Two of the things terrifying markets looked somewhat more hopeful Friday. Brexit booster Boris Johnson gave way to Leo Varadkar over where the border between Eire and Northern Ireland will go after Britain withdraws from the European Union. Varadkar said the deal would let Britain leave “in an orderly manner.” There will be no border between the two after Brexit so both will remain in the EU customs area. Johnson risks trouble with his coalition partners but he already has lost his parliamentary majority. Donald Tusk, President of the EU council, called the chances of a deal “promising.”

Then China indicated that it would accept a partial trade deal, which would not address the real issues like intellectual property theft and requirements that companies investing in China take on local partners, both of which cause great harm to firms seeking access to the country. Instead, the two countries can paper over their differences and do a deal cutting tariffs which are hurting both countries. President Trump may just accept a “mini-agreement” as good for his re-election chances and, in the short term, for trade, now that his tax returns will be given to House Democrats working to impeach him. Trump tweeted “They want to make a deal but do I?”

The Fed will buy short-term US Treasury notes to the tune of $60 billion per month to feed liquidity into the banking system. It will go on until next year.

Even the depressed price of oil rose 2% when reports hit that an Iranian tanker had been hit by missile fire near Jiddah, Saudi Arabia.

The US may have thrown the Kurds under the bus but we are sending 2,000 more troops to Saudi. Asia Times reported that our President has admitted to a conflict of interest with Turkey, telling Breitbart News in December 2015 that “I have a major building in Istanbul. It's called Trump Towers-two towers instead of one.” It is a multipurpose retail, office, and residential building which Trump said was “tremendously successful”, wrote Alison Tahmizian Meuse from Beirut.

HSBC did a report on Indian equities in which it warned that “the corporate tax cut may not drive a meaningful near-term economic turnaround amid weak external and domestic demand conditions. Aside from passing on some benefit to consumers, companies could use tax savings for de-leveraging and share buybacks rather than invest aggressively near-term. Cyclical and structural growth headwinds (problems with non-bank financial companies; weaker household balance sheets, and global uncertainties) will not be addressed by policy stimulus. Near-term risks to earnings remain.

“The tax cut and fiscal measures raised the risk of fiscal slippage and expenditure cuts, [given] weak revenue collection and ambitious divestment targets.

“Despite more competitive tax rates, other determinants for attracting foreign direct investment (skills, infrastructure, land acquisition) will take time to come together.” Our India reporter agrees with the Asia-based bank.

The Bombay Sensex Index rose 0.65% today which is a very cautious reaction to Xin Jinping visiting Narendra Modi today.

Most stock markets soared, starting with a Brexit stock added to the model portfolio yesterday (which is not British), and the pound sterling did too.

The new stock which would have suffered from a no-deal Brexit is French waterworks Veolia Environnement, VEOEY. It opened at $25.52, up 2%. VEOEY is a conglomerate and its businesses range from funerals to municipal London garden maintenance. Its sales and earnings from continuing operations (a preferred metric for this kind of hodge-podge) have grown steadily over the past four years after a large rise in 2016 which was not repeated.

Banks and Finance

Banco Santander rose to hit $5 at the opening and briefly jumped to $5.20 before settling back, still a 4.7% gain over Thursday. One reason may be that another land border between the EU and Britain is at Gibraltar. But the main cause is that SAN is a complex creature.

Also heavily traded was Clydesdale & Yorkshire Banking Group in Britain, up 5.9%. Its US trading is spotty but tracks, up 5.87%.

Sampo Oij of Finland, rose 3.1%. SAXPY owns banks and insurance interests.

Pharmaceuticals

Israeli Teva gained 3% in US trading (Tel Aviv is closed for the Muslim Sabbath) after it revealed that it was doing a sale-leaseback of its research facility in Israel, to cut debt. It failed to break out over $6.99 however and then fell back .

Takeda Pharma, which is aiming to cut its debt, is selling its assets in Russia to Stada Arzneimittel AG, the German druggist firm bought by Cinven and Bain Capital, whose full takeover price was never received by owners of STADF like me and some of you thanks to a fiddle by depositary BoNY-Mellon.

