The Long and Short of it - Weekly Update - GraniteShares
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27 April 2020
The Long and Short of it – Weekly Update
Week in review – Record breaker, new norm
The chart below tells the story. WTI May futures moved into negative territory ahead of expiry as lack of storage
capacity meant that holders of futures had to pay offload their exposure. Will it happen again? The CME isn’t
ruling it out, announcing on 21 April that it will “switch the options pricing and valuation model to Bachelier to
accommodate negative prices in the underlying futures and allow for listing of option contracts with negative
strikes” for a number of products, including the WTI contract (CL).
Stock markets struggled over the week as the economic data continued to paint a grim picture for the economy. US
initial jobless came in at 4.43 million, taking the figure for job list since mid March to close to 27 million. The IHS
Markit PMI figures for March across Europe fell significantly, setting record lows in many cases including in the UK.
Chart of the week: WTI volatility as May futures contract moved into negative territory
Source: https://www.bloomberg.com/news/articles/2020-04-20/crude-s-monster-meltdown-in-three-charts?sref=iXgypxTV
Week ahead – Q1 earnings for banks plus Federal Reserve and ECB meetings
The major UK banks will be reporting Q1 results, kicking off with HSBC on Tuesday, followed by Barclays and Standard
Chartered on Wednesday, Lloyds Banking Group on Thursday, and RBS on Friday. In the context of the economic
slowdown, focus will be on balance sheet strength and capital levels. US banks have announced loan loss provisions
in excess of $25 bn, what can we expect from the UK banks? BP reports on Tuesday, all eyes on the dividend, and
AstraZeneca on Wednesday.
The Fed meeting takes place on Wednesday, investors will be watching closely to see if there is more colour on
their QE strategy. For the ECB, meeting on Thursday, similar considerations will apply to the possible expansion of
the Pandemic Emergency Purchase Programme (PEPP). In terms of releases, key ones include Q1 GDP figures for
US and Eurozone, respectively on Wednesday and Thursday.
Top performing ETPs over the week
Top performing long ETP 3x AstraZeneca (3LAZ) +8.9%
Top performing short ETP 3x Short BAE Systems (3SBA) +32.5%
Past performance is not a reliable indicator of future results. The value of an investment may go down as well as
up and can result in losses, up to and including a total loss of the amount initially invested. All ETP performance
figures are inclusive of fees and other adjustments.
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27 April 2020
Weekly performance and moving averages – Underlying stocks
Closing price 24 Weekly Price vs
Underlying stock MA 200d MA 50d High - 52w Low - 52w
Apr 2020 change 52w High
AstraZeneca 8,204.00 2.9% 7,259.30 7,231.74 8,232.00 5,626.00 -0.3%
BAE Systems 505.00 -9.6% 567.60 557.77 672.60 428.60 -24.9%
Barclays 88.61 -2.3% 151.09 118.20 192.96 73.04 -54.1%
BP 308.60 1.7% 462.22 353.02 582.80 222.90 -47.0%
Diageo 2,655.00 -2.1% 3,108.37 2,679.75 3,633.50 2,139.00 -26.9%
Glencore 139.28 -1.4% 219.25 161.60 318.14 109.76 -56.2%
Lloyds Banking Group 29.74 -2.3% 52.58 40.19 69.99 27.70 -57.5%
Rio Tinto 3,750.00 -1.7% 4,134.80 3,707.04 4,977.34 2,954.00 -24.7%
Rolls-Royce 310.20 -7.3% 672.05 463.62 939.61 249.00 -67.0%
Royal Dutch Shell A 1,379.20 0.7% 2,094.81 1,498.32 2,637.50 946.10 -47.7%
