(April 25/ 2017)
Investors Cheer Election Results in France
The French presidential election was only in the first round, but a victory for market-friendly candidate Emmanuel Macron led to a big rally for the euro and European stocks – and helped push stocks in other regions higher too.
The field was narrowed down narrowed down to two candidates in Sunday’s election. In two weeks, Macron will face off against Marine Le Pen, who is in favor of France leaving the euro. Investors were heartened that Le Pen did not perform better than polls predicted – after surprises with the Brexit vote and President Trump’s election, investors were more distrustful than usual of polls. According to current polls Macron is expecting a roughly 60/40 advantage heading into the final round, and investors appear confident in his victory.
What Does This Mean?
For the markets: It was a great day for Eurozone investments.
There was positive activity as many international investors bought into Eurozone investments. This involves buying the Euro which drove prices up. Some of our clients made very lucrative returns in the matter of a few hours. International investment helped push the euro up versus other currencies. Eurozone stocks jumped about 4% (which is a lot for one day!), reflecting investors’ optimism that a major risk to the eurozone economy had abated. The optimism fed through to other markets, with almost all major stock markets higher on Monday; it was what traders call a classic “risk on” day (when riskier investments, like stocks, go up).
The bigger picture: The election results in France could be seen as a vote of confidence in the euro.
The nine years since the financial crisis have been challenging for the eurozone, with relatively high unemployment and bailouts of over-indebted states. Anti-euro movements have gained ground in countries such as Italy, France and others. If Sunday’s electoral result in favor of Macron is repeated in two weeks it will be, effectively, an endorsement of the euro by its second largest economy – and a big pare back of a potential existential risk for the euro.
Toys & Games Are a Serious Business
The race is on! American toy maker Hasbro reported better-than-expected profits in its most recent quarter thanks to sales in its digital games division – and its stock price hit an all-time high! Sales from Hasbro’s gaming division went up 24% compared in the first three months of 2017, which includes digital gaming along with well-known board game franchises like Monopoly. The company also said that it expected the bump in sales to continue through this year, in anticipation of toy sales related to upcoming Star Wars, Marvel, and Transformers movies. Altogether, profits from entertainment and licensing more than doubled versus a year ago -- and investors were excited enough to send the stock up by over 5% on Monday.
What Does This Mean?
For the stock: Mattel is losing the toy war and Hasbro is now in the lead.
The size of Hasbro’s quarterly revenues surpassed that of its chief rival, Mattel for the first time since 2000. Mattel, another American toymaker produces brands like Barbie and Hot Wheels. While Mattel has historically been more successful than Hasbro, the tables started to turn last year when Hasbro won a big contract for the rights to manufacture dolls from the 3D Disney hit Frozen – the kind of deal with Disney that had long been reserved for Mattel. Mattel reported worse-than-expected earnings last Friday, and Monday’s results confirm that the tide is still moving in Hasbro’s direction, thanks to its growing advantage in franchising.
The bigger picture: By innovative approaches Hasbro is trying to bring traditional games into the 21st century.
Hasboro's innovative initiatives are a response to the rise of electronic gaming which has been a competitive threat to traditional toymakers like Hasbro. For example, it is launching a subscription service that will deliver three new board games every three months to customers’ doorsteps. It’s also launched apps and digital interfaces for Dungeons & Dragons, one of its best-selling board games. Mattel, for its part, has hired a former Google executive to be its new CEO, and she’s promised to boost Mattel’s offerings in mobile games. One big question is whether these companies can use their existing brand power to drive success in a digital setting.
Questions and Answers
“Is it always true that a stronger currency leads to weaker stock prices?”
“The answer is yes and no. The impact of a company’s home currency on its stock price is largely determined by the amount of business that it does abroad. For example, it might export lots of products or have substantial international operations. When that is the case, its overseas income is particularly important because that overseas income must be translated back into its home currency. Certain countries, like Britain, have more big companies that operate largely overseas than, say, America, whose companies tend to have relatively more domestic sales.”
Coffee Breaks - The Ultimate Passive Income
Abeo Tinibu moved to the UK ten years ago from Nigeria. For the last seven years he has driven lorries all over the country and enjoys his work. Abeo also dabbles in the stock market and has a broker that sends him signals via his mobile. When he pulls over for a cup of coffee he puts his trades in and checks his stats.
Recently through the suggestion of his broker Abeo discovered that he can make more money from coffee breaks than he makes from driving! How is that? The formula is very simple. Abeo shares the excitement of his hobby with his many friends, acquaintances and waitresses along his route. They also want to make money in the market. Guess who their broker is? Abeo.
Abeo: Who doesn't want to make money? Abeo laughs
GSI: Do you have sales skills?
Abeo: Me? Not at all. I just like talking about the stock market and when I tell friends of mine how I made some overnight profit they ask me if it cost money to join. I tell them its free and I can have someone call them and show them how to do it. Nobody has said no to me yet.
GSI: When did you start building your network and how many clients do you have now?
Abeo: Let me see, its been about a year now and I have around 50 people in my network. I'm like Santa Clause whenever I come around (he says with a big laugh).
One of the perks that our clients enjoy at GSI is the network option. You will earn an additional 20% from the deposits of your network. With the typical average 200-300% success rate that quickly adds up to a very nice passive income. If you would like to develop your own network feel free to get in touch with us. More.
Dear clients I am always available for your questions or concerns. If you are not yet receiving my VIP tips let me know and I will add you to my list. Contact me. Cheers.