Author: Editor

We may be getting closer to an infrastructure bill, we mentioned on May 19.

After all, we desperately need massive improvements, with roads, bridges, and water systems crumbling. The situation has become so dire, the American Society of Civil Engineers gave the country a D+ in 2017. More than likely, things are far worse now.

To get our infrastructure to where it must be, we’ll need nearly $4.2 trillion.

“We’re looking at aviation, bridges, roads, transit, dams, levees, schools, parks, solid waste, drinking water, waste water,” ASCE told CNBC. “Unfortunately, 12 out of 16 categories are in the ‘D’ range, which is ‘poor’ or ‘at-risk,’ which is really reflecting a lot of our infrastructure being at the end of its useful life.”

Today, the Senate GOP unveiled a $928 billion counter-offer bill to President Biden.

According to CNBC, “The Republican plan includes $506 billion for roads, bridges and major infrastructure projects, including $4 billion for electric vehicles. It also includes $98 billion for public transit and $72 billion for water infrastructure.”

It also includes:

· $98 billion for public transit
· $72 billion for water systems
· $65 billion for broadband
· $56 billion for airports
· $46 billion for passenger and freight rail systems
· $22 billion for ports and waterways
· $22 billion for water storage
· $21 billion for safety efforts
· $20 billion for infrastructure financing

That counters the $1.7 trillion plan Biden offered the other day.

CNBC also noted, “To reach a deal, the sides would have to resolve not only a gap in the price tag but also differing visions of how to offset the spending. In their counteroffer, Republicans again rejected Biden’s call to raise corporate taxes, contending they could cover infrastructure costs with funds already allocated by Congress or with transportation user fees.”

With both sides talking, investors should keep an eye on the SPDR S&P Global Infrastructure ETF (GII), the iShares Global Infrastructure Index ETF (IGF), Vulcan Materials (VMC), Fluor Corp. (FLR), United States Steel (X), Caterpillar (CAT), Nucor (NUE), and Freeport McMoRan (FCX).

 

The post The Top 8 Infrastructure Stocks to Consider Right Now appeared first on Morningology.

The green energy boom is here.

Not only did the U.S. just pledged to reduce emissions by up to 52%, Europe wants to cut CO2 emissions by up to 55% by 2030. China says it’ll stop releasing CO2 in the next 40 years.

In doing so, global leaders want millions of electric vehicles on the roads, which is great news for companies like Tesla (TSLA) and Nio (NIO).

In fact, “A new report by Cairn Energy Research Advisors, a research firm focused on the battery and EV industries, predicts a surge in electric vehicle sales in 2021 as countries around the world push new programs to encourage consumers to buy battery powered vehicles. Cairn estimates global sales of EVs in 2021 will jump 36% and top 3 million vehicles for the first time ever.”

Now, even major oil companies are being forced to cut emissions.

A Dutch court just ruled that Royal Dutch Shell is partially responsible for climate issues, and ordered the company to cut emissions by 45% by 2030. According to The Wall Street Journal, “the company said that it was disappointed with the ruling and that it was investing billions of dollars in low-carbon energy, including electric-vehicle charging, biofuels and renewables.”

Activist shareholders in Exxon Mobile are also pushing for the company to cut emissions.

That being said, keep an eye on EV stocks, like TSLA and NIO, and EV charging station stocks like Blink Charging (BLNK) and ChargePoint Inc. (CHPT).

The post Green Boom: Royal Dutch Shell Ordered to Cut Emissions by 45% appeared first on Morningology.

Space tourism is getting closer to launch.

While space tourism companies aren’t ready to send folks into space just yet, as we noted on May 24, we’re one step closer. In fact, weeks after Blue Origin carried out another successful test of its New Shepard rocket, Virgin Galactic (SPCE) had a successful test over the weekend.

That news sent Virgin Galactic from a low of about 15 to $26.90 in days.

However, this could be the start of a bigger rally.

According to Canaccord analyst Ken Herbert, now is the time to buy, upgrading the stock to a buy rating with a price target of $35 a share.

In addition, as reported by Barron’s, “Herbert calls Virgin Galactic ‘a leader in the emerging space-tourism market,’ adding that after the recent delays, flight activity should pick up culminating with commencement of commercial space service.”

“As tourist flights gain traction, we believe the stock should benefit from multiple potential catalysts,” he added.

