Headlines -- July 16, 2024

 Locator: 48159ARCHIVES.

What a great country. I dropped off several extended family members and friends at DFW airport on way to Montana.

I came home and went swimming -- a nice evening swim; my second swim of the day.

Tracked that flight on FlightRadar24.

CCR, Lana Del Rey, and Blondie on Bluetooth speaker while swimming.

Came home to catch two minutes of Nikki Haley at RNC Convention, ABC coverage. The ABC "analysts" seem flummoxed -- not exactly knowing how to handle the speeches. LOL. There's no way the DNC convention will be more entertaining inside. Outside, perhaps, but not inside. The DNC Convention inside will be Biden, Jill, Shumer, Pelosi, Clooney et al. Booooring. The RNC convention? One big clown show and I say that with sincerity and deep respect for clowns around the world.

After two minutes switched to the All-Star Game. AL wins 5 - 3. Lots of fun.

Not a bit hungry -- hadn't eaten since lunch, hours ago, but after a swim, often not a bit hungry. 

Settled for half-a-summer-sausage sandwich. 

80+°F outside -- our thermostat is set for 80°F also and after a swim, it feels almost "cold" in the house, but my wife won't let me turn the thermsotat up any more.

Now to check the news, the equity futures, and pretty much relax until 1:00 a.m. Have to get another Duolingo Spanish lesson in, both before midnight and after midnight to keep my streak going.

Matt Strahm, West Fargo High School, ND --> to the All-Star Game. Wow! He's thinking the same thing -- what a great country. He's 32 years old. It seems he's played with almost every MLB team (not quite) but now plays with the Phillies. Quite a journey.

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Headlines

NDIC Director's Cut: link here. Oil production down 3.9% m/m.

Bitcoin back over $66,000 today; quite a chart.

AAPL is now outperforming both the NASDAQ 100 (QQQ) and the S&P 500 (SPY) so far in 2024. Dan Nathan, over at CNBC, probably won't mention this.

Elon Musk has had it with California. Will move X and SpaceX headquarters from California to either Florida or Texas. Maybe one to Florida, one to Texas, or better yet, both to Texas. Which would make the most sense. Oh, there it is. He's moving both to Texas! Whoo-hoo! Musk says he has also moved his residence to Texas. Another whoo-hoo! California-to-Texas relocation tracked by clicking here. The full list here. Or go direct.

Charles Schwab says it's time to fix its banking business. Has to do with "cash sorting."

Biden's plans to overhaul the US Supreme Court sounds like the talk of a desperate man. This is so bizarre ...

Trump is no friend of Taiwan ... wow, one thing you can say about Trump .... he wants to make American great again. Screw the rest of the world even if it means Russia and China win a few regional wars. Warren Buffett may have known what he was doing when he dropped his TSM stock like a hot potato after only three months. LOL. After awhile, all Americans may end up liking Trump -- after all it was Hillary and Bill that took the US down the path of "globalism."

Even a cynic has to admit this is pretty remarkable:

Ditto:

The Russell 2000 just had its best day compared to the S&P 500 ... ever.

Tom Lee makes absurd calls over and over and over. And then he's right.

BRK-B: wow, talk about perfect timing. Pivoted back to BRK-B a few days ago; again, see Personal Investing. Rambling below; may be inaccurate; if important to you, go to the source (the IRS). Everything needs to be fact-checked.

No new money is going into my accounts. All new money is going to grandchildren. In addition, gradually moving money from existing personal accounts to grandchildren's accounts, so when I say I pivoted to BRK-B, it means I bought BRK-B with new money for at least one of the grandchildren's accounts. In this case, it was for Sophia. I'm done investing in (adding new money to) my accounts. My accounts are on auto-pilot except for a two self-directed IRAs in which I make trades. 

RMDs, for the most part, are going in to tax-deferred 529s for the five grandchildren. After fifteen years, the 529's can be converted to Roth IRAs. Almost no limit on number of 529s for owner or beneficiary; I guess the limit for any one beneficiary would be 50 or thereabouts. LOL. It's unclear but it sounds like each 529 can be converted to a Roth IRA -- one can do the math. Five grandchildren x $35K = $175,000, just to get started. And one knows, with inflation, Congress will increase that $35,000 limit.

CLR Brakken Permits Renewed -- July 16, 2024

 Locator: 48158B.

The renewals were in the NDIC daily active report dated July 16, 2024.

Four permits renewed:

• CLR: four Brakken FIU permits, SENW 7-153-100; Catwalk; Williams County; the Brakken wells are tracked here;

 

Dow 30 Surges More Than 700 Points; All Major Indices Green; Russell 2000 Particularly Interesting -- July 16, 2024

 Locator: 48157INV.

