Perfect storm in the markets. The European bags have recorded heavy losses, of 3% in the Ibex 35 and somewhat lower in other indices, given the news about the new strain of coronavirus detected in the UK. Although, according to the European Center for Disease Control, the mutation does not aggravate the disease, it is more contagious. That is why the United Kingdom has closed London and Kent, and that is why air traffic in the country and the movement of goods in the English Channel have been closed, frightening investors with new waves of draft restrictions. The health situation, and the blockage in the negotiation of Brexi, cloud the positive announcement of the fifth fiscal stimulus package in the US and the expected approval today of the Pfizer vaccine in the EU.
He Ibex 35 It has fallen by more than 4%, although at the close it has moderated the fall to 3.08% that has served to sustain the 7,800 points. Wall Street has started with losses of 0.6% in the Dow Jones. The securities most exposed to the United Kingdom are the most punished. So, IAG it plummets 8.8%, while Meliá cuts 2.07% and NH falls 7.05%. Aena leaves 2%, while in banking, one of the most affected sectors in Europe, Sabadell subtracts 6.8% and Santander, 5%. The rest of the entities suffered falls of more than 3%.
The nervousness also affects the commodity market and the Petroleum it goes back 5%, but has fallen to 5% and lost 50 dollars. A barrel of Brent stands at $ 50.12. So, Repsol registers a decrease of 5.6%. The energy sector is the second worst in the Euro Stoxx. All the values of the Spanish selective are tinted red.
“The different governments continue to increase restrictive measures to the mobility of people and economic activity as the only solution to contain the pandemic, pending the arrival of vaccines,” they explain in Link analysis. “In the short term, the impact of these actions on these economies can be very negative,” he adds. Thus, although at the health level the new strain does not cause more deaths, the one that is contagious to a greater extent can force more intense restrictions and, therefore, more economic impact.
Spain and Portugal have finally joined the restrictions of other European countries, and outside Europe, to travel with the United Kingdom. At first, the Spanish Government had announced that it would reinforce the PCR test verification control at airports and ports, however, it has decided in coordination with the Portuguese country to suspend the arrival of flights from the United Kingdom from tomorrow and reinforce control in Gibraltar to prevent the spread of the new strain. A British government spokesman has said that the new strain of the virus has also been detected in Gibraltar, Denmark and Australia.
For his part, the spokesman for eToro in Spain, Javier Molina, warns that “despite the news of vaccines, the determination of new confinements will continue to affect economic activity and as always, the investor must be very cautious when it comes to to raise the positioning in any type of asset. ”And he points out that“ the news about the health crisis will continue to impact sharply, generating volatility and possibly giving up the Christmas effect ”.
The flight of investors from equities favors safe haven assets. The dollar is up 0.9% against the European currency, which stands at $ 1,215. The debt of the United States also rises, and puts downward pressure on profitability. The yield on the US 10-year bond falls to 0.923%, six basis points less. In Europe, bund German cuts their performance, points, and Spanish draws. In other words, investor fear has not come to classify debt as a risky asset, something that does happen in Italy, but it is not considered a safe haven either. The yen rises 0.5%.
Natixis IM’s Esty Dwek believes that “more stringent measures will need to be taken into account in the coming months as this strain is unlikely to remain in the UK alone, which could lead to temporary market setbacks although the vision in the long term it remains constructive. “
The bad news does not end, as the Brexit negotiations remain blocked. Brussels and London continue to try to reach a pact on their relationship after Brexit, once the deadline set by the European Parliament for the negotiation has passed, which in any case neither party had endorsed. The pound falls 1.8% against the dollar.
Brexit and the pandemic “will weigh on the behavior of the European stock markets at the beginning of the week, overshadowing two very good news: the agreement finally reached in the US for Congress to approve a new fiscal aid program for those affected by Covid- 19, and the progress of the vaccination process “, they maintain in Link Securities.
With an impeccable side parting, the harsh voice of a ‘western’ actor and one of those Obamian smiles practiced in front of the mirror some six million times, the conservative Josh Hawley a media gap is being carved out in these days of transition. And not in the way one would expect from a Republican. The senator from Missouri, 40, appeared these days shoulder to shoulder with the socialist Bernie Sanders. The two demanded, as part of the second stimulus plan, a new round of checks to lower-middle-class families affected by the economic debacle unleashed by the coronavirus pandemic.
It was not the first time that Hawley advocated progressive policies. The senator has proposed to tax foreign capital, monitor the quality of university education according to its price and force the centers to pay half of the debt of students who cannot pay it. But above all, it has become one of the main scourges of Silicon Valley; both for its responsibility in addictions to technology and for the censorship, in the view of many Republicans, of conservative content.
