This is why we are facing a K-shaped recession. Companies and investors have a difficult time ahead. They not only have to navigate a potentially major downturn. But they also have to completely reposition their portfolios for the New Normal world that will follow.
Chemicals and the Economy
These are difficult times, and there is no guarantee that they may not get worse. But they also remind us of the critical need to move beyond the Age of Oil, and develop more sustainable energy resources for the future.
Automakers are ahead of the game in terms of strategic planning. They soon realised the move to EVs meant their traditional business model, based on proprietary engine technology, would inevitably become obsolete. And so they quickly realised they need to pivot to focus on AVs and become software-driven. The rest of us need to catch up.
Plastics recycling is set to become a major new industry, based on the need to use renewable carbon. As the Nova Institute has shown, there is scope to expand production by 15x by 2050. And so if plastics companies don’t get to work now, new entrants will quickly emerge to replace them.
The issue is simply that investors are in a state of Denial. And so there is a growing risk of a financial crisis as reality finally dawns on them.
BP are aiming for their new joint venture in China to provide drivers with a fresh, fully-charged battery in less than a minute – and save 2 million tonnes of CO2
Two core trends are playing out in the smartphone market, now it has gone ex-growth. The weaker players are suffering major hits to their revenue and profits. And the most successful company, Apple, is busy accelerating its move into the more service-based markets of the future.
The central banks are now abandoning the ‘Bernanke Doctrine’ set out in November 2010 – that what was good for markets, was good for the economy.
Our pH Report Sentiment Index has been a very reliable guide to the S&P 500 in recent years. Now it is suggesting a major downturn may be underway as the US and Chinese stimulus programmes come to an end.
Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways.