companies

Countries and companies are increasingly wary of possible shortages of raw materials going forward and seek to secure supply. Battery metal demand is also evolving as demand shifts between chemistries. Current interdependence is significant and actors seek to reduce supply risk in light of the energy transition.

 

China dominates downstream EV battery supply chains China has massively pushed electric vehicle (EV) sales in recent years which has helped to further develop the battery supply chain. China’s dominant role in battery metals supply chains, as well as export restrictions in other countries, risk slowing down the pace of EV adoption. EV supply chains are expanding, but for manufacturing, China remains the key player in the battery and EV component trade. In 2022, 35% of exported electric cars came from China, compared with 25% in 2021, according to the International Energy Agency (IEA). The rapid increase in EV sales during the Covid-19 pandemic and increased geopol

At The Close On The New York Stock Exchange Indices Closed Mixed

Popular Stocks Like MSFT, APPL And MSFT Will Publish Their Earnings Shortly. How Will Indices (e.g. SPX) React?

Paul Rejczak Paul Rejczak 13.04.2022 15:41
Stocks fluctuated following their recent decline on Tuesday and the S&P 500 index closed slightly below the 4,400 level. Is this still just a downward correction? The S&P 500 index lost 0.34% on Tuesday following its Monday’s decline of 1.7%. There is still a lot of uncertainty concerning the Ukraine conflict and Fed’s monetary policy tightening plans. On Monday it led to a more pronounced profit-taking action. However, the coming quarterly earnings releases season may be a positive factor in the near term. This morning the broad stock market is expected virtually flat following the Producer Price Index release. The nearest important resistance level is now at around 4,475-4,500, marked by the recent support level and Monday’s daily gap down. On the other hand, the support level is at 4,350-4,400. The S&P 500 index retraced more of its March rally, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Futures Contract – Short-Term Consolidation Let’s take a look at the hourly chart of the S&P 500 futures contract. Recently it broke below the 4,400 level and our profitable long position was closed at the stop-loss (take-profit) level of 4,440. Overall, we gained 100 points on that trade in a little less than two months’ time (it was opened on Feb. 22 at 4,340 level). So now we will wait for another profit opportunity. (chart by courtesy of http://tradingview.com): Conclusion The S&P 500 index is expected to open 0.1% lower following the producer inflation number release. Stocks will likely extend their consolidation. For now it looks like a relatively flat correction within a short-term downtrend. Here’s the breakdown: The S&P 500 index trades within a short-term consolidation following the recent declines. Our profitable long position was closed at the 4,440 level (a gain of 100 points from the Feb. 22 opening). Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Comparison of client’s profitability among European brokers 2021

Comparison of client’s profitability among European brokers 2021

Purple Trading Purple Trading 21.04.2022 12:14
How did we come up with this data? This comparison is based on publicly available data on the percentage of retail CFD accounts that were in loss and was collected within a one year span (between 1. 4. 2021 and 31. 3. 2022). Publishing of this data is mandatory for brokerage companies operating in the EU and they have to include them as a part of so-called "disclaimers". These can be found on all marketing materials (online banners, emails, ebooks), but also in the footer on their website. One of the subchapters of this article focuses on how and where to find this data.   What does ESMA request? Online Forex trading has come a long way since its wild unregulated beginnings, and while unregulated brokerage firms or those that are less tightly regulated can still be found, Forex traders of today can rely on a much greater degree of protection than their counterparts from the past. The European Securities and Markets Authority (ESMA) provides guidelines to regulators, for example, the Cypriot CySEC, and thereafter each regulator provides guidelines and restrictions to regulated firms. EU regulations are considered to be one of the strictest, caring for the protection of clients (retail traders) and guaranteeing them a high standard of security and transparency compared to other (for example, off-shore) regulators.   How regulation protects traders? For example CySEC requires a number of guarantees and client protection mechanisms from brokerage companies, below are some of the main ones.   Negative balance protection If a trader loses more money than he had in his trading account due to an accident, adverse market fluctuations, or leverage, he/she does not have to worry about possible debt. Thanks to the new guidelines, retail traders cannot lose more money than they put into their account, if they get into the red, the debt incurred must be paid by the broker.   Segregation of client bank accounts In the early days of online Forex trading, we could often witness many fraudulent brokerage companies using their clients’ funds to enrich themselves or pay for operating expenses. Brokerage companies operating in the EU must therefore deposit all client funds in bank accounts, segregated from the company's funds, and insured against bankruptcy. This way, traders have fewer things to worry about.   Disclosure of loss rate of client accounts Every 3 months, brokerage companies must publish the loss rate of their clients' trading accounts. This is stated as a percentage and is placed in small print on each advertising banner, image, or other promotional material. You can also find it in the footer on the brokers' websites in the so-called "Disclaimer" (see picture).   Figure 1: Percentage of profitability of client accounts in the footer of Purple Trading websites ~/getmedia/897c3636-9d3b-44f4-8420-35bc0c6b5065/P-ziskovost.png Table comparing the profitability of clients of European brokers - how did we do? Because the loss rate of clients’ accounts is information that brokers are required to disclose publicly in the EU, we decided to venture to other broker’s websites in order to see how our competitors are doing. The result completely exceeded our expectations.   Table No.1: Comparison of the number of profitable client accounts of leading European brokers *This number refers to CFD retail (client) accounts and is based on data for the period from 1 April 2021 to 31 March 2022) Broker Number of profitable accounts in 2021* 37 % 32 % 29,25 % 29 % 28,95 % 28,76 % 27,13 % 26,97 % 26,07 % 26 % 25,6 % 24,8 % 24 % 23 % 23 % 22 % 19,5 %   As you can see, Purple Trading is among the absolute top with more than 35% of client accounts ending up in profit. Which leaves behind a large part of the competition. To some, however, a third of profitable clients may seem like a low number. However, we must take this number in the overall context of the Forex industry.   Why a third of profitable clients are such a success? It should be noted that Forex trading is one of the most challenging disciplines and as such has a very steep learning curve. In particular, beginning traders must initially go through a number of educational materials if they want to make money in this discipline. And even then, the task of the most difficult remains ahead of them - to deal with themselves and set strict rules of risk management and thus avoid the psychological pitfalls of trading.   What could be the secret behind the profitability of our clients?   Ability to respond immediately to trading opportunities Thanks to LD4 Equinix servers in London, our traders can count on lightning-fast executions and thus adequately respond to trading opportunities. If you also want to start trading with a fair Forex broker who takes his clients seriously and provides them with all the means to be truly profitable, Purple Trading is here for you.   Comparison of client’s profitability among European brokers in 2021 What our competition doesn't want you to see The profitability of client accounts of European brokers is no longer a figure that you would have to decipher from a footnote written in fine print somewhere in the depths of the terms and conditions. All brokers operating within the EU follow ESMA (European Securities and Markets Authority) guidelines and must publish this number in a way that is as transparent as possible. Therefore, at Purple Trading, we decided to look at it in a more elaborate way and compare the profitability of our clients with that of our competition. And the result took our breath away!
The Scale Versus the Casino

