01Jun2021 Market Close: At The End Of The Day There Was Little Movement In The Markets. But Oil Advanced To A Two Year High.

Lawmakers Are Firing Back At Fossil Fuel Divestors

As divestment from emissions-heavy fossil fuels and boycotting of the oil sector gain traction in both the public and private sector, a major backlash is brewing around the United States. Lawmakers in more than a dozen red states around the nation are attempting to push through laws that would pull funding from state-run and large financial institutions that take steps to decarbonize their own investment portfolios. In short, the message is simple: if you divest from coal and oil, we divest from you. While there are many economies

Oil Prices Hit 2-Year High

Oil prices hit their highest level in more than two years as OPEC+ agreed to maintain its production cut plans while demand projections continue to improve. – The average retail price for gasoline in the U.S. jumped above $3 per gallon last week, the highest price since 2014.- Memorial Day travel is expected to be 50% higher than the same weekend in 2020.- California saw the highest prices at over $4 per gallon, while Texas saw the lowest at $2.72. Market Movers- Pembina

Libyas Oil Sales Fell 36% In April As Production Declined

Libya generated total revenues from oil sales worth US$1.31 billion in April, the countrys National Oil Corporation (NOC) said on Tuesday in its regular update, which showed a 36-percent drop compared to March. Libyas revenues from sales of crude oil, gas, condensates, and petrochemical by-products stood at US$1.3 billion-plus more than 6.2 million euros, making the total sales worth US$1.307 billion, according to NOCs statement. In March, Libya had generated as much as US$2.052 billion in revenues from crude oil, gas, condensates,

Mumbai Gasoline Prices Now 2x More Expensive Than New York City

Citizens of Mumbai now pay twice as much for gasoline as a citizen of New York City, Bloomberg has reported, with prices at the pump up 11 percent since the start of the year in Indias most populous city. The price rise, however, has not got much to do with the latest trends in international oil prices, according to the report. It rather has to do with a series of increases in the sales tax, which, Bloomberg says, the government applied in an attempt to prop up public finances. Since 2013, the sales tax on gasoline and diesel has risen almost

IEA Backpeddles, Says Oil Demand Will Soon Reach Pre-Crisis Levels

Oil demand is recovering faster than previously expected, and unless OPEC+ puts additional barrels on the market on top of the plans to restore 2 million barrels per day (bpd) by July, oil prices will be heading higher as the gap will widen, the Executive Director of the International Energy Agency, Fatih Birol, told Bloomberg Television in an interview on Tuesday. According to Birol, global oil demand could return to the pre-crisis levels of 2019 as soon as in a years time. Demand in one year or so may well come back to the levels

Exxon Quits Deepwater Oil Project In Ghana

Exxon is leaving a deepwater prospect in Ghana after seismic work failed to produce good enough results. Bloomberg reports that the supermajor relinquished its whole stake in the Deepwater Cape Three Point block and resigned as the operator of the block. Bloomberg cited sources as saying that the work Exxon had performed since its assumption of the block’s operatorship consisted of processing some 2,200 square kilometers of seismic data. What it did not involve, according to the sources, was drilling any exploration wells. Ghana is one of the newcomers

U.S. begins study testing mix-and-match Covid vaccine booster shots

The trial will include about 150 adults who have been fully vaccinated with the Johnson & Johnson, Moderna or Pfizer Covid vaccines.

World economic leaders call for $50 billion from wealthy nations to help stop Covid pandemic

World economic leaders estimated that $50 billion will generate about $9 trillion in global output by 2025 by accelerating an end to the pandemic.

AMC’s ‘apes’ gave it a lifeline. Now, its CEO wants to use the meme frenzy as a springboard for growth

AMC has pivoted back to an offensive strategy on a bet that its retail investors will stick with the company long enough for it to recoup its pandemic losses.

Biden’s proposed 39.6% top tax rate would apply at these income levels

President Biden’s proposed 39.6% top marginal income tax rate would affect single and married filers with over $452,700 and $509,300 of income, respectively.

Mudrick Capital bought 8.5 million shares of AMC, then reportedly sold them off for a profit

Mudrick Capital sold all of its stock in AMC Entertainment, according to a new report from Bloomberg News.

Cirque du Soleil ticket sales are double digits above pre-pandemic levels, CEO says

Cirque du Soleil sees double-digit growth in ticket sales as Las Vegas shows begin to return at the end of the month, CEO tells CNBC.

Stocks making the biggest moves midday: Devon Energy, Cloudera, AMC and more

These are the stocks posting the largest moves in midday trading on Tuesday.

Do vaccine incentives work? Krispy Kreme says giving away 1.5 million free doughnuts has helped

What will it take to get more people vaccinated? From free doughnuts to a million-dollar state lottery, companies and community groups are trying it all.

More than 50% of Americans got at least one Covid vaccine shot as U.S. cases fall further

More than 50% of the U.S. population has received at least one Covid vaccine shot, federal data shows, as nationwide case counts continue to fall.

Travel bookings bounce back as Hilton has best night since pandemic hit, CEO says

Hilton was nearly 93% occupied on the Saturday of Memorial Day weekend, making it the best day the company has had since the start of the pandemic, its CEO says.

E-Waste, shell company linked to $100 million New Jersey deli, announces reverse merger

A shell company, E-Waste, which is connected to the New Jersey deli own Hometown International, is doing a reverse merger.

U.S. air travel reaches pandemic high as peak season kicks off

Air traveler volumes reached pandemic highs over the weekend but demand was still below 2019 levels.

Movie theaters made a comeback over Memorial Day weekend, raking in nearly $100 million

Over the four-day Memorial Day weekend, domestic cinemas tallied nearly $100 million in ticket sales, the best performance since the start of the pandemic.

