The Market And Energy Page, T+199 -- August 8, 2017; Coal-Fired Plants To Be Leading Source Of Electricity For Next Two Years -- EIA

Wow. I wasn't paying attention. Futures were down earlier this morning so I wasn't paying attention to the market. For whatever reason I checked in and to my surprise, all indices are green, and actually doing quite well. Dow 30 and S&P 500 both hit new all-time highs. Now, 87 new highs on the NYSE. Among the new highs: Deere; RDS (Shell); Diageo (whoo-hoo);

Jolt: job openings at a record high. Apparently 6.2 million job openings. June JOLTS job openings 6.163 billion vs 5.7 billion expected.

Apple just hit another all-time high, now trading above $160; market cap $828 billion with a quarter of a trillion dollars in cash. Shares outstanding: 5.17 billion.

Plug Power missed estimates; shares fall 7%.

Credit card debt: Americans now have the highest credit-card debt in U.S. history. This is an incredibly interesting story. Cheap money. A digression. Apple has a quarter-trillion dollars in cash, and yet it raises more money selling bonds. Why. Because money is cheap. Other examples abound. Same for the individual. Banks are offering individuals the opportunity to borrow thousands of dollars against their credit card with zero percent interest if the loan is paid off in twelve months (only charge, a transaction fee). Retailers, especially those selling big ticket items like furniture, are doing the same thing: one, two, even three years of no interest as long as the debt is paid off within the time period. Ads on television suggest similar low-interest loans on automobiles.

I took advantage of one of those bank offerings -- 0% interest as long as the loan is paid back within the year. I will pay it back well before the due date, and will have that much more in my equity portfolio. So, I am one of those Americans that "contributes" to the highest credit-card debt in US history. I assume I am not the only one, and I assume I "borrowed" a relatively small amount.

The good news: I will pay back my interest-free loan in half the time required. The even better news: the offers keep coming. But I won't do it again until current loan paid off.

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EIA Short-Term Energy Outlook

Oil Markets:

• The forecast calls for U.S. oil production rising over the next two years, with oil output heading for an all-time high of just over 9.9 million barrels per day in 2018, surpassing the old record set in 1970.
• U.S. oil production growth could slow as some U.S. energy companies plan less investment spending for the rest of this year and the number of drilling rigs has recently increased at a slower clip.
• The monthly increase in U.S. onshore oil production during the second half of 2017 is expected to slow from the pace seen during the first six months of this year.

Gasoline/Refined Products:

• U.S. consumers are buying record amounts of gasoline this summer, even though pump prices are higher than last year.
• A growing economy and more people working are major contributors to higher gasoline consumption this summer.

Natural Gas:

• U.S. natural gas production growth is expected to accelerate over the next two years with growth rates over 2% in 2017 and over 5.5% in 2018.
• Forecast record natural gas production in 2018 coincides with an expected rise in electricity generation from natural-gas fired power plants and a 23% increase in U.S. natural gas exports.
• Looking ahead to the start of the upcoming winter heating season, U.S. natural gas inventories are forecast to total just over 3.9 trillion cubic feet at the end of October, about 2.9% less than last year’s record level.

Electricity:

• U.S. electricity generation is expected to decline in 2017 for the third year in row, as forecast milder temperatures in the third quarter compared to the same period a year earlier reduces electric cooling demand.
• Coal-fired power plants are expected to be the leading source of U.S. electricity for the next two years, as the cost of coal is expected to rise by less than the cost of natural gas and renewable generation continues to grow.

Coal:

• U.S. coal production is getting a boost in 2017 from higher coal exports and more coal-fired electricity generation. (Coal certainly is getting a boost.)

Renewables:

• U.S. wind power, which provided 6% of total U.S. electricity in 2016, is expected to have a 9% generating capacity increase this year and another 16% in 2018. (1.09 x 6 = 6.54%)
• Solar power, which provided 1% of total U.S. electric generation in 2016, is expected to see the largest rate of growth in utility-scale electricity generating capacity of any energy source, increasing 36% this year and more than 10% in 2018. (1.36 x 1 = 1.36%; 1.36 x 1.1 = 1.5% in 2018)

A Night Out -- Introduction To Roller-Skating -- August 8, 2017 -- Nothing About The Bakken

Photos from last night. Sophia learning to skate. In the first picture, note Sophia's hat; she looked very chic.

I was the only one over the age of 65 on the floor; Sophia was the only one younger than four years of age.