The Scale Versus the Casino

David Merkel David Merkel 28.04.2022 07:55
Photo Credits: Jen and www.david baxendale.com with help from pinetools || The casino is exciting. The scale is honest and unrelenting. I want to give an update to one of the major concepts of Ben Graham, in order to make it fit the modern era better. Ben Graham said: “In the short run, the market is a voting machine but in the long run, it is a weighing machine.”https://www.goodreads.com/quotes/831517-in-the-short-run-the-market-is-a-voting-machine quoted from The Intelligent Investor So let me modify it: In the short run, the market is a casino, but in the long run, it is a scale. Is this an improvement? Probably not, but speculation has become so rampant that it may be a necessary modification to change voting machine to casino. The voting machine makes sense, but typically we think of voting as being democratic. We only get one vote per person. Markets are different. Someone who brings a little money to the market will not have the same influence as the one who brings a lot of money to the market. Thus my analogy of the casino, though typically casinos will place limits on how much the casino will wager. They want to avoid random large losses so that they can live to extract money from rubes for many years to come. The winner can brag that he “broke the bank,” but the casino survived to play on. Bill Hwang and his CFO were formally charged with fraud today. What did they do? They synthetically borrowed a lot of money from investment banks to own huge amounts of a few companies. Their buying pushed the prices of the stocks higher, allowing them to borrow more against the positions. But eventually as the stocks they owned had some bad results, the margin calls on his positions wiped him out as the stock prices fell. The scale trumped the casino. The same is true of crypto and meme stocks. Cryptocurrencies require a continuing inflow of real cash (admittedly fiat money) in order to appreciate. If people stop buying crypto on net, and that may be happening now, cryptocurrencies will decline. The scale says crypto is a zero — no intrinsic value. The casino begs for more people to bring real money to buy fake money. That applies to meme stocks as well. You can throw a lot of money at a stock and it will rise. But for it to stay there or rise further, it will need increasing free cash flows to validate the value of the firm. Going back to crypto, it lacks any link to the real economy. Crypto will only become legitimate when you can buy groceries and gasoline at a fixed amount of bitcoin that varies less than the same price in US dollars. As a final note on the Scale versus the Casino, I give you Elon Musk. He borrows against his shares of Tesla to buy Twitter. He either did not realize or ignored the fact that he could lose his stake in Tesla if the price of Tesla falls enough. Do you really want the margin desk to control your fate? This may not totally impoverish Musk, but it is not impossible that he could the entirety of his holdings of Tesla in order to keep his holdings of the unprofitable Twitter. All it would take is for short sellers to push Tesla below $740, and then the margin desk starts selling his shares into a falling market. Momentum, aided by an agreement leading to forced selling. The market abhors a vacuum. So it is for those who assume that things will continue to go right for them.
The Swing Overview – Week 20 2022

The Swing Overview – Week 20 2022

Purple Trading Purple Trading 02.06.2022 16:36
The Swing Overview – Week 20 The markets remain volatile and fragile, as shown by the VIX fear index, which has again surpassed the level 30 points. However, equity indices are at interesting supports and there could be some short-term recovery. The euro has bounced off its support in anticipation of tighter monetary policy and the gold is holding its price tag above $1,800 per troy ounce. Is the gold back in investors' favor again? Macroeconomic data The week started with a set of worse data from the Chinese economy, which showed that industrial production contracted by 2.9% year-on-year basis and the retail sales fell by 11.1%. The data shows the latest measures for the country's current COVID-19 outbreak are taking a toll on the economy. To support the slowing economy, China cut its benchmark interest rate by 0.15% on Friday morning, more than analysts expected. While this will not be enough to stave off current downside risks, markets may respond to expectation of more easing in the future. On a positive note, data from the US showed retail sales rose by 0.9% in April and industrial production rose by 1.1% in April. Inflation data in Europe was important. It showed that inflation in the euro area slowed down a little, reaching 7.4% in April compared to 7.5% in March. In Canada, on the other hand, the inflation continued to rise, reaching 6.8% (6.7% in March) and in the UK inflation was 9% in April (7% in the previous month). Several factors are contributing to the higher inflation figures: the ongoing war in Ukraine, problems in logistics chains and the effects of the lockdown in China. Concerns about the impact of higher inflation are showing up in the bond market. The benchmark 10-year US Treasury yield has come down from the 3.2% it reached on 9 May and is currently at 2.8%. This means that demand for bonds is rising and they are once again becoming an asset for times of uncertainty.  Figure 1: US 10-year bond yields and USD index on a daily chart   Equity indices on supports Global equities fell significantly in the past week, reaching significant price supports. Thus, there could be some form of short-term bounce. Although a cautious rally began on Thursday, which was then boosted by China's decision to cut interest rates in the early hours of Friday, there is still plenty of fear among investors and according to Louis Dudley of Federated Hermes, cash holdings have reached its highest level since September 2001, suggesting strong bearish sentiment. Supply chain problems have been highlighted by companies such as Cisco Systems, which has warned of persistent parts shortages. That knocked its shares down by 13.7%. The drop made it the latest big-stock company to post its biggest decline in more than a decade last week. The main risks that continue to cause volatility and great uncertainty are thus leading investors to buy "safe" assets such as the US bonds and the Swiss franc. Figure 2: The SP 500 on H4 and D1 chart From a technical analysis perspective, the US SP 500 index continues to move in a downtrend as the market has formed a lower low while being below both the SMA 100 and EMA 50 moving averages on the H4 and daily charts. The nearest resistance is 4,080 - 4,100. The next resistance is at 4,140 and especially 4,293 - 4,300. Support is at 3,860 - 3,900 level. German DAX index The index continues to move in a downtrend along with the major world indices. The price has reached the support which is at 13,680 – 13,700 and the moving average EMA 50 on the H4 chart is above the SMA 100. This could indicate a short-term signal for some upward correction. However, the main trend according to the daily chart is still downwards. The nearest resistance is at 14,260 - 14,330 level. Figure 3: German DAX index on H4 and daily chart The euro has bounced off its support The EUR/USD currency pair benefited last week from the US dollar moving away from its 20-year highs while on the euro, investors are expecting a tightening economy and a rise in interest rates, which the ECB has not risen yet as one of the few banks. Figure 4: The EURUSD on H4 and daily chart   Significant support is at the price around 1.0350 - 1.040. Current resistance is at 1.650 - 1.700.   The Gold in investors' attention again The gold has underperformed over the past month, falling by 10% since April when the price reached USD 2,000 per ounce. But there is now strong risk aversion in the markets, as indicated by the stock markets, which have fallen. The gold, on the other hand, has started to rise. Inflation fears are a possible reason, and investors have begun to accumulate the gold for protection against rising prices. The second reason is that the gold is inversely correlated with the US dollar. The dollar has come down from its 20-year highs, which has allowed the gold to bounce off its support.  Figure 5: The gold on H4 and daily chart The first resistance is at $1,860 per ounce. The support is at $1,830 - $1,840 per ounce. The next support is then at $1,805 - $1,807 and especially at $1,800 per ounce.
Why do we voluntarily disclose our clients' loss ratios?

