InvestMacro

By JustForex

US stock indexes were trading up yesterday. By Monday’s close of trading, the Dow Jones (US30) gained 0.45%, and the S&P 500 (US500) added 0.40%. The NASDAQ Technology Index (US100) jumped by 0.62%. Investors are still focused on signals of weakening inflation in the US and an improvement in the country’s economic assessment. However, the Fed is only 60-70% of the way through its interest rate hike cycle and will begin trimming the balance sheet starting in September.

The focus for traders this week remains the FOMC minutes, data on US industrial production and retail sales for July, and quarterly reports from US retailers Walmart Inc, Target Corp, and Home Depot Inc, which should show how the US retail sector and consumers are holding up amid high inflation.

Stock markets in Europe were mostly up yesterday. Germany’s DAX (DE30) gained 0.74% on Monday, France’s CAC 40 (FR40) added 0.25%, Spain’s IBEX 35 Index (ES35) increased by 0.32%, Britain’s FTSE 100 (UK100) closed up by 0.11%.

Europe is facing rising energy bills this year, driven by global increases in wholesale electricity and gas prices. European gas prices have more than tripled this year, partly after supply disruptions related to Russia’s invasion of Ukraine.

Oil prices hit six-month lows Monday after China released weak July data on industrial production and retail sales. As a result, the People’s Bank of China poured 400 billion yuan (nearly $60 billion) into the financial system to bolster the Chinese economy to revive demand in an economy slowed by Beijing’s ongoing Covid restrictions.

Iran is due this week to finally answer the remaining three outstanding questions on the nuclear deal. If Tehran reaches an agreement with Europe and the United States, oil supplies may rise sharply soon, putting even more downward pressure on oil quotes.

The head of Saudi Aramco, the world’s largest oil exporter, unexpectedly said yesterday that the company is ready to increase production to 12 million barrels per day despite signs of a global economic slowdown. This came as a surprise to analysts, especially after the recent OPEC+ meeting, as the state-owned company rarely makes such a comment without permission from Energy Minister Abdulaziz bin Salman or his half-brother, Crown Prince Mohammed bin Salman. In the United States, the peak summer driving season is winding down, and fuel demand is expected to decline further in the next two weeks.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) gained 1.14%, Hong Kong’s Hang Seng (HK50) decreased by 0.67%, and Australia’s S&P/ASX 200 (AU200) was up by 0.45%. At the market’s opening, Asian shares started to show gains on expectations that China would deploy more stimulus measures to improve economic growth.

ING Bank cut its 2022 GDP growth forecast for China to 4%, down from the previous forecast of 4.4%, and said a further downgrade is possible. The Chinese yuan fell the most among Asian currencies on Tuesday, hitting a three-month low, as the central bank’s unexpected rate cut raised fears of a slowdown in economic growth.

S&P 500 (F) (US500) 4,297.14 +16.99 (+0.40%)

Dow Jones (US30) 33,912.44 +151.39 (+0.45%)

DAX (DE40) 13,816.61 +20.76 (+0.15%)

FTSE 100 (UK100) 7,509.15 +8.26 (+0.11%)

USD Index 106.51 +0.88 (+0.83%)

• – Australia RBA Meeting Minutes at 04:30 (GMT+3);
• – UK Average Earnings Index (m/m) at 09:00 (GMT+3);
• – UK Claimant Count Change (m/m) at 09:00 (GMT+3);
• – UK Unemployment Rate (m/m) at 09:00 (GMT+3);
• – Eurozone German ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
• – Eurozone ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
• – US Building Permits (m/m) at 15:30 (GMT+3);
• – Canada Consumer Price Index (m/m) at 15:30 (GMT+3);
• – US Industrial Production (m/m) at 16:15 (GMT+3).

By JustForex

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By Erin Baker, UMass Amherst 

With many nations making efforts to transition away from fossil fuels to renewable energy, SciLine interviewed Erin Baker, a professor of industrial engineering and operations at UMass Amherst. Baker discussed the technological, political and regulatory efforts needed for this transition, as well as ways that our fossil fuel-dependent system disproportionately harms poor communities and communities of color.

The Conversation has collaborated with SciLine to bring you highlights from the discussion, which have been edited for brevity and clarity.

How is our country doing at making the transition to renewable energy?

Erin Baker: There has been amazing technological change over the past 15 years. Offshore wind costs 50% less than it did six years ago. Solar has had a sixfold decrease in costs since 2010. And I think there’s a lot of evidence that technology will adapt and improve if we set the goals and incentives for it.

In terms of policy and regulations, we are moving forward, but we need to be more aggressive. Something that we’re missing and that would be really helpful would be a coherent, federal-level climate policy – whether that is regulatory policy, such as we have for pollution, or a carbon tax or some kind of a cap. The Inflation Reduction Act would be a fantastic starting point if it becomes law.

