Trump’s US dollar comments light a fire under gold and silver

Michael Hewson (00:00)
Welcome to this week’s podcast brought to you by the Good Money Guide and our sponsors Pepperstone who are a multi-regulated CFD broker providing trading services in forex stocks and commodities in multiple destinations. I’m Michael Huston and joining me once again is Pepperstone Senior Market Strategist Michael Brown. Good afternoon, Michael. It’s certainly been a busy week, not only in obviously stock markets, but in commodity and currency markets.

Michael Brown (00:24)
Yeah, absolutely. Hello, mate. Very good afternoon to you. Good afternoon to all our listeners as well. ⁓ Yeah, it has been a very busy week. And I’d also say it’s probably been the first week in a while where attention has arguably not centered on the equity market because we’ve had obviously metals running to fresh record highs and we’ve even had the return of some volatility in the FX space as well. ⁓ a little bit of a break from the norm. But one thing that has continued as usual is the generally quite chaotic

nature of proceedings that I think we’ve all become quite used to now.

Michael Hewson (00:58)
Indeed. Okay, well before we get into it, let’s do the risk warning because we’ve got quite a bit to get through. Trump’s comments on the dollar, obviously the record highs for gold, silver and now copper, I think. And obviously that’s helping drive the FTSE 100 to new record highs. I’m no doubt that the Labour MPs will take credit for the fact that the miners are going gangbusters, but hey-o.

Michael Brown (01:04)
Mm.

Yes.

Well they’ve already taken

credit for the pound trading at four year highs or whatever it is so it wouldn’t surprise me.

Michael Hewson (01:25)
But then

they’re absolute muppets, lot of them. Anyway, I better get into the risk warning. The information provided here, whether from a third party or not, isn’t to be considered as a recommendation or an offer to buy or sell, or the solicitation of an offer to buy or sell any security, financial product or instrument, or to participate in any particular trading strategy. We advise any readers, viewers or listeners of this content to seek their own advice.

SpreadBits and CFDs are complex instruments and come with a high degree of risk of losing money rapidly due to leverage 71.9 % of retail investor accounts lose money when trading spreadBits and CFDs with this provider. Okay, a lot to chew over. I mean, obviously the record highs for gold and silver. We’ve also seen record highs for the S &P and the Dow this week on top of the FTSE 100 today.

And I think you could potentially argue that an awful lot of this blow back into precious metals is largely as a consequence of comments by President Trump that came across as him being fairly relaxed about the recent weakness of the dollar. Easy for me to say. So obviously we’re going to we’re going to talk about that. We’ll have a

Michael Brown (02:34)
Ha

Michael Hewson (02:40)
brief look at UK markets. They’ve not really done that much this week. And then we’ll look at the latest earnings numbers from Tesla, Microsoft, Metta, a bit of divergent reaction to those. ⁓ And also we’ll look at Lloyds Banking Group and EasyJet. But before we get onto that, and then obviously we’ll look at next week, ⁓ Bank of England, DCB, Non-Farm Payrolls, as well as a continuation of the Mag7 with Amazon.

Michael Brown (03:00)
Yes.

Michael Hewson (03:08)
and alphabet but let’s start with Trump what came first the record highs for gold and silver or Trump’s comments or was it all of you know all interconnected

Michael Brown (03:23)
Yeah, I mean, it all sort of

it is all very, very interconnected. I mean, the rally in gold and silver is nothing new. know, we’ve been talking about both of those trading very, very well for a while now. What?

Michael Hewson (03:35)
20 % up this year.

Gold, I think.

Michael Brown (03:36)
Yeah, exactly.

What is new is the fact that the two of them seem to have gone slightly parabolic over the last week or so. I think we don’t need to go through the bull case for that because that’s very, very well known at this point. But what’s given it another sort of kick higher this week is those comments we had from Trump on the dollar. Obviously, we had this kind of

sell America trade coming through at the back end of last week. And Trump was asked about the value of the dollar ⁓ on Tuesday. And he said, well, I think the dollar is doing great. It’s finding its own level. I think that’s fair. And his exact words were we can have it go up or down like a yo-yo, which market participants almost took as a little bit of a green light to actually say, well, do you know what? The dollar at that point was trading at roughly four year lows against a basket of other currencies. Market participants kind of took that as a

like to say, well, do you know what? Yeah, the dollar has sold off a lot, but clearly the president isn’t particularly bothered. And maybe the president is even trying to engineer further dollar weakness as part of this broader run it hot approach that they have to the US economy. And that just drove the latest leg higher in gold, higher in silver and higher in other currencies as well.

Michael Hewson (04:47)
Do you think that these concerns about him weakening the dollar are in any way justified? Or is this just the normal nip and tuck that you get with policymakers when it comes to their pronouncements on the dollar? I mean, I think it’s been an article of faith for quite some time now that the US has a strong dollar policy, but it’s not, it’s implied. There’s nothing written down.

Michael Brown (05:08)
Hmm.

Michael Hewson (05:13)
that says, yeah, you know, the US has a strong dollar policy. ⁓

Michael Brown (05:18)
Yeah, and you’re never going to get

a Treasury secretary or a president coming out and saying, we want the dollar to trade at 100 or we want the dollar index to trade at 80 or whatever it might be. I think one of the reasons why myself and other market participants have probably placed a little bit more weight on this than we otherwise might be inclined to is because it’s actually broadly in keeping with the view that Trump has had for quite some time now. You you even go back to the first administration where he was very critical of countries like China for devaluing

valuing

their currency. He has mentioned on many, many occasions his preference for a weaker dollar. And I guess against that backdrop, participants have kind of put two and two together and gone, well, maybe actually he does want the dollar to decline further. But as you alluded to when we were chatting before we hit record, that doesn’t really chime with his desire to, as he said on Truth Social earlier today, have the lowest interest rates in the world, because if you’re bringing the value of the dollar lower, you’re running the

risk of importing inflation, which obviously makes the Fed’s job considerably harder than it already is.

Michael Hewson (06:24)
Yeah, and I think that’s something that maybe he’s not completely perhaps aware of. Like most politicians, I think anything that you say with respect to a currency has spillover effects. But I mean, it only four years ago that we were talking about the dollar being at 20 year highs. And actually, if you look on a 20 year basis, the dollar’s unchanged from where it was 20 years ago. Again, you know, on a dollar index basis.

Michael Brown (06:46)
Mm.

Yeah, well.

Yeah, and also actually, well, I mean, it is mainly the euro in the dollar index, but also euro dollars not actually that far off where it was at the inception of the euro. So, yeah, at the end of the day, it’s been kind of long and winding ride to end up back where we started, I guess.

