Category Archives: China

Conference Presentation: What is Driving Today’s Investors? by Barry Ritholtz . Commodities Prices are Falling. Really. Barron’s (Google the title, the piece has interesting charts). The 15 year CRB and 20 year CRB . “…by 2030, at which…

The stock market’s secular and cyclical position discussed in Barron’s and by Josh Brown . S&P 500 Fair Value Update at Value Plays (Has the shift in income to capital from labor permanent? Or is it a function of the credit bubble?). 2008…

According to Macquarie Private Wealth The resource boom ended in 2011 already . The cliff notes are at Mining and the whole piece is at MPW. Think China… End of An Era: 30 Years of Double-Digit Chinese Growth at Saturna Capital . Yes, the…

Coal Stocks Grinding Higher at Next Big Trade . KOL, however, represents international coal and is a function of China. China’s Economy: The Coming Year at WSJ . Iron ore continues to shine at Mining . Coal’s share of global energy mix to…

China’s renewed momentum to drive commodities at Financial Express . Why India Will Displace China as Global Growth Engine by Gary Shilling . I’m not so sure. Iron ore surge continues – now up 51% from September lows at Mining . CIBC’s…

A subscriber asked about TCK. In short, TCK is my favorite vehicle for Western investors and speculators to play the industrialization of the China and emerging markets. Rather than compete against them, sell ’em what they need! Yet ISA…

Top Ten Market Themes for 2013 : Goldman “…stocks don’t always provide the inflation protection investors seek, especially over time periods relevant to most of us; i.e. less than 20 years. When valuations are high and/or falling, and…

The possibility of a Santa Claus rally: Cam Hui . “There are a number of possible Utica deals on the horizon, with some values potentially rivaling the approximate $15,000 per acre that Chesapeake previously announced.” Wow! UG Center…

Last Wednesday Teck Resources (TCK) released third quarter results and had its quarterly conference call. The results, webcast and presentation slides are all available here (scroll down a bit). TCK remains ISA’s favorite investment to…

Is Coal Ready for Comeback? Coal Investing “…a super-bullish take on the state of coal markets, noting it should pass crude oil as the world’s largest energy source next year as everyone from the U.S. and China to Europe, Japan, and India…

Fed considers upping QE3 size and language at Marketwatch . Sounds like when operation sterilized twist expires at the end this year it will be replaced with an unsterilized increase in QE3 to infinity. ISA suggests the precious metal…

What to make of the latest round of Chinese data at FT Alphaville . “ September Chinese exports came in +9.9% Y/Y, while imports were +2.4% higher. However, the larger than expected increase in exports was due to shipments being made ahead…

The coal stocks ripped higher yesterday. Perhaps speculators were betting a Vice-President candidate was going to announce “I love coal”, as did a candidate at the top of a ticket. Natural gas was very strong on an inventory number…

After the poor overnight economic data, markets are quite tame as Canadians enjoy their Thanksgiving Day. The big news of the slow day: “The World Bank cut its economic growth forecasts for the East Asia and Pacific region on Monday and…

Having long advocated w aiting on coal , note my latest essay: Coal Stock Bottom Has Passed . Alpha Natural’s restructuring ( Mining Weekly ) was the industry catalyst as I stalk entry into my favorite coal play Cloud Peak Energy. With $4…

Today ISA looks extensively at potential timing in the materials space. Material stocks have been some of the biggest movers since China announced minor additional infrastructure investment last week Friday. In fact, the only stocks to…

For the third straight day the coal names have rallied. Interestingly, only those with a position would have noticed. Share owners have had relief and shorts have been squeezed hard. I continue to wait on coal. The rally from deeply…

China’s targeted infrastructure investment announcement in itself is underwhelming. Building 1254 miles of roads is not going to turn around the base metal and material sector. However, if this is a down payment the story has shifted. ISA…

If Moody’s is correct , then natural gas is headed much higher after the shoulder season: Switch From Coal-to-Gas Looks Permanent, Says Moody’s ( CIN ) and Most Coal-to-Gas Switching in U.S. Permanent, Moody’s Says ( Bloomberg ). The price…

Looks like Europe will be making headlines again “as meetings between Greece’s prime minister and euro-zone leaders this week loom.” WSJ But our interest is China centric: Are the forecasts for re-acceleration in Chinese growth accurate…

