Locator: 45218WTI.
Tea leaves suggesting China’s economy is picking up steam come at the same time as Saudi cuts back exports and same time issues are being reported regarding “right” kind of oil.
US markets: green across all indices and NASDAQ up 80+ points.
Round of applause for JPow and friends.
AAPL futures green.
If WTI trend holds CVX will go green.
Locator: 45216INV.
The AI bubble, link here. Archived.
Think there's a bubble in the stock market fueled by hype surrounding artificial intelligence? Think again, says Fundstrat's Tom Lee.
In a video to clients on Monday, July 24, 2023, Lee outlined three reasons why the stock market has yet to enter a bubble. T
o make his point, Lee compared the price action of Nvidia stock today to Cisco during the 2000 dot-com bubble. The comparison makes sense given that Nvidia is seen as one of the biggest beneficiaries of the AI boom, while Cisco was the poster child of the dot-com bubble thanks to its suite of networking products during the internet boom.
From 1990 to 1997, $100 invested in Cisco stock turned into $11,500. That may sound like a bubble to most people, but what happened next defied everyone's expectations.
************************
Dow Winners During The Streak
Just scratches the surface.
******************************
The Book Club
Philip and Alexander: Kings and Conquerors, Adrian Goldsworthy, c. 2020. 938GOL.
Locator: 45215B.
Of note:
****************************
Back to the Bakken
Locator: 45215B.
WTI: $78.91.
Active rigs: 38.
One new permit, #40076:
Eight permits canceled:
The AI bubble, link here. Archived.
Think there's a bubble in the stock market fueled by hype surrounding artificial intelligence? Think again, says Fundstrat's Tom Lee.
In a video to clients on Monday, July 24, 2023, Lee outlined three reasons why the stock market has yet to enter a bubble. T
o make his point, Lee compared the price action of Nvidia stock today to Cisco during the 2000 dot-com bubble. The comparison makes sense given that Nvidia is seen as one of the biggest beneficiaries of the AI boom, while Cisco was the poster child of the dot-com bubble thanks to its suite of networking products during the internet boom.
From 1990 to 1997, $100 invested in Cisco stock turned into $11,500. That may sound like a bubble to most people, but what happened next defied everyone's expectations.
****************************
GDPNow
If things continue to go well, JPow may go down in history as one of the best Fed chairmen ever. Right now he’s walking on water: no recession; widows getting 5% doing nothing; longest stock market rally since 1987.
I do believe some have been awarded the Nobel Memorial Prize in Economic Sciences for less.
JPow: originally appointed to the board by Barack Obama, and later Donald Trump made him the chair.
When you compare JPow's testimony with the press conferences by the US President and/or Vice President, one can at least feel secure in the knowledge there is an adult in the room when JPow speaks.
Locator: 45213INV.
Thirteenth day in this rally. Last time we saw a consecutive thirteen days in a rally? 1987.
Incredible. Absolutely not on my bingo card today.
My not-ready-for-prime-time-comment to a reader:
Perfect storm:
But let's assume Dow Theory is correct, and market rallies through next year ... and then .... a rate cut.
Katie, bar the door.
By they way, talking heads on CNBC mentioned several times that JPow had egg on his face by suggesting a year ago (or whenever it was) that "inflation was transitory."
Most interesting: no one has asked JPow and JPow has not volunteered why he thought that "inflation was transitory." If someone asked that question and if JPow answered honestly, I think we might have an interesting answer.
Locator: 45211TECH.
Germany to take a page from the Biden playbook:
US auto manufacturers join hands, circle wagons:
The announcement is short on details, but this is what we have. Look at what is buried in the last paragraph! Yup, Tesla wins again.
There are currently just under 8,700 direct-current fast-charging stations in the U.S. and Canada with nearly 36,000 charging plugs, according to the U.S. Department of Energy.
Fast chargers can get a battery to 80% of its capacity in 20 minutes to one hour, making them optimal for travel corridors and in some cases comparable to a gasoline fill-up. {LOL -- comparable to five minutes for full refueling an ICE[
They’re much quicker than 240-volt “Level 2” chargers that can take hours to get a battery to a full charge.
The new network is expected to have 10 to 20 charging plugs per station, meaning there would be a minimum of 1,500 stations and a maximum of about 3,000. [Compare the footprint required for 20 charging plugs with multiple cars in line, pulling in every three to five minutes.]
Tesla’s network, with the largest number of fast chargers in North America, has 2,050 stations and more than 22,000 plugs in the U.S. and Canada, the DOE says.
Most interesting: The network formed by the seven automakers would be public and open to all electric vehicle owners. It will have connectors for both Tesla’s North American Charging Standard plugs as well as the Combined Charging System plugs used by other automakers.
***************************
The Book Club
F. Scott Fitzgerald: Bloom's BioCritiques, Harold Bloom, c. 2003. 813F.
Locator: 45210ECON.
TAM: total addressable / available market.
From an earlier post:
Daimler Truck: forecasts "sunny condition," link here.
As a reminder, I'm very bullish on Daimler Truck as a company executing very well in a tough environment. I'm accumulating shares in Daimler but making no recommendation. My investment horizon is a rolling 30-year investment. Will the US have a robust economy over the next 30 years? Will trucking remain part of the US economy. Will the west coast -- Washington, Oregon, California -- hold to the 2030 / 2035 EV mandate?