Why do we voluntarily disclose our clients' loss ratios?

Purple Trading Purple Trading 03.06.2022 09:12
Why do we voluntarily disclose our clients' loss ratios? Why rather click on an ad from a brokerage firm that states that 70% of their clients' accounts are loss-making than an ad from a broker that does not disclose this statistic at all? Come with us to delve into the ins and outs of broker licensing and learn what protections you are legally entitled to as a client. Broker's licence The operation of a brokerage company involves many minor acts anchored in legislation. From the operation of the broker as a firm with employees; arranging the opening of client accounts to handling client deposits and managing the online platform through which clients trade. For all of this, a broker needs a license. While this can be issued by almost any state authority, licences of some states are more desirable than that of others. And that is due to variety of reasons. Licenses issued in so-called offshore states allow brokers to provide their clients with very attractive trading conditions. For example, the financial leverage that allows a client to multiply his or her trading position and with it also potential earnings (as well as losses) can often go as high as 1:1000 for offshore licenses. However, when it comes to client protection, offshore licenses fall somewhat short. Client protection takes many forms and one of them is the wording of the mentioned disclaimer. Thus, if you see a disclaimer below the image of an advertisement that does not state the percentage of loss but only somewhat vaguely warns of the potential risk, it is very likely that the broker to whom the advertisement belongs has an offshore license. Image: Purple Trading banner ad (see disclaimer below the button) What is a disclaimer The short phrase "XY% of client accounts lose money" and its other small permutations, which you can see for example under our online advertisements, are part of the so-called disclaimer. The disclaimer takes many forms, from a single sentence under a banner ad on Facebook to a multi-paragraph colossus in the footer of the broker's website. The purpose of the disclaimer is simple - to highlight, to those interested in trading on financial markets, the potential risks of this activity and to disclaim broker’s responsibility for their client’s eventual failure. However, the overall message of the disclaimer might be written differently. Because sometimes we see loss percentages under the advertisement of Broker A, while Broker B's disclaimer merely tells us that trading is risky. No percentage, nothing more. Image: Sample of a shorter disclaimer on the broker's page Offshore vs EU license The European Union's legal environment is characterized by a much stricter regulatory approach. This applies to the control of pharmaceuticals, and foodstuffs, but also, for example, to the control of brokerage companies. This sector is dealt with by ESMA (European Securities and Markets Authority), to which the regulators of all countries within the EU have to answer (including the regulator of Purple Trading, the Cypriot CySEC). It is ESMA that takes it upon itself to protect consumers (in this case, investors and retail traders in the financial markets). And it does so in all sorts of ways. The aforementioned client account loss ratios on brokers' marketing materials are one of them.   Other ESMA protections include:   Reduced financial leverage Financial leverage is the ratio of the amount of capital a trader puts into an account to the funds provided by the broker. In simple terms, it is essentially borrowed capital from the broker, which is not reflected in the balance of money in your account, but allows you to trade a greater volume of transactions than you could with your own money. More experienced traders can use leverage to increase their profits many times over. However, as well as profits, leverage also multiplies losses, so less-experienced traders should be wary of using leverage generously. That's also why ESMA capped leverage limit for retail clients at 1:30 in 2018, and higher leverage (up to 1:400) can only be provided by brokers to clients who have met a number of strict criteria to qualify as a so-called Professional Client.   Protection against negative balance A key aspect of client protection. If a client's trade that he had "leveraged" fails and the multiplied loss puts him in the red, the broker will pay the entire amount that is "in the red" from his pocket. Thus, the client can never lose more money than he has deposited in his account and consequently become a debtor. Negative balance protection is compulsory for all brokers operating in the EU. It is not compulsory for offshore brokers, which, combined with the high leverage offered there, can lead to very unfortunate situations.   Segregation of client deposits Forex and online trading, in general, has come a long way since its beginning in 2008. Especially in the early days, the online trading environment was highly unregulated and it was not uncommon for brokers to use capital from client deposits to fund their operations. More than that, there were also cases where the client’s capital was outright misused to enrich a select few. Brokers operating in the EU are obliged to secure clients’ funds in many ways. One is depositing client capital in accounts segregated from the capital brokers use to finance their operations. What if the broker fails to provide his clients with these guarantees? Brokers subject to such strict regulatory authorities as CySEC (cypriot based regulator under ESMA) must undergo regular audits. As part of these audits, the regulator monitors whether all the measures resulting from the licence granted by the regulator are being complied with. Should this not be the case, the broker is usually subject to a hefty fine and often even the suspension of its licence. This means that broker cannot really afford not to comply with the client protection principles of the EU regulatory environment. Conclusion Voluntary disclosure of client account loss rates under broker advertisements may seem odd. However, it is a positive signal that lets you know that the broker in question is highly regulated. Therefore, if you choose to trade with them, you are protected by a number of legislative regulations that the broker will not dare to violate. See which EU broker has the best disclaimer number
Investors? Bulls? Bears? These Series Are Linked To Finances

