If not for the war, there would’ve probably been a repeat of the 2008 gold market. However, there is something similar: the bearish outlook for miners. Gold stocks are declining similarly to how they did in 2008. History Can Be Rhymed The Russian invasion triggered a rally, which was already more than erased, and if […] If not for the war, there would’ve probably been a repeat of the 2008 gold market. However, there is something similar: the bearish outlook for miners. Gold stocks are declining similarly to how they did in 2008. History Can Be Rhymed The Russian invasion triggered a rally, which was already more than erased, and if it wasn’t for it, the self-similarity would be very clear (note the head-and-shoulders patterns marked with green). Since the latter happened, it’s not as clear, but it seems that it’s still present. At least that’s what the pace of the current decline suggests.  if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q1 2022 hedge fund letters, conferences and more I used a red dashed line to represent the 2008 decline, and I copied it to the current situation. They are very similar. We even saw a corrective upswing from more or less the 200-week moving average (red line), just like what happened in 2008. We saw a breakdown to new short-term lows, which means that the volatile part of the slide is likely already underway. Today’s decline in silver prices to new yearly lows definitely supports the above. All right, let’s zoom in and see how mining stocks declined in 2008. Back then, the GDXJ ETF was not yet trading, so I’m using the GDX ETF as a short-term proxy here. The decline took about 3 months, and it erased about 70% of the miners’ value. The biggest part of the decline happened in the final month, though. However, the really interesting thing about that decline – that might also be very useful this time – is that there were five very short-term declines that took the GDX about 30% lower.  I marked those declines with red rectangles. After that, a corrective upswing started. During those corrective upswings, the GDX rallied by 14.8-41.6%. The biggest corrective upswing (where GDX rallied by 41.6%) was triggered by a huge rally in gold, and since I don’t expect to see anything similar this year, it could be the case that this correction size is an outlier. Not paying attention to the outlier, we get corrections of between 14.8% and 25.1%. The interesting thing was that each corrective upswing was shorter (faster) than the preceding one. The first one took 12 trading days. The second one took seven trading days. The third one took 2 trading days, and the fourth and final one took just 1 trading day. Fast forward to the current situation. Let’s take a look at the GDXJ ETF. The GDXJ ETF declined by 32.4% and then corrected – it rallied by about 20.3%. The corrective upswing took 14 trading days. The above is in perfect tune with the previous patterns seen in the GDX during the 2008 slide. What does it tell us? It indicates that history can be rhymed, and while it will not be identical, we should pay attention to the indicators that worked in 2008. The next corrective upswing (a notable one, that is) might start when the GDXJ ETF declines by about 29-35% from its recent top. To clarify, I don’t claim that the above technique would be able to detect all corrective upswings, or that I aim to trade all of them. For instance, in my view, it was a good idea to enter a long position on May 12 and switch to a short position on May 26, but I wasn’t aiming to catch the intraday moves. GDXJ could also decline a bit more than 29-35%, as let’s keep in mind that previous statistics are based on the GDX ETF and we are discussing the GDXJ here, and the latter is likely to decline even more than GDX as juniors are more correlated with the general stock market (and the latter is likely to slide). So, let’s say that the GDXJ might decline between 29% and 40% from the recent high before triggering another notable corrective upswing (one that could take between 5 and 10 trading days based on how long the last one took and how big those corrections were in 2008). The recent high was formed with the GDXJ ETF at $42.19. Applying the above-mentioned percentages to this price provides us with $24.78-29.32. And yes, the above would be likely to take place along with a big decline in gold prices. Now, is there any meaningful support level in this area that could stop the decline? Yes! Still Bearish The late-March 2020 low is at $26.62, and it provides significant short-term support within the analogy-based target area. Additionally, the above corresponds – more or less – to the size of the decline that would match the size of the April-May decline. It would be only somewhat bigger. Let’s keep in mind that gold stocks don’t necessarily move on their own, but rather move along with gold. So, if gold moves to its strong medium-term support provided by the 2021 lows and then starts a brief rally, the same action would be likely in mining stocks. The head and shoulders pattern confirms that the downside target is well below $30, perhaps even as low as ~$24. There’s also an additional detail present on GDXJ’s very short-term chart. The GDXJ just broke below the declining wedge. While falling wedges are usually a bullish sign, they only become such after a break to the upside. What we witnessed was a relatively uncommon occurrence: a breakdown on the downside. The implications are therefore bearish instead of being bullish, and the profit potential for the current short position remains enormous. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFA Founder, Editor-in-chief Sunshine Profits: Effective Investment through Diligence & Care All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice. Find A Qualified Financial Advisor Finding a qualified financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you're ready to be matched with local advisors that can help you achieve your financial goals, get started now. Updated on Jul 1, 2022, 12:06 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

In a purported phone call between a Russian-backed separatist and his wife, the fighter describes chaos and war crimes among Russian soldiers. Russian soldiers walks along a street in Mariupol on April 12, 2022.Photo by ALEXANDER NEMENOV/AFP via Getty Images) A Russian-backed separatist fighter reportedly trashed Putin's troops in a call with his wife.  Ukraine's military intelligence released on Thursday what it said was a phone call between the two.  Russian troops have been accused of war crimes and other atrocities since the war's early days. A Russian-backed separatist fighter reportedly told his wife that President Vladimir Putin's troops are war criminals and used a slur for disabled people to call them imbeciles. Ukraine's military intelligence uploaded a video to YouTube on Thursday of what it alleged was a phone conversation between a soldier from the Moscow-backed and self-proclaimed Donetsk People's Republic and his wife. During the phone call, the soldier describes disorganization and chaos among the Russian soldiers, using a slur to call Putin's forces morons and comparing soldier infighting to those who mutinied during World War I. "Like during the war on Potemkin, in the night, they had support come in to help them, and they started firing on themselves, Russians firing on Russians, destroying themselves," he says. The separatist also purportedly blasts Russian military generals for not understanding the situation on the ground."In short, they fucked us for everything," the fighter reportedly says.The separatist fighter also complains that Russian forces aren't allowing them to rotate off the front lines. "I just want them to get us out of here," he said, adding that he thinks the Russians aren't allowing soldiers off the front lines because they're afraid they'll desert and never return."Nobody is going home, because they won't fucking come back," he said. "And mostly, they are right, because even the guy from the 33rd regiment said, 'this is a one-way ticket, I will leave and not come back.' "Russian troops have been accused by Ukrainian officials and Western states of committing war crimes and other atrocities against civilians since the war's early days. Throughout the four-month-long conflict, civilians, journalists, and officials have documented and reported instances where Russian troops have directly targeted Ukrainian civilians with their brutality.Among the horrors are summary executions and raping of civilians, as well as the indiscriminate bombing of residential areas and hospitals. Ukraine and the West have vowed to prosecute any alleged war crimes.  The soldier's wife is heard in the phone call saying, "the rapes and everything happened there in Ukraine was done by the Russians," but explains that some people say the Russians aren't capable of such a thing. "They are capable of anything," the soldier replies. Translations by Nikita Angarski.Read the original article on Business Insider.....»»

Kinder Morgan (KMI) plans to bring the enhanced natural gas pipeline into service in November 2023, subject to necessary approvals. Kinder Morgan Inc. KMI, through its subsidiary, reached a final investment decision on its proposed natural gas pipeline expansion project.The final investment decision was taken after Permian Highway Pipeline (“PHP”) secured binding firm transportation agreements for all available capacities. PHP is owned by subsidiaries of Kinder Morgan, with a 26.7% ownership interest.The decision came as multiple liquefied natural gas processing facilities have been proposed along the Texas Gulf Coast to meet Europe’s rising demand for gas. The facilities would require 3.1 billion cubic feet per day of natural gas supply.Permian Highway transports natural gas from the Waha hub on the Texas side of the Permian Basin to Katy, TX, near Houston. The pipeline currently carries 1.2 billion cubic feet per day from the Permian Basin of West Texas and New Mexico.The expansion would increase the pipeline’s total capacity by up to 550 million cubic feet per day. The project will increase natural gas supplies from the Waha area to various mainline connections, which involve Katy, TX, and other U.S. Gulf Coast markets.Kinder Morgan plans to bring the enhanced natural gas pipeline into service in November 2023, subject to necessary approvals. The project will reduce transportation constraints from the Permian Basin, and help reach the company’s domestic and global energy requirements.The project is expected to support natural gas production growth in West Texas. It will provide several liquefaction facilities with a more affordable and reliable supply. Beside this, the project will grant access to high-priced markets and transportation flow assurance, which is crucial to reducing flared volumes.Company Profile & Price PerformanceHeadquartered in Houston, TX, Kinder Morgan is a leading midstream energy infrastructure provider.Shares of the company have underperformed the industry in the past six months. The KMI stock has gained 5.7% compared with the industry’s 8.7% growth. Image Source: Zacks Investment Research Zacks Rank & Stocks to ConsiderKinder Morgan currently has a Zack Rank #3 (Hold).Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.Phillips 66 PSX is the leading player in each of its operations like refining, chemicals and midstream in terms of size, efficiency and strengths. It has an oil and gas pipeline network of 22,000 miles, which is expected to increase in the coming days.Phillips 66 has hiked its quarterly dividend to 97 cents per share, representing an increase of 5% from the prior quarterly dividend. With the recent resumption of the stock repurchase program, the increment in the quarterly dividend represents Phillips 66’s strong focus on returning capital to stockholders. Since the company’s inception in 2012, this has resulted in its 11th annual dividend hike.Range Resources Corporation RRC is among the top 10 natural gas producers in the United States. The upstream energy firm expects the free cash flow to exceed $1.4 billion this year, which could be the highest among Appalachian players.Range Resources has reinstated its regular quarterly cash dividend, expected to start in the second half of this year. The company anticipated its annual dividend rate to be 32 cents per share. RRC’s board of directors approved the authorization of a $500-million share repurchase program, which is likely to be funded with the company’s free cash flow generation.Antero Resources AR is among the fast-growing natural gas producers in the United States. The leading natural gas producer is expecting a free cash flow yield of 25% for 2022, which could be the highest among Appalachian players.Antero Resources is targeting a capital return program of 25-50% of free cash flow annually, beginning with the implementation of the share repurchase program. The company’s board authorized a share repurchase program of up to $1 billion of outstanding common stock. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Range Resources Corporation (RRC): Free Stock Analysis Report Kinder Morgan, Inc. (KMI): Free Stock Analysis Report Phillips 66 (PSX): Free Stock Analysis Report Antero Resources Corporation (AR): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Fridays are all about podcast links here at Abnormal Returns. You can check out last week’s links including a look at the... The bizHow "The Tennis Podcast" became central to understanding the game. (nytimes.com)A Q&A with Stephen Dubner of Freakonomics fame on their 500th episode. (morningbrew.com)Substack is greatly increasing audio availability on the site. (on.substack.com)WorkCardiff Garcia talks with Adam Ozimek, the chief economist of the Economic Innovation Group, about the future of work. (shows.acast.com)Adam Grant on how to improve the status quo at work. (podcasts.apple.com)CryptoJeff Malec talks with Leigh Drogen of Starkiller Capital about the wild world of crypto. (youtube.com)Stephen Dubner on whether NFTs were just a big, old scam. (freakonomics.com)Real estateBarry Ritholtz talks with Jonathan Miller, CEO and co-founder of the real estate appraisal and consulting firm Miller Samuel, about the state of residential real estate. (ritholtz.com)Christine Benz and Jeff Ptak talk with Ilyce Glink about the state of the residential market. (morningstar.com)FinanceJosh and Michael talk with Felix Salmon about the financial media, art markets and more. (thereformedbroker.com)Joe Weisenthal and Tracy Alloway talk with Dan McCrum and Paul Murphy about unearthing the WireCard fraud. (podcasts.apple.com)Kevin Thompson talks with Jonathan Clements about Humble Dollar and the markets. (rss.com)Vishal Khandelwal talks with William Green the author of "Richer, Wiser, Happier: How the World’s Greatest Investors Win in Markets and Life." (vishalkhandelwal.com)Patrick O'Shaughnessy talks with Chris Bloomstran about the business of Berkshire Hathaway ($BRK.A) (joincolossus.com)Non-financePatrick O'Shaughnessy talks with Prof. Kenneth Stanley co-author of "Why Greatness Cannot Be Planned: The Myth of the Objective." (joincolossus.com)Dan Harris talks with Shaila Catherine author of "Beyond Distraction: Five Practical Ways to Focus the Mind." (tenpercent.com)Diahna Fortuna talks with Annie Murphy Paul author of "The Extended Mind: The Power of Thinking Outside the Brain" (youtube.com)Russ Roberts talks with A.J. Jacobs author of "The Puzzler: One Man's Quest to Solve the Most Baffling Puzzles Ever, from Crosswords to Jigsaws to the Meaning of Life." (econtalk.org).....»»

