Finance

Take a look at some of the biggest movers in the premarket:
Tesla (TSLA) – Tesla shares rose 3% in the premarket after the company announced it delivered 241,300 vehicles during the third quarter, its most ever for a quarter and a 73% increase over the same quarter a year ago.

Moderna (MRNA), Novavax (NVAX) – Moderna and Novavax shares are under pressure once again this morning. Both Covid-19 vaccine makers saw double-digit percentage losses Friday, following news of Merck’s (MRK) successful late-stage trial for its new anti-viral pill. Moderna fell 4% in premarket trading, while Novavax slid 3.3%. Merck rallied another 2.7% in the premarket following Friday’s 8.4% surge.
General Motors (GM) – Hedge fund Engine No. 1 announced its support for GM’s goal to have a 100% electric car portfolio by 2035, as well as an investment in the automaker. Engine No. 1 gained prominence earlier this year by successfully placing three climate-focused independent directors on Exxon Mobil’s (XOM) board.
Delta Air Lines (DAL) – Delta reinstated its original third-quarter revenue forecast, after cutting it a month ago. CEO Ed Bastian said ticket sales stabilized and then improved, and the airline is also expecting 2022 domestic bookings to surpass pre-pandemic levels. Delta will report third-quarter results on October 13.
Southwest Airlines (LUV) – Southwest added 1.4% in premarket trading after Barclays upgraded the stock to “overweight” from “equal weight,” saying it sees bluer skies ahead for airlines and that it favors low-cost, low-fare carriers like Southwest.
Sun Life Financial (SLF) – The financial services company struck a deal to buy oral health care provider DentaQuest for $2.47 billion in cash. The transaction is aimed at increasing Sun Life’s employee benefits offerings.

3M (MMM) – 3M fell 1.5% in the premarket after J.P. Morgan Securities downgraded the stock to “neutral” from “overweight,” citing a lack of “fundamental direction” for the company.
Roper Technologies (ROP) – Roper is selling its engineering solutions unit TransCore to Singapore Technologies Engineering for $2.68 billion. TransCore focuses on safety solutions for roads, bridges and tunnels.
Johnson & Johnson (JNJ) – Johnson & Johnson is planning to ask the Food and Drug Administration this week to authorize a booster shot for its Covid-19 vaccine, according to The New York Times citing officials familiar with the company’s plans.
Amazon.com (AMZN) – Amazon released what it is billing as “Black Friday-worthy” deals – nearly eight weeks before the actual Black Friday date. Amazon also announced a program that will allow Prime members to send gifts using just a mobile phone number or email, without having to know the recipient’s address.

