As we move to adopt wider covid-19 jabs for younger people, note that they may be more susceptible to side effects from the vaccination. My middle grandchild, a girl, was knocked out for 24 hours by her first shot. She is 17.

Boris Johnson justifies his hefty spending on décor for his apartment at 11 Downing St, shared with his mistress and baby, because its prior inhabitant, P. M. Teresa May, went in for John Lewis Partnership furnishings. My husband is a member of the John Lewis clan which gave their department stores and supermarkets to the workers but which supplies Mrs. May. Their line of upholstery and window dressing, furniture, and accessories is popular with Britons who don't need to knock the socks off visitors to their homes. Boris Johnson is of part Turkish heritage which may push him to excessive exotica.

Qatar has arrested its finance minister for corruption. South Africa suspended the ANC head Ace Magashule for alleged corruption. But Lebanon has not arrested its central bank governor for moving its dollars into a private offshore bank account with his brother.

Paypal today reported excellent quarterly earnings ($1.22/sh, up 21¢) and the revenues also beat. Alas, it will be offering a digital wallet for crypto-currencies. It will also stop mini-payments that people use to buy what they cannot afford, usually in emerging markets. Read on because we have a share position here.

Foreign markets, starting with London, were up. But the USA is in inflation shock.

We have the usual pileup of reporting companies to deal with today. Markets are up because jobs data were much better than expected, below 500,000 for the first week since Covid-19 started last week.

*Mercado Libre Q1 sales rose 110% from prior year to $222 bn and merchandise sales rose 114%, in both cases currency-neutral from prior Q1 level of $652 bn. MELI said net sales at $1.38 bn were up 158%. Gross merchandise volume rose 6.1% to $6.1 bn. It boosted its active user count from 3,414 mn to 6,057 mn. (An active user buys at least one thing from MELI in the period covered.)

The problem is that fintech plans for credit to buyers and sellers, free delivery, and credit cards MELI had been working toward became money losers in the pandemic. Revenues were barely up from Q4 2020, at $1.378 bn from $1.327 bn. It engaged in capital expenditures of $112.7 mn in Q1 this year compared to $53.5 mn a year ago. Its depreciation and amortization hit $38.4 mn up from prior Q1 level of $21.6 mn. Net sales while up from Q1 2020 were essentially flat from the rest of last year.

Moreover, MELI had a real net loss of $34 mn in the quarter, hit by interest and finance expenses to its own financing operations plus foreign exchange loss of $13 mn. The problem, in case you were wondering, was to keep selling in its home market, Argentina, a sufferer from a financial crisis. All the new logistics for Mexico and Brazil boosting sales 124% and 92% resp are not enough to overcome the Buenos Aires bank mess which cut items sold. And its new fintech wallet, credit cards for clients, and digital accounts for sellers was not enough to overcome the collapse in Argentina's currency. Unfortunately, it provides more financial service to sellers in Argentina, 87% of whom signed up, its highest penetration level. Brazil is at 83% and Mexico at 79%. Its biggest new market push is in Chile, a country managing better than the rest, but there its financial services are only used by 53% of accounts.

Meanwhile, the MELI operation is providing much more credit for sellers and buyers, $576 mn this Q1 compared to $179 mn in Q1 2020. If the credit line continues to operate post-Covid 19, it may turn out to have been brilliant, but nobody knows if this will happen. Arrears in credit are at 26% this year vs 21.3% a year ago, and arrears over 90 days are now at 8.3% from zero last Q1 when standards were higher.

Market fees for transactions hit $911 mn, up from $873 mn in Q4 and $381 mn in Q1 '2020, but this was not enough to generate profits. Credit fees hit $468 mn, up from $454 mn in the December quarter and $271 mn a year ago. Collection fees were up 4.8% and first party sales lossed topped 5.5%. Expansion of managed networks cost nearly 3%.

Gross profits this year were 42.9% vs 48% a year ago. Marketing efficiencies from scaling up offset the lower cost of goods sold and the collection fees, so the pretax margin was 6.8% positive vs 4.8% negative a year ago. But then MELI was hit with taxes up 2.5% and interest on its convertible debt up 3%. Its forex penalty for buying back Argentina shares was 1.1%.

There is some good news apart from finance. MELI is fulfilling 32% of its orders from centers it runs in Brazil and Argentina, and 60% from ones in Mexico (flat from last year.) Logistics will be the key to recovery and predicting how it will play out is beyond me. Some of the logistics gains resulted from mobility restrictions from coronavirus and others from the decision to offer free shipping in Brazil on orders of up to 79 reais, boosting customer satisfaction... and delivery costs to MELI. Merchant point of sale volumes grew by 650,000 in Q1, but I think that was mostly because of the virus, and this will drop.

While the conference call last night was very kind to MELI its stock opened down 5.06% today, an indication of analyst skepticism. Stifel Nicolaus upgraded MELI, to buy from hold and Crédit Suisse kept it at outperform while slashing the target price from $1850 to $1824. They managed to cut its drop to 4.35%, to $1469.14 now.

