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Category: topSource: foxnewsMay 25th, 2021

Futures Rise On Taper, Evergrande Optimism

Futures Rise On Taper, Evergrande Optimism US index futures jumped overnight even as the Fed confirmed that a November tapering was now guaranteed and would be completed by mid-2022 with one rate hike now on deck, while maintaining the possibility to extend stimulus if necessitated by the economy. Sentiment got an additional boost from a strong showing of Evergrande stock - which closed up 17% - during the Chinese session, which peaked just after Bloomberg reported that China told Evergrande to avoid a near-term dollar bond default and which suggested that the "government wants to avoid an imminent collapse of the developer" however that quickly reversed when the WSJ reported, just one hour later, that China was making preparations for Evergrande's demise, and although that hammered stocks, the report explicitly noted that a worst-case scenario for Evergrande would mean a partial or full nationalization as "local-level government agencies and state-owned enterprises have been instructed to step in only at the last minute should Evergrande fail to manage its affairs in an orderly fashion." In other words, both reports are bullish: either foreign creditors are made whole (no default) as per BBG or the situation deteriorates and Evergrande is nationalized ("SOEs step in") as per WSJ. According to Bloomberg, confidence is building that markets can ride out a pullback in Fed stimulus, unlike 2013 when the taper tantrum triggered large losses in bonds and equities. "Investors are betting that the economic and profit recovery will be strong enough to outweigh a reduction in asset purchases, while ultra-low rates will continue to support riskier assets even as concerns linger about contagion from China’s real-estate woes." That's one view: the other is that the Fed has so broken the market's discounting ability we won't know just how bad tapering will get until it actually begins. “The Fed has got to be pleased that their communication on the longer way to tapering has avoided the dreaded fear of the tantrum,” Jeffrey Rosenberg, senior portfolio manager for systematic fixed income at BlackRock Inc., said on Bloomberg Television. “This is a very good outcome for the Fed in terms of signaling their intent to give the market information well ahead of the tapering decision.” Then there is the question of Evergrande: “With regards to Evergrande, all those people who are waiting for a Lehman moment in China will probably have to wait another turn,” said Ken Peng, an investment strategist at Citi Private Bank Asia Pacific. “So I wouldn’t treat this as completely bad, but there are definitely a lot of risks on the horizon.” In any case, today's action is a continuation of the best day in two months for both the Dow and the S&P which staged a strong recovery from two-month lows hit earlier in the week, and as of 745am ET, S&P 500 E-minis were up 25.25 points, or 0.6%, Dow E-minis were up 202 points, or 0.59%, while Nasdaq 100 E-minis were up 92.0 points, or 0.60%. In the premarket, electric vehicle startup Lucid Group rose 3.1% in U.S. premarket trading. PAVmed (PVM US) jumps 11% after its Lucid Diagnostics unit announced plans to list on the Global Market of the Nasdaq Stock Market.  Here are some of the biggest movers today: U.S.-listed Chinese stocks rise in premarket trading as fears of contagion from China Evergrande Group’s debt crisis ease. Blackberry (BB US) shares rise 8.7% in premarket after co.’s 2Q adjusted revenue beat the average of analysts’ estimates Eargo (EAR US) falls 57% in Thursday premarket after the hearing aid company revealed it was the target of a Justice Department criminal probe and withdrew its forecasts for the year Amplitude Healthcare Acquisition (AMHC US) doubled in U.S. premarket trading after the SPAC’s shareholders approved the previously announced business combination with Jasper Therapeutics Steelcase (SCS US) fell 4.8% Wednesday postmarket after the office products company reported revenue for the second quarter that missed the average analyst estimate Vertex Energy Inc. (VTNR US) gained 2.1% premarket after saying the planned acquisition of a refinery in Mobile, Alabama from Royal DutVTNR US Equitych Shell Plc is on schedule Synlogic (SYBX US) shares declined 9.7% premarket after it launched a stock offering launched without disclosing a size HB Fuller (FUL US) climbed 2.7% in postmarket trading after third quarter sales beat even the highest analyst estimate Europe's Stoxx 600 index rose 0.9%, lifted by carmakers, tech stocks and utilities, which helped it recover losses sparked earlier in the week by concerns about Evergrande and China’s crackdown on its property sector. The gauge held its gain after surveys of purchasing managers showed business activity in the euro area lost momentum and slowed broadly in September after demand peaked over the summer and supply-chain bottlenecks hurt services and manufacturers. Euro Area Composite PMI (September, Flash): 56.1, consensus 58.5, last 59.0. Euro Area Manufacturing PMI (September, Flash): 58.7, consensus 60.3, last 61.4. Euro Area Services PMI (September, Flash): 56.3, consensus 58.5, last 59.0. Germany Composite PMI (September, Flash): 55.3, consensus 59.2, last 60.0. France Composite PMI (September, Flash): 55.1, consensus 55.7, last 55.9. UK Composite PMI (September, Flash): 54.1, consensus 54.6, last 54.8. Commenting on Europe's PMIs, Goldman said that the Euro area composite PMI declined by 2.9pt to 56.1 in September, well below consensus expectations. The softening was broad-based across countries but primarily led by Germany. The peripheral composite flash PMI also weakened significantly in September but remain very high by historical standards (-2.4pt to 57.5). Across sectors, the September composite decline was also broad-based, with manufacturing output softening (-3.3pt to 55.6) to a similar extent as services (-2.7pt to 56.3). Supply-side issues and upward cost and price pressures continued to be widely reported. Expectations of future output growth declined by less than spot output on the back of delta variant worries and supply issues, remaining far above historically average levels. Earlier in the session, Asian stocks rose for the first time in four sessions, as Hong Kong helped lead a rally on hopes that troubled property firm China Evergrande Group will make progress on debt repayment. The MSCI Asia Pacific Index climbed as much as 0.5%, with Tencent and Meituan providing the biggest boosts. The Hang Seng jumped as much as 2.5%, led by real estate stocks as Evergrande surged more than 30%. Hong Kong shares later pared their gains. Asian markets were also cheered by gains in U.S. stocks overnight even as the Federal Reserve said it may begin scaling back stimulus this year. A $17 billion net liquidity injection from the People’s Bank of China also provided a lift, while the Fed and Bank of Japan downplayed Evergrande risks in comments accompanying policy decisions Wednesday. Evergrande’s stock closed 18% higher in Hong Kong, in a delayed reaction to news a unit of the developer had negotiated interest payments on yuan notes. A coupon payment on its 2022 dollar bond is due on Thursday “Investors are perhaps reassessing the tail risk of a disorderly fallout from Evergrande’s credit issues,” said Chetan Seth, a strategist at Nomura. “However, I am not sure if the fundamental issue around its sustainable deleveraging has been addressed. I suspect markets will likely remain quite volatile until we have some definite direction from authorities on the eventual resolution of Evergrande’s debt problems.” Stocks rose in most markets, with Australia, Taiwan, Singapore and India also among the day’s big winners. South Korea’s benchmark was the lone decliner, while Japan was closed for a holiday In rates, Treasuries were off session lows, with the 10Y trading a 1.34%, but remained under pressure in early U.S. session led by intermediate sectors, where 5Y yield touched highest since July 2. Wednesday’s dramatic yield-curve flattening move unleashed by Fed communications continued, compressing 5s30s spread to 93.8bp, lowest since May 2020. UK 10-year yield climbed 3.4bp to session high 0.833% following BOE rate decision (7-2 vote to keep bond-buying target unchanged); bunds outperformed slightly. Peripheral spreads tighten with long-end Italy outperforming. In FX, the Bloomberg Dollar Spot Index reversed an earlier gain and dropped 0.3% as the dollar weakened against all of its Group-of-10 peers apart from the yen amid a more positive sentiment. CAD, NOK and SEK are the strongest performers in G-10, JPY the laggard.  The euro and the pound briefly pared gains after weaker-than-forecast German and British PMIs. The pound rebounded from an eight-month low amid a return of global risk appetite as investors assessed whether the Bank of England will follow the Federal Reserve’s hawkish tone later Thursday. The yield differential between 10-year German and Italian debt narrowed to its tightest since April. Norway’s krone advanced after Norges Bank raised its policy rate in line with expectations and signaled a faster pace of tightening over the coming years. The franc whipsawed as the Swiss National Bank kept its policy rate and deposit rate at record lows, as expected, and reiterated its pledge to wage currency market interventions. The yen fell as a unit of China Evergrande said it had reached an agreement with bond holders over an interest payment, reducing demand for haven assets. Turkey’s lira slumped toa record low against the dollar after the central bank unexpectedly cut interest rates. In commodities, crude futures drifted lower after a rangebound Asia session. WTI was 0.25% lower, trading near $72; Brent dips into the red, so far holding above $76. Spot gold adds $3.5, gentle reversing Asia’s losses to trade near $1,771/oz. Base metals are well bid with LME aluminum leading gains. Bitcoin steadied just below $44,000. Looking at the day ahead, we get the weekly initial jobless claims, the Chicago Fed’s national activity index for August, and the Kansas City fed’s manufacturing activity index for September. From central banks, there’ll be a monetary policy decision from the Bank of England, while the ECB will be publishing their Economic Bulletin and the ECB’s Elderson will also speak. From emerging markets, there’ll also be monetary policy decisions from the Central Bank of Turkey and the South African Reserve Bank. Finally in Germany, there’s an election debate with the lead candidates from the Bundestag parties. Market Snapshot S&P 500 futures up 0.7% to 4,413.75 STOXX Europe 600 up 1.1% to 468.32 MXAP up 0.5% to 200.57 MXAPJ up 0.9% to 645.76 Nikkei down 0.7% to 29,639.40 Topix down 1.0% to 2,043.55 Hang Seng Index up 1.2% to 24,510.98 Shanghai Composite up 0.4% to 3,642.22 Sensex up 1.4% to 59,728.37 Australia S&P/ASX 200 up 1.0% to 7,370.22 Kospi down 0.4% to 3,127.58 German 10Y yield fell 5.6 bps to -0.306% Euro up 0.4% to $1.1728 Brent Futures up 0.3% to $76.39/bbl Gold spot up 0.0% to $1,768.25 U.S. Dollar Index down 0.33% to 93.16 Top Overnight News from Bloomberg Financial regulators in Beijing issued a broad set of instructions to China Evergrande Group, telling the embattled developer to focus on completing unfinished properties and repaying individual investors while avoiding a near-term default on dollar bonds China’s central bank net-injected the most short- term liquidity in eight months into the financial system, with markets roiled by concerns over China Evergrande Group’s debt crisis Europe’s worst energy crisis in decades could drag deep into the cold months as Russia is unlikely to boost shipments until at least November Business activity in the euro area “markedly” lost momentum in September after demand peaked over the summer and supply chain bottlenecks hurt both services and manufacturers. Surveys of purchasing managers by IHS Markit showed growth in both sectors slowing more than expected, bringing overall activity to a five-month low. Input costs, meanwhile, surged to the highest in 21 years, according to the report The U.K. private sector had its weakest month since the height of the winter lockdown and inflation pressures escalated in September, adding to evidence that the recovery is running into significant headwinds, IHS Markit said The U.K.’s record- breaking debut green bond sale has given debt chief Robert Stheeman conviction on the benefits of an environmental borrowing program. The 10 billion-pound ($13.7 billion) deal this week was the biggest-ever ethical bond sale and the country is already planning another offering next month A more detailed look at global markets courtesy of Newsquaw Asian equity markets traded mostly positive as the region took its cue from the gains in US with the improved global sentiment spurred by some easing of Evergrande concerns and with stocks also unfazed by the marginally more hawkish than anticipated FOMC announcement (detailed above). ASX 200 (+1.0%) was underpinned by outperformance in the commodity-related sectors and strength in defensives, which have more than atoned for the losses in tech and financials, as well as helped markets overlook the record daily COVID-19 infections in Victoria state. Hang Seng (+0.7%) and Shanghai Comp. (+0.6%) were also positive after another respectable liquidity operation by the PBoC and with some relief in Evergrande shares which saw early gains of more than 30% after recent reports suggested a potential restructuring by China’s government and with the Co. Chairman noting that the top priority is to help wealth investors redeem their products, although the majority of the Evergrande gains were then pared and unit China Evergrande New Energy Vehicle fully retraced the initial double-digit advances. KOSPI (-0.5%) was the laggard as it played catch up to the recent losses on its first trading day of the week and amid concerns that COVID cases could surge following the holiday period, while Japanese markets were closed in observance of the Autumnal Equinox Day. China Pumps $17 Billion Into System Amid Evergrande Concerns China Stocks From Property to Tech Jump on Evergrande Respite Philippines Holds Key Rate to Spur Growth Amid Higher Prices Taiwan’s Trade Deal Application Sets Up Showdown With China Top Asian News European equities (Stoxx 600 +0.9%) trade on the front-foot and have extended gains since the cash open with the Stoxx 600 now higher on the week after Monday’s heavy losses. From a macro perspective, price action in Europe has been undeterred by a slowdown in Eurozone PMIs which saw the composite metric slip to 56.1 from 59.0 (exp. 58.5) with IHS Markit noting “an unwelcome combination of sharply slower economic growth and steeply rising prices.” Instead, stocks in the region have taken the cue from a firmer US and Asia-Pac handover with performance in Chinese