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FOR MUCH of the past half-decade, the operative word in the energy sector was “abundance”. An industry that had long sought to ration the production of fossil fuels to keep prices high suddenly found itself swamped with oversupply, as America’s shale boom lowered the price of oil around the world and clean-energy sources, such as wind and solar, competed with other fuels used for power generation, such as coal and natural gas.In recent weeks, however, it is a shortage of energy, rather than an abundance of it, that has caught the world’s attention. On the surface, its manifestations are mostly unconnected. Britain’s miffed motorists are suffering from a shortage of lorry drivers to deliver petrol. Power cuts in parts of China partly stem from the country’s attempts to curb emissions. Dwindling coal stocks at power stations in India are linked to a surge in the price of imports of the commodity.Yet an underlying factor is expected to make scarcity even worse in the next few years: a slump in investment in oil wells, natural-gas hubs and coal mines. This is partly a hangover from the period of abundance, with years of overinvestment giving rise to more capital discipline. It is also the result of growing pressures to decarbonise. This year the investment shortfall is one of the main reasons prices of all three energy commodities have soared. Oil crossed $81 a barrel after the Organisation of the Petroleum Exporting Countries (OPEC), and allies such as Russia who are part of the OPEC+ alliance, resisted calls to increase output at a meeting on October 4th.The potentially inflationary upheaval will not be good for a world that still gets most of its energy from fossil fuels. But it may at least accelerate the shift to greener—and cheaper—sources of energy.Start with oil, an industry that needs constant re-investment just to stand still. A rule of thumb is that oil companies are supposed to allocate about four-fifths of their capital expenditure each year just to stopping their level of reserves from being depleted. Yet annual industry capex has fallen from $750bn in 2014 (when oil prices exceeded $100 a barrel) to an estimated $350bn this year, reckons Saad Rahim of Trafigura, a large commodity trader. Goldman Sachs, a bank, says that over the same period, the number of years’ worth of current production held in reserves in some of the world’s biggest projects has fallen from 50 to about 25. A supply crunch was temporarily averted last year because the covid-19 pandemic clobbered oil demand. But once the world economy started to recover, it was only a matter of time before a squeeze started to emerge.The industry would usually respond to robust demand and higher prices by investing to drill more oil. But that is harder in an era of decarbonisation. For a start, big private-sector oil companies, such as ExxonMobil and Royal Dutch Shell, are being pressed by investors to treat oil and gas investments like week-old fish. That is either because their shareholders reckon that demand for oil will eventually peak, making long-term projects uneconomic, or because they prefer to hold stakes in companies that support the transition to clean energy. Even though prices are rising, investment in oil seems unlikely to pick up. The Economist looked at capital-spending forecasts for the world’s 250 biggest commodity producers in 2022 compared with 2019. Whereas miners and agricultural firms predict big increases in capex, energy investment is expected to fall by a further 9%. Oil firms are instead giving excess cash back to shareholders.Another factor inhibiting oil investment is the behaviour of OPEC+ countries. The half-decade of relatively low prices during the “age of abundance”, which reached its nadir with a price collapse at the start of the pandemic, gutted state coffers. That cut funding for investment. As prices recover, governments’ priority is not to expand oil-production capacity but to shore up national budgets. Moreover, state-run producers are cautious, worried that a new flare-up of covid-19 cases could hit demand again. And as Oswald Clint of Bernstein, an investment firm, puts it, many are wondering “Why not just ride this high price for a while?” In any case, even if the rally were eventually to inspire investment, it would take several years to meaningfully raise output.Lower investment in oil has a spillover effect on the output of natural gas, which is often a by-product of drilling for crude. Added to that is a dearth of liquefied natural gas (LNG) terminals for shipping gas from places where it remains relatively easy to access (America) to those where it is scarcer (Asia and Europe). Given the long time it takes to build facilities, the lack of spare terminal capacity in America is expected to last at least until 2025.Investment in thermal coal is weakest of all. Even in China and India, which have big pipelines of new coal-fired power plants, the mood has swung against the dirtiest fossil fuel. Yet with China potentially heading into a cold winter and India struggling with supplies, it may be in the throes of its last hurrah.All this places fossil-fuel producers in something of a bind. A slump in investment could enable some oil, gas and coal investors to make out like bandits. But the longer prices stay high, the more likely it becomes that the transition to clean energy ultimately buries the fossil-fuel industry. Consumers, in the meantime, must brace for more shortages. The age of abundance is dead. More

Wall Street may be on the verge of an uncharacteristically painful quarter.
Wharton finance professor Jeremy Siegel, who’s known for his positive market forecasts, is sounding the alarm on the market’s ability to cope with inflation.

“We’re headed for some trouble ahead,” he told CNBC’s “Trading Nation” on Friday. “Inflation, in general, is going to be a much bigger problem than the Fed believes.”
Siegel warns there are serious risks tied to rising prices.
“There’s going to be pressure on the Fed to accelerate its taper process,'” he said. “I do not believe that the market is prepared for an accelerated taper.”
His cautious shift is a clear departure from his bullishness in early January. On Jan. 4 on “Trading Nation,” he correctly predicted the Dow would hit 35,000 in 2021, a 14% jump from the year’s first market open. The index hit an all-time high of 35,631.19 on August 16. On Friday, it closed at 34,326.46.
According to Siegel, the biggest threat facing Wall Street is Federal Reserve chair Jerome Powell stepping away from easy money policies much sooner than expected due to surging inflation.

“We all know that a lot of the levity of the equity market is related to the liquidity that the Fed has provided. If that’s going to be taken away faster, that also means that interest rate hikes are going to occur sooner,” he noted. “Both those things are not positives for the equity market.”

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Siegel is particularly concerned about the impact on growth stocks, particularly technology. He suggests the tech-heavy Nasdaq, which is 5% away from its record high, is set up for sharp losses.
“There will be a challenge for the long duration stocks,” said Siegel. “The tilt will be towards the value stocks.”
He sees the backdrop boding well for companies benefitting from rising rates, have pricing power and deliver dividends.
“Yield is scarce and you don’t want to lock yourself into to long-term government bonds which I think are going to suffer quite a dramatically over the next six months,” he said.
The inflationary backdrop, according to Siegel, may set-up underperformers utilities and consumer staples, known for their dividends, for a strong run.
“They may have their day in the sun finally,” said Siegel. “If you have a dividend, firms can raise their prices and historically dividends are inflation-protected. They’re not as stable, of course, as a government bond. But they have that inflation protection and a positive yield.”
Siegel is bullish on gold, too. He believes it has become relatively cheap as an inflation hedge and cites bitcoin’s popularity as a reason.