Long-Term Technical Outlook for Gold & Silver at Daily Gold . Gold’s performance in stock bear markets: Zeal . China and India account for half of world wide gold demand: Frank Holmes . So could “ China’s problems be gold’s problems” at…

The super-cycle is still soft as BHP warns of job cuts in coal as China cools in Mining Weekly . However, mine curtailments and capex cuts are the fertile ground of bull markets. Peabody Energy says it is continuing to evaluate spending in…

Coal shares down on lower steel coal price talk at Reuters . ISA readers already know coking coal is not the play right now. “Coal used to make steel is set to drop to the lowest price in two years” at Bloomberg . Walter Energy Shares…

Amid the European mess and weak emerging markets, the US has seen The Housing Recovery Strengthen at esoltas . Both Home Prices and Rents Rise at CNBC . Auto manufacturing and sales are a strong tailwind at the Detroit News . The good news…

In spite of the current depressed conditions, coal is here to stay (excellent read by Robert Bryce ). The thesis here at Independent Stock Analysis consists of a booming US thermal market when natural gas production finally declines…

Alpha Natural (ANR) reported results and had their conference call. Let’s just say they’re in trouble. Much of the industry rationalization in this down cycle is going to come at their expense as the strong eat the weak. I’ll have more to…

Listening to the coal company management teams on their conference calls broach’s the surreal. The observer is left to figure out by himself the industry is depressed. Hope springs eternal with happy talk. Three things have kept natural…

Oil Rises a Second Day as U.S. Inventories Decline, ECB Meets at Bloomberg . Blackout Highlights India’s Diesel Dependence at the WSJ . “NLG Bloodbath…rippling across the oil and gas industry” at Bloomberg . Devon JV’s some Permian…

Coal plant retirements in 2012 look to be 9,000 megawatts against 318,000 megawatts of capacity, a bit less than 3% of the total. More than 1,000 megawatts of the new plant total is coal-fired. John Hanger Meanwhile, “Dale Earnhardt Jr…

Continue to watch natural gas. “US Lower 48 production at 72.39 Bcf/d essentially unchanged in May from 72.38 Bcf/d output in April” ( EIA ). The worm will turn, but have much patience. In the hot 2010 summer about 12% of total U.S…

India’s power grid failed for the second day in a row, this time for more than half the country ( BBC News ). Is there much doubt about emerging market infrastructure development, as $80-trillion urban boost for mining projected at Mining…

Consol Energy and Suncoke Energy are stronger coal players who reported second quarter results today and have higher stock prices. Leveraged and high cost names like ANR, ACI and JRCC are acting poorly in a strong tape. Ironically the US…

“The number of Chinese online was already huge, and it’s soared over the past year by more than 50 million thanks to an upsurge in mobile Internet access.” CNET “…800 million to 1 billion new consumers around the world will enter the…

Cooling related power demand remains strong ( Bentek ). So natural gas is higher on a tough market day, dragging the coal sector to near flat. US utilities may return to coal as natgas prices rise at Mining Weekly . Peabody reports second…

Holy crap! Nexon agrees to $15.1B takeover by Cnooc . Marketwatch The Chinese are coming! The American Shale Conundrum Facing China’s Energy Champions at WSJ (google the title to read the whole article). Oil Plunges to Four-Day Low as…

I look for the public pension problems to get papered over later this decade: WSJ . Practically speaking, central bank cooperating means easy policy at a faster pace. WSJ As states and city’s go bankrupt ( Mish ), remember gold is no one’s…

The chart is from the Economist . Future electricity generation demand just for air conditioning, and thus for coal, is wildly bullish ( Guardian ). Wind and solar are not going to get the job done. China is always the elephant in the room…

China Economic Growth Slows to 7.6% at Iacono Research . On and on they rant about China’s over investment. “China’s capital stock per capita is still only about a tenth of the United States” at the New York Times . The commodity complex…

With a recovery in the coal complex dependent upon some kind of natural gas normalization, note natural gas is in oversupply in two ways: Storage and Supply. First, natural gas in storage is off the charts per the EIA . The low natural gas…

Both energy and industrialization of China related: China to Cut Retail Fuel Prices at WSJ . “Car makers are falling over themselves to get a slice of the action in China, the world’s biggest market.” Telegraph The structural economic…

Outstanding coal analysis re-post by Gregor . First half 2012 coal production was down 6.2% vs 2011: EIA The greenies will try to slow coal exports: Business Week . Fundamental to reviving the depressed coal sector is a natural gas price…

