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Lithium prices are only headed higher.

With EV demand accelerating, and hopes for a green future, lithium miners are struggling to supply the market. While that’s a big catalyst for companies like Lithium Americas (LAC) and Albemarle (ALB), it’s creating a nightmare scenario for companies that need supply now.

General Motors, for example, wants to increase its spending on EVs to $435 billion through 2035. Ford is targeting 40% EV sales by 2030. Volkswagen is investing billions in EVs. Countries all around the world want millions of them on the roads over the next few years.

Unfortunately, none of it may happen – without a good source of lithium.

Even the International Energy Agency said existing projects can only meet half the demand for lithium by 2030, notes CNN. “The United States has only one active lithium mine today. The country will need 500,000 metric tons of lithium carbonate equivalent by 2030, according to research by RK Equity, a New York firm that advises investors on lithium,” they added.

At the moment, “As prices increase now, there will be unknown yet-to-be-announced projects and expansions that will help to increase supply to meet demand. That is almost a certainty. What is not certain is just how many unknown projects there are out there,” says Cameron Perks, an analyst at BMI, as quoted by Bloomberg. “There’s also a possibility that not enough lithium can be mined, then it could risk a slower EV roll-out.”

With billions, maybe even trillions on the line, the world must secure far more lithium supply.

 

The post Lithium Miners are Struggling to Keep Up with Demand appeared first on Morningology.

Digital currencies were derailed again – but it may only be temporary, we noted on Sept. 27.

Sure, China’s central bank said all cryptocurrency related transactions were now illegal.

But investors may want to use the pullback as an opportunity, we also said.

For one, China has threatened cryptocurrency trading several times in the past, and markets continue to shrug it off. In fact, according to CNBC, “China has periodically tried to restrict crypto activity and Bitcoin has shrugged it off. Not including the latest crackdown, China has announced tough new measures on crypto six times since 2013. Bitcoin fell an average 4% in the week after the announcements but was up an average 46% a year later.”

Days later, it happened again.

Markets are shrugging off China’s threats, as Bitcoin approaches $50,000 again.

“For the past years, the Chinese authorities have often tried to bully bitcoin and force it out of existence, but all its efforts – so far – have always proved a failure. The crypto industry continues to thrive as the market usually recovers from whatever blows it receives from the giant Asian nation,” added Crypto Potato.

Even mentioned miners are just beginning to push higher, including Marathon Digital (MARA) Riot Blockchain (RIOT), and Bit Digital (BTBT).

All could move even higher as institutions race to cater to growing, explosive crypto demand.

U.S. Bank for example is expected to announce that its crypto custody service is available to fund managers, says CNBC.

“The move is the latest sign that established financial players are beginning to accept cryptocurrencies as a legitimate asset class. In the realm of custody banks, which verify and safeguard trillions of dollars of traditional assets for money managers, major players including Bank of New York Mellon, State Street and Northern Trust have all announced plans to custody digital assets,” they added.

In short, it’s time to get bullish on cryptocurrencies again.

Better, it doesn’t matter what China tries to do, they can’t seem to bring cryptos down for long.

The post This is Why Bitcoin is About to Cross $50,000 Again appeared first on Morningology.

Oil prices are spiking – again.

All after OPEC+ “reconfirmed the production adjustment plan” that it previously agreed that would see 400,000 barrels per day (bpd) added in November, as noted by Reuters.

Not helping, Bank of America analysts say oil could be headed back to $100.

“[O]il prices could spike and lead to a second round of inflationary pressures around the world,” analysts including Francisco Blanch wrote in a note. “Put differently, we may just be one storm away from the next macro hurricane.”

In short, we could be looking at a real mess with oil prices.

Fortunately, we were well prepared for the chaos. On September 27, we highlighted opportunity in some of the top oil ETFs, including:

SPDR Energy Select Sector ETF (XLE)

When we highlighted the XLE, it traded at $52.70. It’s now up to $55.26, and could be headed to $60, near-term unless oil prices back off from highs.

The XLE ETF provides exposure to companies in the oil, gas and consumable fuel, energy equipment and services industries, as noted by State Street SPDR. Not only does an ETF allow for diversification, you can buy it for less.