‘They’re turning to bitcoin, and I think ignoring gold’

“I remember inflation in the 70s. Everyone turned to gold. They turned to collectables. They turned to precious metals,” he said. “Today in our digital world, they’re turning to bitcoin, and I think ignoring gold.”
He’s also not put off by the jump in real estate prices.
“I don’t think it’s a bubble,” Siegel said. “Investors have foreseen some of this inflation…. Mortgage rates are going to have to rise an awful lot more to really, I think, dent real estate. So, I think real estate [and] REITs still are good assets to own.”
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Traders work on the floor of the New York Stock Exchange (NYSE) on September 30, 2021 in New York City.
Spencer Platt | Getty Images

U.S. stock futures were higher in overnight trading on Sunday as investors readied for the first full week of trading in October and the fourth quarter.
Dow futures rose about 100 points. S&P 500 futures gained 0.3% and Nasdaq 100 futures climbed 0.35%.

Friday marked the first trading day of October and the final quarter of 2021. The major averages rose that day on news of a new oral treatment for Covid-19, which boosted stocks tied to the economic reopening.
The market rebound followed a rough September plagued by fears of inflation, Federal Reserve tapering and rising interest rates. The 10-year rate topped 1.56% last week, its highest point since June.
The S&P 500 finished the month down 4.8%, breaking a seven-month winning streak. The Dow and the Nasdaq Composite fell 4.3% and 5.3%, respectively, suffering their worst months of the year.
The fourth quarter is typically a good period for stocks, but overhangs like central bank tightening, the debt ceiling, Chinese developer Evergrande and Covid-19 could keep investors cautious. Heading into the fourth quarter, more than half of all S&P stocks are off at least 10%.
The S&P 500 has averaged gains of 3.9% in the fourth quarter and was up four out of every five years since World War II, according to CFRA.

“Q4 2021 will likely record a higher-than-average return. However, investors will need to hang on tight during the typically tumultuous ride in October, which saw 36% higher volatility when compared with the average for the other 11 months,” notes CFRA chief investment strategist Sam Stovall.One of the first hurdles markets face in the new quarter is Friday’s closely watched employment report, which could spur the Federal Reserve’s decision on when to taper its bond-buying program.
Economists expect about 475,000 jobs were added in September, according to an early consensus figure from FactSet. Just 235,000 payrolls were added in August, about 500,000 less than expected.
—CNBC’s Patti Domm contributed to this report.

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President Joe Biden’s $3.5 trillion economic plan has few parallels in modern U.S. history.
The Great Society of the 1960s and New Deal policies of the 1930s, marshalled by Presidents Lyndon B. Johnson and Franklin D. Roosevelt, are the closest comparisons, according to economists and historians.
Biden’s Build Back Better plan both shares similar qualities and is dissimilar in key ways, experts said.

Anna Moneymaker | Getty Images News | Getty Images

President Joe Biden’s $3.5 trillion economic agenda — and the social spending it would usher in — has few parallels in modern U.S. history.
The New Deal era of the 1930s and the Great Society of the 1960s are its closest comparisons, according to economists and historians.

Those periods of vast social expansions — marshalled by Presidents Franklin D. Roosevelt and Lyndon B. Johnson, respectively — saw the creation of some of our nation’s most popular programs, such as Social Security, Medicare, Medicaid and unemployment insurance.
Biden’s Build Back Better reforms — which would expand spending in areas like childcare, health care, paid leave and education — shares traits with these past eras but diverges in significant ways, experts said.
“They’re all important,” Stephen Marglin, an economist at Harvard University, said of the prongs of Biden’s agenda. “They’re all part of what we should be regarding as necessary infrastructure, social infrastructure, that’s important to a 21st century economy.”

The birth of social spending

The national government was small when the Great Depression hit in 1929. At the time, most social welfare programs were funded and administered by local government, according to John Joseph Wallis, an economic historian and professor at the University of Maryland.
But FDR’s series of New Deal programs in the 1930s fundamentally changed the public’s expectation from Washington and the government’s role in their lives.

