The Market And The VIX -- All Clear? November 22, 2023

Locator: 46138INV.

Market today:

Going back as far as records are kept, the VIX has never been lower (not to be taken out of context):

 

From June 23, 2023: 

Locator: 45023INV.  

VIX: at lowest levels since January, 2020.

Wall Street's so-called "fear index" — the CBOE Volatility Index — fell to 12.73 Thursday, the lowest reading since January 2020.

As stocks snap a three-day losing streak and return to climbing the proverbial wall of worry, the VIX is signaling the most complacency in stocks since just prior to the pandemic.

It may not signal the all-clear, the low VIX reading does underscore the powerful rally U.S. large cap equities have mounted this year. While the rally was largely concentrated in growth tech names and mega cap stocks through May, cyclical sectors have joined the party since the last jobs report dropped in early June.

The VIX is perhaps most famous for its skyward spikes during periods of market turmoil. But sustained, lower readings are a hallmark of bull markets.

Smartphones Looking Good In 2024 -- November 22, 2023

Locator: 46138AAPL. 

From Martin Peers today:

Hey, here’s some good news for Apple, Samsung and various smartphone component manufacturers.

The smartphone market is growing again. That’s according to research firm Counterpoint, which estimated that sales rose 5% last month compared to a year earlier, the first month to show year-on-year growth in smartphone sales in more than two years.

That’s consistent with other data points out there. Research firm IDC, for instance, which estimated the market fell 11.3% last year and about the same amount in the first half of this year, reported recently that the rate of decline slowed to just 0.1% in the third quarter. It has predicted a return to growth in 2024.

Morgan Stanley this month also projected that smartphone shipments would grow next year, citing data showing “record upgrade intentions”—lots of people want snazzy new devices—fueled by the emergence of more powerful phones to deliver AI services.

The bank argues that now is the time for investors to buy global smartphone stocks.

Of course, the market had probably already assumed a recovery was coming, so it may be a little late to jump in. Apple stock hasn’t exactly suffered much—it’s up 48% this year. Even dominant mobile chip supplier Qualcomm, whose revenues tumbled 19% in the year to September, has seen shares rise 18% this year. Still, better late than never.

Speaking of AI, ChatGPT, OpenAI, and Apple, one may want to take a look at this.

Huge Strategic Shift -- November 22, 2023

Locator: 46137EVS.  

Ford re-thinks its strategic plan: link here. The UAW is now running GM, Ford, and Stellantis.

From the linked article:

Ford announced it is cutting production capacity on its upcoming electric vehicle battery plant, amid cooling customer demand for purchasing EVs and rising labor costs.

The automaker says it will reduce its original $3.5 billion planned investments to build the Michigan plant to somewhere around $2 billion and is now only expecting to hire 1,700 workers instead of 2,500.

Ford had originally announced the ambitious Michigan battery plant in February in partnership with China’s Contemporary Amperex Technology (CATL), a company that makes LFP (lithium iron phosphate) batteries. The plant will now only produce about 20 gigawatt-hours of batteries per year, which is about a 43 percent cut.

In order for EVs to qualify for up to $7,500 in federal tax credits, automakers must source at least 40 percent of their battery materials from North America or US trading partners by 2024. Ford’s partnership with CATL has also made it a target of anti-China GOP politicians.

The automaker still plans to open the new facility on target in 2026 despite recent production halts during the UAW labor union strike last month. The company also recently put off plans to build its Kentucky battery plant.

Let's look at those "rising labor costs": 

Oh, that's right. UAW-Ford settled for a 30% jump in hourly wages, or something in that range. And, then, of course, the benefits package.

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The Recipe Page

Looking forward to Thanksgiving dessert tomorrow.

Only in Texas and Tennessee.

The Bad News Just Keeps Coming -- November 22, 2023

Locator: 46136EVS.  

Ford re-thinks its strategic plan: link here. The UAW is now running GM, Ford, and Stellantis.

Longer. Much longer. Link here.

Demand will continue to drop: link here.