*Also reporting was Atlantica Sustainable Infrastructure plc, AY, a UK fund investing in US dollars (90% of AY assets are dollar-denominated). We own it 2 ways, directly on Q, and via Algonquin Power & Utilities Corp, AQN, of Canada, which operates across borders in both North America and elsewhere. AQN is down 0.45% today. It will present Q1 results after hours today. AY produced negative earnings of minus 17¢ in Q1, missing by 4¢ the consensus forecast of a 13¢/sh loss, a total of $19.2 mn, better than the prior-year loss of $40.5 mn. It also missed the revenue forecast by $13.04 mn, although revenues did rise 11.8% from prior year's $210.40 mn to $235.2 mn. There were some fiddly adjusted EBITD numbers, up to $170.070 from prior year's $165.962 mn, and dividends from affiliated companies of $166.722 mn, up from $162.405 mn. It cut its non-monetized items by $6.177 mn from $4.334 last year, whatever that may be. The dividends paid in fell too.

Yet cash available for distribution hit $51.237 mn, up 7.6% from prior Q1 level of $47.558. But don't expect to get that cash. AY now has about 111 more shares outstanding than it had a year ago. And its debt of $5.107 mn is up from $4.894 mn a year ago.

The good news is that AY probably will again be paying shareholders a dividend which is not taxed, assuming that they don't sell their AY shares. AY shares trading here initially lost about 3% but then recovered so they are only down half that, at $36 even. Later they rose to $36.04. AY closed on its buy of California's COSO, a renewable plant producing 135 megawatts of power and its buy of Chilean PV2 which has a 40 mW solar power plant. It also is in the process of adding 596 mW of wind power in the US, in 4 states. It has boosted solar capacity by 18% although North American levels were nearly flat, thanks to buys in Latin America and the Middle East & Africa.

*Cosan now is trading post-split (4:1) and is down 0.55%.

Banks and gold

*I get SAN (Santander) which I try to get the CSAN price at my brokerage. It changed its ticker but the market hasn't noticed.

SAN hit a new 52-wk high in Madrid today in the wake of brilliant Q1 results from Société générale of France.

*The barbaric relic is up. SPDR Gold gained 2.81% on misspoken remarks by Treasury secretary Yellin, who was yelling.

*Miner Kirkland Gold rose 2.42% despite a sharp drop in production in Fosterville (Australia). KL earnings were $161.19 mn (US) vs prior KL earnings in Q1 hit $161.19 mn down from prior Q1 level of $202.88 mn, or per share 59 cents from 77 cents. It is attracting money from people fearful of US inflation and higher interest rates after having lost 12% YTD.

Drugs

*The FDA accepted the applications for new approvals from Merck and Eisai for the tyrosine kinase inhibitor found by ESALY to treat kidney and endometrial cancers. It will rule by Aug. 25 on the kidney use and by Sept. 3 on the endometrial cancer use. ESALY is Japanese and partners with MRK on Keytruda and Lenvina combo which is taken orally. This is an accelerated review by the FDA.

*US plans to lift patent protection for covid-19 jabs has hurt most of the drug-makers here.

*Irish Theravance will present next May 13 at the BofA healthcare conference.

*NIO fell 2.1% today despite launching its electric vehicles in Norway, an oil-producing country trying to go green. It has recuperated about a third from its initial drop this morning. It will start delivering vehicles in Sept., later than anticipated, why the stock dropped according to Barron's Daily. It may also reflect a drop in Tesla stock.

*Naspers, South African global media firm, dropped precipitously in London by 5.75% but actually rose 2.94% here. Its euroland clone Prosus rose 1%+ in parallel with NPSNY, PROSY. Both have cut back their holdings of Tencent in Hong Kong and Prosus may be a winner when Remitly, a payment system for poor people to send money it backs, issues stock here. Al Gore, former US Veep, is co-founder of the potential IPO firm along with Jeff Bezos.

*Schlumberger Ltd hit another 52-wk high today because finding oil and gas is part of a global recovery. It is at $30.42. Other winners include Vale in Brazil which we sold over tailings dam disasters which it is not funding recovery for. SLB is a model gainer as it has a hefty shareholder base of descendents of the founder brothers Schlumberger, who are French Protestants for the most part.

*Cement stocks continue their rise, CX of Mexico and CRH of Ireland.

*Following Mercado Libre down, Coupang of South Korea dropped 2.93%. CPNG.

Meanwhile, the bad guys are winning. BAE Systems, warmongers, gained 0.9% despite negative votes on its pay to executives at the annual meeting today, and proxy votes.

*Utes BCE of Canada, Veolia (VEOEY) of France, E.On SE (EONGY) of Germany, Vodafone (VOD) of Britain are all up as are suppliers like Taiwan Semiconductor, Nokia, (NOK) Ericsson, (ERIC). The logic is that usage will have risen as the world exits lockdown and people yak more and hold parties and use more electricity according to Citi analysts.

*Cameco reports Friday and fell 1.9% today in anticipation of trouble, to $18.57. CCJ mines uranium which will get US subsidies, I think.

*Renishaw, which ended its ADR program without giving its shareholders any rights, is dropping like a stone in London, perhaps a comeuppance.

Drink

*Anhaeuser-Busch Inbev, sold, saw shares rise 6% on news that Carlos Brito will retire as CEO this summer. He will be replaced by Michael Doukeris.

*Mexico is suing Heinecken for calling one of its beers tequila, which is a higher alcohol product of cactus plants.