    Welcome to the Second Half of this annus horribilis, the worst start to any year since 1982? 1971? 1929? Pick your favorite year, the specifics no longer matter. The headlines are all shouting at us how bad the first half was. The New York Times is fairly typical: “After Worst Start in 50… Read More The post Nowhere to Hide appeared first on The Big Picture.     Welcome to the Second Half of this annus horribilis, the worst start to any year since 1982? 1971? 1929? Pick your favorite year, the specifics no longer matter. The headlines are all shouting at us how bad the first half was. The New York Times is fairly typical: “After Worst Start in 50 Years, Some See More Pain Ahead for Stock Market.” Mohammed El-Erian sums it up well: Further to yesterday’s tweet, some of this morning’s media headlines.#Investors are finding that the notion of “#inflation impacting everyone” applies to them too. A key issue for the outlook is the extent to which a late #Fed will aggressively hike rates into a slowing #economy pic.twitter.com/GDxqPBT9GO — Mohamed A. El-Erian (@elerianm) July 1, 2022   The problem with all of this handwringing: It’s a feature, not a bug, and there is nothing you can do about it. If you want the upside, you must tolerate the uncomfortable downside (more or less). Consider the century of drawdowns as shown in the chart above. If you want to see any kind of long-term returns, putting up with regular decreases in value is simply the cost of admission. You can diversify, but that has not helped very much this year. You can try to time the market, but good luck with that. Few can do it, fewer still with any consistency, and fewer yet will do it on your behalf. You can try to miss the big down days, but then you end up missing the big up days, too. Worse, people who try to time make a hash out of the process, with 30% never returning to risk assets or equities — just move to cash, and * SHEESH*  stay that way for the rest of their lives. Rather than get pulled into this mania, it is much more useful and psychologically healthy to recognize we must accept that drawdown, corrections, bear markets, and crashes are simply part of the process. Indeed, they are a very important part, because bear markets and crashes are where you earn the upside over risk-free treasuries. Risk is what leads to returns — and risk means suffering through markets that fail to meet your expectations. Have a great holiday weekend . . .         Previously: Big Up Big Down Days May 5, 2022 Panic Selling Quantified (March 24, 2022) If You Sell Now, When Do You Get Back In? (March 23, 2022) Stop Listening to Pundits (December 8, 2021) Market Volatility is a Feature not a Bug (February 11, 2019) Pundit Suckitude: Its a feature, not a bug. (July 30, 2013)   The post Nowhere to Hide appeared first on The Big Picture......»»

Blain: "Markets Are Still In Denial/Fool-Themselves Mode" Authored by Bill Blain via MorningPorridge.com, “Cheer up my lads ‘tis to glory we steer, to add something new to this wonderful year…” Stocks tumbled 20% in H1, but Central Banks are fixated on Inflation as the No 1 priority with higher interest rates nailed on. Supply chain issues remain difficult, meaning corporate earnings will remain under pressure. The market is setting up for further weakness through H2. It’s the last day of June, the end of the 2nd Quarter of this inglorious year, and the headlines sum up the mood: Banks are warning of recession, Tesla is laying off staff from its Autodrive division (really? I thought that was what justified it’s 100 times P/E?), petrol prices at the pump are putting on a new high. Or how about Morgan Stanley warning the price of Carnival Cruise could tumble to zero if recession triggers a major demand shock.. High probability then… Will things get any better in the second half of the year? Probably not. Jay Powel said it all: The process is highly likely to involve some pain, but the worst pain would be from failing to address this high inflation and allowing it to become persistent” Inflation is Central Banks number one concern – not addressing the market declines we’ve seen in the first half. We’re expecting a series of large hikes in interest rates through the summer – even the ECB! Yet, Markets are still in denial/fool-themselves mode. Markets tend to accentuate the positive and, in doing so remain largely unaware of reality. But at some point reality and inflated hopes tend to collide. Usually painfully. I’m guessing, but I have a gut-feeling the coming July earnings season could be the straw that triggers the next leg down. The results news-flow will be subtle, and its unlikely to be a succession of disastrous results – just a stream of not-quite-as-good-as-expected numbers. Cumulatively, the news trend will confirm companies are struggling more than anticipated with the consequences of high staffing costs and low availability, high inventories and the need to discount, falling demand on the back of the inflation shock, and ongoing supply chain issues. Listen very closely to what CEO’s are really saying, and strip out what they want you to hear. Get past the corporate blandishments and it could reverse years of blithe expectations. It’s going to highlight just how badly the real world is still misfiring. (There is a developing sub-text to the corporate outlook – the increasing untenability of highly levered Zombies.. the first, like Revlon have already stumbled.) Think back to the Pandemic. When it began in March 2020 the stock market took a massive dip. And then it went steadily higher and higher – fuelled by expectations of swift recovery once Covid was beaten. Positive news – like vaccine tests, airports reopening or falling infections were each greeted by rallies. Traders and professional investors talked about how the wall of pandemic savings would create a post-pandemic boom. The real question to ponder is… why were markets so wrong? Now we look headed for recession. It’s not just the Ukraine energy and food inflation stocks. Much of it boils down to still broken global supply chains. One of the surprising things I’ve learnt over nearly 40 years about the business of finance is how little investment bankers actually know about the real world. They experience little real “friction” in the business of moving assets around an electronic balance sheet, or calculating returns on a laptop. This morning I have experienced friction because my Laptop had a hissy fit. I was about to punch it before our IT guy bravely stepped in…. In the real world there is tremendous friction in every single part of all transactions – loading a ship, putting cargo on a plane, getting goods shifted from A to B, waiting for parts, waiting for payments, dealing with customers, building products and selling them. It’s difficult. Yet, friction played little part in the markets analysis of the pandemic. Analysts straight out of Investment Management school have diddly-squat idea about the real world. Even now I don’t think the “market” understands the real economy. It’s still poised for a buying opportunity – looking for signals the bottom has passed and it’s time to buy. I read loads of research about why markets may go up, and look at pages of overweight recommendations and just a few lines of underweight. The market remains highly biased to the upside. That’s the real divergence in the economy – what the market thinks is happening, and what actual people on the ground actually see… Let me digress for a moment and try to explain the divergence: For the first 20 years of my inglorious career in finance I spent 99% of my time speaking to fellow finance professionals – traders, salesmen, economists all pushing whatever the investment banking line was. I then relayed these perspectives to my clients in the debt capital markets; Bank Treasurers, CEOs, Investment Firm Economists and Strategists, Portfolio Managers and funding bosses. I existed in a groupthink bubble comprising entirely financial market participants. I thought, acted and behaved like a financial professional clone. It took me years to realise just how conditioned I had become. I was lucky. Writing the Morning Porridge since 2007 – and being a natural cynic – has helped. I was lucky to retain just enough disbelief to realise how fundamentally broken financial markets were by the Global Financial Crisis in 2008. My blinkers over investment banking were lifted after the bank I’d led from zero to top 3 in the Financial Institutions business sacked me for “not fitting in.” I perceived just how distorted markets became as a result of regulation, monetary experimentation and QE. I broke out the bubble. As financial markets became more and more distorted, I started to look for opportunities in real assets rather than financial assets. It’s been fascinating. Since 2009 I’ve been fortunate to spend an increasing amount of my time talking to real people with real jobs in the real economy. I chat to real entrepreneurs and businesses looking for finance and meeting a whole range of executives, engineers, marketing managers, retail leaders, designers and guys who actually make stuff. A brush with illness brought me to Earth, meeting doctors able to explain not only why I wasn’t working, but the issues with heath provision. Talking to real nurses, brickies, chippies, and artisans has been extraordinary. I now find it’s difficult to take all finance professionals seriously. It’s been a learning curve about friction. Pandemic reality slows and there still aren’t enough ships, lorry drivers, pilots, baggage handlers… As shortages bite, inflation rises, we get further exogenous shocks, and a cost-of-living crisis develops. Firms suddenly find themselves with over-ambitious inventories, and suddenly there is talk of companies dumping stock, meaning they miss margins. As interest rates soar to address inflation, zombie companies that leveraged themselves up to buy back their own stock suddenly find themselves busting. (There just is not enough worry about how the junk sector is likely to fare.) And supply chains are not fixed. Speak to real economy professionals and they will tell you rising labour costs, rising energy costs, rising logistical costs, rising transport costs, ongoing shortages of key parts, longer lead times for parts, ongoing supply disruptions, rising inventory levels, rising tariffs and barriers to trade, increasing red-tape, geopolitical uncertainty, right down to their simply not being enough space to store components in what was once a just-in-time based factory… and it’s all a recipe for a broken economy. Compare and contrast to what the market expected and believed would happen – a frictionless reopening of the post-pandemic economy, and what we actually have: ongoing supply chain disruption and friction. All it takes is a few missing containers, a delayed ship (because it slowed down because fuel costs soared), or a container pork blocked because there aren’t enough lorry drivers. One pebble quickly becomes a landslide. Real businesses are addressing it – they are solving problems ranging from storage space, using smart data, communications, planning and new supply chain approaches. If a particular chip is unavailable and irreplaceable, they find a work around – even it means delaying deliveries. Its tough. They know it may take years because it’s not just supply chains that are changing – its terms of trade, trade routes and costs. Markets assume it will just happen – probably tomorrow or the day after. No it won’t. And ongoing supply chain crisis is just one aspect of what markets aren’t grasping in terms of the economic reality out there… The inflation shocks from Energy, Food and now Wages. These are real and long-term. They were never transitory. One of the aspects of the coming Carnival Lines dunking will be its coming liquidity crisis on the back of rising interest rates and crashing customer demand. Morgan Stanley point out it has $30 bln of debt and “unsustainably” high leverage. As its’ stock prices continues on a downwards spire, then raising new equity will be dilutive and costly. You can bet its not the only firm in trouble! Tyler Durden Fri, 07/01/2022 - 11:05.....»»