Michael Hewson (07:09)
And we’re well off the record lows that we saw in the aftermath of the financial crisis ⁓ in 2007 2008 where everyone was writing off the dollar. I mean, I think there is a concern here that his attitude towards the dollar is almost one of benign neglect more than anything else. And I think perhaps all he’s doing is he’s articulating a position.

Michael Brown (07:27)
Hmm.

Michael Hewson (07:35)
that essentially has been in play pretty much since those highs that we saw four years ago. And I think one of the reasons for that

is perhaps why the Federal Reserve is perhaps a little bit cautious about cutting interest rates too aggressively because of the decline that we’ve seen in the dollar over the course of the past four years is going to make inflation an awful lot more trickier to tackle if it continues to weaken and goes back to the lows that we saw you know in 2020 and 2017.

Michael Brown (07:57)
Yeah.

Hmm.

And certainly the Fed on Wednesday evening last night giving really no indication that they’re looking at delivering a rate cut anytime soon. think they’re very much in kind of this wait and see mode at this point. And actually, unless you see some pretty significant labour market weakness coming in between now and May, we’re probably not going to get another rate cut under Chair Powell. And then, of course, the whole discussion will change as and when we know Powell’s successor and they’re likely to take a much more dovish approach. The question then

becomes, can they bring the rest of the committee with them? But yeah, certainly the Fed are happy with where they are at this point, I think.

Michael Hewson (08:43)
despite the dissents on the committee yesterday.

Michael Brown (08:46)
Yeah, I mean, one of those dissents was pretty much guaranteed in terms of Governor Myron and I’m surprised it was only 25 basis points.

Michael Hewson (08:51)
Yeah, I’m not counting him.

Michael Brown (08:57)
Part of me wants to go, this is just kind of while I’m going, well, if I want any hope of getting the Fed chair gig, I have to dissent. Part of me is going, actually, do know what? He has been pretty dovish since last summer, June, July time. And it’s just a continuation of that sort of policy ethos. I would like to hope that it’s the latter and it’s not a sort of opportunist dissent. either way, I think the key takeaway is that they are just two members, the other 10 voters and actually

the other non-voting members very much are of the view that standing pat is appropriate for the time being I think.

Michael Hewson (09:35)
OK, so we’ve seen this dollar weakness. I mean, obviously, it’s just continued a trend that’s been in place pretty much for the past 12 months or so. Now, you’d think that given those comments on the dollar, we’d have seen US yields perhaps move in one direction or the other, but they haven’t done anything this week.

Michael Brown (09:53)
No, it has been, I don’t want to use the key word because it will tempt fate. It’s been a subdued week in the Treasury market. I guess the biggest takeaway for me is that the benchmark 10 year is still above that four spot 2 % mark. The benchmark 30 year is still above that four spot 8 % mark. They seem to be

Michael Hewson (10:06)
Mm.

Michael Brown (10:11)
kind of lines in the sand at this moment in time. And you would argue that the balance of risks tilts lower for treasuries higher in terms of yields in order to well, not yet, not yet.

Michael Hewson (10:22)
But we haven’t seen that. But

you’d think given what he said that we would. And we haven’t.

Michael Brown (10:30)
You would.

And it is perhaps a little bit strange that the market hasn’t reacted to that. yeah, it is a bit of a head scratcher. I don’t have an answer for you at that point on that one.

Michael Hewson (10:41)
I mean, and I think this is part of the divestment trade that we’ve seen. We’ve seen people coming out of dollars, then, you know, obviously they’re not selling treasuries. What they’re doing is buying, they’re buying gold, they’re buying silver, they’re buying copper, they’re buying Europe.

Michael Brown (10:57)
Yeah, well, not just Europe, but buying Asia as well. it’s part of that. Sell America participants are reconsidering the exposures they have to the United States and they are trimming those positions and they are going and looking for to put that cash to work elsewhere, whether that be in the metals complex or whether that be in another geography.

Michael Hewson (10:59)
Yeah, ⁓

I was talking to the stock trading network on a podcast earlier this week and I framed it that people were not selling America, they were going underweight in America.

Michael Brown (11:29)
Yeah, and realistically, this is not a new phenomenon. This is something that people have really been doing, well, certainly for the last year or so. But also you’ve got to remember the base that we’re coming off. We’re coming off a base where we had probably 10, if not 15 years post-GFC of massive overweight US positions. So, you know, even trimming that massive overweight back to just neutral before we even consider going underweight, that is going to be a massive, massive flow of capital. And I think that’s a reflection of what we’re seeing.

Michael Hewson (11:44)
Yeah. Yeah.

One thing I would also add is that Trump is only president for another three years.

Michael Brown (12:05)
Hmm. And actually, in

many respects, after November he could be a bit of a lame duck, depending on how the midterms go.

Michael Hewson (12:11)
Yeah,

exactly. you know, all this, you know, people getting their knickers in and not about his comments on the dollar. You know, he’s not going to be president after the next election. So quite conceivably, US policy towards the dollar could well change now.

Michael Brown (12:29)
Hmm.

Michael Hewson (12:35)
Obviously, that really depends on who replaces him at the moment. think the person in pole position for that is JD Vance. What he says as Trump’s number two and what he says is perhaps potential presidential candidate are likely to be significantly different if you contrast what he said three or four years ago about Trump and what he says now.

Michael Brown (12:57)
Yes, absolutely. little bit chameleon-esque in terms of how he’s been changing his stripes depending on the role that he has and the allegiances that he has at a time. But I guess that’s politicians for you at the end of the day.

Michael Hewson (13:01)
Yeah.

it is. What do you make of this dollar yen trade? We talked about it. We touched upon it a little bit last week. We heard chatter about rate checking on the Friday. There was then further chatter on earlier this week that there was some coordination involved which pushed the dollar even lower. But we haven’t really dropped.

Michael Brown (13:17)
Hmm.

Michael Hewson (13:38)
that much more since that was denied by Mr Besant, the Treasury Secretary, earlier this week.

Michael Brown (13:43)
Yeah, it does feel like Dolly En is starting to find a little bit of a base. As you said, we had sort of that double round of rate checking on Friday, firstly from the Ministry of Finance and then later in the day from the New York Fed, who we assume were acting on behalf of the Japanese authorities and basically just helping them out because of time zones, how late in the day it would have been in Tokyo. The way that I’m kind of looking at Dolly En now is a case of

We’ve had these two rate checks. think the Ministry of Finance have set out their stall very, very clearly that they’re worried about where the yen is trading. They don’t want the yen to be detached from fundamentals, etc, etc, etc. However, the longer that we now go without any actual intervention taking place, I think the more likely it is that the market sort of goes, OK, well, do you know what? We’re going to test your metal a little bit. We’re going to try and find that pain threshold a little bit, because it’s all well and good, you know, throwing out these threats.

