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

12 March 2021

1) There are some estimated 3.2 million abandoned oil and gas well sites. To plug a well cost as much as $150,000 each. Estimates are that abandoned oil and gas wells cover more than 2 million acres in the U.S., and if that land is restored, it could deliver billions of dollars in benefit for a fraction of the cost of restoration. Cleaning up these wells and restoring the land around them would safeguard against the harmful impacts of abandoned oil and gas infrastructure such as methane leaks and groundwater contamination. Two specific ecosystem benefits are agricultural products, like food from farms, and carbon sequestration.

2) With the onset of the pandemic in March 2020, companies abruptly shuttered their offices and instructed employees to work from home indefinitely. Companies at first thought the shutdowns would last a couple months, but one year later, millions of workers are still working remotely. This has amounted to a ‘remote work experiment’ on a scale never seen before, and here’s a little of what’s been learned. Employers have become more nimble, loosening restrictions on where employees can work, and equipping them with the tools to do so. Meetings aren’t always necessary, working a standard eight-hour shift may not be the best schedule for everyone, sitting at a desk doesn’t always mean you’re being productive and perhaps you miss your coworkers more than you thought you would. Some companies plan to remain 100% remote post-pandemic, while others, including companies like Reddit and Microsoft, will take a hybrid approach, giving workers more flexibility about where they work. But companies have also found cost savings, by reducing the office space needed, which is a major cost factor for businesses.

3) Chinese imports of Iranian crude oil will hit 856,000 barrels a day in March, the most in almost two years and up 129% from last month. Crude shipments from Iran to the province of Shandong, home to a quarter of China’s refining capacity, have surged so much they’re causing congestion at ports and filling up storage tanks, according to traders and analysts. The waiting time for tankers looking to offload in Shandong is estimated to be 12 days. Most refiners and traders are reluctant to purchase Iranian crude for fear of repercussions that can include being cut off from the American banking system and having cargoes seized by the U.S. Navy. Iranian cargoes are heavily discounted due to the sanctions.

4) Stock market closings for – 11 MAR 21:

Dow 32,485.59 up by 188.57
Nasdaq 13,398.67 up by 329.84
S&P 500 3,939.34 up by 40.53

10 Year Yield: up at 1.53%

Oil: up at $65.91

11 March 2021

1) The Interior Department moved one step closer to allowing the construction of the country’s first commercial scale offshore wind project with the release of a Final Environmental Impact Statement. This is the last step before issuing a decision on whether it will approve or deny the request to build the 800-megawatt project, the amount of energy used by more than 400,000 homes, and is 12 miles from Martha’s Vineyard. But the environmental assessment notes the project is expected to negatively impact commercial fishing, a $630 million industry in Massachusetts. If approved the Vineyard Wind 1 project is expected to be completed in 2023.

2) Japan’s new supercomputer Fugaku is the fastest supercomputer in the world and now is finally in fully operational status. Now, after undergoing nearly a year of testing on projects aimed at combating the COVID-19 pandemic by using analytics, modeling and policy making to prevent similar disasters, the computer is operational. Fugaku has been at the top of the list of fastest supercomputers since mid-2020, and it continues to hold that spot in the most recent Top 500 list. With three times the computing power of the runner-up IBM Summit, Fugaku is likely to remain the supercomputer to beat until Finland’s LUMI is completed. Fugaku is powered by ARM A64FX chips, of which it has 7,630,848 cores. When tested against the HPL supercomputing benchmark, it set a world record of 442 petaflops. And against the ‘high-performance computing artificial intelligence’ workload (HPC-AI) benchmark it maxed out at 2.0 exaflops, beating the previous record (also held by Fugaku) of 1.4 exaflops set in June 2020. According to Top 500, Fugaku’s HPC-AI benchmark was the first benchmark measurements above one exaflop for any precision on any type of hardware. In terms of the type of research Fugaku will be working on, some projects have already returned results such as simulating tsunami waves to forecast flooding in Japan. Seventy-four additional projects have been selected for implementation starting in April 2021.

3) Worries continue to grow that interest rates and inflation will rise as a result of greater government borrowing- a.k.a. the just passed $1.9 trillion stimulus package. Washington doesn’t want to talk about how to pay for it, and now they’re wanting to do an infrastructure bill. The negative effects on the economy will include higher mortgage rates and car payments. There are growing fears that coming next is a massive tax increase.

