MUST READ / MUST Watch: JPow's Comments At The Economic Club Of Washington, DC -- July 15, 2024

Locator: 48140JPOW.

Wow, wow, wow -- JPow at The Economic Club of Washington, DC --interview incredibly good. Anyone that missed this interview missed one of the best interviews I've ever heard on economics.

JPow was very, very freewheeling -- the interviewer was incredible. The interviewer was a doppelgänger for Leo G Carroll and was just as pithy and astute as the latter was in his Hitchcock movies. I'm thinking North By Northwest. 

JPow's  explanation of "transitory" was great. Great, great explanation.  Agree 1000%.

Just an incredible interview.

I'm sure the whole interview will be available later on CNBC or YouTube. Hopefully. A must watch. CNBC has a short clip.

Early on, JPow made it clear he was not going to talk about the market, future meetings, future changes in the "Fed rate," etc.

And then, less than a minute later he sent a very, very strong signal about the likelihood of a rate cut in September, if not July, 2024. Huge, huge signal. The "market" didn't catch the signal! Wow! Movers and shakers asleep at the wheel. It will be interesting if the CNBC panelists / anchors caught the signal. My hunch: unless JPow says something even more newsworthy, his comments / signaling will be the headline story.

Inflation target: 2%. That's the global-agreed-upon number set some years ago. He very clearly said that 2% is the "goal" set by the global community, but, he said very clearly, that a previous Fed chairman said if one waits until "we" get to 2% to cut rates that will be too late.

Employment target: not as amenable to a single number. Completely avoided the question.

Does JPow think we should eventually get back to "free money?" He said that was a very, very unusual period. Today, 5.3% is restrictive, but not particularly restrictive. The neutral rate is probably higher than the "free money" era. JPow suggests the Fed rate won't (ever) get back to "free money." 

That last statement / answer will provide huge information for those interested in "my favorite chart."

JPow suggests he's looking for a Goldilocks environment for both equity investors and those interested in bonds and Treasuries. That will make my wife happy.

An absolute pleasure to hear.

Energy Snapshots -- One-Liners -- Provides Course Correction For Traders -- July 15, 2024

Locator: 48139ENERGY.

Ammonia fuel carriers: huge surge in interest. Maersk tankers and competitors bet billions on ammonia fuel carriers; owners place $16 billion of orders for ammonia, gas carriers. Maersk, Japanese, and Greek owners investing in this sector.  Link here.

Copper: vehicle electrification -- EVs -- requires 55% more copper mines by 2050. Link here.

US energy production / consumption spread widens. Link here.

US oilfield jobs: looking good.

Global oil demand: keeps surging. Link here.

And with global warming, demand will only increase. Exhibit A -- Saudi Arabia, link here.

From the linked article:

Saudi Arabia boosted imports of the dirtiest type of oil to the highest in more than three years to help meet power demand during the scorching summer.

Shipments of fuel oil rose in June to the most since at least the end of 2020, and are expected to remain elevated this month, according to data from market researchers Kpler and Vortexa. Purchases, which typically jump during the hottest months as air conditioners crank up, have risen as much as fourfold since March to about 350,000 barrels a day, according to Vortexa.

Saudi Arabia is the region’s biggest buyer of fuel oil, a type of dirty product that’s left over after refineries produce transport fuels like gasoline and diesel. It also burns crude oil directly to produce electricity, which likely contributed to the kingdom’s exports dropping to a 10-month low of about 5.6 million barrels a day in June, according to data compiled by Bloomberg. Fuel oil is mostly sold at a discount to crude since it’s heavier and more polluting.

Temperatures in Riyadh hovered in the mid-40Cs this week, according to AccuWeather, and can top 50C (122F) in the summer. The heat drives demand for electricity to power air conditioners, which in turn forces the kingdom to burn more oil.

And then there's AI, so it won't only be global warming driving energy demand. AI? Take a look at Taiwan. Link here.

And Taiwan's "woke" politicians appear to be asleep at the wheel. Link here.

And more, link here:

My Favorite Chart -- The Issue Being Discussed On CNBC's "Halftime Report" Today -- July 15, 2024

Locator: 48138INV.

From July 10, 2024:

My favorite chart: link here.

Link here.

That increase, not only was it a reversal of the two previous months, the increase was not trivial. And, oh by the way, in the process, set an all-time record.

There are a lot of folks who have money on the sidelines -- albeit earning upwards of 5% -- but still -- a lot of folks with hundreds of thousands of dollars on the sidelines are starting to wonder if they just missed the biggest bull market in years.

Today, on CNBC's "Halftime Report," this was the discussion -- whether money is now coming off the sidelines (see chart above) pushing the market higher? 