markets aided by further liquidity injections by the PBoC. Some positivity has also been observed on the Evergrande front amid mounting expectations of a potential restructuring at the company. That said, at the time of writing, it remains unclear what the company’s intentions are for repaying its USD 83.5mln onshore coupon payment. Note, ING highlights that “missing that payment today would still leave a 30-day grace period before this is registered as a default”. The most recent reports via WSJ indicate that Chinese authorities are asking local governments to begin preparations for the potential downfall of Evergrande; however, the article highlights that this is a last resort and Beijing is reluctant to step in. Nonetheless, this article has taken the shine off the mornings risk appetite, though we do remain firmer on the session. Stateside, as the dust settles on yesterday’s FOMC announcement, futures are firmer with outperformance in the RTY (+0.8% vs. ES +0.7%). Sectors in Europe are higher across the board with outperformance in Tech and Autos with the latter aided by gains in Faurecia (+4.6%) who sit at the top of the Stoxx 600 after making an unsurprising cut to its guidance, which will at least provide some clarity on the Co.’s near-term future; in sympathy, Valeo (+6.6) is also a notable gainer in the region. To the downside, Entain (+2.6%) sit at the foot of the Stoxx 600 after recent strong gains with the latest newsflow surrounding the Co. noting that MGM Resorts is considering different methods to acquire control of the BetMGM online gambling business JV, following the DraftKings offer for Entain, according to sources. The agreement between Entain and MGM gives MGM the ability to block any deal with competing businesses; MGM officials believe this grants the leverage to take full control of BetMGM without spending much. Top European News BOE Confronts Rising Prices, Slower Growth: Decision Guide La Banque Postale Eyes Retail, Asset Management M&A in Europe Activist Bluebell Raises Pressure on Glaxo CEO Walmsley Norway Delivers Rate Lift-Off With Next Hike Set for December In FX, not much bang for the Buck even though the FOMC matched the most hawkish market expectations and Fed chair Powell arguably went further by concluding in the post-meeting press conference that substantial progress on the lagging labour front is all but done. Hence, assuming the economy remains on course, tapering could start as soon as November and be completed my the middle of 2022, though he continued to play down tightening prospects irrespective of the more hawkish trajectory implied by the latest SEP dot plots that are now skewed towards at least one hike next year and a cumulative seven over the forecast horizon. However, the Greenback only managed to grind out marginally higher highs overnight, with the index reaching 93.526 vs 93.517 at best yesterday before retreating quite sharply and quickly to 93.138 in advance of jobless claims and Markit’s flash PMIs. CAD/NZD/AUD - The Loonie is leading the comeback charge in major circles and only partially assisted by WTI keeping a firm bid mostly beyond Usd 72/brl, and Usd/Cad may remain contained within 1.2796-50 ahead of Canadian retail sales given decent option expiry interest nearby and protecting the downside (1 bn between 1.2650-65 and 2.7 bn from 1.2620-00). Meanwhile, the Kiwi has secured a firmer grip on the 0.7000 handle to test 0.7050 pre-NZ trade and the Aussie is looking much more comfortable beyond 0.7250 amidst signs of improvement in the flash PMIs, albeit with the services and composite headline indices still some way short of the 50.0 mark. NOK/GBP/EUR/CHF - All firmer, and the Norwegian Crown outperforming following confirmation of the start of rate normalisation by the Norges Bank that also underscored another 25 bp hike in December and further tightening via a loftier rate path. Eur/Nok encountered some support around 10.1000 for a while, but is now below, while the Pound has rebounded against the Dollar and Euro in the run up to the BoE at midday. Cable is back up around 1.3770 and Eur/Gbp circa 0.8580 as Eur/Usd hovers in the low 1.1700 area eyeing multiple and a couple of huge option expiries (at the 1.1700 strike in 4.1 bn, 1.1730 in 1 bn, 1.1745-55 totalling 2.7 bn and 1.8 bn from 1.1790-1.1800). Note, Eurozone and UK flash PMIs did not live up to their name, but hardly impacted. Elsewhere, the Franc is lagging either side of 0.9250 vs the Buck and 1.0835 against the Euro on the back of a dovish SNB Quarterly Review that retained a high Chf valuation and necessity to maintain NIRP, with only minor change in the ordering of the language surrounding intervention. JPY - The Yen is struggling to keep its head afloat of 110.00 vs the Greenback as Treasury yields rebound and risk sentiment remains bullish pre-Japanese CPI and in thinner trading conditions due to the Autumn Equinox holiday. In commodities, WTI and Brent have been choppy throughout the morning in-spite of the broadly constructive risk appetite. Benchmarks spent much of the morning in proximity to the unchanged mark but the most recent Evergrande developments, via WSJ, have dampened sentiment and sent WTI and Brent back into negative territory for the session and printing incremental fresh lows at the time of publication. Back to crude, newsflow has once again centred around energy ministry commentary with Iraq making clear that oil exports will continue to increase. Elsewhere, gas remains at the forefront of focus particularly in the UK/Europe but developments today have been somewhat incremental. On the subject, Citi writes that Asia and Europe Nat. Gas prices could reach USD 100/MMBtu of USD 580/BOE in the winter, under their tail-risk scenario. For metals, its very much a case of more of the same with base-metals supportive, albeit off-best given Evergrande, after a robust APAC session post-FOMC. Given the gas issues, desks highlight that some companies are being forced to suspend/reduce production of items such as steel in Asian/European markets, a narrative that could become pertinent for broader prices if the situation continues. Elsewhere, spot gold and silver are both modestly firmer but remain well within the range of yesterday’s session and are yet to recovery from the pressure seen in wake of the FOMC. US Event Calendar 8:30am: Sept. Initial Jobless Claims, est. 320,000, prior 332,000; Continuing Claims, est. 2.6m, prior 2.67m 8:30am: Aug. Chicago Fed Nat Activity Index, est. 0.50, prior 0.53 9:45am: Sept. Markit US Composite PMI, prior 55.4 9:45am: Sept. Markit US Services PMI, est. 54.9, prior 55.1 9:45am: Sept. Markit US Manufacturing PMI, est. 61.0, prior 61.1 11am: Sept. Kansas City Fed Manf. Activity, est. 25, prior 29 12pm: 2Q US Household Change in Net Wor, prior $5t DB's Jim Reid concludes the overnight wrap My wife was at a parents event at school last night so I had to read three lots of bedtime stories just as the Fed were announcing their policy decision. Peppa Pig, Biff and Kipper, and somebody called Wonder Kid were interspersed with Powell’s press conference live on my phone. It’s fair to say the kids weren’t that impressed by the dot plot and just wanted to join them up. The twins (just turned 4) got their first reading book homework this week and it was a bit sad that one of them was deemed ready to have one with words whereas the other one only pictures. The latter was very upset and cried that his brother had words and he didn’t. That should create even more competitive tension! Back to the dots and yesterday’s Fed meeting was on the hawkish side in terms of the dots and also in terms of Powell’s confidence that the taper could be complete by mid-2022. Powell said that the Fed could begin tapering bond purchases as soon as the November FOMC meeting, in line with our US economists’ forecasts. He left some room for uncertainty, saying they would taper only “If the economy continues to progress broadly in line with expectations, and also the overall situation is appropriate for this.” However he made clear that “the timing and pace of the coming reduction in asset purchases will not be intended to carry a direct signal regarding the timing of interest rate liftoff.” The quarterly “dot plot” showed that the 18 FOMC officials were split on whether to start raising rates next year or not. In June, the median dot indicated no rate increases until 2023, but now 6 members see a 25bps raise next year and 3 members see two such hikes. Their inflation forecasts were also revised up and DB’s Matt Luzzetti writes in his FOMC review (link here) that “If inflation is at or below the Fed's current forecast next year of 2.3% core PCE, liftoff is likely to come in 2023, consistent with our view. However, if inflation proves to be higher with inflation expectations continuing to rise, the first rate increase could well migrate into 2022.” Markets took the overall meeting very much in its stride with the biggest impact probably being a yield curve flattening even if US 10yr Treasury yields traded in just over a 4bp range yesterday and finishing -2.2bps lower at 1.301%. The 5y30y curve flattened -6.7bps to 95.6bps, its flattest level since August 2020, while the 2y10y curve was -4.2bps flatter. So the market seems to believe the more hawkish the Fed gets the more likely they’ll control inflation and/or choke the recovery. The puzzle is that even if the dots are correct, real Fed funds should still be negative and very accommodative historically for all of the forecasting period. As such the market has a very dim view of the ability of the economy to withstand rate hikes or alternatively that the QE technicals are overpowering everything at the moment. In equities, the S&P 500 was up nearly +1.0% 15 minutes prior to the Fed, and then rallied a further 0.5% in the immediate aftermath before a late dip look it back to +0.95%. The late dip meant that the S&P still has not seen a 1% up day since July 23. The index’s rise was driven by cyclicals in particular with energy (+3.17%), semiconductors (-2.20%), and banks (+2.13%) leading the way. Asian markets are mostly trading higher this morning with the Hang Seng (+0.69%), Shanghai Comp (+0.58%), ASX (+1.03%) and India’s Nifty (+0.81%) all up. The Kospi (-0.36%) is trading lower though and is still catching up from the early week holidays. Japan’s markets are closed for a holiday today. Futures on the S&P 500 are up +0.25% while those on the Stoxx 50 are up +0.49%. There is no new news on the Evergrande debt crisis however markets participants are likely to pay attention to whether the group is able to make interest rate payment on its 5 year dollar note today after the group had said yesterday that it resolved a domestic bond coupon by negotiations which was also due today. As we highlighted in our CoTD flash poll conducted earlier this week, market participants are not too worried about a wider fallout from the Evergrande crisis and even the Hang Seng Properties index is up +3.93% this morning and is largely back at the levels before the big Monday sell-off of -6.69%. Overnight we have received flash PMIs for Australia which improved as parts of the country have eased the coronavirus restrictions. The services reading came in at 44.9 (vs. 42.9 last month) and the manufacturing print was even stronger at 57.3 (vs. 52.0 last month). Japan’s flash PMIs will be out tomorrow due to today’s holiday. Ahead of the Fed, markets had continued to rebound from their declines earlier in the week, with Europe’s STOXX 600 gaining +0.99% to narrowly put the index in positive territory for the week. This continues the theme of a relative outperformance among European equities compared to the US, with the STOXX 600 having outpaced the S&P 500 for 5 consecutive sessions now, though obviously by a slim margin yesterday. Sovereign bonds in Europe also posted gains, with yields on 10yr bunds (-0.7bps), OATs (-1.0bps) and BTPs (-3.2bps) all moving lower. Furthermore, there was another tightening in peripheral spreads, with the gap in Italian 10yr yields over bunds falling to 98.8bps yesterday, less than half a basis point away from its tightest level since early April. Moving to fiscal and with Democrats seemingly unable to pass the $3.5 trillion Biden budget plan by Monday, when the House is set to vote on the bipartisan infrastructure bill, Republican leadership is calling on their members to vote against the bipartisan bill in hopes of delaying the process further. While the there is still a high likelihood the measure will eventually get passed, time is becoming a factor. Congress now has just over a week to get a government funding bill through both chambers of congress as well as raise the debt ceiling by next month. Republicans have told Democrats to do the latter in a partisan manner and include it in the reconciliation process which could mean that a significant portion of the Biden economic agenda – mostly encapsulated in the $3.5 trillion over 10 year budget – may have to be cut down to get the entire Democratic caucus on board. Looking ahead, an event to watch out for today will be the Bank of England’s policy decision at 12:00 London time, where our economists write (link here) that they expect no change in the policy settings. However, they do expect a reaffirmation of the BoE’s updated forward guidance that some tightening will be needed over the next few years to keep inflation in check, even if it’s too early to expect a further hawkish pivot at this stage. Staying on the UK, two further energy suppliers (Avro Energy and Green Supplier) ceased trading yesterday amidst the surge in gas prices, with the two supplying 2.9% of domestic customers between them. We have actually seen a modest fall in European natural gas prices over the last couple of days, with the benchmark future down -4.81% since its close on Monday, although it’s worth noting that still leaves them up +75.90% since the start of August alone. There wasn’t much data to speak of yesterday, though US existing home sales fell to an annualised rate of 5.88 in August (vs. 5.89m expected). Separately, the European Commission’s advance consumer confidence reading for the Euro Area unexpectedly rose to -4.0 in September (vs. -5.9 expected). To the day ahead now, the data highlights include the September flash PMIs from around the world, while in the US there’s the weekly initial jobless claims, the Chicago Fed’s national activity index for August, and the Kansas City fed’s manufacturing activity index for September. From central banks, there’ll be a monetary policy decision from the Bank of England, while the ECB will be publishing their Economic Bulletin and the ECB’s Elderson will also speak. From emerging markets, there’ll also be monetary policy decisions from the Central Bank of Turkey and the South African Reserve Bank. Finally in Germany, there’s an election debate with the lead candidates from the Bundestag parties. Tyler Durden Thu, 09/23/2021 - 08:13.....»»