But I think we’re kind of getting to the point of put up or shut up at this stage And of course while we’re on the subject of Japan do remember that next week is or next Sunday is Election Day in Japan So it could get relatively spicy in terms of the yen and in terms of JGBs but I do think that the rate checks in the immediate aftermath of them really tilted the risk reward out of favor of being short yet because you know the Ministry of Finance come in with a rate check

It’s a real shot across the bowels. Final warning. We are thinking about intervening. No one wants to be short the yen and run the risk of being five big figures offside if they do actually step in. The longer we go without them stepping in, the more that balance actually starts to come back a little bit and participants think, well, do you know what? Maybe they’re just bluffing. Maybe we can find a trade there. And that’s when things start to get a little bit dangerous.

Michael Hewson (15:36)
Yeah,

I’m not totally convinced about that now having looked at the Dolly End Daily chart there’s a big gap between 1.5580 where ⁓ we closed on Friday and where we opened on Monday. ⁓ And that will be tough to get back above I think. So we may see a short squeeze back to around about mid 1.55s.

Michael Brown (16:00)
Mm.

Michael Hewson (16:01)
But I think it’s going to take something really substantive to put it above there. Has the JGB market settled down a bit now?

Michael Brown (16:07)
It has settled down a little bit. I mean, I

think, you know, it is going to be tough to get back to towards those highs, which were what 159.25, I think was the high that we printed on on Friday. I think it’s a bit of a tough ask to expect us to get back to there anytime soon. But you’ve also got a question, you know, where how far would the Ministry of Finance let any weakness go before they step in? You know, certainly when the Takaichi administration seemed to have a much, much lower tolerance for any yen weakness than

than those who came before them, which is ultimately why we’re talking about this in the first place.

Michael Hewson (16:39)
Yeah.

We also we are also very close to the record lows on the yen at the moment. So it pays to be cautious, particularly ahead of the election. But I would also pose or posit the argument that maybe the concern about JGBs is slightly overblown because the real yield is still negative.

Michael Brown (17:00)
Yeah, I think that concern is considerably overblown, to be honest with you. I think the reality is very different from the headlines in the JGB market, because I think a lot of people have been spooked by words along the lines of record high yield on the 40 year or multi-decade high on the 30 year. But these numbers are still about 2 % in nominal terms and rightly, as you say, negative in real terms. So I think we’re still quite a long way from this idea of a ⁓ mass unwind of the carry trade.

Japanese investors bringing all their cash back to Tokyo etc etc etc I think that’s that’s media hyperbole and hysteria as opposed to market reality.

Michael Hewson (17:42)
and the fact that 90 % of the bond market is owned by the Bank of Japan anyway.

Michael Brown (17:46)
Yeah, and although they are stepping back, think I think I worked it

out. It was either their bond holdings or their ETF holdings. If they continue to trim them at the pace they’re doing at the minute, it would take them about a century and a half to get back to flat, which kind of gives you an idea of how glacial this whole thing is going.

Michael Hewson (17:59)
Okay.

Yeah, both of you and I will be long gone. Will be a footnote in financial markets history. Any… Yeah, it is, isn’t it? Okay, so oil prices spiking again. Concern about a US strike on Iran this weekend.

Michael Brown (18:06)
Yes, I would imagine so. Well that’s rather morbid isn’t it?

Yeah, it seems to be that way. I was just looking now, both Brent and WTI are up by about 5 % on the day. We’re recording this on Thursday afternoon, of course.

Michael Hewson (18:32)
$71

a barrel Brent

Michael Brown (18:34)
Yeah,

and WTI is north of 65, both trading at six month highs. I think it’s a difficult one because every time anyone hears, you know, intervention in the Middle East, they automatically go, is it going to interrupt crude supplies? Do we need to send benchmarks higher, etc, etc? I think it just speaks to how nervous the market is, firstly, about the potential for intervention and also the potential for things to become prolonged in nature in terms of the US involvement. And I think secondly, it speaks to

a lot of positions being squared up. mean, you know, if you’re a crude trader right now, do you really want to be sitting short oil over the weekend? Absolutely not.

Michael Hewson (19:16)
don’t think it will be sitting short oil over any weekend, particularly with this administration. So, I mean, obviously that then imposes an inflation risk going forward. It’s going to make it much more difficult for central banks to indulge in multiple rate cuts this year. If it’s prolonged, I mean, obviously.

Michael Brown (19:19)
No, I would agree, but certainly not right now.

if it’s prolonged.

Michael Hewson (19:42)
I’m looking at my Brent chart now and you’re right. We’re at six months high. And the six month highs, but the fact is, we’re almost back at levels that we were in the middle of the summer when we spiked up to around about $73 a barrel on Brent. I think it’s the speed of the rise more than anything that’s a little bit concerning.

Michael Brown (19:54)
Mm.

Yeah, I think that’s absolutely the case, although you would then argue that if we end up in a situation where there is no military action, then actually do you just see all of this unwind in relatively rapid fashion? I think there’s a lot of unknowns. Obviously, as quite often happens, markets have sort of jumped to one extreme and over time they will probably come back from that extreme.

Michael Hewson (20:30)
Let’s hopefully price that out. ⁓ Okay, so here’s a bit of a strange one that I’ve observed this week. UK yields have firmed up quite a bit this week, particularly five and tens. Any reason behind that?

Michael Brown (20:33)
Yes.

Hmm.

Well…

I it all sort of started last week, if we’re being honest with you. You know, short, I think it was. I think it was primarily those PMI numbers, which, well, I think we may have talked about on the podcast last week. I don’t know where the 21 month high in both services and composite PMIs came from, but the market seems to have looked at that and gone, maybe the UK is starting to turn around. Maybe we were too pessimistic. The swaps curve has had a big move. We’ve now just got 35 basis points of cuts from the Bank of England price.

Michael Hewson (20:53)
Was it the data?

we did.

Michael Brown (21:19)
priced in by the end of the year. Frankly, it all seems a little bit, the market feels like the market’s gone a little bit too far too fast with all this one. It’s one data release that is considerably out of kilter with the other UK data releases that we’ve had. Let’s hold our horses a little bit. If we see turnarounds in other metrics, then absolutely fine. Let’s buy into the idea that maybe we were too bearish on the UK, but I’m not going to say that just yet.

