24 March 2021

1) The CLEAN Future Act, a nearly 1,000-page piece of legislation, is meant to curb greenhouse gas emissions and air pollution that’s emitted from the petrochemical facilities that produce plastics or the raw materials used to make plastics. More significantly, the bill would impose a temporary pause on air pollution permits needed for approval of new plastics production facilities. But Republican lawmakers are raising concerns that provisions in the sweeping climate bill from top house democrats would stifle the plastics industry. The EPA regulations also require any permit for a plastics production facility to be accompanied by an ‘environmental justice assessment’, which would include consulting with the people living in the region where the facility is located.

2) Canadian Pacific Railway announced its plan to acquire the Missouri-based Kansas City Southern Lines rail company, which operates railroads in Mexico, Panama, and the United States. The new agreement will result in the first ever rail network to span the length of the North American continent to create the first rail network spanning from Canada to Mexico.
The CP values KCS at $29 billion dollars and agrees to assume $3.8 billion in outstanding debts as part of the agreement. The deal awaits final approval from the U.S. Surface Transportation Board.

3) President Biden’s economic advisers are preparing to recommend spending as much as $3 trillion dollars aimed at boosting the economy, reducing carbon emissions and narrowing economic inequality, including a giant infrastructure plan that may be financed in part through tax increases on corporations and the rich. Rather than trying to push a mammoth package through Congress, Biden has separated his plan into legislative pieces. The bill includes money for rural broadband, advanced training for millions of workers and 1 million affordable and energy efficient housing units. Additionally there is nearly $1 trillion dollars in spending on the construction of roads, bridges, rail lines, ports, electric vehicle charging stations and improvements to the electric grid and other parts of the power sector. But Republican support will depend in large part on how the bill is paid for.

4) Stock market closings for – 23 MAR 21:

Dow Jones 32,423 down by 308.05
NASDAQ 13,228 down by 149.85
S&P 500 3,911 down by 30.07

10 Year Yield: unchanged at 1.69%

Oil: down at 60.62

23 March 2021

1) Some analysts expect Tesla Inc. stock to hit $3,000 by 2025, up from its current price of $655. This would make the company worth almost $3 trillion dollars. This is based on expectation of a 50% chance of Tesla achieving fully autonomous driving systems within five years. This would allow the company to scale up its planned robotaxi service quickly. Additionally, Tesla’s insurance business adds value to the company, believing the offering could be rolled out to more states in the next few years with better than average margins, thanks to highly detailed driving data the company collects. Presently, their insurance is currently available only in California. Forecasts are for Tesla’s unit sales to be between 5 million and 10 million vehicles in 2025, assuming increased capital efficiency.

2) Intel made small waves by launching an ad campaign featuring none other than the “I’m a Mac guy” himself . . . Justin Long to explain why PCs are better than Macs. Intel’s five YouTube videos have racked up over a million views, but the ad campaign extends to a website extolling the benefits of PC over Mac. In the real world, a PC with an 11th Gen Intel Core mobile processor offers users more, with real research and test results to prove it. Many Apple M1 claims don’t translate to real world usage and appear questionable. When compared to a PC with the 11th Gen Intel Core mobile processor, the M1 MacBook features just don’t stack up.

3) After years of outcry about corruption and wasteful spending, Congress banned earmarks, the legislative maneuver of having special budget items that allow members to funnel money to projects in their districts. Earmark spending went away in 2011 after corruption scandals, but now it’s back on the table. Leaders in both parties are taking steps to allow limited earmarks on spending legislation, opening the door to the sort of ‘horse trading’ that Democrats hope could lead to GOP support for Biden initiatives on issues ranging from infrastructure to the annual federal agency funding bill. Republicans are leery of what type of taxes and revenue-raising devices the Democrats are considering to finance a legislative package that could top $1 trillion dollars. With $28 trillion dollars worth of debt, and on the way to a $30 trillion debt, the Congress ought to be focused on how to save money.

