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| | Top News Shutterstock The reputation of black gold got more tarnished yesterday as a trifecta of trouble hit the oil industry. While environmental groups and activist investors have stepped up the pressure in recent years to address concerns about climate change and fossil fuels, some of these historic defeats are being looked at as a watershed moment that will shift the oil-and-gas landscape. Shareholders, investment giants and lawmakers are increasingly raising their voices about a sustainable future, while some even see the transition as a way to secure future profits given changing trends and an ESG world.
Exxon - Activist hedge fund Engine No. 1 won at least two board seats on the company's board, which will likely force it to confront growing concerns about climate action. While it's still too soon to gauge what the green-tinged members will do, fundamentally, it was a blow to the oil major and shows that shareholders are no longer buying a permanent future in the oil-and-gas arena. The Exxon (XOM) battle was one of the biggest proxy shocks in Wall Street history, especially for a campaign that only began last December.
Chevron - Shareholders voted 61% to cut emissions from the end-use of its fuels, while the firm barely lost a non-binding vote calling for a report on the business impact of achieving net-zero emissions by 2050. The decision signals a "new sense of urgency," said Mark van Baal, who leads a climate advocacy group that placed resolutions calling for emissions cuts at Chevron (CVX) and elsewhere. Earlier this month, ConocoPhillips (COP) shareholders also rejected the company's board to support a similar push for a full-scope emissions reduction target.
Shell - Emissions goals were deemed insufficient by a Dutch court, which ordered the oil major to curb its carbon outflows by 45% by 2030 compared with 2019 levels. It also said that Shell (RDS.A, RDS.B) was not only responsible for lowering its own direct emissions from drilling and other operations, but also those of the oil, gas and fuels eventually burned by consumers. While Shell said it will appeal the ruling, Rystad Energy feels it has a "negligible chance" in court, and it also raises eyebrows on the company's decarbonization agenda that was considered one of the stricter plans in the industry. (111 comments)
| | Stocks Up, down, up, down... Stock futures are pointing slightly lower this morning, keeping up with a trend seen this week of tepid gains and losses. Nasdaq futures are off by 0.5%, while contracts tied to the S&P 500 and Dow Jones are down 0.3% and 0.1%, respectively. The wavering of equities this week came as fears over runaway inflation eased, but Fed taper talk picked up pace, resulting in mixed sentiment on Wall Street.
Economic data: There's no shortage of figures today that can spark discussion over when monetary stimulus could begin to be scaled back. Durable goods numbers are scheduled to be released at 8:30 a.m. ET and are likely to reflect strong demand for cars, appliances and other factory goods. Initial jobless claims, a proxy for layoffs, will be released at the same time, as well as a revision to the 6.4% annualized GDP growth figure seen in Q1.
"Equity markets are quiet as investors continue to anticipate the Fed's next move," said Mark Hackett, chief of investment research at Nationwide. "Low volatility and low trading volume are a frequent occurrence in the week leading into a holiday."
Don't forget the meme trade! The WallStreetBets crew has returned with fervor, driving up so-called "meme stocks" on Wednesday. Shares of AMC Entertainment (AMC) rose nearly 20% and GameStop (GME) climbed 16%, and the two are up more than 60% and 37%, respectively, this week alone. "These people don't have unlimited firepower," Mad Money's Jim Cramer noted, "but they've got enough firepower to engineer a short-squeeze any time a bunch of professionals decide to bet against this thing." | | Sponsored By Robinhood We believe that everyone should have equal access to financial tools. Regardless of how much money you intend to invest, you will not be charged account minimums or commissions to buy or sell stocks, ETFs or Options on Robinhood. And if you open an account today, you can receive a free stock valued between $2.50 and $200 to get you started. Certain limitations apply.
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