Michael Hewson (21:49)
No, I mean, I think what we’ve seen over the past few weeks since the beginning of the year is that the 10 year yield and the five year yield have respected the ranges they’ve been in over the course of last six months. So what you’re seeing is it’s just basically trading in at corridor a price action. Now on the 10 year, that’s around about 4.5 % at the moment, which is the top end of the range pretty much for since November.

Michael Brown (22:00)
Hmm.

Michael Hewson (22:17)
and the bottom end of the range is around about 4.3%. So, you know, it’s above that 4.2%, but it’s been above that 4.2 % for God only knows how long.

Michael Brown (22:23)
Hmm.

Yeah, and I don’t think it’s going to get below anytime soon either.

Michael Hewson (22:32)
Yeah, you’re talking 2024.

Michael Brown (22:34)
Hmm.

Michael Hewson (22:36)
was when it was back below 4.2%. So it’s been pretty much above there since Labour got in.

Michael Brown (22:39)
Yeah, the…

The

other thing that we’ve actually seen this week when you’re looking at the fixed income space, I was just bringing up a chart myself, is that you’ve actually started to see the spread on the 10-year guilt yield over the 10-year Treasury begin to widen out once again. You know, as we said earlier, 10-year Treasury has been pretty much flat this week. So that might at the margin suggest a degree of fiscal worry coming back into the fray despite the fact that Andy Burnham seems to be on the sidelines for the foreseeable.

Michael Hewson (23:10)
Yeah, I don’t think it’s really taken anything away from the risk that Keir Starmer could get replaced. It just won’t be by Andy Burnham.

Michael Brown (23:17)
Yeah, exactly. It’ll be by someone else and we all know that they are going to be further to the left than he is.

Michael Hewson (23:20)
Yeah.

Well, yeah, exactly. Basically, it’ll be the tail wagging the dog. Anyway, let’s move away. Let’s look at this week’s earnings numbers. I’m going to start with the UK. ⁓ I was thinking about doing the US ones which were last night, but let’s start with the UK. Lloyds Bank. ⁓ Bit of a mixed reaction, I think, in terms of Lloyds and EasyJet. But Lloyds…

Michael Brown (23:32)
Yes, indeed.

Mm.

Michael Hewson (23:51)
pretty decent set of numbers all told. Nothing to really be concerned about 12 % increase in annual statutory profit before tax of 6.66 billion pound, which is obviously prompted the usual suspects to talk about taxing the banks more. This time it’s Mr. Farage at reform. mean, I almost said the F word.

Michael Brown (23:53)
Yeah.

Yeah, go.

That might have to be edited out.

Michael Hewson (24:18)
I

almost said the F word there. What is wrong with these people? What is wrong with these people?

Michael Brown (24:21)
It’s me that’s meant to be the one with the bad language,

Well, you’re absolutely right. And

I wish I knew the answer to that. But yeah, you know, we can’t just have this environment where we end up taxing success and, you know, disincentivising businesses, whether it be banks, energy companies, whoever, from actually doing well, because that is just well, ultimately, it’s not a capitalist way to run the economy and it leads you to ruin. as for the lawyers report, mean, really nothing to dislike in there at all. You know, as you said,

Michael Hewson (24:36)
Yeah.

Michael Brown (24:57)
really strong net interest income return on tangible equity up one percentage point compared to the guidance that they issued last year. They’ve announced a new buyback as well. I think it all really just kind of feeds into to what we were saying last week, which is that actually they do seem to have sort of touch wood got their house in order. A lot of the legacy issues are resolved or being resolved. And you would expect that that should bode pretty well for the stock going forward.

Michael Hewson (25:25)
Yeah, I I look at the Q4 numbers, they were pretty solid underlying loans and advances to customers increased 4 billion, up 4 billion on Q3 and customer deposits steady over the quarter, total dividend 3.65p per share. And as you said, you know, there’s a buyback and the guidance was pretty strong as well. And once wealth management starts to kick in, I would imagine that will also contribute significantly to

the outlook for 2026. And I have to say the guidance for 2026 is pretty punchy.

Michael Brown (26:00)
It is, but based on the figures that they’ve put out today, you wouldn’t want to bet against them delivering on that guidance, to be honest.

Michael Hewson (26:09)
No, indeed. ⁓ So the shares are up 1.7 % above 106, well further away from a pound now, £1.06p. And yeah, to my mind, I really can’t see them. I can’t see them slowing down anytime soon.

Michael Brown (26:18)
Mm.

No, it’ll be interesting to see if they were to pull back a little bit, it’d be interesting to see how we react to that one pound mark. If that now becomes support, yeah, well, you’d certainly expect it to. Then that should help with the rebound and the bounce that we’re seeing.

Michael Hewson (26:34)
It should do.

What was interesting is that despite the big provision of 800 million in Q3, the profits were still 12 % higher than they were a year ago. Which means that’s much more tax that goes into government coffers.

Michael Brown (26:47)
Mm.

Well, there you go.

and they don’t need a

bloody windfall tax or anything stupid.

Michael Hewson (27:01)
Exactly, because there’s also the banking levy which they’re still paying. It’s just not as high. So the more successful banks are the more tax they pay. So why would you penalize that?

Michael Brown (27:06)
Yeah.

Hmm.

which is ultimately the same as any company, if we’re being honest. But there we go. That’s probably a discussion for another time. Otherwise we’ll be here until the cows come home.

Michael Hewson (27:15)
Well yeah, unfortunately getting…

Yeah.

Okay, so no surprises with EasyJet. They posted a loss in the first quarter. I think the surprise is that it was actually higher than the same period last year by around about 30 million pounds. 93 million Q1 loss up from 61 million a year ago. They’ve increased capacity, but they’ve also higher costs as a consequence of that. Go on.

Michael Brown (27:24)
Mm.

Hmm.

Yeah, and the stock is trading

a little bit lower today, encountering a ⁓ bit of turbulence earlier on. ⁓

Sorry. It hasn’t quite crash landed, so it could be worse. But yeah, I think the big takeaway from that is not the fact they reported a loss because we know that Q1, that first half of the year actually for EasyJet is always a little bit weaker than the second half. It’s the fact that that loss was bigger than expected and bigger than it was a year ago. And I think the market is really going to be looking for how do they plan to recoup that by the end of the year. They’re forecasting some quite decent growth in the holidays business up to 15%.

Michael Hewson (28:22)
Hmm.

Michael Brown (28:22)
in the financial year so they’re really betting big on that underpinning the entire thing I think.

Michael Hewson (28:29)
Yeah, mean the holidays business was a standout as you rightly say. was 26 % increase in revenue in the first quarter to 311 million pounds. Now obviously that’s out of a total revenue of 2.25 billion pounds for Q1. But what was interesting about that Michael was not so much the fact that revenue was up by 26 % but costs were up by 28.