Investors? Bulls? Bears? These Series Are Linked To Finances

Purple Trading Purple Trading 15.07.2022 14:23
5 must-watch series from the world of finance With the boom of streaming services, investors are presented with often exciting opportunities. But today, we'll try to move away from looking at the world through the eyes of an investor and focus more on the content that streaming services offer. More accurately, we will take a look at the series that can be found on these platforms. But don’t worry, we won’t get too far from our beloved world of finance either. Financial world has always been an attractive subject not only for Hollywood screenwriters. Classics such as Wall Street (1986) and Wolf of Wall Street (2013) have not only grossed millions of dollars world-wide but even managed to convince many viewers into starting their own careers in finance. However, with the rise of streaming services, finance has also taken centre stage for a number of series. Some of the most well-known are the HBO-produced series Billions (2016) and Succession (2018). Today, let's take a look at a few lesser-known, but definitely not inferior series from the world of finance that are simply a must-watch. Devils (Sky, 2020) - a probe into investment bank’s speculation during global crises Produced by Italian broadcaster Sky, Devils is one of the most interesting European series in years. The plot follows Massimo Ruggero, who has risen from rags to riches as a head of the trading desk of the New York London Investment Bank (strikingly reminiscent of Goldman Sachs).   Massimo and his team speculate on the financial markets during the biggest events of the last 12 years. This gives viewers an insight into the behaviour of investment banks during the mortgage crisis, the Greek debt crisis and the Brexit vote, for example. The series is enriched with real time footage of international financial institutions meeting, mixing fiction with reality.   The second season premiered a few months ago and is of equal quality. With the main roles being masterfully played by Alessandro Borghi (known from the Suburra series and the film) and Patrick Dempsey (known from the Surgeons series).     Industry (HBO, 2020) - a series written by the bankers themselves Industry provides a grim and realistic look at what it's like to start a professional career in the financial sector in the heart of London. Here we follow a group of young bankers as they are trying to work their way up to a full-time position at one of London's investment banks, having to navigate this cutthroat and competitive environment as quick as possible.   The series captures well how depressing a given career can be and partially subverts any standards that may have been ingrained by titles such as Wall Street or Billions, taking off the rose-colored glasses of the viewer. Industry simply shows how challenging and competitive a career in finance can be.   As we watch the story of two main protagonists, experiencing their first successes and failures we simply have to wonder - will the desire for success and money prevail, or will the young bankers realise that there is more to life than the pursuit of money? The series, created by two former bankers, has completed its first season, with a second to follow later this year (2022).     Black Monday (Showtime, 2019) - when crisis meets satire   Welcome to the 1980s! A decade full of extravagant hairstyles, clothes and one of the biggest stock market crises in history. We're talking about "Black Monday", a single day in October 1987 during which world stock indices fell by tens of percent. As bleak as it might sound, Black Monday is the most light-hearted series on this list.   The series follows a group of traders from a second-rate Wall Street firm called the Jammer Group and uses satire and fiction to reveal the events that led to the aforementioned stock market crash. Don Cheadle, known from the Avengers franchise, stars in the lead role. The series ended after three seasons, all of which are currently available on HBO.   The Dropout (Hulu, 2022) - based on true events Enron, Worldcom and Theranos. Three of the biggest investor scams in decades. The Dropout series follows the story of Theranos - a company that promised to revolutionize blood testing. Founder Elizabeth Holmes managed to create an aura of success around herself and Theranos, fooling the biggest investment banks and the most famous investors. The company's market capitalization gradually climbed to $9 billion, which was almost unbelievable given the lack of a fully functional product.   The series reveals the rise and fall of the company and its founder, who went from being a female copy of Steve Jobs to an outlaw. However, If you're not too keen on dramatization of real events, we recommend watching the HBO documentary The Inventor: Out for blood in Silicon Valley. It also deals with this topic.   WeCrashed (Apple TV+, 2022) - when the marketing strategy goes too far   Investors who have followed the events of the US stock markets in recent years will immediately know that behind the title of this series lies the story of WeWork, a company that operates a network of co-working offices around the world. However, comparing WeWork to Theranos would be rather harsh, but there are several similarities.   The company's founder, Adam Neumann, has used a great marketing strategy to attract several major investors, most notably Softbank founder Masayoshi Son. Investors then valued the company at a hard-to-believe $47 billion ahead of its planned IPO. As the title of the series suggests, things did not go quite as planned. You can look forward to seeing well-known actors Jared Leto and Anne Hathaway in the lead roles.   Are you tempted by the world of stocks and even more so by shorting them?   At Purple Trading, you now have the opportunity to speculate on the rise and fall of more than 100 of the world's most famous companies and ride the current trend. And if you don’t feel like risking your own money, you can try it with virtual ones on our free demo account.  
Stock Market: Uber, Palantir And Moderna In Top 3...

Stock Market: Uber, Palantir And Moderna In Top 3...

