1. Brexit Blowout
Theresa May Suffered an historic defeat in parliament last night after her deal was squashed by an overwhelming 230 vote margin. The devastating loss revealed exactly how unpopular the deal was and triggered a vote of no-confidence against May’s government. Never a dull moment in parliament!
May’s attempts to soften the split between the EU and UK met criticism from both hard-line Brexiteers and those wanting to remain close to the EU, pleasing nobody.
Ahead of the vote, the Pound dropped like a stone against the Euro before mounting a spectacular reversal to close significantly higher for the day. So what does this tell us?
It tells us that the markets were pleased with the failed vote. Not only that, but it would seem that the investors believe that a no-Brexit is a more likely outcome than a no-deal Brexit blowout bonanza.
Investors will be watching the next vote closely as a negative outcome would trigger a change in government and potentially a general election in the event that a new government cannot be selected in a 14-day window.
All we know for sure is that the clock is ticking down to the Brexit deadline, and with no clear path ahead, things are heating up!
2. Weed Stocks Get Trimmed
Millennials’ favourite weed stocks got a haircut yesterday after Attorney General nominee, William Barr, called the current marijuana laws ‘untenable’. He also articulated his support for the re-illegalisation of cannabis-based products. That would definitely be more than just a haircut!
Since Christmas, weed stocks have had a serious growth spurt thanks to targeted mergers by the likes of Altria, and breakthroughs in licensing for industrial-scale hemp production in New York.
Canadian firms, Canopy Growth and Cronos, have skyrocketed more than 40% and 20% respectively since Christmas, but took a slight dip yesterday when the AG nominee voiced his opinion.
Barr did say, however, that he would not go after cannabis companies operating in states where it is legal, but the prospect of stricter policy on expansion into new states is still a considerable stumbling block for the future.
For now, the industry is operating in an uncertain space with massive growth potential in the healthcare and retail sectors. More M&A activity is likely to change the dynamics of the industry, and it would seem a minor haircut like this can only put a short-term dampener on the 2019 Weed Rush.
Today we are watching…
1. BlackRock (#blckrck)
BlackRock is set to post its Q4 earnings today, and investors are paying close attention. Despite trading 2.8% lower than it was ahead of its Q3 earnings report, some analysts have labelled the share as undervalued and are upbeat about its prospects going forward. The consensus earnings per share estimate is $6.36 and revenue is $3.46bn. Don’t miss this one!
2. Bank of America (#bankamer)
Bank of America is the next big name to grace the earnings stage. After a shaky start by JP Morgan and Wells Fargo, investors will be on their guard for this big announcement. The consensus earnings per share estimate is $0.63 and revenue is $22.35bn. It is worth noting that in the last 2 years BOA has beaten EPS estimates 100% and revenue 63% of the time. Some strong stats there, let’s see if it can keep with the trend.