E Retail Sales Rising

The parallel TV performances by Donald Trump and Joe Biden last night caused us to channel switch but mainly to listen to the president, who was sweating and angry whereas the former veep was cool and mostly prepared. The main feature of the Trump show was his constant lies and misstatements about his handling of the COVID-19 crisis. His nose did not grow, despite my waiting for a Pinocchio moment. He seems to be incapable of noticing how well the public already knows his past positions.

Trump again failed to distance himself from QAnon terrorists (as defined by the FBI), merely noting that they are against pedophiles. So am I.

I suspect my views are not widely shared. Trump is also hinting that if re-elected he will drop two of his cabinet members, Attorney-General Bill Barr and Treasury Secy Steven Mnuchin.

Biden dodged one matter if he would “pack the court” if he wins the election. I suspect he would because he is channeling the ghost of FDR in other matters.

We close the week with what may be an upwardly mobile market at last thanks to retail sales rising and hopes for a quickie COVID jab as soon as next month from Pfizer and BioNTech. But we have 2 company reports and a report by a Swedish-speaker on another share we own, so enough about the 2020 election.

Oilpatch

*Schlumberger Ltd of the Dutch Antilles reported before the opening today and while its non-GAAP Q3 earnings (excluding charges and credits) beat consensus by 3¢ cents at 16¢, its 38% lower sales than last year at $5.26 bn (and 2% lower than Q2) and negative outlook forecast took the SLB share down 8% at the opening today. Its worst performance came in North America where it spent a lot of money on acquisitions like Cameron and where drilling is down sharply. Its diluted EPS was up from a mere nickel in Q2. Its best business line was production which grew sequentially by 12% as more wells went live. Ecuador drilling boosted Latin America revenues by 30% from Q2 to $707 mn but the rest of the world saw decreases.

CEO Olivier Le Peuch stated that its execution capabilities are rising while cost of capital is being reduced by $1.5 bn with tech innovations. It is lowering its North America holdings with two sales. One is of OneStim pumping in return for a 37% stake in Liberty Oilfield Services. It is also selling its fracturing sand business.

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Comments

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William K. 2 weeks ago Member's comment

Lots of news and a few interesting opinions.

But I feel no sympathy for the petroleum sector after all the years of price gouging on gasoline prices. None at all. Shades of "instant Karma" perhaps?? OR???

Vivian Lewis 1 week ago Author's comment

as a Manhattanite I do not run a car but my impression is that gasoline sales prices are 1) competitive 2) regulated and 3) taxed. What I like is the European oil companies getting set for lower demand for gasolene as electric vehicles come to market, and their investment in alternative fuels, not typical of their US rivals. They are buying into low-carbon which means for the longer term. Note that in European counties which are trying to meet the Paris standards to cut carbon the oil companies are taking the lead in funding solar, wind, LNG, and other alternatives. This kind of long-term investing smarts cannot be found among US oil giants.

William K. 1 week ago Member's comment

In Michigan the gas is taxed a whole lot, But the sell price is regulated by "the Oakland County Petroleum Dealers Association", in order to prevent price wars like there used to be back in the 1950's era. Thus there is not much competition to be found among service stations around here. I am aware that in the UK gasoline is taxed heavily to support public transportation, This results in a lot less personal freedom of movement,

Vivian Lewis 1 week ago Author's comment

Gasolene is taxed not just in Britain but in most European counties. It doesn't stop freedom of movement because people pay the tax, but it did lead to serious protests by the yellow shirts in France who said they could not afford it.

I think the US oil majors are more reluctant than European ones to invest in the new alternative fuels that will power cars in the future, like batteries for electric vehicles.

My favorite idea for that is China's NIO which will sell its electric vehicles with leased batteries, so when they run down the car driver can switch batteries at a service station rather than having to hang around for the recharging.

NIO is NYSE listed and has gained the most year to date and is well ahead of even Tesla. It is funded in part by the local government of the town where it is headquartered. Volkswagen also benefits from the same subsidies so it is not only for Chinese.