4) Stock market closings for – 22 MAR 21:

Dow 32,731.20 up by 103.23
Nasdaq 13,377.54 up by 162.31
S&P 500 3,940.59 up by 27.49

10 Year Yield: down at 1.69%

Oil: up at 61.47

19 March 2021

1) American military officials are warning that, in the next few years, China could invade Taiwan. The island nation has long been a sore subject of U.S.-China relations. China’s rapid military build-up, are recent indications that Taiwan could unilaterally declare its independence from the mainland. An invasion could throw the whole region into chaos and potentially culminate in a shooting war between China and the United States, who is treaty bound to help Taiwan defend itself against Beijing. The Chinese army’s capabilities have matured to such a degree that this is no longer a dilemma we can afford to brush off. The Biden administration must signal its willingness to ‘go to the mat’ for Taiwan and help ensure the island can defend itself, but without further spooking Beijing. China has commissioned 25 advanced new ships, including cruisers, destroyers and ballistic missile submarines, with capabilities designed to keep America and its allies, who might interfere on Taiwan’s behalf, at bay. Meanwhile, China is integrating its new equipment into an increasingly sophisticated force

2) Production at U.S. manufacturers unexpectedly declined in February, representing a pause in recent momentum as factories were beset by severe winter weather and supply-chain challenges. The 3.1% decrease in output was the first since April, following an upwardly revised 1.2% gain in January. Total industrial output reflected a 7.4% surge at utilities, that was the largest advance since March 2017, also driven by increased demand for heating. Manufacturers continue to battle supply shortages and shipping challenges, but lean business inventories, steady demand from consumers and solid capital spending should push manufacturing back up.

3) A Tesla Model Y electric car, with its Autopilot engaged, crashed into a Michigan police car that had pulled over with its lights on. The driver was using Tesla’s Autopilot system when he crashed into the police vehicle, but there were no injuries, according to police. The 22-year-old driver was issued citations for failure to move over and driving with a suspended license. Tesla’s Autopilot system allows the car to brake, accelerate, and steer automatically. The electric car maker also sells its full self-driving software as a $10,000 one-off add-on and plans to release it as a subscription model this summer.

4) Stock market closings for – 18 MAR 21:

Dow 32,862.30 down by 153.07
Nasdaq 13,116.17 down by 409.03
S&P 500 3,915.46 down by 58.66

10 Year Yield: 1.73%

Oil: down at $59.53

18 March 2021

1) Griddy Energy, the Texas power retailer, filed for bankruptcy, becoming the latest casualty of the cold weather blast and sweeping blackouts that pushed electricity prices to historic highs. The company, after its customers received exorbitant power bills, blamed its downfall on Texas’s grid operator Ercot who is blamed for destroying Griddy’s business. Griddy is at least the third to file for bankruptcy. Ercot owes more than $29 million dollars, making the grid operator Texas’ largest unsecured creditor. Texas is unusual in the U.S. in that homeowners and businesses can choose from a number of power providers. Griddy charges wholesale prices instead of fixed ones, and knowing that rate structure would mean massive bills for its customers as power prices climbed, the company made the unusual move of pleading with customers to switch to another provider in mid-February, but some customers who didn’t switch in time were stuck with bills for thousands of dollars.

2) The world’s three biggest consumers of coal, the most dirty of the fossil fuels, are getting ready to boost usage so much that it’ll almost be as if the pandemic-induced drop in emissions never happened. The U.S. power plants will consume 16% more coal this year, and then an additional 3% in 2022. China and India, which together account for almost two-thirds of coal demand, have no plans to cut back in the near term. This means higher emissions, and in the U.S., the gains may undermine President Biden’s push to reestablish America as an environmental leader and raise pressure for him to quickly implement his climate agenda. Coal consumption at U.S. power plants is almost returning to 2019 levels. While in recent years, China has reduced the share of coal in their energy mix, total power consumption has risen, so its usage has also climbed. China has the world’s largest number of coal-fired power plants, so it’ll be tough to shift to alternatives. India is also a very long way from a clean grid, with coal continuing to account for around 70% of its electrical generation. Consumption at their power plants will rise 10% this year, and is set to increase every year through at least 2027.

3) Although little known to most people, sand is another natural resource becoming scarce. So China has launched a crackdown on illegal sand mining operations on the Yangtze river, which have made large parts of central China more vulnerable to drought. Sand mining in the river and its connecting lakes and tributaries has also affected shipping routes and made it harder for authorities to control summer floods.

4) Stock market closings for – 17 MAR 21:

Dow 33,015.37 up by 189.42
Nasdaq 13,525.20 up by 53.64
S&P 500 3,974.12 up by 11.41

10 Year Yield: up at 1.64%

Oil: down at $64.63

10 March 2021

1) There is an insatiable global appetite for sand, one of the world’s most important but least appreciated commodities. The problem, however, is this resource is slipping away. It is the world’s most consumed raw material after water and an essential ingredient to our everyday lives. Sand is the primary substance used in construction when using concrete. Sand, is used to make the glass found in every window, computer screen and smart phone. Even the production of silicon chips uses sand. The world consumes roughly 40 to 50 billion tons of sand on an annual basis, which has tripled over the last two decades, far exceeding the natural rate at which sand is being replenished. Desert sand grains are too smooth and rounded to bind together for construction purposes, instead sand from rivers and ocean shores is needed.