The other key catalyst for the SPCE are folks paying thousands of dollars for a flight. At the moment, there are about 600 paying customers, which is likely to grow. Following that, the next catalyst would be the actual commercial service, which is expected next year.

However, not everyone is bullish on the SPCE story.

Morgan Stanley analyst Kristine Liwag lowered here price target from $30 to $25, reports The Fly. “She has updated the firm’s model with “more conservatism,” as Liwag has delayed her forecast for a first commercial flight out to 2022 and now assumes the equivalent of 12 passengers being flown in 2022. While last weekend’s successful flight test was a “critical milestone,” prior delays highlight downside risks.”

With the story heating up – and out of this world – SPCE could be a long-term winner.

The post Here’s Why Virgin Galactic Holdings is Blasting Off appeared first on Morningology.

The idea of space travel is out of this world.

While space tourism companies aren’t ready to send folks into space just yet, we’re one step closer. In fact, weeks after Blue Origin carried out another successful test of its New Shepard rocket, Virgin Galactic had a successful test over the weekend.

“The flight carried two pilots to an altitude of 55.45 miles, according to the company, positioning Virgin Galactic to begin launching paying customers within the next year. The 50-mile mark is considered to be where the earth’s atmosphere ends and space begins,” says CNN.

From here, the company still needs to get through three more flights. The next one will carry four passengers to test the spacecraft cabin. Then, Richard Branson will fly.

Better, there’s already a good deal of demand.

For one, according to analysts at Cowen, “39% of people with a net worth of more than $5 million are interested in paying at least $250,000 for a flight.” In addition, by 2040, Morgan Stanley believes the space tourism industry could be worth about $1 trillion.

Two, Virgin Galactic already has 600 customers ready to blast off at $250,000 a ticket. All for a 90-minute trip that will take them about 60 miles above the Earth.

If we see even more progress, space tourism investments could rocket to higher highs.

Stay tuned for more on this developing story.

The post The World is “One Small Step” Closer to Space Tourism appeared first on Morningology.

The cybersecurity issue is getting out of hand.

We know there’s an issue. We know the chances of getting hit again are high. Yet, companies and government officials still aren’t fully prepared.

For example, “The U.S. is currently not designed to act with the speed and agility necessary to defend the country in cyberspace. Our country has lost hundreds of billions of dollars to nation-state-sponsored intellectual property theft using cyber espionage,” as noted by the Cyberspace Solarium Commission, as reported by Fox Business.

Hospitals, schools, and financial institutions aren’t ready. “Nearly 29% of organizations haven’t tested their cyber defenses for a year and out of them more than half weren’t confident about whether their plans will work as per the expectations,” says FireEye, as reported by Cybersecurity Insiders,

Even some of the biggest companies in the world have been hit.

Just look at what happened the other day with US Colonial, which was forced to shut down to deal with an attack. On top of that, Cybersecurity Ventures expects global cybercrime costs to grow by 15 percent per year over the next five years, reaching $10.5 trillion annually by 2025, up from $3 trillion in 2015.”

Hopefully, things will change with President Biden’s latest executive order.

As noted by the White House, “President Biden signed an Executive Order to improve the nation’s cybersecurity and protect federal government networks. Recent cybersecurity incidents such as SolarWinds, Microsoft Exchange, and the Colonial Pipeline incident are a sobering reminder that U.S. public and private sector entities increasingly face sophisticated malicious cyber activity from both nation-state actors and cyber criminals. These incidents share commonalities, including insufficient cybersecurity defenses that leave public and private sector entities more vulnerable to incidents.”

For investors, while you can always buy stocks like FireEye (FEYE), Palo Alto (PANW), and Fortinet (FTNT), you can also pick up ETFs, which offer solid diversification at less cost, such as:

Global X Cybersecurity ETF (BUG)

“The Global X Cybersecurity ETF (BUG) seeks to invest in companies that stand to potentially benefit from the increased adoption of cybersecurity technology, such as those whose principal business is in the development and management of security protocols preventing intrusion and attacks to systems, networks, applications, computers, and mobile devices,” says Global X.

