The Million Dollar Way (The Bakken Oil Blog): 06/05/24

Wednesday, June 5, 2024

Big, Big, Big Tech Story Today? ASML And TSM -- Part Two -- June 5, 2024

Locator: 48070TECH.

This will be a follow-up to an earlier post: https://themilliondollarway.blogspot.com/2024/06/big-big-big-tech-story-today-asml-and.html.

Maybe I will go back and add a "Part One" to the subject heading of that blog, and call this "Part Two."

After a most remarkable day, I was doing a lot of surfing to try to explain (to myself) what happened today with regard to the market. I spent a lot of time reading comments to the articles. I was negatively surprised by the number of folks (some/many/most) who seemed not to understand anything about "chips." That's why I posted so much about "chips." It made all the difference in the world for me.

I was most amazed by those who said that the "run-up" by Nvidia "made no sense since chips were simply a commodity that China would someday exploit."

Wow.

Chips are not a commodity. Period. Dot. I've discussed it at length elsewhere.

So, I was thinking about that.

And then this popped up in my twitter feed (this is the Dutch ASML chipmaking machine):

Writing that Nvidia chips are commodities, is like saying the space rockets like the one launched today built by SpaceX and Boeing are commodities.

[An aside: that was posted above by "Evan." If you want to subscribe, $4.99 / month --

isn't that amazing ... ]

But back to that ASML chip making machine -- weighs as much as two Airbus airplanes:

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Cramer

I was listening to Cramer tonight. He talked about Nvidia. He says he was alerted to this company by another investor more than a decade ago.

Look at this:

Someday it will be interesting to read Huang Jensen's biography during this period.

Rambling After A Most Remarkable Day -- June 5, 2024

Locator: 48069RAMBLING.

I don't know where this will go.

This has been a most incredible day.

Mostly the market.

But more.

The "more" was a note from a reader. A very interesting note. I will refer to him as Reader X -- I am not aware that I had heard from him before. He said he identified with me -- based only on what he read on the blog -- and needed to talk to someone. He said he had no one else who would understand his feelings today / tonight. He had had an incredible day on the market today; making as much as he had ever made in one day but he was depressed.

That's not unusual. I saw it all the time during my medical career. It's akin to post-partum depression.

It sounded like Reader X had more money than he needed -- in fact, I don't think he even knew why he was investing any more .... more on that later.

I'm going to stop here; come back to this later. My mind is distracted.

I think I will complete this story elsewhere.

Random thought: after re-reading his note, this thought flashed across my mind. There were others. Reader X is not alone. Del Shannon. Hunter S. Thompson. A third: a great writer whose name I've misplaced.

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Beach Boys

For the archives, on YouTube: "Endless Harmony: The Beach Boys Story (Documentary)"; SmileySMILEE67, posted four years ago.

I purposely won't finish the documentary tonight. It's too good to just sit through and not be 100% into watching it. Needs to be watched during "the midnight hour."

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Gilda

I think I've watched Gilda more than once or twice, but not sure if I ever watched it from start to finish in one sitting, nor do I ever recall having really paid attention to the movie.

Tonight, it came up on my YouTube mix -- I didn't look for it (the movie). Just imagine. If YouTube can do this, imagine what "AI" will be eventually be able to do. This movie -- Gilda -- was exactly what I was ready to watch tonight.

It was awesome.

Casablanca: 1942. Ingrid Bergman. Humphrey Bogart.

Gilda: 1946. Rita Hayworth. Glenn Ford.

See this -- link here.

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Ten Songs You Didn't Know Were By The Beatles

WatchMojoUK, eight months ago.

Link here.

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Reader X

I'm drawn back to the note from Reader X. My hunch: he's not alone. Investing is a very, very interesting vocation. Reader X sounds like a really, really serious -- but amateur investor -- who is depressed because he did so well, not because he was a "great investor," but because he was nothing more than "lucky."

[Note: the reader and I have corresponded so what I'm writing here will not be "new" to the reader. At least not the general theme.]

Maybe I should stick to just writing about the Bakken. LOL. Wow, that would get old.

A Reminder: This Is Not An Investment Site -- June 5, 2024

Locator: 48068DISCLAIMER.

Normandy: 80th anniversary tomorrow.

Gun permits revoked once one "becomes" a felon.

Southwest Airlines: up as much as $149.

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Disclaimer Briefly Reminder

I am inappropriately exuberant about the US economy and the US market,
I am also inappropriately exuberant about all things Apple.
See disclaimer. This is not an investment site.
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.
Reminder: I am inappropriately exuberant about the US economy and the US market,
I am also inappropriately exuberant about all things Apple.

No New Permits -- And Nothing Else, Either -- June 5, 2024

Locator: 48067B.

Gasoline demand: link here.

