I can’t keep writing “It’s quiet…TOO quiet” every day when markets start off like this. So suffice it to say that markets aren’t doing all that much.
Equities and Treasuries are flatlining, while crude oil is up just a smidge. Gold and silver are bouncing and the dollar is modestly lower.
On the news front...
We have quite the Merger...er... TUESDAY going on here.
Gold mining giant Newmont Mining (NEM) launched a new takeover bid for Australian powerhouse Newcrest Mining (NMCGY). The enhanced, $19.5 billion offer is roughly 16% higher than Newmont’s original bid in early February. Newmont wants to add more production of copper to capitalize on clean energy demand, while enhancing its dominance in the precious metals sector.
As for the energy sector, the Wall Street Journal reported that Exxon Mobil’s (XOM) preliminary talks to buy Pioneer Natural Resources (PXD) are just the beginning. Big Oil is loaded with cash thanks to the rebound in oil prices over the last couple of years. Plus, shale oil producers are reluctant to overinvest in drilling and risk another bust like the one they experienced several years back. The money has to go somewhere – and a lot of it will go into M&A.
Dust off those old economics textbooks. A plunge in money supply growth could portend a sharp downturn in inflation, at least according to some old-school monetarists. They argue that with measures like M2 in the U.S., M3 in the eurozone, and M4 in the U.K. all declining, we’re going to shift from an inflationary environment back to a disinflationary one. Time will tell!
The Biden Administration – and even many car and truck makers – are pushing hard to boost EV adoption. But could new Environmental Protection Agency (EPA) rules on pollution go TOO far? That’s what some worry. Less than 6% of the new vehicles sold in the U.S. were all-electric last year, while the rules are designed to boost that to as much as 60% by 2030.