Dow inched up 2 after being in the red for much of the session, advancers slightly ahead of decliners & NAZ gained 91. The MLP index remained mixed & the REIT index fell 1+ to the 369s. Junk bond funds slid lower & Treasuries were pretty much even ahead of the long holiday weekend. Oil hardly budged & stayed above 80 while gold fell 11 to 2024 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Wind & solar power generators wait in yearslong bureaucratic lines to connect to the power grid, only to be faced with fees they can't afford, forcing them to scramble for more money or pull out of projects completely. This application process, called the interconnection queue, is delaying the distribution of clean power & hampering the US in reaching its climate goals. The interconnection queue backlog is a symptom of a larger climate problem for the US. There are not enough transmission lines to support the transition from a fossil fuel-based electric system to a decarbonized energy grid. The Oceti Sakowin Power Authority, a nonprofit gov entity owned by 7 Sioux Indian tribes, is working to build 570 megawatts of wind power generation to sell to customers in South Dakota. “Economic development through renewable energy speaks to the very heart of Lakota culture and values – being responsible stewards of Grandmother Earth, Unci Maka,” Oceti Sakowin Power Authority,said. “Together our tribes occupy almost 20% of the land area of South Dakota. And the experts who have been measuring our wind resources literally describe them as screaming.” To connect wind power generation to the electric grid & make money from the sale of that power, the Oceti Sakowin Power Authority, like every electricity generator in the US, has to submit an application called an interconnection request to whichever organization is overseeing the coordination of the electric grid in that region. Sometimes it's a regional transmission planning authority, other times a utility. There are efforts underway to improve the efficiency of the process, but they're fundamentally putting a Band-Aid on top of an even deeper problem in the US. There isn't enough transmission infrastructure to support the energy transition from fossil fuel sources of energy to clean sources of energy. The entire electric grid in the US has installed capacity of 1250 gigawatts. There are currently 2020 gigawatts of capacity in the interconnection queue lines around the country, according to a report published by the Lawrence Berkeley National Laboratory. That includes 1350 gigawatts of power capacity, mostly clean, looking to be constructed & connected to the grid. The rest, 670 gigawatts, is for storage. On average, it took a new power generation project 35 months to go from the interconnection request being filed with a grid operator to an interconnection agreement being reached in 2022. The US energy grid is a patchwork system of many regional utility companies.
Tons of clean energy stuck waitting in line in outdated U.S. grid
Walmart (WMT), a Dow stock & Dividend Aristocrat, announced plans to add electric vehicle charging stations to thousands of US stores by 2030. The
compan would expand its EV fast-charging network to
WMT & Sam's Club locations across the country, adding to the
nearly 1300 EV stations currently in operation at 280 of company
locations. It said it's in the process of identifying supplier &
plans to own & operate the EV charging stations in its national
network. The company expects an average of 4 chargers to be installed
at each participating store. In the past, WMT has worked with EV charger providers EVgo & Electrify America. The company has grown its network substantially over the last 2 years. “Easy
access to on-the-go charging is a game-changer for drivers who have
been hesitant to purchase an EV for concerns they won’t be able to find a
charger in a clean, bright and safe location when needed,” Vishal
Kapadia, senior VP of energy transformation, said. The planned expansion would make EV ownership more
reliable, Kapadia added. WMT's more than 4700 stores & 600 Sam's
Clubs are located within 10 miles of around 90% of Americans, according
to the company. The Biden administration recently announced an investment of over $7.5B
to launch a national charging network, particularly in lower-income &
rural communities. This will likely boost EV sales, which accounted for
7% of new US vehicle registrations in Jan. The stock rose 1.13.
If you would like to learn more about WMT, click on this link:
club.ino.com/trend/analysis/stock/WMT_aid=CD3289&a_bid=6aeoso5b6f7
Walmart will add thousands of EV charging stations to stores by 2030
The $ is expected to weaken against most major currencies in 2023, according to a Reuters poll of foreign exchange strategists. Despite starting the year lower, the greenback rallied nearly 3% in Feb as investors anticipated the Federal Reserve would take interest rates even higher. However, the collapse of 2 regional US banks in Mar forced the Fed to reconsider the hawkish strategy, sending the $ in a downward spiral for the near-to-medium term. Although market concerns over the banking crisis have receded, aggressive interest rate hikes are still tabled, implying the Fed is nearing the end of steep rate hikes while ending the bull run on the $. Median forecasts in the Mar 31-Apr 4 poll of 90 foreign exchange strategists showed the $ ceding ground to all major currencies in a year. Highlighting the outsized role interest rates play in currency movements, most analysts, 32 of 56, who answered a separate question said rate differentials will drive the $ the most over the coming month. Fed funds futures showed markets were pricing in a rate cut to come as early as Sep despite economic inflation still running well over double the Fed's target. With the $'s expected retreat, the € briefly crossed below parity with the $ on lagging rate expectations in 2022. Up 2.5% this year, the European single currency was forecast to trade around current levels of $1.09 in the next 1-3 months & then strengthen another 2% to change hands around $1.12 in 12 months. Despite gaining more than 2.5% in Mar, the Japanese ¥ is still down 0.6% for the year. The safe-haven currency, which hit 32-year lows in 2022 again on rate differentials, was forecast to recoup that loss over the forecast horizon. The median view showed the ¥ gaining nearly 6% to trade around 125.00 of the $ in 12 months.
Dollar bull market to end as Fed tempers rate hikes: strategists
US oil futures settled slightly higher & tallied a 3rd consecutive weekly gain for the holiday-shortened trading week. It looks like West Texas Intermediate crude isn't going to budge from the $80 a barrel level, even as the headlines suggest the US economy is quickly weakening. May West Texas Intermediate crude rose 9¢, to settle at $80.70 a barrel, with prices for the front-month contract up nearly 6.7% for the week.
U.S. Oil Futures Settle Modestly Higher, Up A Third Straight Week
Gold closed with a loss even as the $ & bond yields eased. Gold for Jun was last seen down $9 to $2026 per ounce. The metal has traded above the $2000 mark for 4-straight sessions, as weaker than expected US employment reports heighten concerns the economy is dipping into recession as the Federal Reserve continues to raise interest rates to slow the economy & check inflation. The drop comes even as the $ fell off early gains, making gold more affordable for intl buyers. The ICE dollar index was last seen down 0.07 points to 101.78. Bond yields were lower, supportive for gold since it offers no interest. The US 2-year note was last seen paying 3.792%, down 1.3 basis points, while the yield on the 10-year note was down 2.5 basis points to 3.288%.
Gold Closes Lower Despite a Lower Dollar and Bond Yields
With only limited news & some traders beginning the holiday weekend early, little was decided in the financial markets. Next week may bring more excitement. Dow finished up less than 210 for the week. Have a good holiday weekend. 😀😀
Dow Jones Industrials
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