Invesco DB Oil Fund (DBO)

DBO traded at $13.85 when we first mentioned it. It’s now up to $14.29, and could push higher with oil prices. This ETF seeks to track changes, whether positive or negative, in the level of the DBIQ Optimum Yield Crude Oil Index Excess Return plus the interest income from the Fund’s holdings of primarily US Treasury securities and money market income less the Fund’s expenses. It trades WTI crude futures.

iShares Global Energy ETF (IXC)

IXC was at $27. It’s now up to $28.07 and pushing higher. The iShares Global Energy ETF seeks to track the investment results of an index composed of global equities in the energy sector. Trading at $27, some of its top holdings include Exxon Mobil, Chevron Corporation, BP PLC, Total SA, and EOG Resources.

The post The Top Ways to Profit from Potentially Higher Oil Prices appeared first on Morningology.

It’s been a busy hurricane season.

Well aware of that possibility, we recommended related stocks like Generac Holdings (GNRC), Home Depot (HD), Lowe’s (LOW), and Xylem (XYL) on June 8, 2021.

At the time, GNRC traded at $339. It’s now up to $404 – and could run higher. Home Depot traded at $309. It’s now up to $330. Lowe’s even ran from $190 to $204. While most are pulling back at the moment, don’t count them out just yet.

Many have a history of running even higher around this time of year with the season still active.

In fact, according to Accuweather, the Atlantic hurricane season shows no signs of slowing.

“There are three systems that have the potential to become tropical depressions and storms this week over the Atlantic basin,” AccuWeather Hurricane Expert Dan Kottlowski said earlier this week, adding that one is a strong candidate to take on the next name from the 2021 list.

In addition, October has a history of producing major hurricanes. “The ocean heat content or what meteorologists call “available energy” for hurricanes can be quite high in the western Caribbean during October. When warm ocean water evaporates, it heats the surrounding air, which in turn, can fuel the growth and intensity of a hurricane,” added Accuweather.

Should October 2021 prove to be another active hurricane month, the above-mentioned stocks could see higher highs.

The post The Top Hurricane Stocks to Consider Even Now appeared first on Morningology.

There’s big news with COVID-19.

Merck just announced it would submit its oral, antiviral pill to the US FDA for emergency use authorization. All after analysis shows the drug cut the risk of hospitalizations or death by nearly half in a late stage trial.

That’s game-changing news.

According to the study, 14.1% of those that received the placebo were either hospitalized or died after 29 days, as compared to the 7.3% that received the treatment. Also, according to an independent data committee, trial recruitment can stop thanks to positive results, says Barron’s.

“With these compelling results, we are optimistic that molnupiravir can become an important medicine as part of the global effort to fight the pandemic and will add to Merck’s unique legacy of bringing forward breakthroughs in infectious diseases when they are needed most,” said Merck’s CEO, Robert M. Davis, as quoted by Barron’s.

Should the US FDA issue emergency use authorization, Merck could push even higher. That’s because the U.S. government has already agreed to buy 1.7 million treatments for $1.2 billion.

Even former US FDA Commissioner Dr. Scott Gottlieb has said, “This is a phenomenal result. This is a profound game-changer to have an oral pill that had this kind of effect, this magnitude of effect in patients who are at high-risk who are already symptomatic,” as quoted by CNBC.

Shares of MRK last traded at $82, up nearly 10% on the day.

The post Merck’s COVID Treatment Could be a Game-Changer appeared first on Morningology.

With a good amount of fear in the markets, volatility is spiking, we noted on September 20.

Even though markets recovered some lost ground, they’re headed lower — again – for three key reasons. One, bond yields just hit a high of 1.545% on fears the Federal Reserve will curb its emergency bond-buying stimulus shortly.

“People are realizing, or at least remembering, that central banks are going to have to start raising rates,” said Altaf Kassam, head of investment strategy for State Street Global Advisors in Europe, as quoted by The Wall Street Journal. “The patient has become used to being given all these drugs, but soon those drugs are going to have to be reduced.”

Two, we could see a government shutdown if Congress fails to approve funding by this Friday. Three, we could also see a U.S. default if the debt ceiling isn’t raised either. In fact, according to Treasury Secretary Janet Yellen, the U.S. won’t be able to pay its bills if lawmakers don’t raise the debt ceiling by October 18.

“At that point, we expect the Treasury would be left with very limited resources that would be depleted quickly. It is uncertain whether we could continue to meet all the nation’s commitments after that date,” she said, as quoted by The Wall Street Journal.