Sometimes they could be put in the mouth of Sanders or Elizabeth Warren things that Hawley has said without making a difference, which has aroused misgivings among the conservative ranks. “They told us to shut up,” Hawley acknowledged, “while the party’s establishment focuses more on cut taxes and do favors for corporations. Multinational corporations that do not share our values, that will not uphold American principles, that were delighted to send American jobs abroad.
Room 2 | “This Has To Stop”: The Other Republicans Who Saved Democracy
Argemino Barro. NY
“This has to stop”. Republican Gabriel Sterling, supervisor of Georgia’s voting system, becomes a symbol of conservatives who want to protect the electoral system
The anti-elite stance of this young conservative, enthusiastic about the president Teddy Roosevelt, which broke the great monopolies of the early 20th century, can generate disbelief. Until we travel a few decades back in time. A time when the Republican Party retained some of the concerns that, for a few years, seem to us Democratic heritage.
San Francisco, August 1956. The Republican Convention meets to re-nominate the exgeneral Dwight Eisenhoweras a candidate for reelection. Among the points of his program are to strengthen Social Security and expand it to 10 million more workers, protect the salary increase that Eisenhower himself had approved as president, increase unemployment insurance and “grant asylum to thousands of refugees, expelled and displaced ”. As if that were not enough, the party promised “to continue fighting (…) to ensure the same pay for equal work, regardless of the sex” of the worker.
He Republican PartyLike the Democrat, it was not always the same. Both political forces have been realigning their positions according to the time and context. The ‘great emancipator’, Abraham Lincoln, he was a Republican. In the second half of the 19th century, it was the party of the big cities, the industrial and cosmopolitan force that ended up going to war to end slavery. On the contrary, until almost the middle of the 20th century, the party mostly rural and segregationist it was the other, the Democratic Party.
One of the hinges of the turn that ended up happening was the New Deal of Franklin D. Roosevelt. The Democratic president, who at that time was still courting the racist electorate of the South, added Italians and Irish from big cities like New York or Boston to his coalition of voters. Workers who had arrived at the beginning of the century, but who had remained on the margins of the system. This is how the Democrats, little by little, they were urbanizing. Roosevelt’s adoption of strong socialist policies also contributed to the change.
Room 2 | The Latin myth: what the world doesn’t quite understand about minorities in the US
Argemino Barro. NY
Among many other lessons, these elections have invited us to recognize diversity within diversity, and to understand that the Democratic Party does not have a monopoly on minorities
From 1933 onward, the Democratic Party became the dominant machine of U.S. The output of the Great Depression and victory in the Second World War they consolidated their prestige. The dazzling rise of the young man (Irish) John F. Kennedy, finished off with a tragic ending, formed one of the most enduring legends of the 20th century. His successor, Lyndon Johnson, finished off the play by betting everything on the civil rights charter, passed in 1964. Democrats have earned the political loyalty of African Americans, to this day, and confirmed that great change of course.
The Republican Party, while retaining the support of the industrial and financial elites of the cities, was increasingly serving the rural world. That southern electorate that the Democrats, with their embrace of the minority cause, had abandoned. A profile voter more conservative and somewhat less wealthy. And this is where the reasonably social program with which Eisenhower won the 1956 elections again fits in. One of his star proposals, precisely, was an expensive investment plan in rural areas.
For years the Republicans therefore maintained a balance that did not bring them much profit. In the nearly half century from 1932 to 1980, Democrats ruled the country for 32 years. In 1975 a record 37 state congresses dominated, and in Washington both the Senate and the Supreme Court were nothing short of non-negotiable, its territory by divine right.
But the Democratic force, since the early 1970s, has faded. The oil crisis tightened the nuts of the industrial model, the welfare state was increasingly unsustainable and globalization was gaining strength. This was the window through which Ronald Reagan launched his 1980 ordeal: a conservative revolution that would return the Republicans to preeminence. An optimistic and vibrant rhetoric, a robust foreign policy and an incurable distrust of anything that smelled of social spending, of that government that was slipping towards bankruptcy.
Judge Amy Barrett: Or How Republicans Really Control America
Argemino Barro. NY
Once upon a time, progressives in the United States controlled the country, but now they are too focused on getting the presidency
The Republican Party that we have known for almost four decades is this: that of austerity, free trade and interventionism in middle East. The Bush party and Wall Street party, climate skepticism and the Chicago School. A paradigm that, like the previous ones, will not last forever.