Vodafone 109.32 0.4% 145.39 124.09 169.46 92.76 -35.5%
3x Long ETP performance
Underlying stock Ticker 20-Apr 21-Apr 22-Apr 23-Apr 24-Apr 1 Week Last 20 days
AstraZeneca 3LAZ 5.6% 1.1% -0.2% 1.5% 0.6% 8.9% 48.2%
BAE Systems 3LBA -5.6% -7.3% -13.6% 1.9% -5.0% -26.9% -0.1%
Barclays 3LBC 1.1% -15.0% 4.1% 10.0% -6.6% -8.1% 8.7%
BP 3LBP -1.2% -9.1% 17.9% 6.4% -8.4% 3.2% -27.0%
Diageo 3LDO -1.3% -13.2% 9.0% 3.2% -3.5% -7.1% 22.9%
Glencore 3LGL 3.6% -19.7% 12.9% 8.6% -8.6% -6.9% 41.0%
Lloyds Banking Group 3LLL -3.4% -8.9% 7.1% 5.3% -6.9% -7.7% 15.8%
Rio Tinto 3LRI 1.2% -15.6% 11.1% 1.2% -2.6% -6.5% -3.9%
Rolls-Royce 3LRR -6.8% -18.2% 5.4% 4.2% -6.8% -22.0% 55.0%
Royal Dutch Shell A 3LRD -6.0% -7.4% 17.2% 8.4% -9.4% 0.2% -22.4%
Vodafone 3LVO 5.8% -13.9% 3.8% 1.4% 4.4% 0.1% -7.4%
3x Short ETP performance
Underlying stock Ticker 20-Apr 21-Apr 22-Apr 23-Apr 24-Apr 1 Week Last 20 days
AstraZeneca 3SAZ -5.7% -1.1% 0.2% -1.6% -0.6% -8.6% -37.2%
BAE Systems 3SBA 5.5% 7.3% 13.6% -1.9% 5.0% 32.5% -9.0%
Barclays 3SBC -1.0% 14.8% -4.1% -9.9% 6.6% 4.5% -33.6%
BP 3SBP 1.2% 9.1% -18.0% -6.6% 8.5% -8.4% 19.1%
Diageo 3SDO 1.2% 13.2% -9.0% -3.2% 3.5% 4.4% -24.6%
Glencore 3SGL -3.8% 19.9% -13.1% -8.7% 8.7% -0.6% -49.5%
Lloyds Banking Group 3SLL 3.2% 8.9% -7.1% -5.1% 6.8% 5.8% -29.1%
Rio Tinto 3SRI -1.3% 15.5% -11.1% -1.2% 2.6% 2.8% -4.8%
Rolls-Royce 3SRR 6.3% 18.3% -5.1% -4.8% 7.0% 21.6% -72.4%
Royal Dutch Shell A 3SRD 5.9% 7.3% -17.2% -8.4% 9.4% -5.7% 8.0%
Vodafone 3SVO -5.9% 13.9% -3.9% -1.4% -4.5% -3.0% -1.2%
Data and charts
All performance data to 24 April 2020. Data and charts sourced from Bloomberg, unless otherwise indicated.
Company events data sourced from company websites.
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27 April 2020
Company AstraZeneca (AZN) AZN Performance
Listed ETPs 3x Long AstraZeneca Daily ETP (3LAZ) 1 week 2.9%
3x Short AstraZeneca Daily ETP (3SAZ) 1 month 18.6%
YTD 10.0%
Exchange London Stock Exchange Price vs 52w high -0.3%
Overview
Market outperformer over the week. Q1 results on Wednesday, investors will be closely out for an
update to 2020 guidance given in February. News flow included announcement of a trial with Saint
Luke’s Mid America Heart Institute to assess the potential of Farxiga (dapagliflozin) as a treatment in
patients hospitalised with COVID-19 who are at risk of developing serious complications. Kepler
Cheuvreux maintained its ‘buy’ rating, raising price target to 8300p from 7700p.
Chart with moving averages and RSI indicator
Consensus forecasts
12/31/2020 31/12/2021
Net Income EPS DPS Net Income EPS DPS
Current $5.2 b $4.03 $2.80 $6.5 b $4.93 $2.81
1 month change -1.0% -6.6% 2.5% -2.0% -2.9% 0.3%
Upcoming Events
29/04/20 Q1 results
30/07/20 Half year results
30/07/20 XD, 1st interim dividend
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27 April 2020
Company BAE Systems (BA.) BA. Performance
Listed ETPs 3x Long BAE Systems Daily ETP (3LBA) 1 week -9.6%
3x Short BAE Systems Daily ETP (3SBA) 1 month -3.6%
YTD -10.6%
Exchange London Stock Exchange Price vs 52w high -24.9%
Overview
Market underperformer over the week. News flow included the a contract with the U.S. Defense
Advanced Research Projects Agency (DARPA) to develop machine learning analytics as a service.
Goldman Sachs maintained its ‘neutral’ rating, cutting target price to 607p from 759p, Société Générale
upgraded its rating to ‘buy’ from ‘hold’, cutting target price to 550p from 705p.