A good example of something that has been done is President Biden’s move to coordinate and streamline the federal approval process for offshore wind. There are seven federal agencies involved, and having them all separate and moving at their own pace was really difficult for offshore wind energy developers. So Biden has coordinated that, and that’s fantastic. But there are tens of local and state-level agencies and processes that developers still have to go through. It would be really great if we could figure out ways to coordinate and streamline those.

How does our current energy system disproportionately harm poor communities and communities of color?

Erin Baker: Unfortunately, in a lot of different ways. Polluting facilities tend to be located disproportionally in areas that are low income and home to people of color, which can lead to negative health outcomes. Also, in the Texas blackout last winter that killed around 250 people, some research done by my colleague Jay Teneja showed that the long blackouts were four times as likely in communities of color as in predominantly white communities. And, unfortunately, the energy transition won’t necessarily be any more equitable.

For example, it’s common for states to subsidize rooftop solar. And this is good, but the people who get the subsidies are people who own roofs with sun shining on them. People who live in apartments and in cities don’t have access to this, and yet they’re paying for the subsidies. We take the money for the subsidies from everyone, including low-income people, and send them mostly to white, wealthy suburbs.

How can injustices in our energy system be rectified?

Erin Baker: There’s obviously no one solution, but there are a couple of categories of things we can do. One thing that would be really helpful would be to collect data. We have very little data about energy equity issues.

We also need to involve and listen to the traditionally marginalized communities that are most affected by the inequities.

What do you think of the federal and state targets set for offshore wind?

Erin Baker: The Biden administration set a target for 30 gigawatts by 2030. That’s an ambitious goal, since in 2019 the entire world had only 30 GW. But it’s growing rapidly, with global capacity at an astounding 56 GW.

Having this goal of 30 gigawatts helps to organize the supply chain – all the pieces that need to get done for this to happen. We need people who know how to install offshore wind farms. We need special ships. We need planning for transmission. Having these goals really helps to organize all that and make sure all these pieces are in place.

What are the environmental costs and benefits of offshore wind?

Erin Baker: Offshore wind is a really promising technology. The ocean has really good wind resources. And it’s near population centers – we have lots of cities up and down the coasts. Because wind energy is carbon-free, it will provide benefits by reducing emissions and reducing costs.

Some of the work I’ve done has shown that there are billions, and maybe even trillions, of dollars of climate value in offshore wind. We lose between US$10 million and $150 million per year per wind farm by delaying them. We really want to keep these large global environmental benefits in mind as we plan. These can be balanced against local environmental costs and benefits, as well as other factors, like jobs.

In terms of local environmental benefits, when you build an offshore wind farm, the stuff underneath the water ends up creating an artificial reef and actually increasing sea life in that area, which is a benefit.

Negatively, they interfere with bird migrations. Birds don’t actually fly into the wind turbines that much. They fly around them. But if there are a lot of wind farms, that’s a lot of flying around, and that can be hard on the birds. And some animals, like right whales, can get caught in mooring lines if we have floating wind turbines. So, there are local environmental costs. What we need to do is balance these with the global benefits from addressing climate change.

Are you hopeful about our ability to address climate change?

Erin Baker: I am optimistic that we can solve climate change, because humans are very inventive. My work on technological change has shown that once we have a goal or incentive, we tend to improve technologies much faster than we ever predicted. So I think we can be ambitious. We can aim for net-zero by 2030 instead of 2050. And we can solve climate change while at the same time stimulating innovation, fueling growth and increasing quality of life. But we have to set these goals. To access the benefits of the energy transition, we really need to act boldly and decisively.

Watch the full interview to hear more about what’s required for a just, renewable energy transition.

SciLine is a free service based at the nonprofit American Association for the Advancement of Science that helps journalists include scientific evidence and experts in their news stories.

About the Author:

Erin Baker, Professor of Industrial Engineering Applied to Energy Policy, UMass Amherst

This article is republished from The Conversation under a Creative Commons license. Read the original article.

By RoboForex Analytical Department

The commodity market suffered another stress last week. On Monday, the situation reached stability, but it remains quite complicated; Brent is trading at $95.60.

The asset closed last trading week near its 5-month lows.

The key reason for these negative vibes is the same’ global expectations of a worldwide recession. Economic slumps all over the world will eventually lead to a decline in demand for fuel, hence a drop in energy prices.

Another local factor that puts pressure on is the USD strengthening.

Last Friday’s report from Baker Hughes showed that over the past week, the Oil Rig Count in the US lost 7 units, down to 598. In Canada, the indicator increased by 3 units, up to 140. Shale oil companies are in no hurry to invest more money in production.

