AES 2Q21 notes, Clearway OMIB and end of week news dump ?3

12:45 13-Aug-21

A Clearway Director bought 2300 shares on the open market Wednesday at $30.75.  I don't think that's such a value, but the trend toward utilities and defensive yield stocks is clear.  AES share pricing continues to confirm that as well as the preference for American investment.  The company noted in its earnings call that it is now in a position to execute on its grid modernization plan with regulatory approval to recover the costs.  It's also following Clearway's lead in re-powering wind farms.

Most interesting in the AES call, though was how tight-lipped the CEO was about Fluence, whose automated trading platform just got a big solar win in Australia.  The time may finally be approaching for Fluence to be spun off.  Management also says that it's ahead of battery supply concerns, which is encouraging.  AES shares are closer to a fair value with the increasing revenue, which beat by $400K, but I still can't see buying them at current prices and still look instead for PPL to follow in the AES path.

For the record, I'm also glad I was dismissive of eMagin earnings as the company continues to struggle with production tools.  I was more interested in Rakuten earnings, which continued to make OpenRAN look costly.  In the medium to long term, that's bad news for Nokia and Dish, but maybe an opportunity for Lumen.

The market is being dismissive of a Senate bill to break the monopolistic app store practices of Google and Apple, but it shouldn't be.  As I've noted before, this is a potentially big deal.  The Apple vs. Epic decision is still (im)pending as well.

Last but certainly not least is that I'm a little surprised at the market regarding the PPI numbers as a mere speed bump.  Maybe it's thinking as I did following the jobs report, and weekly claims give the Fed further scope to blow off inflation concerns.  Thus, the guess I made then for a purgatorial sideways market are looking good for now.  However, when taken together with the CPI figures, the eventuality of stagflation grows clearer by the day, and budget negotiations won't help.  Those will come to head just as we're seeing what Powell has to say at the end of the month.  What could possibly go wrong?