At the close / near the close:

Only two news items in last 24 hours:

• Trump names JD Vance as his VP nominee; and,
• JPow strongly signals a "Fed cut" sooner than later.
  

After 300 points today, the rest was due to short covering.

None of it was money coming from the sidelines. 

So, from where was the money coming? Rotation. Movers and shakers were taking their profits in the "magnificent seven" and moving to Dow components.

We'll see that when "my favorite chart" is updated in the next few days or so. 

The Buffett indicator: if the indicator sounded an alarm five days ago, imagine how long and how loud the alarm is today! OMG! Link here. And if the Fed cuts rates, the indicator will only get worse. Buffett indicator here.

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Back to the Bakken

WTI: $80.82. Barely held above $80.

Active rigs: 39.

Six new permits, #40925 - #40930, inclusive:

• Operators: Enerplus (5); Oasis
• Fields: Jim Creek (Dunn County); Arnegard (McKenzie)
• Comments:
• Oasis has a permit for a Sapphire well, lot 2, section 31-150-100; 
• to be sited 2414 FNL and 521 FWL;
• Enerplus has permits for five Fischer wells, SESW 29-145-96; 
• to be sited 354 FSL and between 2268 FWL and 2408 FWL;

Four permits renewed:

• CLR: four Brakken FIU permits, SENW 7-153-100; Catwalk; Williams County; the Brakken wells are tracked here;
  

Three permits canceled:

• Northwester Production LLC: three TMW wells, Billings County;

Two producing wells (DUCs) completed:

• 40006, 794, Slawson, Thor 2-31-30H,
• 40009, 661, Slawson, Thor 5-31-30H,

Inflation Watch -- All Three Grocers Within Five-Minute Bike Or Car -- July 16, 2014

Locator: 48156APPLE.

Eggs:

• Target, a dozen: "new low price" -- $2.67
• Kroger, a dozen: 99 cents
• Tom Thumb / Albertsons: 18-count: $1.77 (= $1.18 / dozen)
• Kroger and Tom Thumb: less than a dime / egg -- most expensive item I have for breakfast, except K-cup coffee at 50 cents to 67 cents / cup

Target continues to be the high price grocer. 

Apple, TSM Update -- July 16. 2024

Locator: 48155APPLE.

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

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.  

Link here. 

Some of the data points:

• MacRumors contributor is quibbling over 1H25 vs 2H25. Oh, give me a break!
• the bigger story: we're talking about 2-nm (2 nm, 2nm);
• the iPhone 17 will still use the 3-nm process! OMG! The 3-nm process -- how will Apple ever survive (by the way, the folks that know have moved on to new metrics -- moving away from "x-nm" being the be-all and end-all).

This is the most important paragraph in that story: 

TSMC plans to begin volume production of 2nm chips next year, but multiple reports out of Taiwan suggested that the company had been accelerating the process ahead of schedule to secure a stable yield for mass production. Apple is TSMC's main client, and it is typically the first to get TSMC's new chips. Apple acquired all of TSMC's 3nm chips in 2023 for iPhones, iPads, and Macs, for example.

Repeating that in bold:

• 2nm chips (to put that in perspective, Intel threw in the towel at 10 nm);
• accelerating the process (which means exactly what it suggests; TSM is completing their new facilities on time or ahead of schedule)
• secure a stable yield for mass production (mass production, not risk production)
• Apple is TSMC's main client
• Apple is generally the first to get TSMC's new chips
• Apple acquired all of TSMC's 3nm chips in 2023

The next two paragraphs, background:

The 2nm fabrication process, also known simply as "N2," is expected to offer a 10 to 15 percent speed improvement at the same power or a 25 to 30 percent power reduction at the same speed compared to chips made with the supplier's ‌3nm‌ technology. The A17 Pro chip in Apple's iPhone 15 Pro models is manufactured with TSMC's first-generation 3nm process, known as N3B. Apple's M4 chip, which recently debuted in the new iPad Pro, uses an enhanced version of this ‌3nm‌ technology.

Code in iOS 18 has confirmed that all four iPhone 16 models are set to use Apple's next-generation A18 chip, based on TSMC's N3E process. N3E is TSMC's second-generation 3nm chip fabrication process, which is less expensive and has improved yield compared to TSMC's first-generation 3nm process.

No analyst on CNBC has yet mentioned 2 nm, 3 nm, N2, N3, and until they do, those Apple analysts interest me not.

Only one CNBC contributor has mentioned M4 and that came out of left field. Literally from an analyst who probably doesn't even know what CPUs cores or threads are.

