Paddling The Canoo to Prosperity. Why This Non-Entity EV Firm is Suddenly in Vogue.

As an early-stage EV company that is still in its development stage, Canoo is likely to be a key beneficiary of such a ruling. Indeed, any sort of regulatory environment that encourages more ZEV credits to be bought and sold could benefit Canoo, should this company start producing vehicles en masse.

What is very odd is that the company had managed to get its stock listed on a public exchange before having even delivered one vehicle to a customer, however it had announced a few key partnerships with established car manufacturers whilst it was a privately held company.

Why, in that case, is a little-known firm with a slow-to-market approach and no credentials starting to attract so much attention that its stock rose by an almost unbelievable 31.18% yesterday?

In the United States, home to one of the world’s most pro-electric vehicle governments in the world, the National Highway Traffic Safety Administration (NHTSA) announced that it will consider higher penalties for automakers who fail to meet fuel efficiency requirements, being a negative catalyst for traditional auto makers, this announcement turns out to be very bullish for EV-focused companies.

This could be one reason, as it is not likely to be Canoo’s production performance, as there are many prestigious and well-known car manufacturers such as Volvo, Porsche, Ford, General Motors which are championing the cause of electric vehicles and have 100 years of being at the top of their game behind them. Even relative upstart Tesla is now considered part of the establishment despite its perceived lack of pedigree among enthusiasts.

You can even buy an electric Harley Davidson motorcycle, which is quite simply a fantastic piece of equipment and very well designed and executed.

Canoo’s partnerships with Hyundai and Kia to develop a new EV platform is not likely to fool the establishment. Kia and Hyundai are huge companies and are capable of developing their own.

In mid-January 2021, The Verge reported that, in the first half of 2020, Canoo had been in talks with tech giant Apple for a potential role in its secretive Titan car project which is another left-field diversion.

Yes, the electric van is interesting, but who will buy that instead of a Volvo XC90 T8 or a Porsche Taycan?

Even Rivian, a rival electric vehicle company which has made some electric trucks and was featured on Ewan McGregor & Charlie Boorman’s ‘Long Way Up’ motorcycling adventure are not exactly taking business away from Ford and General Motors with their hybrid versions of the F-series or Silverado pickup trucks.

The car business is one of pedigree. Buyers like brands and buy into a certain ethos, ownership experience and driving preference.

It is not easy to get into such an established, brand-sensitive and style-orientated marketplace, therefore this is a real quest for start-ups like Canoo, which perhaps is why the company resorted to a Silicon Valley-style SPAC approach rather than attempting to become another Tesla challenger, which would likely not work.

Tesla, after all, is now huge. Its market cap is 10 times that of Toyota, and Toyota is the largest motor manufacturer in the world. Go figure.

Yet Tesla’s products lack pedigree and are somewhat bland. Car enthusiasts, of which there are millions worldwide, would perhaps eschew it on the grounds of its relative lack of charisma, lack of history and similarity to an Apple iPhone rather than a car.

For certain, raising money in a world of experienced and sophisticated contenders and appealing to a motoring public when establishing from scratch is a hard enough challenge.

Therefore, given the lack of presence, lack of sales when other manufacturers’ sales is up 650% year-on-year as of July this year, and lack of pedigree, Canoo’s rocketing share price is something to be marvelled at.

Regulatory Information: Monecor (London) Ltd is a member firm of the London Stock Exchange. Authorised and regulated by the UK Financial Conduct Authority (FCA) with Financial Services register number 124721 and the South African Financial Sector Conduct Authority (FSCA) under license number 50246.

Risk Warning: 73.18% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Renewed Hope For The S&P500 as The Week Starts with an Upward Move

After a mid-July rally to a 6-month high, the household-name stock market index that tracks 500 large companies listed on stock exchanges in the United States tailed off, closing at 4,395.57 on Friday, creating an end-of-month damp squib within a market that investors had held a huge amount of confidence in for two weeks.

