Five Hundred Words 12/03/2018

Monday, December 3, 2018

Daily Writing

7:04 AM

Today is the first trading day of December.  We are looking forward to implementing our new risk management strategy which emphasizes performance against the SPX benchmark.

Over the weekend the United States and China agreed to a trade war ceasefire.

Certain commodities are trading much higher, notably WTI Crude and copper.  Is this due to a perceived increase in Chinese demand?

We are exploring a short-term dividend capture strategy[1] targeting Blackrock (NYSE: BLK).  BLK’s ex-dividend date is this coming Thursday December 6.  Our strategy will be to find an appropriate time to purchase shares of Blackrock before the ex-dividend date and unload the shares at an appropriate price any time after Thursday.  Blackrock’s current share price is 428.01 sitting on 31.32% volatility.  The dividend yield is 2.42% and the quarterly dividend is $3.13 per share.

Sanofi S.A.[2] (NYSE: SNY) is lower close to 2.00% pre-market while most other equities are riding higher pre-market on news of US-China trade war ceasefire.  Sanofi is a French pharmaceutical company headquartered in Paris.  Are concerns over Sanofi somehow related to the Gilets Jaunes (yellow-vest) riots?[3]

Mexico’s peso currency gained 1.30% on news of US-China trade truce.  Separately, local media cited a two-page report detailing agreements made by the group building the airport, which noted than an offer to purchase up to $1.8 billion in bonds will be offered in New York on Monday[4]; this means construction of the controversial airport will continue even after the project was cancelled by incoming President AMLO.

2:06 PM

On November 30 we opted to pivot to several defensive names, namely KO, MCD, and SNY.  Defensive stocks are underperforming today, despite a 1.00% on the day for the S&P.  KO, MCD, and SNY are down 2.00%, 1.75%, and 2.29% respectively at time of writing.  I still want to hold on to defensive stocks in case we are at risk of entering a bear market heading into the end of the year.  I’m having difficulty generating alpha, I will analyze the data at the end of the day to see if there are any changes I can make to my portfolio.

[1] https://www.investopedia.com/articles/stocks/11/dividend-capture-strategy.asp

[2] https://en.wikipedia.org/wiki/Sanofi

[3] https://www.ft.com/content/7d0e1318-f09b-11e8-ae55-df4bf40f9d0d

[4] https://www.reuters.com/article/uk-mexico-peso/mexican-peso-up-after-airport-bond-holder-report-us-china-trade-truce-idUSKBN1O10VP

 

Market Data

Resource Commodities

 

December 3, 2018

November 30, 2018

November 29, 2018

November 28, 2018

Gold Spot

1228.28

1223.90

1220.70

1214.60

Silver

14.385

14.285

14.285

14.120

Gold/silver

85.29

85.76

85.39

86.13

Platinum

806.00

818.00

822.00

831.00

Copper

2.8571

2.824

2.7955

2.75

Crude (WTI)

52.97

50.52

51.07

51.23

 

Global Government Bond Yields

 

December 3, 2018

November 30, 2018

November 29, 2018

November 28, 2018

US 10 year

3.02%

3.02%

3.02%

3.06%

US 30 Year

3.38%

3.38%

3.33%

3.33%

UK

1.33%

1.36%

1.34%

1.37%

Germany

0.31%

0.31%

0.32%

0.35%

Brazil

9.82%

9.89%

10.05%

10.08%

Italy

3.12%

3.21%

3.22%

3.26%

Japan

0.07%

0.08%

0.08%

0.09%

 

Major U.S. Indexes

 

December 3, 2018

November 30, 2018

November 29, 2018

November 28, 2018

VIX

16.04

19.18

NA

18.87

DOW

257.80

253.39

NA

248.33

S&P 500

280.38

273.98

NA

269.61

NASDAQ

7421.77

7296.39

NA

7120.56

EM USD

1054.71

1053.73

NA

1048.40

 

Currency Cross Rates

 

December 3, 2018

November 30, 2018

November 29, 2018

November 28, 2018

USD/JPY

113.590

113.5300

NA

113.6300

EUR/USD

1.1334

1.1316

NA

1.1367

AUD/USD

0.7369

0.7306

NA

0.7304

USD/MXN

20.0611

20.226

NA

20.2442

USD/CNY

6.8893

6.95557

NA

6.9538

USD Index

97.02

97.20

NA

96.84

 

 

Tellier Holdings Apprentice Fund

Monday, December 3, 2018

Equities

 

Close

P&L (%)

Shares

Average price

Entry date

BRK B

220.81

0.29%

30

209.505

11/30/2018

KO

49.69

(0.23%)

83

49.65

11/30/2018

MCD

185.37

(0.24%)

19

187.43

11/30/2018

SNY

44.55

(0.19%)

60

45.15

11/30/2018

SBUX

67.50

0.11%

38

66.61

11/30/2018

LMT

296.79

(0.09%)

6

302.45

11/30/2018

MSFT

112.09

0.07%

15

110.28

11/30/2018

TCEHY

41.46

0.12%

23

39.87

11/30/2018

 

ETFs

 

Close

P&L (%)

Shares

Average price

Entry date

Franklin FTSE CHINA

FLCH

22.70

0.09%

50

22.14

11/30/2018

SPDR S&P 500 ETF

SPY

279.30

0.21%

15

274.38

11/30/2018

 

Cash

 

Close

P&L (%)

Market value

Average price

Entry date

EUR/GBP

0.89151

0.18%

10,651

0.89043

11/30/2018

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1 thought on “Five Hundred Words 12/03/2018”

  1. […] Yesterday we touched on commodities moving higher.[1]  Intuitively you’d think that the spike in demand for copper and other base metals would be due to the tentative truce between the US and China.  However, we can’t confirm this, and the dramatic downturn we witnessed today could dispel this theory. […]

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