Written by Gary
U.S. solar capacity passes 100 gigawatts after strong first quarter, but Covid challenges persist (SPY – 0.3%). U.S. jobless claims rise unexpectedly in latest week.
Here is the current market situation from CNN Money | |
 | European markets are mixed. The DAX is higher by 0.06%, while the CAC 40 is leading the FTSE 100 lower. They are down 0.43% and 0.07% respectively. |
What Is Moving the Markets
| Here are the headlines moving the markets. | |
 | The Best Oil Stocks As Prices ReboundOil prices rallied to their highest levels two and a half years after OPEC+ recently agreed to extend its historic production cuts. On Friday, WTI was trading at $70.91 per barrel while Brent crude was changing hands at $72.69. levels they last touched in 2018. By Wednesday morning WTI was trading above $72 and Brent had climbed above $74. Beginning on May 1, OPEC cut production by 9.7 million barrels per day, with the cuts scheduled to start declining beginning July 1. OPEC+ now says July’s production cut will be 9.6 million bpd after Mexico said |
| Bankruptcy: A Cheap Way Out Of Trouble For Oil CompaniesBack in 2013, the worlds largest private-sector coal company, Peabody Energy (NYSE:BTU), pulled off a new trick from the ever-growing trove of corporate subterfuge. Peabody created a new entity that it named Patriot Coal and moved more than $2 billion in retirement and environmental obligations into the new subsidiary. Patriot Coal, shortly thereafter, filed for bankruptcy, making Peabody the energy sectors pioneer of this new type of malfeasance. And now a host of oil companies have borrowed a leaf from Peabodys playbook with |
| Biden Asks Putin How He Would Like Ransomware Attack On Russian PipelinesBiden Asks Putin About Oil Pipeline Ransomware Biden Asks Putin How He Would Like Ransomware Attack On Russian Pipelines Biden Suggests to Putin that Certain Critical Infrastructure be Offlimits to Cyberattackers U.S. President Joe Biden on Wednesday asked Russian President Vladimir Putin how he would feel if someone carried out a ransomware attack on Russian oil pipelines. The question was asked during a face-to-face summit on Wednesday, and comes just weeks after a Russian hacker group known as DarkSide attacked one of the United States |
| Oman Is Vital To Iran And Chinas Energy AgendaAlthough Omans fiscal breakeven price per barrel of Brent crude oil has fallen to US$61 this year, the fact that it was over US$90 on average for much of the past decade has resulted in long-term financial problems that need quick solutions. Even before its dire economic situation was made worse by another Saudi-instigated oil price war in 2020, the Sultanate had been facing a budget deficit for that year alone of at least 18 percent of GDP and budget deficits averaging at least 15 percent per year over the next five years. Oman has very |
| Energy Transition Fad Will Send Oil Sky HighIronically, the wave of ESG investing in global energy markets may lead to much higher oil prices as a serious lack of capital expenditure on new fossil fuels dries up just as demand for crude continues to grow Pressure from investors, tighter emissions regulation from governments, and public protests against their business have become more or less the new normal for oil companies. What the worldor at least the most affluent parts of itseem to want from the oil industry is to stop being the oil industry. Many investors are buying |
| India’s Fuel Demand Is RecoveringIndia’s fuel demand jumped by 13 percent in the first two weeks of June, for a first monthly rise since March, suggesting that the worst of the impact of the second COVID wave has peaked and consumption is rebounding. Sales of diesel, the most used road fuel in the world’s third-largest importer, and gasoline sales have rebounded so far this month, sources with knowledge of preliminary data from the biggest fuel retailers in India told Bloomberg on Wednesday. India has started to ease some restrictions as daily COVID cases have been falling in |
| 5 things to know before the stock market opens ThursdayDow futures slipped Thursday after the 30-stock average closed off 265 points as the Fed moved up its interest rate hike timetable. |
| The fast-spreading delta Covid variant could have different symptoms, experts sayThe Covid delta variant that was originally discovered in India is now spreading around the world. |
| U.S. solar capacity passes 100 gigawatts after strong first quarter, but Covid challenges persistThe sector faces some potential headwinds going forward. |
