In London, the day before Christmas is shopping heaven, so most people have to work. To make up for it the day after Christmas is a holiday mysteriously called Boxing Day, rumor has it because things are put back in the box to return them to the shops. It is also observed in former British colonies like Canada and Australia. 

We got into Gatwick Sunday morning without very much ado as the drone criminals were either arrested or not, but the winged horrors ceased stopping planes taking off or landing. We landed. Then we took a new link running exclusively from Gatwick to London Bridge where you can take the railroad, the underground, or the Jubilee Line. The much vaunted Crossrail, however, is not yet in place and will not be up and running as initially planned in 2019. As we went from one benighted ugly Essex neighborhood to the next on our railroad, it was clear why the locals may be rebelling against the airport or other sites set up in their area to serve richer people. The walls alongside the tracks were totally covered with graffiti, mostly just ugly lettering, with less wit than you get in the South Bronx. This is a protest against the railroad and I suspect the drones are a protest against the airport.

TASE Tasered

*Sunday saw a huge sell-off in Tel Aviv, a market which gathered more focus than normal as a harbinger of trouble on Wall Street, because Tokyo is shut for the Emperor's birthday for the last time on Dec. 24. (He is retiring Jan. 1 and the new Emperor has a different birthday than Jesus of Nazareth.)

Tel Aviv sold-off anything tainted by Wall Street, including an 8% drop in Teva, in part for technical reasons. The Israeli Central Bank, like the Swiss one, operates on the market to stop the currencies from becoming too strong, buying US dollars against shekels or Swiss Francs. The sums are then invested by the Central Banks in US stocks and bonds which account for ~20% of Israeli reserves.

The bank officials are not stock market experts and they are quick to panic when markets turn down and sell wildly. That happened yesterday in Tel Aviv because, besides all the usual confusion, a new governor of the CB arrived yesterday, Prof. Amir Yaron. By the time he was sworn in the damage was done. Israel lost about $2 bn in foreign currency reserves so far this year. Moreover, despite the strategy, the Israeli shekel gained against the Greenback Sunday.

Israel will hold parliamentary elections April 9. Netanyahu's majority is down to 1 vote and he can't govern. If he cannot get a majority in the Knesset he faces corruption cases after he steps down. This combines temptation and duty in the supporter parties. Sounds like the USA a bit.

On Monday the sell-off continued but at a more moderate pace, down about 2%. Teva lost another 0.44% Monday. It was the worst performer among our Israeli shares in part because it is the most liquid, but Compugen and Delek Group are also underwater in Tel Aviv over the past 2 days, by 8% and 4% resp. The latter lost over oil price moves. Whether Wall Street will follow the TASE trend is unclear but the opening was downward.

TEVA announced an FDA approval for its ProAir Digital Inhaler with built-in sensors for treating asthma and chronic obstructive pulmonary disease with albuterol sulfate but this was not enough to boost its share price. TEVA in NY was down only 2.52% at the opening Monday, with Tel Aviv losses ignored.

King Kong

*Hong Kong had good news but this did not improve the stock market performance. Beijing informed the world that approvals for new games were completed and they would be coming out soon—but it is not clear how soon. China has blocked new games since last March to prevent addiction of young people by limiting playing hours and banning excessive violence or gore. King Kong is out.

Tencent Holdings was the main victim of the crackdown and initially, its share rose after a Friday press conference in Hainan at which the official in charge of gaming licenses, Feng Shixin, said new approvals were coming. The second thoughts came because TCEHY is not the only applicant for new licenses and the approvals will probably not come in time for the Chinese New Year. So Monday, Tencent in Hong Kong lost 1.4% on very heavy volume but gained it back and more, finally up 7.63% to HK$324.5.

Asian Plays

*AIA Group lost 1.23%. It is an Asia-wide insurer. AAIGF also fell 0.24% at the Monday opening in New York.

*The first plane which landed Friday morning at Gatwick after the drones were cleared was a Shanghai arrival by China Eastern Airlines, CEA. It had initially been planned to divert it to Heathrow. It lost 0.6% yesterday in Hong Kong trading. Markets fear it is not as careful of its passengers' lives than rivals.

*The big winners in Hong Kong Monday were none of these China plays, but good old Hong stocks like China Light & Power (CLPHY), and Bank of Qingdao which is creating a wealth management sub. It is not the Chinese bank which bought Irish stock brokerage Goodbody; that was Fexco.

*Azure Power, a green play picked for 2019, was up 0.97% in NY yesterday. AZRE makes solar power stations and wins bids with low estimated charges per kW, not surprising given that the sun shines a lot in India. (However Canadian Algonquin, AQN, is down.)

*Despite or because Tokyo is closed Monday, there was a lot of random selling and most Japanese shares fell on Wall Street at the opening. Among the losers was Goldman Sachs ActivBeta Japan, GSJY, which did not steal money from Malaysia's wealth fund

*Closed end fund Japan Smaller Cap, JOF, however, is up.cf below.