2) The oil giant Exxon is looking to enter the carbon-capture technology business, and Exxon says it’s ready to go all-in. This is a business of capturing carbon dioxide and storing it underground, which is far easier for a company like Exxon than building out renewable energy capabilities, as its European competitors are doing. The main use of captured CO2 is to extract more oil out of the ground, anyway. Exxon’s strategy is to cut emissions but pared back capital spending and a low breakeven price for oil. Experts have raised questions about the economics of carbon capture technology. Exxon has had to slash its operations budget last year to stay afloat, which resulted in job cuts that several employees described as haphazard. Morale inside the company has suffered as a result.

3) Fears are growing that the national average cost of gasoline could hit $3 a gallon by Memorial Day. With OPEC’s decision not to meaningfully boost oil production despite rising demand, the price at the pumps will soon breach $3 a gallon. Early in the coronavirus pandemic, OPEC slashed its oil production as demand for gasoline fell sharply. Presently, the national average price of gasoline is $2.76, up 30 cents from $2.46 a month ago. Last week gasoline demand reached the highest level in nearly a year, rising 15% from the prior week and now close to pre-pandemic demand. President Biden’s recent decisions to cancel the Keystone XL oil pipeline while also halting new drilling on federal land are playing no role in rising gas prices. There is no shortage of pipeline capacity and U.S. producers have little incentive to install new rigs on federal land since some existing wells remain shut down. With the economy improving, demand for gasoline has been rising, so with oil production not increasing, gasoline prices must rise.

4) Stock market closings for – 9 MAR 21:

Dow 31,832.74 up by 30.30
Nasdaq 13,073.82 up by 464.66
S&P 500 3,875.44 up by 54.09

10 Year Yield: down at 1.55%

Oil: down at $63.97

4 March 2021

1) Kelley Aerospace has officially launched the world’s first supersonic unmanned combat aerial vehicle (UCAV), called the ‘Arrow’. The drone is designed with a single shell of lightweight carbon fiber that allows it to reach speeds up to Mach 2.1. The UCAV has reduced radar cross-section and infra-red signatures, and is designed for multiple combat or reconnaissance roles. Kelley has 100 pre-orders for the war machine, which costs between $9 to $16 million dollars each. It’s designed to complement manned aircraft making it a force multiplier in the aerial battlefield. A manned combat aircraft would control multiple Arrow UAVs, tasking each with a different missions.

2) There are about a thousand restaurant closures a month in Texas, a result of the coronavirus pandemic. About 11,000 restaurants have closed in Texas since the start of the pandemic. This is about a fifth of all Texas restaurants with about 150,000 Texans who have lost their jobs. Nine out of 10 of these restaurants are small businesses employing less than 50 people. Restaurants in downtown city centers have been hit particularly hard because business lunches and conventions were suspended almost immediately. Surprisingly, the more expensive restaurants have not fared as well as family dining locations.

3) The American Petroleum Institute is considering throwing its weight behind a government imposed price on carbon dioxide emissions as a way to slow global warming, making for a major policy shift by the oil industry’s top trade group. Supporters of a tax argue that a carbon tax increases the cost of energy derived from oil, natural gas and coal so it would be more effective than regulations at paring U.S. greenhouse gas emissions. Exxon Mobil Corp., ConocoPhillips, BP and Royal Dutch Shell already support a carbon tax-and-rebate plan. The tax has gained momentum as international energy companies make investment decisions based on the assumption that emission limits will be imposed by regulation, tax or other mechanisms. The companies are seeking regulatory certainty on the issue, instead of environmental policies that whipsaw with every presidential election. A carbon tax could benefit producers of natural gas over coal and spur investment in renewables and nuclear power. Some environmentalists who oppose fossil-fuel development criticized the possible move, calling it little more than a public relations ploy by letting producers buy their way out of climate accountability. Several utilities have lobbied Biden administration officials to support a nationwide carbon price.