Today, however, a new lease of life has been breathed into the S&P 500, as it began the New York trading session this morning with a healthy upward direction to 4,415 by 9.30am Eastern Standard Time.

Looking at this today as the US market opened, analysts are keen to present their perspectives, one of which is that the current strength within the S&P 500 could be relatively short lived.

Credit Suisse, one of the world’s largest interbank dealers by market share, stated that its opinion is that investors may well continue to look for a “summer consolidation/correction” to emerge.

This contrasts considerably to analyses from early July, in which a degree of non-specific indications was made that it would go higher.

Interestingly, the big movers on the S&P range from top influential tech stocks such as Tesla and Microchip Technology to fashion brands including Ralph Lauren.

Tesla moved 3.75% this morning, whereas Ralph Lauren stock went up a sharp-suited 4.14%.

Whilst the analyses today differ from those two weeks ago, one thing is clear, and that is the presence of volatility, an aspect of the markets welcomed by traders which has been absent for some time.

Given the variation of sectors represented by the top movers on the S&P 500 today, it appears that volatility is across the board, not just driven by the ramblings of the usual social media-reliant big tech influencers.

Risk warning: Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74.5% of retail investor accounts lose money when spread betting or trading CFDs with ETX. You should consider whether you understand how spread bets or CFDs work and whether you can afford to take the high risk of losing your money. Authorised and regulated by the Financial Conduct Authority, with Firm Reference Number 124721.

Big Oil Bonanza as Shell Rockets 112 Points in a Month.

Royal Dutch Shell PLC, known colloquially as simply ‘Shell’, is having a field day, if you’ll pardon the pun, as its stock has rocketed by an astonishing 112.6 points, which equates to 8.09% in just one month.

As an overall result, Shell has stated today that it will boost shareholder pay-outs from the second quarter of this financial year after a sharp rise in petroleum prices and boost in demand for crude oil helped it reduce its debts.

Against the backdrop of woke, elbow-bumping caricaturist Western politicians who have spent the last few years spewing anti-business, anti-establishment diatribe in an arrogant, dictatorial way that only Banksy would be proud of and inventing absurd laws in the name of perceived ‘climate change’ along with the inevitability that vehicles, factories and homes that are no longer powered by fossil fuels will certainly arrive soon, it would on the face of it be surprising that oil is making such an incredible resurgence.

However, propaganda is all it is, and whilst some highly advanced Western countries such as Sweden are ultra-clean and there has been a well-engineered shift toward green energy without seeing the country’s prime minister grinning and wearing a banal lab suit when not qualified as a scientist, there are many pretenders, and many users of good old crude oil without attempting to disguise it.

Whilst those very elbow-bumping, lab suit-wearing, grinning G7 politicians keep the lockdown charade going, the highly industrious Asia Pacific region is hard at work and has been for the past 16 months whilst the populations of many European nations have been told to hide behind their sofa at the same time as being told that by merely existing they are ‘killing the planet’ to the extent that there is a ‘climate emergency’.

A quick trip on a standard, kerosene-fuelled plane to Singapore, mainland China, Japan, Indonesia, Taiwan, India, Malaysia, Vietnam or Thailand, all of which make up the region of the world where the majority of the world’s population resides, would demonstrate that the hive of industrious activity in that region is at an all-time high, with the hard-working producers of pretty much everything in everyday use across the world today going about their daily lives at full speed.

South and Southeast Asia are the world’s largest consumers of oil, and there is no such whimsical climate-related caterwauling from anyone in the region. It’s simply full steam ahead, perhaps in this case full oil ahead.

Yesterday’s abandonment of its meeting without a deal by the OPEC+ nations has been sensationalized across the mainstream media.

The attempts to resolve an internal dispute between two sheikdoms is really not the crux of the matter at all, and the oil market is still absolutely rocketing in general, something it has been doing for a few weeks.

The feudal ideology that unless an agreement can be salvaged, the OPEC+ Countries and its allies won’t increase production for August thus depriving supplies is old hat really.

The greenwash that is everywhere now on Western channels is quite simply that – greenwash. Oil demand is relevant.

