Entries by Simon Lack

Why The Fed’s Critics Will Become More Vocal

SL Advisors Talks Markets
SL Advisors Talks Markets
Why The Fed’s Critics Will Become More Vocal







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The ten year treasury yield touching 3% has drawn headlines, but the bigger story is that the increase in nominal yields has been driven by rising real yields. Ten year TIPs yield 0.18%, the first time they’ve been positive in over two years. Until recently, real yields had been declining irregularly for decades. $TNs of […]

Why Recession Fears Can Help Energy Stocks

SL Advisors Talks Markets
SL Advisors Talks Markets
Why Recession Fears Can Help Energy Stocks







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Last week recession questions were more common than in the past during our many conversations with clients. The likely performance of the energy sector during a slowdown is what they’re asking. Recession risks are growing in the minds of many. In one recent survey, a third of economists are forecasting a recession within two years. […]

Pipelines — There’s Always A Bull Market Somewhere

SL Advisors Talks Markets
SL Advisors Talks Markets
Pipelines -- There’s Always A Bull Market Somewhere







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The US was increasing its net exports of natural gas before Russia’s invasion of Ukraine added an element of urgency. Liquefied Natural Gas (LNG) gets most of the attention, but this year we’ll export nine Billion Cubic Feet per Day (BCF/D) by pipeline, to Mexico and eastern Canada. LNG exports are still rising, with most […]

Criticism Of The Fed Goes Mainstream

SL Advisors Talks Markets
SL Advisors Talks Markets
Criticism Of The Fed Goes Mainstream







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Earlier this month there was a fascinating exchange on Bloomberg TV between former NY Fed president Bill Dudley and journalist Jonathan Ferro. Dudley has been vocal in criticizing the slow rate at which his former FOMC colleagues have been normalizing monetary policy. He’s pointed to the robust stock market and warned that the Fed’s going […]

The Varied Uses For LNG

SL Advisors Talks Markets
SL Advisors Talks Markets
The Varied Uses For LNG







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Wells Fargo describes Liquefied Natural Gas (LNG) as THE theme for midstream energy infrastructure. In a recent series of meetings they found investors were “highly constructive on long-term fundamentals for global LNG…and looking for ways to play the theme.” One reason is that Europe’s pivot on energy security seems unlikely to change regardless of the […]

LNG Stocks And Real Yields Rise

SL Advisors Talks Markets
SL Advisors Talks Markets
LNG Stocks And Real Yields Rise







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The energy sector, already responding to inflation in recent months, has been a clear winner from Russia’s invasion of Ukraine. Few countries in history have striven for energy independence as much as America. Having achieved it, the US is now in a position to help Europeans achieve energy security. They have no hope of energy […]

Energy Independence Is Not Just For America

SL Advisors Talks Markets
SL Advisors Talks Markets
Energy Independence Is Not Just For America







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In the US, energy independence has been a sought after goal for generations. Ever since the 1973 Arab oil embargo in response to the Yom Kippur War, US presidents have spoken out in favor of reducing our dependence on foreign oil – notably OPEC. There are several definitions of energy independence — The definition of […]

The Fed’s Yield Curve Problem

SL Advisors Talks Markets
SL Advisors Talks Markets
The Fed’s Yield Curve Problem







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What’s the best shape for the yield curve? Today’s flat verging on inverted shape isn’t optimal. It suggests the market is worried that the Fed will tighten too much, causing a recession. It also makes it hard for banks to make much money extending credit, because they typically lend for longer maturities while funding themselves […]

The Fed’s Aspirational Base Case

SL Advisors Talks Markets
SL Advisors Talks Markets
The Fed’s Aspirational Base Case







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There were few places to hide last quarter. The S&P500 was –4.6% with nine of its eleven sectors losing. Energy sparkled at +39% and Utilities were +4.8%. Bonds were even worse, with the Bloomberg Aggregate –6.2%. Close to our hearts, pipelines (as defined by the American Energy Independence Index) were +24.5%. Low yields have underpinned […]

Energy Investors Unfazed By US Selling Oil

SL Advisors Talks Markets
SL Advisors Talks Markets
Energy Investors Unfazed By US Selling Oil







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The Administration’s planned release of 1 million barrels of oil a day from the Strategic Petroleum Reserve (SPR) is borne of their frustration with high prices. Average crude prices have been higher under Biden than Trump, even after adjusting for the collapse during Covid (not Trump’s fault) and the jump following Russia’s invasion (not Biden’s […]

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