"…And Then?" By Michael Every of Rabobank "... And Then?" Thursday was another down day in most markets, with staggering moves in some. US stocks closed down (-0.9% S&P) and had their worst H1 since 1970. How many Wall Street analysts had that pencilled in? Bonds rallied. US 10s breached the key 3% level, which had been establishing itself as a floor vs. a 3.50% ceiling, but were back above it at time of writing. European bonds have seen a staggering two-day move, with German 5s down 35bp in just two days, apparently only the third time that has happened in 20 years, and 10s down 29bps. That was despite Reuters suggesting that the ECB would buy Italian, Greek, Portuguese, and Spanish bonds with the proceeds from German, French, and Dutch bonds. Yet overall bonds still had an H1 for the ages too – in a bad sense. Commodities got smacked again and are all well down from their 2022 peaks. Base metals have given up all their Ukraine war gains. Yet oil as the key benchmark is still up 48% year-to-date. Javier Blas from Bloomberg also picks up the Banque de France flagging concerns about global commodity trading, which it calls an "oligopolistic market", with "potentially systemic importance and moral hazard", and where "more extensive work still needs to be done on the regulation." This is red flag that has been waved by the Fed before. Bitcoin crumbled further below $19,000. The US dollar once again was up sharply, then down again, with the DXY at 104.7, having been at 105.5. If we see another spike that is held even as everything else starts to collapse,… well, fasten your seatbelts. Fed swap lines will be needed. In short, if you bought stocks in H1, you lost; if bonds, you lost; if commodities, you were doing great until recently; if crypto you lost; if the US dollar, you were fine. Some of the extreme moves we have seen recently were likely exacerbated by end-month and end-quarter flows/repositioning. So, now on to Q3 and H2. We kick off with the Atlanta Fed Q2 GDP tracker being revised down to -1.0%, meaning the US *is* already in recession even before we have to worry about one ahead. At least that clears the picture a little. Except that supply chain chaos may be easing at sea in some places, but worsening in others. As Freight Waves puts it, “The jaws of the supply chain vise are squeezing trade so tight that the headache it is creating will be a whopper for logistics managers this peak season. Port congestion is growing again as a result of labour and equipment inefficiencies.”  More, properly-focused workers are needed urgently, is their conclusion. Indeed, alongside airport chaos, American Airline pilots are getting a 17% pay rise to try to keep things running. Yes, 17%, not 1.7%. In short, some pipeline deflation is evident – but not in energy: and pockets of structural inflation remain that cannot be resolved by the stroke of any central bank pen. Listening to recent commentary, the market appears madly focused on the idea that for all of the calamites unfolding around us there is one simple solution - the Fed cuts rates, and soon. Making that call is important, and particularly because it means ignoring what the Fed, every central bank, and the BIS, just said loudly and clearly – that rates are going up a lot anyway. However, let’s presume the Fed and every central bank is wrong (which is a healthy place to start) and the market is right (which isn’t), and a Fed pivot is imminent (which may be true). My key question is: “…and then?” Most of the market doesn’t seem to have an answer in terms of the big picture. It doesn’t even want to try to think of one. Fed cuts will apparently make all our issues go away. Yes, a logical near-term response is “go long stocks; long bonds; long commodities; short the US dollar; long crypto; and long risk”. However, my question is still: “…and then?” What about Inequality? Energy prices? The food crisis? Regulation of commodity markets? Geopolitics? National security? The war? The climate? How does this all join up, and where are we going even if we do get lower rates? I cannot tell you how few market commentators are willing to even begin to answer those questions holistically: because it’s hard; and because “go long stocks; long bonds; long commodities; short the US dollar; long crypto; and long risk”, makes lots of people lots of money. So, they will keep peddling their threadbare wares, and I will keep saying “…and then?” until I get some answers like the annoying voice at the Chinese restaurant in that avantgarde arthouse US film ‘Dude, Where’s My Car?’ And ‘wonton soup’, while nice, is not going to be one of them. To make my point, yesterday saw another huge US Supreme Court ruling: this time to roll back the “administrative state” - as Justice Thomas had flagged in an interview. Specifically, it ruled the Environmental Protection Agency has limits to its regulation of carbon emissions. As with Roe vs. Wade, elected officials now have to make decisions on crucial matters, this time federal not state. “…and then?” Which regulator will be next, and which key legislation will then be added to the pile for a dysfunctional Congress that has a narrow Democrat majority now, but which is likely to see a larger Republican (and MAGA) one after the November mid-term elections? “…and then?” To repeat another point I had made on Monday, if you extend the logic of the ruling, the Fed may get nervous. I’m not sure exactly what case somebody might be able to bring against the 1913 Federal Reserve Act --perhaps being egregiously harmed by QE?-- but if they can, we might find out if this Court thinks the Fed also has de facto executive power, enforcement power, and adjudication power outside of the constitution. The ECB dealt with similar issues in their German constitutional court case in recent years and emerged even more powerful – but then Europe generally likes centralized regulation a whole lot more than US conservatives do. Yet one wonders how the ECB will fare politically if it starts selling core bonds to buy peripherals, and once we eventually find out how its much-vaunted but even more controversial Anti-Fragmentation Tool (AFT) actually works --or doesn’t-- in practice. “…and then?” Who knows? But more volatility surely. Does the Fed get to keep control when other elements of the administrative state fade away? Or does the Fed gain greater power via regulation of commodity markets and expanded dollar swap lines (for friends only),… and then do central governments gain greater powers over central banks to ensure national security needs are met? “…and then?” We have to look bigger picture. Turkey is to get new US F-16s, and so Greece is to get new US F-35s (partly paid for by the ECB via German, French, and Dutch bonds). “…and then?”   Not too far away, and despite the utopian prognostications of the EU’s foreign policy bumblebee Borrell, the word on the street is the Iranians are playing hard ball in the latest indirect US-Iran talks because a powerful clique in Tehran is not sure if they want to bother with the pretense of the nuclear deal or not. People are really talking about the “last chance” for any agreement. “…and then?” New Zealand agreed a trade deal with the EU. Yet PM Ardern’s warning at the recent NATO summit --also attended by Australia, Japan, and South Korea-- that China is becoming more assertive, has drawn a sharp rebuke, as did the summit’s focus on China as well as Russia. Beijing has noted Ardern’s “misguided,” “wrong,”, and “regrettable” accusations.     “…and then?” In the US, Senate Minority Leader McConnell has now threatened to withhold support on the until-now bipartisan US COMPETES Act aimed at helping to onshore semiconductor production, if the bill also includes items not related to the issue at hand. Relatedly, just published a look at the potential for ‘friend-shoring’ of supply chains from China to others (‘Friends Reunited’). The simple conclusion is that were this to happen on even the limited scale we project relative to China’s total labour force, it could transform global trading patterns; moreover, China’s trade surplus would swing to a deficit, leading to lower GDP growth and an inability to use fiscal and monetary policy to compensate without a balance of payments and FX crisis. Obviously, China will do all that it can to retain its trade ‘MySpace’ as a result. “…and then?”   “…and theeen?”  “…and theeeeeen?” “…So, we think the Fed will cut rates…”  Happy Friday, July, Q3, and H2. Tyler Durden Fri, 07/01/2022 - 11:45.....»»