A few weeks ago, Goldman Sachs analysts said that we would see the $80 oil barrel very soon, and at the time that appeared outlandish, yet here we are at $76 per barrel for crude oil.

Whilst there is a lot of infighting within the OPEC+ countries, we have to consider that Russia, which despite sanctions enforced by many Western nations, has been opening its pipeline to the United States recently. Russian Deputy Prime Minister Alexander Novak last month said that with all of the climate clamour that is currently abound and the IEA roadmap, “The price for oil will go to, what, $200?”.

That wouldn’t be a comment made flippantly at all, especially given that Russia’s government never stoops to trends, and that Oil and gas are responsible for more than 60% of Russia’s exports and provide more than 30% of the country’s gross domestic product. Gazprom is the largest publicly listed energy company in the world and the largest company in Russia by revenue, and its products are entirely fossil fuel.

All this, without even going into the absurd activism that is demanding that Big Oil drastically cut emissions and shift strategies to investment in low-carbon energy instead of oil and gas. Of course, clean energy and progress is important, but its highly political and potentially costly!

Goldman Sachs has been almost proven right, and despite the push for alternative and sustainable energy that is all over the Western media, the electric car revolution – 33% of the new cars in Europe and UK are electric or plug in hybrid – demand is still huge for oil.

The US, whose relationship with Russia is very complicated, is a pioneer in electric vehicles, yet it remains the third largest consumer of oil in the world, and Russia is one of its key suppliers.

Therefore, the talks breaking down in the OPEC+ nations of the middle east, added to the rise in sustainable fuels does not affect the fact that oil is in higher demand than ever.

Risk warning: Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74.5% of retail investor accounts lose money when spread betting or trading CFDs with ETX. You should consider whether you understand how spread bets or CFDs work and whether you can afford to take the high risk of losing your money. 

For a look at all of today’s economic events, check out our economic calendar.

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Morrisons in Multi-billion Pound Bidding War: Shares Rocket to Five-year High

In 1956, William’s son, Ken Morrison, took over the operations of the small network of grocery stores that by that time bore the Morrisons name across the nearby Yorkshire towns, and it was his business acumen that took his father’s hard work into the massive empire that it is today.

For those who remember Morrisons’ foray out of Yorkshire which was greeted by amusing stereotype images of bags of coal for sale or a delicatessen counter that sold only pies when the first Morrisons supermarket that made its way south of Watford Gap Services on the M1 opened in Letchworth Garden City, it is no longer a laughing matter.

Morrisons is now the subject of a fierce bidding war as large institutions fight to buy it at multi-billion-pound sums.

Last week, it was assumed a done deal when the company came under acquisition talks from US private equity firm Clayton, Dubilier & Rice which wanted to buy Morrisons for a princely £5.5 billion, however since then, many more potential acquirers have got in on the action, resulting in an almost auction-like stand-off between potential investors.

Over the weekend, SoftBank-backed Fortress Investment struck a £6.3 billion deal to buy Morrisons, resulting in a massive rise in share price of over 28 points this morning to 266.8p. That’s an astronomical 11.23%.

It’s also a five-year high.

Confidence by investors has been massaged by Morrisons’ fortuitous position of being able to turn down massive offers as others materialize, and as a result, two weeks ago, the company’s share price rose by 35%, and has been steadily going up since.

Today’s rocketing value as a superior deal was sealed is further testimony to that.

As Omar has sung in 1993, It ain’t over till it’s over, and this is certainly the case today as Fortress’ bid of £6.3 billion is looking set to be challenged by another private equity firm, this time Apollo, which has admitted that it is considering a higher bid.

Apollo became the third potential suitor to declare an interest in Morrisons, announcing to the stock exchange on Monday that it was “in the preliminary stages of evaluating a possible offer for Morrisons”, in a move that could trump a £6.3bn bid by a consortium led by the US investment fund Fortress, the owner of Majestic Wine.

