Longtime market bull Phil Orlando is bracing for a rough stretch because Wall Street has reached a critical “inflection point.”
The Federated Hermes chief equity market strategist is blaming the risk dynamic. Not only does Orlando see hotter-than-expected inflation and the Covid-19 delta variant as glaring issues, he’s also worried about uncertainty surrounding monetary and fiscal policy.
“We’re entering what is historically a seasonally choppy period of time, and we’ve got a bunch of things that are coming together at the same time,” he told CNBC’s “Trading Nation” on Monday. “We’ve got this surging inflation. We’ve got questions about what the Federal Reserve is going to do in terms of policy. We’ve got this debt ceiling issue that’s coming up the end of this week.”
It appears Wall Street isn’t sharing his concern. On Monday, the S&P 500, Nasdaq and Dow closed at all-time highs. The record activity comes a day before the Federal Reserve gets ready to convene for its policy meeting.
Orlando, who oversees $625 billion in assets under management, suggests investors will soon get a wake-up call.
“The stock market has done incredibly well. It’s quite literally doubled since the bottom of the pandemic low — March a year ago,” noted Orlando, who warns valuations are frothy.
The S&P 500 is up 18% so far this year. According to Orlando, the index is noticeably vulnerable to a 5% to 8% pullback over the next two months. His S&P 500 year-end target is 4,500. The index closed at 4,422.30 on Monday.
“We’re less than 100 points away from our full-year objective,” he said. “Our view is that there could be some volatility or some chop as the market sort of consolidates around all of these concerns and issues.”
“It was those cyclical stocks that we left for dead back in the spring of 2020,” Orlando said. “It [the recession] ended in April of last year, and now the market has got to play catch-up to price in these very powerful revenue and earnings gains that we’re seeing.”
It only happens every three years, but it’s spectacular! I’m speaking of course, about bauma – one of the largest trade shows of any kind where heavy equipment manufacturers serving construction, forestry, mining, and more bring out their latest and greatest new job site innovations, and we’ve got a whole bunch of them here, on this special bauma edition of Quick Charge!
With more than two million square feet indoors and twice that outdoors, bauma hosts more than 600,000 guests from 200 countries to see 3,600 exhibitors’ hardware (and, increasingly, software). We’re only going to cover a sliver, but it’s a really cool sliver, you guys – enjoy!
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Elon Musk went on an all-day Tesla self-driving propaganda spree ahead of the company’s earnings, which are expected to be rough.
It’s well known these days that Musk doesn’t often comment on Tesla as he is busy with his government work, buying elections, and running several private companies.
Some Tesla shareholders argue that the CEO is neglecting the public company, which saw its stock tumble this year.
That wasn’t the case today.
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Musk went on a tweeting spree about Tesla, specifically about Tesla’s self-driving effort.
Here are some of the highlights:
Tesla posted that “one day” its vehicles will drive themselves from the factory to new customers and Musk couldn’t stop himself and had to say that it will happen “this year”:
Like most of Musk’s self-driving comments, this one is hard to take seriously since he said the exact same thing in 2018 and claimed it would happen in 2019.
The tweet he was responding to has been deleted by the author, but it asked when Tesla vehicles would drive themselves to customers:
Spoiler alert: regulators are not the bottleneck here.
Musk then claimed that “Tesla self-driving will be far safer than human driving”:
The problem here is that Musk has claimed on many occasions that Tesla’s FSD is already safer than humans, like in 2023: “Supervised FSD is vastly safer than human driving.”
There’s no data that supports that. Tesla refuses to share any data regarding its self-driving program and instead, the company shares a very misleading quarterly “safety report.”
Considering Tesla’s FSD requires supervision from a driver at all times, the driver’s supervision and attention help reduce accidents that the self-driving system wouldn’t necessarily prevent.
Musk also shared positive experiences of a few Tesla owners, including a Tesla engineer and Joe Rogan:
As we often highlight, Tesla’s FSD can be impressive to use, but the problem is when you compare it to its promise, which is in the name: full self-driving.
Under its current form, FSD is still a level 2 advanced driver assist system, and not self-driving, but Musk said that it would become truly “unsupervised” self-driving every year for the last 8 years.
Therefore, it’s not what Musk has been promising buyers for years and as for when it is coming, he has been consistently wrong and has asked owners to rely on anecdotal experiences as Tesla refuses to release any data.
Tesla has previously stated that FSD must achieve 700,000 miles between critical disengagements to be safer than humans.
The spree of Tesla FSD tweets comes as Tesla is preparing to report its Q1 2025 earnings next week, which should be difficult after the automaker reported its lowest delivery results in three years.
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Texas is No. 1 in the US for wind and solar capacity, but the Texas Senate just passed a bill that aims to kneecap clean energy with an industry-killing review process. Will the Texas House pass it, too?
The Texas Senate today passed SB 819, which creates new restrictions on the development of wind and solar energy under the guise of “protecting” wildlife. The restrictions don’t apply to any other forms of energy.
Texas uses an extraordinary amount of power, and renewables play a big part in supplying that power. The Texas Tribunereported in March that “ERCOT [the Texas grid] predicts that Texas’ energy demand will nearly double by 2030, with power supply projected to fall short of peak demand in a worst-case scenario beginning in summer 2026.” That’s because of extreme weather, population growth, and crypto-mining facilities.
As of February, Texas increased its energy supply by 35% over the last four years, and 92% of that supply came from solar, wind, and battery storage.
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Solar is the largest source of energy generating capacity that has been added to the Texas grid. That’s because it’s cost-effective and it can be deployed quickly. So if new solar projects are kneecapped, power demand will outstrip supply in the Lone Star State.
Daniel Giese, Solar Energy Industries Association (SEIA)’s Texas director of state affairs, stated after the Senate’s vote, “With energy demand rising fast, Texas needs every megawatt it can generate to keep the lights on and our economy strong. We cannot afford to turn away from the pro-energy and pro-business policies that made the Lone Star State the energy capital, but that’s exactly what SB 819 does. We urge the Texas House to reject this bill.”
Less clean energy would also jack up electricity bills for Texans, and rural areas would lose billions in landowner revenue and tax payments. Every time a wind farm or solar farm is installed on rural land, it brings a lot of money to the community that surrounds it. A January report estimated that existing and planned solar, wind, and battery storage projects will contribute $20 billion in local tax revenue and $29.5 billion in landowner payments.
What’s especially baffling about this bill is that it flies in the face of a core Texas value – keeping the government out of private property decisions – yet it does precisely the opposite.
Environment Texas executive director Luke Metzger issued the following response: ‘By making it much more difficult to build wind and solar energy in Texas, this bill threatens to increase pollution, increase blackouts and increase our electric bills.
“Under the guise of helping land and wildlife, SB 819 would create a discriminatory and capricious permitting standard that could grind renewable energy development to a halt.
“We urge the House of Representatives to reject this bill and instead support policies that promote a cleaner, more sustainable energy future for all Texans.”
It will come as no surprise to regular readers that I find this bill ludicrously masochistic. Let me know your thoughts in the comments below, and please keep it civil.
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