Housing inventory recovery made major strides in June, with the number of homes available to buyers climbing at its fastest yearly pace of all time (+18.7%), according to the lates realtor.com® Monthly Housing Trends Report released this past week. Among key factors driving June’s jump in active listings were new sellers, who entered the market… The post For-Sale Home Supply Grows Faster Than Ever as New Seller Activity Rebounds appeared first on RISMedia. Housing inventory recovery made major strides in June, with the number of homes available to buyers climbing at its fastest yearly pace of all time (+18.7%), according to the lates realtor.com® Monthly Housing Trends Report released this past week. Among key factors driving June’s jump in active listings were new sellers, who entered the market at a higher rate than in 2017-2019 prior to the pandemic, according to the report. “Our June data shows the inventory recovery accelerated, posting the second straight month of active listings growth in nearly three years. We expect these improvements to continue, as predicted in our newly-updated 2022 forecast,” said Danielle Hale, chief economist for realtor.com®. “While we anticipate that more inventory will eventually cool the feverish pace of competition, the typical buyer has yet to see meaningful relief from quickly selling homes and record-high asking prices. However, a deeper dive into June’s inventory gains by square footage reveals potential opportunities for move-up buyers, as newly-listed homes skewed larger. In other words, this first wave of supply improvements may be particularly opportune for summer sellers looking to upgrade from their starter homes, which could mean more equity to put towards purchasing a bigger property.” Hale added, the increase in larger, more expensive homes as a share of new listings is one reason that overall asking prices continue to soar despite moderating demand. In June, homes with at least 1,750 square feet accounted for more new listings (54.3%, up from 52.7% in 2021) than relatively smaller homes (45.7%, down from 47.3% in 2021). Inventory climbs as buyer demand cools and seller activity rebounds The inventory recovery from 2021 declines continued to accelerate in June, due to the combination of rebounding new listings growth and moderating demand, reflected in recent home sales trends. While still-hot housing competition is motivating more new sellers to list, some buyers are being priced out of the market by rising mortgage rates and record-high asking prices that have driven up typical mortgage payments by 58% from a year ago. In June, the U.S. inventory of active listings grew 18.7% year-over-year, a faster pace than last month (+8.0%). However, there are still fewer than half (-53.2%) as many for-sale homes compared to June 2019. One factor behind June’s accelerated inventory improvement was pending listings declines (-16.3% year-over-year), which means fewer for-sale homes under contract with a buyer. Additionally, new seller activity rebounded to 1.0% greater than its 2017-2019 pace, with new listings up 4.5% year-over-year. Compared to June 2021, active inventory increased in 40 of the 50 largest U.S. metros, led by Austin, Texas (+144.5%), Phoenix (+113.2%), and Raleigh, N.C. (+111.7%) . June’s biggest new listings gains were posted in southern markets (+11.0%): Raleigh (+37.6%), Nashville, Tenn. (+37.2%) and Charlotte, N.C. (+30.1%), as well as Las Vegas, Nevada (+34.8%). Home shoppers are still snatching up homes quickly, but there are early signs of relief Despite cooling demand, June time on market trends relative to last year show that buyers continued to snatch up homes at a near-record-fast pace. However, month-to-month data tells the beginnings of a different story, with overall time on market growing from May to June for the first time since 2019. Additionally, while homes moved more quickly than in June 2021 across all size tiers, declines were greater among larger for-sale homes. These trends suggest that one potential reason why the overall pace of time on market remains competitive, despite softening demand, could be a shift in the mix of home shoppers, such as an increase in move-up buyers. The typical U.S. home spent 32 days on market in June, nearly a full month (-27 days) faster than usual June 2017-2019 timing. Time on market held close to May’s record-low, but posted a slightly smaller yearly decline month-to-month (-4 days vs. -6 days). Among June’s active inventory, some listings with more square footage, such as those with 3,000-6,000 square feet sold faster year-over-year (-8.5 days) than relatively smaller homes like those with 750-1,750 square feet (-5 days). In June, 34 of the 50 largest markets posted annual declines in time on market, led by southern (-4 days) and northeastern (-2 days) metros: Miami (-22 days), Hartford, Conn. (-8 days) and Jacksonville, Fla., Orlando, Fla. and Atlanta, Georgia (-7 days). Meanwhile, time on market was flat year-over-year in six markets and grew in ten metros, led by Austin (+6 days), Denver and Detroit (+4 days each). Typical asking prices soar to latest record, reflecting still high seller expectations  Nationally, typical asking prices again soared double-digits over 2021 levels in June, reaching their latest new high, suggesting that many sellers still have great expectations of the market. At the same time, a number of June trends indicate that sellers are beginning to compete for fewer buyers who have more options. Both active and pending listing prices posted smaller yearly gains than last month, while the share of total inventory with price reductions increased. In June, the U.S. median listing price hit its latest record-high of $450,000, up 16.9% year-over-year. However, active listing prices posted a slightly smaller gain than last month (+17.6%), as did pending listing prices (to 13.9% from 16.2%). Relative to June’s national rate, listing prices grew at a faster annual pace in 15 large markets, led by: Miami (+40.1%), Orlando, Fla. (+30.6%) and Nashville (+30.6%). Four markets posted year-over-year declines: Pittsburgh (-8.6%), Rochester, N.Y. (-5.9%), Cincinnati (-5.7%) and Buffalo, N.Y. (-2.0%). However, in all of these metros aside from Pittsburgh, the price per square foot grew on an annual basis, indicating that a change in the mix of homes has pushed the median listing price lower. The share of total homes with a price reduction grew year-over-year nationwide (+7.6 percentage points) in June, as well as in all 50 but one of the largest metros, most significantly in: Austin (+24.7), Phoenix (+22.2) and Las Vegas (+20.1). Roughly one-in-seven homes in June had a price reduction, up from roughly one-in-13 in June 2021, but still below the one out of every four-to-five that was typical in 2017-2019. Spotlight On: Condos offer relative affordability in most U.S. counties Despite recent supply improvements, affordability remains a significant obstacle to homeownership for many Americans. Home shoppers are feeling the strain on their budgets due to higher-than-anticipated inflation, mortgage rates, home and rental prices, down payments and more. In this context, Realtor.com® recently compared 2021 home sales trends among single-family homes versus condos to identify potential opportunities for buyers to find relatively affordable housing, with key findings including: Nationwide, the typical condo sold for an average of 6.7% less than the typical single-family home in 2021. Location explains this understated trend. Common to crowded big cities where real estate typically comes at a premium, the vast majority (84.1%) of condos were sold in just 6% of counties. Drilling down to the county-level in New York, Massachusetts, Illinois and Washington, states with high levels of 2021 condo sales, reveals that condo prices were an average 13.5% lower than single-family homes. In the cities of New York, Boston, Chicago and Seattle, condo buyers paid an average of 33.2% less. While these opportunities are driving demand for condos, recent data shows home shoppers may still find relatively affordable condo listings. In June, condos made up 20.2% of active inventory and were listed at 17.5% lower (on average across the 50 largest metros) than single-family homes. “As big city buyers looked for ways to stay on budget in 2021, our analysis shows opting for a condo offered a solution in some counties. And there may still be opportunities going forward, even as condos’ relatively lower price point is driving up their popularity and prices. If demand leads builders to ramp up condo construction, and the resulting increase in supply may help keep condo prices more manageable than those of single-family homes,” said Hannah Jones, Economic Research Analyst for realtor.com®. The post For-Sale Home Supply Grows Faster Than Ever as New Seller Activity Rebounds appeared first on RISMedia......»»

Some of the same researchers who collaborated to evaluate markets where homes are over or undervalued released a new report this week, this one focused on rentals, finding a continued trend of rental costs vastly exceeding expected increases. The collaboration between Florida Atlantic University (FAU), the University of Alabama (UA) and Florida Gulf Coast University… The post Florida, South Top Inflated Rental Markets appeared first on RISMedia. Some of the same researchers who collaborated to evaluate markets where homes are over or undervalued released a new report this week, this one focused on rentals, finding a continued trend of rental costs vastly exceeding expected increases. The collaboration between Florida Atlantic University (FAU), the University of Alabama (UA) and Florida Gulf Coast University (FGCU) found cities in the South—and Florida in particular—have rental markets currently inflated massively above expectations. A total of 10 cities have rental averages 15% higher than where they should be, and two markets—both in Florida—saw year-over-year rent increases topping 30% in May. “Until we can build units faster, the nation’s rental crisis will continue,” said Bennie Waller, an incoming faculty member at UA, in a statement. With a historic spike in rental costs over the past few months, the researchers saw some reasons to be optimistic that most markets will not continue to balloon out of control, while cautioning that structural factors could persist in keeping rents unaffordable for the medium term. “As long as the demand for renting remains high, rental rates almost certainly will stay elevated as well,” said Ken H. Johnson, economist at FAU, in a statement. The average rental across the country is 9.85% overvalued, according to the researchers. Researchers compared the “difference between statistically modeled prices and actual rental prices” using Zillow data to determine whether the market was over or undervalued, also calculating month-to-month increases. Largely, rent spikes have hit the South and West the hardest, they found, and even areas with traditionally lower rents are increasing at a far swifter pace than predicted. Sierra Vista, Arizona, for instance, has an average rental cost of $1,291—well below the national average of $1,979. But that rent is 18.6% higher than it should be, the researchers found, up 17.8% year-over-year. Factors Unsurprisingly, a lack of inventory and high demand are a primary cause of these over-inflated rents, according to the researchers. Shelton Weeks, a researcher at FGCU, faulted local governments and grass-roots resistance from residents for stymying the creation of more rental housing. “In addition to the lengthy approval process faced by apartment development projects, a primary culprit here is the resistance within many communities to new projects with higher levels of density,” he said in a statement. “In order for markets to function properly and add supply where needed, it is critical for municipalities to streamline the approval process for these projects and for density to be increased to a point where the new units can be offered at reasonable rental rates.” Johnson also posited that mortgage rate increases will indirectly drive up the cost of rentals as the pool of homebuyers shrink. “The Fed’s interest rate increase will price more people out of the housing market and keep them as renters,” he said. At the same time, “the vast majority” of the 107 metros examined by the researchers are on pace for smaller year-to-year increases than in 2021, though exactly when, how and where renters will get relief is uncertain. One path to increasing the rental stock is through seasonal or short-term rental properties, many of which are “likely” to become traditional rentals as investors try to cash in and sell at the peak of the current housing market. Johnson adds that some renters—particularly in the warmer climates of the South and West—may be forced to return to in-person jobs in other areas, freeing up some supply. “These two elements could come together to produce a better balance between supply and demand of rental units and give burdened renters a break,” Johnson said. “But until then, renters may have to cut back on discretionary spending to make ends meet.” Here are the top 10 inflated rental markets: Miami, Florida – 22.70% Fort Myers, Florida – 20.41% Sierra Vista, Arizona – 18.56% Sarasota, Florida – 17.86% Tampa, Florida – 17.52% Knoxville, Tennessee – 16.92% Port St. Lucie, Florida – 15.89% Killeen, Texas – 15.76% Lakeland, Florida – 15.36% Bakersfield, California – 15.33% The post Florida, South Top Inflated Rental Markets appeared first on RISMedia......»»

The market mood is still dominated by the possibility of recession in the U.S. The days of being able to rely on central banks easing monetary policy to support economic growth and the markets are nowhere to be found. Jay Powell has warned that if the central bank does not raise interest rates high enough to combat inflation quickly, the U.S. could face severe and repeated bouts of price rises that policymakers could struggle to rein in. With western global central banks moving in tandem effort to fight inflation, rising recession fears produced the worst start to ...Full story available on Benzinga.com.....»»