Category: blogSource: zerohedge45 min. ago

Elon Musk says dogecoin fees have to fall for it to become a viable form of payment, after AMC suggests it might accept the token for movie tickets

Musk has been relatively quiet about cryptocurrencies ever since he announced Tesla would no longer take bitcoin as payment for its electric vehicles. Elon Musk. Patrick Pleul/picture alliance via Getty Images Elon Musk says dogecoin fees would have to fall for it to become a viable payment option. His tweet came after AMC's CEO said the movie-chain operator may accept dogecoin for movie ticket payments. Musk's latest tweet suggests he isn't sure about adopting dogecoin for Tesla yet. Sign up here for our daily newsletter, 10 Things Before the Opening Bell. Tesla boss Elon Musk said Wednesday dogecoin fees would have to drop for it to become a feasible payment option, after movie-chan operator AMC's CEO hinted he might add it as a method to pay for tickets."Super important for Doge fees to drop to make things like buying movie tix viable," Musk said in a tweet.The billionaire CEO was responding to dogecoin creator Billy Markus, who is no longer developing the digital asset."Robinhood announcing wallets, AMC CEO not only talking about accepting dogecoin but saying it was the single most interacted with tweet he has ever made, the crypto market finally seeing some green," Markus had tweeted.Cryptocurrencies had a weak start to the week with the total value of the market falling below $2 trillion, as the fallout from Evergrande's debt crisis delivered a huge blow to risk appetite, sending roughly every asset class lower. Bitcoin tumbled 8% to around $43,000 on Monday, while dogecoin fell 13% to 22 cents.Most digital coins made some gains Wednesday, after Robinhood announced it would launch a crypto wallet by next year and AMC CEO Adam Aron responded to the Twitter poll he put out that sought input on accepting dogecoin in theaters. "It's clear that you think AMC should accept dogecoin," Aron said. "Now we need to figure out how to do that."Aron also appeared thrilled that Musk had liked his poll, and called him the "epitome of innovation."Musk has been relatively quiet about cryptocurrencies ever since announcing Tesla would suspend vehicle purchases using bitcoin due to its impact on the environment. He previously hinted at adopting dogecoin for the EV-maker instead, but his latest suggestion about lower fees seems like he still isn't sure.Dogecoin fees are made for the effort used in processing transactions on the blockchain. These fees can fluctuate, depending on how busy the network is. The dogecoin development team last month announced an update to the network, which claimed to enable upcoming fee reductions. Musk had reacted positively, calling it "good progress."Dogecoin was last trading at 22 cents on Thursday. It's up more than 4,500% so far this year, according to data from CoinDesk.Read More: Ahead of bitcoin's $3 billion options expiry this Friday, 5 experts told us how much the crypto and other leading altcoins can surge or fall from here: 'if markets bleed, they will bleed as a group.'Read the original article on Business Insider.....»»

