New job, new firm but the same Free Whelan. Thank you for your continued support and keep unlocking valuable insights into the global market every week with me!
Another great podcast episode on Friday where I go into the case for the Mag 7 to be perfectly justified in their positions along with naming the most recent winner to the BCP NRL Tipping Comp. Congrats to all winners and here’s to the final stretch home!
Wellnex with a June update as well just now and revenues continue to grow every month with gross margins now at 40%. Margins are everything.
Speaking of margins, I went to the Global X Thematic Conference and the Head of Investment Strategy, Scott Helfstien spoke brilliantly. He’s always great on a strong thematic idea and reminding us that, for the most part, markets are the best discounting tools known to man and that more often than not valuations are justified.
This is one of the many slides that day but it tells the story of why the US market is so strong and so easy to be bought. Margins.
Source: Bloomberg as of April 26, 2024
There’s a stack of other slides which tell similar stories, that the “bubble” everyone is calling the Mag 7 run is barely there compared to the dot com bubble at the turn of the century.
Companies are also stronger, making real things in space, and are far better at protecting and expanding their turf than at any other time.
All the easy money has been made but the smallest of dips are ok to be bought.
Election #1
A French election update and it looks as if the National Rally has secured 34% of the popular vote, and Macron’s “Together” Picking up a number in the low 20s. Huge.
We now go to the second round which has traditionally been bad for the far-right party but in this case, there’s no certainty about smaller candidates (who received the minimum 12.5% of the vote) dropping out, or that voters will follow advice to avoid Le Pen’s party.
I’m far enough away that I can justifiably not have my finger on the pulse but the instability created in an already tenuous economy by this should be enough to continue the slide.
No reason to be overly aggressive on Europe here with other areas presenting better value.
And I’ll concede I underestimated the strength of the right-wing move there.
Source: CBGN
We again look at the cost to insure France against default (putting it basically, please don’t write in)
Meanwhile in other Elections…
Source: Andy Borowitz
Our call a few months ago that Trump win just got both stronger and weaker at the same time. Stronger because finally, the world realised Joe should not be anywhere near an actual job, let alone the Presidency. Not for anything to do with his policies but more on his cognitive abilities.
Amazingly Trump actually comes across as relatively sensible (compared to previous appearances)
We think it’s weaker at the same time because by the time you’re reading this Biden is replaced. And may well be replaced by a far stronger candidate. Michelle Obama would be a formidable opponent for Trump.
This is the iShares Global Clean Energy ETF and let’s see if you can pinpoint the general time when it became apparent Trump was the clear favourite.
Source: TradingView
New Highs
I love a good stat and yes, we did close off the Month, Quarter and Financial Year fairly strongly.
In fact here’s what happens if the S&P 500 has 20 or more ATHs at the midpoint of the year.
“There has never been a year that didn't have at least one more new ATH, but usually it has a lot in H2. In fact, avg another 20 new ATHs the rest of the year.” – Ryan Detrick, Carson Research
Another 20 all-time highs on average for the rest of the year. Wow.
Source: Carson Investment Research, FactSet 06/28/2024
Copper to finish
Source: China Customs
One of the main hindrances to the copper price is starting to turn, apparently. Watch this space and long copper on big technical points. Don’t rush it.
Bonus feature: How to ruthlessly close out. Courtesy Bloomberg
Source: Bloomberg
All the best and stay safe,
James
A quick detour to announce the BPC NRL Tipping Competition!
Welcome to the BPC NRL Tipping Competition for 2024. The season has kicked off with a bang in the glittery lights of Las Vegas. Panthers are favorites to take the crown again but the Broncos look like a formidable opponent to take revenge from the heartbreak of 2023. BPC loves its footy and we're very excited for the season ahead. We also love to win stuff so please keep an eye out for the prizes on offer. Sign up and join the game!