Nasdaq Dips, Russell Rips As Tail-Risk Insurance Costs Soar

Nasdaq Dips, Russell Rips As Tail-Risk Insurance Costs Soar

The month of June started with a bang for Small Caps and a whimper for Big-Tech as Russell 2000 handily outperformed (Dow managed a tiny gain) while Nasdaq and S&P were unable to close green…

WHO Switches To Greek Letters To Name Most Dangerous COVID Mutants

WHO Switches To Greek Letters To Name Most Dangerous COVID Mutants

In a decision that echos the WHO’s decision back in early 2020 to rename the novel coronavirus to “COVID-19”, the agency has decided to change the names of the most prominent mutant strains of the coronavirus to letters from the Greek alphabet.

Using letters like Alpha, Beta and Gamma (instead of B.1.1.7, B.1.351 and P.1) to refer to the variants will make it “easier and more practical” to discuss them with non-scientific audiences, the WHO said in a statement. COVID strains believed to be more infectious are deemed “of interest” and “of concern” by the WHO.

“While they have their advantages, these scientific names can be difficult to say and recall, and are prone to misreporting,” the WHO said in a statement.

A Margin Story: Fast Economic Growth Without Profits

A Margin Story: Fast Economic Growth Without Profits

By Joe Carson, former chief economist at Alliance Bernstein

In Q1 2021, the US economy registered double-digit annualized growth in nominal GDP, a rare occurrence. Yet, an even more rare event is that corporate operating profits did not increase in the quarter when GDP growth increased double-digits.

How can companies’ operating earnings be flat when nominal growth is booming? How does the GDP measure of operating square with S&P 500 firms reporting substantial gains in Q1, far exceeding analysts’ estimates?

GDP Growth & Operating Profits

The Bureau of Economic Analysis (BEA) reported that nominal GDP increased at an annual rate of 11% in Q1 2021. Since the Reagan boom of the early 1980s, the US only registered double-digit annualized quarterly growth eight times, not including Q1. Five of those occurred during the 1983-84 period of massive federal tax cuts and defense spending boom.

Rapid gains in GDP generate equally substantial increases in gross domestic income (GDI). GDI has two main components; personal income and corporate profits. BEA reported that Q1 gross domestic income (GDI) jumped 11.4% annualized in Q1, with personal income jumping 59% annualized (helped by record federal stimulus payments) while operating profits showed no gain.

A decline in operating margins helps explain the weak profit performance against a backdrop of rapid nominal growth. Factors that squeezed Q1 margins include private-sector wage and salary cost increasing faster than GDP …

“A Reset Is Required”: Why Morgan Stanley Sees Pain In The Next 6 Months

“A Reset Is Required”: Why Morgan Stanley Sees Pain In The Next 6 Months

In its mid-year outlook, published just two weeks ago, Morgan Stanley – while still sticking with an overall bullish outlook – argued that it’s “often better to travel than arrive.” After all, markets are discounting machines and often anticipate changing dynamics long before they become obvious. However, as the bank’s chief equity strategist Michael Wilson writes today, “eventually such changes do become obvious and priced, at which point a reset is required or evidence the higher expectations are not only achievable, but beatable.”

In many ways, Wilson writes, “this year represents such a period when last year’s extraordinary moves in stocks are justified by the fundamentals” and his V-shaped recovery call from last year is now the consensus. Actually, no – Wilson laments that in its eagerness to catch up, the consensus is now ahead of what Morgan Stanley thinks will occur over the next 12 months: “More specifically, post Q1 earnings results, bottom-up 2022 EPS estimates are now ahead of our top forecasts for the first time since the recovery began.”

To be sure, there is some fundamental justification for this euphoria: in Wilson’s review of past earnings surprises, he has never witnessed such a large beat rate over a four-quarter period and/or revisions to out-year forecasts (something we predicted would happen ahead of earnings in “Q1 Earnings Will Be Stellar, But Are Fully Priced-In And Only Guidance Will Matter”). And while the results over the past year have been very muc …

US Supreme Court rejects J&J talc cancer case appeal

The court declines to hear an appeal over a $2.1bn (£1.5bn) damages award.

Eurozone inflation up sharply as economies reopen

Inflation hit 2% in May as Covid restrictions were scaled back and energy prices climbed.

UK manufacturing growth at 30-year high, says PMI survey

The easing of lockdown rules unleashes pent-up demand, but some suppliers are struggling to keep up.

Lava IPO plan ready, firm dials up shareholders for approval

Phonemakers are expected to benefit from the PLI scheme, which offers 4-6% incentive for mobile manufacturers.

Bitcoin’s easing volatility sends bullish signal for some

The world’s largest cryptocurrency was little changed at $36,425 as of 6:45 a.m. in New York on Tuesday, following two straight sessions of gains.

US yield curve steepest in a week after manufacturing data

The steeper yield curve on Tuesday reflected expectations that the Federal Reserve would hold interest rates low for now, even as the economy recovers.

May 2021 ISM and Markit Manufacturing Surveys Continue To Show Strong Growth

Written by Steven Hansen

The ISM Manufacturing survey improved and remains in expansion. The Markit PMI manufacturing index improved and remains in expansion.

April 2021 Construction Spending Improves

Written by Steven Hansen

The headlines say construction spending marginally improved month-over-month. Our analysis shows the rolling averages improved.

The Margin: JAMA editor in chief steps down over tweet that questioned racism in medicine

The Journal of the American Medical Association drew outrage for tweeting ‘No physician is racist, so how can there be structural racism in health care?’