The Assassination Attempt -- Another Thought -- July 16, 2024

Locator: 48154PP.

If this has been mentioned by anyone else, I have not seen it. Yet.

Everybody and his sister (or her brother) is flying drones for all kinds of uses. 

How in the world,  why is the Secret Service, with a $3-billion budget, not flying multiple drones over presidential rallies, including indoors? I am not aware of any drone video footage over the Trump outdoor rally.

An there are at least two or three other observations not yet mentioned by media.

And the conspiracy theory folks: wow, are they out in left field. 

This was simply ineptness.

The current director: from 2019 to 2022, she wasn't even in Washington, DC. She was the senior director of global security at PepsiCo.

But she filled the DEI square.

Apparently she was recommended by Jill. Dr Biden. The First Lady. 

It seems the skill set for protecting the US president and the skill set for providing global security for a soda pop corporation would be entirely different. 

#1 threat for US president: assassination.

#1 threat for PepsiCo: cybersecurity.

WSJ.

She returned to the Secret Service after serving as senior director at PepsiCo North America overseeing facilities, personnel and business continuity. Before joining PepsiCo, she was a 27-year veteran of the Secret Service in which she was the first woman to serve as assistant director of protective operations. 

Her appointment to lead the Secret Service made her the agency’s second female director. When he appointed her director, Biden said he and first lady Jill Biden got to know Cheatle while she served on his security detail during his vice presidency. “She has my complete trust,” the president said in 2022.

EVs: American Enthusiasm For EVs Less Than Expected -- GM's Mary Barra -- July 16, 2024

Locator: 48153INV.

The EV narrative continues: less buyers than expected. I'm shocked. Shocked. 

How bad is it? GM's P/E is .... drum roll ... 6. A company's / ticker's P/E is the "polling" number for that company / ticker. A poll number of "6" in today's US equity market is .... atrocious.  TSLA's polling number: 65.

Biggest EV story of the day and GM's CEO Mary Barra barely mentions it. Link here. The big question: is Mary Barra transformational -- something expected of a CEO or simply a saleswoman? Link here.

On a day that the Dow surges almost 600 points:

Holy Mackerel: Dow Up Almost 600 Points -- Tuesday, July 16, 2024

Locator: 48152ARCHIVES.

Is this a vote for Trump / Vance? 

Is this the first time in a very, very long time that the VP may overshadow the P?

What's the only news story overnight? Trump names a first-rate 39-year-old for his VP.

• fresh face. How fresh? 
• first millennial ever to be nominated for VP 
• political experience? two years in the US Senate.
• state: Ohio -- not trivial -- 
• remember, a US Senator is determined by the entire state, not simply a gerrymandered enclave of supporters
• this may speak volumes about the "real Midwest" voter
  
• one word: populist
• coming of age experience: US Marine
• wife: Indian; also a Yale graduate; three children (IIRC -- needs to be fact-checked)
  
• bottom line: Trump's first major decision in his candidacy, possibly his presidency -- Trump hit it out of the ballpark by naming JD Vance as the VP

Politics:

• the popular vote can be incredibly close and yet the electoral margin can be massive.

Equity Markets Surge On News Of June's Retail Sales -- Tell Me Again The Economy Is In Trouble, That The American Consumer Is Hurting -- Breaking -- IN PROGRESS -- July 16, 2024

Locator: 48151ARCHIVES.

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Opening

• major indices
• Dow: up 200 points -- trading at record high.
  
• S&P 500: up 16 points
• NASDAQ: up 55 points
• most surprising
• AAPL surging again -- up another $1.60 
• BRK-B: up another $2.53
  
• no surprising
• GM down
• Starbucks down
  

What's the only news story overnight? Trump names a first-rate 39-year-old for his VP. 

• political experience? two years in the US Senate.
• fresh face. How fresh: first millennial ever to be nominated for VP
  
• state: Ohio
• one word: populist
• coming of age experience: US Marine
• wife: Indian; also a Yale graduate; three children
• bottom line: Trump's first major decision in his candidacy, possibly his presidency -- he hit it out of the ballpark by naming JD Vance as he VP
  

**************************
Economy

"Everyone" says the consumer is stretched. "That low growth story" is not borne out by the data. Holy mackerel. Even CNBC reader/analyst seems surprised.

• the retail numbers for June come in better than expected; and,
• one can't say it's all inflation -- inflation has been dropping like a rock
• implied Dow open on the news: up 121 points; later, pre-market just before the open, implied open --> up 200 points.
  

