|
|
|
 |
|
|
|
|
|
Daily Intelligence Briefing
|
|
|
|
|
|
|
|
|
Wednesday, December 11, 2019
|
|
|
|
|
|
|
|
|
Identifying Change-Driven Investment Themes – Five sections, explained here.
|
|
|
|
|
|
We bring you our Daily Intelligence Briefing courtesy of McAlinden Research Partners. The report is provided to Hedge Connection members for free. Below is snapshot, login to view the full report. Not a member? Join today. McAlinden Research Partners is offering a complimentary one-month subscription to receive the Daily Intelligence Briefing – to Hedge Connection clients/friends. Activate yours by contacting Rob@mcalindenresearch.com and mentioning “Sent by Hedge Connection”
|
|
|
|
|
|
|
I. Today’s Thematic Investment Idea
A deep dive into a market driver with alpha generating potential.
|
|
|
Race for Robo-Taxis and Autonomous Trucking Services Defines Self-Driving Vehicle Tech →
|
|
|
Summary: Autonomous ride-sharing services, also known as “robo taxis”, have been the pipeline for years, but 2020 seems to be prime time for investors to finally be parse the winners from losers. A number of auto and tech firms have launched robo-taxi trials across the country, with Alphabet’s Waymo leading the way; but competitors like Uber, Daimler, and Tesla all remain in the chase for the lead in self-driving passenger cars. Autonomous tractor trailers are also in the mix, with some seeing their utilization of highways and other open road as a less intensive, but more efficient way to deploy autonomous vehicle technologies. Read more +
|
|
|
|
|
|
|
|
|
|
|
|
II. Updates of Themes on MRP’s Radar
Follow-up analysis of key market drivers monitored by MRP.
|
|
|
|
|
|
|
Plant-Based: Beyond Meat Revenue Expected To Explode — But It Depends On This
|
|
|
China Tech: China will phase out foreign technology from government and public institutions by 2023
|
|
|
Liquidity: Credit Suisse shocking call: Fed will launch ‘QE4’ before year-end to stem Street cash crunch
|
|
|
Streaming: Streaming Service Quietly Gathers More Subscribers Than HBO Now
|
|
|
Aviation SHORT: Why you won’t fly on a 737 Max again for quite some time
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IV. Active Thematic Ideas
MRP’s active long and short themes, with an archive of follow-up reports.
|
|
|
See Them Here →
|
|
|
|
|
|
|
|
|
|
V. Macroeconomic Indicators
Key data releases relevant to MRP’s Active Thematic Ideas.
|
|
|
See Them Here →
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Race for Robo-Taxis and Autonomous Trucking Services Defines Self-Driving Vehicle Tech
|
|
|
|
|
|
|
|
|
|
|
|
Autonomous ride-sharing services, also known as “robo taxis”, have been the pipeline for years, but 2020 seems to be prime time for investors to finally be parse the winners from losers. A number of auto and tech firms have launched robo-taxi trials across the country, with Alphabet’s Waymo leading the way; but competitors like Uber, Daimler, and Tesla all remain in the chase for the lead in self-driving passenger cars. Autonomous tractor trailers are also in the mix, with some seeing their utilization of highways and other open road as a less intensive, but more efficient way to deploy autonomous vehicle technologies.
|
|
|
|
|
|
For a whole year now, Google’s autonomous driving arm, Waymo, has been successfully operating its self-driving ride-sharing project in the suburbs of Phoenix, Arizona. Just last week, the company topped 100,000 robo-taxi trips ahead of an expansion to Apple’s App Store. Bloomberg reports that Waymo’s service, now attracts 1,500 monthly users and has tripled the number of weekly rides since January. Since late summer, Waymo has ramped up a “rider only” option without human safety drivers to a test group of a few hundred commuters. While those people weren’t always charged initially, they are now paying rates that are competitive with Uber and Lyft ride-hailing services.
The cars have added features like Wi-Fi, music control and a “zoom feature” that lets riders see what the car is viewing. In Chandler, the city installed what’s believed to be the nation’s first autonomous pick-up and drop-off zone in front of City Hall to accommodate government workers. Wedbush, who estimates Alphabet is spending nearly $1 billion a year on its self-driving fleet and technology, has said they expect Google CEO Sundar Pichai, now the head of parent company Alphabet, to double down on the project and grow spending around Waymo even more in the next 12 to 18 months.