Michael Brown (28:54)
Yeah, and that’s not particularly promising from, if you’re analyzing that, you’re yeah, fine, revenues are up, but if your cost base is growing faster than your revenue bases, that’s not a particularly great sign in terms of sustainability looking forward.

Michael Hewson (29:08)
But having said that, mean, there was 50 million in headline profit before tax for the holidays business, which helped in that regard. as long as they can control those costs, then ultimately it’s manageable. Q2, fairly decent, 63 % sold compared to 61 % a year ago. H2, 22 % sold, which is not surprising, H2 is a way away. But yeah.

Michael Brown (29:17)
Mm.

Michael Hewson (29:32)
EasyJet Holidays the numbers appear to be much better with first half 97 % sold so they’re almost at capacity there.

Michael Brown (29:39)
Yeah,

and that does bode very, well. mean, far from a catastrophe, let’s put it that way, but could have done better and the market will want them to be doing better.

Michael Hewson (29:45)
No, indeed. Could have.

I’m just disappointed that the shares weren’t able to hang on to the early gains that we saw first thing. I think they bounced straight off the 50 day moving average and came straight back down again. Anyway, plenty of time for that picture to change. Right, let’s move to the US. Tesla, their shares are now four and a half percent low, four and a half percent down.

Michael Brown (30:08)
Right, I want to ask you a question about Tesla.

Are they still a car company?

Michael Hewson (30:17)
Yes, they are because most of their revenue comes from automotive. So yes, they are. But the big question is for how much longer?

Michael Brown (30:25)
Well, exactly, because I think that for me and we can get onto the figures in a second, but that for me was the big kind of takeaway from from those Tesla earnings last night. It wasn’t really what they reported. It’s the fact that, you know, Elon Musk is basically planning to sort of transform the entire company. They’re going to stop production of the Model S and the Model X. They’re going to take the capacity and all their factories that was being used to make those cars to build humanoid robots instead. And this is going to apparently cost them 20 billion

Michael Hewson (30:30)
Mm.

Michael Brown (30:55)
billion

this year alone. And on top of that, they’re going to invest another $2 billion in XAI, which is of course Elon Musk’s, well, sort of challenger to open AI and anthropic and all the rest of them. yeah, the Tesla figures themselves were okay. But I think the real question now is, you okay, fine, you’re generating all of your revenue from autos, but you want to spend on all of this other stuff that is very unproven, very experimental, and no one really knows whether that’s

Michael Hewson (31:09)
Mm.

Michael Brown (31:25)
that bet is gonna play off.

Michael Hewson (31:27)
Yeah, mean, to be fair, I mean, I don’t think there’s any surprise that he’s cutting the Model S and Model X programmes. You look at the production numbers for them and they made a very, very small amount. You look at Model 3 and Model Y production, 422,652 out of 434,358 cars. So you’re talking a very small part.

Michael Brown (31:37)
Mm.

Hmm.

Michael Hewson (31:53)
of the production line to create these optimus robots is it optimus optimus prime transformer there’s a bit of a transformers thing going on there i think

Michael Brown (31:59)
Optimus humanoid robots they’re called apparently.

Yeah, I must admit I did have to

read the press release two or three times and then check the date that it wasn’t April the 1st when I saw this last night.

Michael Hewson (32:13)
But yeah, mean, all other areas of business is solid growth, but you you can’t get away from the elephant in the room. And the fact is that automotive revenues declined. And they declined for the first time in quite some time, actually, total automotive revenues down 10%.

Michael Brown (32:36)
Yeah, and this is the thing. Obviously, you’ve got some degree of skew in there from these EV tax credits that expired in the third quarter of last year. But I don’t think that explains all of it. And, you know, it’s a difficult one because, you know, you’re sort of looking at it you’re going the the revenue, the main revenue generator for the company is seemingly showing signs of stalling.

And at the same time, you’re announcing these huge capital expenditure plans to kind of reinvent the entire firm. You know, I’m not surprised the market is having a little bit of struggle in terms of digesting that. And I think it certainly makes it difficult to have much conviction in terms of where we go next.

Michael Hewson (33:15)
I mean, all other areas of business, solid growth, 29 % increase in storage deployed, supercharger and stations and connectors also saw double digit growth of close to 20%. Free cash flows solid rose 74 % to 6.22 billion and the highest since 2022. So, you know, on all the other metrics, the company looks in fairly decent shape. I just think that markets are now…

Michael Brown (33:29)
Hmm.

Yeah.

Michael Hewson (33:40)
you’re starting to see some doubts creep in as to about the sustainability of these plans that Musk has outlined because, as I say, the shares rose in after hours, but they’re now down four and a half percent.

Michael Brown (33:53)
Yeah, and I’m not entirely surprised that those gains have fizzled out. But if we’re if we’re speaking about companies where the market’s taking a more sceptical view, mean, Microsoft have been punished, shall we say.

Michael Hewson (34:03)
Microsoft yeah, let’s talk about that

Yeah, I’m not really sure why Unless you’re talking about the fact that the trend has been lower for quite some time. We are now below that big 440 level which was the lows earlier this month and You know, I think I was listening to your podcast earlier this morning with Ryan and I’ve got to say he’s got a point

Michael Brown (34:29)
Hmm.

Michael Hewson (34:32)
It’s 45 % with open AI. I think that is a big, big concern as to whether or not.

Michael Brown (34:36)
Hmm.

And as OpenAI continue

to, well, one, burn cash and two, lose market share to people like Google with Gemini, you you would naturally expect that to pressure Microsoft. you know, if that is already a market concern and then the company come out and say, we’re going to increase our capital expenditure by 66 % compared to where we were last year and to a higher level than markets expect at $37.5 billion, you know, they’re not sort of doing a lot to insure

against any potential downside risks or people taking away that competitive edge. perhaps no surprise that they’ve been punished on the back of that.

Michael Hewson (35:12)
No.

I’ve just idly put some Fibonacci retracements on the Microsoft move. Seriously, from the lows back in April last year, you know, the older liberation day lows of 341 to the record highs at the end of July, beginning of August. And a 61.8 retracement of that is basically where we are right now.

Michael Brown (35:23)
⁓ no.

Liberation Day.

Hmm.

It’s a pretty key level then in that case.

Michael Hewson (35:44)
Yeah, $425. So it’d be interesting to see how the market reacts around these current lows. But no matter how negative the reaction to Microsoft’s numbers is or outlook was, the guidance was pretty strong. $81.2 billion for Q3 revenue. Maybe the cloud crowd, cloud growth for Q3, 37%, which is pretty much.