Posted in this past 48 hours:

Locator: 46121EVS. 

That was Jim Cramer's comment this morning -- "this is the high water mark for EVs," about 8:30 a.m. CT on CNBC's "Squawk on the Street," with Jim Cramer, Carl Quintanilla, and David Faber. 

Faber ,with some light banter, pushed back on Cramer's comment. Cramer sounded more serious than Faber who simply called GM's Cruise setback a speed bump.

From the blog yesterday:

• Fake EVs: taking market share. 
• EVs: for the urban rich. Very rich. You and I don’t make the cut.
• EVs: three articles to be linked in a.m. All three were “front-page” articles in The WSJ.

Cybertruck: deliveries to begin November 30, 2023, a Thursday, exactly one week after Thanksgiving.

 

Today, those three articles on the "front page" of yesterday's WSJ:

• Are Americans falling out of love with EVs? 
• EV startup Fisker has lost another chief accounting officer.
• More than a speed bump: GM's self-driving car unit skids off course.

All this in the last 24 hours. Twenty-four hours. And the UAW is now running GM, Ford, and Stellantis.

Amazing How Much Attention This One Man Gets -- November 22, 2023

Locator: 46135BRK.  

 

Weekly Petroleum Report: Crude Oil Inventories And Jet Fuel Provide Both Surge -- November 22, 2023

Locator: 46134EIA.  

Weekly EIA petroleum report: link here.

• US crude oil supplies: 448.1 million bbls; 1% below five-year average; increased by a whopping 8.7 million bbls w/w;
• US crude oil imports: background noise; yawn;
• refiners: 87.0%
• distillate fuel inventories: 13% below five-year average; decreased by 1.0 million bbls w/w;
• jet fuel product supplied up a whopping 13.6% compare with same four-week period last year

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Gasoline Demand

Link here.

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Back to the Bakken

Active rigs: 38.

WTI: $76.07.

Two new permits, #40353 - #40354, inclusive:

• Operators: Iron Oil Operating, KODA Resources
• Fields: Bully (McKenzie); and Fertile Valley (Divide)
• Comments:
• KODA Resources has a permit for an Amber well, SWSW 13-160-103, 
• to be sited 305 FSL and 426 FWL;
• Iron Oil Operating has a permit for a Stocke well, SESW 36-149-149, 
• to be sited 400 FSL and 2286 FWL

Nine permits renewed:

• BR: Rifle Person, Scottvale, Tilton (3), Concord (3), Lloyd -- all in Dunn County -- Lone Butte, Little Knife, and Murphy Creek;

One producing well (a DUC) reported as completed:

• 14953, 21, Foundation Energy, federal DM 9210 JV-P2, Billings, recompleted from Birdbear to Bakken;

Holiday Reading: Six Weeks Of Bliss -- November 22, 2023

Locator: 46133BOOKS.  

Holiday reading: Shakespeare.

I have just finished the first reading of Chris Skidmore's Richard III: England's Most Controversial King, c. 2017. That was a library copy. I have just ordered my own copy from Amazon / third party so I can mark it up -- LOL. 

Wow, what a great book. It all started with Brenda James and The Truth Will Out:

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Shakespeare -- Incarceration And Release

Hamlet: while Shakespeare was incarcerated in The Tower. He was incarcerated for his role in the Essex Rebellion, in which the conspirators sought to overthrow the monarch; Hamlet is a play about overthrowing a king.

Measure for Measure: Shakespeare's first play upon being (unexpectedly) released from The Tower. From wiki: believed to have been written in 1603 or 1604. Originally published in the First Folio of 1623, where it was listed as a comedy, the play's first recorded performance occurred in 1604. The play's main themes include justice, "mortality and mercy in Vienna," and the dichotomy between corruption and purity: "some rise by sin, and some by virtue fall." Mercy and virtue predominate, since the play does not end tragically.

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 Chronology of Plays

First, the tetralogy of his family (Henry VI and Richard III). Henry VI, Part 1, probably written 1589 - 1592. Richard III probably written 1592 - 1593. 

