Worldwide Upbeat

Happy Friday. It looks like markets worldwide are upbeat, with rises in Japan and India, although both Hong Kong and Taiwan markets are down because Hong Kong accused the island state of “gross interference” in its domestic affairs, and closed the Taiwan representative office in Hong Kong, presumably at the behest of its new masters in Beijing. And Taiwan faces a new round of covid-19. 

European markets also were up, notably Germany and France, while London slid because of inflation fears offsetting news of higher retail volumes, which sounds familiar to US stock-watchers. Our lead index, the DJIA, continues to rise, up 11% at the opening today, but still cheap at an average of 20x earnings, according to Al Root writing in Barron's Daily. Nasdaq is up only 5% but is seriously more expensive, at 32x earnings, and fell about 1% at the opening. Here are some of the reasons why:.

The US crackdown on cryptocurrencies continues with the Fed today indicating that an official crypto-currency is going to be created for the USA, subject to taxes, but also with a more secure payments process and bank backers. The talk from the Fed along with proposals to tax cryptocurrency trades worth over $10,000 (a low barrier) took down the greenback despite the Fed's hints that a taper tantrum is coming.

Photo by Annie Spratt on Unsplash

A minimum tax on global US company earnings of about 15% is on the cards, but it is better than the earlier tax leve of 21%. This will require global cooperation. US taxes are irrational, based either on where a firm has its headquarters, or where its earnings are generated, meaning there is a huge loophole allowing major companies to use low tax havens rather than either. And another bunch of experts delivered inflation warnings, notably BofA-Merrill. Mark Mobius, the former emerging markets guru of the Templeton Funds, is due to give his insights next Tuesday. (Mark, who was at MIT doing graduate work was in one of my undergraduate courses at Harvard, with Barrington Moore. Because I have watched his work for decades I did not include Sir John Templeton in my list this weak of great investors, because I think Templeton is given credit for work done by his employees. He was smart to include Japan and less developed countries in his portfolios but he depended on hired hands to find the stocks.)

Winners

*The best performing non-US share is Swiss Cie Financière Richemont. Every time I check the time I look at a Cartier product, but I still failed to tip it as a buy. Today's Financial Times warns that its outlook is tarnished by dependence on a few brand lines and refusal to consider a tie-up with Kering.

*Oatley soared 34% on its $10 bn IPO but since I have never tasted the stuff I did not buy into it. otly.

*Once again our top portfoli rerformer is Antofagasta, the Chilean copper and gold miner, listed in London for more than a century. I upped my position in ANFGF after the Chilean election produced a left-wing winner, not a bit like Salvador Allende, who was a genuine Marxist aiming to keep the left in power with constitutional changes. I remember those days when I worked for Senate Foreign Relations Committee Republican Clifford Case, (R-NJ), on the CIA intervention on behalf of the Colonels.

*Another winner is green stock Tomra of Norway, up 1%+ and now back over $50. TMRAY.

*A third is Vodafone, VOD, tipped by CFRA at $18.3/sh over hefty option trading of bullish calls.

*Dutch Antillean Schlumberger rose another half percent. SLB gained after it announced a cloud digital solution deal with Amazon Web Services for its cognitive exploration and production environment. The release by Benzinga said it was a “clout” solution. I have no idea what this means.

*Hoegh LNG Partners was tipped in March on seekingalpha by Ashland's, engineer Eric Robken.

*UK Guardian stockbrokers back South African shares, notably our Naspers, NPSNY, a media firm.

Losers

*Alas, my pick for 2021, Cosan, CSAN of Brazil, producer of sugar and ethylene, fell today. Its divvie is payable next Thursday. It is barely down from the high when its new ticker symbol went live in March. My theory was it would rise to earlier price levels but I failed to predict the confusion among analysts and investors over the ticker and the oil price. It fell 1.14% today at the opening. Even my broker treats CSAN as a short-term purchase, despite the years I owned CZZ, its former ticker.

*Nio, a maker of electric vehicles in China was highly volatile but looks like it will close fractionally lower. It may gain from Tesla raising prices for its US sedans. 

*Bimbo, Mexico's bakery multinational, is our worst performer today, down 6.4% after it added new US offerings from its Takis brand: ridged potato chips, popcorn, cheese, corn, and nut snacks.

*Mexican Orbia (MXCHF) today issued a sustainbility report and its Mexican shares fell 0.53%. Until the drip-feed firm gets a new listing with a US ticker symbol it will continue underperforming however green, up-front, and feminist it becomes. MXCHF is too hard for US retail ADR owners to track.

*VALE, which I sold in disgust after the maker of lithium and its partner BHP refused to pay victims of Brazil deadly tailings dam bursts, won a higher rating from Jefferies but other brokers like Exane BNP Paribas, Zacks, and two other unnamed brokers cut it to underperform or sell. It fell over 3.15% today.

*Canadian Solar, CSIQ, lost 1.3% in spite of its push to diversify into new markets like Japan and partner with Habitat Energy in AI and machine learning to better handle battery storage and recharging. The Chinese firm, incorporated in the Cayman Islands, also affirmed its commitment to huma rights and against forced slavery, removing any link with the Uighur oppression by the PRC. I think we all need a couple of good Chinese plays, and this is one of them.

