Mon, 26th June 2017

Anirudh Sethi Report


Archives of “May 8, 2017” Day

Apple receives $1tn valuation call from Drexel Hamilton

Apple on Monday landed a $1tn valuation after analysts at Drexel Hamilton boosted their price target on the stock.

Brian J White at Drexel Hamilton maintained his “buy” rating on the stock and boosted its price target to $202 a share — the highest on Wall Street — from $185 previously. That values the iPhone maker at more than $1tn based on its outstanding share count of 5.2bn shares on May 8.

Apple’s shares were up as much as 2.9 per cent to an all-time high of $153.25 on Monday.

Moreover, he notes that Apple has “proven its resilience through its unique ability to develop hardware, software and services that work seamlessly together. We believe this positions Apple very well to capitalise on the trend toward more ‘things’ becoming a computer.”

Looking ahead, he notes that Apple’s quarterly results will be less important as investors focus on the iPhone 8 this fall, capital distribution plans, “depressed valuation” and possible innovations.

Market Mocks OPEC Crude Jawboning; Morgan Stanley Warns Of Risks To 2018 Oil Price

In the clearest indication yet that OPEC jawboning no longer has an effect on markets, and especially headline scanning algos, following numerous headlines from Saudi energy minister Khlaid Al-Falih overnight warning that the oil rebalancing is imminent, and in case it isn’t, it will come in 2018 when OPEC and Non-OPEC producers may extend their production cuts, this morning oil is firmly hugging the flatline after a failed attempt to push higher earlier in the session.

As Bloomberg reports, Saudi Arabia and Russia signaled they may extend production cuts into 2018, doubling down on an effort to eliminate a supply surplus as oil prices continue to drop. 

 In separate statements just hours apart on Monday, the world’s largest crude producers said publicly for the first time they would consider prolonging their output reductions for longer than the six-month extension widely expected to be agreed at the OPEC meeting on May 25. “We are discussing a number of scenarios and believe extension for a longer period will help speed up market rebalancing” the Russian Energy Minister Alexander Novak said in a statement.

Speaking in Kuala Lumpur earlier Monday, Saudi energy minister Khalid Al-Falih said he was “rather confident the agreement will be extended into the second half of the year and possibly beyond” after talks with other nations participating in the accord.

Fitch: French Election Reduces Political Risk; Challenges Ahead -Full Text

The victory of Emmanuel Macron over Eurosceptic Marine Le Pen in the presidential election, with around 66% of the vote, removes the risk of a near-term severe political shock to France and wider Europe. The result supports our assumption that France will remain a member of the EU and eurozone, in line with our expectations when we affirmed France’s ‘AA’/Stable sovereign rating in March.

The next key political event is elections for the National Assembly on 11 and 18 June. The outcome is uncertain: Macron’s victory was the first in modern French history for an independent presidential candidate, and legislative elections have historically secured majority positions for mainstream parties. It is unclear how much support the president-elect’s En Marche! (EM) movement, which he founded only last year, will win, given that at least half of its parliamentary candidates will have no prior political affiliation.

A recent poll by OpinionWay-SLPV Analytics for Les Echos suggests that EM could secure the largest parliamentary position (249 to 286 seats), just short of the 290 seats required for an absolute majority. As a single survey that included only mainland constituencies, the poll’s predictive capacity is limited. Still, such an outcome would provide the president-elect with a strong parliamentary backing to enact his centrist programme, which features some tax relief measures financed through a reduction in public spending, an extension of welfare benefits, and labour market reforms. He also wants to deepen integration of the eurozone.

Moody’s: Macron’s policy platform credit positive for France; implementation risks remain-Full Text

New French President Emmanuel Macron’s policy platform is, on balance, credit positive for France because it aims to enhance medium-term growth, while continuing the gradual process of debt consolidation, Moody’s Investors Service said in a report today. However, the outcome of France’s legislative elections in June will be crucial in determining whether the new president is able to achieve his policy plans.

The report, “Government of France – Credit Impact of Macron Presidency Will Depend on Ability to Reach Consensus on Economic and Fiscal Policy”, is available on www.moodys.com. Moody’s subscribers can access the report using the link at the end of this press release. The research is an update to the markets and does not constitute a rating action.

“The ability of France’s policymakers to design, and successfully implement, policies which enhance growth and support fiscal consolidation over time will drive the trajectory of France’s rating and outlook over the medium-term,” said Sarah Carlson, a Moody’s Senior Vice President and co-author of the report. “The new president will face tests in all of these areas.”