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

17 March 2021

1) One part of the U.S. infrastructure that America can invest in now is the recycling infrastructure. The recycling infrastructure and related new technologies hasn’t been updated for roughly 20 years, in particular the massive growing plastics waste problem. Several years ago, China’s National Sword policy ended its role as a recipient of western waste, leaving the west with a seriously growing waste problem. Some consider the up coming bill on infrastructure upgrade will present an opportunity to leap ahead of the plastic problem with money for developing new technologies.

2) As if the American economy hasn’t suffered enough with the pandemic and record snow storms across the land, one more massive snow and ice storm system is sweeping across the nation again. Not only is there heavy snow, torrential rain and severe weather, but also there were 14 reported tornadoes, and additionally, wind gusts reaching as high as 87 mph in the Texas Panhandle with the region experiencing baseball-sized hail. Over 6 inches of rain has been reported in southern Missouri and over 4 inches of rain reported in Kansas and Nebraska, with all three states seeing flooding due to the storm. Snowfall rates of 1 to 2 inches per hour in Colorado and Wyoming, with up to 4 inches per hour locally in the foothills and mountains, closing highways and freeways. Totals of 1 to 4 feet of snow is expected in parts of the Rockies from this storm with 6 to 12 inches from Denver to Rapid City.

3) The microchip shortage continues with GM forced to shut down its Chevy Camaro Production. The global microchip shortage will force some automakers to prioritize the production of only their most important models. For GM, this means that Chevrolet Camaro and Cadillac CT4 and CT5 production must be temporarily paused. Whatever microchips GM has access to, will be diverted to those factories remaining in production, leaving other lines to fight for what’s left. This problem comes just when automakers are trying to climb out of the financial disaster from the pandemic, when makers are needing to make every auto sale they can get, to bring in much needed revenues. Many automakers are now delaying or pausing their development programs, the debut and on-sale dates receding, thereby further aggravating long range revenues. The microchip shortage was caused by semiconductor production stoppages early in the COVID-19 pandemic. Automakers underestimated the rate at which sales would recover, and so, it left them behind all the other companies that rely on microchips. It’s unclear when the shortage will end. Many major automakers, from Honda to Mercedes-Benz have had to either pause or cut production over these shortages, so GM isn’t unique here.

4) Stock market closings for – 16 MAR 21:

Dow 32,825.95 down by 127.51
Nasdaq 13,471.57 up by 11.86
S&P 500 3,962.71 down by 6.23

10 Year Yield: up at 1.62%

Oil: down at $64.91

5 March 2021

1) For many years, there has been one report after another about the critical need to repair, replace and expand our infrastructure of roads, waterways, air travel systems, highways, dams, bridges, electric power and many other necessary parts of a modern society. The U.S. is facing a $2.59 trillion dollar shortfall in meeting its infrastructure needs. The American Society of Civil Engineers released its latest report card on U.S. infrastructure giving an overall grade of C-. That’s an upgrade from the D+ of the last report from four years ago, but leaves lots of room for improvement. America is spending about half what our infrastructure bill is, the total investment gap has gone from $2.1 trillion to nearly $2.59 trillion in over 10 years.

2) The General Motors auto company is extending its production cuts amidst the chip crisis shortage at three North American plants and added a fourth to the list of factories hit by the global semiconductor chip crisis. However, the cut did not change GM’s February forecast of a $2 billion loss in 2021. The automaker expects chip supplies to normalize by the second half of the year with no incremental losses. GM did not disclose the impact on volumes or parts affected by the chip shortage but said it intends to recover much of the lost output. Power outage in Texas further hit chip production. President Joe Biden has also pushed for $37 billion in Congressional funding to tackle the chip crisis.

3) Banning natural gas would cut carbon emissions. Cities across the country are pushing for electric only buildings, some by banning natural gas, as part of an ongoing effort to curb emissions and stall climate change. But another national push is underway in state legislatures to prevent this banning from happening elsewhere. HB 1191 is written in a way that says cities can’t put in place policies or requirements that would prioritize one fuel over another for heat and appliances in buildings. The bill is effectively a ban on banning natural gas. Advocates say it’s a necessary effort to protect consumer choice and keep energy costs low, but others are saying the gas industry is trying to protect itself by taking away local control and stifling cities’ sustainability goals. Critics question whether protecting consumers is the true aim.