Michael Brown (35:59)
Yeah, it was.

Michael Hewson (36:12)
slightly less than what we saw in Q2.

Michael Brown (36:15)
Well, yeah, you’re right. And it’s not much less than we saw in Q2 because Q2 was 38%, but Q1 was 39%. So that’s exactly, yeah, that’s the problem is when you’re looking at a stock that is kind of priced to perfection, for want of a better word, and then sort of chinks start appearing in the armour, you know, the market is going to start taking a pretty sceptical view of things exactly as we’re seeing now.

Michael Hewson (36:22)
It’s stalling, so it’s going that way.

But you know, it still it still generates a lot of cash, Microsoft and it and you know, okay, yeah, spending a lot of money on CapEx, but it’s not using complex bond structures to finance it and yet you’ve got meta for Q4, another strong quarter, you know, revenue, upper end of guidance at 59.9 million above the upper end of guidance.

Michael Brown (36:48)
Yeah.

Mmm.

Michael Hewson (37:09)
and yet there was a fairly positive reaction to their announcement that they were going to spend even more. Well, sorry pal, you can finance it out of existing revenue, so why do you need complex bond structures?

Michael Brown (37:15)
Yeah, absolutely.

Well, and I think that is a head scratcher because, you rightly say, Metta can and should be financing this capital expenditure via their revenues. The business is performing very, very well indeed. They delivered 60 billion dollars worth of revenue in the fourth quarter. They are planning to deliver as much as 56 and a half billion dollars of revenue in the first quarter. They don’t need to be

messing around in the bond market, they can fund this out of their revenues. And actually, by changing the capital structure of the company to that sort of a degree, it does pose a risk to the sustainability of this and probably an unnecessary risk to the sustainability of things as well, I would argue.

Michael Hewson (38:11)
Yeah, I $201 billion in Renfri New for the current fiscal year. $201 billion. That’s an increase of 22%. And yet, you know, they’ve got this complex bond structure. And CapEx spend 115 to 135 billion dollars for fiscal year 2026 going forward.

Michael Brown (38:18)
Mmm. It’s insane.

Yeah.

Michael Hewson (38:35)
You don’t

need all of these sort of fancy bells and whistles financing deals. Reality Labs, again, an absolute bloody car crash.

Michael Brown (38:45)
Well, I mean, they may as well just throw a load of cash on a bonfire than spending it on these reality labs, to be honest. I’m not entirely sure what that’s delivering.

Michael Hewson (38:51)
six but six billion

six six billion dollars in q4 in losses and 19.2 billion annually i mean just just shove it into your capex for crying

Michael Brown (38:56)
Hmm

Yeah, it’s pretty punchy.

That’s what they should be doing.

Michael Hewson (39:07)
Anyway, I mean, they are are they are sort of winding that back now. So.

Michael Brown (39:11)
When we run the company. No it’s not is it?

Michael Hewson (39:14)
Yeah, that’s not gonna

happen. so that’s pretty much the earnings numbers. So by and large, better shares are flat today, or slightly lower. But that’s off the back of a big punchy move higher after hours. So

Michael Brown (39:31)
I was gonna say they were

up about 11 % at one point after hours yesterday so they have unwound a fair chunk of

Michael Hewson (39:39)
have they? because

I’m showing them near the highs at the moment, or maybe my charts wrong

Michael Brown (39:43)
Yeah, they

unwound most of it pre-market this morning, to be fair.

Michael Hewson (39:49)
Alrighty, so let’s move on to next week. ⁓

Michael Brown (39:52)
Indeed, speaking

of things we should be running, the Bank of England brings some common sense back to Threadneedle Street.

Michael Hewson (39:58)
Yeah.

I mean, you say that, but we’re just one or two people. And again, we probably get outvoted. So I really don’t think that that’s going to work. mean, Andrew Bailey was a casting vote in December. Inflation since then has taken an upward tick. Obviously, the moves higher that we’re seeing in oil prices is not going to help with the pumps this month. So, you know, certainly it’s going to make it much more difficult.

Michael Brown (40:10)
Well, yeah, there’s…

Mm.

Michael Hewson (40:32)
against a slightly better than expected backdrop for December and January for anyone on the MPC to argue that a rate cut is warranted now. And we’ve got the February inflation report.

Michael Brown (40:36)
Hmm.

Yeah, I think…

Yeah, and I think that’s going to be interesting. That’s actually going to be the most interesting thing, I think, to be honest. know, bank rate is going to be remaining unchanged at three and three quarter percent. We absolutely know that it might be a five, four vote. It might be a six, three vote. I’m not entirely sure that matters too much. What I’m going to be looking at very, very closely is that updated monetary policy report and particularly the inflation forecasts within it, because the expectation would be that they they pencil

in CPI getting back to the 2 % target this year and then probably staying there for the remainder of the forecast horizon. And the way I would look at that is if that does indeed prove to be the case, they’re really laying the groundwork and the foundations to deliver another cut either at the March meeting or at the following meeting in April. So I think this time around it’s more about what do they guide us towards expecting over the remainder of half one as opposed to anything that they’re to do roughly.

now.

Michael Hewson (41:48)
Yeah, I mean in November, they projected the CPI would fall to 3.2 % by March this year. That looks feasible now, given the fact that we’re at 3.4. But before slipping to 2 % in the middle of 2027, so your thinking is that if they bring that 2 % target forward, it makes a rate cut much more likely.

Michael Brown (41:54)
Mm.

Yeah.

Mm.

Well, it would certainly imply that. I think they are likely to because, know, simply if you look at, two things, one is I think firstly, we would all agree that inflation is not a target yet. Let’s not count our chickens or anything like that. But the disinflationary process is happening faster than the bank had penciled in in the November forecast round. And secondly, the measures in the budget, purely mechanically, if you do things like freezing railfares and knocking money off energy bills, they

are going to bring down headline inflation, probably to the tune of maybe 50, 60 basis points. So there’s enough scope in there to bring your inflation profile lower. And of course, this is a Bank of England who we know want to get rates back to a neutral level, and they’re going to use any excuse they can to get there, I think.

Michael Hewson (43:03)
Yeah, you might be able to convince some members of that, but there still remain a number of hawks on that committee that will probably remain to be convinced of that.

Michael Brown (43:10)
Well,

yeah, I mean, I think there’s there’s a decent chance we get to the end of the cycle and get to terminal with, you know, someone like Hugh Peele, the chief economist, not voting for another rate cut. But I don’t think that’s a bad thing. I think, you you and you and I have sat here enough times over the years and gone, there’s too much groupthink among central bankers. The fact that actually you’ve got central bankers that are having these disagreements and having these debates, I think it’s a good thing. Yeah, absolutely. And hopefully that leads to a better policy outcome.

