Demand Destruction Or Supply Destruction? March 22, 2022

Three suppliers, three "supply destruction" scenarios:

• US: government dis-incentivizing production at so many levels;
• Saudi Arabia: at war; enemy targeting oil facilities
• Russia: literally running out of storage -- will cut back on production

Cutting back on production due to lack of storage: Russia. Link here. Also, at Regina Leader-Post.

First group "financial / economic" indicators:

• 10-Year Treasury: link here. Yield at 2.355%.
  
• DXY: link here. 98.61.
  
• Silver: link here. $25.24.
• Gold: link here. $1,927.
  
• CBOE volatility index: link here. Explained at Investopedia. 23.24. Wow, this has really come down since I last looked.

Lots of green, the St Patrick's Day effect?

Fed watch, from Goldman Sachs: terminal rate unchanged at 3 - 3.5%. Watch for "dog days of summer," 2022:

• April: no rate hike
• May: a rate hike of 50 basis points; baseplate rate = 0.75%
• June: a rate hike of 50 basis points; baseplate rate = 1.25%
• four remaining meetings back half of 2022: 25 basis points = 100 bp = a baseplate rate of 2.25% by end of 2022
• 2023: three quarterly hikes
• next up: how the US will pay for all the interest it owes on bonds. LOL. 
  

Warren Berkshire: speaks volumes about his successful investing -- paid a 28% premium for Alleghany. Not a market timer; a "value" timer. Ninety-one years old. His last hurrah? Says he had been watching Alleeghany for sixty years. Sixty years. By the way: William Shatner turns 91 years old this year, also.

Apple: if Apple is going to deliver their first EV by 2025, they need to sort out where their EV is going to be built: Foxconn? Kia? Porsche? Apple is involved with a lot of different auto manufacturers. Most intriguing? Porsche.

Porsche CEO Oliver Blume said that the company has discussed "exciting common projects" with Apple, but it it is currently too soon to make any firm decisions on future projects. It is unclear exactly what the seemingly off-hand remark refers to, but it could relate to Apple's long-rumored electric vehicle project.

Blume said that Porsche and Apple traditionally cooperate closely and are "on the same wavelength," and managers from Porsche travelled to the United States late last year to discuss joint projects with Apple.

Porsche: wholly owned subsidiary of Volkswagen

• has sprinted out to the forefront in the EV space
• has set ambitious targets in the domain
• 40% of Porsche's deliveries in Europe, last year, were already at least 40% partly electric;
• target:
• generate half its annual sales from EVs by 2025
• 80% of all new vehicles by 2030 to be all-electric
• globally: Porsche delivered 301,915 vehicles, exceeding the 300,000mark for first time in its history:
• 2021-end (numbers rounded):
• revenues: $40 billion
• up $5 billion
• operating profit jumped 27% to $6 billion

Apple likes winners.