Waymo has continually extended its self-driving lead over major competitor Uber, who now may have to pay Waymo some substantial fees after an independent software expert found the company to still be utilizing some of Waymo’s technology, violating a 2018 settlement between the two companies. That case centered around former Waymo engineer Anthony Levandowski who was accused of taking proprietary files related to self-driving technology with him to Uber later on. In a filing with the U.S. Securities and Exchange Commission, Uber said that it “will likely” have to either enter a licensing deal with Google’s Waymo, or make some high-priced changes to its autonomous driving software. It appears Uber is leaning toward the latter, as they are nearing a modest deal to acquire Foresight, a Silicon Valley-based startup that develops simulation software to help test self-driving car prototypes.
Meanwhile, during Tesla’s quarterly earnings call in October, CEO Elon Musk reiterated his year-end target for the company’s autopilot feature: “While it’s going to be tight,” Musk said, “It still does appear that we will be… in early access release of a feature-complete Full Self-Driving feature this year.” Though Tesla’s definition of full self-driving (FSD) has never been equivalent to “autonomous”, since human drivers are still expected to maintain supervision of the vehicle’s actions, Fortune notes an FSD launch would be a boost to Tesla’s balance sheet. The company says it would allow nearly $500 million in revenue from pre-orders of the self-driving features, held off the books for years, to be recognized in quarterly earnings statements. Tesla said earlier this year that they plan to launch robo-taxis in 2020, as part of broader vision for an autonomous ride-sharing network. According to Musk, Tesla will enable owners to add their properly equipped vehicles to its own ride-sharing app, which will have a similar business model to Uber or Airbnb. Tesla will take 25% to 30% of the revenue from those rides.
Per The Verge, Lyft has been offering rides in Las Vegas, and a startup called Voyage is giving them in a Florida retirement community. Toyota plans on offering rides in its self-driving cars for the 2020 Olympics in Tokyo.
Of 65 companies currently licensed in California to test self-driving cars on public roads, the most preeminent new competitor to Waymo is likely the new self-driving taxi service coming to San Jose from two of Germany’s biggest companies: Mercedes-Benz and Tier 1 auto supplier Bosch. Autonomous S-Class vehicles will ferry passengers between West San Jose and the city’s downtown area, the companies announced Monday. The service will only available to a small number of people from private organizations at first.
This would be the first time either company has offered anything close to resembling a taxi service. Mercedes-Benz and parent company Daimler have worked on a number of self-driving projects in the past that range from futuristic concepts (like the F 015 or the Smart Vision EQ) to more practical attempts at developing something for the near term.
In that same vein, Daimler (Mercedes’ parent firm) has actually prioritized other self-driving initiatives like autonomous trucking. As Daimler CEO Ola Källeniushas himself recently told Fortune, the company’s technology would be used in trucks first. Daimler—which is in the throes of cost-cutting as it scrambles to become a serious player in the electric era, sees cargo-carrying trucks as a much more simple and efficient means of deploying autonomous vehicles. The trucks spend around 80% of their time on high-speed freeways, 10% on regular highways, and just 10% getting to their final destinations. If human drivers can handle the relatively minor urban parts of the journey, the rest can safely be automated. This could reduce transportation costs while also making trucking a more attractive career in the midst of a growing trucker shortage.
The American Trucking Association estimates 160,000 driver positions will go unfilled in the next decade and autonomous driving, combined with last mile human drivers could be the solution. California-based startup Plus.ai claims to have already completed a cross-country trip with a prototype autonomous truck. While a human backup driver and a safety engineer were onboard for the entire 2,800-mile trip, Plus.ai claims the truck was in autonomous mode most of the time. This wasn’t just a test run, either: the truck hauled a refrigerated trailer loaded with cargo for Land O’Lakes. The trip was completed in three days, which was sufficient for the perishable cargo to be delivered on time, according to Plus.ai.