Social Security retirement benefits and unemployment insurance were the most consequential and lasting reforms of that period, according to economists. Some modern-day programs — like the Supplemental Nutrition Assistance Program (food stamps) and Temporary Assistance for Needy Families (also known as welfare) — have their roots in New Deal reforms.  
Later, in 1965, President Johnson’s War on Poverty led to the creation of Medicare and Medicaid, public health plans for seniors and the poor.

The federal government also roughly doubled the value of Social Security benefits between 1965 and 1972, and began pegging them to increases in the cost of living, according to Irwin Garfinkel, a professor and co-founding director of the Center on Poverty and Social Policy at Columbia University. (Some of those reforms occurred during President Richard Nixon’s tenure.)
“What we did in the 60s, what was most remarkable, was we nearly wiped out poverty among the aged,” Garfinkel said.
Biden’s proposals come at a time of similar U.S. economic and social upheaval.
The pandemic downturn was the worst recession since the Great Depression, hurtling millions into unemployment overnight. The country’s concurrent reckoning with racial inequality following the murder of George Floyd harked back to the civil rights movement of the 1960s and put a spotlight on the recession’s unequal impact on minorities and the poor.
While U.S. social programs had largely tilted toward the elderly, Biden’s agenda would somewhat shift that focus to children and families, according to experts.
By one estimate, his proposed expansion of the child tax credit would cut child poverty by half. (Child poverty is the share of kids living in poor households.)
“It’s not quite as we did for the aged, but it’s not bad,” Garfinkel said.
Biden’s proposal would expand programs for seniors, too, by adding vision, dental and hearing benefits for Medicare, for example.

Program cost

Comparing the overall cost and spending of Build Back Better versus the New Deal and Great Society eras is challenging.
For one, the budgeting tools the federal government uses today to gauge cost weren’t around then. But examining cost as a share of the U.S. economy is among the best ways to judge programs’ relative scope, economists said.
The $3.5 trillion plan Biden proposed would be spent over 10 years. That amounts to roughly $350 billion per year, or about 1.5% of the country’s current $22.7 trillion gross domestic product, a measure of economic output.
That 1.5-point increase is a big jump from the last several decades but is smaller than those during the Roosevelt and Johnson eras.
More from Personal Finance:Here are the changes that could be coming to your Social Security benefitsClimate change can impact your financesHouse Democrats’ tax proposal may affect life insurance for the rich
By 1939, the share of federal social-welfare spending hit a New Deal-era peak of 3.6% of GDP, according to an analysis by Price Fishback, a professor at the University of Arizona who studies New Deal political economy. That’s a 2.7-percentage-point increase relative to 1933.
In 1963, social spending was 4.1% of GDP; by 1973, it had jumped to 7.4%, an increase of 3.3 points, Fishback said.
“This is a pretty hefty slug of money,” Fishback said of Build Back Better. “[But] it doesn’t look like a big budget buster,” he added.
The picture is somewhat different when considering spending per capita, to account for U.S. population growth over the last century.
Social spending would increase about $1,060 per person per year under Biden’s plan, Fishback said. By comparison, New Deal policies had swelled spending about $400 per person by the end of the 1930s; spending grew $2,571 per person over 1963-73.

We are redefining the safety net to a higher level. It will shift the public resources to more people.

William Hoagland
senior vice president at the Bipartisan Policy Center

One caveat: The Biden’s proposed outlays would be on top of the existing social welfare system, Fishback said. And it’s unclear how or whether the programs may grow over time or become permanent fixtures.
Social Security, for example, paid few benefits in its early years but accounted for about $1 trillion, or 23%, of the federal budget in 2019.
And the overall price tag may change during congressional negotiations. One key Senate Democrat, Joe Manchin, D-W.Va., said Thursday that he wouldn’t support legislation exceeding $1.5 trillion — less than half the amount of Biden’s proposal.

Investment vs. spending

Of course, some economist consider these federal outlays to be “investments” in the country’s future rather than outright spending.
“I almost think the [$3.5 trillion] plan is a bit more comparable to LBJ’s War On Poverty [than to the New Deal], because it’s trying to address long-term strategic issues,” said Krishna Kumar, director of international research and a senior economist at the RAND Corporation.
Investing in children (the beginning of the lifecycle) as opposed to seniors (toward the end of their lives) distinguishes Biden’s plan, he explained.
In addition to an expanded child tax credit, the plan calls for lower childcare costs, two years of universal preschool, 12 weeks of paid family and medical leave, and two years of free community college.