My thoughts on this issue have not changed much. 

Regardless, this is the irony: a lot of folks took a safe/guaranteed 5% on their cash for the past year or so, and now that rates may be coming down they're looking at bringing money into the equity market. Meanwhile, the market has "exploded" / surged over the past few weeks, making it "scary" for these folks who like safety to now have to make a decision to get into equities, riskier by nature, and even riskier now with the surge in the equity market. 

Quite ironic.

Apple Surges -- WTI Down -- Another Win For Trump -- NOG In The News -- Manic Monday -- July 15, 2024

Locator: 48137B.

One day only: MSNBC pulls "Morning Joe" off the air for one day, to "cool down" the rhetoric. 

Win for Trump: jude dismisses Trump's classified documents case. Will likely be appealed; will likely end up before US Supreme Court.

Apple: personal thoughts, flashback, March 22, 2024. Link here.

• AAPL share price:
• March 22, 2024: $172
• April 19, 2024: $165
• today, July 15, 2024: $235.60

BRK-B:  

• BRK-B share price:
• March 22, 2024: $412
• April 19, 2024: $405
• today, July 15, 2024: $432

Winner today -- CNBC flash: Netflix -- up almost $17; up 2.5%.

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July 15, 2024

WTI: $81.91.

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,

Monday, July 15, 2024: 28 for the month; 28 for the quarter, 354 for the year
None.

Sunday, July 14, 2024: 28 for the month; 28 for the quarter, 354 for the year
None.

Saturday, July 13, 2024: 28 for the month; 28 for the quarter, 354 for the year
None.

RBN Energy: Uinta's prolific waxy crude drives SM Energy / Norther O&G Purchase Of XCL. Archived.

The Uinta Basin is no Permian when it comes to drilling activity and production volumes, but the folks behind what may be the biggest M&A deal in Uinta history say the oil-production economics in parts of the quirky-as-heck play in northeastern Utah compare very favorably with the best of the Permian’s Delaware and Midland basins. And where else will an astounding 85%-plus of the produced hydrocarbons come out of the ground as high-quality waxy crude? In today’s RBN blog, we discuss the recently announced plan by SM Energy and non-op specialist Northern Oil & Gas (NOG) to acquire XCL Resources in a pair of deals valued at $2.55 billion. 

That brings us to SM Energy and NOG’s recently announced agreements to acquire Uinta Basin producer XCL Resources, with SM Energy to purchase an undivided 80% interest in XCL for $2.04 billion (a combination of cash and debt) and NOG to buy the other 20% for $510 million (also a cash-and-debt combo). The deals — the largest ever for both SM Energy and NOG — are expected to close early this fall, subject to customary closing conditions. SM Energy will operate the assets the companies will  acquire from XCL, with NOG assuming its familiar role as a “non-op E&P.”

The agreements provide the acquiring companies with a total of 46,500 net acres in the over-pressured oil window in the Uinta (37,200 net acres to SM Energy and 9,300 net acres to NOG; see black-outlined area in Figure 1) and production of 53.5 Mboe/d (43 Mboe/d to SM Energy and 10.5 Mboe/d to NOG). Astonishingly, more than 85% of that production comes in the form of crude oil — and high-quality waxy crude at that, with an API gravity range of 36 to 43 degrees and the low-sulfur, low-TAN, low-metals and low-nitrogen benefits we cited above. (An over-pressured oil window is a geologic condition that favors higher levels of oil formation and production.)

Futures Don't Mean Squat -- But Say What You Want -- I Prefer Green To Red -- July 15, 204

Good luck to all.

Locator: 48136INV.

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Tech

Intel (INTC): screenshot -- 12:18 a.m., Monday, July 15, 2024 --

Nvidia (NVDA): screenshot -- link here -- 12:18 a.m., Monday, July 15, 2024 -- 

This is such an incredible story, I will probably re-post as a stand-alone story.

• the article quotes NYU's Aswath Damodaran, Stern Business School:
  

• in recent interview with CNBC said that the Magnificent Seven stocks have become the "value stocks for investors who care about earnings and cash flows."
• the Magnificent Seven: in the last 18 months -- they've added $8.8 trillion in market cap
• perspective
• China, second largest market in the world, has a market cap of $12.1 trillion
• these seven stocks have added more in market cap than the entire (combined) German market, the French market, the Swiss market
• in the past: Damodaran had been consistently arguing that "major technology companies are fully or overvalued."
• in his latest interview: "before we dismiss the Mag 7 stocks as risky tech companies, we should keep in mind that these are the money machines in this market."

BUT he says that the market overall is in a "danger zone."

Long, long article.