4) Stock market closings for – 10 MAR 21:

Dow 32,297.02 up by 464.28
Nasdaq 13,068.83 down by 4.99
S&P 500 3,898.81 up by 23.37

10 Year Yield: down at 1.52%

Oil: up at $64.69

8 March 2021

1) Walt Disney Co. will close at least 60 Disney stores in North America this year, which amounts to about one-third of their stores. Like so many other retailers, Disney has found that shopping has changed because of the coronavirus pandemic- and so has Disney’s entire business with its theme parks closed to some extent. But Disney+ streaming service has blossomed to 94.9 million subscribers. Disney’s revenue in the October to December quarter fell 22% to $16.25 billion from $20.88 billion in the previous year but still beat Wall Street expectations.

2) General Motors said it’s exploring the possibility of a second battery production site in the country, the first is its facility in Lordstown, Ohio, a site it will operate with partner LG Chem. Reports are that GM is interested in a second site in Tennessee, as a venture with Korea’s LG. The Ohio operation is set to open next year with enough capacity to build hundreds of thousands of batteries per year. The automaker is keen to quickly capitalize on a shift to electric vehicles and said it aspires to only sell zero-emissions, light-duty vehicles by 2035, including light-duty pickup trucks. The Ohio plant may be a down payment on this EV future, in which the automaker has invested $2.3 billion.

3) Lumber prices have skyrocketed 140% over the last year, although the economy might not be able to handle further increases in 2021, nevertheless lumber is the best performing commodity. Analyst predict lumber prices could gain another 35% in the next year. Rising lumber prices are from the pandemic induced housing boom, fueled by record low mortgage rates and a mass exodus to the suburbs. It’s a sign that the economy is recovering, but if prices of lumber and other commodities continue to rise quickly, the economy might falter, as prices move higher driven by demand, while supply will continue to shrink. Worker wage increases haven’t been keeping pace with the dramatic spike in all the commodities at this point in time. With interest rates going up and all these inflationary commodities advancing in price, there are growing fears of people being self-sustaining when wages remain static.

4) Stock market closings for – 5 MAR 21:

Dow 31,496.30 up by 572.16
Nasdaq 2,920.15 up by 196.68
S&P 500 3,841.94 up by 73.47

10 Year Yield: unchanged at 1.55%

Oil: up at $66.28

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

2 March 2021

1) The electronics giant Best Buy, has laid off 5,000 full time staff in a move the electronic retailer says was caused by changing consumer patterns because of the coronavirus, and the result of online sales growth in the Amazon race. Driven by the pandemic, their online sales has grown by almost 90 percent in the fourth quarter compared with the previous year. With many Americans stuck at home, there has been a surge in demand for items ranging from computers, gaming consoles to kitchen appliances. But the retailer said that owing to a spike in online sales, which have more than doubled so far in 2021 compared with the same time last year, the retailer needs fewer full-time staff and so plans to add 2,000 part-time workers to their staff.

2) Newport News Shipbuilding, the largest industrial employer in Virginia, has announced the layoffs for 314 employees. In addition, they are moving about 120 managers to lower-level positions. These changes are necessary cost controls to help ensure the shipyard’s future and the afford ability of the ships it builds, while also reducing the number of management layers. The Newport News Shipbuilding company designs, builds and refuels nuclear-powered aircraft carriers and designs and builds nuclear-powered submarines, while employing roughly 26,000 workers.

3) The badly mauled U.S. shale industry is finding a resurgence in one of the most unlikely places . . . private operators that most investors have never heard of. For instance, the case of little known and closely held DoublePoint Energy. It is now running more rigs in the Permian Basin than the giant Chevron Corp. The family owned Mewbourne Oil Co. has about the same number of rigs as Exxon Mobil Corp does. Once minor players, private drillers hold half the horizontal rig count as of December. It’s the first time in the modern shale era that they have risen to the level of the supermajors. This is the result from the big guys starting to show restraint. They’ve dialed back drilling after the pandemic sent oil prices into collapse. Now that the market is on the rise again, the majors and publicly-traded counterparts are mostly sticking to the mantra of discipline, all but ending shale’s decade-long assault on OPEC for market share. But if private drillers keep expanding at their current pace, it could eventually mean that U.S. production ends up on the higher end of analyst forecasts. And that, of course, could weigh on prices. Oil’s dizzying collapse last year is still fresh in the minds of many, and shareholders are quick to punish the producers they think are getting too aggressive.