Chips: they're not commodities. Trust me on this one.

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Back to the Bakken

WTI: $74.07.

Active rigs: 38.

No new permits.

A Snarky Chart -- Okay, Several Snarky Charts -- Wednesday, June 5, 2024

Locator: 48066INV.

Tag: TSM, BRK, SNOW. NCDA

And then there's this:

The chips took off today. SNOW? Not so much:

Big, Big, Big Tech Story Today? ASML And TSM; The Economy Slowing Down -- Part One -- Fed Needs To Do Something But Fed Absolutely Doesn't Want To Add Fuel To Bull Market; On Top Of That, Running Out Of Time With Election Around The Corner -- June 5, 2024

Locator: 48065TECH.

NASDAQ surged 330 points today. On the strength of "chips." Cramer on Huang Jensen:

I don't think I've ever seen anyone as influential to the value of US equities."
has started nothing less than "an American revolution."

After-hours: LULU up 11% after hours.

Market: S&P 500 and the NASDAQ close at all-time highs. VIX well below 14.

Fed: does anyone really think the Fed will cut rates with the market doing this?

Chips, semiconductor: link here.

Home page for tech: link here.
The cloud: link here.
Streaming: link here. Streaming wars.
Spatial computing: link here.
Generative AI: link here.
Apple Silicon: link here.

tech: chip count updates.

Supercomputers: link here.
Data centers: link here.

Locator: 10001TECH.

I think a lot of folks don't understand why the "AI" market jumped today. What happened?

The background is in the links above.

Today's news is seen in this one screenshot:

Based on comments on social media it appears many / most folks don't understand what this is all about. And if they don't learn, it's only going to get worse (for them).

ASML: link here.

Market cap race. It does not matter. These three companies are not in direct competition with each other. The market cap does not matter, but it is fascinating to watch. Microsoft and Apple are on a treadmill; they need to keep running faster just to stay in one place without falling off the treadmill. Nvidia is on an open quarter-mile track with no other runners; Nvdia is on the track alone, trying to better its own time.

It will be fascinating to watch NVID when it splits at the end of the week.

The big story: ASML and TSM. And don't forget: TSM and AAPL are joined at the hips. A big, big deal. A reminder, Microsoft now partners with Qualcomm. Another huge story.

IYKYK.

TSM up over 6% today.

ASML up as much as 9% today.

QCOM up 3% today.

MU up 5% today.

AMD up 4%.

NVDA / AAPL; market cap rate -- link here. Be sure to read comments at the story. Many/most don't understand. Anyone who suggests chips are a commodity is a doofus. That's like saying that cars (everything from the Ferrari and Lamborghini to the Chevy Volt) are a commodity.

What's BRK doing today? BRK-B dropped from 410.5 to 406 at the open but then recovered to 409.89 near the close. Right now, BRK-B shows a 0.1% gain for the day. I hate to think how much money Warren Buffett left on the table when he bought/sold TSM in a six-month stretch.

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Disclaimer Briefly Reminder

I am inappropriately exuberant about the US economy and the US market,
I am also inappropriately exuberant about all things Apple.
See disclaimer. This is not an investment site.
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.
Reminder: I am inappropriately exuberant about the US economy and the US market,
I am also inappropriately exuberant about all things Apple.

*****************************

Google Ngram Viewer -- June 5, 2024

Locator: 48064SEARCH.

Link here.

Google Ngram Viewer.

Brilliant. Link here.

The Big Stories -- June 5, 2024

Locator: 48063B.

Equity markets mid-afternoon, new intra-day highs for S&P and NASDAQ:

And with all, there's even more good news for the market, link here:

Big news stories today:

Canada's central bank cuts rates; joins the EU in cutting rates;
jobs data suggests economy slowing; all eyes on Friday's unemployment number.
EVs plunge in value, y/y
record dividends and interest income for Americans
Israel steps up military offensive
Russia's war in Ukraine has hit Gazprom's revenues hard
AAPL hits $3 trillion mark again
HPE surges on 2q24 earnings beat: it's all about AI.
NVDA: another record high; not today, not tomorrow, but the next day -- a 10:1 split;
NASDAQ and S&P 500 within 1% of all-time highs; Dow struggles

reverses; in the green after Canada's central bank says it will cut rates

DOE suggests it may start re-filling the SPR (again)
jet fuel: up 13% compared with same four-week period last year
electronic stock exchange proposed for Dallas, TX, to take on / compete with the NYSE

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Background To Some Of Those Stories

Cars, glut coming? Link here.

Car deals coming back: link here.

Deflation, used autos: link here.

Car sales: highest since April, 2023. Link here.

EVs plunge in value: link here.

Americans' interest and dividend income, 1Q24: sets record. Link here to The WSJ.