| KLM will resume most routes this year as vaccine rollouts boost travel, CEO saysDutch airline KLM plans to reinstate almost all of its international routes this year as vaccine rollouts offer hopes of reviving the travel industry. |
| Vaccination is key to bringing tourism back from the brink, industry leaders sayGlobal travel and tourism took a massive hit last year as the coronavirus pandemic shut down borders and suspended most international travel. |
| Jim Cramer says investors should ‘stay the course’ after Fed Chair Powell’s policy outlook“I think you should simply stay the course, maybe using this decline to buy some high-quality stocks, especially industrials,” CNBC’s Jim Cramer said Wednesday. |
| Albertsons CEO says customers have so far been able to handle higher inflation“We haven’t seen the consumer affected yet by that level of inflation,” Albertsons CEO Vivek Sankaran told CNBC’s Jim Cramer. |
| CureVac shares tank 50% after preliminary data shows Covid vaccine is only 47% effectiveThe late-stage clinical trial found high prevalence of virus variants. |
| GM expects inflation, semiconductor shortage to add $3 billion in extra costs in second halfThe increased costs include a greater-than-expected impact from the parts shortage as well as rising commodity inflation costs of up to $2 billion. |
| Africa sees 44% spike in new Covid infections, 20% increase in deathsReports of new Covid cases have decreased in every region of the world except Africa, where weekly cases jumped 44% while fatalities rose 20%. |
| The pandemic made lifestyles more active, outdoor-focused, Dick’s Sporting Goods CEO Lauren Hobart saysThe retail chief said Wednesday that sales have persisted in popular pandemic categories like golfing and biking. |
| McDonald’s CEO says dine-in is here to stay despite online and drive-thru sales growthMcDonald’s CEO Chris Kempczinski said Wednesday that dine-in is here to stay, despite off-premise growth during the pandemic. |
| Patient receives first infusion of Biogen’s controversial Alzheimer’s drugA 70-year-old man from Rhode Island on Wednesday was the first to receive an infusion outside of a clinical trial of Biogen’s Alzheimer’s drug, Aduhelm. |
| SpaceX Ignored “Last Minute Warnings” From FAA About December Starship Launch That Ended In FlamesSpaceX Ignored “Last Minute Warnings” From FAA About December Starship Launch That Ended In Flames Elon Musk doesn’t play by the rules of public markets, nor does he play by the rules of the NHTSA. He also appears to be immune to any consequences from spineless regulators alike. So why is anyone surprised that Musk is openly skirting the suggestions of the FAA? That’s exactly what SpaceX did back in December. SpaceX “ignored at least two warnings from the Federal Aviation Administration that launching its first high-altitude Starship prototype last December would violate the company’s launch license” and wound up launching anyway, a new report from The Verge details. Even better is that SpaceX, while under investigation, turned around and “told the FAA that the agency’s software was a ‘source of frustration’ that has been ‘shown to be inaccurate at times or overly conservative,'” the report notes. The FAA wasn’t amused with Musk’s behavior, but – in keeping with the impotence of other regulators (i.e. the SEC and NHTSA) doesn’t appear to have done anything about it. Not only that, but SpaceX actually won a $2.9 billion contract to put NASA astronauts on a flight to the moon shortly thereafter. |
| We Are Still Talking About A Rate Hike In Over Two Years And $2 Trillion More In QEWe Are Still Talking About A Rate Hike In Over Two Years And $2 Trillion More In QE By Michael Every of Rabobank
FAIT, hope, and charity Yesterday’s Fed meeting saw the Fed’s FAIT (Flexible Average Inflation Targeting) tested. As Philip Marey notes in his coverage, the updated economic projections of FOMC participants showed upward revisions to GDP growth and the Fed’s favourite PCE (and core) inflation measures in 2021, but the revisions for 2022, 2023 were only minor, and longer run projections were unchanged. Nevertheless, the median rate projection for 2023 was revised upward by 50bp. The dot plot also shifted upward aggressively, not only implying two 25bp rate hikes before end-2023, but also getting closer to a rate hike in 2022. It takes only two more participants to shift toward a hike in 2022 to make it a split 9-9 committee. As a result, US 10-year Treasury yields spiked 10bp, and the dollar jumped, while equities initially wobbled ” then bounced, before closing slightly down. Oh ye of little FAIT! We are still talking about no rate hike for two and a half years, most probably; and more importantly, there won’t be any tapering of the $120bn of QE a month until œsubstantial further progress has been made toward the Fed’s maximum employment and price stability goals. What does œsubstantial furt … |