Back To 59 Active Rigs In North Dakota -- August 8, 2017

Making America great again: GALLUP: U.S. Small-Business Owners' Optimism Highest in 10 Years ---http://www.gallup.com/poll/215048/small-business-owners-optimism-highest-years.aspx?g_source=ECONOMY&g_medium=topic&g_campaign=tiles

Connecting the dots? Maybe this sheds light on the recently announced Toyota-Mazda joint venture, sent to me by a reader: Mazda announces breakthrough in long-coveted engine technology ---
http://www.reuters.com/article/us-mazda-strategy-idUSKBN1AO0E7?il=0.

 

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Back to the Bakken

Active rigs:

$49.43↑	8/8/2017	08/08/2016	08/08/2015	08/08/2014	08/08/2013
Active Rigs	59	34	73	193	182

RBN Energy: changes afoot in sourcing of crude for Asian refiners.

Gusher: a gusher of cash at Suncor. Oil sandsproducer has lost its luster to hot shale drillers but its ability to generate cash is the envy of them all. Link at Wall Street Journal.

Canada’s oil sands are dirty, costly and the opposite of fast-money shale drilling, but the companies that mine them generate gushers of cash and are some of the biggest bargains in the stock market right now.

Canada’s Suncor Energy SU 0.06% is among the world’s higher-cost producers of oil. By all rights it should have scaled back its ambitions during the last few difficult years. Instead, it did the opposite, buying out partners on the cheap and plowing ahead with projects that could pay off for decades.

This came at a time when the shale producers, which sport flashy growth rates but devour cash, attracted plenty of investment. Now Suncor’s shares look undervalued at current oil price assumptions. If prices rise then Suncor is especially alluring.

Sage grouse.  Zinke Directs Agencies to Follow New Plan on Sage Grouse Protections. U.S. interior secretary’s order follows task force recommendations that potentially loosen conservation measures around mineral leasing areas. Link at The Wall Street Journal:

Interior Secretary Ryan Zinke has ordered his agencies to begin implementing a revised management plan to protect the greater sage grouse, a move that could undo some protections created under the Obama administration.

Among other things, the recommendations compiled by an Interior task force at Mr. Zinke’s request call for potential loosening of sage grouse protections around mineral leasing areas, using states’ conservation plans that provided more flexibility to potential economic development and using potentially increased cattle grazing in some sage grouse areas as a tool to protect the birds’ habitat against wildfire and invasive grasses.

Nuclear energy: South Carolina Seeks Ways to Salvage Nuclear Project. Governor looks to get at least one reactor completed after Scana Corp. abandoned the project. Link at The Wall Street Journal:

An energy company’s decision to abandon work on a nuclear project in South Carolina has left the state reeling and the governor seeking one of several solutions to save at least one of the two reactors.

Last week, Scana Corp. said it would walk away from its project to build two nuclear reactors in tiny Jenkinsville—after nine years and $10.4 billion spent—stunning local leaders and the 600 nuclear employees and 5,000 construction workers at its V.C. Summer Nuclear Station. The move left Jenkinsville, population 71, with an unfinished worksite the size of 1,000 football fields, while electric customers continue to pay 18% of their bill for a nuclear-power plant that may never generate a single kilowatt.

“I just hope that people who bought new houses, new cars, didn’t create a situation where they lose everything they worked so hard to get,” said Jenkinsville Mayor Gregrey Ginyard.

Banks: Banks Poised to Boost Buybacks and Dividends. Financial stocks have been strongly correlated to the yield on 10-year Treasurys. The link at The Wall Street Journal:

Financial stocks this year are more closely tethered to government bond yields than ever.

The tight relationship is an indication that traders are playing big-picture macroeconomic trends over stock-specific fundamentals. That focus could provide an opportunity for investors willing to look past the expected trajectory of interest rates as banks increase the capital they return to shareholders.

Higher rates tend to boost lenders’ profitability, so financial stocks often beat the S&P 500 when government bond yields rise and lag when they fall. This year the degree to which that is happening is unprecedented. This is evident in the six-month correlation between the performance of financial stocks versus the S&P 500 and the yield on benchmark 10-year Treasury notes.

"Global Warming" is dead. US Dept of Agriculture will no longer use "climate change" in its correspondence. New phrase: "weather extremes." Link at The Guardian.

An inconvenient truth, and I think we've found the problem: the major of NYC says the "subway system" needs more money. Helloooo....

.... the MTA has cobbled together an $800 million plan to fix the subways — and wants half of that from Gothamites.

No matter that the MTA’s own budget has increased by $3.4 billion since the governor has been in a charge, from $12.3 billion to $15.7 billion.

No matter, either, that much of that increase is due to the governor’s union deals. Payroll at NYC Transit, which runs the subways, has grown from $3.5 billion annually to $4.4 billion — a 26 percent increase, although inflation is up only 11 percent.