Wall Street delivered an awful performance in June. But still these ETF areas delivered an awesome performance. Wall Street delivered an awful performance in June. The S&P 500 (down 6.9%), the Dow Jones (down 5.4%), the Nasdaq (down 6.8%) and the Russell 2000 (down 7.3%) – have all given an extremely downbeat performance. The combination of factors such as 40-year high U.S. inflation, renewed Coronavirus cases in various parts of the world, the Russia-Ukraine war and the Fed’s aggressive tightening policy are weighing heavily on investor sentiment.The sell-off in the S&P 500 Index aggravated when the Fed raised interest rates by 75 bps in its latest FOMC meeting — the biggest increase since 1994 — and signaled continued tightening ahead, which could further weigh on risk-on trade sentiments. The U.S. yield curve again inverted in June after April, giving cues of a likelihood of a recession.Another Fed rate hike of 50 or 75 bps at the next meeting in July is likely. An increase in interest rates means higher loan rates for consumers and businesses, which in turn hurt economic growth. On the economic data front, U.S. retail sales unexpectedly fell 0.3% sequentially in May of 2022, marking the first decline so far this year. It follows a downwardly revised 0.7% increase in April, as high inflation, gasoline prices and borrowing costs hurt spending on non-essential goods.Most investment banks are warning about an impending recession. Deloitte sees about a 15% chance of a U.S. economic recession, as quoted on a New York Times article. Morgan Stanley sees the probability of a recession in the next 12 months at about 30%, according to the bank’s models.Goldman Sachs David Mericle and Ronnie Walker put the odds of a recession in the next year at 30%, up from 15% before. JPMorgan Chase economists raised their expected probability of a recession in the next one year to 35%. So, talks of a U.S. recession will be high in Q3.Against this backdrop, below, we highlight a few winning ETF areas of June that trumped the S&P 500 smoothly.Winning ETF Areas of JuneRate-SensitiveThe Fed had enacted three rate hikes so far this year and pushed through a total hike worth of 150 basis points, with June itself seeing a 75-bp rate hike. As a result, interest-hedged products won in June.Simplify Interest Rate Hedge ETF PFIX – Up 13.1%DefensiveIfthe volatility level is this high and markets crash, defensive ETFs would gain.US Anti-Beta Fund Mkt Neutral QuantShares (BTAL) – Up 6.9%U.S. DollarThe U.S. dollar is gaining on a hawkish Fed and a general demand for a safe-haven asset amid uncertainty.Wisdomtree Bloomberg U.S. Dollar Bullish Fund USDU – Up 3.3%DB US Dollar Index Bullish Fund Invesco (UUP) – Up 3.3%Short-Term U.S. TreasuryAs the Fed is hiking rates faster, yields on the ultra-short term treasury bonds are rising fast, which is beneficial for investors. These bonds are, in any case, less sensitive to interest rate risks.iShares 0-3 Month Treasury Bond ETF SGOV – Up 0.02%ChinaChinese equities started rebounding from late April as the nation’s top political leaders boost economic stimulus to promote growth. There could also be easing of the continued clampdown on various sectors. The economy has also been opening slowly from the COVID-induced lockdowns.Global X MSCI China Consumer Discretionary ETF CHIQ – Up 21.8% Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report WisdomTree Bloomberg U.S. Dollar Bullish ETF (USDU): ETF Research Reports Global X MSCI China Consumer Discretionary ETF (CHIQ): ETF Research Reports iShares 03 Month Treasury Bond ETF (SGOV): ETF Research Reports Simplify Interest Rate Hedge ETF (PFIX): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Spiking oil and natural gas prices have positioned the Zacks Oil and Gas - US E&P operators like DVN, AR, RRC, MTDR and ESTE for explosive gains during the remainder of this year. A major tailwind in the form of high oil and natural gas prices is likely to position the Zacks Oil and Gas - Exploration and Production - United States industry for substantial gains in the second half of this year. Building on this bullish narrative, there is significant upside in upstream firms like Devon Energy DVN, Antero Resources AR, Range Resources RRC, Matador Resources MTDR and Earthstone Energy ESTE. With an all-round improvement in efficiency and cost structure, these companies should experience impressive revenue and cash flow growth.About the IndustryThe Zacks Oil and Gas - US E&P industry consists of companies primarily based in the domestic market, focused on the exploration and production (E&P) of oil and natural gas. These firms find hydrocarbon reservoirs, drill oil and gas wells, and produce and sell these materials to be refined later into products such as gasoline, fuel oil, distillate, etc. The economics of oil and gas supply and demand is the fundamental driver of this industry. In particular, a producer’s cash flow is primarily determined by the realized commodity prices. In fact, all E&P companies' results are vulnerable to historically volatile prices in the energy markets. A change in realizations affects their returns and causes them to alter their production growth rates. The E&P operators are also exposed to exploration risks where drilling results are comparatively uncertain.4 Key Investing Trends to Watch in the Oil and Gas - US E&P IndustryElevated Commodity Prices: Over the past few months, the price of oil has generally traded above $100 a barrel amid Russia’s launch of military operations in Ukraine. The spike reflected concerns about oil supplies from Russia, which is one of the world's largest producers of the commodity. As it is, crude prices were already gaining strength prior to the attack because of a demand uptick owing to the reopening of economies and a rebound in activity. The situation is particularly complex on the natural gas front, with Russia being the world's largest producer of the fuel. Significantly, some 70% of Russian natural gas supplies are purchased by European countries that have no option to substitute a major part of it. The worldwide uncertainty imposed by Kremlin’s aggression briefly pushed U.S. natural gas prices past the $9 mark to its highest levels in nearly 14 years. In other words, macro as well as geopolitical tailwinds have driven most of the bullish sentiments in the energy market in years and the E&P companies should greatly benefit for obvious reasons.Shale Production Restraint: Unlike previous occasions, this time, the U.S. shale operators have been reluctant to turn the tap on production despite the rise in oil realizations. Most of them were forced to dial back output in response to the COVID-induced decimation in demand and prices. Generally, the shale patch constituents are quick to pick up drilling activities on any steep rise in the price, which may thwart the fuel’s bull run. Yet, this time, the companies seem to be in no hurry to boost output. Finally, learning their lesson, shale operators are focusing primarily on improving cost and increasing free cash flow rather than looking at boosting production. While oil at $90 is profitable for almost all shale entities, the industry, for its part, is sticking to the mantra of capital discipline and sustainable production. According to the weekly data provided by Houston-based Baker Hughes, the last time that WTI crude traded at these levels, some 1,600 oil rigs were operational. Now, it’s just around 600, which is proof of the wariness on the part of the producers to raise output too quickly.Lower Cost Structure: The energy companies have changed their approach to spending capital. Over the past few years, producers have worked tirelessly to cut costs to a bare minimum and look for innovative ways to churn out more oil and gas. And they managed to do just that by improving drilling techniques and extracting favorable terms from the beleaguered service providers. Moreover, driven by operational efficiencies, most E&P operators have been able to reduce unit costs, while the coronavirus-induced collapse in crude forced them to adopt a more disciplined approach to spending capital. These actions might restrict short-term production but are expected to preserve cash flow, support balance sheet strength, and help the companies to eventually emerge stronger. In particular, despite continued inflation and supply chain challenges, cash from operations is on a sustainable path as revenues improve and companies slash capital expenditures from the pre-pandemic levels amid sharply higher commodity prices.Commitment to Shareholder Return Framework: The sharp increase in crude prices has allowed the upstream operators to deliver a solid financial performance. Cash from operations looks sustainable as revenues improve and companies cut capital expenditures from the pre-pandemic levels amid sharply higher commodity realizations. To put it simply, the environment of strong prices has helped the E&P firms to generate significant “excess cash,” which they intend to use to boost investor returns. In fact, energy companies are increasingly allocating their rising cash pile by way of dividends and buybacks to pacify the long-suffering shareholders. Zacks Industry Rank Indicates Positive OutlookThe Zacks Oil and Gas - US E&P industry is a 41-stock group within the broader Zacks Oil - Energy sector. The industry currently carries a Zacks Industry Rank #27, which places it in the top 11% of more than 250 Zacks industries.The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates fairly strong near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.The industry’s position in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are highly optimistic about this group’s earnings growth potential. While the industry’s earnings estimates for 2022 have surged 167.5% in the past year, the same for 2023 have risen 162.8% over the same timeframe.Considering the encouraging dynamics of the industry, we will present a few stocks that you may want to consider for your portfolio. But it’s worth taking a look at the industry’s shareholder returns and the current valuation first.Industry Outperforms Sector & S&P 500The Zacks Oil and Gas - US E&P industry has fared better than the broader Zacks Oil - Energy Sector as well as the Zacks S&P 500 composite over the past year.The industry has gone up 31% over this period compared with the broader sector’s increase of 16.2%. Meanwhile, the S&P 500 has lost 12.1%.One-Year Price Performance Industry's Current ValuationSince oil and gas companies are debt-laden, it makes sense to value them based on the EV/EBITDA (Enterprise Value/ Earnings before Interest Tax Depreciation and Amortization) ratio. This is because the valuation metric takes into account not just equity but also the level of debt. For capital-intensive companies, EV/EBITDA is a better valuation metric because it is not influenced by changing capital structures and ignores the effect of noncash expenses.On the basis of the trailing 12-month enterprise value-to EBITDA (EV/EBITDA), the industry is currently trading at 5.56X, significantly lower than the S&P 500’s 12.19X. It is, however, well above the sector’s trailing-12-month EV/EBITDA of 3.80X.Over the past five years, the industry has traded as high as 16.47X, as low as 2.90X, with a median of 7.08X.Trailing 12-Month Enterprise Value-to EBITDA (EV/EBITDA) Ratio (Past Five Years)   5 Top Stocks to Buy NowEarthstone Energy: An oil producer targeting Midland Basin of west Texas and the Eagle Ford trend of south Texas., ESTE focuses on growth through a combination of acquisitions and active drilling. The company’s impressive acreage position in the top basins provides it with some 13 years of high-quality inventory life. With a reinvestment rate of just 50%, Earthstone is able to create robust free cash generation.Over 60 days, ESTE has seen the Zacks Consensus Estimate for 2022 increase 13%. The Zacks Rank #1 (Strong Buy) ESTE’s shares have gained some 6.7% in a year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Price and Consensus: ESTE Range Resources: Range Resources has extensive oil and gas resources in key regions like Marcellus Shale & North Louisiana. The company is ideally positioned to reap benefits in the long term from its projects in the Appalachian Basin. As most of its production comprises natural gas, RRC is well-positioned to capitalize on the mounting clean energy demand.Sporting a Zacks Rank of 1, the 2022 Zacks Consensus Estimate for RRC indicates 130.2% earnings per share growth over 2021. Range Resources’ shares have gained approximately 51.8% in a year.Price and Consensus: RRC Matador Resources: Matador Resources’ operations are mainly concentrated in the Delaware Basin, which is among the country’s most prolific oil and gas plays. Since 2011, the company significantly boosted its Delaware acreage, which now covers 124,800 net acres. Moreover, it identified up to 4,381 gross potential drilling locations on its Delaware Basin acreage, making its production outlook bright. Based on MTDR’s strong dividend growth story, it makes for an attractive offering.The 2022 Zacks Consensus Estimate for MTDR indicates 158.1% earnings per share growth over 2021. The company currently carries a Zacks Rank #1. Meanwhile, Matador Resources has seen its shares gain 26.9% in a year.Price and Consensus: MTDR Antero Resources: Antero Resources has positioned itself among the fast-growing natural gas producers in the United States. The company's strategic acreage position in the low-risk and long reserve-life properties of the Appalachian Basin is a major positive. Cashing in on high commodity prices, AR expects to generate more than $2.5 billion of free cash flow in 2022.The 2022 Zacks Consensus Estimate for Antero Resources indicates 413.9% earnings per share growth over 2021. Antero Resources currently carries a Zacks Rank #1. Meanwhile, the hydrocarbon producer has seen its shares increase around 103.6% in a year.Price and Consensus: AR Devon Energy: Devon is an independent energy company whose oil and gas operations are mainly concentrated in the onshore areas of North America, primarily in the United States. The upstream operator’s cost management, divestiture of Canadian assets, and completion of the Barnett Shale gas assets sale will allow it to focus on its holdings in four high-quality, oil-rich U.S. basins. DVN’s innovative dividend policy should also attract investors and position it for more upside in the near-to-medium term.    The 2022 Zacks Consensus Estimate for Zacks Rank #2 (Buy) DVN indicates 157.8% earnings per share growth over 2021. Devon Energy’s shares have gained some 83.9% in a year. Price and Consensus: DVN   Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Devon Energy Corporation (DVN): Free Stock Analysis Report Range Resources Corporation (RRC): Free Stock Analysis Report Matador Resources Company (MTDR): Free Stock Analysis Report Antero Resources Corporation (AR): Free Stock Analysis Report Earthstone Energy, Inc. (ESTE): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Radio and television broadcast companies, Warner Bros. Discovery (WBD), Fox Corporation (FOXA), and Gray Television (GTN) are benefiting from higher content consumption and increased digital viewing despite intensifying competition for ad dollars. The Zacks Broadcast Radio and Television industry has been benefiting from rising demand for streaming content amid an increasing rate of cord-cutting. Industry participants like Warner Bros. Discovery WBD, Fox Corporation FOXA and Gray Television GTN are benefiting from a huge spike in digital content consumption. Diversified content offerings, which are original, regional, short and suitable for small screens (smartphones and tablets), improved Internet speed and penetration, and technological advancement are benefiting the industry participants. As monetization and revenues in terms of ad-spend continue to be subdued, profit protection and cash management with greater technology integration have gained strategic significance and are expected to aid these companies in driving the top line in the near term.Industry DescriptionThe Zacks Broadcast Radio and Television industry comprises companies offering entertainment, sports, news, non-fiction and musical content over television, radio and digital media platforms. These companies majorly derive revenues from the sale of television and radio programs, advertising slots as well as subscriptions. Notably, these industry players are increasing their spending on research and development as well as sales & marketing in order to stay afloat in an era of technological advancements with increased demand for VR and Internet Radio among audiences. The industry is likely to remain focused on sustenance at current levels along with a renewed emphasis on flexibility, which would accelerate the move to a variable cost model and reduce fixed costs.4 Broadcast Radio and Television Industry Trends to Watch Out ForShift in Consumer Preference a Key Catalyst: To adapt to the changes in the industry, companies are coming up with varied content for over-the-top (OTT) services in addition to linear TV. Additionally, they are adding OTT services to their content portfolios. The availability of streaming services on a wide range of platforms is helping such services easily reach a global audience. It is also helping them to expand their international user base, which in turn, attracts advertisers to their platforms, thereby boosting ad revenues. Moreover, the use of services to help advertisers measure their ROI and enhance their use cases is expected to benefit advertisers and industry participants. Also, major leagues and events such as NFL, NHL, Olympics, European Games, EPL and elections attract significant ad dollars. The recent resumption of live sports events after delays and cancellations over the past year is expected to boost advertiser demand.Increased Digital Viewing Aids Content Demand: Many industry participants who are either launching their own OTT services or acquiring other OTT services are banking on user insights to deliver the right content. Increased digital viewing is making consumer data easily available to companies, thereby allowing them to apply AI and machine-learning techniques to create/procure targeted content. The move not only boosts user engagement but also lets industry participants raise the prices of their services at an appropriate time without the fear of losing subscribers.Coronavirus Hurts Production and Ad Demand: Industry participants are bearing the brunt of coronavirus-induced macroeconomic woes. Advertising is a major source of revenues for this industry, which has been badly hit by the coronavirus. Recovering yet low ad demand and reduced spending are expected to hurt the top line in the near term. Moreover, the industry players are facing stiff competition from tech and social media companies for ad dollars. This has been a major impediment to growth.Low-Priced Skinny Bundles Hurt Revenues: Increase in cord-cutting has forced industry participants to offer “skinny bundles.” These services, which are available through the Internet, often contain fewer channels than a traditional subscription and therefore are cheaper. The move is in line with changing consumer viewing dynamics as growth in Internet penetration and advancements in mobile, video and wireless technologies have boosted small-screen viewing. The alternative services are expected to keep users glued to their platforms, thereby increasing the need to produce more content. However, the low-priced skinny bundles are likely to dampen top-line growth.Zacks Industry Rank Indicates Bright ProspectsThe Zacks Broadcast Radio and Television industry is housed within the broader Zacks Consumer Discretionary sector. It carries a Zacks Industry Rank #92, which places it in the top 37% of more than 250 Zacks industries.The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates encouraging near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.The industry’s position in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are optimistic on this group’s earnings growth potential.Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.Industry Lags Sector and S&P 500The Zacks Broadcast Radio and Television industry has underperformed the broader Zacks Consumer Discretionary sector and the S&P 500 Index over the past year.The industry has declined 57.8% over this period compared with the S&P 500’s decline of 12.8% and the broader sector’s decline of 42.4%.One Year Price PerformanceIndustry's Current ValuationOn the basis of trailing 12-month EV/EBITDA (Enterprise Value/ Earnings before Interest Tax Depreciation and Amortization), which is a commonly used multiple for valuing Broadcast Radio and Television stocks, the industry is currently trading at 16.52X versus the S&P 500’s 12.19X and the sector’s 9.17X.Over the past five years, the industry has traded as high as 41.9X and as low as 16.13X, recording a median of 30.23X, as the chart below shows.EV/EBITDA Ratio (TTM)3 Broadcast Radio and Television Stocks to WatchGray Television: Headquartered in Atlanta, GA, this Zacks Rank #1 (Strong Buy) company’s local stations are quite popular among political ad buyers. Notably, post the Raycom acquisition, Gray reached almost 36% of the U.S. population in 113 markets, operating more than 150 Big Four affiliated stations. You can see the complete list of today’s Zacks #1 Rank stocks here. In the first quarter of 2022, the company’s core advertising revenues increased 40% year over year and retransmission consent revenues increased 59% year over year. The company has also been witnessing a big surge in political advertising revenues, which increased 189% year over year in the first quarter.The Zacks Consensus Estimate for 2022 earnings has remained steady at $5.27 per share over the past 60 days. Grey Television’s shares are down 16.2% year to date.Price and Consensus: GTNFox: This New York-based company is riding on the growing demand for live programming. The robust adoption of Fox News and Fox Business Network (FBN) is expected to drive the user base in the near term. This Zacks Rank #3 (Hold) company generates a major portion of advertising revenues from live programming, which is relatively immune to the rapidly intensifying competition from subscription-based video-on-demand services.Moreover, recovering ad spending in the local advertising market, affected by the coronavirus outbreak, is a major positive for Fox. Also, increasing affiliate-fee revenues are expected to drive Fox’s top line.The Zacks Consensus Estimate for Fox’s fiscal 2022 earnings has declined 0.7% to $2.81 per share over the past 60 days. The stock is down 12.9% year to date. Price and Consensus: FOXAWarner Bros. Discovery: This Zacks Rank #3 company’s expanding direct-to-consumer offerings are driving top-line growth.Expanding sports coverage based on partnerships with the likes of PGA TOUR, Tiger Woods and Olympics is a major growth driver for Discovery. Further, recovery in advertising spending, primarily in the international markets, is a major positive.Markedly, the stock has declined 43% year to date. Notably, the Zacks Consensus Estimate for its 2022 earnings has remained steady at $1.51 per share over the past 30 days.Price and Consensus: DISCA Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Warner Bros. Discovery, Inc. (WBD): Free Stock Analysis Report Fox Corporation (FOXA): Free Stock Analysis Report Gray Television, Inc. (GTN): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

