Notes from the kitchen - Episode 6

It’s been hovering in the background for a while, but is it time for us to start worrying about BREXIT again? Sterling’s strength against a weakening Dollar is understandable, but appreciating against a stronger Euro looks a bit odd, given what’s coming. Time to take a little profit off the table perhaps?

Exxon Mobil, the world’s largest company for a short period in 2013 (and currently worth approximately 9% of the present largest company) was unceremoniously dumped from the Dow Jones Index at the end of August. The company, the longest surviving member of the US’s most iconic index, ironically exited primarily because of Apple splitting its stock (the Dow being a price, rather than market cap weighted, index). Think the global energy markets are changing much?

On which subject:The new EUR 6.5 Billon Federal Republic of Germany 10 Year Green Bond came to the market yesterday at a yield of -0.46%. Bids were received for ….. EUR 33 Billion, making the jumbo issue 5.5 times over-subscribed. At a yield of 0.01% LESS than the equivalent conventional 10 Year Bund. All of which is significant for a number of reasons. Ask Exxon, they can probably explain.

PMI Services and Manufacturing numbers coming in strong for August from both sides of the Atlantic, albeit from low bases. But at least the numbers are Green. Inflation ? Not if the Eurozone is to be believed with August CPI at -0.2%

Quandary of the week. Both Government and Corporate Bond yields continue to contract, whilst stock markets (or at least bits of them) continue to run.

Leading us to question – Can tech fly irrespective of underlying domestic economic conditions?

Value search for the week – Beaten down transport exposure which concentrates on road and rail, and excludes sea and air ? Going anywhere nice later this year? Or next?