As manufacturing jobs shifted to China, hinterlands became poorer, and cities became even more Democratic, the ground was paved for the rise of a new sect within the Republican religion. A movement that was already there, larvae in the Tea Party and in the books of Ann Coulter, and that Donald Trump He knew how to back up with his talents as a ‘showman’. National-populism, with its protectionist strands and its rhetoric more focused on the common people than on the big financial interests, took power in 2016.
What we have seen for four years in the Republican Party is the struggle between two souls. An old, Reaganian, with that ‘establishment’ of interventionists and tax hawks. And the new, the bug that comes out of the chrysalis and that enjoys the sympathy of the constituencies: Trumpism.
Checking several of the Trumpian boxes may be enough to give Hawley a bright future in 2024 or 2028
Now that the leader of the new sect is on his way out, even though he hasn’t recognized him yet, Josh Hawley is one of his most notorious heirs. The Missouri senator is halfway through the overworked and occasionally social rhetoric of the 1950s and Trump’s populist isolationism. Like other Republicans, he remains a staunch enemy of abortion, a radical critic of coastal elites, a supporter of protectionism and a recipient, despite his words, of substantial donations from the koch brothers.
The fact of check several of the Trumpian boxes it may be enough for Hawley to have a good future in 2024 or 2028. The street is not with Mitch McConnell, nor with Marco Rubio. He’s with Trump. The Republican lost the election, but he did so with more than 74 million votes. And a part of its base (50% of Republican voters) supports, for example, a wealth tax like the one who proposed leftist Elizabeth Warren. There is Hawley, at this precise intersection. Everything will depend on which soul, whether the new or the old, ends up imposing itself within the ‘Old Great Party’.
Hundreds of Syrian citizens took to the streets of Qamishli again to reject the illegal presence of US and Turkish troops in their country.
The protest march took place on Tuesday in the city of Qamishli, in the oil-rich province of Al-Hasaka (northeast), according to the official news agency. YOU.
The protesters carried national flags and banners demanding the withdrawal of US “occupying” troops from the Al-Jazeera region in Al-Hasaka.
The outraged also condemned the theft of Syrian natural resources, specifically oil, by US troops and called on the Army to fight to expel all the occupiers from Syrian territory.
“Today’s protest in Qamishli is a message of rejection of the presence of any occupying force in Syrian territory”Said a protester at the protest.
In addition to rejecting the US and Turkish military presence in their country, the inhabitants of the Syrian provinces of Al-Hasaka and Deir Ezzor (east), among other regions, have repeatedly denounced the continuous attacks and arrests carried out by the Kurdish militias- Arabs, the so-called Syrian Democratic Forces (SDF), seconded by the US, and the instability they create, as they have negatively affected their businesses and livelihoods.
Locals also denounce that Kurdish militias have occupied schools in Al-Hasaka, thus depriving thousands of children of their right to education, and other practices aimed at destabilizing security.
The Damascus government accuses Washington of training, financing and arming terrorist gangs and armed gangs in order to overthrow the legitimate government of President Bashar al-Asad, which has promised to cleanse the country of terrorists and drive out the invaders.
The Syrian president also criticizes Washington’s obsession with Syrian oil, which demonstrates the Nazi style of the policy of the current US Administration, chaired by Donald Trump.
The futures of the international benchmark Brent fell 4.6% to $ 39.74 a barrel, after climbing almost 2% on Tuesday, while those of the West Texas Intermediate in the United States (WTI) fell 5.7% to 37 $ 38 a barrel, after winning 2.6% in the previous session.
US oil and gasoline stocks rose last week, according to data from the American Petroleum Institute (API). Crude inventories rose 4.6 million barrels to about 495.2 million barrels, well above analysts’ expectations in a Reuters poll of a rise of 1.2 million barrels.
“Given the sharp rise in stocks across the board in API figures, it is no surprise that the price of crude is dropping this morning as we await the official EIA numbers this afternoon,” said Harry Tchilinguirian, BNP Paribas analyst.
Energy companies and ports on the US coast of the Gulf of Mexico prepared Tuesday for the impact of Hurricane Zeta, which was moving through the area.
Likewise, the United States, Russia, France and other countries are registering record numbers of Covid-19 cases in recent days and European governments are passing new restrictions to try to stop the strong growth of the outbreaks.
US President Donald Trump acknowledged Tuesday that an economic relief package for the coronavirus is likely to be agreed upon after the presidential election, as the White House was unable to bridge differences with fellow Republicans in the Senate and with Democrats in Congress.
Oil markets were equally pressured by Libyan production, which is expected to rebound to 1 million barrels a day in the coming weeks.
