The stock and bond markets are closed today for the Presidents’ Day holiday. Futures and currency markets are open, however, with crude oil mostly flat and gold and silver mixed. The dollar is largely unchanged.
The Biden Administration is doling out money in order to bring more semiconductor manufacturing back to America’s shores. New York-based GlobalFoundries scored a $1.5 billion grant and up to another $1.6 billion in federal loans to triple production capacity in its home state over the next several years.
Only 12% of the world’s chip supply comes from the US, with Asian nations producing most of the remainder. Some believe that could leave America vulnerable if China and Taiwan go to war or if Asian suppliers decide to hold back supply or undercut US producers in a future fight with the US.
Global X Lithium & Battery Tech ETF (LIT)
Sales growth has tailed off for Electric Vehicles (EVs), and that’s causing headaches for producers of the metals used in car and truck battery production. Lithium prices have plunged as much as 90% since early 2023, while the price of nickel has been cut in half. That’s causing miners to shutter some mines and halt expansion plans for others. The $1.6 billion Global X Lithium & Battery Tech ETF (LIT), for its part, has lost 16% of its value so far in 2024 and 34% over the last 12 months.
On the flip side, the price of cocoa has exploded in the past several months. It just hit $6,000 per ton, eclipsing a record high dating all the way back to 1977. Around three-fourths of the world’s supply comes from four West African nations, and years of underinvestment plus weather-related issues are combining to drive prices skyward. That will put pressure on companies like The Hershey Co. (HSY), and lead to higher supermarket shelf prices for consumers.
