"The falling costs of renewables and the decline in fuel cell costs will make hydrogen increasingly competitive. We expect the cost of green hydrogen to fall to less than US$2/kg by 2030, equivalent to US$1/gallon gasoline. We expect an 80% decline in fuel cell costs over the next decade to US$30/kW as the industry scales up, which will make heavy goods vehicles (HGVs) powered by fuel cells more competitive than diesel trucks by mid-2020s. Hydrogen will play a key role in decarbonizing space heating, power, industry, chemicals, and other hard-to-abate sectors, given its versatility as a fuel. Fuel cell and electrolyzer manufacturers plus renewable (Solar and Wind) energy producers are the most direct ways to play the hydrogen revolution. Some industrial gas companies will also have high leverage to hydrogen growth. Oil & gas producers, gas utilities, and automotive manufacturers will be disrupted by the growth in hydrogen"
In a new research report CITI shows that less international trade will damage global growth very substantially and while it may have a positive impact on the environment, it is relatively small compared with the economic cost of weaker productivity. A persistent substitution of corporate travelling with virtual meetings will have a negative impact on the global economy and a slightly positive impact on the environment, although not being a game-changer.
Excerpt from the working paper, "Volatility indices and implied uncertainty", on new VIX type of indices for measures of European government bond futures (Bunds, BTPs, or OATs), which do not yet exist, and also show a number of practical ways how to measure bond market uncertainty from option prices. (ESM)
"The eruption of the Covid-19 pandemic resulted in large market movements, as investors feared the financial and economic consequences of the crisis. A swift European policy response restored market confidence, and data from the fixed-income options market has vividly demonstrated this return to stability.
Streamlining the implied uncertainty into a single measure, new volatility indices from option prices on German, French, and Italian government bond futures provide insights into investor sentiment and forward-looking market uncertainty in the underlying European sovereign bond market."
Recent action by Trump is spilling over to Asian tech with many tech names down big: SMIC -8%, ZTE -3.5%, Xiaomi -3.7%, Tencent -5.7%, Alibaba -3.5%.
Tech has been the main driver of the equities melt up, but tech is also sensitive to politics and regulation. Below is the chart of NASDAQ and the relatively new HK tech index (the index was just recently launched, but long history exists as the underlying component have traded on main markets before).
HSTECH has been much stronger than NASDAQ this year (second chart in percent).
It would be ironical if Trump derailed the tech bull just in time for the elections....
Everybody has been cheering the great EU package, but equities continue trading with poor momentum. Eurostoxx 50 is not trading well, but more importantly, markets such as MIB and IBEX continue trading poorly, and these are the markets supposedly "bailed out" by the great package.
Note that SX5E "VIX", V2X, has moved higher recently, while VIX has been moving lower.
Watch this closely, as volatility tells the truth...
One of our summer ideas has been for volatility to drift lower and eventually reach "good" levels where interesting long vol trades can be set up for what we believe will be a highly "dynamic" autumn session.
Post the most recent expiration, dealers have become long gamma and moves are getting tighter, just in time for vacations. We expect this dynamic to continue for longer, eventually leading long gamma crowd to decide puking vols. This is getting closer and closer. Ideally, we would need the VIX guy proclaim VIX is dead...for us to get really triggered.
“We think that bank stocks have the potential to increase by 50% over the next 18 to 24 months,”
If this happens, Berkshire should be a winner. The recent surge in Apple has practically brought BRK to being a "tech specialist". If you add a possible surge in banks, Buffett surely looks in a good position.
Mayo also says;
"“Banks are experiencing four 100-year events at the same time. The decline in the net interest margin, the worst in 100 years. The decline in traditional banking revenues, the worst in 100 years. The decline in total revenues, the worst in 100 years, and the build up of reverses has been the highest in history,”