A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the World Wide Web.
Three separate stories over the weekend underscored the good, the bad, and the complicated aspects of a global shift to alternative, environmentally friendly sources of energy.
The good news came from a Barron's article detailing a Barclays downgrade of the U.S. electric utility sector because of the rapid proliferation of solar power. The downgrade is one of the first signs that solar power is no longer a utopian dream held mostly by Trekkies, and its tangible, economic effects are now being felt on the income statements of incumbent power providers.
"Barclays Downgrades Electric Utility Bonds, Sees Viable Solar Competition" – Barron's
A Reuters report paints a less economically optimistic view of alternative energy. The story compares the energy costs of U.S.-based chemical company Huntsman Corp. with German competitor Wacker Chemie AG.
The rapid rise of U.S. fossil fuel production has vastly improved the finances of Louisiana's Huntsman through lower energy costs which, because natural gas is a primary input cost, are particularly important for the industry.
At the same time, the German government's decision to move away from nuclear power in the wake of the Fukushima disaster has left Wacker Chemie with far higher input and operating costs. In this case, the environmentally conscious German government policy has put Wacker Chemie at a severe competitive disadvantage in global markets.
"How fracking helps America beat German industry" – Reuters
See also: "A primer on Obama's new rules to cut carbon emissions from power plants" – Vox
Prominent U.K. columnist Ambrose Evans-Pritchard sees signs of U.S. Federal Reserve-style quantitative easing in China. Mr. Pritchard's column cites the Chinese Security Journal, which is regulated by the country's central bank: "The authorities may have to widen the range of possible options for 'targeted monetary loosening.' These include surgical stimulus for the West and Central regions, as well as 'direct asset purchases by the central bank,' mostly government bonds, financial and railroad debt, as well as state-backed housing bonds."
"China explores bond buying in first hint of QE" – Telegraph
See also: "China accelerates as euro zone stumbles" – Reuters
As if the global auto industry doesn't have enough problems, the Huffington Post reports on the steep decline in U.S. car ownership and miles driven. "After rising almost continuously since World War II, driving by U.S. households has declined nearly 10 per cent since 2004, with a start before the Great Recession suggesting economics is not the only cause. 'There's something more fundamental going on,' says Michael Sivak of the University of Michigan Transportation Research Institute."
"Americans' Car Ownership, Driving In Steep Decline" – Huffington Post
Diversion: "Bill Murray Crashes Bachelor Party, Gives Awesome Speech" – Deadspin
Follow Scott Barlow on Twitter at @SBarlow_ROB.
Scott Barlow