Whether any of these bids will result in a signed and sealed acquisition is yet to be known, particularly considering that Morrisons has a history of failed takeover bids behind it, however this time it is very different in that potential acquirers are literally tripping over themselves to outbid each other.

For example, in February 2014, it emerged that younger members of the founding Morrison family, who owned 10% of the company and who were thought to include two of Honorary President Sir Ken Morrison’s children, William Morrison Junior and Andrea Shelley, along with Sir Ken Morrison’s niece and her husband, Susan and Nigel Pritchard, had approached a number of private equity firms about taking the company private.

They were said to be extremely unhappy about the company’s disastrous financial performance, and the corporate strategy being undertaken by Dalton Philips.

At that time, straight-talking Yorkshireman Sir Ken Morrison blasted Dalton Philips and his new board of directors for destroying the company he inherited from his father. Sir Ken remarked disdainfully on Philips’s strategy to save the failing supermarket from the pressures of Aldi and other discounter stores.

Following on in this bold as brass tradition, Morrisons continued as a publicly listed firm and when the latest round of acquisition attempts approached it, the firm rejected Clayton, Dubilier and Rice’s £5.5 billion bid, deeming it to “significantly undervalue” the company, leading to a host of other bids that we now see.

Morrisons has a lot of freehold property, and some analysts think that private equity firms could be showing this much interest in Morrisons partly because of its property portfolio, which they would ‘sale and leaseback’ to generate cash to pay back to themselves.

With sensationalist mainstream media having touted that ‘Morrisons has been sold to Americans’ over the weekend, only to wake up this morning and find that it has not yet been sold and there are more bids, volatility is being stoked.

Will it sell and continue to show high share price rises, or will all talks fail and the share price go down to its relatively low level?

All currently hangs in the balance.

Risk warning: Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74.5% of retail investor accounts lose money when spread betting or trading CFDs with ETX. You should consider whether you understand how spread bets or CFDs work and whether you can afford to take the high risk of losing your money. Authorised and regulated by the Financial Conduct Authority, with Firm Reference Number 124721.

JD Sports on the Brink of Shareholder Rebellion

JD Sports stock at 2nd highest point in 5 years, but advisors want the CEO out and his pay curtailed.

Being a good sport is all part of corporate leadership, and in the case of one of Britain’s largest high street retail chains, sportsmanship goes beyond the boardroom.

JD Sports Fashion PLC, headquartered in Bury, Greater Manchester, is a household name with retail shops in every high street and every mall across the United Kingdom, and has been publicly listed on the London Stock Exchange since 1996.

The company’s stock prices have been rising steadily until reaching the highest point for 5 years on April 16 this year, and have remained steady since, however today there has been a slight decline by 1.6 points (0.17%) today.

Big deal, you may say…

It may not seem like such a move, and the company’s share price is still at a relatively high position when looking at its performance over a five year period, however there is now a very important factor to bear in mind.

Today, majority shareholders have begun to revolt against what they consider to be inappropriate bonuses that have been granted to JD Sports chairman Peter Cowgill.

Mr Cowgill was paid over £4.3 million in bonuses in the last financial year, which made his total remuneration package up to over £5 million if his salary is also taken into consideration, despite having received a salary cut of 75% for a few months during that accounting period.

Independent provider of global governance services Glass Lewis has advised that major shareholders in JD Sports should vote against the company’s pay policy.

Mr Cowgill was entitled to this gargantuan bonus as a result of a remuneration package that was signed off by the company two years ago for what the firm describes as ‘exceptional past performance’ however the external advisors to shareholders have stated their position in that this should be contested, especially given the massive £86 million in furlough payments JD Sports has received from the government.

What’s more, Glass Lewis has attacked Mr Cowgill indirectly, as it is not just his pay packet the advisory firm disapproves of, but also Mr Cowgill’s suitability as CEO by implying that shareholders should vote him off the board when he is due for re-election in three weeks time.

This is not yet a shareholder rebellion, however that is exactly what is being encouraged, and if it occurs it will be yet another in a long line of such activity that has been virulent over the past few months among top London Stock Exchange listed companies.