4) Stock market closings for – 4 MAR 21:

Dow 30,924.14 down by 345.95
Nasdaq 12,723.47 down by 274.28
S&P 500 3,768.47 down by 51.25

10 Year Yield: up at 1.55%

Oil: up at $64.31

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

3 March 2021

1) In Petaluma, California the local city council unanimously voted to ban new gas stations, building on a two-year moratorium passed in early 2019. Petaluma is just 15 square miles in size, with a population of 61,000 and has 16 gas stations with another one recently approved. City officials consider that’s more than enough for all current and future residents. This decision is part of the city’s climate plan to get to zero emissions by 2030. There are multiple gas stations located within a five minute drive of every existing residence. The legislation also streamlines the process for stations to add electric vehicle chargers and potential hydrogen fuel cell stations in the future.

2) Millions of families in Texas were struggling in freezing temperatures without heat or running water. Losing these essential services can be life threatening, however that situation is all too familiar to millions of low income families across the nation, who are struggling to pay their utility bills. By the end of December, low income families owe more than $27 billion dollars for their gas and electric utilities, and with the combined rent and utilities their debt exceeds $70 billion. By the end of March, when the winter heating season is over, the numbers will be even higher.

3) Brazos Electric Power Cooperative Inc. is based in Waco, and provides power to many communities near Fort Worth. The electric cooperative with 1.5 million customers has filed for bankruptcy protection, saying it wants to protect customers from huge energy bills sent by ERCOT after last month’s historical winter storm. The CO-OP was a financially robust, stable company with perpetually strong credit ratings until the February 13-19 cold snap that essentially shut down Texas and caused widespread power outages. As a result of the catastrophic failures due to the storm, Brazos Electric received excessively high invoices by ERCOT for collateral and for purported cost of electric service, payment of which was required within days. The cooperative costs are passed through to its members, but Brazos Electric determined that it cannot and will not foist this catastrophic financial event on its members and those consumers. Brazos Electric supplies wholesale power to 16 member owner distribution cooperatives in 68 Texas counties.

4) Stock market closings for – 2 MAR 21:

Dow 1,391.52 down by 143.99
Nasdaq 13,358.79 down by 230.04
S&P 500 3,870.29 down by 31.53

10 Year Yield: down at 1.42%

Oil: down at $59.56

26 February 2021

1) The pandemic has been especially hard on small business, who don’t have the cash reserves of large corporations. They face a number of challenges they need to meet in order to survive. Here is a brief list of challenges they face- 1) The Ability to Transition to a Digital First World 2) Lack of In-Person Networking Events 3) Forward Planning is Difficult 4) Leaving Brick and Mortar Stores. 5) Lacking Work Life Balance 6) Increased Shipping Costs 7) Lacking Creativity 8) Blips in Production 9) Pressure to Perform 10) Long Term vs. Short Term Content

2) More than 4 million barrels of daily oil output, which is almost 40% of the nation’s crude production, is now offline because of the deep freeze weather. One of the world’s biggest oil refining centers has seen its output drastically cut back. Experts say the market is underestimating the amount of oil production lost in Texas due to the bad weather. Crude oil briefly surged above $65 a barrel, a level not seen since last January. Supply tightness has also soared, where just ten months ago, the price slumped below $16 because of a demand shock caused by Covid-19. Estimates for how long the outages may last have gotten progressively longer as analysts try to figure out the time span involved in thawing out infrastructure, especially in those areas where freezing weather isn’t the norm. That means ever more barrels are being removed from the global market, resulting in a surge in price of crude in other parts of the world.

3) Another long time retailer chain has filed for bankruptcy, as the Covid-19 pandemic makes the retail industry the site of regular closures and financial woes. Now, regional department store Belk, the nation’s largest privately owned department store, can be added to the ‘dead’ list, with the closing of all its stores. The bankruptcy filing for the 133 year old retailer comes about half a decade after the founding Belk family sold the company to its current owners for $3 billion dollars. The pandemic directly resulted in the drastic declines in the retailer’s sales, revenue, and liquidity. Unfortunately, Belk is far from the only shopping mainstay to struggle under the pressures of the pandemic. The company’s bankruptcy plan was filed in a Houston courtroom on Feb. 23, which relieves Belk of $450 million worth of debt and create an infusion of capital for the business.