4) Stock market closings for – 3 MAR 21:

Dow 31,270.09 down by 121.43
Nasdaq 12,997.75 down by 361.03
S&P 500 3,819.72 down by 50.57

10 Year Yield: up at 1.47%

Oil: up at $61.06

24 February 2021

1) The employees at Boeing Commercial Airplanes headquarters have been told to clear out their belongings as the coronavirus pandemic has increased the viability of working remotely. The aerospace giant has its Commercial Airplanes headquarters there and has hinted it could sell the facility as a cost cutting measure, although the company hasn’t unveiled its plans publicly. Boeing continually assesses the company’s entire portfolio of real estate property assets and adjusts the company’s footprint as the business environment evolves. Boeing Commercial Airplanes leadership will remain in the Puget Sound region. As Boeing adapt to new market realities and position for the future, they are taking action across the company in five key categories: infrastructure; overhead and organizational structure; portfolio and investment mix; supply chain health; and operational excellence. That involves a look at the costs of maintaining some office space. Boeing can offer more flexibility for their teammates with a combination of virtual and on-site workspace, while also ensuring that leaders and teams are closer to where the work is being done to support customers.

2) In late December, the activist investment firm Engine No. 1 announced that it had the support of the California State Teachers’ Retirement System for the firm’s slate of four candidates for election to the board of directors of Exxon Mobil Corp. Engine No. 1’s stake is less than 0.02%. Like many other oil producers, Exxon cites the role of carbon capture in reducing carbon emissions by the end of the century. Exxon’s stated goal of an 11% to 13% reduction in emissions by 2025 is misleading, according to the firm. That goal does not include what are called Scope 3 emissions, the carbon emitted from burning the oil and gas products a company sells. The investment firm claims that Scope 3 emissions account for about 83% of Exxon’s total emissions.

3) American made solar panels cannot compete with Chinese prices as the demand for green energy increases under the Biden administration. American companies must compete on quality, so must make sure that everything done here is up to a higher standard than anywhere else. Two thirds of all of the world’s solar panels are produced in China, with only a few companies that manufactures panels in the U.S. As it stands now, with America attempts to be self sufficient with energy, we are dependent on to China to supply the bulk of solar panels.

4) Stock market closings for – 23 FEB 21:

Dow 31,537.35 up by 15.66
Nasdaq 13,465.20 down by 67.85
S&P 500 3,881.37 up by 4.87

10 Year Yield: down at 1.36%

Oil: up at $61.32

19 February 2021

1) U.S. retail sales surged in January, the most in seven months, beating all estimates. This suggests fresh stimulus checks helped spur a rebound in household demand following a weak fourth quarter. The value of overall sales increased 5.3% from the prior month after a 1% decline in December, and was the first monthly gain since September with all major categories showing sharp advances. The jump in retail sales could further embolden Republican opposition to President Biden’s $1.9 trillion stimulus plan, which the GOP considers too big. Even so, the Democrats can most likely pass the package without Republican votes, while the data might be evidence of how critical relief payments are to the economy and jobs.

2) The IRS has sent out all $600 stimulus payments, delivering more than 147 million second round stimulus checks, worth over $142 billion dollars. Some payments may still be in the mail, but otherwise, eligible Americans who did not receive the first or second payment can claim a Recovery Rebate Credit on their 2020 tax returns, which will be on line 30 of the 2020 Form 1040 or 1040-SR. The agency also noted that its ‘Get My Payment’ tool, which updated taxpayers on the status of their stimulus checks or deposits, was updated in January and will not be refreshed again for the second check.

3) The automaker Kia seems to be in quite a predicament. The automaker’s online services appear to have been severed from the outside world, with customers unable to start their cars remotely via Kia’s apps or even log into the company’s financing website to pay their bills. All signs pointed to a potential cyber attack against Kia, a ransom ware attack most likely, which is exactly what a new report is claiming. A report by information security news site Bleeping Computer seems to solidify that theory, as the publication shared a screenshot of an alleged ransom note asking Kia for the hefty tune of $20,000,000 to decrypt its files. The infection is believed to be the work of a group called DoppelPaymer by Crowdstrike researchers in 2019. Such threat actors routinely hunt big game for large pay outs, according to a security bulletin released by the FBI late last year. The note left behind mentions that the malware not only encrypted live data, but also the company’s backups, which more sophisticated attacks of this sort often prevent an easy restoration.

4) Stock market closings for – 18 FEB 21:

Dow 31,493.34 down by 119.68
Nasdaq 13,865.36 down by 100.14
S&P 500 3,913.97 down by 17.36

10 Year Yield: down at 1.29%

Oil: down at $59.79

15 February 2021

1) The Colt Manufacturing Company is ending 175 years as an American gunmaker with the purchase by the Czech firearms company CZG. Colt, a financially troubled company, that with its new Czech owner, is now expected to generate $500 million in revenue. Colt was an early innovator of interchangeable parts on the assembly line, and helped to define the growth of precision manufacturing. In addition to guns, Colt made gauges, sewing machines, printing presses and other products. The manufacture became the first school of applied mechanics in the United States, and was a fountainhead of mass production. But Colt filed for bankruptcy protection in June 2015, despite the booming sales in small arms. Like so many other manufactures, Colt was plagued by the high cost of capitalization and low return on investment that is systemic to all types of manufacturing. CZG acquires significant production capacity in the United States and Canada and substantially expand its global customer base.