Purple Trading Purple Trading 15.07.2022 13:08
TOP 3 most traded CFD stocks of this week Information is one of the most valuable commodities. No one can tell you with absolute certainty where any stock is headed. But sometimes you just need to know where, at what point, and why are investors taking the most positions to try to take advantage of the volume and volatility yourselves. We bring you a summary of this week’s top 3 most traded CFD stocks at Purple Trading. What is behind their popularity and what is the outlook for the future? You can find answers to these questions in today’s article. Uber Shares of the notoricaly loss-making taxi service are under a lot of pressure this year. They have lost more than half their value since January. Uber is now selling more than 50% below the price it was when it entered the stock markets in 2019. Comparing it to its all-time high of $63.18 in early January 2021 is even more dismal. The big drop in Uber stock isn't too surprising in the context of the company's financial results from the first quarter of the year. While Uber's revenue grew 136% year-over-year to $6.9 billion, its net loss came in at $5.9 billion due to failed investments in Grab, Aurora, and DiDi. Chart 1: Uber shares on the MT4 platform on the M15 timeframe along with the 100 and 200 day moving averages Uber has become the focus of investor attention in recent days due to leaked information about lobbying high-profile politicians such as French President Emmanuel Macron. The revelations of the scandal have made Uber shares very volatile, which traders have taken advantage of.   The outlook for the coming months is not very positive for the company - high fuel prices are making Uber's services more expensive and a possible recession could significantly affect the company's revenues. Uber's business can be described as rather cyclical and in times of recession the company could suffer as a result. Nor should we underestimate the impact of the growing coronavirus, which is once again beginning to plague the entire world.   However, Uber’s relatively low valuation (it is now trading near an all-time low) and its positive cash flow outlook for 2022 is what’s playing into Uber’s hands. The company will publish its 2Q earnings in early August, and no matter the outcome, Uber shares are likely to remain popular among traders.   Palantir Uber has become the focus of investor attention in recent days due to leaked information about lobbying high-profile politicians such as French President Emmanuel Macron. The revelations of the scandal have made Uber shares very volatile, which traders have taken advantage of.   The outlook for the coming months is not very positive for the company - high fuel prices are making Uber's services more expensive and a possible recession could significantly affect the company's revenues. Uber's business can be described as rather cyclical and in times of recession the company could suffer as a result. Nor should we underestimate the impact of the growing coronavirus, which is once again beginning to plague the entire world.   However, Uber’s relatively low valuation (it is now trading near an all-time low) and its positive cash flow outlook for 2022 is what’s playing into Uber’s hands. The company will publish its 2Q earnings in early August, and no matter the outcome, Uber shares are likely to remain popular among traders. Chart 2: Palantir shares on the MT4 platform on the M15 timeframe along with the 100 and 200 day moving averages Investors still have no idea where to classify Palantir - is it an army contractor or an IT company? The stock's performance so far this year would point more towards an IT company. Military contractors like Lockheed Martin and Raytheon Technologies have had a great year so far, outperforming the S&P 500 index significantly. Palantir's CEO visited Ukraine in June in an effort to expand the company's operations. This obviously pleased investors, but potential expansion is difficult to quantify.   Moreover, the company's capitalization is still more than 10 times its annual revenue, a giant number compared to its competitors. Competitor Booz Allen Hamilton is currently selling for about 1.5 times annual sales, and the company's stock is near this year’s low. The company has a long track record of growing sales and, unlike Palantir, is profitable. Palantir's 2Q earnings are due in the first half of August. The company is expecting 25% year-on-year revenue growth. However, in the same period a year ago, the company grew revenue by 49%. Thus, any surprise in the earnings could cause high volatility. Palantir is definitely a stock to watch.    Moderna Seeing the famous vaccine producer among this week’s most traded companies in our CFD stock offering is not much of a surprise. Yet, back in mid-June, things were not looking good for Moderna shares - as this company was about 50% below the price we could see at the beginning of the year. However, the last month has been great for Moderna and its shares have soared almost by 50%. The reasons for this steep rise are clear - the coronavirus is once again on the rise globally. Since the beginning of June, the number of daily covid cases have practically doubled globally. The World Health Organisation has warned that the pandemic is far from over. This is just more water on the mill for companies such as Moderna and BioNTech. In addition, Moderna's actions were also helped by the June approval of a vaccine for American children and adolescents aged 6 months to 17 years. Chart 3: Shares of Moderna in the MT4 platform on the M15 timeframe along with the 100 and 200 day moving averages After the outbreak of the coronavirus pandemic, Moderna was the darling of investors for obvious reasons. Shares thus reached an all-time high of almost USD 500. Since last September, however, it has gone south sharply. Looking at the P/E ratio (the ratio of share price to earnings per share), Moderna looks very attractive - the ratio is now around 5, which is a great number for a pharmaceutical company. In addition, Moderna is well funded - the selling of coronavirus vaccines have given it very interesting liquidity.   The biggest concern for investors, however, is the future of the company and its earnings once the coronavirus has passed. Apart from the vaccines mentioned above, at this moment the company does not sell any other products to the public. It has several other products in the testing phase, but their final approval and sales are uncertain. Thus, Moderna's stock may continue to thrive in the coming months thanks to further covid waves. In the long term, however, the company will need more products if it is to prosper.  
Which stock market sector is currently interesting due to its volatility?

Which stock market sector is currently interesting due to its volatility?

Purple Trading Purple Trading 18.07.2022 07:57
Which stock market sector is currently interesting due to its volatility While long-term investors in physical shares are not too interested in volatility, CFD traders can make potentially very nice profits from it. However, equity markets are vast and it can happen that an interesting title slips through one’s fingers. This article will make sure that it doesn't happen. What is volatility and how is it created If you were to equate the words volatility and nervousness (or moodiness) you would not be far off the mark. Indeed, volatility is really a measure of nervousness in the markets and where there is nervousness, there is also uncertainty. Uncertainty in the markets can arise for many different reasons, but it usually happens before the release of important macroeconomic news (on our economic calendar), you can identify those by the three bulls' heads symbols) or during unexpected events with a major impact on a particular market sector or the geopolitical order of the world (natural disasters, wars).   On the charts of trading platforms, you can recognize a highly volatile market by the dynamically changing price of the instrument, the market is said to be going up or down, and if you switch to a candle chart, you may notice large candles. Conversely, non-volatile, calm markets move sideways without any significant dips or rises. Volatility can also be historical or implied, but we'll write about that another time. Now, let’s talk about how can one potentially profit from volatility and where to find suitable markets to do so.   How to potentially profit from volatility For intraday and swing traders, volatility is the key to their potential success. For traders, often the worst situation is the so-called "sideways" market movement, where the asset in question goes "sideways" without significant movements either up or down. With small and larger price fluctuations, traders can potentially generate interesting profits. One of the most volatile markets is the stock market, where some news can trigger very significant price movements. Events such as important economic reports, a stock split, or an acquisition announcement, for example, can move the price of a given stock. In addition, traders using CFDs for share trading can also use leverage to multiply any gains (and losses) in a given volatility.   The key to potential success is choosing the right stock titles. Some stocks and sectors can be considered more volatile, while others can go longer periods of time without significant fluctuations. So how do you look for volatility? Several indicators measure price movements in stocks, perhaps the most well-known is beta, which measures the volatility of a given stock compared to a benchmark stock index (typically the S&P 500 for US stocks). The beta indicator is listed on most well-known stock sites, but we can calculate it using the following formula: Beta = 1 In this case, the stock is highly correlated with the market and we can expect very similar movements to the benchmark index.   Beta < 1 If the beta is less than 1, we can consider the stock to be potentially less volatile than the stock market.   Beta > 1 Stocks with a beta greater than 1 are theoretically more volatile than the benchmark index. So, for example, if a stock's beta is 1.1, we think of it as 10% more volatile. It is stock titles with a beta above 1 that should be of most interest to investors looking to take advantage of volatility. However, it is not enough to monitor the beta alone, traders should not forget to monitor important news and fundamentals related to the company and the market in general. Thus, it is advisable to choose a few companies whose stocks have been significantly volatile in the past and where we expect strong movements due to positive and negative news to continue. So which sectors may be worth following? In which sectors can you potentially benefit from high volatility? Energy sector The energy companies sector has historically been one of the most volatile, as confirmed by the course of 2022 so far. The price development of energy companies is of course strongly linked to the price of energy commodities. These have had a great year - both natural gas and oil have appreciated by several tens of percent since the beginning of the year. However, this growth has not been without significant fluctuations, often by higher units of percent per day. The current geopolitical situation and growing talk of recession promise to continue the volatility in the sector. In the chart below, you can see the movement of Exxon Mobil Corp shares in recent weeks. Chart 1: Exxon Mobil shares on the MT4 platform on the H1 timeframe along with the 50 and 100-day moving averages Travel industry Shares of companies related to the travel industry have always been very volatile. According to data from the beginning of the year (NYU Stern), even the companies classified as hotels and casinos were the most volatile when measured by beta. Given the coronavirus pandemic, this is not surprising. However, the threat of coronavirus still persists and there is currently the talk of another wave. However, global demand for travel is once again strong. Airlines and hotels are beginning to recover from the previous two dry years. As a result, both positive and negative news promises potential volatility going forward. In the chart below, you can see the movement of Hilton Hotels Corp shares in recent weeks. Chart 2: Hilton Hotels shares on the MT4 platform on the H1 timeframe along with the 50 and 100-day moving averages Technology Technology is a very broad term - some companies in a given sector can be considered "blue chip" stocks, which can generally be less volatile and have the potential to appreciate nicely over time. These include Apple or Microsoft, for example. However, even these will not escape relatively high volatility in 2022. Traders looking for even stronger moves, however, will be more interested in smaller companies such as Uber, Zoom Technologies, Palantir, or PayPal. In the chart below, we can see the evolution of Twitter stock, which has undergone significant volatility in recent weeks. This was linked to the announcement of the acquisition (April gap) and its recent recall by Elon Musk. With both opposing parties facing a court battle, similarly wild news is just more water on the volatility mill. Chart 3: Twitter shares on the MT4 platform on the H1 timeframe along with the 50 and 100-day moving averages There are, of course, more sectors that are significantly volatile. Traders can follow companies in the healthcare sector, for example, where coronavirus vaccine companies are among the most interesting ones. Restaurants or aerospace and chemical companies can also be worth looking at. But few things can move stock markets as significantly as the economic cycle. We'll look at the impact of expansion and recession on stocks in our next article.  
Key Economic Events and Earnings Reports to Watch in US, Eurozone, and UK Next Week