Know Your Hashrates From Your Pharmaceuticals? You Can Now Trade Commission Free!

No, not that kind of hash. I refer to the words of technology entrepreneur Jeff McGonegal, who last year said that he wanted to increase the hash rate by purchasing 8,000 new Bitmain S19 Pro Antminers for $17.7 million.

He was, of course, referring to the hashrate, which refers to the number of hashes that a cryptocurrency mining computer can make in each period of time, usually a second.

Mr McGonegal is CEO of Riot Blockchain, which is a NASDAQ-listed cryptocurrency mining entity, based in Castle Rock, Colorado, whose stock price appreciated sharply in 2017 after announcing a pivot from veterinary drugs and medical technology to blockchain.

The intention of the increase in hardware was to bring a total of 9,000 mining machines online by January this year and grow the network at a rate of 2,000 machines until April this year.

It’s been a tumultuous journey for the company’s stock, as remarkable as it is that a Bitcoin mining enterprise is even able to list its stock on a public exchange, and values remained very low until a sudden spike in February this year which took the stock from a paltry $3.40 to a sudden $77 per share, before tailing off to its current value of $28.

This is just one of the interesting range of stock CFDs that ETX Capital is now offering with zero commission.

Today, ETX Capital selected a range of stocks available for trading with zero commission, representing a diverse selection of industry sectors including pharmaceutical giant Moderna, big tech mainstays Amazon and Tesla, and internet giant Alibaba.

The ethos behind providing these stock CFDs on a commission-free basis centers on continual demand among ETX Capital’s loyal client base for stock CFDs, as well as a need to reduce entry barriers experienced by new traders wishing to begin their trading journey on indices. ETX wanted to provide a larger cross section of the trading community with a simpler way to buy and sell these bigger stock CFDs with no minimum charge or commissions.

Due to their lower costs, commission-free trading apps tend to offer less research and investment information to their customers than established platforms, however with ETX Capital, traders can have the best of both worlds, with zero commission on these ten selected stocks, and a number of detailed analytical resources each day, ranging from our own technical analysis from Alex Neale and Michael Baker, and of course my own televised and written research which is published several times per day across a range of channels.

Commission-free stock trading evolved from a market niche dominated by newcomers to a mainstream feature in just a few years, however now the ability to trade popular stocks with an established brokerage with a long-term, loyal client base is very much here.

Risk warning: Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74.5% of retail investor accounts lose money when spread betting or trading CFDs with ETX. You should consider whether you understand how spread bets or CFDs work and whether you can afford to take the high risk of losing your money.

Authorised and regulated by the Financial Conduct Authority, with Firm Reference Number 124721.

As if the Credit Crunch in 2008 Was Not Enough. Here We Go Again….

Before the credit crunch, which was a sudden reduction in the general availability of loans along with a sudden tightening of the conditions required to obtain a loan from banks in Britain and North America due to what critics had written off as a willy-nilly approach to assessing affordability, it was easy to get any mortgage or loan for, well, pretty much anything.

It was a case of simply saying “yes, I can afford it” and simply dividing the amount of borrowing by three, stroking one’s chin and saying “hmm, yes, that’s my salary” and the lenders simply granted it and away you go with a free house, free furniture and a free £10,000 to spend on lifestyle trappings of choice.

All very well, except that it was not free, and the lack of affordability checks caused the inevitable – defaults on repayments, home repossessions and banks with an insurmountable level of unpaid debts.

The regulators gave a few disapproving shakes of their collective metaphorical heads, introduced a set of underwriting criteria that required proof of earnings, and removed almost all access to high loan-to-value secured loans meaning that mortgage applicants needed to pay a higher percentage of the purchase price of a property from their own money.

A few years of bruised credit ratings and sore banks ensued, and of course the size of the market for high interest, high risk lending was too much to ignore, so an entire new set of sub-prime lenders became established to do the same thing all over again, only this time with even higher interest. It is almost unbelievable that loans with over 1000% interest can be legitimately issued on today’s credit market.