Making America Great Again -- 2016 Automobile Sales Hit Record

I don't remember if I posted this or not. I would assume I had but for some reason it escapes me. I was reminded of it when re-reading the "Daily Note" from the second thirty days after the 2016 presidential election. At that linked post, this item:

January 4, 2017, T+55: Trump rally extends to auto sales. December auto sales much stronger than expected; could push annual sales to new record.

So, I was curious. Did the US set a new record in 2016 for automobile sales. Yes. From The Los Angeles Times, the headline: 2016 U.S. auto sales set a new record high, led by SUVs --

US consumers bought a record number of new cars and trucks in 2016. A repeat performance in 2017 could be a tall order.

Low gas prices, rising employment and low interest rates kept buyers coming to car dealerships last year. There was also the allure of new technology — such as backup cameras, automatic emergency braking and Apple CarPlay — and new vehicles such as the Chrysler Pacifica minivan, the Honda Civic and the all-electric Chevrolet Bolt.

U.S. vehicle sales totaled 17.55 million, beating 2015's record of 17.47 million. It was the seventh consecutive year of year-over-year sales gains, an unprecedented string.

That string could be in jeopardy, however. The National Automobile Dealers Assn. expects U.S. sales to drop to 17.1 million vehicles in 2017 as interest rates and vehicle prices rise. Large numbers of cars coming off leases will hit the used-car market next year, putting pressure on new-car sales. And more buyers are opting for longer loans, so they won't be returning to dealerships anytime soon.

The Daily Note

The Trump Presidency (301 - 400)
The Third 100 Days

The Third 30 Days + 10 (261 - 300)
The Second 30 Days (Days 231 - 260)
The First 30 Days (Days 201 - 230) -- this page

The Trump Presidency (201 - 300)
The Second 100 Days
 The Third 30 Days + 10 (161 - 200)
The Second 30 Days (Days 131 - 160)
 The First 30 Days (Days 101 - 130)

The Trump Presidency (101 - 200)
The First 100 Days
The Third 30 days + 10

The Second 30 Days 
The First 30 Days

Between Election And Inauguration (1 - 100)
The Third 10 Days

The Second 30 Days

The First 30 Days

 
September 7, 2017, T+230: RINOs saying they are upset with President Trump cutting deals with the Dems is laughable. To the best of my knowledge, Congress (in the hands of the GOP) has done little to move Trump's agenda; they are still way behind in confirming nominations. I have no idea what GOP will campaign on in 2018.

September 6, 2017, T+229: cognitive dissonance. Americans filled seasonal jobs at higher pay due to Trump's visa squeeze upsets Politico. Can't make this stuff up. Politico showing their true colors: anti-American.

September 5, 2017, T+228: Thomas Friedman on CNBC this morning highly supportive of Trump's policy on North Korea and highly supportive of Trump's "wall." Iraq is a completely different country: US and Iraq on the same page; huge success. On Afghanistan, he was very clear: the US can lose late, lose early; lose big, lose small. Five-thousand more troops won't make any difference.

September 4, 2017, T+227: Hillary's book is out:

September 3, 2017, T+226: what a bunch of hypocrites. Dems and RINOs criticize Trump for ending DACA (the "Dreamers' Act"). In fact, he is postponing his executive order for 6 months which will give Congress more than enough time to pass a law to put DACA into effect. Congress simply has to pass a veto-proof law protecting "Dreamers." This is not rocket science. But Rachel Maddow will have trouble understanding the nuances of Trump's thinking.

September 2, 2017, T+225: President Trump makes a second visit in three days to Texas flood.

September 1, 2017, T+224: Trump is simply awesome. Compare Katrina, Sandy, Harvey. Bush did a flyover; Obama made a speech then back to campaigning. Trump: two visits in three days.

August 31, 2017, T+223: chance of "tax reform" this year? Less than 10%. Not gonna happen. Chance of "tax cut" this year? Not gonna happen.

August 30, 2017, T+222: Holy cow! Making American great. Jobs report today. ADP employment report to be reported later. Forecast: US added 185,000 jobs in August. Actual: holy cow! 237,000 jobs added in August. Steve Liesman, CNBC seems awestruck, blown away. Doesn't understand where jobs are coming from. Talking head: "can't last forever." In addition, the July number was revised higher, up 23,000 to 201,000. And now they are saying the initial August figures tend to be on the light side and are generally revised upward. Wow. And in a very long CNBC segment, Trump administration not mentioned. In fact, Steve Liesman specifically said he did not want to talk politics.

August 29, 2017, T+221: raising the debt limit just got easier. On another note, it looks like Denmark is giving up on the Paris (Climate) Accord also; will scrap the 200% tax on automobiles for something more reasonable, like 100%. LOL.