Certain Companies And Industries Could Start To Feel Their Pricing Power Fade As Consumers Struggle With The Squeeze On Real Incomes

Franklin Templeton Franklin Templeton 31.12.2022 10:16
And what does this look like for corporate IG? Josh: The 10-year US Treasury yield spent most of the last decade between 0.50% and 2.50% and IG credit spreads traded in a tight range as well.7 Because of this incredibly low-yield environment, fixed income investors were pushed to look for additional yield in lower-quality asset classes to secure the income they required. Moreover, higher-quality, longer-duration assets had significant total return risk due to the potential for an eventual rise in interest rates. This is exactly what we have seen year-to-date in 2022. Though there was certainly some weakness in widening credit spreads, rising US Treasury yields drove most total return losses in fixed income year-to-date. We believe that this outcome created a path for longer-term tailwinds for IG credit going forward. First and foremost, even if there is a recession, the probability of default for IG issuers is very low. Balance sheets remain generally robust, providing most IG corporates with more financial flexibility to navigate a period of slowing economic growth. This is not to say that spreads won’t widen; they can widen significantly if we enter a recession. But we have reached a point in time where investors can play both offense and defense through their allocations to US IG corporate bonds. The defensive benefits of higher US Treasury yieldscan materially offset credit spread weakness going forward. Fixed income is finally delivering income! Overall, we believe that with higher yields in the asset class, the risk-reward balance of current valuations has improved materially compared to the start of the year. In our opinion, this makes IG corporates a more attractive place for investors seeking relatively safe income. However, due to ongoing market uncertainty, slowing growth and deteriorating fundamentals, we acknowledge spreads can go wider and are certainly up in quality today within our US IG allocations to preserve liquidity and take advantage of any potential volatility in markets. If the Fed keeps interest rates higher for longer next year, what near-term opportunities do you see across IG sectors? Josh: Given an uncertain environment based upon our view of the Fed’s future interest-rate hikes, which is higher than widely anticipated, it likely means volatility will remain elevated for the foreseeable future. Additionally, our belief is Fed Chair Jerome Powell appears more concerned with continued tightening and as such, we do believe a shallow recession is likely over the medium term. However, this doesn’t appear to be priced into earnings estimates. In times of increased volatility, higher-quality credits with strong fundamentals and less sensitive end-demand are likely to outperform. We are therefore pushing more of our portfolio risk into non-cyclical sectors and still believe the US financial sector has strong risk-adjusted return potential, given elevated spreads and very strong capital levels. And from an HY sector perspective? Glenn: Higher rates and inflationary pressures will not impact all companies equally, and while many companies are able to increase prices to offset cost increases, others are suffering pressure on their margins. Monetary policy is driving up the cost of borrowing, which will have a more severe impact on companies with unhedged exposure to floating-rate debt. Given the numerous challenges facing HY issuers, we expect to see increased dispersion of returns among indi- vidual HY bonds in the coming years. In our opinion, this environment highlights the importance of active management in the HY asset class, as individual credit selection will be key to driving future performance. We are currently seeing opportunities in select issuers in cyclical industries, like chemicals, where the market is focused on the potential for an economic slowdown to hurt top-line growth. However, we are focused on each company’s cash-generation profile and the ability of its capital structure to withstand economic headwinds. We also like classic defensive industries, like packaging and utilities, where demand is not tied to the level of economic growth and their bonds provide an attractive risk/reward profile. And we continue to like the energy sector, where we see ongoing fundamental tailwinds and the potential for elevated levels of ratings upgrades. Which HY sectors give you the most cause for concern looking into 2023? Glenn: As we enter 2023, we believe that certain companies and industries could start to feel their pricing power fade as consumers struggle with the squeeze on real incomes. At the same time, inflation seems to be stickier than expected and will continue to push up costs, as well as keep the Fed committed to its monetary policy tightening path. In such a scenario, there are several areas that are cause for concern. Companies with more elastic end-consumer demand and/or exposure to the lower-end consumer are likely to face ongoing pressure. This category includes many retailers and consumer products companies. Separately, companies with limited free cash flow—often due to high debt loads—or reliance on future cost savings to make their capital structures work, will be challenged as financial condi- tions tighten. Many leveraged buyouts (LBOs) of the pastseveral years fit this profile, and we are highly selective when evaluating such deals. We are also wary of industries facing secular decline, such as wireline telecom, or those under- going rapid changes to their competitive landscape, such as autos—given the rise of electric vehicles (EVs) and their uncertain impact on the industry—or the broadcasting/pay television ecosystem. While some of these changes will take years or decades to play out, we prefer to be positioned now ahead of any potential acceleration in the pace of change. And from an IG standpoint? Josh: Looking ahead, companies are going to face some challenges. Margins are likely to continue to feel the squeeze from elevated labor, financing and input costs. Corporates are already feeling the effects of significant wage increases, as evidenced by the first layoff announcements from various technology companies. While companies are still benefiting from interest costs that hovered near generational lows for more than a decade and frontloaded borrowing, rising rates will certainly bite into the broader economy, affecting both consumers and future corporate borrowing needs. Also, though we have seen improvements in supply chain issues, inflation will most likely stay higher, even if it stabilizes or retreats, and for longer than consumers or markets are accustomed to. This will continue to impact global growth. Considering our expectations for a potentially challenging market environment over the near to medium term, we believe that cyclical consumer-focused industries and companies with high levels of exposure and sales to weaker markets, such as Europe, will likely underperform. We are also less excited about commodity sectors. We believe that although fundamentals are decent and commodity prices may hold up, valuations are stretched. Weaker economic growth is likely to cause spread volatility in these sectors as aggregate demand slows.
Solid Wage Growth in Poland Signals Improving Labor Market Conditions