*The HOLI (if not the Ivy) won in Hong Kong, Hollysys Automation Tech, up 1.61%.

*Jaguar Landrover (the British sub of Tata Motors, TTM) gave assurances to the UK that it will not say Tata to its UK. Whyever not, Mr. Chandrasekaran?

Finance

*Standard Life Aberdeen picked itself up from the floor in London Friday, moving up over GBX 252 from 220. It is suffering from the distaste for managed funds as investors switch to automaton index-tracking exchange-traded funds, although we sold because of revelations of hidden Israeli positions in a fund set up to consolidate control of Aberdeen closed-end funds. SLFPY.

*Gold is up and so is SPDR Gold, GLD. Frankincense and myrrh were not quoted.

*Banco Santander of Spain is up. SAN has an emerging markets Latin America focus but its UK branch network faces fines of £23 bn for misselling personal payment insurance to retail borrowers.

*I am still trying to extract from E-trade the final gain to be reported to the IRS for our Barclays non-cumulative Preferreds D series 5 which were acquired Dec. 18, I think at $25. We bought them Dec. 11, 2009 at $24.23 so the gain will be modest, but it is still shockingly poor service at year-end.

*Treasury Secy Steve Mnuchin is reported to be calling banks to tell them Pres. Trump did not threaten to sack Fed Chair Jerome Powell. As nobody believes Mnuchin, US markets are down again.

Europe Winners

*A Wall Street myth states that if copper prices are not falling, a recession is not imminent. Note that despite the blues in London yesterday, Antofagasta, Chile copper miner listed there, gained 3.8%. ANFGF.

*London took a slide, not too surprising, given that trading will stop for two days. European markets also suffered from nerves, among other reasons because of fear of the US government shut in and rumors that Pres. Trump wants to fire Fed chief Powell.

*Swiss drugmakers Roche and Novartis split, RHHBY up, and NVS down.

*Greencore Group, maker of ready meals for Britons and Irish, rose 14.74% in London on Monday. Perhaps stock investors noticed that they were buying its products for the holiday. There was no news but lots of food buying yesterday. Another argument is that GNCGY will pay a special semi-annual dividend of 4.47% Jan. 9 after selling its US arm to a private capital group. It is thereby informing the market that there will be no new adventures in the short term. (The ex-div date has passed so that is not lurking in the shoppers.)

*Anheuser-Busch-InBev lost 1.4% despite its market-shocker deal last week to make brews with marijuana content under a deal by its Labatt sub with Tilray of Canada. Each will put up $25 mn to research beverages infused with cannabinol, which has no psycho-active ingredients. One reason is the euro is losing froth.

*E.ON, EONGY, the German ute, is down 2.2%. Ich habe kein Ahnung warum. No idea why.

Cement and Industry

*Cemex is growing thanks to intervention, if nothing else, it was up another 0.6% yesterday. CX.

*Irish CRH gained 1.1%.

*Schlumberger Ltd of the Dutch Antilles is up. SLB reported insider buying to the SEC. Its systems help find and fund oil and gas.

*BP plc, the UK oil co returning to the US Gulf of Mexico waters, lost 1.3% yesterday. Last week insider Helge Lund bought £3 mn worth of shares.

*Peace on Earth is not in view so BAE Systems, maker of military goods, rose 0.75%. BAESY. Dassault Aviation in France also rose. Fighter planes are in demand.

Funds

*Yesterday's Barron's reports that last Thursday US closed-end funds, notably bond ones, traded down as much as 15% before pulling up a bit. That was over the Fed's decision to raise interest rates and the initial reaction by Pres. Trump calling for the head of its chairman. Discounts in double digits resulted, writes Randall Forsythe, who notes that this free fall results from the smallness of CEFs and their trading at market whim when compared to open-end or exchange-traded funds, which are managed. That is the flip side of their advantage, often at a double-digit discount from net asset value. If you want to sleep well at night don't pursue the biggest discounts or the highest yields. We don't, why we cover a few Yankee bonds outright.

Our country funds fell sharply in the wake of the bond fund sales, however, and closed the week at double-digit discounts à la Canadienne: Herzfeld Caribbean (CUBA) -22.9%; Japan Small cap JOF (cf above), -14.7%; Korea Fund, KF, -13.2% Mexican Equity & Income, MXE, -9.9%; Morgan Stanley India,IIF, -15.6%; Templeton stocks EMF, -13.4% and bonds TEI, -16.2% , and naturally, Canadian General Corp, CGRIF, -27.1%. End of year tax selling of CEFs is normal but the discounts are bigger than normal and may be a harbinger of more trouble for the market overall.

*SeekingAlpha writer Christoph Liu is recommending Investor AB, the listed investment group owned by the Wallenberg clan of Sweden's Skandinavska Enskilden Bank and managing pension funds for its holdings. We told you first. He thinks its discount is not as great as that of other European holding companies, but the reason is that this is the easy entry into Sweden and the Nordics. IVSBF.