The timeline for the deployment of autonomous vehicles has been notorious for delays, but 2020 does seem to be quite a promising year for budding robo-taxi operations, as well as autonomous shipping solutions like self-driving trucks. Investor can gain exposure to autonomous vehicles via KraneShares Electric Vehicles and Future Mobility Index ETF (KARS), tracking an index of global stocks that are involved in the production of electric vehicles or other initiatives that may enhance future mobility. This includes companies engaged in one or more of the following sub-industries: electric vehicle production, autonomous driving, shared mobility, lithium and/or copper production, lithium-ion/lead acid batteries, hydrogen fuel cell manufacturing, or electric infrastructure.
|
|
|
|
|
|
|
|
|
|
|
|
Future Mobility (KARS) vs S&P 500 (SPY)
+ Ride-Sharing (UBER, LYFT) vs Tesla (TSLA) vs Daimler (DAI.DE)
|
|
|
|
|
|
|
|
|
|
|
|
|
Source material for today’s market insight…
|
|
|
|
|
|
|
|
|
|
|
|
Autonomous Vehicles
Google Could Dominate Self-Driving Cars. New Alphabet CEO Sundar Pichai Could Make It Happen.
Alphabet’s Waymo unit is the clear leader in the race for autonomous driving leadership, according to a team of analysts at Wedbush. They estimate roughly a trillion dollars will be spent over the next decade to develop autonomous vehicles and other endeavors.
Last year the company launched its own robot taxi service, Waymo One, which has carried 1,000 riders to school, work, or shopping in Phoenix. The real test will be for these vehicles to drive safely in upstate New York during the winter.
Read the full article from Barron’s +
|
|
|
Autonomous Vehicles
Daimler starts pilot testing of self-driving Mercedes taxis in the U.S.
Daimler is testing autonomous taxis in the U.S. despite new CEO Ola Kallenius saying that the automaker will “rightsize” its spending level on self-driving technologies.
The company has started self-driving taxi tests in California to gather user feedback, people familiar with the matter told Automotive News Europe. “We have not put the project on ice. We are looking at where we can improve efficiency and gain synergies so we don’t unnecessarily duplicate or triplicate our development work,” said one of the people.
The fleet includes about 30 vehicles, mainly Mercedes-Benz S-class sedans equipped with sensor arrays including long-distance, laser-scanning lidar, the person said, saying the test could last for several months.
Read the full article from Auto News +
|
|
|
Autonomous Vehicles
This autonomous truck just made a cross-country grocery run
California-based startup Plus.ai claims to have completed a cross-country trip with a prototype autonomous truck. Perishable cargo gave Plus.ai an added incentive to ensure its tech worked.
Sticking mostly to Interstate 15 and Interstate 70, the truck still encountered varied terrain and weather conditions, including rain and snow, Plus.ai claims. The truck operated in both daytime and nighttime conditions, according to the company.
Autonomous trucking didn’t initially attract as much attention as self-driving cars, but it’s quickly catching up. In addition to small startups, bigger companies like Waymo and truck manufacturer Scania are developing driverless trucks.
Read the full article from Digital Trends +
|
|
|
Autonomous Vehicles
Walmart partners with self-driving startup Nuro to test autonomous grocery delivery in Houston
Walmart this morning announced a new pilot program that will test autonomous grocery delivery in the Houston market starting next year. The retailer is partnering with autonomous vehicle company Nuro, a robotics company that uses driverless technology to deliver goods to customers.
Nuro’s partnership with Walmart is hardly its first. The company partnered with Kroger (Fry’s) in 2018 to test autonomous Prius vehicles and its custom-built robot, R1. The R1 autonomous vehicle was operating as a driverless service without a safety driver on board in the Phoenix suburb of Scottsdale. In March 2019, Nuro moved the service with Kroger to Houston, beginning with autonomous Toyota Priuses.
Walmart’s Online Grocery business is booming, but today still relies on partnerships with third-party delivery services. Currently, Walmart partners with delivery providers across the U.S. to facilitate deliveries, including Point Pickup, Skipcart, AxleHire, Roadie, Postmates and DoorDash. It has also tried, then ended, relationships with Deliv, Uber and Lyft.
Read the full article from TechCrunch +
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Select a theme to see when and why we added it. Also included is a link to all recent Market Insight reports we’ve written about that theme, allowing you to track its progress.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US NFIB Business Optimism Index Rises at Fastest Pace Since 2018
The NFIB Small Business Optimism Index in the US rose to 104.7 in November 2019 from 102.4 in October, beating market expectations of 102.8. It is the largest month-over-month gain since May 2018, led by a 10-point improvement in earnings.
Earnings, or the frequency that owners report positive profit trends, rose 10 points, 1 point below the record set in May 2018. Also, owners reporting it is a good time to expand increased by 6 points and those expecting better business conditions increased by 3 points.