Bausch Health Cos. BHC, rose 6.6%, topping the drug sector.

Eisai of Japan gained 3.23%, hitting $50.91.

French Genfit recovered by 3.15%.

Canadian Zymeworks gained 3.8%. ZYME.

Tech

Infosys disappointed the markets with its Q2 report today and the stock fell 1.25% in a bullish market. We sold INFY in time.

However another stock we sold, Tencent, rose 3.4% (in Hong Kong not here).

South African Naspers then rose 3%. in sympathy.

Its Euro version, Prosus, listed in Amsterdam, PROSY rose 3.61% because it is not African but is still down 10% from its spin-off price.

Mercado Libre (Argentina-run but a US company) jumped 2.6% today. MELI does e-commerce in South America and Mexico.

Tourism

MakeMyTrip, MMYT of India, is up 2% today.

Minor International of Thailand, operator of hotels and restaurants worldwide, gained 10.9% today, our best performer. It is over $31. MNILY is not an operator of Thai hotels as “The Value Pendulum” wrote. It operates hotels and restaurants in Europe, Africa, and Cuba. The hotels are doing well. The animator of MNILY is Ellwood Heinecke, the son of the former US CIA station chief in Bangkok during the Vietnam War who started an ice cream franchise there when he was in high school and refused to go to the US, becoming Thai.

Energy

BP plc said it expects it will take $2.3 bullion in impairment charges from low-ball assets sales in the latest Q3. The total divestitures came to ~$10 billion (ahead of schedule), a sign that valuations are stressed. Despite this, BP stock briefly topped $45 over the Iranian tanker hit and general British optimism and Trefis Daily Research tipping BP. It then fell back to $37.5.

Schlumberger Ltd of the Dutch Antilles rose 2.5% today back in the overpriced bunch. By lunchtime it was up 5.61%.

Algonquin Power & Utilities priced its secondary offering at $13.50 today and will raise over US$390 million (including the green shoe option). AQN stock fell 1.1%.

Food & Drink

Greencore, the Irish vendor of ready meals at UK supermarkets, is our second top performer today, up 8.18%. GNCGY.

Grupo Bimbo, the Mexican bakery giant, is buying Mr Bagels Ltd in Britain, writes Eduardo Garcia in sentidocomun.co.mex. In the East End of London the thing is called a beigel. I have no idea how to name it in Spanish.

Tomra Systems, whose main business is making machines for recycling bottles and cans, gained 3.7% today. It is from Norway.

Anhauser-Busch-Inbev will sell Labatt-branded beer laced with marijuana from Tilray once this becomes legal in Canada. We exited Belgium's BUD in the spring.

Canadian Nutrien, maker of plant food, is up 2.3% on hopes for new US soybean sales to China.

SoQuiMich of Chile, which produces nitrates and lithium, gained 4.75 today. SQM.

Mexichem, maker of PVC drip pipes for farms, is now renamed Orbia and is the hardest stock to track of all. It plans a NYSE listing in a couple of years as it expands its business in developed countries, the Middle East, Africa and India. Its stock has cratered this year by nearly 30% but today gained an improbably 16.5%. I considered buying MXCHF back but not at this level. It is family controlled, a negative, but very into renewables. For more Mexico read on.

Funds

Mexican Equity & Income Fund issued a fawning report on its dealings with the eight-month old government of Andres Manuel Lopez Obrador by fund manager Pichardo Asset Mgm's Maria Eugenia Pichardo. She claims to have created “a new paradigm” “building harmonious coexistence between the government and the entrepreneurial sector.” She also argues that redistribution can be aligned with “higher economic activity” by the private sector. We are supposed to cheer because rather than declining in Q2 as many analysts forecast, GDP rose by 0.1% sequentially—although manufacturing fell by 1.6%.

Maru is a Mexican serving investors there and she has to make nice to AMLO. She tended to out-perform the index in previous years but not in 2019, when the MEXBOL fell 4.24% and MXE NAV in pesos fell 4.96% (in dollars it fell 4.83%). Its leading sectors for investment are consumer staples; financials; communications services; materials; and real estate. MXE gained 0.28% today.

Our gold positions are down modestly as people took out money to invest in stocks.