In reply, from a reader who knows this sector much better than I do:
I agree that Daimler is a good investment, especially now that there is some progress made in suppliers furnishing parts and chips to assemble the trucks.
I see a rat in the wood pile in pricing.
Previous to Covid , prices were stable for many years with small increases each year.
Supplier interruptions caused a lot of delays in delivery as well as higher costs. The result is a much more expensive truck, as much as $100,00.00 more than a 2019 model of the same manufacturer. Supply is still a problem as deliveries are still in the 6 month to 1 year timeframe.
As Covid progressed, freight rates increased which covered the increase costs of equipment.
Rates have now been returned to pre-Covid levels but equipment costs have not.
The new proposed emissions regulations will add $25,000.00 (manufacturer’s estimates) to new power units. This will cause a jump in demand of units before the new reg’s are in effect.
Electric units are not yet priced as most are experimental or lease only deliveries. This financial imbalance has not yet gone through the transportation system’s finances. That effect should increase rates but competition has kept them low. The interest rate increases has slowed down business and over 15,000 trucking companies have closed because of this.
Most all are small operations so there has been no real loss in capacity to increase rates.
Transportation’s costs vs income is going to suffer, how much and when will soon be answered. This will have a huge effect on the new truck sales, especially after the new reg’s take place in 2027.
Keep close watch on the whole industry as stock prices will become extremely volatile. There should be a lot of dips to buy on and big gains to capitalize on. Good luck, keep watch of the changes
***************************
The Book Club
Emily Dickinson: Bloom's BioCritiques, Harold Bloom, c. 2003.
Locator: 45209EVS.
Chevy Cruise, update, The Verge, a couple of months ago, April 25, 2023. Right around the corner: 2030.
The UK government vowed to stick to its ban on the sale of new petrol and diesel cars from 2030 in an attempt to reassure businesses and investors in the electric vehicle industry after Prime Minister Rishi Sunak had appeared to waver on the policy in recent days.
Sunak on Monday declined to commit to the ban when asked by broadcasters about it, and another minister, Andrew Mitchell, had also cast doubt on the deadline. But Housing Secretary Michael Gove on Tuesday replied “yes” when asked by Times Radio if the timing of the ban was immovable. Asked later by Sky News if that was an “absolute guarantee,” Gove again replied: “Yes.”
Daimler Truck: forecasts "sunny condition," link here. As a reminder, I'm very bullish on Daimler Truck as a company executing very well in a tough environment. I'm accumulating shares in Daimler but making no recommendation. My investment horizon is a rolling 30-year investment. Will the US have a robust economy over the next 30 years? Will trucking remain part of the US economy. Will the west coast -- Washington, Oregon, California -- hold to the 2030 / 2035 EV mandate?
So, on the sunny side, Daimler projected revenue growth in its major markets by 2030: North America and Europe — 10% higher in each; Brazil, up 20%; and India, a whopping 70% improvement as more of the most populous nation on earth industrializes.
Equally bright forecasts for market share by 2030 followed: North America, 40% today to 45% in 2030; India 8% to 14%; Japan 23% to 25%.
Service revenue is expected to grow 50% between 2025 and 2030, made up of service and parts (60%), zero-emission vehicles (30%) and digital services (10%).
Autonomous vehicles — which Daimler is developing through Freightliner, its independent subsidiary Torc Robotics and with Waymo Via — should contribute more than $3.6 billion revenue in 2030, with greater than $1.1 billion in earnings before interest and taxes.
“Sunny is basically what we see in two core markets: North America and Europe,” Goetz said. “On the other hand, due to the fact that we are a cyclical industry, on the lower side where it’s been raining or there’s a thunderstorm outside, we still have decent profitability.”
Locator: 45208B.
Weekly EIA petroleum report, link here:
Saudi, oil imported by US: four conscecutive months in which Saudi imports are lower each month compared to same one month earlier. Happens occasionally but when Saudi imports are this low, it's even more remarkable. Link here.
**************************
Back to the Bakken
WTI: $79.10 -- a pleasant surprise.
Thursday, July 27, 2023: 86 for the month; 194 for the quarter, 449 for the year
None.
Wednesday, July 26, 2023: 86 for the month; 194 for the quarter, 449 for the year
39509 conf, CLR, Vance 4-14H,
39476 conf, Ovintiv, Newman 150-97-21-16-6HR,
RBN Energy: pipeline expansions key to unlocking second wave of LNG exports.
The bulk of the second wave of U.S. LNG export projects will be situated along a small stretch of the Gulf Coast, from Port Arthur at the Texas-Louisiana border to the Mississippi River in southeastern Louisiana. Three of these projects — Golden Pass LNG, Port Arthur LNG and Plaquemines LNG — are under construction there and will add nearly 7 Bcf/d of new gas demand by 2028, and others could reach a final investment decision (FID) in the coming months or years. That’s prompted a frenzy of natural gas pipeline projects vying to serve this growing demand center, whether by moving incremental supply into the area or providing “last mile” delivery to the terminals. These pipeline expansions — and how well the incremental capacity, geography and timing align with liquefaction capacity additions — will drive the pace of overall gas demand growth and how the Lower 48 gas market will balance in the coming years.