U.S. stocks ended lower on Thursday, with the S&P recording its worst first-half performance in more than 50 years. U.S. stocks ended lower on Thursday, with the S&P recording its worst first-half performance in more than 50 years. The Dow and S&P 500 also registered their worst quarterly performance since the first quarter of 2020, while the Nasdaq recorded its worst quarter since 2008. All the three major indexes ended Thursday’s session in negative territory.How Did The Benchmarks Perform?The Dow Jones Industrial Average (DJI) slid 0.8% or 253.88 points to close at 30,775.43 points.The S&P 500 declined 0.9% or 33.45 points to finish at 3,785.38 points. Energy, consumer discretionary and tech stocks were once again the biggest losers.The Energy Select Sector SPDR (XLE) gave up 1.1%. The Consumer Discretionary Select Sector SPDR (XLY) slipped 1.5%, while the Technology Select Sector SPDR (XLK) lost 1.3%. Seven of the 11 sectors of the benchmark index ended in negative territory.The tech-heavy Nasdaq fell 1.3% or 149.16 points to end at 11,028.74 points.The fear-gauge CBOE Volatility Index (VIX) was up 1.95% to 28.71. Decliners outnumbered advancers on the NYSE by a 1.75-to-1 ratio. On Nasdaq, a 1.52-to-1 ratio favored declining issues. A total of 12.58 billion shares were traded on Thursday, lower than the last 20-session average of 12.86 billion.Market Volatile on Recession FearsThursday marked the final day of the first half of the year and also the second quarter. The first half, particularly the second quarter, witnessed one of the most turbulent times for the markets in recent times, as major indexes entered bear market and correction territory from their all-time highs.Stocks started taking a hit from the beginning of the year as rising prices and soaring interest rates have been making investors jittery. Investors now are fearing an economic slowdown owing to the aggressive rate-hike stance adopted by the Fed to check surging inflation. This has been taking a toll on stocks.On Thursday, a fresh batch of economic data showed personal consumption expenditures declining in June, indicating that people are now skeptical about spending freely, as soaring price of consumer goods is pinching their pockets. The consumption data came just a day after a downwardly revised first-quarter GDP showed that growth contracted more than it was previously expected in the first three months of the year.This further dented investors’ confidence. Healthcare, energy and consumer discretionary stocks were the big losers. Shares of HCA Healthcare, Inc. HCA declined 4.3%. Shares of Carnival Corporation & plc CCL fell 2.5%, while Royal Caribbean Cruises Ltd. RCL and Norwegian Cruise Line Holdings Ltd. NCLH declined 3.1% and 3.9%, respectively. Norwegian Cruise Line carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.Investors’ Worries AggravateStocks have been taking a beating since the beginning of the year. A rise in COVID-19 cases owing to the Omicron variant, followed by Russia’s invasion of Ukraine during the initial months aggravated concerns over a financial meltdown. Fears of a possible recession further escalated on decades-high inflation and aggressive interest rate hikes by the Fed.Higher interest rates sent bond yields higher and historically price equity valuations saw growth stocks, especially the tech sector, taking a hit. Future earnings, like those promised by growth businesses, become less alluring as rates rise. Thus, tech stocks have been one of the worst affected this year, which saw the Nasdaq taking a major hit. The index is now down over 31% from its Nov 22 all-time high.The Fed has so far lifted the policy rate by 150 basis points in its past three meetings and more hikes are likely to follow. Aggressive interest rate hikes have now raised concerns over a slowing economy, which have been denting the confidence of investors, leading to massive selloffs almost every week. The S&P 500 is also down by more than 20% at the halfway point of the year. The Nasdaq and S&P 500 are both in bear market territory, while the Dow is in a correction zone.Economic DataEconomic data released on the last day of the quarter further aggravated fears among investors. Consumer spending slowed, disposable income decreased and inflation remained high.The Commerce Department said on Thursday that inflation rose marginally lower than expected by still remained hot. Core personal consumption expenditures (PCE) prices jumped 4.7% year over year in May, declining 0.2% from the previous month. Economists had expected a rise of 4.8%.On a month-over-month basis, the index, which excludes prices of volatile food and energy, rose 0.3%, less than analysts’ expectations of a rise of 0.4%. Headline inflation figures rose 0.6% in May, which was high compared to a 0.2% rise in April. This kept the year-over-year inflation figure at 6.3%, unchanged from April.The report also mentioned that personal income rose 0.5% in May, higher than expectations of a rise of 0.4%. However, disposable personal income declined 0.1% on a month-over-month basis and 3.3% from a year ago.Also, personal spending, after adjusting for inflation, saw a sharp decline of 0.4% in May from 0.3% in April. However, it was up 2.1% year over year.Goods inflation jumped 9.6%, while services inflation increased 4.7% month over month in May.In other economic data released on Thursday, the Labor Department said that initial jobless claims fell to 231,000 for the week ending Jun 25, a declining 2,000 from the previous week’s revised level. The four-week moving average also increased to 231,750, an increase of 7,250 from the previous week’s revised average of 224,500.Continuing claims came in at 1,328,000, a decline of 3,000 from the previous week’s revised level. The previous week's numbers were revised down by 16,000 from 1,315,000 to 1,331,000. The 4-week moving average came in at 1,319,500, an increase of 5,500 from the previous week's revised average.Half-Yearly RoundupThe first half of the year has been one of the worst for markets in decades. The S&P 500 and Nasdaq are in the bear market and the Dow is in correction territory. The S&P 500 is down 20.6% year to date, recording its worst first half since 1970 when it declined 21.1%.The Nasdaq fell 29.5% through Thursday’s close to record its worst first half ever.The Dow fell 15.3% through Thursday to record its worst first half since 1962 when it declined 23.2%.Quarterly RoundupAll the three major indexes recorded their second straight quarterly decline. The S&P 500 declined 18.3% through Thursday’s close. The last time the index recorded two straight quarters of decline was in 2015.The Dow declined 12.8% for the quarter. The last time the blue-chip index posted two declines for two consecutive quarters was in 2015.The Nasdaq ended the second quarter down 22.4%. The tech-heavy index recorded two-straight quarters of decline for the last time in 2016.Monthly RoundupThe S&P and Dow ended the month down 9% and 7.3%, respectively. The Nasdaq declined 9.1% in June. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Carnival Corporation (CCL): Free Stock Analysis Report Royal Caribbean Cruises Ltd. (RCL): Free Stock Analysis Report HCA Healthcare, Inc. (HCA): Free Stock Analysis Report Norwegian Cruise Line Holdings Ltd. (NCLH): Free Stock Analysis Report To read this article on Zacks.com click here......»»