The world stopped between March and May and, with it, energy consumption plunged to record lows. Without factories, without companies, without cars, without airplanes, without ships… Only household consumption rose slightly, around 4%, far from being able to compensate for the slowdown in everything else. Thus, for example, in Spain electricity demand fell on average by 12.7% between March and June and natural gas by 15.5%. The demand for gasoline 60%, diesel A 43% and aviation fuel 88%.
But the first onslaught of the coronavirus in the world had a definite negative impact on oil. West Texas (WTI) lost more than 65% in the futures market and the reference Brent in Europe the same. In fact, in April, futures were trading negative for the first time in history and traders paid up to $ 40 to get rid of barrels that they had no place to store in a scenario of excess supply and no demand.
The great dilemma of producing countries: is the negative price of oil sustainable?
The depletion of the storage capacity of crude oil in the US plunges crude prices by up to 70% and puts the shale oil industry on the ropes
Is this impact final?
Experts agree that although covid has had a very strong impact on the energy marketAs with everything else, this impact is temporary. The closures of all countries have been noticeable in demand, while supply has adjusted. But it would be a temporary effect. And it is that covid apart, the world grows in its demand for energy without ceasing. The world is thirsty for energy and needs more and more to function. We are 7.8 billion people and GDP per capita grows annually, something that could not be done without more energy or with more efficient energy.
In this way, the demand for primary energy in the world grew in 2019 another 1.3% And, in fact, it has never stopped growing in the last 200 years. 2020 could be an exception, but something very timely given the circumstances. However, the high uncertainty that exists makes it difficult to establish estimates for the end of the year.
Which country has had the worst share?
The American shale industry undoubtedly, since the sharp drop in crude oil generated many bankruptcies of companies dedicated to this modality that already had their excessive indebtedness. “This had a very profound impact, since a price per barrel below 55 or 60 dollars makes these types of companies incur losses,” Diego Morín, an expert at IG Markets, explains to El Confidencial. “In addition, the difficulty in storing the crude produced generated a lot of uncertainty in the Gulf of Mexico, where it was even possible to rent tankers to store crude offshore,” he says.
Not surprisingly, the United States is the country that had grown the most in production in the last ten years due to the development of unconventional oil extraction from shale in the rocks, the so-called ‘shale oil’. For this reason, it is also the country that has suffered the most from the collapse of prices since this type of production is highly dependent on constant investment to sustain it. In fact, these types of wells lose 70% of their capacity in the first year and if this industry is not lost, it stops.
The problem comes when at current prices this type of ‘shale oil’ is not competitive. Therefore, facing the elections in November one of the focuses of attention has been on the ‘fracking’ industry, as it is one of the largest ‘contractors’ in the American labor market and where the most has been invested in the last 10 years. Not surprisingly, it allows the US to be autonomous from the energy point of view (it has gone from being a net importer to being an exporter) so the impact of the covid in this sense can be decisive.
Will the world energy order change?
As in all sectors, energy is not going to be alien to covid-19 and, for now, its direct impact on the most important industry of the world’s leading power is going to change the future of the world energy market in one way or another. The key is how far and with what intensity that change will come.
“For now, what we see are many disputes and insecurity between the producing countries, where the United States, Saudi Arabia, Europe or Latin America still cannot find a clear direction to resume their activities. Therefore, I think there will be a before and after the coronavirus, with possible alliances between producers and many disputes, so we will have many months of instability in the market, ”explains Morín.
However, throughout history there have been other energetic transitions and these are always slow. Before the covid there was already a global consensus to stop depending exclusively on oil for geostrategic, economic, social and environmental issues.
The intention is there, but the road is longer, more difficult and more expensive than we think, and it cannot come from the hand of a punctual blow, no matter how hard it may have been, like this pandemic. Replacing the day-to-day demand for oil is very complicated and expensive. In 10 years, the weight of oil + coal + gas has fallen only from 86% of world demand to 84%, according to data from the British Petroleum Statistical Review of World Energy. Despite commitments and investments, fossil energy sources have only fallen 2 percentage points in this time.
Oil, image, geopolitics: what hides the accelerated space race in the Gulf?
With the launch of the Mars Hope probe (Al Amal, in Arabic), the UAE becomes the fifth country to reach the Martian orbit, and the architect of the first Arab interplanetary exploration
Is the demand for oil going to recover?
In the short term, experts agree that it is complicated due to the uncertainty due to the advance of the coronavirus and the new measures in the countries with the highest number of cases, which mean that two of the producing countries, Saudi Arabia and Russia, have been far away in terms of negotiation this week.