Category: topSource: businessinsider8 hr. 12 min. ago

Bitcoin mining will contribute just 0.9% to total global emissions by 2030, even in the most bullish price scenario: NYDIG

Bitcoin mining will only contribute to 0.9% of global carbon emissions even if the coin's price were to hit a mind-boggling $10 trillion by 2030. Mining machines FEDERICO PARRA / Getty Images Even if bitcoin hit $10 trillion by 2030, its emissions would still only account for less than 0.9% of the global total, an NYDIG report said. Bitcoin mining currently produces fewer carbon emissions than aviation or air conditioning, the report said. Back in 2019, bitcoin already used as much energy as the Philippines, according to Cambridge University data. Sign up here for our daily newsletter, 10 Things Before the Opening Bell. Bitcoin mining will only contribute to 0.9% of global carbon emissions even if the coin's price were to hit a mind-boggling $10 trillion by 2030, according to a report by crypto technology company New York Digital Investment Group (NYDIG) earlier this week. Bitcoin's emissions are mostly driven by the carbon intensity of the energy sources and consumption of the miners that scour the network. Bitcoin creation depends upon a "proof of work" system, where miners compete to assemble transactions on the blockchain and this requires vast amounts of power, much of it currently derived from fossil fuels. In the past, bitcoin has faced a lot of criticism because of its energy consumption. Already in 2019, bitcoin already used as much energy as the Philippines, according to Cambridge University data. Elon Musk said on Twitter back in May that his Tesla electric vehicle maker would no longer accept any payment in bitcoin over concerns that its fossil fuel use was rapidly increasing. However, the NYDIG report showed the situation is not quite as dire as many might fear."Bitcoin's absolute electricity consumption and carbon emissions are not significant in global terms," NYDIG said in its report.Bitcoin mining only represents 0.1% of global carbon emissions right now, which was 33 million tonnes of carbon dioxide (MtCO2) in 2020, less than what aviation or air conditioning produces, the report said. After the Chinese crackdown on mining, bitcoin mining fell from consuming 92 terawatt hours (TWh) in March this year, to just 49 TWh by July, the report showed. NYDIG said it had calculated the future energy consumption of bitcoin miners based on price trajectory, miners' energy mixes, activity, locations, economics, power prices and transaction fee volumes. Prior to China's crackdown, most of the world's bitcoin miners were located there. But many have since relocated to countries that offer more environmentally friendly power sources, such as Iran or the United States. "Over the longer term, the intensity of bitcoin's carbon emissions (and with it bitcoin's absolute carbon emissions) will decline, as the development of renewables continues and countries strive to decarbonize their electricity grids," the report said.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderSep 22nd, 2021

Commodities Corner: Electric vehicle market growth is a blessing for some metals — and not a big worry for oil

Growth in the electric-vehicle market has been a blessing for metals like copper and lithium. It has also raised concerns about the long-term outlook for oil demand that some analysts say aren’t justified......»»

Category: topSource: marketwatchMay 6th, 2021

Exclusive: Tesla in talks to use CATL"s cobalt-free batteries in China-made cars - sources

Tesla is in advanced stages of talks to use batteries from CATL that contain no cobalt - one of the most expensive metals in electric vehicle (EV) batteries - in cars made at its China plant, people familiar with the matter said......»»

Category: topSource: reutersFeb 18th, 2020

U.S. Senate moves forward on plan to develop electric vehicle supply chain

U.S. lawmakers on Tuesday moved closer to developing a national electric vehicle supply chain policy, with senators voicing bipartisan support for legislation designed to parry China's dominance in metals production and battery manufacturing......»»

Category: topSource: reutersMay 14th, 2019

Tesla expects shortage of metals used in EV batteries: report

Tesla Inc. is expecting global shortages of nickel, copper, and other metals used to make electric-vehicle batteries, Reuters reported Thursday, citing two sources who heard comments from the company's head of minerals procurement at a .....»»

Category: topSource: marketwatchMay 2nd, 2019

Exclusive: United States sets sights on China in new electric vehicle push

U.S. government officials plan to meet with executives from automakers and lithium miners in early May as part of a first-of-its-kind effort to launch a national electric vehicle supply chain strategy, according to three sources familiar with the matter......»»

Category: topSource: reutersApr 5th, 2019

Ailing EV maker Faraday Future co-founder Nick Sampson quits

Faraday Future co-founder Nick Sampson has quit his executive post at the Chinese electric vehicle developer, the latest blow to the troubled company that said it was experiencing "extraordinary financial hardship.".....»»

Category: topSource: reutersOct 31st, 2018

U.S. copper projects gain steam thanks to electric vehicle trend

Once seen as a laggard in the global mining industry, U.S. copper deposits have quietly drawn more than $1.1 billion in investments from small and large miners alike as Tesla and other electric carmakers scramble for more of the red metal......»»

Category: topSource: reutersJan 24th, 2019

Allison (ALSN) & JJE Join Forces for Commercial E-Powertrains

Allison's (ALSN) partnership with JJE will bank on the latter's robust foothold in the Chinese commercial vehicle electrified powertrain market. Allison Transmission ALSN recently entered into a global strategic collaboration partnership agreement with Jing-Jin Electric (“JJE”) to accelerate the development of best-in-class electrified powertrain solutions for global commercial vehicles.China-based JJE is an electrified propulsion leader in components, assemblies and systems for the global automotive and commercial vehicle customers.The companies are highly optimistic about this partnership as it will prove beneficial for both. JJE possesses more than 10 years of experience in the industry-leading electric motors and power electronics as well as central and direct drive electrified propulsion architectures. Allison, meanwhile, brings to the table decades of experience in building reliable and valued propulsion solutions, including electrified propulsion systems development and commercialization.The collaboration aims to bank on JJE’s dominance in electric motor and inverter development, and its robust foothold in the Chinese commercial vehicle electrified powertrain market, while exploiting Allison’s expertise in the fully electric and electric hybrid commercial duty propulsion systems.Commercial vehicle’s electrification will be one of the greatest contributors toward achieving carbon neutrality in transportation. The deal will enable Allison and JEE to merge their competencies in order to create the most powerful, most efficient and most reliable electrified powertrains for global commercial vehicle customers. Amid the aggravating climate change concerns, the companies together will pivot the transformation toward carbon neutral and zero emission transportation.Moreover, the integration of their capabilities through the partnership will enable them to offer innovative and reliable electrified propulsion solutions to the commercial vehicle manufacturers across the globe. The partnership will uniquely position both parties to gain a global manufacturing presence and take advantage of their combined service networks in order to cater to customers in local markets with highly cost-competitive products. Together, the companies will further enhance their product menus, manufacturing locations and supporting resources. Additionally, Allison has pledged to provide debt financing to back JJE North America’s efforts for commercial vehicle electric drive product development, testing and manufacturing.In a separate development, Daimler’s DDAIF Truck arm has integrated Allison 3414 Regional Haul Series (RHS) into its Class 8 Freightliner Cascadia Day Cab models. The first Freightliner Cascadias, equipped with the 3414 RHS, will begin production in January 2022.The Allison 3414 RHS is an upgraded variant of Allison’s proven 3000 Series fully automatic transmission. It offers up to 8% fuel economy efficiency compared to the Allison 3000 Highway Series, and provides 25% quicker acceleration over the automated manual transmissions.Allison’s latest development in regional haul trucking provides Daimler’s Freightliner customers with an efficient solution that enhances the payload, performance, fuel efficiency and driver comfort. The latest integration creates a winning portfolio for weight-conscious segments, where acceleration and maneuverability are the most crucial aspects.Headquartered in Indianapolis, IN, Allison is a manufacturer of fully-automatic transmissions for medium- and heavy-duty commercial and heavy-tactical U.S. defense vehicles. In fact, the company is the largest producer of fully-automatic transmissions, holding the leading position in several niche markets. The firm also offers electric hybrid and fully-electric propulsion systems.Allison, peers of which include American Axle & Manufacturing Holdings AXL and Meritor MTOR, currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. More Stock News: This Is Bigger than the iPhone! It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.Click here for the 4 trades >>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 Daimler AG (DDAIF): Free Stock Analysis Report American Axle & Manufacturing Holdings, Inc. (AXL): Free Stock Analysis Report Meritor, Inc. (MTOR): Free Stock Analysis Report Allison Transmission Holdings, Inc. (ALSN): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacks45 min. ago

