A daily market update from FS Insight — what you need to know ahead of opening bell

“To me, if you love it enough to devote your life to it, then you’re doing the right thing.” ~Kris Kristofferson (June 22, 1936 – September 28, 2024)

Over the Weekend

US East Coast port strike looms Tuesday with no talks scheduled RT

Hurricane Helene death toll continues to climb as states survey flood, wind damage CNBC

Israel prepares for potential Lebanon incursion following Hezbollah leader death SEM

California governor blocks landmark AI safety bill BBC

Far right in Austria ‘opens new era’ with election victory BBC

China stocks surge in biggest single-day rally since 2008 on stimulus cheer RT

Nikkei index sinks 4.7% after ruling party chooses Ishiba as next prime minister AP

DirecTV clinches long-elusive deal to combine with Dish CNBC

China’s factory activity contracts less than expected in September CNBC

US companies raise $20bn in surge of follow-on stock issuance FT

Melting glaciers force Italy and Switzerland to redraw border SEM

Possible cluster of human bird-flu infections expands in Missouri NYT

Shares of Acadia Healthcare plunge after new federal investigations NYT

Costco’s gold bars are flying off the shelves as metal sees record prices BAR

Fidelity slashes mobile deposit limits following fraud wave WSJ

BofA suspends bankers following probe into Asian stock offerings FT

Google to spend $1 billion in Thailand to speed up Asia AI push BBG

SpaceX vessel docks at ISS to collect stranded astronauts RT

DOJ charges three Iranians for hacking Trump campaign AX

Marine Le Pen on trial for alleged EU funds misuse BBC

Mark Zuckerberg joins exclusive $200 billion club, closes in on third-richest person in world CNN

Chart of the Day

MORNING INSIGHT

Good morning!

We have a very heavy macro week ahead, including ISM, JOLTS, VP debates, Fed speeches, and jobs report. All of this we expect to be dovish and supportive of equities.

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TECHNICAL

• Short-term bullish trend is intact, despite some sector rotation last week.
• DJ Transportation Avg. looks very close to a triangle breakout.
• China’s FXI ETF likely could retrace 50% of its selloff from 2021 into next year.

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CRYPTO

Successful economic support from the PBOC and MOF could boost the broader Asian economy, providing a tailwind for APAC capital flows into crypto over the coming quarters. BNB’s strong ties to Asia, as demonstrated by its outperformance during APAC market hours, position it to benefit from a Chinese economic recovery.

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First News

Squeaky clean? Many readers likely know ammonia as that sharply acrid substance that lives under our kitchen sink, or wherever it is household cleaning supplies are kept. Yet the U.S. government recently awarded a $1.5 billion loan to help fund the development of a “green” ammonia facility in Indiana, while ExxonMobil, Mitsubishi, and the Abu Dhabi National Oil Company have recently invested in a venture to fund a similar facility in Texas. And it’s not because any of these players have suddenly become obsessed with sparkling clean windows and mirrors.

Ammonia has long been more than just a cleaning agent. It is widely used in the food industry – it helps in the manufacture of cheese, baked goods, and some processed meat products, for example. Many industrial processes and products rely on ammonia as well. Perhaps more importantly, ammonia is an important ingredient in the manufacture of fertilizers.

The problem, of course, is that the most common industrial process for manufacturing ammonia  involves extracting hydrogen from natural gas, which is then combined with nitrogen to form ammonia – NH₃. With the volatility in natural gas prices ever since Russia’s invasion of Ukraine, not to mention natural gas being a non-renewable fossil fuel.

Cheaper, greener ammonia would obviously be advantageous for the U.S. agricultural sector. But the question that seems to be behind public- and private-sector investment in ammonia is this: what if, instead of using fuel to make ammonia, we could come up with a cost-effective, sustainable way to use ammonia AS a fuel?

The idea of ammonia as an energy source is not, to be clear, particularly new. In the early 1870s, when the city of New Orleans was looking to move away from using sooty locomotives or animals to pull its iconic streetcars, it tried ammonia-powered engines on the St. Charles Avenue line. During World War II, Belgium powered its buses with ammonia amidst a diesel embargo. Scientists also experimented with ammonia as rocket fuel in the 1960s with its experimental X15 hypersonic jet.

These early experiments with ammonia-fueled engines were largely abandoned because they used ammonium combustion engines, in which ammonia was vaporized and ignited, similar to how internal combustion engines work. This method was disadvantaged due low combustion efficiency, high ignition temperatures, and toxic emissions in the form of nitrous oxide (N₂O), which in addition to being a potent greenhouse gas, can also be toxic if regularly inhaled.

New technologies could solve both of those problems. Multiple companies are poised to use solar- and wind-powered electrolyzers to split water into its components, combining the resulting hydrogen with atmospheric nitrogen to produce ammonia. Rather than burn the ammonia directly as fuel however, researchers are working on more efficient ways of “cracking” the ammonia back into hydrogen for use in fuel cells that generate electricity. Proof of concept was demonstrated this week when a tugboat retrofitted with prototype ammonia-cracking technology, the NH3 Kraken, chugged down the Hudson River.

One might ask: Why bother converting the hydrogen into ammonia at all if the engines will ultimately be powered by hydrogen fuel cells? Primarily because hydrogen needs to be cooled to -487 degrees F (-253 C) to liquify it, and even then it can only be shipped and stored in high-pressure tanks. Ammonia, which liquifies at -27.4 degrees F (-33 C), is far less demanding. (SPC, AP, WSJ, SA, RT)