Michael Hewson (43:34)
thoughtful discussions.

Okay, ECB. They don’t really have any concerns about inflation at the moment. 1.9 in December headline CPI. Not really surprising when you look at the euro. It’s up 10 % against the dollar over the last 12 months. So that has a deflationary effect on prices in the euro area. I think their biggest concern is that if the euro continues to go higher, that they might consider perhaps

Michael Brown (43:48)
Mm.

Michael Hewson (44:12)
cutting rates further.

Michael Brown (44:14)
Yeah, and that’s now what everyone’s talking about. The ECB Vice President, De Gendos, has previously said that 120 is kind of a level, I think his exact words were, where it gets sort of complicated, which is a bit of an understatement. But yeah, I think the ECB are going to be on hold this week.

If you see further euro strength and that poses, as you rightly say, disinflationary risks, then there is the potential that they actually pull the trigger on another rate cut. you know, is a 25 basis point cut really going to move Euro dollar that much over the longer run? I struggle with that one, to be honest with you, but there we are.

Michael Hewson (44:51)
Yeah, we’ll see. Okay, non-farm payrolls. Friday.

Michael Brown (44:57)
Yes.

Michael Hewson (44:59)
70k and again, I think this is the reasoning behind the fed staying on hold last night the improving labor market jobless claims at 210 weekly claims coming down Non-farm payrolls starting to show quite more quite a bit more resilient I think the only concern for me Michael is I’d ADP and I know what you’re going to say But ADP hiring has been a lot patchier than non farms

Michael Brown (45:05)
Mm.

Michael Hewson (45:23)
And for me, that’s a better gauge of the US economy, I think.

Michael Brown (45:28)
Yeah, well, do you know what? was actually going to touch on a sort of similar point there, which is that actually what are we watching over the payrolls print is what sounds quite technical and boring, but is the private payrolls metric excluding healthcare. And the reason why I’d look at that is because take government jobs out. We know there’s a federal hiring freeze. Take healthcare jobs out because they are non-cyclical, they are non-rate sensitive. And that metric has actually been as

near as makes no difference flat since last May. And I think that’s the metric that that’s really telling is that, the labor market is stalling. And that’s the same message that the ADP report is sending us. And it’s the same message that things like challenger layoffs are sending us as well. So yeah, I think that is the metric to watch. I do worry a little bit that the Fed have been

I guess falsely reassured by unemployment holding steady at four spot four percent when actually job creation hasn’t really picked up. The reason unemployment has steadied is simply because people have left the labour force. So we’ll see how that one shakes out. yes, 70k is fine at a headline metric. But if 65000 of it comes from health care, I don’t think we need to pop the champagne.

Michael Hewson (46:49)
What is the participation rate?

Michael Brown (46:51)
62.4 at the moment.

Michael Hewson (46:55)
be interesting to see which way that goes. Okay, we’ve got moving to the UK earnings next week, we’ve got Shell. When I wrote this, it said with oil prices very much on the back foot, it’s been a steady 12 months in terms of the share price performance. Shell! And now we’re at six months highs for the oil price. So just wipe that egg off my face.

Michael Brown (46:58)
Yes, indeed.

hahahahah

Michael Hewson (47:24)
But yeah, what can you say about oil and gas prices? As I say, mean, Shell’s share price hasn’t really gone anywhere ⁓ over the course of the past few months. It’s sort of in the middle of the range. It’s a full year results. Net debt is lower, but it’s still higher from the same period a year ago, free cash flow, still lower than a year ago. You know, it’s really about

Michael Brown (47:34)
Mm.

Michael Hewson (47:54)
what’s the outlook for buyback program? I’m guessing they’re still doing their buyback program. And the refocus on oil and gas, is it continuing to pay off?

I look at Shell and I just think, what’s to say?

Michael Brown (48:17)
I’m not sure there is much to say to be completely honest with you. ⁓ You know, I think we could probably leave it there. You’d expect revenues to decline a bit based on that fall in prices. But yeah, there’s just not a lot to get excited about right now.

Michael Hewson (48:24)
Yeah.

Vodafone on the other hand has been going gangbusters since the middle of the summer the share price is up from loads of around about 65 P and it’s now at around about 106 So whatever Margarita De La Valle has been doing The markets seem to like it Decent quarter for the Vodafone share price half the first half numbers in November Saw a fairly decent move higher and the share price has continued to move higher

Michael Brown (48:44)
Yeah, indeed.

Mmm.

Michael Hewson (49:00)
Ever since the German business has been improving, service revenue has been improving, UK business has been improving. And obviously the three merger, the integration costs there should hopefully be in the rear view mirror. So for me, current momentum, know, favors perhaps further gains. But I do caution that we’re now back at levels that we were at.

Michael Brown (49:17)
Hmm.

Michael Hewson (49:29)
in 2022. how much further have we got to go?

Michael Brown (49:33)
Well, I guess that’s the question, isn’t it? You we’ve come a long way in a relatively short space of time, so the market will naturally question how much further upside there’s going to be. The other thing to look at is, of course, the dividend. They flagged previously that they expect to increase the dividend, so we’ll see what they do there.

It’s looking all right. It does look like they’re, you know, they seem to have turned around very, very well. I don’t want to say that because I’m worried I’m going to jinx the whole thing by saying it. ⁓ But it does feel like things are for the first time in quite a long time actually moving in the right direction.

Michael Hewson (49:52)
It is, isn’t it?

I look at the daily charts and look at the weekly charts. Momentum is uniformly positive, particularly on the weekly chart where the 50 week moving average is now starting to point very strongly towards the upside and could well cross above the 200 week moving average, although that is still pointing down. So it is not a golden cross. A golden cross occurs when both moving averages

Michael Brown (50:11)
Hmm.

Michael Hewson (50:34)
point in the same direction and the faster one crosses above the slower one. If the slower one is moving down, it’s a weak signal. That doesn’t mean that it’s no less valid, but you just have to be a little bit cautious because you don’t want to buy the top of a wave and then watch it come all the way back down and wait three or six months before it comes back your favour. It’s about timing and timing in this market is notoriously difficult.

Michael Brown (51:01)
Absolutely.

Michael Hewson (51:01)
But certainly I think

if you see a dip back to around about 100p on Vodafone, maybe it’s worth having a little bit of a nibble. That’s not investment advice, I’m just saying.

Michael Brown (51:11)
Yeah, let’s

make that very clear.