On the H4 chart, after breaking 100.00 downwards, Brent is still correcting and has already reached the short-term target at 94.80. Possibly, today the pair may form one more ascending structure to test 99.90 from below and then complete the descending wave by reaching 90.00. After that, the instrument may resume trading upwards with the target at 122.00. From the technical point of view, this scenario is confirmed by the MACD Oscillator: its signal line is moving near the lows outside the histogram area and may later grow to reach 0.

As we can see in the H1 chart, after finishing the descending correctional structure at 95.15, Brent is consolidating above this level. Possibly, the asset may break the range to the upside and start another growth with the target at 100.00. Later, the market may resume falling to reach 90.00. From the technical point of view, this idea is confirmed by the Stochastic Oscillator: its signal line is moving near the highs above 80. Later, the line may fall to break 50 and continue falling to reach 20.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

By RoboForex Analytical Department

The commodity sector remains rather tense on Monday; Brent is trading at $102.75.

Global geopolitics is what investors are focused on right now. Any complications in this area muddy the water one way or another, and it’s bad news. Last weekend, the Kosovo situation escalated – a gas pipeline “Balkan Stream” is going through Serbia, which doesn’t recognise the independence of Kosovo. The pipeline delivers natural gas from “TurkStream” to Hungary.

Later this week, OPEC and OPECF+ will have meetings. The OPEC+ agreement is ending in August and the organisations are set to discuss options to increase oil production. First of all, it depends on Saudi Arabia, a country that still has the potential for oil extraction expansion. However, Saudis don’t seem to be interested in it.

The latest report from Baker Hughes showed that over the past week, the Oil Rig Count in the US gained 6 units, up to 605. In Canada, the indicator increased by 13 units, up to 137.

On the H4 chart, Brent is forming the third ascending wave with the target at 111.55 and may later correct down to 106.16. After that, the instrument may resume trading upwards with the short-term target at 118.80. From the technical point of view, this scenario is confirmed by the MACD Oscillator: its signal line is moving above 0 inside the histogram area. Both the line and the price chart may yet continue to move upwards.

As we can see in the H1 chart, after finishing the descending correctional structure at 106.16, Brent is consolidating above this level. Possibly, the asset may break the range to the upside and start another growth with the target at 111.55, or even extends this structure up to 118.70. From the technical point of view, this idea is confirmed by the Stochastic Oscillator: after breaking 20, its signal line is heading towards 50. Later, the line may break the latter level and continue growing to reach 80.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

By Ino.com

Natural gas prices are exploding.

For one, Russia said it would cut natural gas shipments to Europe.

In fact, as noted by Barron’s, “Russian company Gazprom said on Monday that it will cut natural gas shipments from the key Nord Stream pipeline to Germany starting this week. The pipeline’s exports will be cut to 20% of capacity, down from 40%, because of a sanctions-related issue with turbines serving the pipeline.”

Two, there are drought conditions in the U.S., and a heat wave forcing millions to turn up their air conditioners to full blast.

Three, according to EQT CEO Toby Rice, as quoted by Barron’s, “In the United States, we’ve got the natural gas here, we’ll be fine. But you think about our allies in Europe, and the tremendous power and influence that Russia has on these countries. Clearly, we need to take away the gun, and provide the energy to our allies around the world.”

All could create a big opportunity for natural gas stocks, like Tellurian (TELL).

Tellurian – a $2.1 billion company – is “building a low-cost, global natural gas business, profitably delivering natural gas to customers worldwide.”

Better, the company could benefit from a substantial shortage of natural gas.

In fact, according to its latest investor deck, geopolitics and energy security providing a step change in global LNG demand. Tellurian notes there’s (1) underinvestment in energy and post-CV structural growth have collided with a geopolitical crisis; (2) A need to replace 20 Bcf/d of Russian gas to Europe, equivalent to ~35% of the world’s LNG market; (3) Natural gas shortage expected to lead to catastrophic consequences.

Technically, according to MarketClub, shares of TELL are slightly overbought. The MarketClub Smart Scan also gives the stock a score of +60, which tells us at the moment, the stock is struggling to move in a solid trend.

However, with natural gas prices showing no signs of cooling off, I’d like to see the stock run from a current price of $3.68 to $5, near-term.

The MarketClub Trade Triangles are also mostly green.

While it’s telling us that the longer-term trend has been down over the last month, the intermediate trend has been strong since mid-July. In addition, the short-term trend, according to Market Club, has been up since mid-July as well.

Ian Cooper
INO.com Contributor

The above analysis of Tellurian Inc. (TELL) was provided by financial writer Ian Cooper. Ian Cooper is not a Registered Investment Advisor or Financial Planner. This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Ian Cooper expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

By Ino.com – See our Trader Blog, INO TV Free & Market Analysis Alerts

Source: Chart Spotlight: Tellurian Inc. (TELL)