History does indeed repeat itself, and today, one of the sub-prime, high risk lenders is teetering on the brink of bankruptcy.

Amigo Loans, which is the brand name of Amigo Holdings PLC, which is listed on the London Stock Exchange under the ticker symbol LON:AMGO is a company that lends to individuals with poor credit histories and offers personal loans of up to £10,000 with a guarantor.

Despite insisting on a guarantee from a third party with a good credit rating, the loans are unsecured and require no collateral, and Amigo Loans is experiencing a credit crunch of its own, which according to its executives is ‘considering all options, including insolvency.

Amigo fell into trouble last year, after rules concerning affordability checks were changed once again and hundreds of thousands of its customers were suddenly eligible for compensation and a High Court judge has refused to approve a compensation scheme for customers.

Amigo understood that it did not have the £151 million required to pay customers, so it attempted to establish a scheme which would pay those eligible for compensation 10p for every £1 that they were due.

Amigo has also postponed the release of its results for the year to March 2021, which were due around now. It is hoping to publish them before July 29, however as they say, there’s nothing like a news story to get people interested, and rather weirdly, the price of Amigo Holdings stock has rocketed this morning.

In August 2019, Amigo Holdings stock price collapsed and has been in the doldrums ever since, but since the news that the firm is considering insolvency came about, stock is up 12.61% to 8.22p per share by 9.30am this morning from 7.30p per share at 8.00am this morning.

Shares in the company slumped by 12.1%, or 1p, to 7.3p yesterday, and overall have crashed 97% over the last two years.

A city trader today commented “A sad tale for everyone involved, more so vulnerable customers who will be forced down the route of extortionate pay day lenders charging 1000-1500% APR. Amigo charged a little more than credit cards. Market capital and shareholder value has been stripped. The only option is insolvency or a modification to the SOA to factor a larger slice of the profits for a longer period.”

Amigo Loans did meet the criteria for a London Stock Exchange listing, however, and there have been no short sells this morning on its stock as a result of the news.

Risk warning: Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74.5% of retail investor accounts lose money when spread betting or trading CFDs with ETX. You should consider whether you understand how spread bets or CFDs work and whether you can afford to take the high risk of losing your money.

Authorised and regulated by the Financial Conduct Authority, with Firm Reference Number 124721.

The Death of The EA: Why Trading Robots are No Longer in Vogue

“Never underestimate the power of the human element,” said Ramez Faza Senior, one of the executive Account Managers at global customer satisfaction survey company JD Power & Associates.

When such obvious and basic notions of common sense emanate from one of the world’s most feared and respected consumer data firms, it should be taken at face value. It is on this company’s survey results that many luxury European car manufacturers find themselves languishing at the very bottom, below the cheaper, more mainstream efforts from Japan and Korea.

Embarrassing? yes. Fixable? Certainly.

Poignant to our industry, Rasheed Ogunlaru, Author of Soul Trader said “Until you understand your customers — deeply and genuinely — you cannot truly serve them.”

He is indeed correct.

Thus, it is clear that despite being very much an online, fully computerized ecosystem from the top tier banks that provide liquidity right through to the trading platforms that are so well honed that global markets can be accessed from anyone’s living room almost anywhere in the world and trades executed with millimetric precision, the human aspect is vital.

Just a decade and a half ago, however, many retail FX industry participants, especially those brokers which do not have their own trading infrastructure, made great efforts to accommodate trading robots, known in the FX industry as ‘Expert Advisors’.

These take the form of a software code, which is then connected to a trading platform, executing trades automatically on behalf of the trading account holder, removing the need to master the markets or become a trader.

Many of such Expert Advisors, or EAs as they became known, had no provenance, were developed by individuals who were often affiliate partners of offshore FX firms therefore having an interest in coding in such a way that investors see it as a convenience, yet it gradually loses their money so that the affiliate commission can be paid on a profit/loss basis rather than on a commission basis, and there were very little means of testing or verifying the strategies that they follow.

