New week, the same rebound. Stock futures point to new gains as investors become optimistic that the bond crash is over and the Fed’s plans to raise interest rates will be cut short due to a global slowdown.
Of course, this optimism comes with growing worldwide dissatisfaction with high commodity prices, which have raised food prices, distorted US summer driving plans and left some poorer countries in complete crisis. “The real world in which companies sell their products does not seem very special to H2,” wrote Jeffrey Halle of OANDA.
This brings us to the literal habituation of the day off the grid by Cornerstone Futures’ Brin Kelly, who warns that the next black swan for the markets could be damaged power grids and power shortages.
“Energy network problems in the United States and elsewhere are a potential catalyst for chaos in energy markets that are undervalued,” energy trader Kelly wrote in a new analysis.
She notes that while high-ranking goods such as petrol receive a lot of media attention due to easily accessible price points, electricity lacks liquid benchmark futures and utility tariff structures are too complex to understand.
Its two charts below show changes in the futures curve for major electricity markets – the Pennsylvania / New Jersey / Maryland power grid and the ERCOT in Texas on the right. Both have seen “unprecedented” higher moves this year, but that remains largely on the radar, she said.
Corner futures
That is, until something big happens, like the incredible winter storm of 2021 in Texas, which pulled the state’s lucrative energy companies offline, along with transportation, water distribution and telecoms.
“Simply put, crude oil does not actually produce electricity in today’s environment. However, power is required for oil production. In other words, a faulty power grid MAY be the next problem with the supply of an oil chain, ”she said.
Anything bigger than what we see in Texas “can be potentially catastrophic,” she warns as we enter the height of the summer cooling season amid rising temperatures. Tokyo warnings of eclipse warnings caused by heat waves are food for thought.
“It simply came to our notice then. Therefore, the electricity grid can be the soft belly of the whole economy, “Kelly said. She shared the chart below from the US Chamber of Commerce, which shows a risk to the reliability of electricity in the summer and warns that the transition to clean energy is not in line with reality.
United States Chamber of Commerce
And then there are electric vehicles, which are expected to grow tremendously, “a consumer segment of the electricity grid that essentially doesn’t exist right now,” she said.
And while governments stop keeping oil prices lower, the same can’t be said for the power industry, Kelly said. See the full blog here.
the buzzing
Russia defaults on foreign debt for the first time since the 1917 Bolshevik revolution of Russian gold.
Spirit Airlines SAVE, + 2.90% fell in pre-market trading after the low-cost carrier agreed to a sweetened buyout from Frontier ULCC, + 6.57%, rejecting the increased offer from JetBlue Airways JBLU, + 5.77%.
Shares of Epizyme EPZM, -0.31% rose 63% after France’s biotechnology Ipsen IPN, -2.67% announced a deal to acquire the US cancer drug maker for about $ 247 million.
Chinese manufacturers of electronic components – BYD Electronic 285, + 14.85% and AAC Technologies 2018, + 6.94%, among others – jumped in Hong Kong with optimism about potential new orders from Apple AAPL, + 2.45% in the coming months .
Orders for durable goods and upcoming home sales are accepted this morning, after a week that will also give us the preferred inflation indicator by the Federal Reserve. We will also hear a number of Fed officials this week, including President Jerome Powell.
The markets
US stock futures YM00, + 0.35% ES00, + 0.47% NQ00, + 0.62% are rising, as the yield on TMUBMUSD10Y bonds, 3.179% TMUBMUSD02Y, 3.093% is also rising.
Oil prices CL.1, + 0.47% BRN00, + 0.70% are slightly lower as traders await the OPEC meeting this week. Bitcoin BTCUSD, -0.52% holds just over $ 21,000.
Tickers
These were the most sought-after tickets in MarketWatch at 6 a.m. Eastern Time:
Ticker Brand name TSLA, + 4.52% Tesla GME, -4.80% GameStop AMC, + 3.49% AMC Entertainment NIO, + 4.47% NIO MULN, Mullen Automative AAPL, + 2.45% Apple AMZN, + 3.58% Amazon BABA, + 4.91% Alibaba NVDA, + 5.55% Nvidia EVFM, + 16.95% Evofem Biosciences Random Indications
The organizer of the sex party, Killing Kittens, gets a new investor – the Ministry of Finance of the United Kingdom.
Four miles below the surface, a US World War II warship became the deepest shipwreck ever found.
Ready for hurricanes and other disasters, the mobile emergency power plants of this all-female startup are green and fast
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