Chart with moving averages and RSI indicator
Consensus forecasts
12/31/2020 31/12/2021
Net Income EPS DPS Net Income EPS DPS
Current £1.4 b $0.45 $0.24 £1.6 b $0.50 $0.25
1 month change -5.5% 0.2% -1.6% -3.1% -2.9% -1.6%
Upcoming Events
07/05/20 AGM
30/07/20 Half year results
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27 April 2020
Company Barclays (BARC) BARC Performance
Listed ETPs 3x Long Barclays Daily ETP (3LBC) 1 week -2.3%
3x Short Barclays Daily ETP (3SBC) 1 month -16.2%
YTD -50.7%
Exchange London Stock Exchange Price vs 52w high -54.1%
Overview
Market underperformer over the week as the banking sector struggled to keep up with the market. A
big week ahead with Q1 results on Wednesday, investment banking revenues should have received a
boost but figures from other business lines, particularly UK consumer, are likely to be impacted by the
speed of the downturn. UBS maintained ‘buy’ rating, target cut to 150p from 205p.
Chart with moving averages and RSI indicator
Consensus forecasts
12/31/2020 31/12/2021
Net Income EPS DPS Net Income EPS DPS
Current £1.0 b $0.06 $0.39 £4.7 b $0.25 $0.40
1 month change -76.1% -41.5% -2.5% -25.9% -39.0% -4.1%
Upcoming Events
29/04/20 Q1 results
07/05/20 AGM
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27 April 2020
Company BP (BP.) BP. Performance
Listed ETPs 3x Long BP Daily TP (3LBP) 1 week 1.7%
3x Short BP Daily ETP (3SBP) 1 month -9.1%
YTD -33.4%
Exchange London Stock Exchange Price vs 52w high -47.0%
Overview
Market outperformer helped by the recovery of the oil price from its 21st century lows at the start of the
week. Q1 results on Tuesday will show how hard it has been hit by the collapse in oil prices and bring
news of the dividend. This week BP signed a strategic cooperation agreement with one of China’s
leading producers of PET (polyethylene terephthalate) plastic, China Resources Chemical Innovative
Materials Holdings Limited (CRC), and agreed to become a shareholder. JP Morgan Cazenove
maintained ‘overweight’ rating, target cut to 425p from 475p.
Chart with moving averages and RSI indicator
Consensus forecasts
12/31/2020 31/12/2021
Net Income EPS DPS Net Income EPS DPS
Current £0.8 b $0.07 $0.02 £2.9 b $0.16 $0.06
1 month change -75.7% -31.4% -68.4% -24.1% -25.9% -43.3%
Upcoming Events
28/04/20 Q1 results
07/05/20 XD, Q1 dividend
28/07/20 Q2 results
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71-91 Aldwych, Aldwych House, London WC2B 4HN EUROPE@GRANITESHARES.COM
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27 April 2020
Company Diageo (DGE) DGE Performance
Listed ETPs 3x Long Diageo Daily ETP (3LDO) 1 week -2.1%
3x Short Diageo Daily ETP (3SDO) 1 month 5.7%
YTD -16.3%
Exchange London Stock Exchange Price vs 52w high -26.9%
Overview
Market underperformer over the week. No news flow of note since the trading update on 9 April, when
Diageo maintained the interim dividend payable on 9 April, but indicated the suspension of the share
buyback programme for the remainder of fiscal 2020. RBC Capital Markets downgraded its rating to
‘sector performer’ from ‘outperform’, also cutting its price target to 2400p from 3000p, Jefferies
International downgraded to ‘underperform’ from ‘hold’, cutting its target to 2200p from 2800p.
Chart with moving averages and RSI indicator
Consensus forecasts
6/30/2020 30/06/2021
Net Income EPS DPS Net Income EPS DPS
Current £2.6 b $1.14 $0.71 £2.9 b $1.27 $0.74
1 month change -10.4% -6.0% -4.6% -8.7% -7.8% -2.5%
Upcoming Events
30/07/20 Preliminary results
13/08/20 XD, Final Dividend
01/10/20 AGM
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71-91 Aldwych, Aldwych House, London WC2B 4HN EUROPE@GRANITESHARES.COM
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27 April 2020
Company Glencore (GLEN) GLEN Performance
Listed ETPs 3x Long Glencore Daily ETP (3LGL) 1 week -1.4%
3x Short Glencore Daily ETP (3SGL) 1 month 4.0%
YTD -40.8%
Exchange London Stock Exchange Price vs 52w high -56.2%
Overview
Market underperformer over the week. It was reported that Glencore is taking its Toronto-listed Congo
business Katanga Mining private and separately Katanga lowered it cobalt production target for the year
to 26,000 tonnes from 29,000 tonnes. Société Générale maintained its ‘buy’ rating, cutting target price
to 200p from 260p.
