👉 The Investing Week Ahead: 8/29/22

We’ve brought this up recently and will continue to do so for good reason. As the calendar flips to September, the European energy crisis is a serious danger to global markets. The map above shows the current electricity prices throughout Europe.

Here’s what you should know:

• Tough Winter Inbound: Currently, the euro and US dollar are essentially equal in value. According to last week’s Energy Information Administration (EIA) report, the cost of one megawatt hour (MWh) in the United States is about $60. In France, the market price is over $730. In Germany, it’s over $650.

• Rationing Needed: The CEO of Shell just warned that Europe may need to ration access to energy for several years, as the crisis is likely to last more than one winter. This comes at the same time that Finland and Norway have noticed Russia wasting massive amounts of natural gas for months.

• Russia & China Have a Plan

The Nord Stream 1 pipeline is the single largest pipeline that brings Russian natural gas to Europe, via Germany. Russia recently announced unscheduled ‘maintenance work’ on the pipeline — suspending any gas flow for three days starting this Wednesday. Its all but guaranteed that this is an attempt to increase the pain on European countries as their full reliance on Russian oil has become so abundantly clear.

Just a few hours ago, Russia announced that it will launch sweeping military drills in the country’s east that will involve forces from China — a show of increasingly close defense ties between Moscow and Beijing amid tensions with the West over the Kremlin's action in Ukraine.

The Russian Defense Ministry said that the Vostok 2022 (East 2022) exercise will be held Sept. 1-7 in various locations in Russia's Far East and the Sea of Japan and involve more than 50,000 troops, over 5,000 weapons units — including 140 aircraft and 60 warships. This comes just a few days after Putin announced that he will increase the country’s armed forces by 137,000 people. The will bring the military’s total headcount to over 2 million.

Russia wants Ukraine and is fine with dragging out the process of victory that likely could have already taken place. China wants Taiwan and is willing to partner up with Russia if it means this is more easily accomplished.

What’s the Takeaway?

Know that if Russia ‘wins’ and China ‘wins’ — we will likely all lose pretty badly.

Russia would have a significant leg up on energy (as described above). China would have a significant leg up on semiconductors (as show below).

The Investing Week Ahead — Too Long, Didn’t Read:

⚡ As earnings season ends, we’ll focus on BroadCom, CrowdStrike, Lululemon, Okta, and SentinelOne.

⚡ Western countries that were weening off of nuclear power are sprinting back to it.

⚡ The unemployment rate will be the biggest economic market-move, ironically just before ~Labor~ Day.

Key Earnings Announcements:

As earnings season winds down — cybersecurity remains a hot topic and chips may be in trouble.

Monday (8/29): Catalent, Pinduoduo, Prospect Capital

Tuesday (8/30): Baidu, Best Buy, Big Lots, ChargePoint, Chewy, CrowdStrike, Futu, HP

Wednesday (8/31): Brown-Forman, C3.AI, Designer Brands, Five Below, MongoDB, Okta, SentinelOne, Veeva, Vera Bradley

Thursday (9/1): Broadcom, Build-a-Bear Workshop, Campbell’s, Ciena, HashiCorp, Hormel Foods, Lululemon, PagerDuty, Signet, Smartsheet, Toro

Friday (9/2): N/A — Labor Day Weekend

Investor Events / Global Affairs

The mission to the moon was paused, nuclear energy is sexy again out of necessity, and AMD hopes to capitalize on NVIDIA’s shortcomings.

• The Most Powerful Rocket Ever Assembled… Coming Soon

The debut of NASA’s Artemis 1 was supposed to take place this morning around 8:45am. Just before that time, the launch was delayed due to an engine bleed. The purpose of the mission is to send the Space Launch System (SLS) rocket and Orion capsule on an over-one-month journey around the moon.

• Going Nuclear

As the energy crisis described at the beginning of this post continues, there’s a mad dash to embolden nuclear energy capabilities. The US, France, Japan, Belgium, and a handful of other countries had planned to let operating licenses expire for nuclear reactors and shift away from the effective energy source.

According to the WSJ, There are technical and financial obstacles to prolonging the lives of reactors. In the U.K., EDF Energy has been monitoring the appearance of cracks in graphite blocks in the reactor cores. The problem is specific to the U.K.’s main reactor design, which isn’t used anywhere else in the world. EDF Energy says the cracks cannot be repaired.

In the U.S., 13 U.S. nuclear reactors have shut since 2013, largely because the low cost of alternative fuels such as natural gas rendered nuclear energy unprofitable.

At the same time, Ukrainian nuclear plant staffs are working at gunpoint to keep the plant operational. United Nations leadership fear that the plants damage from the war with Russia could lead to a nuclear catastrophe.

• AMD Product Reveal

AMD announced a major product reveal for Tuesday, in which they’ll unveil their next-generation PC products. The company wants to be at the forefront of the new era of performance desktop PCs.

Major Economic Updates:

Unemployment and housing prices are in focus this week.

Monday (8/29): N/A

Tuesday (8/30): Case-Shiller Home Price Index, Consumer Confidence Index, NY Fed President Speaks, Job Openings & Quits

Wednesday (8/31): Atlanta & Cleveland Fed Presidents Speak, ADP Job Report, Chicago Manufacturing PMI

Thursday (9/1): Construction Spending, ISM Manufacturing Index

Friday (9/2): Factory Orders, Nonfarm Payrolls, Unemployment Rate

If you’re starting your investing journey or want to change to a cleaner, social-focused investing platform, consider visiting Public.com.

Disclaimer: This is not financial advice or recommendation for any investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.