5 Stocks to Watch as EV Adoption Revs Up

EV adoption has witnessed significant growth this year. Thus, investors should keep an eye on Nikola (NKLA), Hyliion (HYLN), Tesla (TSLA), Ford (F) & General Motors (GM). Electric vehicles (EV) are rapidly gaining in terms of reliability and a way to reduce the global carbon footprint. Longest-lasting, farthest-driving and affordable batteries are the key parameters of the race in the EV market.The automobile industry is moving toward electrification and the U.S. government is providing aid through the promotion of EV infrastructure and consumer rebates. Regardless of the government’s boost and the infrastructure bill scheduled to be passed on Sep 27, the industry is poised to witness tremendous growth.Consumer enthusiasm has been a key to EV growth, as can be seen from the boom in sales. In the first quarter of 2021, global EV sales surged 160% from the same quarter last year to 2.6 million units, according to a report by Canalys. Sales have been spectacular despite several supply-side constraints, especially the pandemic and chip shortage.China is the largest EV market while Europe has the highest EV adoption, with Norway leading with more than 80% of new car sales. Meanwhile, the United States is trying to catch up and the Biden administration hopes 40% to 50% of all new cars sales to be EVs by 2030.Recent technological developments are also boosting the EV space, starting from carmakers to battery producers and charging networks. In fact, batteries are the linchpin of any EV and this segment has especially witnessed exponential growth. Companies like Hyliion Holdings Corp. HYLN are developing electric powertrains that are compatible with renewable natural gas and hydrogen fuel cells. Meanwhile, QuantumScape announced a major breakthrough in solid-state lithium metal batteries that can totally change the way consumers view EVs.The EV market has also created several niches like battery recycling and disposal of old batteries. Companies like Li-Cycle Holdings, founded only in 2016, estimates that the EV industry will produce more than 15 million tons of discarded lithium-ion batteries by 2030. Li-Cycle, a battery recycling firm, plans to capture this segment by offering an outlet for used batteries and a sustainable source for materials to be used in recycled batteries. It aims to recover usable materials from thrown-away batteries and touts that up to 95% of the battery materials can be processed for recovery, which in turn will reduce waste.Automobile bigwigs are also investing millions into EVs. On Sep 22, Ford Motor Company F reported that it is investing $50 million in Redwood Materials to recycle EV batteries. Redwood, which is well known for recycling batteries for e-bike, will expand its manufacturing facilities and cater to make EVs more sustainable and affordable. This deal is part of the $22-billion plan that Ford earlier announced to up its game in the EV market. The company also has the Mach-E, the e-Transit commercial van, and an electric F-150 line-up, set to be launched this year and the next.5 Stocks to WatchGlobal administration bodies are increasing regulations to phase out fossil fuel-powered vehicles and promoting EV infrastructure. Additionally, the decline in the cost of batteries and the luxury that EVs provide are also attracting buyers. Per a Meticulous Market Research forecast, the global EV market is expected to reach $2.5 trillion by 2027, at a CAGR of 33.6% from 2020. The company estimates the sale of 233.9 million units by 2027, at a CAGR of 21.7%.Given the positives, we have shortlisted five stocks covering EV manufacturers (pure-play & traditional), battery makers and charging networks that are poised to grow and investors should look out for.Nikola Corporation NKLA develops and commercializes battery-electric (BEV) and fuel cell electric (FCEV) Class 8 trucks for the short, medium, and long-haul trucking sector and also offers hydrogen EVs, EV drivetrains, vehicle components, and energy storage systems. Earlier in September, Nikola inaugurated a joint-venture manufacturing facility with CNH Industrial dedicated to the development of the Nikola Tre electric heavy-duty trucks.The company’s expected earnings growth rate for the current quarter is 16.1% against the Zacks Automotive - Domestic industry’s projected decline of 48.7%. The Zacks Consensus Estimate for this company’s current-year earnings has been revised 18.5% upward over the past 60 days. Nikola currently holds a Zack Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Hyliion Holdings designs, develops, and sells electrified powertrain solutions and also provides battery management systems for hybrid and fully EV applications. This Zack Rank #2 company that belongs to the Zacks Automotive - Original Equipment industry has an expected earnings growth rate of 50% for the current quarter. The Zacks Consensus Estimate for this company’s current-year earnings has been revised 9.4% upward over the past 60 days.Tesla, Inc. TSLA designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems.The company’s expected earnings growth rate for the current year is more than 100% compared with the Zacks Automotive - Domestic industry’s projected growth of 15.2%. The Zacks Consensus Estimate for this company’s current-year earnings has been revised 19.1% upward over the past 60 days. Tesla carries a Zack Rank #3 (Hold).Ford, a Zack Rank #3 company, designs, manufactures, markets, and services a range of Ford trucks, cars, sport utility vehicles, electrified vehicles, and Lincoln luxury vehicles. The company plans to add F-150 Lightning with four series and two battery options to the range of Mustang Mach-E catalog by spring 2022.The auto giant has an expected earnings growth rate for the current year of more than 100% compared with the Zacks Automotive - Domestic industry’s projected growth of 15.2%. The Zacks Consensus Estimate for this company’s current-year earnings has been revised 28.2% upward over the past 60 days.General Motors Company GM designs, builds, and sells cars, trucks, crossovers, and automobile parts. The company recently unveiled the Cadillac LYRIQ show car and the GMC HUMMER EV, which joined the Chevrolet Bolt EV, and is currently on the market. The auto giant will invest $27 billion in EVs and associated products between 2020 and 2025.This Zack Rank #3 company’s expected earnings growth rate for the current year is 25.7% compared with the Zacks Automotive - Domestic industry’s projected growth of 15.2%. The Zacks Consensus Estimate for this company’s current-year earnings has been revised 0.7% upward over the past 90 days. More Stock News: This Is Bigger than the iPhone! It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.Click here for the 4 trades >>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 Ford Motor Company (F): Free Stock Analysis Report General Motors Company (GM): Free Stock Analysis Report Tesla, Inc. (TSLA): Free Stock Analysis Report Nikola Corporation (NKLA): Free Stock Analysis Report Hyliion Holdings Corp. (HYLN): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacks45 min. ago

Blink (BLNK) Expands its Sustainable EV Charging Framework

Blink Charging (BLNK) secures a contract from Sourcewell to provide EV chargers to the agencies served by the latter. It also signs a deal with San Antonio city to deploy EV charging stations. Blink Charging Co. BLNK recently made two announcements that expand its distribution channels and ease out the access of its sustainable electric vehicle (EV) charging stations.It announced that Sourcewell, a self-sustaining government organization offering contract purchasing solutions, has awarded it a cooperative purchasing contract, in the Electric Vehicle Supply Equipment category.The program includes more than 400 competitively solicited contracts to government, education, and nonprofit bodies. The Sourcewell contracts save time and money for participating agencies by harnessing the collective buying power of more than 50,000 organizations. This brings new clients for product providing companies like Blink.Blink said that an increasing number of drivers are transitioning to EVs, which call for the easy availability of a reliable charging infrastructure. The purchasing contract will make its EV chargers accessible to a broad range of entities, aiding them in modernizing their procurement process and expediting the use of EVs within local communities.In another development, Blink has signed a public-private agreement with the city of San Antonio to install its first publicly accessible Blink EV charging station at the San Antonio Zoo.The unique deal paves the way for the deployment of 202 Level 2 charging stations and 3 DC fast-chargers across the city, as part of the city’s Electric Vehicle San Antonio Program to elevate the city’s goals of improving the climate and air quality. Apart from the deployments that have already been completed, Blink will be installing five additional sites in the coming weeks. The Blink chargers were funded partly through the state-wide Texas Volkswagen Environmental Mitigation Program, which consists of a $10.4 million fund to deploy Level 2 charging across Texas to ensure improved air quality and easy EV charging.Zacks Rank & Stocks to ConsiderHeadquartered in Florida, Blink Charging is the leading EV charging company and has deployed more than 30,000 charging ports across 13 countries. Shares of Blink have climbed 287.3% over a year, significantly outperforming the industry’s 5.1% rise.Image Source: Zacks Investment ResearchThe company currently carries a Zacks Rank #4 (Sell). A few better-ranked players in the auto equipment industry are Meritor, Inc. MTOR, Driven Brands Holdings DRVN, and XPEL, Inc. XPEL, each carrying a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. More Stock News: This Is Bigger than the iPhone! It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.Click here for the 4 trades >>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 Meritor, Inc. (MTOR): Free Stock Analysis Report Blink Charging Co. (BLNK): Get Free Report XPEL, Inc. (XPEL): Free Stock Analysis Report Driven Brands Holdings Inc. (DRVN): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacks45 min. ago

So Much For Hawkish Fed

So long – better said (as if it did apply in the first place). If June FOMC showed us anything, it was the power of (cheap) talk. We‘ve gone a long way since inflation‘s (getting out of hand) existence was acknowledged – yesterday, we were treated to very aggressive $10-15bn a month taper plans, cushioned […] So long – better said (as if it did apply in the first place). If June FOMC showed us anything, it was the power of (cheap) talk. We‘ve gone a long way since inflation‘s (getting out of hand) existence was acknowledged – yesterday, we were treated to very aggressive $10-15bn a month taper plans, cushioned with the „may be appropriate“ and Nov time designations. Coupled with the few and far away rate hikes on the dot plot, something fishy appears going on. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q2 2021 hedge fund letters, conferences and more While the real economy recovery progress has been acknowledged (how does that tie in with GDP downgrades and other macroeconomic realities I raised in yesterday‘s extensive analysis?), I think that the bar is being set a bit too high. Almost as if to give a (valid) reason for why not to taper right next. And the theater of taper on-off could go on, otherwise called jawboning, as markets reaction to this fragile phase of the economic recovery (marked by increasing deflationary undercurrents as shown by declining Treasury yields and contagion risks – make no mistake, Evergrande is the tip of the iceberg, real estate has been heating up over the last 1+ year around the world, and in the U.S. we have BlackRock mopping up residential real estate supply, underpinning high real estate prices especially when measured against income). Don‘t forget the weak non-farm payrolls either when it comes to the list of excuses to choose from. At the same time, we have not been entertained by the debt ceiling drama nearly enough yet. Right, the Fed is projecting the aura of independence, which made a Sep decision all the more unlikely. And who says we‘re short of drama these days? So, S&P 500 looks seeing through the Fed fog, but don‘t forget about the historical tendency to fade the first day (FOMC day) move during the next 1-2 days. So, I‘m looking for a certain paring off of yesterday‘s upswing in both paper and real assets. And that includes backing and filling in both commodities, precious metals and cryptos. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook The bulls are on the move, running into headwinds though – more intraday hesitation (inan overall up day with a notable upper knot) is expected. Credit Markets High yield corporate bonds again merely kept opening gains – there is still hesitation, but the bullish spirits are ever so slowly returning. Gold, Silver and Miners Gold was still stunned by the taper plans presented, and miners are bidding their time. We haven‘t turned the corner yet. Crude Oil Oil stocks confirmed the oil upswing, and black gold‘s chart still maintains bullish posture. Copper Copper didn‘t really hesitate – the red metal produced another wild upswing, but the volume and base is lacking, and might take a moment to establish itself. Bitcoin and Ethereum Bitcoin and Ethereum rebounded, but the volume could have been larger – what was amiss there, could be compensated by prices hanging above at least the midpoint of yesterday‘s white candle. Summary The balance of power is shifting to the bulls, who are about to face a retracement attempt of yesterday‘s upswing, however. The degree of its mildness would hint at what to expect next – crucially, the dollar is getting the Fed (not a hawk) message, which would serve to cushion any hiccups taking markets lower over the nearest days. Thank you for having read today‘s free analysis, which is available in full here at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals. Thank you, Monica Kingsley Stock Trading Signals Gold Trading Signals Oil Trading Signals Copper Trading Signals Bitcoin Trading Signals www.monicakingsley.co mk@monicakingsley.co All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice. Updated on Sep 23, 2021, 10:35 am (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});.....»»