The U.S. lags behind other developed rich nations in the Organisation for Economic Co-operation and Development in many of these categories, Kumar said.
Such “investments” can yield economic benefits in the future. For example, healthier, more educated kids tend to live longer, earn more as adults, pay more taxes and lean less on the safety net, Garfinkel said.
Investment in early childhood programs returns $2 to $4 for every dollar invested, according to a RAND analysis.

Beyond the New Deal and Great Society

Biden’s plan diverges from its predecessors in some ways, according to economists.
Perhaps most importantly, its benefits are spread across a broad swath of the American population — not just the neediest.
That shifts the U.S. closer to a social model adopted by Scandinavian countries like Norway and Sweden, perhaps reflecting that childcare issues also affect middle-class families, economists said.
For example, poor families get the largest gains from the expanded child tax credit, but extra funds also reach higher-income households (individuals with up to $200,000 of income and married couples with up to $400,000.)
Overall, the expansion doubles the average family’s benefit to almost $5,100, according to the Congressional Research Service.
“We are redefining the safety net to a higher level,” said William Hoagland, a senior vice president at the Bipartisan Policy Center. “It will shift the public resources to more people.”
This strategy may help garner political support for Biden’s initiatives. A narrower focus — just on the poorest individuals, for example — is a “recipe for political disaster” because it erodes the base of supporters, according to Marglin, the economist at Harvard.
“This is just the way our political system works,” he said. “The great innovators understood that.”
“It was something Franklin Roosevelt knew in 1935, and I’m sure Lyndon Johnson knew it in 1965, and I’m sure Joe Biden knows it, as well,” he added.

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Google is shuttering its bank account product nearly two years after announcing ambitious plans to take on the retail finance industry.
One key factor: The new head of the business, Bill Ready, decided that he’d rather develop a digital banking and payments ecosystem instead of competing with banks, according to a person with knowledge of the decision.
Google may have ultimately decided it wasn’t worth antagonizing current and prospective customers for its various businesses, including cloud computing, according to a Friday research note from Wells Fargo banking analyst Mike Mayo.

The logo for Google Pay displayed on a phone screen.
Jakub Porzycki | NurPhoto via Getty Images

At least one tech giant has decided it’s better to serve banks rather than taking them head on.
Google is shuttering its bank account product nearly two years after announcing ambitious plans to take on the retail finance industry. One key factor: The new head of the business, Bill Ready, decided that he’d rather develop a digital banking and payments ecosystem instead of competing with banks, according to a person with knowledge of the decision.

For the past few years, bank executives and investors have shuddered whenever a tech giant disclosed plans to break into finance. With good reason: Tech giants have access to hundreds of millions of users and their data and a track record for transforming industries like media and advertising.
But the reality has proven less disruptive so far. While Amazon was reportedly exploring bank accounts in 2018, the project has yet to materialize. Uber reined in its fintech ambitions last year. Facebook was forced to rebrand its crypto project amid a series of setbacks.
“We’re updating our approach to focus primarily on delivering digital enablement for banks and other financial services providers rather than us serving as the provider of these services,” a Google spokeswoman said in a statement.
Google, which is owned by parent company Alphabet, could help banks provide more secure ways for consumers to make online purchases like via virtual cards or single-use tokens. That’s according to the person with knowledge of the company who declined to be identified speaking about business strategy. Those methods cut down on fraud by protecting users’ credit-card numbers.
Google may have ultimately decided it wasn’t worth antagonizing current and prospective customers for its various businesses, including cloud computing, according to a Friday research note from Wells Fargo banking analyst Mike Mayo.

In recent years, Google has funneled more resources to its cloud business, which still lags behind Amazon and Microsoft in market share. However, it has made steady gains under cloud boss Thomas Kurian, who, along with Google CEO Sundar Pichai, has repeatedly touted financial services as a target in terms of customers they hope to attract.
“Banks are worried about disintermediation, and I think it’s likely that Google executives were getting signals that banks weren’t on board with what Google was going to do,” said Peter Wannemacher, a Forrester Research analyst who advises banks on digital efforts. “They made the bet that there was a greater gain in selling to banks rather than selling to customers.”
Being the customer-facing entity for banks may have risked inviting greater regulatory and Congressional scrutiny, he said. As it is, the public has already become suspicious of technology firms’ reach, he added.
“Financial services is a difficult space to get into,” Wannemacher said. “Everyone knows that, but it’s often more vexing and knotty than people expect.”