US Manufacturing Slumps In May, New Orders & Jobs Contract Analysts expected Manufacturing PMI to be flat from its ugly preliminary print of 52.4 and saw ISM Manufacturing dropping to 54.5 from 56.1 - both still comfortably in expansion (above 50) despite the collapse in US macro data relative to expectations. BUT... things improved intra-month for Manufacturing PMI - rising to 52.7 final from 52.4 preliminary - but still notably below April's 57.0 print. ISM Manufacturing was worse, falling to 53.0 from 56.1 (below the 54.5 expectations). Source: Bloomberg The headline PMI dropped to its lowest level since July 2020 amid a near-stagnation of factory output and a fall in new orders. The decrease in sales was the first since May 2020, with domestic and foreign client demand falling. The ISM print is the weakest since June 2020 and under the hood is more worrisome with an outright contraction in new orders and employment... Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said: “The PMI survey has fallen in June to a level indicative of the manufacturing sector acting as a drag on GDP, with that drag set to intensify as we move through the summer. Forward-looking indicators such as business expectations, new order inflows, backlogs of work and purchasing of inputs have all deteriorated markedly to suggest an increased risk of an industrial downturn. “Demand growth is cooling from households amid the cost-of-living crisis, and capital spending by companies is also showing signs of moderating due to tightening financial conditions and the gloomier outlook. However, most marked has been a steep drop in orders for inputs by manufacturers, which hints at an inventory correction. “Some welcome news is that the drop in demand for inputs has brought some pressure off supply chains and calmed prices for a wide variety of goods, which should help alleviate broader inflationary pressures in coming months.” So, even though the manufacturing surveys are still above the 50 Maginot Line, the steep declines sync positively with the rising recession fears and soaring rate-cut expectations being priced into the markets... Will Powell jawbone that expectation away, or embrace it as policy? Tyler Durden Fri, 07/01/2022 - 10:04.....»»

Cryptocurrencies are bad for the environment—at least, that’s what most people online seem to believe. Pro-crypto posts on social media are often flooded with angry comments about the industry’s outsized contribution to greenhouse gas emissions. Studies estimate that Bitcoin mining, the process that safeguards the Bitcoin network, uses more power globally per year than most… Cryptocurrencies are bad for the environment—at least, that’s what most people online seem to believe. Pro-crypto posts on social media are often flooded with angry comments about the industry’s outsized contribution to greenhouse gas emissions. Studies estimate that Bitcoin mining, the process that safeguards the Bitcoin network, uses more power globally per year than most countries, including the Philippines and Venezuela. On the other side, members of the crypto community argue that crypto mining is actually good for the environment in several crucial ways. They say that it offers a new, energy-hungry market that will encourage renewable projects. In the long run, they say, crypto will revolutionize the energy grid, and soak up excess energy that would have been otherwise wasted. [time-brightcove not-tgx=”true”] As lobbyists have volleyed arguments on both sides, a blow was dealt to crypto mining’s hopes for rapid expansion in the U.S. on June 30 when New York officials denied the air permits of Greenidge Generation, a Bitcoin mining operation, on June 30, citing “substantial greenhouse gas (GHG) emissions associated with the project.” The decision could set a precedent for how local jurisdictions across the country approach a hotly contested topic. So which side is correct? To investigate, TIME spoke with several energy and environmental experts to break down some of the crypto community’s main arguments. While some experts say that there’s potential for positive impact from crypto mining, most agree there are few indications that the industry is going in the right direction. “There is a narrow path upon which they could be useful to the energy system—but I don’t see that happening,” says Joshua Rhodes, an energy research associate at the University of Texas at Austin. And right now, he says, damage is already being done. “Writ large, they’re probably adding to carbon emissions currently.” Claim: Crypto mining relies on renewable energy. Bitcoin’s network relies on groups of computers, all around the world, to run complex math equations. These computing centers act less like “miners” in the literal sense and more like network watchdogs, used for security and stability. The process, known as proof of work, is energy-intensive by design, in order to prevent hacks and attacks. Crypto advocates argue that the proof-of-work process is becoming more energy efficient: that more and more miners are turning to renewable energy sources like wind, solar, or hydropower, as opposed to coal or natural gas. However, one peer-reviewed study from earlier this year shows the opposite: that the Bitcoin network’s use of renewable energy dropped from an average of 42% in 2020 to 25% in August 2021. Researchers believe that China’s crackdown on crypto, where hydropower-driven mining operations used to be plentiful, was the primary catalyst of this decrease. At the moment, the rate at which crypto miners use renewable energy sources is heavily disputed. The Bitcoin Mining Council, an industry group, argues that 60% of mining comes from renewable sources, which is 20 percentage points higher than the number listed by the Cambridge Center for Alternative Finance. George Kamiya, an energy analyst at the International Energy Agency, says that while the Bitcoin Mining Council likely has access to more data, its numbers come from a survey that hasn’t been peer-reviewed and lacks methodological details, and encouraged them to share the underlying data and methodology with outside researchers like Cambridge. Regardless of which statistic is closer to the truth, there are still many mining operations using non-green energy sources. In New York, Greenidge repurposed a coal power plant that was previously shuttered. It’s now powered by natural gas, which is also fossil-fuel-based. Yvonne Taylor, vice-president of Seneca Lake Guardian, an environmental non-profit, told TIME in April that Greenidge would emit “over a million tons of CO2 equivalents into the atmosphere every year, in addition to harmful particulate matter.” A representative for Greenidge wrote in an email to TIME that the company has offered to reduce its greenhouse gas emissions by 40% from its currently permitted levels by 2025, and that it plans to be a “zero-carbon emitting power generation facility” by 2035. The company also plans to appeal the denial of its air permits and remain operational. Claim: Crypto mining will lead to a renewable energy boom. If crypto mining isn’t sustaining itself on renewables right now, might it in the future? Fred Thiel, the CEO of the crypto mining company Marathon Digital Holdings, has announced his intention to make the company fully carbon-neutral by the end of this year, and says that companies like his could have a huge impact on the future of the renewable energy industry. It’s worth noting that many cryptocurrencies already use much less energy-intensive processes than Bitcoin’s proof of work. Smaller blockchains like Solana and Avalanche use a security mechanism called proof of stake, which Ethereum Foundation researchers claim reduces energy usage by more than 99% compared to Bitcoin’s system. Ethereum, the second largest blockchain behind Bitcoin, is in the process of switching from proof of work to proof of stake this year. It doesn’t seem like Bitcoin will transition away from proof of work any time soon. But renewable energy developers need customers in order to grow, and proof-of-work miners provide exactly that, Thiel argues. As an example, Thiel suggested that there are wind farms in Vermont that have no ability to sell their energy because of their remote locations and the lack of transmission lines. Putting a crypto mining plant on top of the farms would theoretically give them immediate revenue. “If the goal of this country is to convert to green or sustainable energy forms for the majority of our energy use by 2050, the only way it’s going to happen is if the power generators have an incentive to build the power plants,” Thiel says. But Thiel declined to give the name of the Vermont wind farms, and a follow-up email to a Marathon representative asking for the name of that operation or any similar ones received no response. Most experts TIME spoke with dispute the idea that there has been any sort of boom in renewables due to crypto. “I am not aware of any specific examples where a major crypto mining project directly—and additionally—boosted renewable energy production,” Kamiya wrote. “The proof is in the pudding–and I have not seen that play out in the state of Montana,” says Missoula County Commissioner Dave Strohmaier, whose county hosted energy-intensive mining operations that rankled local communities, leading the local government to restrict miners’ ability to set up new operations. Joshua Rhodes says that counties in Texas were ”chock-full of renewable projects getting built and turning on” even before the Bitcoin mining rush. He also argues that even if crypto did spur a renewables boom, it might not even help the right places. While wind and solar energy is plentiful in West Texas, for example, it requires extensive infrastructure and transmission lines to run that power back east to the cities that desperately need it, like Houston and Dallas. “All of the cheap electricity can’t get out,” he says. And even if it were true that crypto mining is creating rapidly accelerating demand for solar and wind farms—which, again, doesn’t seem to yet be the case—there’s the problem of where to put them. Many communities or organizations have opposed them on various grounds ranging from aesthetic to conservational. In New York, Assemblymember Anna Kelles—who spearheaded a bill to impose a moratorium on crypto mining in the state—says that a crypto-driven influx of solar and wind operations would be “directly competing with farmland in New York State at a time when it’s becoming more and more the breadbasket of the country because of climate change.” With major resistance and long timetables to erect wind and solar projects, impatient crypto miners are more likely to set up shop using other, less clean forms of energy. In Kentucky, abandoned coal mines are being repurposed into crypto mining centers. Claim: Crypto miners improve electricity grids If crypto companies aren’t yet supercharging a renewables boom, then maybe they’re helping other ways, like making our electricity grids more resilient. Thiel argues that crypto miners are uniquely suited to help grids for several reasons: that they can be turned off quickly during peak hours of energy usage in a way that, say, pasteurization machines can’t; that they can soak up energy from the grid that would be otherwise wasted; that they can be located very close to sources of energy. “We voluntarily curtail whenever the grid needs the energy,” Thiel says. “It acts as this ideal buffer for the grid.” During peak stretches of Texas’s energy usage, Thiel says, Marathon has lowered or completely shut off their usage of the grid for two to three hours a day. Flexible energy loads are, in fact, good for the grid, Rhodes wrote in a study last year. He found that if crypto miners were willing to curtail their energy usage during peak times so that their annual load is slashed by 13-15%, then their enterprises would help reduce carbon emissions, improve grid resiliency under high-stress periods, and also help foster the shift to renewables. But Rhodes and others are skeptical that most miners will be willing to operate on someone else’s schedule. Crypto miners have shown that in order to maximize their profits, they would much rather operate 24/7. Strohmaier, in Montana, says that when he met with crypto miners operating in his county about their activity, the topics of grid resilience or curtailment “never came up once. We never got the sense there was any willingness to scale back even for a nanosecond of what they were doing. It was all, ‘We have to keep every one of these machines running—and add more if we are able to remain viable,’” he says. Thiel says that when there isn’t enough energy from the wind farms to power Marathon’s plants—as wind doesn’t blow all the time—the company then supplements it partially with natural gas from the grid. When asked for a breakdown of Marathon’s energy usage, a representative wrote in an email, “We’re still in the process of installing miners in Texas. It’s hard to estimate what the ultimate mix will be.” Claim: Crypto miners are simply using energy that would have gone to waste. Plenty of electricity gets wasted in the U.S., and crypto miners are hoping to take advantage of it. The process of oil extraction, for example, produces a natural gas byproduct that many companies simply choose to flare (burn off and waste) rather than building the infrastructure to capture it. But in North Dakota, crypto miners signed a deal with Exxon to set up shop directly on site and use gas that would have been flared for new mining operations instead. Some experts say this process could still be severely damaging. “I don’t see that as a benefit: They’re still burning the gas,” says Anthony Ingraffea, a civil and environmental engineering professor at Cornell University, who co-wrote a paper in 2011 on the environmental hazards of extracting natural gas. Further, Ingraffea argues, by giving Exxon extra business at their oil drilling sites, crypto mining theoretically incentivizes the fossil fuel industry to keep investing in oil extraction. Kamiya contends that there are other productive uses for flared gas, including producing electricity to be sold back to the grid, but that crypto mining “could disincentivize the operator from finding other uses and markets for its gas that can drive higher emission reductions.” And crypto miners are running into problems even in ideal energy circumstances. A paper released this month from the Coinbase Institute contends that in Iceland, a “new gold rush” of mining activity has led to minimal environmental impacts due to the country’s “abundant geothermal energy.” But in December, the country experienced a severe electricity shortage, causing its main utility provider to announce they would reject all future crypto mining power requests. Claim: Some crypto mining operations are already carbon neutral. Last year, Greenidge Generation, the crypto mining facility in New York, tried to quell criticisms about its environmental impact by announcing its intention to become carbon neutral. In a press release, the company said it would purchase carbon offsets and invest in renewable energy projects to account for its gas-based emissions. Replacing fossil-fuel-based energy with renewable energy is certain to be an environmental good. But carbon offsets are not as clear-cut. The offset industry has come under fire from many scientists who say that many such projects are poorly defined and not as helpful as they seem—that it’s common for projects that have no positive environmental impact to be rewarded on technicalities. Offsets essentially allow companies to pay to continue polluting. Greenpeace even called the entire system “​​a distraction from the real solutions to climate change.” Carbon offsets “do not reduce global emissions, they just move them around the globe,” Ingraffea says. He argues that they should only be used in the case of emissions that are impossible to reduce. Read more: The Crypto Industry Was On Its Way to Changing the Carbon-Credit Market, Until It Hit a Major Roadblock Claim: Data centers are just as bad for pollution as crypto mining operations. Many crypto miners feel unfairly targeted about their environmental impact, believing that data centers, which receive far less scrutiny, are just as responsible for increasing carbon emissions. Multiple experts disagree. “Crypto mining consumes about twice as much electricity as Amazon, Google, Microsoft, Facebook, and Apple combined,” says Kamiya. Jonathan Koomey, a researcher who has been studying information technology and energy use for more than 30 years, says that the two categories of machines are moving in opposite directions in terms of efficiency. A 2020 study he co-wrote found that while the computing abilities and output of regular data centers had grown vastly between 2010 and 2018, its electricity use barely increased at all. Meanwhile, in Bitcoin mining, “there’s a structural incentive for the entire system to get less efficient over time,” he says. He’s referring to the fact that, generally, Bitcoin miners are forced to solve harder and harder puzzles over time to keep the blockchain functioning—and the computing power to work through those tasks requires increasing amounts of energy. Claim: Christmas lights use more electricity than Bitcoin. This claim has been repeated over and over by Bitcoin mining defenders, including Thiel in our interview, in order to deflect attention from Bitcoin mining and onto other large uses of electricity. It’s also completely unsubstantiated. The latest major study on holiday lights came from a paper written in 2008, which put their electricity consumption in the U.S. at 6.63 terawatt hours of electricity per year. (The paper noted that figure would only decrease as LED bulbs became more common). The Bitcoin network, by comparison, consumes an estimated 91 terawatt hours yearly. Popular online posts on this topic that defend Bitcoin, including from the digital mining operator Mawson, either do not cite any sources for their data or mangle the findings of trusted institutions. Claim: Bitcoin’s value added to society will make it all worth it. Koomey and other experts say that over the last decade there’s only been one surefire reason crypto mining’s environmental impact can sometimes fall: when cryptocurrency prices go down. During these drops, miners are disincentivized to stay in the market or buy new equipment, and some close up shop, leading to fewer greenhouse-gas emissions. Indeed, as Bitcoin’s value fell from $40,000 to $20,000 from late April to June, industry power usage also dropped by a third according to the Cambridge Bitcoin Electricity Consumption Index. So why should the U.S. allow crypto miners to go on, if they’re harming the environment? Crypto enthusiasts argue that the long-term societal and economic benefits of their industry will offset its electricity usage, just as the computer revolution did before it. Koomey says that when weighing the possible environmental impacts of crypto, it’s important to take a wide-lens approach: to think about what crypto might add to society overall compared to other energy guzzlers. “Sure, Google uses a measurable amount of electricity—but I would argue that’s a pretty good use of that electricity,” he says. “So you have to come back to this question for the crypto people, aside from just how much electricity they use: What business value are you delivering? How does this technology perform a function better than the technology that it replaces? Is it worth it?”  .....»»