• Henry Neville: in 1590 was 26 years of age. He was member of Parliament as early as 1584 (age 20). In 1579, his father inherited a highly successful cannon manufactury -- Henry would have been 15 years old.
• So, at an early age, in his 20's, he did not write a blog, but instead he wrote four plays to record his family's involvement with perhaps the most important part of England history -- from medieval times (Edwardian) to modern times (House of Tudor). These plays were nothing to write home about but it got him started as a playwright. 
• I think one can argue, it was the Neville family, specifically Cecily Neville, that had the greatest impact on the outcome of the War(s) of Roses and the ultimate "winner" -- Richard III, Henry VII, and Henry VIII, the House of Tudor.
  
• Sir Henry Neville was knighted at age 35, in 1599, the same year he was sent to France as the British ambassador.

Then, the seven comedies.  – the Italinate comedies – seven plays in the four years after 1593 – all except two categorized as “comedies” – set in places he had visited in Italy. This is pretty cool -- probably all written as a result of his "Grand Tour."

• Titus Andronicus
• The Two Gentlemen of Verona
• The Comedy of Errors
• The Taming of the Shrew
• Romeo and Juliet
• Love’s Labour’s Lost – set in France
• A Midsummer Night’s Dream – set in Greece

The eight years before he was sent to France in 1599; writing 8 plays; the most productive writing years of his life.

During this period –

• plays more profound
• created his most popular character, Falstaff
• his most patriotic play, Henry VI

Just before the Falstaff plays –

• King Richard II
• King John

Richard II (~ 1595) has always been linked with the rise of the Essex circle (Essex rebellion – 1601)

1 Henry IV – first play featuring Falstaff. Arguably S’s most satisfyingly single play.

TMWOW – lots to say about it (p. 117 – 118).

Then – the two final plays of this period – 2 Henry IV and Henry V – considered two of his best-known plays.

Falstaff banished from plays, when Shakespeare banished from England -- sent to France as England's ambassador.

In France: alone, frustrated, angry bored;

• As You Like It
• Twelfth Night
• Much Ado About Nothing – probably written earlier

Then the Essex Rebellion and incarceration.

A gap of about a year between Twelfth Night – just before the Tower – and Hamlet – in the Tower – needed a year to regain balance.

• Troilus and Cressida
• All’s Well That Ends Wells
• Possibly also in the Tower, Othello (the 2nd of his 4 great tragedies).

Many of the sonnets written while in The Tower. 

Post-Tower plays:

Measure for Measure, was the first (see above). A very dark comedy; the first of the so-called "problem plays."

Increasingly needed money:

1604 – 1608: three of his greatest tragedies – Macbeth, King Lear, and Anthony and Cleopatra and three other tragedies: Timon of Athens, Coriolanus, and Pericles, Prince of Tyre.

1609 - 1615: toward closure:

• Cymbeline
• Winter's Tale
• The Tempest: his last substantial play

Died: 1615.

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Sir Henry Neville

1564 - 1615.

Terabyte Events

Locator: 46132ECON. 

Taylor Swift: more records. One concert: 29 terabytes of data.

AT&T’s network alone moved 28.9 terabytes of data during the busiest day of Taylor’s three-day tour stop at AT&T Stadium in Arlington, Texas. Set 10 of 13 new records. The other records? NFL championship games. 

The company estimates 1TB of data represents about 200,000 photos or 400 hours of video moving across its network. 28.9TB is a staggering amount of photo and video sharing. [Think cloud, AAPL, AMZN, MSFT, NVDA.]

That’s the most data AT&T’s network has moved at any stadium for any event this year — the average Cowboys game day at the stadium moves about 21 terabytes of data. 

• Swifties also moved record amounts of AT&T data at various other stadium tour stops: 23 terabytes of data at Nissan Stadium in Nashville, 12 terabytes of data at Mercedes-Benz Stadium in Atlanta, and 8.6 terabytes at Raymond James Stadium in Tampa.