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Check out the companies making headlines in midday trading.
Merck — Shares surged 8.4% after it announced its new antiviral pill cut the risk of death or hospitalization by 50% for Covid patients. The pharmaceutical company plans to file for emergency use authorization.

Moderna, Regeneron — Companies with other Covid-19 drugs fell after Merck’s oral pill showed positive data in a clinical trial. Moderna’s stock fell 11.4%, while shares of Regeneron dropped 5.7%.
United Airlines, Delta Air Lines, American Airlines, Southwest Airlines — Airline stocks rallied as Merck’s oral Covid drug showed promising results. United Airlines rose 7.9%, Delta Air Lines gained 6.5% and American Airlines rallied 5.5%. Southwest Airlines jumped 5.7 following an upgrade on the stock by JPMorgan.
Penn National Gaming, Hilton Worldwide, Norwegian Cruise Line — Travel and entertainment stocks jumped following the positive results from Merck’s Covid pill. Penn National Gaming rallied 8.5%, Live Nation Entertainment added 8.5%, Hilton Worldwide gained 4.5% and Norwegian Cruise Line rose 5.9%.
Lordstown Motors — Lordstown Motors saw its stock sink 18.3% after it announced an agreement to sell its Ohio assembly plant to iPhone maker Foxconn for $230 million. Shares of Lordstown Motors had rallied by as much as 21% by Thursday as reports indicated the deal was in the works.
Zoom Video Communications — Zoom and Five9 terminated what would have been a $14.7 billion deal. Five9 shareholders rejected the proposed acquisition by Zoom. Zoom shares gained 2.3% and Five9 shares rose 4.7%.

Walt Disney — Shares of the media giant popped 4% on news that Disney and Scarlett Johansson settled a lawsuit involving the “Black Widow” movie. Johansson had sued Disney over the release of the movie on the Disney+ streaming service at the same time it was debuting in theaters.
Exxon Mobil – The oil giant advanced 3.6% after the company updated Wall Street on its expected third-quarter results. In a filing with the Securities and Exchange Commission, Exxon said that higher oil and gas prices could lift earnings by as much as $1.5 billion. Analysts at Bank of America said the company is on track for its highest earnings per share since the third quarter of 2014.
International Flavors & Fragrances – Shares of International Flavors popped 5.5% after the company announced its chief executive Andreas Fibig plans to retire. The company said Fibig will remain at the helm of the company until a successor is found.
— CNBC’s Jesse Pound and Maggie Fitzgerald contributed reporting

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Cathie Wood
Source: CNBC

Cathie Wood is calling for a drop in oil prices, likening the crude market to the extinction of whale oil in the early 1900s.
“The rise in oil prices this year is a function more of supply than demand. At the turn of the 20th century, whale oil faced the same fate and whale oil prices fluctuated dramatically. If @ARKInvest’s research is correct, oil prices will suffer the same fate as whale oil prices,” Wood said in a tweet Thursday evening.

Arrows pointing outwards

The price of U.S. oil has risen sharply this year as demand recovers after dropping off during the coronavirus pandemic. U.S. West Texas Intermediate (WTI) crude futures sat around $74.38 a barrel on Friday, on track to post their sixth consecutive week of gains. The commodity is up more than 53% in 2021. At one point during the start of the pandemic, futures traded with a negative value because of the demand collapse.
While many analysts and economists see the rise in oil prices as a function of increased demand, Wood postulates it is due to disrupted supply. The innovation investor expects oil prices to decline just as in the early 1900s, when whale oil prices drastically lost value as other sources of fuel replaced it.

Many of Wood’s highest conviction companies surround technologies that bypass the use of oil. Wood is a bull on electric vehicles and battery-related companies. Overall, the widely followed investor believes long-term deflation will return as technology continues to disrupt many industries across the board.
“That said, based on ESG mandates, pension funds are demanding that oil companies cut back on capital spending while US banks, in response to the collapse in oil prices last year, are denying fracking companies of loans for capital spending, and OPEC is holding the line on supply,” Wood tweeted.
Meanwhile, OPEC said earlier this week that it thinks oil demand will continue to grow until 2035 even with cleaner energy sources as developing countries increase use of the fuel. OPEC then expects demand to plateau.
— With reporting from CNBC’s Pippa Stevens.

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