Wednesday brought some more grim news on the energy front, with a warning for U.S. households to expect higher heating bills this winter as supply-and-demand struggles in Europe and Asia come home to roost.
And just as the world is trying to get greener, shortages have led to the revenge of the fossil fuels, helping push crude CL 00, to a nearly 70% gain this year and leading to some bullish calls on Wall Street with Goldman Sachs talk of a multiyear commodity supercycle and $100 oil calls from Bank of America.
Our call of the day from Samir Sam Madani, co-founder of TankerTrackers.com, sees a lot of red flags on oil optimism. He cashed out of his oil exposure two weeks ago after gaining 71% on the asset from exposure that began in March 2020, when oil crashed below $20 a barrel amid early COVID - 19 pandemic panic.
I feel like it s becoming a crowded thing. The narrative is way too bullish, said Madani in a recent interview with MarketWatch, adding oil s downfall will be the consumer. Since the 1960s, the cost of living is greater than income. Food prices are up due to labor shortages, very high fertilizer demand and very high diesel prices used by tractors and trucks alike so I think $100 is too soon. If we had this discussion a year from now when the economy is on a better economic foundation, then certainly $100 is justifiable, he said. And it isn t just that the Organization of Petroleum Exporting Countries and its allies should be holding prices between $68 to $78 to save off an economic meltdown, but the fact that outside of North America consumers are being squeezed by high fuel taxes, he said.
So Madani — who has been socking money for his own retirement and an apartment or anything his four children might need, switched out of public investments that were made via the mutual fund offering through Sweden's public pension plan. He turned to water.
He began investing in water earlier this year, replacing exposure to oil/copper stocks that he had held since 2016 by China stockholders. That investment went up 20%. The oil exposure that he got out two weeks ago went into the Pictet-Water P Mutual Fund. He also looks at some small-cap stock investments and has views on gold mining stocks.
I think it is the mother of all commodities, whereas all other commodities have been boom and bust cycles, there has been a continual demand for water as population growth continues at a rate of 100 million net a year, he said, noting projections for a global population of 10 billion by 2052.
Whether there s a flood or drought this fund should do well because it also includes infrastructure like pipes, procession, filtration, you name it, said Madani. Water s importance popped up for the U.S. infrastructure bill, where it was one of few priorities political parties agreed on, said he.
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Growing up in the Middle East, where spare gasoline was used to wash cars, taught him water s importance and that water is something you re supposed to drink, not something you 'll squander. While many early investors and Wall Street are catching on to water, it is just a physical market with no futures. Investopedia top ETFs include Danaher Corp. DHR, Waters Corp. and American Water Works Company AWK, and Veolia Environnement VIE. Exchange traded funds include First Trust Water FIW, Invesco Water Resources PHO and Invesco S&P Global Water Index CGW, which were all voted by Investopedia the best portfolio of ETFs for the fourth quarter of 2021.
Some argue that water is a tougher investment in social, environmental and governance as the ecosystem involved needs considerable time to understand. Years from now it could be my kids tracking water, said Madani.
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The Bank of America BAC, and Wells Fargo WFC, is reporting, together with Walgreens Boots Alliance WBA, Morgan Stanley MS, Citigroup C and UnitedHealth UNH, among the big names on tap for Thursday.
Taiwan Semiconductor TSM, 2330, reported a record third quarter profit through high chip demand.
While, U.S. efforts to unclog supply-chain problems by opening up the Port of Los Angeles 24 7 might not be enough to save Christmas, industry experts warn.
Headed into Thursday s first day of trading, all-remote software company GitLab posted its initial public offering earlier Wednesday at $77 a share, well above an already elevated range.
Weekly jobless claims and September producer prices are on tap. In September, China's factory-gate prices jumped 10.7%, the fastest increase in more than two decades driven by surging raw materials prices.
Futures ES 00, YM 00, are climbing, followed up in Europe by Nasdaq 100 futures NQ 00, following a mostly positive Asian session, with equities also going up in Asia. Oil prices are higher, the dollar DXY is slipping and the 10 year Treasury yield TMUBMUSD 10 y, is holding steady at 1.548%. The Turkish lira USDTRY hit a record low after President Recep Tayyip Erdo fired several central bank governors on late Wednesday, one of whom opposed last month's surprise rate cut.
Bali has finally reopened to international tourists, but good luck finding a flight.
The emailed version is sent out at about 7: 30 a.m. Eastern.