4) Stock market closings for – 1 MAR 21:

Dow 31,535.51 up by 603.14
Nasdaq 13,588.83 up by 396.48
S&P 500 3,901.82 up by 90.67

10 Year Yield: down at 1.45%

Oil: down at $60.34

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

25 February 2021

1) Nikola Corp. announced that its long-range fuel-cell semi truck gets as much as 900 miles on a tank of hydrogen gas, and is due to come out in 2024. The Nikola Two fuel-cell vehicle would go at least 750 miles on a tank of hydrogen, while its Tre shorter-range fuel-cell truck, can run 500 miles, and remains on schedule to start production in the second half of 2023. Nikola said that their first Tre FCEV prototypes are scheduled to begin assembly in Arizona and Ulm, Germany, in the second quarter of this year and that testing and validation would continue into 2022. The Nikola 900-mile truck will have a sleeping cabin for drivers and a new chassis designed for North American highways.

2) From California to Indiana, aerospace to appliance manufacturers, American factories are struggling to procure cold-rolled steel. Manufactures are getting hit by a fresh round of disruption in the U.S. steel industry. Steel is in short supply and prices are surging. Unfilled orders for steel in the last quarter were at the highest level in five years, while inventories were near a 3-1/2-year low. The benchmark price for hot-rolled steel hit $1,176 per ton this month, its highest level in at least 13 years. Domestic steel prices have risen more than 160% since last August, leaving steel consumers in a quandary whether to absorb or pass along the increased cost. U.S. steel prices are 68% higher than the global market price and almost double China’s, even with prices in both China and Europe up over 80% from their pandemic-induced lows. But the price gap is so wide that even with a 25% tariff, it would be cheaper to import than buy from domestic mills. The United States imported 18% of its steel needs last year.

3) The global semiconductor shortage will slash earnings of General Motors and Ford Motor Co. by about one-third this year, as supply constraints hamper production and profits. The chip shortage will materially erode margins and could lower expected earnings before interest and taxes by as much as $2 billion for GM and $2.5 billion for Ford. GM’s EBITA margin could fall to 3.4%, while Ford’s could dip as low as 1.8%. Rising demand for the chips needed to build technologically advanced and connected vehicles has introduced a new set of challenges for the North American auto industry, with shortages triggering production cuts and temporary plant closures. Demand from consumer-electronic companies exacerbated the supply shortages amid the coronavirus pandemic.

4) Stock market closings for – 24 FEB 21:

Dow 31,961.86 up by 424.51
Nasdaq 13,597.97 up by 132.77
S&P 500 3,925.43 up by 44.06

10 Year Yield: up at 1.39%

Oil: up at $63.36

23 February 2021

1) IBM and Delta have expanded a multi-year services agreement to migrate the airline’s applications to the cloud. Delta will move to a hybrid cloud architecture built on Red Hat OpenShift, and has been retooling during the COVID-19 pandemic with the aim of rebounding in 2021 and 2022 as travel picks up. Like other businesses, Delta has had to accelerate its digital transformation plans, by utilizing IBM’s services, hybrid cloud architecture and roadmaps to migrate its applications. In addition, Delta will also leverage IBM software such as CloudPaks and co-create applications.

2) The relentless rise in lumber prices shows no signs of subsiding as the pandemic keeps people at home, thereby spurring a home renovation boom. Prices have climbed almost 40% this year, fueling concerns for home builders. Surge in lumber prices is adding thousands of dollars to the cost of a new home and causing some builders to abruptly halt projects at a time when inventories are down. This demand has handicapped producers’ abilities to restock inventories quickly, further pushing prices up. There are fears that the rise in lumber will spark inflation bleeding into the home-buying market.

3) It appears that robots will soon have a big role in the construction industry, but until these machines can automatically prioritize tasks, project managers will still need to manually assess and appraise how the project is progressing. The construction industry’s productivity has trailed that of other economic sectors for decades, and there is a $1.6 trillion dollar opportunity to close the gap. AI and deep learning can make robotics useful across the construction industry. Now, AI startup Buildots has been taking its first steps to make this happen. Buildots attaches 360-degree cameras onto project managers’ hardhats to collect footage inside the construction site and analyze the image-data. On a typical site, there are tens of thousands of different construction activities. Tasks can be as small as installing a door handle, or as big as laying a brick wall. The Buildots platform automatically captures data using the cameras, and compares it to the designs and project schedule. It analyzes every electrical outlet, wall, or window, separately to determine its exact state relative to that expected on the plans. Deep learning models and algorithms such as the AI-based image stabilization engine, person data removal which removes people, phone/tablet screens, and paper notes and status classification can transform the visual data into insights. The AI system is able to assess if each item is completed or behind schedule and notify managers of what needs to be done.

4) Stock market closings for – 22 FEB 21:

Dow 31,521.69 up by 27.37
Nasdaq 13,533.05 down by 341.41
S&P 500 3,876.50 down by 30.21

10 Year Yield: up at 1.37%

Oil: up at $62.19