4) Stock market closings for – 25 FEB 21:

Dow 31,402.01 down by 559.85
Nasdaq 13,119.43 down by 478.53
S&P 500 3,829.34 down by 96.09

10 Year Yield: up at 1.52%

Oil: down at $63.31

22 February 2021

1) There have been many reports about the crumbling weakness of American infrastructure, something that became apparent to many people with the recent hard freeze across the country. Example- in two hours Texas’s electric grid almost came crashing down. Electric demand for heat was soaring, then three coal plants followed quickly by a gas plant dropped out. If insufficient power came in, the grid wouldn’t be able to support the energy demand from customers and the other power plants that supply them, causing a cycle of dysfunction. As many as 5 million homes and businesses were abruptly thrust into frigid darkness for nearly four straight days as the crisis continued, ensnaring more than a dozen other states as far as away as California. Wind power was the first to go, as dense fog settled over turbine fleets, freezing on contact. Their blades iced over, so wind farms completely ceased. Then gas generation began declining. As the cold deepened, demand climbed sharply, hitting and then exceeding the state’s all-time winter peak. Gas well shut-ins in West Texas caused gas supplies to dip, reducing pressure at gas plants and forcing them offline, so virtually all of the generation falling off the grid came from coal or gas plants. In the span of 30 minutes, 2.6 gigawatts of capacity had disappeared from Texas’s power grid, enough to power half a million homes. Demand kept climbing, and plants kept falling offline. To stem the plunge, operators started shedding load. Operators removed 10 gigawatts of demand, essentially cutting power to 2 million homes in one fell swoop. As blackouts spread across the state, power was cut not only to homes and businesses but to the compressor stations that drive natural gas pipelines further cutting off the flow of gas supplies to power plants.

2) Now Maersk , the world’s largest shipping line, is taking a historic step toward not using fossil fuels for propulsion. About half of Maersk’s 200 biggest customers have set science-based or zero-carbon targets for their supply chains, or are in the process of doing so. The firm wants to have net-zero emissions from its operations by 2050, and helped found a research center focused on decarbonizing the industry. Getting hold of enough carbon-neutral fuel will be Maersk’s biggest challenge, given the current lack of availability.

3) Some experts are predicting that because of the rare convergence of three economic triggers, we are about to see a massive buying frenzy into the technology sector of the stock market. No details were shared.

4) Stock market closings for – 19 FEB 21:

Dow 31,494.32 up by 0.98
Nasdaq 13,874.46 up by 9.11
S&P 500 3,906.71 down by 7.26

10 Year Yield: up at 1.34%

Oil: down at $59.01

18 February 2021

1) Demand for natural gas is currently at an unprecedented level according to Atmos Energy, because of freezing rain, snow, ice and dangerous travel conditions. Atmos Energy is asking all of its customers and businesses to conserve as much energy as possible. The Dallas-based natural-gas-only company is one of the nation’s largest distributors, serving about three million customers in more than 1,400 communities in nine states. This request comes after a new Winter Storm Warning was issued for all of North Texas while millions in the state remain without power. Atmos Energy has offered their customers a number of suggestions on how they can limit their energy usage.

2) Texas produces more energy than any other state, yet in the midst of the arctic freeze gripping the central U.S., Texas is faced with insufficient energy for its citizens. The arctic freeze gripping the central U.S. is raising the specter of power outages in Texas. The deep freeze this week in the Lone Star state, is causing power demand to skyrocket. The people of Texas relies on electricity to heat many homes, while at the same time, natural gas, coal, wind and nuclear facilities in Texas have been knocked offline by the unthinkably low temperatures. This situation could have wide-reaching implications as the US power industry attempts to slash carbon emissions in response to the climate crisis and move away from fossil fuels. Texas has been hit with life-threatening blackouts. More than 4 million people in the state were without power early Tuesday. Authorities defended the controlled outages, called rolling blackouts, which kept the grid from collapsing. The situation raises the question that if a state like Texas is now having trouble meeting its energy requirements, then how will the other states fare as America moves to a green energy environment.

3) Motorola Solutions has consolidated its video security and AI video analytics production into a newly renovated manufacturing facility in Richardson Texas, with plans to expand staffing in the coming year. The new facility opened in January housing 250 employees, with plans to expand by at least another 50 this year. Motorola acquired the camera and analytics company Avigilon, for a reported $1 billion in February 2018 and the Fort Worth based license plate recognition camera and software maker Vigilant Solutions in January for $445 million. In March 2019, it bought voice-over IP dispatch console maker Avtec, then Watchguard, which designs and sells in-car video systems and police body cameras to law enforcement agencies. Two additional California-based companies Pelco and Scotland-based IndigoVision were also added to Motorola’s growing security abilities.