Economic numbers today: June retail sales: 

• better than expected.
• strip out autos and number improves significantly
• strip out autos and gasoline and number improves even more

Analyst comments:

• "solid report"
• the consumer: bedrock of economy -- still doing well, much better than expected
• beneficiaries, two sectors: restaurant sector (that's a surprise) and e-commerce (no surprise)
• e-commerce doing better than any other retail sector
• department stores suffering
• smaller retailers in malls are actually doing better despite anchor stores being a drag on sales
• most interesting observation: what's all this talk about "tight Fed" hurting US consumers
• Stifel analyst: doesn't see a Fed cut this year (CY2024)
  

*********************************
Cramer: First Hour

Banks earnings:

• earnings: 2Q24 beats -- Morgan Stanley, BofA
• will be beneficiaries of any rate cut; and, less regulation (expected in Trump administration)
• Charles Schwab: down $5.67 in pre-market but Schwab is growing by leaps and bounds
• banking sector earnings pretty much complete for this cycle
  

Amazon Prime Day -- apparently there's a delay in getting checked out -- that's how much activity Amazon is experiencing -- but the system has not crashed

Pre-market:

• AAPL: up 37 cents
• TSM: up $2.53
• AMZN: up $2.16
• BRK-B: up another $2.36 after an incredibly huge day yesterday

Retail sales:

• HP OmniBook Ultra rolled out yesterday -- link here. No one even noticed.
• at the link look at the new focus: TOPS and NPUs 
• without the blog I never would have understood what's going on here
• first subscription-free, ad-free, Bakken-focused blog to notice that Apple was ahead of the game in this area
  
• no longer does transister count matter; it's not just about CPUs or GPUs any more
• this is a huge, huge deal -- the article at the link
  
• Cramer says the HP OmniBook is a huge, huge deal
  

Cramer: both F and GM are losing huge on EVs, but F has it right.

For bragging rights, time-date first: 

• Hulu is optimized for Apple iPad; not desktop computers

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Top Stories Today

Top stories today?

Usually I post only one top story per day if I can even find one top story worth posting.

Today there are at least three top stories. It is absolutely amazing.

And the top three don't even include what the US equity markets did yesterday. And futures, right now, look like more of the same.

But, I'm rambling. The top three stories:

• The EV narrative continues: less buyers than expected. I'm shocked. Shocked. Biggest EV story of the day and GM's CEO Mary Barra barely mentions it. Link here. The big question: is Mary Barra transformational -- something expected of a CEO or simply a saleswoman? Link here. 
• AAPL: 2-nm (2 nm, 2nm) -- so much in the story at the link and the "Fast Money" folks seem to be missing that story. Link here.
• BNY Mellon stock is up 16%. Say what. A ho-hum bank. 

*************************
Autos

P/Es:

• F: 15
• GM: 6

********************
Tech

From "Evan,"ten largest semiconductor stocks."

*****************************
Politics

The first night -- RNC convention - I think independents are fascinated by what they are seeing. A lot of fresh faces and a lot of diversity and lots of populism. Independents cannot possibly be anything but fascinated, excited, energized. And just think, in a few weeks, they get to see Joe Biden make a rousing, electrifying speech at his own convention. 

Trump shows up: when was the last time the party's likely presidential nominee shows up the first night? And NYT didn't even mention it. Of course, did anyone really think Trump wouldn't show up.

JD Vance has added energy that cannot be quantified. 

"Not your father's Republican Party." No, it isn't. It's your grandfather's Republican Party -- all the way back to Ronald Reagan.

Can't wait to see the VP debate. 

Hunch: JD Vance is going to overshadow Trump ... in a good way.

Can't say the same for Biden's VP.  

Quick: if you are an independent who are you most interested in this morning -- Biden? Trump? Kamala? JD? That's a no-brained. And if you're an independent -- daresay, a populist -- who's going to stand out? 

Deep pockets: billionaires Bill Ackman and Elon Musk.

My hunch: a lot of folks in the Biden administration are updating their resumes. 

Most visible right now: the head of the Secret Service. Completely missed a 20-year-old who climbed on top of a building with AR-15 -- and any number of folks in the crowd spotted the shooter before the authorities seemed to take notice and/or action. The shooter couldn't even meet rudimentary skills in high school shooting club. Most interesting observation: shots rang out and there was no panic in the crowd. Folks stayed "put" and maintained composure -- making things so much easier for authorities once shooting began. I've only seen one reporter comment on that fact -- that the crowd did not panic when shots rang out and apparently there were several shots including those by the sniper. But it does appear, the current MO for the Secret Service is to let the assailant take the first shot.  If I'm wrong, the sniped hesitated at the wrong moment.

One person who does not need to update his resume: JPow.