Solid Wage Growth in Poland Signals Improving Labor Market Conditions

ING Economics ING Economics 21.06.2023 13:34
Poland: Solid wage growth in May while labour demand improves In May, average wages in the enterprise sector rose by 12.2% year-on-year, up from 12.1% in April. Double-digit wage growth should continue until 2025, allowing real wages to finally grow in mid-2023, after nearly a year of declines. Wages came close to expectations (consensus: 12.6% YoY). According to the release by the Central Statistical Office of Poland, the decline in average wages in May relative to April 2023 was due to a smaller scale of additional payments. Average employment in the enterprise sector increased by 0.4% YoY in May, in line with the consensus, following an increase of 0.5% YoY in the previous month.   Despite signs of a slowdown in many areas of the economy, the condition of the labour market remains robust. On the one hand, workers' wage expectations are driven by, among other things, high minimum wage increases, inflation, and persistent labour shortages in many sectors of the economy. On the other hand, companies' willingness to raise wages can be seen in surveys, such as the one recently conducted by the National Bank of Poland (text in Polish). Together with the high minimum wage hike in 2024, this suggests that wage growth will continue at double-digit levels until 2025. From the middle of this year, with inflation slowing down, wages should rise again in real terms, after almost a year of declines.   Labour demand, on the other hand, appears to be improving after some signs of weakness at the end of the first quarter. This is particularly evident in manufacturing, where employment fell continuously from May 2022 to March 2023. The construction sector is also doing better, which we link to the finalisation of projects financed by the "old" EU budget. In our view, the relatively low annual growth rate primarily reflects constraints of the labour supply.
Stocks to keep an eye on in the second half of 2023

Stocks to keep an eye on in the second half of 2023

Maxim Manturov Maxim Manturov 29.06.2023 14:08
Analysts at Freedom Finance Europe have highlighted several companies that investors should look out for in the second half of this year. One of them is Amazon (AMZN), which continues to grow revenues in key segments. "The company has too many positive catalysts to ignore, and the recent weakness provides an opportunity to enter into an attractive asset", says the speaker. In addition, despite the challenging macroeconomic environment, AMZN's revenues in the latest quarter exceeded the forecast range to $127.4 billion and operating profit was $4.8 billion. These results are due to growth in e-commerce. North American region, for example, saw double-digit sales increases and a return to profitability, while the international segment also saw strong growth. On top of that, company's cloud business revenues, Amazon Web Services were up 16% year-on-year.  "Management forecasts sales growth of 10%, to $133 billion in the next quarter, with operating profit expected to remain stable, at between $2 billion and $5.5 billion. These results and forecasts look quite compelling. The company has also built an unrivalled logistics network for parcel delivery, sometimes with same-day delivery", said the speaker. These factors take Amazon’s potential to a maximum target price of $220.  Next up is the well-known coffee chain Starbucks (SBUX). As the speaker explained, the company is considered an attractive and long-term investment due to its commitment to shareholder value, revenue growth and higher earnings per stock. SBUX had a solid quarter. In Q2 2023, Starbucks had revenue of $8.7 billion, up 14% year-on-year. EPS increased by 36% compared to the same period in 2022. Even more impressively, Starbucks quarterly sales and EPS were 38% and 49% higher than the same period in 2019 (before the pandemic). The company also has a rewards programme that rewards customers for repeat purchases. For example, there are currently 30.8 million active loyalty programme members in the US. That's an increase of 15% over last year.   "Coffee is an integral part of society and it is hard to imagine a scenario where Starbucks ever disappears. The company has almost 37,000 shops and the goal is to have 55,000 outlets worldwide by 2030", the speaker added. The fundamental potential for an average target price is at $114. Another company that may be worth taking a closer look at is Booking Holdings (BKNG), which operates in the online travel industry. In particular, it offers services through its Booking.com, KAYAK, Priceline, Agoda, Rentalcars.com and OpenTable brands. Data from the Economist Intelligence Unit shows that the segment is expected to grow by 30% in 2023 as the number of Chinese tourists abroad may increase. "In previous years, the 'zero COVID' policy has held back tourism from China, which has recently been a major source of growth. As the situation changes this year, Booking Holdings could benefit from this. In addition, the number of trips remains below 2019 levels, which leaves room for growth and continues a solid recovery", explained the speaker. BKNG's revenue increased by $4 billion in the last quarter, and it continues to benefit from a network advantage that has allowed it to maintain its agency model rather than move to a vendor model where the online travel agency would be responsible for paying the fees. Fundamental potential for an average target price of $2800.  
China Continues to Increase Gold Reserves, While Base Metals Face Mixed Fortunes

US Fed Set to Resume Rate Hikes Amidst Mixed Economic Data: A Look at Key Indicators and Earnings Ahead