Chart with moving averages and RSI indicator
Consensus forecasts
12/31/2020 31/12/2021
Net Income EPS DPS Net Income EPS DPS
Current $0.8 b $0.05 $0.12 $1.6 b $0.13 $0.16
1 month change -48.4% -35.5% 0.0% -27.1% -29.2% -9.3%
Upcoming Events
30/04/20 Q1 Production Report
13/08/20 Half year production report
01/10/20 Half year results
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27 April 2020
Company Lloyds Banking Group (LLOY) LLOY Performance
Listed ETPs 3x Long Lloyds Banking Group Daily ETP (3LLL) 1 week -2.3%
3x Short Lloyds Banking Group Daily ETP (3SLL) 1 month -19.0%
YTD -52.4%
Exchange London Stock Exchange Price vs 52w high -57.5%
Overview
Market underperformer over the week. Thursday brings Q1 results and while the bank is moving to
support businesses affected by Covid-19, the fact is that consumer credit and provision for losses could
become significant if consumers start facing solvency issues. Two new broker notes: HSBC maintaining a
‘buy’ rating, cutting its target to 43p from 48p, UBS also maintaining its ‘buy’ rating, cutting its target to 50p
from 62p.
Chart with moving averages and RSI indicator
Consensus forecasts
12/31/2020 31/12/2021
Net Income EPS DPS Net Income EPS DPS
Current $2.2 b $0.04 $0.02 $3.4 b $0.05 $0.03
1 month change -45.4% -6.7% -17.4% -18.3% -21.7% -25.0%
Upcoming Events
30/04/20 Q1 Interim Management Statement
21/05/20 Annual General Meeting
30/07/20 Half year results
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27 April 2020
Company Rio Tinto (RIO) RIO Performance
Listed ETPs 3x Long Rio Tinto Daily ETP (3LRI) 1 week -1.7%
3x Short Rio Tinto Daily ETP (3SRI) 1 month -1.8%
YTD -12.8%
Exchange London Stock Exchange Price vs 52w high -24.7%
Overview
Market underperformer, but still showing strong relative strength year to date. Moody’s affirmed all Rio
Tinto group ratings with a stable outlook, citing the strength of its iron ore operations and ‘excellent’
liquidity position. Société Générale maintained its ‘buy’ rating, cutting target price to 4240p from
4100p. JP Morgan Cazenove maintained its ‘neutral’ rating and raised its target to 4870p from 4860p.
Chart with moving averages and RSI indicator
Consensus forecasts
12/31/2020 31/12/2021
Net Income EPS DPS Net Income EPS DPS
Current $7.9 b $4.80 $3.01 $6.6 b $4.26 $2.78
1 month change -3.5% 0.6% -123.4% -4.0% -2.2% 1.8%
Upcoming Events
16/07/20 Q2 Operations Review
29/07/20 Half year results
29/07/20 Q3 Operations Review
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1027 April 2020
Company Rolls-Royce Holdings (RR.) RR. Performance
Listed ETPs 3x Long Rolls-Royce Daily ETP (3LRR) 1 week -7.3%
3x Short Rolls-Royce Daily ETP (3SRR) 1 month -21.9%
YTD -54.6%
Exchange London Stock Exchange Price vs 52w high -67.0%
Overview
Market underperformer over the week. Announced a contract win to modernise Engineered Safety
Features Actuation System functions of Fortum’s Loviisa nuclear reactors in Finland. Jefferies
International maintained its ‘buy’ rating, target cut to 700p from 1100p; JP Morgan Cazenove
maintained ‘underweight’ rating, target cut to 175p from 190p; Goldman Sachs maintained ‘conviction
buy’ rating, target cut to 573p from 683p.
Chart with moving averages and RSI indicator
Consensus forecasts
12/31/2020 31/12/2021
Net Income EPS DPS Net Income EPS DPS
Current £0.12 b $0.07 $0.09 £0.37 b $0.19 $0.12
1 month change -65.2% -63.9% -38.2% -40.9% -40.0% -75.4%
Upcoming Events
04/08/20 Half year results
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1127 April 2020
Company Royal Dutch Shell A (RDSA) RDSA Performance
Listed ETPs 3x Long Royal Dutch Shell Daily ETP (3LRD) 1 week 0.7%
3x Short Royal Dutch Shell Daily ETP (3SRD) 1 month -5.3%
YTD -37.2%
Exchange London Stock Exchange Price vs 52w high -47.7%
Overview
Market outperformer, like BP, over the week. Capital expenditure was the focus of news flow, it was
reported that it was postponing its Jackdaw natural-gas field development in the North Sea, a project
valued around $1 billion according to analyst estimates. JP Morgan Cazenove cuts its rating to ‘neutral‘
from ‘overweight’ and cut its target to 1650p from 1750p.