Devon Energy -- Williston Assets -- Update -- RBN Energy -- July 16, 2024

Locator: 48150DEVON.

Link here.

$5 billion.

100 Mboepd. $50,000 / flowing boepd.

307,000 Net acres. $16K / acre.

From RBN Bneergy today:

Devon Energy's and Grayson Mill Energy’s Holdings in the Williston

Figure 1. Devon Energy’s and Grayson Mill Energy’s Holdings in the Williston. Source: Devon Energy

Devon already has about 123,000 net acres in the Williston Basin (orange areas in Figure 1 above), mostly in North Dakota’s Dunn, McKenzie and Mountrail counties. Devon’s production there has recently been averaging about 50 Mboe/d, with 62% of its output in the form of oil. The E&P’s impending acquisition of GME will give Devon another 307,000 net acres in the play (dark-blue areas), mostly in North Dakota’s McKenzie, Mountrail and Williams counties (with some acreage just across the border in Montana) and triple Devon’s Williston production volumes to about 150 Mboe/d. Devon said the deal will also add 500 gross drilling locations and 300 high-quality refrac candidates and gives the acquiring company a roughly 10-year inventory in the play, assuming a constant development pace of three operated rigs. We should note that GME has been a pioneer in drilling three-mile laterals in the Williston — two miles had long been the norm — and had said prior to the deal that it expected 60% of the wells it drills in 2024 to run three miles horizontally.

More broadly, the GME acquisition is expected to increase Devon’s total 2025 production to about 775 Mboe/d, including 375 Mb/d of oil. With the deal, the Williston’s share of Devon’s total output will increase to nearly 20% from the current 9%.

In addition to acreage and production, the transaction will give Devon GME’s extensive collection of midstream infrastructure in the Williston, including freshwater distribution lines (blue lines in Figure 2 below), existing and planned crude oil gathering lines (solid and dashed green lines, respectively), gas gathering lines (red lines) and existing and planned produced-water gathering lines (solid and dashed purple lines, respectively) and disposal wells. The crude gathering systems can deliver oil to (among others) the Dakota Access Pipeline (DAPL) and the North Dakota Pipeline (NDPL).

Grayson Mill Energy’s Midstream Assets in the Williston

Figure 2. Grayson Mill Energy’s Midstream Assets in the Williston. Source: Devon Energy

Greatest Bull Market In History? Goldilocks Economy? Devon/Williston -- RBN Energy -- July 16, 2024

Locator: 48149B.

Market: yesterday -- truly amazing, and CNBC did an incredibly lousy job keeping folks up to date yesterday -- three examples: CAT, BRK-B, and BK.

Assassination attempt: folks are missing the most important observation. Oh, yes, it's mentioned in passing ....

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Back to the Bakken

WTI: trending toward $80. Oh-oh. Peak driving season. Hurricane season. Record air travel.

Wednesday, July 17, 2024: 31 for the month; 31 for the quarter, 357 for the year
40405, conf, CLR, Chase 5-18H,

Tuesday, July 16, 2024: 30 for the month; 30 for the quarter, 356 for the year
40430, conf, Neptune Operating, Gustafson 5-8 5H,
39637, conf, Hess, TI-State-158-95-3635H-3,

RBN Energy: after a good bit of tire-kicking, Devon Energy finally finds "the one." Archived.

There’s been a frenetic scramble among oil and gas producers through the early 2020s to acquire top-tier acreage and production assets they think they will need to survive and thrive. Some of those acquisitions are still being done through smaller deals such as acreage swaps, but the expansion mode of choice for most has been big-time M&A, which in a single multibillion-dollar deal can add years to a company’s inventory life or perhaps give it a stronger foothold in a key production region or two. In today’s RBN blog, we discuss Devon Energy’s recently announced $5 billion acquisition of Grayson Mill Energy, yet another private-equity-backed E&P cashing in on the smart moves it has been making. 

Over the past few years, executives at large U.S. oil and gas producers have put a lot of effort into increasing their company’s scale, improving cost efficiency and boosting shareholder returns. For many — almost all, it seems — that work resulted in either acquiring another E&P or becoming the acquiree.

A comprehensive list would fill half a blog, but prime, 10- or 11-figure examples include Chevron buying Hess Corp., Occidental Petroleum purchasing CrownRock, Chesapeake Energy acquiring Southwestern Energy, and Diamondback Energy snapping up Endeavor Energy Resources. (And don’t forget the case of Permian pure-play Pioneer Natural Resources, which in 2021 bought Parsley Energy for $4.5 billion and DoublePoint Energy for $6.4 billion, only to be acquired itself by ExxonMobil in May for a cool $60 billion.)