On the other hand, the NFIB Uncertainty Index fell 6 points in November to 72, the lowest reading since May 2018.
Click here to access the data +
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US Nonfarm Labor Productivity Declines For First Time Since 2015
Labor productivity in the US non-farm business sector fell by an annualized 0.2 percent during the third quarter of 2019, slightly less than a preliminary estimate of a 0.3 percent decline and following an unrevised 2.5 percent growth in the previous three-month.
It was the first decline in productivity since the fourth quarter of 2015.
Click here to access the data +
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
China Total Vehicle Sales Still in Decline
Vehicles sales in China dropped 3.6 percent from a year ago to 2.46 million units in November 2019, marking the 17th consecutive month of decline, as local governments accelerated changes to emission standards this year.
Sales of new energy vehicles (NEVs), including plug-in hybrids, battery-only electric vehicles and those powered by hydrogen fuel cells, decreased for a fifth month in a row (-43.7 percent), after the government reduced incentives for purchases of such cars amid criticism that some firms have become overly reliant on the funds.
Click here to access the data +
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
France Industrial Production Rises MoM
France’s industrial production grew by 0.4 percent from a month earlier in October 2019, the same pace as in the previous month and above market expectations of 0.2 percent.
Click here to access the data +
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Germany Zew Economic Sentiment Index Highest Since 2018
The ZEW Indicator of Economic Sentiment for Germany jumped 12.8 points from the previous month to 10.7 in December 2019, the highest level since February 2018 and well above market expectations of 0.3, on hopes that German exports and private consumption will develop better than previously thought.
Stronger than expected exports data, alongside relatively robust economic growth in the EU in the third quarter and a stable German labour market were enough to offset weak figures for industrial production and incoming orders for October.
Click here to access the data +
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Australia Consumer Confidence Declines
The Melbourne Institute and Westpac Bank Consumer Sentiment Index for Australia declined 1.9 percent month-over-month to 95.1 in December 2019, as interest rates kept steady in the last RBA meeting but trade policy uncertainty remained.
the Westpac-Melbourne Institute Unemployment Expectations Index went up 1.1% to 138.0 to reach its highest level since June 2017, as consumers expect unemployment to rise in the year ahead amid a slowdown in jobs growth and steady increases in jobless and underemployment rates.
Click here to access the data +
|
|
|
|
|
|
|
|
|
|
|
|
MARKET INSIGHT UPDATES: SUMMARIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plant-Based
Beyond Meat Revenue Expected To Explode — But It Depends On This
UBS analyst Steven Strycula has predicted Beyond Meat will reach $1.8 billion in revenue by 2025, up from an estimated $275 million in 2019. Key to a projected 36% compound annual growth rate is a dramatic ramp up in food service revenues.
Beyond Meat would need to add about 120,000 new outlets at current sales levels to reach $1 billion in food service revenue. A big chunk of this change could come from McDonald’s bringing plant-based burgers to its U.S. outlets. This could add more than $300 million in annual revenue.
More than half of franchisees surveyed by UBS said plant-based offerings help increase foot traffic. In addition, 70% expect them to increase sales over the next 12 months.
Read the full article from Investor’s Business Daily +
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
China Tech
China will phase out foreign technology from government and public institutions by 2023
The Chinese government mandated that all government offices and public institutions must replace foreign-supplied hardware and software by 2023, according to Financial Times. The government will gradually phase out affected foreign technology under its 3-5-2 policy — 30% of hardware will be replaced in 2020, 50% in 2021, and 20% in 2022.
The real risk for foreign tech companies will come if China’s ban on foreign tech expands into the private sector. The decision to rely solely on domestic technology could spill over into the private sector — especially companies that work with the Chinese government — as they look to future-proof their businesses in a time of geopolitical uncertainty.
China also aims to produce 40% of the semiconductors it uses by 2020 and 70% by 2025, per CNBC.
Read the full article from Business Insider +
|
|
|
|
|
|
|
|
|
|
|
| There is much more to this report! McAlinden Research Partners offers Hedge Connection members weekly access to the Daily Intelligence Briefing research for free – click here to view. (You must be logged in first). Not a member? Join today. McAlinden Research Partners is offering a complimentary one-month subscription to receive the Daily Intelligence Briefing – to Hedge Connection clients/friends. Activate yours by contacting Rob@mcalindenresearch.com and mentioning “Sent by Hedge Connection” |
|
|
|
|
|
|
Leave a Reply