I'm an economist with a story. And that story is how you can make money using non-traditional investment strategies.
| | | | | | The Real Opportunity Behind BP and Chevron's Latest Deal |
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|  Good morning. I'm Garrett Baldwin.
I'm an economist with a story. And that story is how you can make money using non-traditional investment strategies.
I'm not talking about the things that you see on mainstream outlets that encourage you to buy and sell quickly. I'm talking about Buy and Hold and --- hold for big profits. Stick with me here.
I'll educate you on elements of finance you've never heard of in your career.
I'm also focused on telling you – and teaching you – about the things that really matter today.
Not tomorrow. Not in a week. Today. Because every day presents an idea. And if you give me just five minutes of your time, I'll give you a better gage of the markets in the mornings.
Let's get started.
The Dow and the S&P 500 are both kicking higher this morning as investors cheer the possibility of new record levels. Brent crude oil is back above $60, and the U.S. 10-Year Treasury Bond is ticking to its highest levels in months as the U.S. government aims for a $1.9 trillion stimulus program. We can dive in now.
Oil Is Surging… Now What?
Today, Wall Street analysts want to talk about earnings reports and FAANG stocks. But the big deal is higher oil prices and surging natural gas prices. Freezing temperatures are blanketing the United States. Across Texas, record low temperatures are pounding the state and driving heating oil costs through the roof. Millions of people are without power.
Most investors anticipate that prices will head higher. But I think that the rally is about to end, and that this storm is very priced in. I don't advise that people chase prices higher, especially looking out a few weeks. Now is the time to look at the state of the U.S. energy industry. Borrowing costs are heading higher right now for U.S. producers. I expect more consolidation in the months ahead because good debt can purchase bad debt (especially on the margins). In addition, we could see OPEC increase production at the same time that more U.S. producers bring rigs back online. This push above $60 for oil and natural gas over $3.10 will likely be short lived when oil wells and refineries come back online.
A Major Partnership
BP (BP) and Chevron (CVX) have announced a massive expansion into an alternative energy source that might transform the future of their business. The two companies are backing a $40 million funding round into a Canadian company called Eavor.
What does Eavor do?
The company has developed a new technology in geothermal energy. The two oil giants believe they have found one of the first scalable clean energy platforms that generate energy from the heat generated by the earth. This is the latest investment by both companies in alternative, zero-carbon energy platforms outside of wind and solar.
This is a big commitment on all sides of the deal. Eavor had never accepted capital from any firms outside of angel investors. Meanwhile, BP and Chevron are among the world's largest oil companies that are looking to diversify their energy portfolios and make big gains in alternative energy the process.
Speaking of profits – we believe that alternative energy will be very lucrative for investors. And our top source is Hydrogen. This clean, zero-carbon energy source presents one of the most remarkable opportunities that we've seen in decades. You can learn more about it, right here.
CVS Continues Testing and Vaccine Rollout
Finally, shares of CVS Health Corp. (CVS) are up 1.8% this morning after the company topped Wall Street earnings expectations for the quarter. The firm reported earnings per share of $1.24 by six cents, while surpassing revenue expectations as well. The company has received a boost from its services in COVID testing and vaccine deployment.
CVS has now provided 15 million COVID tests and 3 million vaccines since the onset of this crisis. The United States and the rest of the world are still a long way from full vaccinations. But this quarter will be one of the most important for companies like CVS and its competitor Walgreens Boots Alliance (WBA). Look for continued interest in vaccine and deployment.
That's all for today. If you have any questions or topics you'd like me to discuss, please don't hesitate to email the team at feedback@haveninvestmentresearch.com.
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| | | | | | | | Market Conditions with Dr. Bauer
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| This morning, market momentum remains positive as investors continue to pour capital into U.S. equities. The 5-day/13-day Exponential Moving Average is a positive gage to identify broader market sentiment. As the chart indicates below, the last crossover into positive territory occurred on February 3, 2021. Since then, we have seen strong capital flows into stocks.
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| | | We'll continue to discuss the importance of this metric on my long-term approach to the markets.
Enjoy your Tuesday,
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