The amount of speculators’ bearish, or short, positions in 30-year Treasury futures exceeded bullish, or long, positions by 230,312 contracts on Oct. 6, a record, according to the CFTC’s latest Commitments of Traders data.
 

The 30-year yield, which moves inversely to prices, has rallied to a four-month high since August, when Federal Reserve Chair Jerome Powell announced that the central bank would allow periods of higher inflation in order to average its target 2% rate.

Bets on lower bond prices have also been fueled by expectations that the nascent U.S. economic recovery will continue, as investors await an additional round of fiscal stimulus from lawmakers and breakthroughs in the search for a vaccine against COVID-19.

The 30-year long bond yield is about where it was on March 6.

Yet speculators keep piling on with record bets.

Any bit of sustained economic weakness will cause the long bond yield to drop blowing the long bond shorts out of the water.

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a sign on the side of a building: The headquarters of QuantumScape (KCAC) in San Jose, California.


© Source: Tada Images / Shutterstock.com
The headquarters of QuantumScape (KCAC) in San Jose, California.

Investors considering making an investment in Kensington Capital (NYSE:KCAC) should understand that they are exercising an appetite for risk. Kensington Capital will take QuantumScape public through a reverse IPO. QuantumScape is a 10-year old battery startup out of Silicon Valley which will form a joint venture (JV) with Volkswagen (OTCMKTS:VWAGY). The JV will produce solid-state batteries first for application in Volkswagen vehicles, and later for other manufacturers.



a sign on a window: The headquarters of QuantumScape (KCAC) in San Jose, California.


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The headquarters of QuantumScape (KCAC) in San Jose, California.

Thus, an investment in KCAC stock is an investment in an unproven technology in solid-state batteries. Further, it is an investment in a JV collaboration which is wrapped up within a shell company in Kensington Capital. 

When the deal closes later this year the new equity will trade under the ticker QS on the New York Stock Exchange. 

Big Names on Board

Volkswagen is central to this deal, but Kensington Capital has several other big name investors on board with its stock. Portfolio companies Kleiner Perkins and Khosla Ventures have invested. Bill Gates and the Qatar Investment Authority have invested. Also within the auto industry, Shanghai Autos and Continental have invested. 

The reason this is important for investors to take note of is because such announcements may bolster individual investors’ risk propensity. I mention this to provide a word of caution. When potential investors read that these big names are on board with KCAC it lends authority to it as an investment. And big name authority is a very effective form of persuasion. 

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Venture Capital Investment vs. Individual Investment

However, we individual investors are simply different than the massive entities listed above. We are likely to be much more

By Stephanie Kelly

NEW YORK, Oct 8 (Reuters)Red River Biorefinery in Grand Forks, North Dakota, came online in April, arguably the worst time for an ethanol facility to begin operating as the coronavirus pandemic sank fuel demand.

Instead of shutting like many ethanol facilities, the company switched focus from producing fuel ethanol to making high-grade alcohol for hand sanitizer, where demand surged during the pandemic as Americans scrambled to protect themselves against the coronavirus.

Red River and several other companies now view the hand sanitizer market as more than a temporary salve for weak fuel demand, making permanent investments in production of high-grade alcohol that meets standards for producing sanitizer.

In recent months Pacific Ethanol PEIX.O, Green Plains GPRE.O and Highwater Ethanol HEOL.PK have said they will boost capacity for high-grade alcohol.

“Our intent when we first went live was to be purely in the fuel market,” said Red River President Keshav Rajpal. “There’s been a huge shift in supply and demand instantaneously. When that happens, in our case margins compared to fuel ethanol are much higher in this space.”

Globally the hand sanitizer market was valued at $2.7 billion in 2019, with North America accounting for a third of the market’s revenue share, according to Grand View Research, a consultancy.

The flurry of announcements indicate some producers see more profitability in hand hygiene because of the pandemic than in transportation fuels. Corn-based fuel ethanol demand tends to track closely to gasoline consumption, as U.S. law requires it to be blended into the fuel.

As of January, U.S. fuel ethanol production capacity totaled 17.4 billion gallons per year, EIA said, up from 2019’s 16.9 billion gallons per year.

Fuel ethanol production nationwide has rebounded from the spring, hitting 923,000 barrels per day from 537,000 bpd in

trump


  • The US can live with a delayed new federal coronavirus relief package as long as it is implemented by early 2021, JPMorgan Asset Management global strategist Patrik Schowitz told CNBC.
  • “It’ll be better to get the stimulus now but as long as we get it early next year, we think the economy will be able to get through that,” the global strategist said, after President Donald Trump abruptly halted discussions over stimulus spending.
  • A second round of spending could be pushed to after the elections because both Trump and Democratic challenger Joe Biden want their name on the package, he said.
  • For investors, Schowitz recommended being “overweight” on risky assets like credit and equities in the medium-term.
  • Visit Business Insider’s homepage for more stories.

The US economy “can live” with the second round of stimulus being delayed until after the presidential election as long as it comes into effect by early 2021, Patrik Schowitz, a global strategist at JPMorgan Asset Management, told CNBC on Wednesday. 

Major economists were mostly expecting the next round to be dragged into next year anyway, Schowitz said, after President Donald Trump abruptly ended stimulus negotiations on Tuesday.

American households have put away a massive amount of savings this year, as they haven’t been able to spend at normal levels, suggesting that the economy can “get through” even with a delay in relief, he said. 

“It’ll be better to get the stimulus now, but as long as we get it early next year, we think the economy will be able to get through that,” the strategist said.

Read More: JPMorgan’s $1.9 trillion asset management firm shares the 5 biggest opportunities it’s recommending for clients across markets during the fourth quarter

While the economy’s continued fragility is potentially negative for markets,

WASHINGTON (Reuters) – The global economy is in “less dire” shape than it was in June but risks crashing again if governments end fiscal and monetary support too soon, fail to control the coronavirus and ignore emerging market debt problems, International Monetary Fund Managing Director Kristalina Georgieva said on Tuesday.

FILE PHOTO: International Monetary Fund (IMF) Managing Director Kristalina Georgieva makes remarks during a closing news conference for the International Monetary Finance Committee (IMFC), during the IMF and World Bank’s 2019 Annual Meetings of finance ministers and bank governors, in Washington, U.S., October 19, 2019. REUTERS/Mike Theiler/File Photo

Georgieva told an online London School of Economics event that the IMF will make a small upward revision to its global economic output forecasts next week, adding: “My key message is this: The global economy is coming back from the depths of this crisis.”

“But this calamity is far from over. All countries are now facing what I would call ‘the long ascent’ – a difficult climb that will be long, uneven, and uncertain. And prone to setbacks,” she added in a speech billed as her “curtainraiser” for next week’s IMF and World Bank annual meetings.

The Fund in June forecast that coronavirus-related shutdowns would shrink global gross domestic product by 4.9%, marking the sharpest contraction since the Great Depression of the 1930s, and called for more policy support from governments and central banks.

The IMF will publish its revised forecasts next week as member countries participate in the meetings, which will be held largely in an online format.

Georgieva said the IMF was continuing to project a “partial and uneven” recovery in 2021. In June, it forecast 2021 global growth of 5.4%.

But $12 trillion in fiscal support, coupled with unprecedented monetary easing, has allowed many advanced economies, including the United