Ed Moya Ed Moya 24.07.2023 10:57
US The Fed is expected to resume raising rates at the July 26th FOMC meeting.  Fed funds futures see a 96% chance that the central bank will deliver a quarter-point rate rise, bringin the  target range to between 5.25% and 5.50%, almost a 22-year high. The Fed delivered 10 straight rate increases and then paused at the June FOMC meeting.  The Fed is going to raise rates on Wednesday and seems poised to be noncommittal with what they will do in September.  The economic data has been mixed (strong labor data/cooling pricing pressures) and that should support Powell’s case that they still could deliver a soft landing, a slowdown that avoids a recession.  This seems like it will be the last rate hike in the Fed’s tightening cycle, but we will have two more inflation reports before the Fed will need to commit that more rate hikes are no longer necessary. The Fed will steal the spotlight but there are several other important economic indicators and earnings that could move markets.  Monday’s flash PMI report should show both the manufacturing and service sectors continue to soften, with services still remaining in expansion territory. Tuesday’s Conference Board’s consumer confidence report could fuel expectations of a soft landing. Thursday’s first look at Q2 GDP is expected to show growth cooled from 2.0% to 1.8% (0.9%-2.1% consensus range) as consumer spending moderated.  Friday contains the release of personal income and spending data alongside the Fed’s preferred inflation and wage gauges. The Q2 Employment Cost Index (ECI) is expected to dip from 1.2% to 1.1%. The personal consumption expenditures price index is expected to cool both on a monthly and annual basis (M/M: 0.2%e v 0.3% prior;Y/Y: 4.2%e v 4.6% prior). Earnings will be massive this week as we get updates from 3M, AbbVie, Alphabet, Airbus, AstraZeneca, AT&T, Barclays, BASF, Biogen, BNP Paribas, Boeing, Boston Scientific, Bristol-Myers Squibb, Chevron, Chipotle Mexican Grill, Comcast, Exxon, Ford Motor, General Electric, General Motors, GSK, Hermes International, Honeywell International, Intel, Mastercard, McDonald’s, Meta Platforms, Microsoft, Nestle, PG&E, Procter & Gamble, Raytheon Technologies, Samsung Electronics, STMicroelectronics, Texas Instruments, Thermo Fisher Scientific, UniCredit, Unilever, Union Pacific, Verizon Communications, Visa, and Volkswagen
Securing Battery Metal Supply Chains: Challenges and Opportunities Amid the Global Energy Transition

Securing Battery Metal Supply Chains: Challenges and Opportunities Amid the Global Energy Transition

ING Economics ING Economics 26.07.2023 14:28
Countries and companies are increasingly wary of possible shortages of raw materials going forward and seek to secure supply. Battery metal demand is also evolving as demand shifts between chemistries. Current interdependence is significant and actors seek to reduce supply risk in light of the energy transition.   China dominates downstream EV battery supply chains China has massively pushed electric vehicle (EV) sales in recent years which has helped to further develop the battery supply chain. China’s dominant role in battery metals supply chains, as well as export restrictions in other countries, risk slowing down the pace of EV adoption. EV supply chains are expanding, but for manufacturing, China remains the key player in the battery and EV component trade. In 2022, 35% of exported electric cars came from China, compared with 25% in 2021, according to the International Energy Agency (IEA). The rapid increase in EV sales during the Covid-19 pandemic and increased geopolitical tensions have exacerbated concerns about China’s dominance of lithium battery supply chains. The risks associated with the concentration of production are in many cases heightened by low substitution and low recycling rates. For example, in EV batteries, there is no substitute for lithium. More than 80% of the world’s lithium is mined in Australia, Chile and China, the latter of which also controls more than half of the world’s processing and refining. Chinese companies (including BYD and CATL) have also made significant investments in projects overseas; in Australia, Chile, the Democratic Republic of the Congo (DRC) and Indonesia. In Chile, the second-biggest lithium producer after Australia, only two companies produce lithium – US-based Albermarle Corp. and local firm SQM, in which China’s Tianqi Lithium Corp. has more than 20% stake. They mainly make lithium carbonate – 90% of which goes to Asia. China dominates many elements of the downstream EV battery supply chain, from material processing to the construction of cell and battery components. China only accounted for about 15% of global lithium raw material in 2022 but around 60% of the battery metal is refined there into specialist battery chemicals. China also produces three-quarters of all lithium-ion batteries. This is a result of Beijing’s early push towards electrification, particularly through subsidising EVs. Meanwhile, Europe is responsible for more than one-quarter of global EV assembly, but it is home to very little of the supply chain apart from cobalt processing at 20%. Like the US, Europe is currently pushing hard to develop its battery supply chain, but this takes time and sourcing dependencies remain. China is the least expensive place to process lithium because of lower construction costs and an already large, processed chemistry engineering base. In 2022, 35% of exported EVs came from China, compared with 25% in 2021, according to the IEA.   Battery cell manufacturing is concentrated in China (2022)   Rising trend of vertical integration of EV and battery production With uncertainties from metal supply chains, some automakers – which have set EV sales targets – have been looking into expanding their businesses into mining in the hope of securing a long-term supply of raw materials. In January, General Motors (GM) announced that it had formed a joint venture with mining company Lithium Americas, which would give GM exclusive access to lithium from a mining site in Nevada, US. Ford, through its joint venture with battery company SK Innovations, will receive a $9.2bn loan from the US Department of Energy (DoE), the largest single loan in the DoE Loan Programs Office history, to develop battery plants in Tennessee and Kentucky. Stellantis has entered separate joint ventures with Samsung SDI and LG Energy Solution to build battery plants in the US and Canada, respectively. Other firms such as Tesla, BMW, VW, Hyundai, and Honda are similarly investing in building battery manufacturing capacity. In the coming few years, we are going to see more partnerships – not just trade partnerships, but strategic partnerships – made along the EV battery supply chain. The future of the EV industry is vertical, ‘mine-to-wheel’ collaboration. This means that early efforts of long-term planning and relationship building will become increasingly important.   Energy transition at risk as resource nationalism gains momentum The energy transition has become a pillar of policy for many governments while global trade and political tensions have prompted a reconsideration of global supply lines. The global incidence of export restrictions on critical raw materials has increased more than five-fold in the last decade. In recent years, about 10% of the global value of exports of critical raw materials faced at least one export restriction measure, according to a report by the Organisation for Economic Cooperation and Development (OECD). The rise in resource nationalism could slow down the pace and increase the cost of the energy transition, impacting the scale of investments, supply and prices. Export restrictions on ores and minerals, the raw materials located upstream in critical raw material supply chains, have grown faster than restrictions in the other segments of the critical raw materials supply chain, correlating with the increasing levels of production, import and export, as well as the concentration in a small number of countries, the OECD report found.

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