| David Tepper Says Oil Stocks Are The “Cheapest Equities By Every Measure”David Tepper Says Oil Stocks Are The “Cheapest Equities By Every Measure” David Tepper loves the “much loathed” world of oil stocks, he revealed this week. At the Robin Hood Investors Conference Wednesday, the billionaire told the audience that equities “were the place to be” with interest rates this low, emphasizing the FAANG stocks, according to Bloomberg. But he also said that oil stocks “are the cheapest equities by every measure because people hate them” and that he’s long “many of them”. The head of Appaloosa told the audience that Occidental Petroleum Corp. was “incredibly cheap” and had the potential to climb from current levels around $30 to about $45 or $50 per share. He also said that the day Exxon added activist investors to its board was the day to buy oil stocks. He said the addition signaled that drilling “will eventually decrease over time” and supply will follow.
Tepper also said Amazon would be a great place to park his money over the next decade and that he didn’t think the Fed would tape … |
| Futures Rebound As Markets Fade Hawkish Fed SurpriseFutures Rebound As Markets Fade Hawkish Fed Surprise Well, the Fed blinked: with virtually nobody expecting a hawkish surprise from Powell on Wednesday, the Fed chair shocked the world and sparked a bond rout and dollar surge when he unveiled that the median Fed dot now showed not one but two rate hikes in 2023…
… confirming that inflation is indeed non-transitory (at least until we get another major deflationary burst). And yet, despite the 4th largest bond selloff in 5Y TSYs since 2011… |
| Cryptoassets: Fears that investors are taking too many risksA shrinking proportion of buyers see it as a gamble, but the regulator warns they could lose the lot. |
| Travel industry anger as Germans flock to MajorcaThe bosses of two travel firms say the Balearic Islands should be on the green list for safe travel. |
| Halfords warns of bike supply challenges as cycle boom continuesThe retailer says sales have surged amid travel restrictions but lockdowns have hampered manufacturers. |
| Tycoon Adani loses $9 billion in three days in worst wealth routThe 58-year-old tycoon lost more money this week than anyone else in the world, with his personal fortune tumbling by about $9 billion to $67.6 billion, according to the Bloomberg Billionaires Index based on Wednesday closing prices. |
| Top 10 smallcap stocks that mutual funds are bullish onAs the broader market continues to outperform, smallcap stocks are gathering all the attention in the market. The Nifty Smallcap index is up 120 per cent in the last one year while Nifty has given less than 60 per cent returns during the period. The smallcap index has run up for 8 consecutive months without any pullback in between. Here is a list of top 10 smallcap stocks that mutual funds bought in May. |
| Fed surprise may herald new era of Asian currency weakness‹Almost all developing Asian currencies were lower against the greenback after the Fed released forecasts that showed officials anticipate two interest-rate increases by the end of 2023, sooner than many thought. |
| Economic Report: U.S. jobless claims rise unexpectedly in latest weekInitial jobless claims rose 37,000 to 412, 000 in the week ended June 12, the Labor Department said Thursday. |
| Futures Movers: Oil prices pull back as Fed’s shift in tone lifts U.S. dollarOil futures edge lower Thursday, with the U.S. benchmark pulling back from its highest close in more than 2 1/2 years as the dollar strengthened in the wake of a hawkish shift in tone by the Federal Reserve. |
| Metals Stocks: Gold tumbles to under $1,800 an ounce after Fed ups inflation forecasts but signals higher interest ratesGold is facing the biggest one-day drop in five months, after a hawkish Fed surprise. But has the move gone too far? One analyst thinks so. |
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