4) Stock market closings for – 17 FEB 21:

Dow 31,613.02 up by 90.27
Nasdaq 13,965.50 down by 82.00
S&P 500 3,931.33 down by 1.26

10 Year Yield: unchanged at 1.30%

Oil: up at $61.66

12 February 2021

1) A massive winter storm system, a polar vortex, will bring sever winter storm conditions with ice, snow, and very low temperatures to millions of Americans from Texas to New Jersey. Some of the worst weather will be in portions of Arkansas, Tennessee and Kentucky where an ice storm is expected with accumulations exceeding a half inch in some locations. This will likely lead to hazardous travel conditions with accidents, power outages and scattered tree damage. All of this promises huge economic losses for the people and local governments. Plus, there has already been loss of life and no doubt more will unfortunately will be lost.

2) NASA’s experimental ‘RainCube’ satellite is now dead. In mid-2018, NASA launched a tiny CubeSat as a proof of concept experiment to study weather on Earth. The objective was to see if compact satellites could return ‘science-quality data’ at a much lower cost than much larger conventional weather satellites. The RainCube satellite not only outlived its designed three-month lifespan, but it returned a wealth of data that proved useful for researchers. The CubeSat is just the size of a shoebox. RainCube’s mission was to study weather on Earth and show scientists what a tiny satellite could do. It completed its three-month mission… and then another three more months… and then three more. Finally, in late December of 2020, the test satellite died, having outlived and outperformed its design several times over.

3) Bank of America forecast the US dollar will strengthen throughout 2021 for 5 key reasons. 1- After several actions to pump dollars into the US economy, the Federal Reserve is starting to end its ultra-easy money policy and purchases of less assets. 2- Stimulus boost with an additional $1.9 trillion dollar stimulus proposal in a bid to supercharge the US economic recovery. 3- Faster growth with the global economy expected to rebound in 2021with the US growth to handily outpace that of the EU. 4- Dollar shorts as the market continues to short the dollar despite the currency’s recent rally. 5- Return of the safe haven as reversal stands to push more investors into cash positions and away from the risk of the markets. The peak in the market is expected this first quarter with a 10% market correction forecasted to arrive sometime this year and shake investors’ appetite for stocks.

4) Stock market closings for – 11 FEB 21:

Dow 31,430.70 down by 7.10
Nasdaq 14,025.77 up by 53.24
S&P 500 3,916.38 up by 6.50

10 Year Yield: up at 1.16%

Oil: down at $57.92

20 January 2021

1) There are growing fears of another stimulus package as the national debt grows. One measure of unemployment suggests Biden’s $1.9 trillion dollar stimulus plan may do more harm than good. The U-6 unemployment rate, a less popular reading than the commonly cited U-3, suggests additional fiscal support could be unnecessary. The gauge (which includes those only partially participating in the labor force) currently is at 11.7%. Five of the past six recessions saw higher readings. The coronavirus pandemic initially pushed the U-6 rate to a record-high of 22.9% in April, but easy monetary conditions and the $2.2 trillion dollar stimulus package brought the rate down in a matter of months. Still, there are serious questions about the long term stability of the world economics as nations struggle to pay off these huge national debts.

2) A new Covid-19 variant has been discovered in Brazil adding to the two newly emerged variants from the United Kingdom and South Africa. Brazil is one of the worst affected countries by the virus, where more people have died of the virus than anywhere else outside the United States. An urgent COVID warning says the worst months are still ahead, and is expected to get more people sicker faster. Infections and deaths are expected to continue increasing.

3) President-elect Joe Biden has an ambitious environmental agenda, with a principle goal of transitioning away from using fossil fuels. There are many questions just how this climate plan could affect the oil and gas industry in America. The new requirements include disclosure of climate risks from public companies, a commitment to end new drilling permits for federal lands, and to eliminate tax subsidies for the oil and gas industry. Tougher methane regulations to give incentives for Americans to buy cars that do not run on gasoline. It’s not just the big oil companies which can be hurt, for there are thousands and thousands of small companies making up the supply chain businesses, as well as the small independent wildcatters who are producing oil. But while oil is slowly recovering with prices above $50 a barrel, it is all in jeopardy if these proposals go into effect. Biden’s proposals could face stiff challenges from Texas officials and the oil and gas industry itself.

4) Stock market closings for – 19 JAN 21:

Dow 30,930.52 up by 116.26
Nasdaq 13,197.18 up by 198.68
S&P 500 3,798.91 up by 30.66

10 Year Yield: down at 1.09%

Oil: up at $53.17