That’s all creating massive uncertainty, which markets hate.

It’s why the VIX just spiked 25% to 23.41. Should fear escalate, the VIX could challenge a January 2021 high of 33, we believe. Some of the best ways to trade the volatility is with VIX-related ETFs such as:

ProShares Ultra VIX Short-Term Futures ETF (UVXY)

The ETF was designed to match two times (2x) the daily performance of the S&P 500 VIX Short-Term Futures Index. The UVXY last traded at $23.13, and could see $30, near-term.

iPath S&P 500 VIX Short-Term Futures (VXX)

The VXX ETN, which provides exposure to the S&P 500 VIX Short-Term Futures Index. The VXX last traded at $26.70 and could see $30, near-term.

ProShares VIX Short-Term Futures ETF (VIXY)

ProShares VIX Short-Term Futures ETF provides long exposure to the S&P 500 VIX Short-Term Futures Index, which measures the returns of a portfolio of monthly VIX futures contracts with a weighted average of one month to expiration. The VIXY last traded at $22 and could test $25.

The post The Top 3 Ways to Trade Wild Market Fear appeared first on Morningology.

Digital currencies were derailed again – but it may only be temporary.

Sure, China’s central bank said all cryptocurrency related transactions were now illegal.

According to the People’s Bank of China, services offering trading, order matching, token issuance, and derivatives are now prohibited, as are overseas cryptocurrency exchanges that provide services in China.

However, investors may want to use the pullback as an opportunity.

For one, China has threatened cryptocurrency trading several times in the past, and markets continue to shrug it off. In fact, according to CNBC, “China has periodically tried to restrict crypto activity and Bitcoin has shrugged it off. Not including the latest crackdown, China has announced tough new measures on crypto six times since 2013. Bitcoin fell an average 4% in the week after the announcements but was up an average 46% a year later.”

Two, investors don’t seem to take Chinese threats seriously.

According to Crypto Potato:

• In 2009, China’s Ministry of Commerce banned the use of cryptocurrencies.
• In 2013, China called Bitcoin a “currency without real value” and mandated that every China’s financial institution had to stop processing Bitcoin transactions.
• In 2015, China again banned Bitcoin transactions.
• In 2017, China banned Initial Coin Offerings (ICOs) and mandated that crypto exchanges discontinue their services.
• In 2018, China again banned cryptocurrency activities.
• In 2019, China said Bitcoin mining did not adhere to laws and regulations.
• In 2020, China sought to ban cryptocurrency mining again. Power stations were also told to stop providing power to miners in the Yunnan province.
• In 2021, China says cryptocurrencies are illegal.

However, each and every time, cryptocurrencies came right back.

“For the past years, the Chinese authorities have often tried to bully bitcoin and force it out of existence, but all its efforts – so far – have always proved a failure. The crypto industry continues to thrive as the market usually recovers from whatever blows it receives from the giant Asian nation,” added Crypto Potato.

Better, most of the miners bounce back along with major cryptocurrencies, like Marathon Digital (MARA), Riot Blockchain (RIOT), and Bit Digital (BTBT).

The post This is Why the Pullback in Cryptocurrencies is Only Temporary appeared first on Morningology.

Crude oil is back above $75, and could see $87, says Goldman Sachs.

All thanks to disruption in the Gulf of Mexico, and signs of unexpectedly strong demand.

“While we have long held a bullish oil view, the current global oil supply-demand deficit is larger than we expected, with the recovery in global demand from the Delta impact even faster than our above consensus forecast and with global supply remaining short of our below consensus forecast,” wrote Goldman Sachs’ Damien Courvalin, as quoted by Fox Business.

Should oil prices continue to push higher, here are some of the top ETFs to consider.

SPDR Energy Select Sector ETF (XLE)

At $52.70 with an expense ratio of 0.12%, the XLE ETF provides exposure to companies in the oil, gas and consumable fuel, energy equipment and services industries, as noted by State Street SPDR. Not only does an ETF allow for diversification, you can buy it for less. For example, we can buy the SPDR Energy Select Sector ETF (XLE) for $52.70 a share.

If we were to buy 100 shares, it would cost us $5,270.