First, a commodity snapshot from Bespoke . Clearly, commodities were the big losers in the first half of this year: Iacono Research . As fallout from the natural gas bust, coal stocks were the worst, being down more than an average of 70%…

Bank of England tacks on $78 billion to their printing program ( Marketwatch ). ECB cuts more rates than expected ( Marketwatch ). But China steals the show with a cuts ( Marketwatch ). One more take: FT Alphaville . Looks like the…

The Barron’s Falling Star piece (google the title to read the whole thing) generated excited commentary from mainstream bloggers including Josh Brown and FT Alphaville . We at ISA are goldbugs and regularly note crazy imbalances. Where you…

China Leads World in Global Light Vehicle Assembly Growth at Polk. After all, The world’s shifting centre of gravity is astounding from the Economist . Thus Jeremy Grantham said in Fortune : “We used to live in a world where the price of…

Yesterday a report by Leonardo Maugeri created big buzz in the oil and gas community. The Oil and Gas Journal actually used the ridiculous 17 million number in a headline. The executive summery forgets about price . The WSJ and economist…

The mining world can be divided into two distinct, but overlapping groups. The small gold mining industry is populated by goldbugs fearful of the credit bubble. The other side is the base metal and bulk commodity complex : Think copper…

Western investors have been waiting patiently for China to stimulate so their stocks will go up again. Just be sure they follow through. Rather than compete against the Chinese, sell them what they need. Enjoy today’s industrialization of…

Eagle Ford human interest article: Fuel Fix As production ramps higher in a new play, operators get behind before a maintenance level of backlog inventory is found. The Eagle Ford backlog at Eagle Ford Shale . Crude oil and refined product…

Shale of the Century at the Economist . Price matters, as natural gas displaces coal at the EIA . Capital Destruction in Natural Gas by Testosterone Pit . The IEA put out a natural gas report: Global Natural Gas Demand to Rise Sharply at…

A paraphrased quote from yesterday: “ Investors just want China to ease already, so global stock markets will rally again .” We wake today to futures down over one percent and China slowdown worsens amid signs U.S. losing steam at Reuters…

With the new oil price deck from last decade, the response from demand and supply has been astonishing. The top chart show the anemic US petroleum products consumption. The chart at the bottom show the supply result, and the bottom chart…

The strength in the materials names today? Stimulus via Business Insider How Strong is China’s Economy? Despite a recent slowdown, the world’s second-biggest economy is more resilient than its critics think. Economist The Global Middle…

Three ideas stand out in the investment landscape: 1) Peak conventional oil production is still real, with the higher price deck and technological advancements changing the game . 2) The industrialization of China and the emerging markets…

In China 17% of home purchases are done with cash, and “Buyers who use mortgages have a lot of skin in the game: the minimum down payment for owner-occupiers is 30% and 60% for investors.” If you read just one long piece this weekend, make…

The industrialization of China is a major theme at Independent Stock Analysis. Here are some recent data points and commentary. Note the negativity toward this meme by the mainstream press and credit bubble financial blogosphere. Even…

Natural Gas Vehicles: Raymond James Energy Stat of the Week Missing from the Export Land Model is the new booming US oil production growth. Saudi Arabia and solar power? Peak Oil Economist Mark J. Perry posts on oil: 1) Peak What? 2) Green…

Over the last three weeks blog postings here at Independent Stock Analysis have been coming at a rate of two or more every market day, plus one on Saturday. I am taking off Mother’s Day weekend for family time and a road race. Be sure to…

Marathon Oil adds to their Eagle Ford assets with an acquisition of 17,000 net acres in the liquids-rich core of the Eagle Ford shale play for $767 million. My math makes it $44,118 an acre, which would need to be adjusted for production…

Last decade investors were concerned about the industry’s ability to produce oil and gas. Natural gas conventionally produced was on a treadmill running too fast and producers could not keep up, forcing the price ever higher. Natural gas…

Is the commodity supercycle ending? Diapason via Pragmatic Capitalism Answer: How fast will they spend and print? A look at the fiscal cliff with Sober Look . The Bakken players were hurt by differentials in Q1. Williston Basin production…

Well publicized among energy and material investors is the ravenous appetite the industrializing nations have for base metals and bulk commodities. From some light reading of BHP’s latest conference call, CEO Marius Kloppers: “In that…