2) American steelmakers’ reluctance to resume full production after pandemic shutdowns are threatening to undercut President Biden’s push to reshoring domestic industries. Producers shut furnaces down in response to falling demand from the coronavirus and now are operating well below pre-pandemic levels, even as recovering economies and tight supplies drive prices higher. The benchmark price for American steel is at an all-time high. Companies have kept blast furnaces idled on expectations that prices are likely to recede at some point, which would squeeze margins and potentially force expensive shutdowns again at those furnaces. But customers in industries from automobiles to appliances to machinery say they can’t get enough metal. This undermines the idea of supporting U.S. manufacturing. American plants are running at about 75% of their maximum potential, well down from the peak of 83% in 2019.

3) President Biden has ambitious plans when it comes to addressing climate change, by eliminating net carbon emissions from the energy sector by 2035, and the entire U.S. economy by 2050. Such a big shift away from the burning of oil, gas and coal will put many Americans out of work. Biden claims the net effect of switching from fossil fuels to clean energy in the coming years will result in more jobs, not fewer. In his first few weeks in office, Biden has taken a number of actions on climate change such as rejoining the Paris climate agreement and directing agencies to procure zero-emission vehicles, while pausing on existing leases for fossil fuel development on public lands. The Trump administration had promised to bring back jobs in areas reliant on fossil, but jobs still declined.

4) Stock market closings for – 12 FEB 21:

Dow 31,458.40 up by 27.70
Nasdaq 14,095.47 up by 69.70
S&P 500 3,934.83 up by 18.45

10 Year Yield: up at 1.20%

Oil: up at $59.73

5 February 2021

1) Dr. Anthony Fauci, MD has issued a new chilling warning about the Covid virus. A new strain from South African, known as the 501Y.V2 variant, is showing itself to be an even greater threat than the variant that started the pandemic. Experience shows that the South Africa virus has a very high rate of reinfection to the point where previous infection does not seem to protect you against reinfection with the South African variant. While research has shown that the current Covid vaccines may be less effective against the South African strain, there is no evidence that any of these new strains are completely resistant to the vaccines currently available. Nevertheless, the South African coronavirus mutation (B.1.351) poses a risk of reinfection to people who have already had Covid-19 and the vaccine efficacy may also be impacted. However, the number of daily coronavirus infections in the US has been dropping for a couple of weeks, but it’s still well over 100,000 per day, while the number of vaccinations is more than 32 million first dose. This isn’t enough to impact the course of the epidemic and significantly reduce transmission.

2) While the fears of a Treasury sell-off has tailed off, after the big move in the 10-year Treasury at the start of the year, the factors that led to that brief sell-off in Treasurys are very much still at hand. Chief among them are the rollout of Covid-19 vaccines, the huge fiscal stimulus already enacted with more in the pipeline, the pent-up spending power in household savings, and the easy monetary policy. Computer models say a perfect storm is being unleashed, with estimates that the 10-year Treasury yield will jump 162 basis points this year and another 160 basis points next year. This is well ahead of market estimates of roughly 17 basis points of gains in each of the next two years. The model doesn’t include the effects of any additional fiscal stimulus from the Biden administration, with its proposed $1.9 trillion dollars.

3) Experts consider gold futures are set to see a decline, which technical strategists believe may underscore a bearish trend in the yellow metal. Called a ‘death cross’, which occurs when the 50-day moving average, that many chart watchers use as a short-term trend tracker, crosses below the 200-DMA, which is widely viewed as a dividing line between longer-term uptrends and downtrends. The idea is that the cross marks the spot that a shorter-term sell-off can be defined as a longer term downtrend. The potential formation of a death cross, which reflects the recent slump in trading, comes as gold has experienced whipsawing action after the precious metal tumbled 1.6% on Tuesday.

4) Stock market closings for – 4 FEB 21:

Dow 31,055.86 up by 332.26
Nasdaq 13,777.74 up by 167.20
S&P 500 3,871.74 up by 41.57

10 Year Yield: up at 1.14%

Oil: up at $56.46