If we were to buy some of the fund’s top holdings individually, it would cost far more than that with Exxon Mobil, Chevron Corporation, ConocoPhillips, and Occidental Petroleum.

Invesco DB Oil Fund (DBO)

This ETF seeks to track changes, whether positive or negative, in the level of the DBIQ Optimum Yield Crude Oil Index Excess Return plus the interest income from the Fund’s holdings of primarily US Treasury securities and money market income less the Fund’s expenses. It trades WTI crude futures, and traded at $13.85.

iShares Global Energy ETF (IXC)

The iShares Global Energy ETF seeks to track the investment results of an index composed of global equities in the energy sector. Trading at $27, some of its top holdings include Exxon Mobil, Chevron Corporation, BP PLC, Total SA, and EOG Resources.

The post Goldman Sachs: Oil Will Climb Back to $87 a Barrel This Year appeared first on Morningology.

The fight is on for clean, safe water.

Sure, more than 70% of our planet is covered in water. However, only 3% is freshwater. Worse, of that 3%, only 1.2% is safe for consumption. Worse, with global communities only exploding in size, the war for water is boiling over – and fast.

Not helping, the U.S. government just declared a water shortage on the Colorado River, and announced mandatory cutbacks. “The declaration of a shortage by the U.S. Bureau of Reclamation has been expected for months and was triggered by the spiraling decline of Lake Mead, which stores water used by Arizona, Nevada, California and Mexico,” reports USA Today.
Orlando just declared a water shortage, with surging COVID cases.

In California, the drought is leading to higher water prices.

“It’s a ‘perfect storm of conditions’ for California’s water, with “worsening supply/demand imbalances, telltale signs of climate change, and a hesitancy by state officials to step up permanent solutions like conservation, water reuse, and desalination,” says Deane Dray, a managing director and multi-industry analyst at RBC Capital Market,” according to Barron’s.

Even Lake Mead is at its lowest level, forcing the Southern Nevada Water Authority to ask that people conserve water. “The water levels at Lake Mead have fallen more than 100 feet in 20 years. The ongoing drought conditions are projected to drop water levels even more in the coming years,” says 8News Now in Las Vegas.

That’s just in the U.S.

It’s all part of the reason water related stocks and ETFs are turning higher. Look at the Invesco Water Resources ETF (PHO) for example. Oversold at $56, the ETF is just beginning to pivot higher, and could retest highs of $59.70 again soon.

Even the First Trust ISE Water Index Fund (FIW) and the Invesco S&P Global Water Index ETF (CGW) are just starting to push aggressively higher.

The post Three Oversold Ways to Trade the Water Crisis appeared first on Morningology.

Cannabis stocks could see higher highs

Dozens of states are legalizing its use. Members of Congress are pushing for federal legalization. Also, according to Pew Research, 91% of Americans say it should be legal.

“As more states, including Virginia and New York, continue to legalize marijuana, an overwhelming share of U.S. adults (91%) say either that marijuana should be legal for medical and recreational use (60%) or that it should be legal for medical use only (31%). Fewer than one-in-ten (8%) say marijuana should not be legal for use by adults.”

Even Amazon.com is pushing for the U.S. government to legalize it already.

In fact, according to CNBC, “The company in June said it supports the Marijuana Opportunity Reinvestment and Expungement Act, which aims to decriminalize cannabis at the federal level, expunge criminal records and invest in impacted communities.”

In addition, according to CBS News, “We strongly believe the time has come to reform the nation’s cannabis policy, and we are committed to helping lead the effort,” Beth Galetti, Amazon’s senior vice president of human resources said. “Today’s status quo is unfair and untenable,” added Galetti, who noted the difficulty for companies in creating cannabis rules for workers given the discrepancy between federal law and local statutes.

Fueling further upside for cannabis stocks, the House just “voted to include an amendment in the National Defense Authorization Act protecting banks that service state-legal cannabis businesses from penalties,” according to Barron’s.

And the U.S. Conference of Mayors, according to Marijuana Moment, are calling on President Biden to legal cannabis at the federal level. The cannabis industry “is likely to become a global multi-trillion dollar industry, with early U.S. sales already generating billions of dollars,” the organization said.

With potential legalization at the federal level, cannabis stocks could see higher highs.

The post This is Why Cannabis Stocks Could See Higher Highs – and Fast appeared first on Morningology.