Nice slide from JPM Q2 2020 Results showing activity measures across their lines of business.
“We saw record levels of debt and equity issuance in the quarter as clients bought to pay down the majority of the revolver draws“
“as markets rebounded to pre-COVID levels, May and June together were our two busiest months for equity issuance ever“
“More recently, we’ve seen the improvement in overall sales growth across the country flatten out, notably in both states with increasing cases and states with decreasing cases.”
“In Auto, April saw the lowest level of loan and lease originations since the financial crisis. But activity rebounded sharply in May and June. And in fact, June ended up the best month for auto originations in our history.“
“And in home lending, retail purchase applications, after reaching a low in April, recovered to well above pre-COVID levels in June due to a strong and broad market recovery.”
The Department of Labor (DOL) has proposed a rule that might ban the ability of corporate sponsored retirement accounts (e.g. 401(k)s) from holding ESG Funds.
“Private employer-sponsored retirement plans are not vehicles for furthering social goals or policy objectives that are not in the financial interest of the plan,” said Secretary of Labor Eugene Scalia. “Rather, ERISA plans should be managed with unwavering focus on a single, very important social goal: providing for the retirement security of American workers.”
Comovement represents the absolute number of stocks in the S&P 500 which move on the same direction on any day (either up or down).
If half the stocks move up and half move down, comovement would equal zero. If 100% of the stocks move up, comovement would slightly exceed 500 (there are currently 505 stocks in the S&P 500).
Holding volatility relatively constant the rise of index funds has led to a marked increase in the comovement of stocks since the 1990s.
This along with volatility selling and illiquidity creates a market structure that has serious implications for investing.
CMA have published an in-depth report on competition in online platforms and digital advertising in the UK.
The dominance of these platforms is clear – as the chart shows Google has market power in the entire vertical chain which takes 35p for every £1 of advertising spend.
Lots of interesting charts inside – some to come in future snippets.
Since 1958, it has been a driving force in the creation of weather satellites, GPS, personal computers, modern robotics, the Internet, autonomous cars, and voice interfaces, to name a few.
This fascinating and thorough article, or more precisely a self describe “collection of atomic notes”, attempts to explain why DARPA works in search of creating a private sector funded “ARPA”.
The section on program managers is worth a look as the characteristics described there are also those that make good investment analysts.
A chart that is one possible explanation for Tesla’s dominance.
When compared to direct competitors like Jaguar, Mercedes, Audi and Porsche, Tesla models 3 and S have almost 2x the efficiency which translates directly into savings.
Insightful FT Alphaville post on short reports (“activist short selling”).
It builds on a recent paper where “two academics studied corporate responses to 351 short-reports published on US-listed companies between 1996 to 2018 in an attempt to discover if a company’s reaction is as important as the market’s when a report is released.”
It seems that companies that launch internal investigations as a response have the worst outcomes – 383% higher chance it is a fraud.
“It makes me nervous when someone believes too deeply or too much. I think that being skeptical and questioning all deeply held beliefs is essential. Of course we must know the difference between skepticism and cynicism because cynicism is as much a restriction of one’s openness to the world as passionate belief is. They are sort of twins.”
Comprehensive report with loads of stats on “whatpeople in the UK are doing online, how they are served by online content providers and platforms, and their experiences of using the internet, alongside business models and industry trends.“
71% of all online time is spent on mobiles now, yet half of over 75 year olds don’t use the internet at all.
39% of online time by adults was spent on Google or Facebook owned sites, and these two control 79% of UK online ad revenue.
This dataset tracks the flow of talent in AI around the world.
The chart shows the top 25 institutions for AI research.
“The United States has a large lead over all other countries in top-tier AI research, with nearly 60% of top-tier researchers working for American universities and companies. The US lead is built on attracting international talent, with more than two-thirds of the top-tier AI researchers working in the United States having received undergraduate degrees in other countries.”
A data rich post about UK housing with some gloomy predictions.
Pictured is a chart of mortgage approvals – in blue since the three years leading up to the financial crisis and red since the three years before lockdown.
Mortgage approvals are “the leading indicator” for housing transactions and it does not bode well.