F1 Las Vegas:

NFL super bowl events:

NFL MNF: hits 27-year-high -- Philly vs Chiefs. Incredible. And then, of course, what Amazon is doing for TNF. Crude oil is so yesterday. It's now all about the blades.

DOD: Gaza. Ukraine, China.

Wednesday — November T-1 — ‘T” For Thanksgiving

Locator: 46131B. 

Personal investing: 

• will buy today: DE
• at end of today, will be fully invested before the end of the month

AAPL: moving up nicely today. Up over 1%; has gained another $2 / share; now trading nearly $193.

NVDA / Nvidia: I can't get enough of this story.

• quick: name one company whose revenue more than tripled this past quarter
• most recent quarter: $18 billion 
  
• projected revenue: likely to hit $25 billion / quarter
• Wells Fargo: raises target from $500 / share now to $675 / share this next year 
• billionaire Ken Griffin loads up on two chip stocks — Nvidia and AMD (FOMO, MOJO, YOLO)
  
• my data point: Taylor Swift.

Taylor Swift: more records. One concert: 29 terabytes of data.

AT&T’s network alone moved 28.9 terabytes of data during the busiest day of Taylor’s three-day tour stop at AT&T Stadium in Arlington, Texas. Set 10 of 13 new records. The other records? NFL championship games. 

The company estimates 1TB of data represents about 200,000 photos or 400 hours of video moving across its network. 28.9TB is a staggering amount of photo and video sharing. [Think cloud, AAPL, AMZN, MSFT, NVDA.]

That’s the most data AT&T’s network has moved at any stadium for any event this year — the average Cowboys game day at the stadium moves about 21 terabytes of data. 

• Swifties also moved record amounts of AT&T data at various other stadium tour stops: 23 terabytes of data at Nissan Stadium in Nashville, 12 terabytes of data at Mercedes-Benz Stadium in Atlanta, and 8.6 terabytes at Raymond James Stadium in Tampa.

NFL MNF: hits 27-year-ratings high -- Philly vs Chiefs. Incredible. And then, of course, what Amazon is doing for TNF. Crude oil is so yesterday. It's now all about the blades.

Inflation: zero percent growth rate last month. If you know, you know. In big scheme of things, transitory. We’ll see that in new car prices this next spring.

WTI: crashing again. OPEC in deep do-doo. Saudi is upset that members are cheating. I’m shocked. Shocked.

• US production: trending toward 13 million bopd going forward and possibly increasing from there;
• Saudi production: most recently, dropped below 9 million bopd; probably at low for foreseeable future; 
• Saudi can't meet budget with this volume x price;
  

Natural gas: the Bakken and Oneok.

Deere: crushes earnings.

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. 

All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them.  

Again, all my posts are done quickly. There will be typographical and content errors in all my posts. If any of my posts are important to you, go to the source.

GM: how bad is it for GM? The company announces it won’t be advertising during the Super Bowl. “High-water mark” for EVs. 

Tesla: to increase fees at charging stations.

Tesla is using a new fee to encourage people not to charge their cars to 100 percent at busy Supercharger locations. In the US, the Supercharger Congestion Fee kicks in after a car hits 90 percent charge, at which point drivers will be hit with a $1 fee for each minute they continue to charge their vehicles. The company’s support page says the fee will apply at “certain Supercharging locations” when they’re busy. 

Has anyone noted Tesla’s charging division now has near-monopoly status?

Gasoline prices: lowest since the pandemic. Analysis. But, OMG, still $3.26 / gallon and much more on the West Coast. The link? Clickbait: the “story” is one big ad. Disappointing that Barron’s would do this. My bad for linking it.

Flying: has anyone figured out why AA’s connecting flight from Nashville to Portland, Oregon, is Miami, Florida? I finally figured it out. I can die happy.

Travel is back:

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Headlines: Re-Posting

Sam Altman; back in as CEO, OpenAI.

GM: won’t be advertising during Super Bowl.

Angus Bull Sales: it appears the “season” for Angus Bull Sales has begun. Link here.