Chart with moving averages and RSI indicator
Consensus forecasts
12/31/2020 31/12/2021
Net Income EPS DPS Net Income EPS DPS
Current $5.4 b $0.45 $1.84 $10.2 b $1.28 $1.89
1 month change -37.3% -42.2% -1.7% -19.7% -18.7% -1.4%
Upcoming Events
19/05/20 AGM
20/05/20 Q1 results
30/07/20 Q2 results
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1227 April 2020
Company Vodafone (VOD) VOD Performance
Listed ETPs 3x Long Vodafone Daily ETP (3LVO) 1 week 0.4%
3x Short Vodafone Shell Daily ETP (3SVO) 1 month -6.6%
YTD -25.5%
Exchange London Stock Exchange Price vs 52w high -35.5%
Overview
Market outperformer over the week. To reduce leverage, it completed the placement of 41.7 million
shares of Infrastrutture Wireless Italiane S.p.A., approximately 4.3% of the share capital, at €9.60 per
share, resulting in gross proceeds of approximately €400 million. Jefferies International maintained its
‘buy’ rating but cut its target from 150p to 148p, and UBS maintaining is ‘buy’ rating but cutting its target
from 200p to 190p.
Chart with moving averages and RSI indicator
Consensus forecasts
12/31/2020 31/12/2021
Net Income EPS DPS Net Income EPS DPS
Current $5.4 b $0.45 $1.84 $10.2 b $1.28 $1.89
1 month change -37.3% -42.2% -1.7% -19.7% -18.7% -1.4%
Upcoming Events
12/05/20 Full year results
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1327 April 2020
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For professional clients and eligible counterparties only.
GraniteShares Limited (“GraniteShares”) is an appointed representative of Duff & Phelps Securities Ltd. which is
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This document does not constitute an offer to buy or sell or a solicitation of an offer to buy securities in any
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specific investment objective, financial situation or particular needs of any potential investor and is intended only
for those investors who are capable of understanding the risk of loss of all or a substantial part of their monies.
Potential investors in the UK are reminded that they will not benefit from the UK investors compensation scheme.
Nothing contained herein constitutes investment, legal, tax or other advice nor is to be relied upon in making an
investment or other decision. No recommendation is made positive or otherwise, regarding individual securities or
investments mentioned herein. Any summary list of risk factors does not purport to be a complete enumeration or
explanation of the risks involved in an investment in short and leveraged products. Prospective clients must
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This document contains the opinions of the author and such opinions are subject to change without notice. The
source of data is GraniteShares unless otherwise stated. No guarantee is made to the accuracy of the information
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Risk Factors
An investment in a GraniteShares short and leveraged exchange traded product (“ETP”) may not be suitable for all
investors. They are intended for investors who wish to take a very short term view on the underlying asset and are
not intended as buy and hold investments.
Performance and capital loss: Past performance is not a reliable indicator of future results. The value of an
investment may go down as well as up and can result in losses, up to and including a total loss of the amount
initially invested.
Generic risks: Investments in ETPs involve numerous risks including, among others, company risks, general market
risks, credit risks, foreign exchange risks, interest rate risks, geopolitical risks and liquidity risks.
Specific product risks: The Index is constructed to track the performance of an increased (leveraged) and/or short
exposure to the underlying asset. A fall (or rise where short and leveraged exposure) in value of the underlying
asset can result in a greater reduction in the level of the Index. The Index is designed to do this on a daily basis only
which should not be equated with seeking a leveraged position for periods longer than a day. The ETP’s
performance over periods longer than one day will not be correlated or symmetrical with the returns of the
underlying asset. Potential investors should refer to the section entitled “Risk Factors” and “Economic Overview of
the ETP Securities” in the Prospectus relating to the GraniteShares ETPs for further details of these and other risks
associated with an investment in short and leveraged ETPs and consult their financial advisers as needed.
Counterparty risk: An investment in a GraniteShares short and leveraged ETP involves counterparty risk.
GraniteShares Financial plc has entered into a Swap Agreement with a counterparty, Natixis, that is backed with
collateral. Failure of the counterparty to make payments may result in an investment in an ETP suffering a loss.
Index Disclaimer
The Index is created, calculated and published by Solactive AG. No financial instrument is sponsored, promoted,
sold or supported in any other manner by Solactive AG nor does Solactive AG offer any express or implicit
guarantee or assurance either with regard to the results of using the Index and/or Index trade mark or the Index
level at any time or in any other respect.
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