At $26.80 a share, BUG offers exposure to cyber stocks such as Fortinet, Palo Alto Networks, Check Point Software, Cyberark Software, and FireEye Inc.

iShares Cybersecurity and Tech ETF (IHAK)

According to iShares, “The iShares Cybersecurity and Tech ETF seeks to track the investment results of an index composed of developed and emerging market companies involved in cyber security and technology, including cyber security hardware, software, products, and services.”

At less than $40 a share, the ETF offers exposure to Fortinet, Proofpoint, Juniper Networks, VMWare Inc., Palo Alto Networks, Okta Inc., and Check Point Software.

The post This is Why Cybersecurity Attacks Could Get Far Worse appeared first on Morningology.

We could see an even bigger push for green energy. 

Sure, countries all over the world have pledged to cut emissions.  The U.S. just pledged to reduce emissions by up to 52% over the next several years. Europe wants to cut CO2 emissions by up to 55% by 2030. China says it’ll stop releasing CO2 in the next 40 years. 

However, it may not be enough.

In fact, according to a new report from The Climate Action Tracker, as noted by Yahoo Finance, “The recent pledges made by world governments to limit carbon emissions will not be sufficient to meet the goal of keeping global temperatures from rising above 1.5 degrees Celsius, a new report concluded. Instead, those non-binding commitments will result in a rise in the average global temperature to a potentially catastrophic 2.4 degrees Celsius.”

To help, says the International Energy Agency (IEA), we have to stop using gas-powered vehicles in the next 14 years, abandoning coal mines, ending oil exploration, and transforming energy systems.

According to the EIA’s Net Zero by 2050 report, some of the top changes needed, as also reported by Yahoo Finance include: 

1. Increasing the use of renewable sources of energy from 29 percent in 2020 to 90 percent in 2050
2. Halting construction of all new coal plants this year, unless they are built with carbon-capture technology
3. Implementing a ban in 2025 on the sale of new oil and gas furnaces to heat buildings
4. Phasing out the sale of automobiles that use gasoline by 2035
5. Conversion of vehicle fleets to either electric or hydrogen fuel sources by 2050
6. Shifting power plants away from carbon emissions to renewable sources of energy by 2035
7. Closing all coal-fired power plants not fitted with carbon-capture technology by 2040
8. Transitioning half of all plane-travel energy sources to hydrogen or biofuels by 2040

The post Scientists Warn U.S. Has Entered Unprecedented Territory appeared first on Morningology.

There’s no end in sight to the copper rally.

With tightening supply issues, and an increase in demand, Goldman Sachs says copper could rally to $15,000 by 2025. The firm also believes annual demand for copper could skyrocket 900% to 8.7 million tons by 2030.

Plus, with Chile, China, and global decarbonization efforts, demand will only increase.

For one, there’s the potential for supply disruptions in Chile.

According to Mining.com, “Workers at BHP’s Escondida and Spence mines rejected BHP’s final wage offer, with almost 97% of the union’s members opting to strike. Combined, Escondida and Spence account for almost 20% of annual copper output in Chile, the world’s largest producer of the metal.”

Two, copper demand in China is gaining momentum. “Demand in top user China is recovering after prices retreated, Jinrui Futures Co. said,” as noted by Bloomberg.

Three, “Copper will be crucial in achieving decarbonization and replacing oil with renewable energy sources, and right now, the market is facing a supply crunch that could boost the price by more than 60% in four year,” reports Business Insider. Electric vehicles, for example, use four times as much copper as petroleum-based cars.

With that in mind, there’s still plenty of time to invest in copper stocks, such as Freeport McMoRan (FCX), Southern Copper (SCCO), BHP Group (BHP), and Riot Tinto (RIO). You may also want to keep an eye on the Global X Copper Miners ETF (COPX).

We highlighted opportunity in each of those opportunities on April 26, 2021.

The post This is Why Copper Prices Will Remain Red-Hot this Year appeared first on Morningology.

The pullback in sports betting stocks is a bit overdone.

Look at DraftKings (DKNG) for example. After falling from about $75 to $40, the stock is ridiculously oversold here. Plus, RSI, MACD, and Williams’ %R are all deep in oversold territory.

The only reason the stock fell was because of a wider than expected loss of 87 cents a share, as compared to estimates for 42 cents. Investors didn’t care if the company’s other numbers point to strong growth. For example, according to Barron’s:

“The company averaged 1.5 million monthly unique paying customers, up 114% year-over-year. Average revenue per monthly unique paying customer hit $61, up 48% year-over-year. The company pointed to growing engagement with its offerings in online casino games, known as iGaming, and mobile sports betting. DraftKings said it has had success selling iGaming to its sports betting users, and vice versa for iGaming users.”

