More Greek Variants To Follow

Whatever Wall Street thinks is going on, the new highs for our exchanges is followed in the rest of the world by lower rates for our greenback. 

Hot from the press, NIO, the US-listed China electric car maker, beat forecasts for its Q2 results on both sales and profits and moreover predicted both would rise further in the current quarter. Moreover, it plans to add to its vehicle range with a new mass-market sub-brand with lower prices for cars and add a further couple of lines in 2022. The stock which had been weak in US trading Weds. is up Thurs. Tesla TSLA is not the only game in town.

Photo by Adeolu Eletu on Unsplash

*Tencent TCEHY is down 3.5% in Hong Kong perhaps because of a new Beijing challenge. I have no details. The share is at 470 HK$. Both the tracker shares are also down, Naspers NPSNY and Prosus PROSY.

*There will be two more portfolio stocks reporting today, Algonquin AQN, the ute, and CSIQ, Canadian Solar, expected to lose 30 cents/sh on revenues of $1/.43 bn. AbCellera ABCL reports also and is expected to earn 11 cent/sh on $87.92 mn in sales.

*Covid: Germany now says more people have been inoculated against the virus than the government data show, which sounds improbable. Our FDA will allow a 3rd jab booster for people with compromised immune systems. Delta is now expected to be followed by more Greek variants.

*Nokia will supply the Western Power District with private long-term evolution fast 5G grid for trials. At least it sounds better than supplying delta as reported earlier. NOK.

*A new stock pick from Harry Geisel, written up at his suggestion by me: SSE plc, a pink sheet utility stock traded in the US as SSEZY, listed in London as SSE. It is in the dumps today for two reasons. First, the UK government will only allow 4.55% equity costs to be applied by utes over the next 5 years, below the 4.76% that Citigroup analysts expected. Worse still, Danish Vestas Wind Systems today issued a profits warning because of the spiraling costs of offshore wind systems, but not those of land-based windmills. This news will hurt SSE which presents a buy opportunity. Here's why:

The UK ute equity sum is mainly because of water and gas companies, which face special needs. Gas is supposed to be cut off entirely for heating homes and water under British rules (at least so far, unless politics intervenes.) And water is likely to be more in need as global warming proceeds. So wind is not the real target. And by selling down its non-core non-wind lines, SSE is boosting its cash position which gives it ammo for building new wind facilities along the east coast of Scotland and north Britain.

PM Boris Johnson needs to support these plans for a couple of reasons. First of all he promised to build a railroad in hitting northeast Britain in his election campaign but the costs are looking prohibitive and he may prefer to substitute windmills. Moreover Prince Charles, a noted environmentalist has backed offshore thermal windmills with pumped storage to help save carbon while rebuilding the economy of the north of his mother's realm. 

Moreover, the SSE regional work for the future Scot Wind Seabed from Petershead to north England near Leeds is backed by Marubeni of Japan and CIP so the UK doesn't have to pay for the whole thing. There are even plans to use wind power to be generated from buses to then be used to power cars. 

British renewable energy took a hit in the pandemic because people were staying home. Output dropped also because of extremely bad offshore weather. Thermal gas production was down 9% in H1 but this required heavier spending by SSE to make sure customers got their power, which cut profits. It has raised 2 mn pounds by selling non core businesses to Aurelius earlier this summer, and there will probably be more money coming in. Meanwhile shareholders are getting dividends of 4.9% on their investment (in sterling which is going up against the greenback.)

Another factor in play is that the price of oil is likely to rise now that Pres. Biden has urged the oil sector to raise prices for the good of humanity or something like that. 

*By the way hopes for a higher oil price boosted Schlumberger Ltd, the drilling service firm from Curacao, by 2.52% in European trading. And also up is good old gold, now at $1754.30 per ounce, vs 1750.40 Weds. SLB.

*And again the drug companies and financial houses of Japan are up in yen because the dollar is losing value. Foreign funds are also up not least because JP Morgan Chase will be converting its mutual funds into exchange-traded funds which will buy foreign funds.

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