The demand for oil has passed in 10 years from 85-86 million barrels day to 100 million barrels day. The brutal impact of the covid has caused it to fall on time to levels of 70 million barrels in the moments of most extreme confinement (April / May). We are already at levels of 94/95 million barrels. And that in the absence of the recovery of the normality of the airline sector, key to return to 100 million barrels a day.
In fact, China is already above precovid levels as far as the demand for crude oil is concerned. Thus, the market consensus suggests that the COVID crisis is strong, but it is temporary and the economic aid packages announced by governments (trillions of euros) will be there for years.
Meanwhile, OPEC + will try to adjust to support the oil market as restrictions continue to affect demand.
Are we going to see the price of a barrel back at $ 100?
A strong rebound in price is, in general by all analysts, ruled out, at least in the short and medium term. “Currently there is an excess of oil motivated by a continued growth in the supply during the last years and a sharp deterioration in demand and consumption prospects, as a result of the outbreak of the coronavirus. The consumption of raw materials is closely linked to the economic cycle, but if we add to this current cocktail, in addition, mobility restrictions that reduce the movements of citizens to a minimum, the crisis is accentuated “, they explain from IG.
The barrel should be priced at a price at which the least efficient producer has an economic incentive to continue producing. Above demand levels of 100 million barrels a day, this price should be $ 55.. But if demand remains stable / growing and there is no investment, price tensions can occur.
When there is no economic incentive, there is no investment, less is produced, a deficit is incurred and the price rises to “encourage” new producers (with a higher price if they make money). And vice versa, when there are excesses, the price sinks and the less efficient producers stop.
Total seeks more renewable assets in Spain after buying EDP customers
Juan Cruz Peña
The French oil giant analyzes several photovoltaic portfolios of large developers with the aim of substantially increasing its generation capacity with clean energy
Has the pandemic been the final push for renewables?
The pandemic has weakened the economy and a mechanism to stimulate it is public investment that revitalizes the labor market, generates activity, etc. In that sense, renewables are in good shape. There are many investment plans. We will undoubtedly see more renewable energy, but also from other (natural and nuclear gas, above all).
How has the covid affected nuclear power plants?
It has negatively affected it, at least in Spain, where the sector has asked the Spanish government for action to reach an agreement on the payment of taxes, since, according to the president of the Nuclear Forum, Ignacio Araluce, “it is impossible to pay 120 % of taxes on the invoicing ”. Further, the irruption of renewable energy can greatly punish nuclear energy, especially in terms of costs, since the arrival in the coming years will continue to grow.
A situation that contrasts with the rest of the countries. Thus, for example, Poland has announced the construction of five nuclear reactors; Japan has received the OK to reopen two more reactors; The Netherlands has opened consultations to install nuclear power; Belgium has postponed the life of its reactors; China has more than 45 reactors under construction and others under study …
According to the British Petroleum Statistical Review of World Energy, nuclear energy in 2019 accelerated its growth by 3.2% and is almost at a historical demand record. It is the great partner of renewable energy does not work (because there is no sun or wind). The world cannot be decarbonized without counting on nuclear energy as a source / technology that guarantees supply.
China, the US, Russia? Who wins and who loses in the new energy geopolitics
The Wall Street Journal
Power will shift from traditional oil giants like Russia and Saudi Arabia to innovators like China (and perhaps the US)
What source of energy is going to be the winner of the pandemic?
“Renewable energy is the winning energy of this pandemic, above all because of the aid that will come from the European fund, with part of the budget destined to companies that carry out green and sustainable energy, something that will attract strong investment from retail investors ”, says Morín.
Although it is still early to know which one is going to win and for how long. For example, in Germany they turned off the nuclear power plants because they wanted to bet everything on renewables (sun and wind) and the energy that has gained from this, curiously, has been the coal that acts as a ‘back up’.
Petróleos Mexicanos (Pemex) reported that land and offshore operations at facilities of the State production company located in the south of the Gulf of Mexico went without incident, after tropical storm Gamma.
“Since the beginning of October, security measures were reinforced, both on the offshore platforms in the Campeche Sound and the Tabasco Coast, as well as in land administration buildings of Pemex Exploración y Producción (PEP), in order to minimize the risks in any weather condition “.
In a statement, Pemex said that the port of Ciudad del Carmen is still closed to navigation, so it was agreed that once favorable conditions exist, the transfers of workers by sea to oil facilities, which is expected next Saturday.
Because transfers to across the sea were temporarily canceled, the provisioning to staff Offshore it was carried out by air, so the required food service was provided and it was not necessary to evacuate any worker.
“Pemex reiterates that all activities in the Campeche Sound They are carried out with strict adherence to the security measures established for these cases, in order to preserve the integrity of the personnel, the facilities and the environment, “he said.