The oil price has rallied 22% over the past 4 months, since it bottomed at $74/bbl. And slowly but surely, traders are being forced to realise that geopolitics are replacing economics as the key driver for world markets.
Chemicals and the Economy
Rethinking, repositioning and restructuring are now essential for industry survival
Resilience requires companies to refocus downstream and diversify their portfolio. They also need to be clear about the value proposition for their target market – are they providing Value, or Luxury? Rethinking, repositioning and restructuring are now all key to survival and future profit.
Time for a new set of business models as the peace and demographic “dividends” become deficits again
The next few years are therefore likely to be very different from anything that we have known in our working lives. Scenario planning is therefore essential in the face of this uncertainty.
Demographics are destiny: today’s ageing populations creating “replacement economy”
Demographics are taking demand patterns in completely new directions. Sustaining future growth now depends on successfully developing and implementing new policies, focused on the opportunities offered by the emergence of the Perennials 55+ cohort. Demographics are taking demand patterns in completely new directions. Sustaining future growth now depends on successfully developing and implementing new policies, focused on the opportunities offered by the emergence of the Perennials 55+ cohort.
Investors hope (again) for interest rate cuts and a ‘Santa Claus rally’
investors are hoping Fed Chairman Jay Powell will soon signal a dramatic interest rate cut. And so they are positioning for a ‘Santa Claus’ rally. But most adults know that Santa Claus doesn’t really exist.
WeWork’s bankruptcy marks the beginning of the end for the stimulus economy
Essentially, the central banks thought that unlimited amounts of free money could reverse the impact of ageing populations. WeWork’s bankruptcy suggests that the bills for this mistake are now coming due, after 20 years of what the Wall Street Journal called “The most reckless monetary and fiscal experiment in history”
Asia’s debt crisis starts to approach its endgame as the yen continues to tumble
Last week, the Japanese yen fell through the US$ : ¥150 level for the first time since 1990. It has now fallen by nearly 50% against the US$ in the past two years. The currency is behaving as if Japan were a 3rd world country – whereas it is actually the 3rd largest economy in the world. Clearly, something is very wrong.
Existential crisis? Growth opportunity? Catalyst for restructuring? Decarbonization challenges the chemical industry and its customers
Essentially, the industry is at a crossroads.
It now needs to move forward, and accelerate the move to create new circular business models. There is a once-in-a generation opportunity to build a completely new future, based on closer relationships with its downstream stakeholders, including brand owners and waste companies.
Central banks start to lose control of interest rates, and housing markets feel the pain
US 10-year interest rates are the world’s benchmark “risk-free” market. And as the chart shows, their yield has risen from 3.25% on 4 June to peak at 4.88% on Friday. Prices move inversely to yield. So that means prices have fallen 50% in 4 months.
Bond market downturn reaches “The End of the Beginning” as traders realise rates will be ‘higher for longer’
300+ years of Bank of England data shows that interest rates are typically inflation plus 2.5%. At today’s level, this would imply – US rates would be 3.7% + 2.5% = 6.2%: Japan would be 3.2% + 2.5% = 5.7%: Eurozone rates would be 5.3% + 2.5% = 7.8%; UK rates would be 6.7% + 2.5% = 9.2%
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