Michael Hewson (51:15)
but it’s very much

a buy the dip mentality for Vodafone when you actually look at the overall numbers. And if you want to look at my analysis on it, it’s on my sub stack. ⁓ Okay, so ⁓ Alphabet, Amazon, Disney and Uber. I’m not going to do all of them. You can read about them on my sub stack. But Alphabet, you know, the current momentum is looking pretty positive. We’ve seen a bit of a pullback today.

Michael Brown (51:27)
Mm.

Hmm.

Michael Hewson (51:42)
Maybe a little bit of pre-earnings profit-taking perhaps. It’s been a standout performer over the course of the past 12 months.

Michael Brown (51:49)
Well, they’re

up 60 % since September alone, as of yesterday, before the pullback we’ve seen today. It has been an incredible move. So perhaps it isn’t.

it isn’t especially surprising that the market has wanted to take a little bit of profit and take a little bit of risk off the table in advance of that earnings report. you know, as we alluded to earlier, it feels like Alphabet is the AI play at the moment. know, Microsoft and OpenAI are losing market share. Google Alphabet seem to be taking that market share. And I think participants will pay very, very close attention to to any science

Michael Hewson (52:17)
Yeah.

Michael Brown (52:30)
of that continuing in the earnings report.

Michael Hewson (52:34)
I also think there’s much more growth potential in Google’s cloud business than there is in Amazon and Microsoft because there are a much smaller percentage of the overall market.

Michael Brown (52:42)
Yeah, absolutely. The other two are almost at that critical mass already, whereas Google aren’t, or I hope they aren’t. They’re the same thing at the end of the day.

Michael Hewson (52:46)
Yeah.

Indeed. So basically you look at the daily chart on the alphabet and 50 day moving average has basically been the support line pretty much since April, May last year. Every dip has basically just fallen shy of the 50 day and rallied higher. So any further dips, keep an on that 50 day moving average because that could be key as to whether or not this particular uptrend has run its course. Their numbers are out on the fourth of Feb.

Michael Brown (53:16)
Yep.

Michael Hewson (53:19)
We’ve got Amazon on the 5th and again their shares are also down a couple of percent but they haven’t really done that much over the course of the past quarter. They’ve pretty much traded sideways between $215 and $255. We’re currently at around about $240. Again, should be a fairly decent quarter for Amazon, Christmas quarter. So retail, they should do reasonably well.

Michael Brown (53:19)
Yes, next Wednesday.

Yeah.

Michael Hewson (53:49)
Big question for me is how well has Amazon Web Services done given the outages that we saw at the end of the last year?

Michael Brown (53:55)
Yeah. And also, you know, like we said before, retail isn’t really the focus for Amazon. If we’re being honest anymore, we know that that side of the business is going to deliver. It continuously delivers. It is the AWS side of the business we should care about. And also, just quickly, I would also flag on Amazon this week, we had confirmation that they’re planning on laying off 16

thousand one six ⁓ corporate workers which is ⁓ not a particularly bullish sign either for the company or for the broader US economy if I’m being honest.

Michael Hewson (54:29)
No, maybe not, but it also suggests that maybe they’re focusing now more on margins, given the fact that they’re going to be setting aside $125 billion in AI, you know, with respect to spending into US government agencies over the next 12 months.

Michael Brown (54:45)
Hmm. Yeah, so it’s going to be interesting to see what Amazon report next week. Just to round off on that, the implied move is six and three quarter percent in Amazon stock.

Michael Hewson (54:47)
You know, so I would suggest that is a big amount of cash as it looks to add 1.3 gigawatts of capacity across its

new data centers. So I think that is definitely something to bear in mind. I think the only concern is obviously resilience when it comes to its current infrastructure after recent Amazon Web Services outages. So what’s the make of that really?

Michael Brown (55:10)
Indeed.

Yeah, and this is something you’ve brought up on many, many occasions previously. I certainly don’t think it’s something that’s going to go away anytime soon.

Michael Hewson (55:21)
sort of flogging that one to death a bit. Is that your subtle way of telling me to shut up about it? Yeah, share that one from yours. Okay, Disney. We’ll finish off with Disney. You can read about who because there’s not really that much on it. But Disney’s share price come off the boil a bit in the wake of its Q4 numbers. This is Disney’s Q1 earnings. They’re due on the second.

Michael Brown (55:23)
Yeah, that one for a few months mate wait wait until the next crisis before you bring that back come on

Go on then. Now we’re taxi for Uber.

Michael Hewson (55:50)
February and yeah it’s been a bit of a mixed bag for Disney over the course of the past few months. The streaming business appears to be starting to improve but it’s theatrical business. I was going to say it’s a bit doggy poo innit.

Michael Brown (56:08)
It is, isn’t it? And like we’ve discussed before, there just doesn’t seem to be a lot coming there. Yeah, exactly. In terms of the content they’re producing, none of it really inspires much excitement. And I don’t see that changing anytime soon. So yeah, it’s the other areas of the business that Disney are going to have to rely on to prop them up, given the general lack of enthusiasm around any of their releases.

Michael Hewson (56:10)
some of the dross that’s come out. This is dross coming out of Hollywood.

I mean the cruise business is doing okay or cruising per se because Royal Caribbean Earlier today talks about the fact that they may have to lay on extra ships because cruise demand is so high Yeah, so, know, maybe that’s ⁓ maybe that’s a silver lining for Disney and the holidays business But you know the shares hit six month lows in November. We’ve seen a bit of a rebound since then So Yeah, it’ll be interesting to see whether or not

Michael Brown (56:34)
Hmm.

Yeah, they almost can’t keep up.

Mm.

Michael Hewson (57:02)
any weakness in entertainment is offset by obviously ⁓ experiences and the cruise business, the holidays business.

Michael Brown (57:12)
Yeah, absolutely. So yeah, it’s gonna be another busy week next week, isn’t it?

Michael Hewson (57:14)
Okay.

Certainly is mate, certainly is. Anyways, yeah, it would be nice, it would be nice. Anyway, okay, well that’s pretty much it for this week. Obviously we’ll be back next week to talk about the Bank of England and the ECB if Michael hasn’t slit his wrists after listening to Christine Lagarde.

Michael Brown (57:20)
Can we just have one calm week, please?

Hahaha!

I can make no guarantees. I’ve got to listen to Andrew Bailey before Christina Card. So I’m to be in even worse mood than normal.

Michael Hewson (57:39)
Hahaha

you lucky lucky boy anyway on that note ⁓ hopefully i’ll see you again same time same place next week anyway thanks for listening guys and see you all again next week

Michael Brown (57:46)
You

See you later.