Category: blogSource: valuewalk2 hr. 12 min. ago

Cathie Wood: “I Would Sell Tesla Next Year If It Reached $3,000”

Speaking at a news briefing at the Morningstar Investment Conference on Wednesday, Ark Invest’s CEO Cathie Wood said of Tesla Inc (NASDAQ:TSLA) stock: “If nothing were to change in our outlook and we got to $3,000 next year, my guess is that we would be peeling out of it.” Q2 2021 hedge fund letters, conferences […] Speaking at a news briefing at the Morningstar Investment Conference on Wednesday, Ark Invest’s CEO Cathie Wood said of Tesla Inc (NASDAQ:TSLA) stock: “If nothing were to change in our outlook and we got to $3,000 next year, my guess is that we would be peeling out of it.” if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Walter Schloss Series in PDF Get the entire 10-part series on Walter Schloss in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q2 2021 hedge fund letters, conferences and more Tesla Stock With Tesla stock worth around $750, Wood said at the event that her base price target in five years was $3,000. Her assertion came amid a debate she held with Research Affiliates chairman Rob Arnott, who showed himself skeptical of high valuation growth stocks like those of the automaker. During the conference, as recollected by Bloomberg, Arnott had asked Wood how investment managers could know when to get out of positions. “What’s the sell discipline that can protect those gains?” he said. “What’s the sell discipline that can rotate you into undiscovered disrupters where the market is unaware of what they’re doing?” She went on to name the benefits of electric cars but mentioned the price declines in battery pack systems. Amid this fall, Wood said she thinks that the average price of an electric vehicle will fall “below that of a gas-powered car in the next year or so.” The phenomenon would spread into 2025 when she foresees that an average electric vehicle could be worth $18,000, while a regular gasoline car could reach the $25,000- $26,000 range. Pricing Delusion Rob Arnott has attacked Tesla in the past by stating that “The electric vehicle industry, with its astronomical growth in market-cap over the 12 months ending January 31, 2021, is a prime example of a big market delusion.” In a co-authored paper earlier this year, Arnott said, “At that market capitalization, Tesla accounted for about 75% of the total EV group’s market value and 35% of the market value of the entire auto industry.” “Such an immense market capitalization makes sense only if the expectation is that Tesla will come to dominate the entire auto industry, not just the EV market.” According to MarketWatch, Tesla shares closed up 1.7% to nearly $752 on the event’s day, while “Year-to-date, Tesla shares are up about 6.5%, versus a 743% rally in 2020, and a 25% gain in 2019.” Tesla is part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders’ families. Updated on Sep 23, 2021, 9:31 am (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});.....»»

Category: blogSource: valuewalk3 hr. 28 min. ago

Tesla Bull Cathie Wood Says There"s No Bubble, 2008-09 Debacle Has Put "Fear" In Investors — And More Key Takeaways From Morningstar Appearance

Popular money manager Cathie Wood on Wednesday defended her bet on electric vehicle maker Tesla Inc (NASDAQ: TSLA) and said she believed that the stock market is not in a bubble. read more.....»»

Category: blogSource: benzinga6 hr. 28 min. ago

Nio Said To Delay Unveiling Of ES8, Nio House In Norway By A Week

Chinese electric vehicle maker Nio Inc. (NYSE: NIO) is delaying the official launch of the ES8 SUV and the opening of the first overseas Nio House in Norway by a week, cnEVpost reported Wednesday......»»

