Global Oil Demand, TeraDyne, Tesla & Facebook's Rebrand
1.) Oil and Gas
United States Oil (NYSE:USO) dropped 2.62% last week. Analysts reported that global crude oil demand is now expected to increase by 4.2mbpd to 100.8mbpd in year 2022, which is similar to pre-pandemic level (vs 6mbpd growth in year 2021). The continuous inventory drawdown suggests that the impact of the Covid-19 Delta variant could be milder than initially expected. US production is expected to grow by 0.6mbps or 6% to 11.7mbps in year 2022, higher prices will trigger more funds to accelerate drilling.
OPEC is projecting a gradual recovery in oil demand to 99.7mbps in 4Q21, from 98.5mbps in 3Q21.
On average, it expects oil demand to increase by 6.0mbpd YoY in 2021, led by OECD and non-OECD regions at 2.7mbpd and 3.3mbpd.
OPEC has also lifted its global oil demand growth estimate to 4.2mbps YoY to 100.8mbpd for 2022, assuming a better recovery against a backdrop of steadier economic growth. With that, global oil demand may exceed the 100mbps mark in 2Q22.
Key Takeaways: OPEC+ is expecting the oil market to be in deficit – at least until the end of 2021 – and stocks to stay relatively low until May 2022. Global inventories could fall by 825k bbl/day over the next four months.
Looking ahead: The current production ramp up schedule allows OPEC+ members to aggressively increase production for a higher market share at the expense of weaker oil prices, especially when US production may not be seen as an immediate threat with its subdued numbers.
2.) Teradyne
Teradyne (Nasdaq: TER) appreciated 17.9% last week. TeraDyne brings high-quality innovations such as smart devices, life-saving medical equipment and data storage systems to market, faster. Its advanced test solutions for semiconductors, electronic systems, wireless devices and more ensure that products perform as they were designed. Its Industrial Automation offerings include collaborative and mobile robots that help manufacturers of all sizes improve productivity and lower costs.
Teradyne invested another USD20mn in Costa Rica for their semiconductor test and system test operations recently. The following are Teradyne’s guidance on future earnings.
3.) Tesla joining the Trillion Dollar Club
Tesla’s Stock (Nasdaq: TSLA) appreciated 17.02% last week following strong earnings results and overall positive outlook. Tesla reported stronger earnings in 3Q21 despite chip shortages and material cost hikes.
Revenue improved by 57% YoY to US$13,757m and net profit rose by 389% YoY to US$1,618m.
The company delivered 240k cars in 3Q21, an improvement of 20% QoQ and 70% YoY.
China remains Tesla’s biggest market and Shanghai has become the company’s main export hub to supply to North America.
Key Takeaways: There is still room to ramp up production as the factory in Shanghai is not running at full capacity due to power shortages and logistics variability.
Looking ahead: the sustained strong demand coupled with the easing chip shortage will continue to propel Tesla’s sales. The company hit $1tn market cap end of October following news that Hertz is ordering 100k vehicles to build out its electric vehicle rental fleet by end of 2022E. This deal is the largest ever purchase of electric vehicles and will bring in an estimated $4.2bn for Tesla.
4.) Facebook’s Rebranded to Meta
Facebook live with Zuckerberg on last Friday to discuss the Metaverse. Facebook’s heavy investment moving into the Metaverse is their way of betting that this new “Metaverse” entity is where everyone will spend their time. . We found space relevant content on the space today is published by Matthew Ball, who was on Facebook live with Zuckerberg on Friday to discuss the Metaverse with his extensive publications here.
Based on Matthew’s findings here’s a summarized version with Facebook’s 3 billion existing users looking to be pivoted to this new platform according to Grit Capital
Be persistent
Be synchronous and live
Be without any cap to concurrent users, while also providing each user with an individual sense of “presence”
Be a fully functioning economy
Be an experience that spans both the digital and physical worlds, private and public networks/experiences, and open and closed platforms
Offer unprecedented interoperability of data, digital items/assets, and content.
Be populated by “content” and “experiences” created and operated by an incredibly wide range of contributors.
Singular will watch how Metaverse unfolds as we enter into this VR/AR universe and one of the companies on our watchlist will be Unity Technologies and Roblox.
KeyTakeways: 50% of all mobile/PC/console games are made with Unity, making it one of the largest subscription software companies riding on this $173.73 Bn. Global Gaming industry still growing with a CAGR of 9.36%.
Unity Technologies (Nasdaq: U) is a picks and shovel type of company rebounded strongly in the past few weeks. The company’s core business is to help developers build games easier and better.