*Taiwan Semi-Conductor TSM fell another 0.54% over fear of the 2nd round of Covid-19 there and is now $112 and change. Taiwan Fund TWN is down 0.6% but is at a 15.7% discount from its Net Asset Value. It is listed here but no longer part of the closed-end fund association because of Taiwan being removed from its country list to make nice to China. 

*Korea Fund fell 1% perhaps because it bought into Coupang, CPNG, which was listed at an excessive premium last month. 

*Israel's Tower Semi fell only 0.22% because it is more global, with US and Israeli factories. TSEM.

Drug dealers

*GlaxoSmithKline and Viv Bio today got EU CHMP approval for their Sotrovimab to treat Covid-19 in people not needing oxygen. GSK fell 0.53%.

*Israeli Teva rose back over $11, up over 4%. Big moves in TEVA cluster on Friday when Tel Aviv is closed for the Muslim Sabbath.

*US Biogen crashed 1% after Annovis Bio reported unexpectedly improved cognition with its Alzheimer's and Parkinson's drug that beat BIIB's aducanumab. Its Japanese partner Eisai, ESALY, rose 1.43% despite the challenge from Annovis, perhaps because it can buy another license to help the country with the largest number of oldsters in the developed world.

*Astra-Zeneca rose after it got Japanese approval of its vaccine for emergency use despite a warning label about blood clot risks which are greatest in young people. Japan is an old country. AZN.

*Bausch Healthcare of Canada was tipped as a buy by Chris Lau on seekingalpha because of BHC's planned spinoff of its eye drugs. We sold at a much higher price already.

*Japan okayed home team company Takeda's covid-19 vaccine. TAK rose 0.14%. Other large-cap drug company winners include Danish Novo Nordisk NVO, up 0.5% plus Swiss Novartis NVS, up 0.15%, and Roche, up 0.5%. However, Swiss Roche, RHHBY, faces JnJ competition in its non-small-cell lung cancer franchise and lost traction. 

*Small and mid-cap gainers included AbCellera, ABCLAurinia, ALPH; Cerus, CERSEnlivex, ENLVNovaCure, NVCR; and Dr. Reddy's, RDY.

*However Israeli Bioline, BLRX and Compugen, CGEN; Spanish Grifols, GRFS, and Canadian Zymeworks ZYME fell. These would all be mid-caps.  

Finance

*SEC chief Gary Gensler warned Finra's annual virtual conference about enforcement around “crypto, cyber, and fintech”.

*Scotiabank of Canada inched up. The loonie is lifting against the US buck. BNS.

*The US oil price rose 1.1% to $62.63/bbl which boosted the sector along with energy-saving companies like ABB, which Gen Joe Shaefer and I both added to our portfolios this year. We owned it already via Investor of Sweden.

*To offset inflation, use gold ETFs with low storage costs and not other commodity or materials funds with high ones, wrote Marvin Appel of Signalert Asset Mgm on the MoneyShow blog today. Despite his insight, Kirkland Lake KL, Canada's gold-miner, fell 1.9% here today and SPDR Gold, GLD, lost 0.35%.

*Mitsubishi Finance, MSBHF, and Sumitomo Mitsui Finance (SMFG) rose today, by 0.72% and 0.27%.

*Lazard rose 1.8% on the news that Goldman Sachs will give it money to manage, reported here yesterday. LAZ.

*South Korean Coupang CPNG lost another 1.83% today. It is a sales and finance website for selling in Korea and environs and had an overpriced IPO. Its large Latin American fellow Amazon clone, Mercado Libre, MELI, lost 0.8%.

*Canada's Energy Fuels, UUUU, which mines and produces both uranium and rare earths, is our most volatile share. It is up 78%+ from my basis but jumps all over the place and today is down 0.36%.

*Dyson shares are no longer trading pending a sale of the UK company.

Tech & Tel

*Apple'sTim Cook will testify Monday before the court deciding on whether the firm he squeezed Fortnite out for offering its games for direct sale, not only via the website.

*Qualcomm was tipped as a potential winner on Seekingalpha.com today, for people with patience. QCOM.

*UK global telco Vodafone VOD bid $850 mn for a permit in troubled Ethiopia, where exiles desperately need to phone home, up $250 mn from the next highest bid from MTN according to Bloomberg.

*AT&T stock perked up1.3% after Elliott Mgm looked at the deal for selling Discovery and decided it would boost T's cash flow and, eventually, dividends, back to earlier levels. It will take a year to get rid of discovery and meanwhile we will still collect the divvies. Elliott pushed the sale.

*Swedish Ericsson is down 0.9% after ERIC paid a fine for patent violations to Finnish Nokia, NOK.

Utes

*Algonquin Energy of Canada ticked up a couple of pennies today. AQN in this case was back to tracking Atlantica Infrastructure Yield Fund, in which it owns a chunk of shares. AY gained 0.08%. They tend to track each other.

*Azure Power of Mauritius, which supplies India, is up on the woes from Covid-19 and a 40-year record destructive typhoon hitting Calcutta. AZRE.

*Veolia Environnement fell 0.18% after bouncing up all week on the consumation of a deal with Suez hareholders. This is part of making nice in France by not necessarily good for VEOEY holders. 

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