The company even raised full year guidance.

It raised its revenue outlook to between $1.05 billion and $1.15 billion. That’s up from a range of $900 million to $1.billion, which led Jefferies’ analysts to maintain a buy rating with a $75 price target. Even Goldman Sachs says investors should buy the dip.

In fact, according to Goldman analyst Stephen Grambling, as quoted by Investors’ Business Daily, “We upgrade DKNG to Buy as we expect ongoing sales beats versus consensus driven by 1) sustained market leading position in new and existing markets, 2) ability to participate in the economics of single operator states, and 3) presence of national partnerships that should allow them to accelerate growth and achieve scale sooner than the broader peer group.”

Needham also initiated a buy rating on the DKNG stock with a price target of $81. That, plus deals with the NFL and UFC, and it may not take long for DKNG to recover.

Better still, not only did New York just legalize sports betting, but we could soon see it in lucrative markets like California, Florida, and Texas. We could even see massive growth in mobile sports betting, too. In short, I’d use weakness in related stocks as a buy opportunity.

The pullback in DraftKings for example is ridiculous.

Great things could be in store for this stock. Use weakness as opportunity.

The post One of the Most Oversold Sports Betting Stocks to Gamble On appeared first on Morningology.

Markets are a mess – again.

All after the latest report on inflation.

“Inflation in April accelerated at its fastest pace in more than 12 years as the U.S. economic recovery kicked into gear and energy prices jumped higher, the Labor Department reported,” as noted by CNBC.  CPI jumped 4.2% year over year.  Month over month, the gain was 0.8%, as compared to expectations for 0.2%.

While the numbers jump, the Federal Reserve isn’t as concerned as the market.  

They see current numbers as transitory, with the expectation that inflation will settle around 2%.  They also won’t raise interest rates or pull back on bond purchases until inflation averages 2% for an extended period. 

With markets pulling back, it’s easy to panic.  

However, that’s the worst thing you can do.  Instead, remember that markets are resilient, and could bounce back, as we’ve historically seen.  

In addition, ignore the herd.  

A trader will often do what a larger group of traders do, so they don’t feel left out of a trend. The rationale is simple. It’s unlikely that such a large group of people can be so wrong. But you know as well as I do, that’s not the case.

Also, be in a strong position to capitalize.  

As Warren Buffett has often said — keeping some cash on hand allows you to take advantage of corrections without having to sell other investments.

Or, if you believe market volatility could get worse, you can always invest in VIX 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 now trades at just $5.40.

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

The VXX ETN provides exposure to the S&P 500 VIX Short-Term Futures Index. The VXX last traded at $44.76 and could easily run well above $50, near-term with the chaos.

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 $9.16 and could run above $15, near-term.

The post Markets are Getting Pummeled – Here’s What to Do Next appeared first on Morningology.

Copper prices have gone ballistic.

As we noted on April 26, “With copper prices just beginning to pop on supply-demand issues, stocks like Freeport McMoRan (FCX), Southern Copper (SCCO), BHP Group (BHP), and Riot Tinto (RIO) could move aggressively higher.”

As hoped, all are pushing higher as demand continues to significantly outweigh supply.

The supply-demand situation has grown so dire, one of the world’s biggest copper traders, Trafigura Group, believes the metal could hit $15,000 a ton over the next decade. Even Goldman Sachs – which called copper ‘the new oil’ – also says copper could rally to $15,000 by 2025, as the world transitions to cleaner energy. The firm also believes annual demand for copper could skyrocket 900% to 8.7 million tons by 2030.

Plus, according to Barron’s:

“Supplies, already tight as the global economy recovers, could be further strained by a predicted fivefold rise in green energy demand in the current decade, leading to significant shortages, starting in the mid-2020s, according to a report by Goldman commodity analyst Nicholas Snowdon. He sees copper, now around $4.50 a pound, hitting $6.80 by 2025. Bank of America commodity strategist Michael Widmer thinks the price could hit $6 this year.”

In short, you may not want to bet against copper any time soon.

The post The Red-Hot Copper Bull Market Shows No Signs of Cooling Off appeared first on Morningology.