By 2008, an entire EA marketplace had opened up, even to the point at which FX portfolio managers in South East Asia were connecting multiple accounts to MetaTrader platforms via the MAM system and trading over 90,000 lots per month in small offices in provincial towns, with all trading activity conducted via EAs.

Many retail FX brokers began focusing heavily on the lucrative and high-volume Chinese portfolio management market, in which many FX portfolio managers were bigger than the brokers to whom they sent their flow.

Meanwhile in Japan, the world’s largest retail FX trading market with Japanese FX trading having made up 35% of all retail order flow globally for the last 15 years, nobody uses EAs, every trade is conducted manually, and MetaTrader 4 barely exists.

By comparison, Japan’s self-directed traders steadily trade to profit, there are no large burnouts and even when the government lowered leverage in 2012 to 25%, traders simply put more margin capital into their accounts, saw it as a move toward stability, and traded even more. By 2013, the largest companies in Japan, DMM Securities, GMO and Monex were reporting over $1 trillion in notional volume per month per company, all by self-directed traders using proprietary platforms.

Now, with China off limits, the more self-directed Western markets are a key focus.

Traders who were new to the world of currency markets a decade ago are now astute, knowledgeable and sophisticated, and require continual increases in technology from their brokers.

Whilst they still exist, the popularity of EAs has dwindled, as many astute traders realize that they are often either vehicles for transmitting advertisements as they are free to download, or are coded by opportunists, or even worse, are designed to lose money for the combined benefit of the developer and the offshore unlicensed broker that is paying loss-based commission.

Today, analytics platforms are much more in vogue. These being carefully developed systems which do not execute trades but provide automated actionable content in order that traders can quickly and concisely access valuable market information in order to make informed decisions on what instruments to trade and what is trending in the market.

Many traders have mastered the trading platform, and are therefore no longer dependent on obsolete third party platforms that are simply popular because of the number of EAs that are available to connect to them.

The internet is awash with calls for help from people who have relied on an EA which has led their account to loss and lack the confidence or analytical skills to recover it due to the reliance on an EA which in many cases has been coded by a private individual to whom there is no recourse.

This conflict of interest is also one of the reasons that social trading became a thing of the past to a large extent.

As long ago as 2015, a British wealth management company sent a questionnaire to its clients asking whether they would be prepared to pay for a low cost online automated ‘advice’ service. The answer was a resounding no.

It had been suggested at the time that such a service would cost between £100 and £400 and considered widening its existing non-advised portfolios into a wider advice proposition.

The firm’s CEO of the time stated “People do not want to pay for advice. There is no chance that robo advisors or EAs are going to replace self-directed traders” he said, concluding that robo advice or EAs will not replace execution only platforms.

Back in 2015, A.T. Kearney, a global management consulting firm that focuses on strategic and operational CEO-agenda issues facing businesses, stated that there would be approximately $2.2 trillion under management by robo advisors in 2020, equating to a staggering compound annual growth rate of 68%.

That did not happen, and it is still only $797 billion globally. Robo advisors and EAs are certainly not the flavor of the time that they were 10 years ago.

British traders are loyal to their broker, highly analytical and go to extensive efforts to continually learn the market, and to expand their ability to maximize the use of trading platform features.

Thus, to be able to keep a toehold in the very upper echelons of electronic trading, your broker needs to be able to offer a good quality, in-house supported and developed trading environment and to provide all the right tools and information to empower traders.

Today’s traders are hands-on, and want their broker to be hands-on too.

It is the constant development of user experience and comprehensive access to comprehensive multi-asset global markets via a finely honed environment, supported by knowledgeable and responsive staff that will lead today’s brokerage to sustainability.

We at ETX Capital have a longstanding and secure basis for exactly this, having been in business for over four decades, and having developed, evolved and maintained our own trading environment toward your trading experience.

It is vital that we continue to consider you, the trader, as the focus of our efforts. After all, trading is a human science, just as it is a computer and mathematical science.