August 28, 2017, T+220: 24/7 - Houston / Hurricane Harvey.

August 27, 2017, T+219: so, how will this play out in 2020 when Trump's "Hillary" opponent campaigns on need to take down statues and memorials of George Washington, Thomas Jefferson, and, Christopher Columbus?

August 26, 2017, T+218: best Trump can do with regard to the huge Texas hurricane (Hurricane Harvey) -- is break even. He will get no credit if emergency response goes well; he will get all the blame if emergency response goes badly.

August 25, 2017, T+217: Janet Yellen gives what-sounds-like-her swan song speech at global economists meeting in Jackson Hole, WY. She criticized Trump for his policies; her term expires in February, 2018; Trump will likely pick either Yellen (re-appoint) or Gary Cohn for Fed Reserve chair.

August 24, 2017, T+216: relatively quiet; still talking about Gary Cohn's interview.

August 23, 2017, T+215: Gary Cohn has "balanced" interview with Financial Times; mainstream press blows it out of proportion (as usual); sounds like he wants to be Fed Reserve chairperson.

August 22, 2017, T+214:  Everyone survived the total eclipse yesterday.

August 21, 2017, T+213: prime-time speech by President Trump -- new strategy in Afghanistan -- we're in it to win.

August 20, 2017, T+212: Trump and family doing the right thing. Skipping the tuxedo-fat cats ball honoring the Hollywood elite (Kennedy Center Honors). The Trumps will not attend this year's Kennedy Center honors. It will be interesting to see how many women show up in high heels; Melania will be home in comfortable shoes.

August 19, 2017, T+211: With Steve Bannon out of the White House, it is likely Gary Cohn will stick with Trump. If Cohn does not leave the White House, he will be appointed Fed Chairman. The big question: will the Senate confirm Cohn? This is not a slam dunk.

August 18, 2017, T+210: someone suggested that with all the leaks in Washington, and the fact that this has gone on for months without a leak suggesting anything has been found, the likelihood that Robert Mueller has found a/the smoking gun is zilch. Nada. Nil.

August 17, 2017, T+209: political fallout of disbanding the "economic" and "strategy" councils by Trump: zilch. Nada. Nil. Now CNBC suggesting that disbanding these councils was the right thing to do. LOL

August 16, 2017, T+208: Trump follows Obama's example of moral equivalence -- WSJ. Link here. Time to rename the Jefferson Memorial and the Washington Monument, "Monument #1" and "Monument #2" immediately, while putting together plans to tear them down. Meanwhile, Mount Rushmore National Park needs to be closed immediately. Cities and states with names like Washington, DC. and Jefferson City, MO; and Washington state need to change their names. Perhaps "City #1" and "City #2" until city leaders can come up with acceptable names. Washington State, of course, would become "State #42." When I look at Trump's (former) manufacturing council, it was composed of all white males, generally in their 50s and early 60s; one woman. No African-American? The strategy forum might have had two African-American CEOs. How can this be in this day and age? All white males heading American corporations. It's also noteworthy that 90% of anchors on CNBC are white males. The only non-white males are "info-babes" as one known radio personality calls them. 

August 15, 2017, T+207: talking head on CNBC -- Charlottesville? That was not free speech; that cross the line, that was not free speech, that was hate speech. Advocating killing police? Hey, it's a crazy world.

August 14, 2017, T+206: I would take the criticism of Trump regarding his response to weekend violence in North Carolina a bit more seriously if that same level of criticism had been voiced following the dozens of police killed directly related to Black Lives Matter. Maybe.

August 13, 2017, T+205: is right-wing Bannon on his way out?

August 12, 2017, T+204: the Democratic National Committee's position on Trump -- NOKO Kim Jong-Un more responsible than President Trump. That should go over well among patriots.

August 11, 2017, T+203: North Korea says it will launch four ICBMs to land 30 miles off-shore America's largest military base in Asia, on Guam. Russia tells the US to chill. Russia goes "ballistic" when US simply announces talks with Russia's neighbors regarding missile defense. Whatever.

August 10, 2017, T+202: VP Pence's "real" power move -- replacing his own chief of staff with talented political operative, Nick Ayers. Pence could not do that until Reince Priebus was out of the White House. Priebus would not allow Ayers to assume a White House staff job -- because, although they were "friends," Ayers was not a member of the RNC. Wow, sounds like the old Soviet Union politburo.

August 9, 2017, T+201: see first comment -- in the key 2018 battlegrounds, Trump's support is as high as ever. Americans opt out of ObamaCare: 6.5 million Americans pay "fine" rather than sign up for ObamaCare. I think it can be safely said that the worst tax plan ever foisted on the American public was ObamaCare, bar none.