Category: blogSource: benzinga8 hr. 28 min. ago

Three Themes Coalescing – Crescat Capital

Crescat Capital’s commentary for the month of September 2021, discussing the three themes coalescing. Q2 2021 hedge fund letters, conferences and more Dear Investors: Three Themes Coalescing With unsustainable imbalances in the global economy and financial markets today, we see unprecedented opportunities to grow and protect capital in both the near and long term. Crescat […] Crescat Capital’s commentary for the month of September 2021, discussing the three themes coalescing. 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); Q2 2021 hedge fund letters, conferences and more Dear Investors: Three Themes Coalescing With unsustainable imbalances in the global economy and financial markets today, we see unprecedented opportunities to grow and protect capital in both the near and long term. Crescat is focused on investment strategies that offer uncommon value and appreciation potential. We believe that all of Crescat’s strategies offer an incredible entry point today based on the firm’s three core macro themes: China credit collapse Record overvalued US equity market top Flight to safety into deeply undervalued gold, silver, and precious metals miners We have researched and written extensively about these themes over the last several years in our investor letters. In our strong view, these are the three biggest macro imbalances and investing opportunities in the world today. The three themes are coalescing at this very moment before the world’s eyes in a likely financial market collision and Great Rotation. We believe our portfolios will be the beneficiary. Our positioning is contrary to many common investment portfolios in the world today. We think too many are over-weighted in extremely overvalued US growth stocks and FAAMG. Most are unprepared for a China monetary collapse or a US stock market downturn. We think too few are positioned for the inevitable stagflation that our models suggest is ahead. As value investors, we are comfortable accepting a reasonable amount of risk to realize the strong returns that are possible from our macro themes and valuation models. Our investment principles and models give us the confidence that the intrinsic value of our portfolios is significantly greater than the current market price at any given time. The combination of already substantial rising inflation in the US along with a China credit collapse, just as the Fed is attempting to taper, is the catalyst for all three of our themes to begin unfolding now. We are headed for a major shake-up in the world’s financial markets at a time of both historic global debt-to-GDP imbalances and record central bank money printing. A Value Approach Our stance is bold. It is highly analytical, valuation-based, and macro driven. As such we are willing to withstand a moderate amount of volatility as markets undergo a re-pricing to realize the ultimate capital appreciation that is attainable from our views. The confidence in our value-based investment process is what gives us the conviction to withstand higher volatility than the average fund manager. Our investment process uses equity and macro models to ensure that the intrinsic value of our portfolios, through discounted cash flow and relative-value methodologies, is always substantially greater than where the market is pricing them today. It is important that Crescat clients embrace a similar value-oriented and long-term mindset to have the confidence that short-term setbacks in Crescat’s strategies are not a permanent loss of capital. The market price of Crescat’s activist long precious metals holdings has fallen in August and September month to date, affecting the long side of all the firm’s strategies. We think this is a mere short-term pullback that presents an incredible buying opportunity. We have the utmost confidence that these positions can deliver extraordinary long-term gains over the next three to five years based on our valuation approach. We have an extensive model to value these holdings based on conservative assumptions. We believe our portfolio of 90+ activist precious metals companies is worth 11 times where the market is valuing them today. That is at the current gold price. They are worth even more than that in a significantly rising new gold and silver bull market that our macro models are forecasting. Pullbacks are a necessary part of the path to delivering substantial long-term returns that more than compensate for the risk. It is the macro imbalances that allow us to enter long positions cheaply and short positions dearly to ultimately deliver outsized appreciation. As value investors, we believe short-term setbacks in Crescat’s strategies offer great opportunities for both new and existing investors to deploy capital. We are firmly positioned in a diversified deep-value portfolio of the most viable new gold and silver deposits on the planet. We own these companies early in what is likely to be a long-term industry cycle for precious metals mining after a decade long bear market. Our companies hold over 300 million target gold equivalent ounces. While the world has largely shunned gold mining stocks since their last major bull market that ended in 2011, in the past year and a half, we have been busy doing private placements to fund the world’s most viable new exploration projects, thereby acquiring gold and silver for literally pennies on the dollar ahead of what we believe will be a new M&A cycle for the mining industry. We very strongly believe that the recent selloff in precious metals, due to Fed taper concerns, is way overdone and that our strategies are poised for a major turn back up in the near term. Our gold and silver holdings have improved over the last two days, and hopefully, it is the turn already. Buy the Dip in Precious Metals The pullback in Crescat’s performance over the past two months, including September month to date, has been almost entirely attributable to our long precious metals positions across all strategies. It is important to understand that these positions were also big winners for us in the prior year through July 2021. The Crescat Precious Metals Fund, our newest fund that is solely focused on this theme, delivered a 235% net return through July in a moderately down gold and silver market. That was the first 12-month period of this fund. Imagine what we should be able to do in a bull market for precious metals. Our precious metals stocks are ultra-deep value positions with incredible appreciation potential still ahead thanks to the expertise of Quinton Hennigh, PhD, Crescat’s Geologic and Technical Director, and his 30+ years of experience in the gold mining exploration industry. The last two months’ sell-off in gold and silver should mark the recent bottom or very close to it. March 2020 was what we believe was the primary bottom of what was a 10-year bear market for junior gold mining stocks. The majors have left exploration to the juniors, so these are the companies that control the world’s next big high-grade gold deposits after a decade of underinvestment in exploration and development. The fact that gold along with our mining portfolios have been catching a safe-haven bid in the market in the last two days as the China Evergrande collapse has caught the world’s attention is phenomenal! This is exactly how a safe-haven currency and the best new gold and silver deposits on the planet should act as a renewed, sober financial order of the world that should emerge as China and the US stock market go into a structural downturn if not outright meltdown. China’s "Mises Moment" The massive US$300 billion China Evergrande collapse feeds into the much bigger $52 trillion Chinese banking system. The latter in our analysis is a phony financial accounting that we can only liken to the largest Ponzi scheme in financial world history. Wall Street came out in force today trying to calm its clients by saying that Evergrande is not China’s Lehman moment. We agree, it is not. It is much bigger than that. The scale of China’s credit bubble is unimaginable. It is 4.5 times the banking bubble in the US ahead of the Global Financial Crisis in absolute as well as relative to GDP terms! US banks were only a US$11 trillion asset bubble at the time when the US GDP was at about the same level as China today. It is not even a Minsky moment. We think China is about to face what we would call a “Mises moment”. China’s unsustainable world-record credit expansion has simply gone on far too long already to where they have only one alternative to reconcile it. All paths lead to a massive currency devaluation. Ludwig von Mises, one of the venerated founders of the Austrian economics school, describes it like this: “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” We think most of the financial world is not prepared at all for a China currency collapse. In our global macro fund, we are positioned for a substantial China yuan devaluation and possible de-pegging of the Hong Kong dollar. The latter is an extremely cheap put option. The yuan collapse is inevitable in our view. We have been writing about it for years and believe it is highly prudent to be positioned now. We hold an asymmetric trade with capped downside and large uncapped upside where we are long the dollar and short China’s two primary currencies, the yuan and Hong Kong dollar, through USDCNH and USDHKD call options with tier-1 US bank counterparties. US Stock Market Top In our analysis, China’s financial woes will absolutely be contagious with the US and the world. It is already happening. There is a strong chance that the US equity market has already topped out as of Sep 2 on both the S&P 500 large cap index and the Wilshire 5000 total market index. This has been arguably the most speculative US stock market in history with the highest valuation multiples to underlying fundamentals. In our strong view, there is much downside ahead for broad US stocks. We are determined to capitalize on the equity downturn with overvalued US short positions based on our equity models in our global macro and long/short funds. US stock and credit market’s historic valuations are compliments of rampant speculation underwritten by the Federal Reserve. These asset bubbles are ripe for bursting. The catalyst is the dual combination of rising inflation in the US and a credit crisis in China. We think most investment managers, including hedge funds, are afraid to short stocks and will be caught wrongfooted. Our macro and equity models give us the conviction to be short today. Our firm has an excellent track record of protecting capital during market downturns via our short positions. See our performance reports which show Crescat’s negative and low “downside capture ratio” versus the market in our global macro and long/short hedge funds respectively compared to the S&P 500 and other hedge funds over the long history of these two strategies. Crescat Global Macro’s negative downside capture ratio since inception means that on average it has made money historically when both the market and the hedge fund benchmark has been down. In fact, both funds were up substantially in March 2020, the month of the Covid crash. Gold Wins Whether Safe-Haven Flight or Inflation Hedge On China’s woes, gold should be getting the monetary metal safe-haven bid even though ultimately it is the inflation protection buying on the back of a fiat currency war that makes gold the most attractive to us. When the Fed acts with new measures to counter the strong dollar vs. yuan that would otherwise crimp the US economy, that is when precious metals should go ballistic. We need to be positioned for all of that now, and we are. The Fed is expected to announce the taper tomorrow. A fully committed taper announcement would likely only further catalyze China’s credit collapse and the US equity downturn in our opinion. That is a possibility, but we think a soft taper announcement with a lot of hedging language given China and the potential contagion effects is a more likely event. It still should not stop the US equity market downturn, and it will do nothing to help China. If it is a hard taper, it is just game-on even more so for our equity short positions and China yuan puts. Regarding precious metals, the odds are that gold has already fully priced in the taper based on its pullback over the last two months. If the Fed gives us the “soft taper”, it should allow gold to catch a huge bid and be off to the races. Current Inflation Spike Already Rivals Stagflationary 1973 and 1980 The US Consumer Price Index has risen from 0.3% annualized to 5.3% over just the last 15 months. The last two times we saw this big of a rise over this short of a time were in 1973 and 1980, the two most notorious episodes of stagflation and rising gold prices in US history. Just like in the 1970s, policy makers are trying to tell us not to worry because inflation is “transitory”. But just as then, there is a host of “non-transitory” drivers that include an incipient wage-price spiral, the lag-effect of rents to already substantially higher housing prices, global supply chain shocks from Western trade disintegration with China, and highly probable ongoing deficit spending and debt monetization in the US as far as the eye can see. The big difference between today and the 1970s stagflation is that the Fed has not done anything to fight rising inflationary pressures but instead has done everything to aid and abet them. For instance, from 1972 to 1973, the Fed had already raised its funds rate from 3.5% to 10.8%. And, from 1976 to 1980, it raised the rate from 4.7% to 17.6%. In contrast today, the Fed has kept the funds rate at 0% for the last 16 months and engaged in $4.3 trillion of quantitative easing over the last 18 months monetizing 88% of $4.9 trillion in new debt taken on by the US Treasury over the same time. Fed officials must be looking at this data and internally freaking out. That is why they are probably seriously considering tapering. Stagflation When monetary policy becomes truly extreme, like it was when the US abandoned the gold standard, for instance, we can get both inflation and a stock market crash at the same time. 1973-74 was the prime example. Gold stocks went up 5x in just two years while the S&P 500 was down 50%. At the same time, the popular but overvalued Nifty Fifty large cap growth stocks went down substantially more. Only those alive during the 1970s with money invested in the stock market truly know how shocking and substantial such a crisis can be. It could have been devasting or glorious depending on how one was invested. Gold Launches as Tech Busts Even in less extreme monetary policy situations, gold stocks can go up while widely-held overvalued equities collapse. Late 2000 through 2002 was a perfect example. Then large cap growth and tech stocks were being decimated at the same time as gold stocks began what would ultimately become a ten-year bull market albeit with a significant selloff in late 2008. These two examples are the types of markets for both gold and broad US stocks that we envision over the next two years. Gold Stocks In The Great Depression The Great Depression is yet another example of how gold and gold stocks can perform versus stocks at large in the most serious of financial times. Homestake Mining was the largest precious metals miner of the time. Fed Policy Error Fed watchers are rightly concerned about a forthcoming policy error, but the truth is that the accumulation of global economic and market imbalances and inflationary pressures after many years of taking the path of least resistance with quantitative easing and low interest rate policy has already been the gigantic policy mistake. These misjudgments are not isolated to domestic affairs but have aided and abetted massive credit bubbles in other countries too, particularly China. We believe it is only a matter of time before investors begin stampeding out of S&P 500 index funds and FAAMG stocks and into tangible assets. We think this is the time to get ahead of the curve. As Warren Buffett’s mentor, the legendary Ben Graham, said: “In the short run, the market is a voting machine that requires only money, not intelligence or emotional stability, but in the long run it’s a weighing machine.” We think a little bit of intelligence and a lot of emotional stability could go a long way right now in selling hyper-overvalued stocks at large and buying deeply undervalued gold stocks. We strongly believe the opportunity to put money to work on the recent pullback in Crescat’s strategies is phenomenal today. Performance Download PDF Version Sincerely, Kevin C. Smith, CFA Member & Chief Investment Officer Tavi Costa Member & Portfolio Manager For more information including how to invest, please contact: Marek Iwahashi Client Service Associate miwahashi@crescat.net 303-271-9997 Cassie Fischer Client Service Associate cfischer@crescat.net (303) 350-4000 Linda Carleu Smith, CPA Member & COO lsmith@crescat.net (303) 228-7371 © 2021 Crescat Capital LLC Updated on Sep 22, 2021, 11:28 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});.....»»

Category: blogSource: valuewalk12 hr. 28 min. ago

Rescued by the Fed Again?

S&P 500 recovered only to dive again – carving out a base? The bulls are attempting to, but neither value, nor tech, nor the credit markets are convincing. The dust is settling though, and the bears are equally in need of a fresh reason to sell – the intraday tug of war is entirely reasonable […] S&P 500 recovered only to dive again – carving out a base? The bulls are attempting to, but neither value, nor tech, nor the credit markets are convincing. The dust is settling though, and the bears are equally in need of a fresh reason to sell – the intraday tug of war is entirely reasonable as Evergrande failed to spook the markets more. Just wait for what happens when the markets come face to face with another unacknowledged event of this magnitude. In our era, it‘s about the contagion effect, manic-depressive market psychology, and uncertainty of the impact. 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 Our Activist Investing Case Study! Get the entire 10-part series on our in-depth study on activist investing in PDF. Save it to your desktop, read it on your tablet, or print it out to read anywhere! Sign up below! (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q2 2021 hedge fund letters, conferences and more It‘s not only about China real estate cooling down, spilling over to Hong Kong. Wtll the House approval on the bill to suspend fresh borrowing obstacles and avoid a partial shutdown do? What would the Senate say – and then everyone as the tax tsunami keeps approaching? Global liquidity isn‘t rising after all either. Fed taper is a side show, but still one that too many are glued to. The dollar would suffer if it doesn‘t materialize later today – and it won‘t be announced, which would make precious metals rejoice. Back to stocks, these are also likely to welcome no taper. The Fed has been already tightening (which means these days it was decreasing the pace of expansion) through the back door, bringing down inflation expectations in spite of the real world input costs, shipping rates and frail supply chains challenges on top of the job market issues. Transitory inflation is still the mainstream thesis – the shift to real assets will become more accentuated once the realization of a higher and entrenched inflation arrives. And it‘s not about real estate and owners‘ equivalent rent either. Commodities did welcome yesterday‘s reprieve, and Treasury yields are unlikely to clobber them the way perceived systemic risks could (did). In a decelerating real economy faced with numerous deflationary pressures, the slow and steady rising yields phase, is deferred for now. And when these do rise again, it may or may not be about returning economic growth, but forced by the systemic realities. Remember that rates are very low by historic comparisons, and the resilence to absorb a modest rise (think 10-year more than a bit above 2%) won‘t be there without consequences. Cashing in on the S&P 500 short profits yesterday, was reasonable from the total portfolio risk point of view (did I say a fresh high was reached?). Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook Daily hesitation followed by more downside, but volume is decreasing – stocks look readying an upswing attempt. Credit Markets High yield corporate bonds merely kept opening gains – there is still hesitation, and the window of opportunity for the bulls is narrow. Gold, Silver and Miners Positive price action of gold, joined by silver – the waiting miners reveal that a little consolidation is likely before the Fed speaks. Crude Oil Oil stocks show that the appetite for oil might be returning, and that‘s confirmed by the volume examination. Commodities such as oil and copper stand to benefit from calming the Evergrande and central bank jitters. Copper Copper gave up opening losses only to rebound before the closing bell. Volume could have been larger, but the beaten down red metal can keep rebounding at its own pace – the smaller volume is an indication it won‘t be a one-way path. Bitcoin and Ethereum Bitcoin and Ethereum haven‘t really recovered from the selloff, and the bears are holding the upper hand now. Summary My yesterday‘s question „Is the selling over, is it not?“ has the same answer „Still inconclusive, but time for the bears is running short.“ It looks like the markets are positioning for a return to risk-on based on today‘s FOMC, which is what quite a few would like to take as an opportunity to sell into strength. The point is the Fed won‘t surprise today, and the price gyrations are likely to continue, albeit at a lesser magnitude. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals. Thank you, Monica Kingsley Stock Trading Signals Gold Trading Signals Oil Trading Signals Copper Trading Signals Bitcoin Trading Signals www.monicakingsley.co mk@monicakingsley.co All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice. Updated on Sep 22, 2021, 9:27 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});.....»»