Risk warning: Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74.5% of retail investor accounts lose money when spread betting or trading CFDs with ETX. You should consider whether you understand how spread bets or CFDs work and whether you can afford to take the high risk of losing your money.

Authorized and regulated by the Financial Conduct Authority, with Firm Reference Number 124721.

The Black Stuff and The Green List: Oil Volatility is On Its Way!

Those 55 miles per hour speed limits on the highway in the 1970s were largely down to shortages of supply and were designed to ensure less fuel was used by motorists as a result of war rather than for the purposes of road safety which they were largely perceived as.

Today, very little has changed, despite the substantial investment in renewable energy and alternative methods of generating motive power for everything from central heating to transport, and the value of the sticky black stuff is still inexorably dependent on the utterings of government leaders.

Over the past year, to consider oil to have been a volatile commodity is an understatement, its value having dropped into negative equity around one year ago for the first time in history, and the ensuing lockdowns and travel bans having created lower prices in the Western markets whilst demand in South and South East Asia has remained very high.

Today, crude oil is absolutely under the microscope. Even the OPEC countries are publicly discussing its immediate future, with Ihsan Abdul Jabbar, the Oil Minister of Iraq, OPEC’s second largest producer, noted that oil could probably remain around US$65 a barrel.

Standard data is scheduled for release within the next 24 hours in the United States, in the form of the weekly inventories from the American Petroleum Institute, which will be compared to the unexpected climb last week to 90,000 barrels, however this is a bland, routine spreadsheet exercise.

The matter of real interest is that commercial consumers and distributors will likely be assessing a huge increase in purchasing refined petroleum products such as gasoline for cars, and perhaps more specifically, kerosene for aircraft, meaning that more crude oil will be bought by refineries, as the perpetually locked down European Union and its Trans-Atlantic neighbours on the entire North American continent begin to lift travel restrictions.

A combination of pent-up will to travel after a year of blocked borders and a desperate travel industry wanting to regenerate its lost earnings would result in skies full of aircraft, especially as the summer begins and the lure of cut-price tourism gives those seeking refuge from the four walls of constraint.

Companies such as Wizz Air, easyJet and Ryanair have all been advertising cheap flights recently, and have been targeting members of the public who would look to fly within Europe as soon as the travel ban is lifted. This means lots of reservations and therefore a demand for fuel.

The European Commission put forward a proposal on Monday this week to expand the list of countries whose citizens may visit the European Union for nonessential reasons and its president, Ursula von der Leyen tweeted “Time to revive EU tourism industry & for cross-border friendships to rekindle – safely. We propose to welcome again vaccinated visitors & those from countries with a good health situation.”

The decision to lift further restrictions for tourism and non-essential travel will be up to the member states and the proposal was discussed at length yesterday.

India has been a huge consumer of oil in recent weeks, and despite Iraq’s oil minister’s predictions, there is speculation within India that it may rise to $80 by the summer of this year, substantially higher than Mr Abdul Jabbar’s prediction of $65.

India, the world’s third-largest oil importer, has increased its use so dramatically recently that OPEC+, out of its own necessity, has intervened in the oil market on the supply side of the equation to offset the oil demand.

As of April 6, the EIA saw global oil demand at 97.7 million bpd this year. Compared to Brent prices that were near $65 per barrel in March, the EIA sees not much movement in the price of Brent, estimating $65/barrel in Q2 2021, $61 per barrel in H2 2021, and even worse–$60 per barrel in 2022.

The US Energy Information Administration (EIA) has overseen a global oil demand at 97.7 million barrels per day this year as of April 6, the EIA Compared to Brent prices that were near $65 per barrel in March, the EIA sees not much movement in the price of Brent, estimating $65/barrel in Q2 2021, $61 per barrel in H2 2021, and even worse–$60 per barrel in 2022, which is a contrasting forecast to what the market analysts and OPEC commentators are expecting!

Such diverging views is a clear sign that volatility is likely to remain for some time yet.

Go figure!

Andrew Saks, Head of Research and Analysis at ETX Capital

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