Long Weekend Reading

Summary

  • Financial markets only expect one interest rate cut from the Fed this year, compared to the initial expectation of six cuts.
  • NOAA predicts the highest number of hurricanes ever, which aligns with the energy cyclical and clean energy secular themes.
  • U.S. natural gas prices decrease after a storage report, indicating a peak in natural gas supplies around 2025-2030.
  • There’s a China deal to be had.
Golden retriever dog sitting at front door holding newspaper
Dogs can read and talk.

I don’t normally do a reading list, but it’s a long weekend and if rains, here you go. I will be including relevant articles in the “Stocks Of The Week” going forward.

Things To Read And Think About…

Financial markets now fully price just one quarter-point interest rate cut from the Fed this year, compared to the six built into futures prices at the start of 2024. Six cuts was always silly, but one cut is probably silly too. (RT)

NOAA predicts the most hurricanes that it has ever forecast. This plays into our energy cyclical theme and clean energy secular theme. (WSJ)

U.S. natural gas prices retreat in wake of storage report. Given peaking oil supply in U.S. that means natural gas supplies will also peak shortly after. So, think about 2025-30 for peak U.S. oil and natural gas supply plateau. Oil supply will fall faster than natural gas supply, but demand is hard to forecast right now. It looks to me like oil demand starts to fall in 2030s, but for natural gas not until 2040s. That means oil will get cheap in the 2030s as “panic pumping” and domestic use in poorer nations with oil happens globally. Watch solar adoption rates as U.S. industry comes online in next few years. Wildcard is small nuclear reactors. I do not think we adopt them much, but we’ll see. (WSJ)

Singapore’s MAS steps up green-finance partnership with China’s Central Bank (WSJ)

Global GDP ain’t dead yet.

Boost for world economy as U.S., Eurozone accelerate in tandem (WSJ)

Emerging markets new business expands at fastest pace in nearly a year (S&P Global)

Emerging Markets Are Exercising Greater Global Sway

Here is a narrative from FFTT – This week, the WSJ highlighted that the tariffs on China, while largely symbolic, are signifying another critical development – “the decoupling of the US and Chinese economies are becoming irreversible.”

I think it is likely going to prove to be wrong. There is a not so hard deal available to U.S. and China if Xi wants it. We’ll see.

US official: Much work remains to reach US-China trade deal

But, still… The Contentious U.S.-China Trade Relationship

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