Category: blogSource: valuewalk15 hr. 0 min. ago

Exro: An Opportunity In Electrified Mobility

“We want to be the agnostic arms merchant to the fiber optic industry” – Kevin Kalkhoven of Uniphase to David Schneider in 1996 Q2 2021 hedge fund letters, conferences and more Investors seek similar situation for the electrified mobility industry Form Factors for Electrified Mobility Form factors include buses, motorcycles, snowmobiles, off-road vehicles/trucks from small […] “We want to be the agnostic arms merchant to the fiber optic industry” – Kevin Kalkhoven of Uniphase to David Schneider in 1996 .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 Ray Dalio Series in PDF Get the entire 10-part series on Ray Dalio 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); Q2 2021 hedge fund letters, conferences and more Investors seek similar situation for the electrified mobility industry Form Factors for Electrified Mobility Form factors include buses, motorcycles, snowmobiles, off-road vehicles/trucks from small to very large passenger vehicles and boats. Highlights of Company Capabilities Its technology advantages: Agnostic to battery chemistry, work for all segments (buses, RVs, motorcycles, snowmobiles, off-road vehicles/trucks and boats) Implementation can reduce number of parts in the vehicle, save money, reduce weight, improve reliability Increase efficiency of motor/battery system for better driving performance Increase miles per charge regardless of form factor $ content per vehicle correlates with size of vehicle Large and growing patent portfolio Implementation of their technology by one player in a segment would create a step function improvement in the vehicle, forcing competitors to adopt their technology or cobble together alternative Company Leadership – Pedigrees from GE Motor, International Rectifier, Siemens, Ballard Power, Ford, Audi, Volkswagen, GM, Vision Marine (electric boats) First commercial revenues likely early 2012 with motorcycle form factor First pure play creating an “ecosystem” of electrification subsystems that work together Company Financials Method for guesstimate of future numbers: Estimate gross profit per unit encompassing all form factors from electric bike to trucks Assume outsourced manufacturing for scale, subtract a high amount for corporate expenses, apply a tax rate and assume we are looking at 2025 Assume free cashflow = net income annually. * Far left column assumes units sold globally, company has enough cash for next 18 months Exro, A Pioneer In Mobile Electrification Exro Technologies Inc, traded in Canada as TSE:EXRO and bulletin board in US as OTCMKTS:EXROF with a market cap of US $310M The product is the coil-driver Its technology Continual optimization of the relationship between torque and speed of the motor Improves efficiency of the system to where in a multi-motor system a motor might be eliminated completely Replacement of moving parts with electronics reduces weight and increases reliability- perfect example :  Why the Porsche Taycan's Two-Speed Gearbox Is Such a Big Deal | WIRED Partnerships Land Motorcycles: for next generation models Zero Motorcycles: for next generation models (Zero is also partner of Polaris for next generation of Polaris electrified vehicles. Templar: Boating application Aurora Powertrains: Snowmobiles Clean Seed Capital: Farm Equipment Sea Electric: Fleet (truck) Vehicles Heinzmann: Auto, truck, e-bike motors Heinzmann is a tier 1 auto supplier Vicinity Motor: Buses Potencia Industrial (Mexico): Industrial and automotive Linimar Corp: Auto parts Advantages Of Exro Technologies From the point of zero motion to moving, you need torque As you get closer to cruising speed, the need for torque drops and you just need to maintain that speed. Encounter a hill, you need torque again. Exro has created a system that manages that relationship between torque and speed This optimizes torque and speed to maximize the efficiency of the motor, and in turn reduces the needs on the battery. Using the coil driver replacesmechanical parts, reduces weight of the vehicle, increases miles/charge, reduces cost Lighter vehicle = more range, better performance Because Exro reduces the cost of the finished product, they have a pricing umbrella that should give the company premium margins in an outsourced manufacturing model How Does The Coil Driver Work? The product consists of electronics in a box that is software driven. They change the coil configuration of the motor on the fly, with the inputs based on vehicle weight, grade of the road, and need for acceleration. The technology has the greatest impact on the largest vehicles and/or those dealing with a terrain such as hills and valleys, and situations with the biggest torque ranges. This makes sense, a reason why they are working with an ATV and snowmobile companies. Another great example for Exro technology is buses. The weight varies with number of passengers, lots of starts and stops, and have to navigate with slope and terrain. Garbage trucks and UPS type of delivery vehicles also. Additional Functionality Exro received new patents in July, 2021 for a new capability Electric vehicles (EVs) require 3 different types of power electronics to power the vehicle in motion and charge the batteries: A motor drive, on-board charger and external DC fast charger. The coil driver can replace all 3 components, reducing cost and complexity of deploying EV’s and simplifying the required infrastructure for charging. Just another example of reducing complexity of the vehicle, pulling out costs. Business Potential Business potential: No partner company has gotten an exclusive deal with EXRO – example they are working with 2 motorcycle companies (ZERO Motorcycles and Land Motorcycles). In an interview with CEO of Polaris (2’50” of the below link), he mentioned partnership with Zero Motorcycles. Anybody make the connection of where ZERO is getting their next generation technology from? Apparently not. Will It Sell? You are in the market for an electric car, boat, or motorcycle. You are having a tough time deciding between two brands, one with Exro, another without. With Exro inside, you realize: 20% more miles per charge, charge at home most of the time, fewer parts so more reliable. – clear competitive advantage. When the adoption of the technology gains traction which in my opinion will be mid 2022, investors won’t care if the hockey stick of revenue and earnings takes off in 2024 or even 2025. Hurdles To Adoption And Commercialization Coil Driver needs be perfectly connected to the motor, need to test, test, and test. New Kid on the block intersecting with big fish with “not invented here” syndrome. OEM’s and Tier 1 suppliers may have existing multi-year supplier deals that need to expire before introducing EXRO application First commercialization will be with nimbler OEM’s that produce motorcycle, off road vehicles. Established Automotive OEM’s due to supply chain logistics are already locking down model year ‘23, so even if an OEM signed with Exro tomorrow, earliest we would see Exro in a major brand vehicle would be ‘24 models. But, I would not be surprised to see a major name come onboard in the next 6-9 months. Investment Summary The elimination of heavy moving parts creates instant cost savings for an OEM. This translates to an increase in overall reliability, and should an issue arrive with the Exro component, it can be easily accessed and/or diagnosed electronically. In one video on YouTube, an electric bus company said they will be trialing EXRO at the end of this year and they expect a 20-30% increase in miles per charge. Lithium: With the world fixated on access to lithium and as the price of lithium increases, there will be more focus on optimizing the electrical system. As the lithium price rises, a technology that allows for fewer cells/battery pack should be welcomed. Charging Stations: Companies are building out recharging stations all over the world. Why not do it at home? With Exro built into the vehicle, you will be able to plug your vehicle into a regular 115v outlet. With the increased range of the vehicle between charges, you won’t need to go to an outside recharge station unless driving a very long distance. A great selling point for an automotive OEM. Company Financials 2025 *Far left column assumes units sold globally, company has enough cash for next 18 months Based on $662 million net income on 3 million units, 130 million shares = $5.09 in EPS. More conservatively cut it down to $4.00 in EPS, push it out to 2026 earnings. Current stock price = $2.25 and Exro has enough cash for 18-24 months. News of an OEM deal could move the decimal point on the stock price at which point I would hope they would issue 2-3 million new shares. That would be all they need until the cash starts to roll in. But Exro could get cash up front in signing a major OEM on a non-exclusive license deal, reducing the need for any equity offering. Battery Control System (BCS) Exro also has a Battery Control System for use when battery packs reach the end of their life. They optimize the batteries for use as energy storage systems. Energy storage system can be grid connected and/or used as a backup power supply for business and homes. They are targeting commercial launch is 2022. They are doing a demo at the North American Battery Show on 9/14 Incorporation of any upside from the BCS is icing on an already target rich cake. 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Category: blogSource: valuewalk15 hr. 0 min. ago