Politics: more and more, it appears Trump’s candidacy is gaining more and more traction, not less, despite the ongoing court cases accusing Trump of wrongdoing. 

State supreme courts, in state after state, are throwing out cases attempting to keep Trump’s name off state ballots for US president. 

Tonight, it was announced that the last remaining US House seat was won by a Trump supporter in Utah, beating out a “moderate” Democrat. (Was there ever any doubt?) 

Right now, the polls suggest Trump would steamroll into the White House in a race against the incumbent but those are just polls. How the election would actually unfold is a completely different story. There’s at least one wedge issue that might be key in a Biden upset.

Boston Red Line: nine slow zones eliminated

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Back to the Bakken

WTI: $74.50.

Friday, November 24, 2023: 132 for the month; 132 for the quarter, 702 for the year
39773, conf, CLR, North Tareentaise Federal 3-18H1,
38782, conf, Oasis, Peregrine 5401 42-24 4B, south of Williston, tracked here;
38780, conf, Oasis, Peregrine 5401 42-24 2B,

Thursday, November 23, 2023: 129 for the month; 129 for the quarter, 699 for the year
39774, conf, CLR, North Tarentaise Federal 4-18H,

Wednesday, November 22, 2023: 128 for the month; 128 for the quarter, 698 for the year
39775, conf, CLR, North Tarentaise Federal 5-18H2,
39080, conf, Hess, RS-State D-155-92-0203H-9, 

An example of the Oasis Peregrine wells:

• 38780, conf, Oasis, Peregrine 5401 42-24 3B, Todd:

Date	Oil Runs	MCF Sold
9-2023	23741	21881
8-2023	24660	22052
7-2023	21882	18979
6-2023	21276	17702
5-2023	3414	2728

RBN Energy: moving away from coal, can Michigan add renewables fast enough?

If it seems like the push for decarbonization has suddenly picked up the pace lately, Michigan provides proof. Home to the Big 3 automakers and for many the symbolic heart of U.S. manufacturing, its efforts to move away from fossil fuels have long been met with skepticism and resistance. But changing attitudes about climate change and renewable power — and full Democratic control of the state government for the first time in 40 years — have led to a swift about-face in the state’s energy policy. In today’s RBN blog, we examine Michigan’s plans to accelerate its transition away from coal-fired power and the long-term challenges that come with it. 

This is the fourth blog in our series on the ongoing state-level efforts to decarbonize U.S. energy networks. So far in this series, we have looked at four markets that could hardly be more different; Hawaii, California, Texas, and New York. While developments are playing out very differently from state to state, based on any number of factors, one thing has become clear over the past couple of years as climate-related initiatives have gained momentum: Economic and logistical realities that may have been initially overlooked are being brought to the fore. Americans expect the energy industry to deliver fuel and power where they need it, when they need it, and for a price that everyday people can afford — what’s referred to as the trilemma of availability, reliability and affordability.

Today, we turn our eyes to Michigan, which now requires the state’s electricity providers 80% of their energy portfolio from renewables, nuclear, and natural gas with CCS by 2035 and that ramps up to 100% by 2040 — among the most aggressive timelines of any state. Before we get into the details of the changes coming down the line, let’s take a quick look at where things stand today.

Figure 1. Michigan Power Generation by Fuel Source. Source: EIA 

Michigan’s power generation has historically been dominated by coal-fired power (black layer in Figure 1), although its share has dropped from more than 60% of the mix in 2001 to about 30% in 2022. The decreases in coal have largely been made up for by natural gas (orange layer), whose share of power generation has jumped from about 12% in 2001 to more than one-third in 2022. Although wind power (dark-red layer) and other renewable sources have expanded significantly over the past several years, the percentage of power generation from fossil fuels has declined only modestly over the last two decades, dipping from 73% in 2001 to 65% in 2022. In addition, nuclear power’s share of the generation mix (pink layer) has varied little during that time. (Coal, gas and nuclear still account for a combined 87% of the mix, down from 97% in 2001.)

But all of that is about to change.