about 67 percent short of the metal’s all-time high of $4.62, set in February 2011.

Last week Morgan Stanley joined Citi and Goldman Sachs in making a bullish call on the metal. The investment bank projected a 14 percent upside for copper in 2019, based on a widening supply deficit and the likelihood of a resolution to the U.S.-China trade spat.

As for copper miners, Morgan Stanley upgraded Freeport-McMoRan, while Goldman Sachs recently upgraded Rio Tinto. Piyush Sood, lead analyst at Morgan Stanley, said in a note that Freeport’s “earnings sensitivity to copper is still the highest among its peers, and combined with its high trading liquidity, we believe it will emerge as the go-to large-cap stock for exposure to a copper price rally.” Shares of the Phoenix-based company’s stock jumped nearly 7 percent on the news last Wednesday.

Singapore-based DBS Bank also sees a copper shortage over the mid-term. Analysts expect supply to be in a deficit each year between now and at least 2022, when it could be at its widest since 2004.

“Copper is king for this electrification trend taking over the global economy,” Matt Gilli, CEO of Nevada Copper, told Reuters. “We see demand increasing steadily in the years ahead and, so far, supply is not keeping up.”

To meet surging demand, four U.S. copper projects are set to open by next year, the first to do so in decades, according to Reuters. And Ivanhoe Mines, founded by my friend Robert Friedland, is in the process of developing the Kamoa-Kakula copper deposit in the Democratic Republic of Congo, which Robert describes as the second-largest copper mine in the world.

“You’re going to need a telescope to see copper prices in 2021,” Robert told us when he visited our office last year.

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Originally Posted on February 19, 2019

About U.S. Global Investors, Inc.

U.S. Global Investors, Inc. is an investment adviser registered with the Securities and Exchange Commission ("SEC"). This does not mean that we are sponsored, recommended, or approved by the SEC, or that our abilities or qualifications in any respect have been passed upon by the SEC or any officer of the SEC.

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Holdings may change daily. Holdings are reported as of the most recent quarter-end. The following securities mentioned in the article were held by one or more accounts managed by U.S. Global Investors as of (12/31/2018): Freeport-McMoRan Inc., Ivanhoe Mines Ltd., Citigroup Inc.

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Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from U.S. Global Investors and is being posted with U.S. Global Investors’ permission. The views expressed in this material are solely those of the author and/or U.S. Global Investors and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


22854




1 2 3 4 5 2 1955

ディスクロージャー

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IBKR金融アナリストのブログ上の資料(記事やコメンタリーを含む)は情報提供のみを目的として提供されています。掲示される資料は、IBKR金融アナリストのブログに掲示をする可能性のある、独立したアドバイザーまたはヘッジファンドまたはその他の個人とお客様またはお客様のクライアントが、サービスの契約または投資をすることをインタラクティブ・ブローカーズ(IB)が推奨するものではありません。IBKR金融アナリストのブログに掲示をする可能性のあるアドバイザーまたはヘッジファンドまたはその他のアナリストはIBとは無関係であり、IBはこういったアドバイザーまたはヘッジファンドまたはその他の個人の過去または将来のパフォーマンス、またはその提供する情報に関する表明または保証をすることはありません。インタラクティブ・ブローカーズはアドバイザーまたはヘッジファンドまたはその他の個人による取引がお客様に適格であることを確認する「適正審査」を行うことはありません。

掲示されている資料に記載される有価証券またはその他の金融商品はすべての投資家に適するものではありません。掲示されている資料はお客様特有の投資目的、経済状況またはニーズを考慮するものではなく、また特別な有価証券、金融商品または戦略をお客様に推奨するものではありません。投資または取引をする前に、これがお客様特有の状況に適しているかを熟考し、必要な場合には専門家のアドバイスをお求めください。過去のパフォーマンスは将来の結果を保証するものではありません。

第三者機関より提供される情報はすべて信頼性および正確性のあると思われる情報源より入手していますが、IBではその正確性を保証するものではなく、いかなる過失または不作為に対する責任を負うことはありません。

IBの雇用者または関連会社により掲示される情報は信頼性のあると思われる情報に基づきますが、IBまたは関連会社のいずれもその完全性、正確性または適切性を保証するものではありません。IBはいかなる金融商品の過去または将来のパフォーマンスに関する表明または保証をすることはありません。IB金融アナリストのブログに資料を掲示することにより、IBはいかなる特定の金融商品または取引戦略がお客様に適切であると示すものではありません。