World's richest have never been so wealthy: link here.

Texas stock exchange? Link here to The WSJ.

EU falling to distant third; can't / won't catch up. Link here to The NYT.

History from The BBC: D-Day deception Operation Fortitude: The WWII army that did not exist. Taylor Downing, BBC. link here.

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Biggest Investing Stories

For me, without question, the two biggest investing stories today: AAPL and NVDA.

I would love to talk about both but this is not an investing site.

Starliner: Launch -- Successful -- June 5, 2024

Locator: 48062NASA.

YouTube link, live.

Apple Hits $3 Trillion Market Cap (Again); US Jet Fuel Supplied Up An Astounding 13% Y/Y -- June 5, 2024

Locator: 48061B.

Big news stories today:

jobs data suggests economy slowing; all eyes on Friday's unemployment number.
EVs plunge in value, y/y
record dividends and interest income for Americans
Israel steps up military offensive
Russia's war in Ukraine has hit Gazprom's revenues hard
AAPL hits $3 trillion mark again
HPE surges on 2q24 earnings beat: it's all about AI.
NVDA: another record high; not today, not tomorrow, but the next day -- a 10:1 split
NASDAQ and S&P 500 within 1% of all-time highs; Dow struggles
DOE suggests it may start re-filling the SPR (again)
jet fuel: up 13% compared with same four-week period last year
electronic stock exchange proposed for Dallas, TX, to take on the NYSE

EIA weekly petroleum report: link here.

US crude oil in storage: 4% below 5-year average; an increase of 1.2 million bbls from previous week;
refinery capacity: 95.4%.
jet fuel: up 13% compared with same four-week period last year

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Back to the Bakken

WTI: $73.57.

Thursday, June 6, 2024: 55 for the month; 119 for the quarter, 318 for the year
40279, conf, CLR, Thorvald 5-6H,

Wednesday, June 5, 2024: 54 for the month; 118 for the quarter, 317 for the year
40278, conf, CLR, Cuskelly 5-7H,
40245, conf, Empire North Dakota, Walleye 32-8 1H,
39387, conf, BR, Watchman Peak 2-8-11TFH,
38057, conf, Oasis, Wood 5498 12-25 4B,

RBN Energy: push for scale, efficiency drives more consolidation in the Eagle Ford. Archived.

Permian-focused M&A activity may grab all the headlines, but don’t forget about the Eagle Ford. Over the past couple of years, a steady stream of big-dollar deals have been announced in the South Texas shale play, most of them tied to efforts by growth-oriented E&Ps to increase their scale, improve their operational efficiency and expand their inventory of top-tier drilling sites. As we’ll discuss in today’s RBN blog, the dealmaking has continued this spring, most recently with Crescent Energy’s announcement that it will be acquiring SilverBow Resources.

As we said a while back, the South Texas production area had its glory days in the early years of the Shale Era, slugging it out with the Permian and offshore Gulf of Mexico for the #1 spot in crude oil production and with the then-preeminent Haynesville for top honors in natural gas output. But the mid-decade crash in oil and gas prices hit the Eagle Ford harder than any other U.S. production area and it didn’t rebound the way those other basins did for a variety of reasons. For the past year and a half, however, South Texas gas production has been topping 7 Bcf/d for the first time since 2015 and oil production has been holding steady at about 1.1 MMb/d for even longer — not Permian numbers by any means, but significant nonetheless.

More pertinent to today’s topic, M&A activity in the Eagle Ford has been through the roof. We’ll get to the latest deals in a moment. First, let’s quickly recap some of the nine- and 10-figure deals that have closed the in just the past couple of years involving South Texas acreage and production. (Note that this isn’t an exhaustive list and there were several other high-profile transactions that happened prior to this timeframe.) These include:

Devon Energy’s $1.8 billion purchase of Validus Energy, a privately held Eagle Ford producer, which closed in September 2022.
Marathon Oil’s December 2022 acquisition of Ensign Natural Resources’ Eagle Ford assets for $3 billion (discussed in Come Back Song).
Spanish energy giant Repsol’s February 2023 purchase of the South Texas acreage and production of Japan’s INPEX Corp. for an undisclosed amount. U.K.-based INEOS’s purchase of some of Chesapeake Energy’s South Texas assets for $1.1 billion — a deal that was finalized in May 2023.
Canadian producer Baytex Energy’s June 2023 acquisition of Eagle Ford pure-play Ranger Oil in a cash-and-stock deal valued at $2.2 billion.
The $551 million purchase by privately held Ridgemar Energy of Callon Petroleum’s Eagle Ford assets, which closed in July 2023.
The recently announced, $22.5 billion plan by ConocoPhillips to acquire Marathon Oil — as we’ll get to, both companies have a significant presence in the Eagle Ford.