The latest price moves in bitcoin ($BTC) and crypto markets in context, for July 1, 2022......»»

Shares of General Motors Co. dropped 1.7% in premarket trading Friday, after the automaker warned of a second-quarter earnings shortfall, as vehicle wholesale volumes were hurt by the timing of semiconductor shipments and other supply chain disruptions. The company expects net income for the quarter to June 30 to be between $1.6 billion and $1.9 billion, well below the FactSet consensus of $2.46 billion. The company affirmed its full-year outlook, however, as the supply disruptions are expected to be temporary. "[W]e had a total of approximately 95 thousand vehicles in our inventory that were manufactured without certain components as of June 30, 2022, a majority of which were built in June," the company said in a statement. "We expect that substantially all of these vehicles will be completed and sold to dealers before the end of 2022." GM still expects 2022 net income of $9.6 billion to $11.2 billion, which surrounds the FactSet consensus of $10.24 billion. The stock has tumbled 45.8% year to date through Thursday, while shares of rival Ford Motor Co. have dropped 46.4% and the S&P 500 has slumped 20.6%.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news......»»

U.S. stocks opened lower on Friday ahead of a long holiday weekend as markets kicked off the second half of the year in the red. The Dow Jones Industrial Average dropped 54 points, or 0.2%, to 30,720. The S&P 500 shed 4 points, or 0.1%, to 3,781. The Nasdaq Composite dropped 20 points, or 0.2%, to 11,006. Stocks just wrapped up one of the first first-half stretches in decades during what has been a brutal year as growth fears and inflation have battered markets. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news......»»

Goldman Sachs (GS) forms an alliance with the leading provider of capital markets technology and derivatives execution services to regional and community banks, Derivative Path. In an effort to expand its transaction banking business, The Goldman Sachs Group, Inc. GS is partnering with Derivative Path, which is a leading provider of capital markets technology and derivatives execution services to regional and community banks.With the collaboration, thousands of U.S. regional banks and credit unions will be able to use Goldman Sachs’ foreign exchange services.While the financial terms of the agreement have not been disclosed yet, the partnership will allow clients of Derivative Path to provide a more cohesive end-to-end global payment solution to their underlying customers using Goldman Sachs’ transaction banking platform.Art Brieske, the global head of payments for Goldman Sachs Transaction Banking, said, “Regional and community banks now have access to the same global payments capabilities as large money center banks. We are pleased to collaborate with Derivative Path to provide access to our global payments capabilities through their platform and provide regional and community banks with a comprehensive yet simplified and efficient cross-border payment solution.”Pradeep Bhatia, the CEO & co-founder of Derivative Path, stated, “Teaming up with one of the world's largest and most-established financial institutions is a major step in the right direction of bringing greater technology sophistication and flexibility to the regional and community banking sector in the US. The launch of our joint solution with Goldman Sachs substantiates our mission of delivering a new wave of innovation to these firms.”Transaction banking means handling cash for governments and multinational corporations, from processing employee payroll to collecting from customers to securing foreign exchange rates for payments sent to other countries.The collaboration with Derivative Path is the latest step by Goldman Sachs to gain market share in the crowded and competitive $300-billion transaction banking sector, which it had entered in 2019.Business diversification has been the key source of Goldman Sachs’ earnings stability. Within traditional banking, a diversified product portfolio has better chances of sustaining growth than many other banks, which have exited some of these areas.Goldman Sachs has been undertaking initiatives to boost asset management and wealth management businesses, while expanding its digital consumer banking platform. Rolling out digital checking facilities will enhance its consumer banking platform, while the GreenSky acquisition will facilitate the expansion of its point-of-sale capability.By rolling out services in different regions, GS is boosting its digital consumer lending platform — Marcus by Goldman Sachs.Over the past six months, shares of GS have lost 24.8% compared with the industry’s decline of 23.6%. Image Source: Zacks Investment Research Currently, Goldman Sachs carries a Zacks Rank #3 (Hold).A couple of better-ranked stocks from the finance space are S&T Bancorp, Inc. STBA and Credit Acceptance Corporation CACC. Currently, STBA sports a Zacks Rank #1 (Strong Buy), while CACC carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The consensus estimate for S&T Bancorp’s current-year earnings has been revised 5.4% upward over the past 60 days. Over the past year, STBA’s share price has declined 11.1%.Credit Acceptance’s current-year earnings estimates have been revised 11.8% upward over the past 60 days. CACC’s shares have gained 4.4% over the past year. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Goldman Sachs Group, Inc. (GS): Free Stock Analysis Report Credit Acceptance Corporation (CACC): Free Stock Analysis Report S&T Bancorp, Inc. (STBA): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»