David Fuller and Eoin Treacy's Comment of the Day
Category - General

    Oil jumps 2%, hits 3-year high as OPEC+ sticks to output plan

    This article from Bloomberg may be of interest to subscribers. Here is a section:

    Despite the pressure to ramp up output, OPEC+ was concerned that a fourth global wave of COVID-19 infections could hit the demand recovery, a source told Reuters a little before the vote.

    "The (price) move looks a bit outsized given the ministers just reaffirmed the decision announced in July, but it shows how tight the market is, reinforcing our view of asymmetric price action with risks skewed to the upside at these inventory levels," Barclays said in a note. 

    Investors will closely watch Wednesday's crude inventory data from the U.S. Energy Information Administration for further direction.

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    Lordstown to Sell Ohio Plant to Foxconn in $280 Million Deal

    This article from Bloomberg may be of interest to subscribers. Here is a section:

    Under terms of the transaction, Lordstown Motors will sell the Lordstown factory to Foxconn for about $230 million after buying it from GM for just $20 million two years ago. The maker of Apple Inc.’s iPhone will buy $50 million worth of common stock in its new partner and will assemble the Lordstown Endurance electric pickup truck. The deal is contingent on the two sides reaching an agreement on manufacturing the vehicle. Foxconn plans to start mass production in April, according to a person familiar with its schedule. 

    Lordstown shares jumped as much as 12% in late New York trading Thursday. During regular trading hours, the stock rose 8.4%, closing at $7.98 after Bloomberg had earlier reported a deal was in the works. It’s still down 60% for the year.

    The accord gives both companies something they badly need. Lordstown Motors gets a partner that will hasten the startup’s move into large-scale production, which will help lower the high costs required to make EVs. Foxconn gets a plant in North America where it can build its open-source electric vehicle platform and do contract manufacturing for partners like Fisker Inc.

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    Amazon Turns Negative for 2021 as Higher Yields Add to Pressure

    This article by Ryan Vlastelica for Bloomberg may be of interest to subscribers. Here is a section:

    The losses in market value for the companies listed in the closely watched NYFANG+ index -- which includes 10 highly liquid tech and internet stocks -- now have soared to nearly $1 trillion from their Sept. 7 highs. Tesla Inc. is the only stock in black during that period.

    The rise in yields has pressured tech names, as investors calculate that future earnings gains will be less valuable amid higher rates. The 10-year Treasury yield is currently around 1.49%, up from 1.3% on Sept. 22.

    “Yields are likely to be biased higher for the time being as the world (and monetary policy) normalizes and inflation proves more durable than hoped,” the research firm Vital Knowledge wrote in a report. While some tech investors view the decline as temporary, “we think this time is different.”

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    World's biggest clean energy project to power Singapore from Australia

    This article from NewAtlas may be of interest to subscribers. Here is a section:

    The Australia-Asia PowerLink project, led by Australia's Sun Cable, plans to create a mammoth "Powell Creek Solar Precinct" on 12,000 hectares (29650 ac) of arid land about 800 km (500 miles) south of Darwin. The site, chosen because it's one of the most consistently sunny places on Earth, would be home to a mind-boggling 17-20 gigawatts of peak solar power generation and some 36-42 GWh of battery storage.

    To give you a sense of scale, that's nearly 10 times the size of the world's current largest solar power installation, the 2.245-GW Bhadia Solar Park in India, and more than 30 times more energy storage than the last "world's biggest battery" project we covered in February. It's a bit big.

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    Email of the day on politically secure mining jurisdictions

    Can you please give us a an update on copper producer plays for relative strength for listings in areas of good governance? As David said, we realize we need the tailwind or bull market to be successful investors.

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    Gold Surge Looks More Flow-Based than Fundamental

    This note from a blog on Bloomberg may be of interest to subscribers.

    Gold is showing some mysterious strength and it’s hard to see why. The dollar has weakened, but not nearly enough to push bullion about 2% higher. Real Treasury yields are actually rising, which usually is enough to keep the yellow metal in check.

    It may seem like a cop out, but the culprit here is probably quarter-end flows. The last Commitments of Traders report showed hedge funds had boosted their gold shorts to near the highest since 2019. Perhaps they’re now covering and taking profits after what has been a month to forget for bullion bulls.

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