The rise of electric vehicles in the United States is by no means a fad, temporary trend or mistake. From my perspective, leading an electrical components manufacturer for nearly a decade, I have seen the rapid growth of the EV space firsthand. At the outset, I was optimistic about the growth potential of the EV sector. Today, I’m ecstatic. Just look at some of the numbers:
Consulting leaders McKinsey & Co. say EVs will largely dominate the truck market by 2035, and Mordor Intelligence forecasts that the commercial EV market will grow to roughly $258 billion by 2027 (compared to around $67 billion in 2021). In response, almost every major manufacturer is retooling production lines for a largely EV future.
Those trends have many suppliers eager to break into the electrification scene, but few know how to effectively penetrate the market. When we committed to breaking into the electric vehicle market in 2015, we were well positioned for the space because of our experience in designing and manufacturing for safety-critical sectors such as aerospace, defense and medical devices. We also did extensive research on the electric vehicle industry…..Continue reading…
There are numerous reasons for starting a business, including pursuing a passion, wanting to set your own hours and wanting to make more money. But if you’re not committed to a larger purpose, all those reasons may not be enough for your business to succeed.
What Is a Commitment?
A commitment can be defined in three ways:
1. It gives you purpose. Let’s define a commitment as a greater purpose for your life that drives you forward every day. Many studies have shown that purpose even leads to longer life for men and women alike.
2. It’s never finished. A commitment is not, “I want to own a successful business,” because that doesn’t give you lifelong purpose. A commitment will never truly be finished, and you’ll work towards it for many years.
3. It’s personal. Although having a purpose in your business is important, your commitment is personal. It will affect all areas of your life, including business, and it will impact how your business grows.
What’s the difference between a goal and a commitment?
A goal is defined as a result that you aim for, define, plan for and then achieve. You have many short-term and long-term goals in life, but a commitment goes beyond even the most long-term goal. It’s not something you finish doing, but something you constantly work towards.
How does a commitment help your business?
It helps you focus. A lack of focus can be extremely detrimental to your business, not only from day to day but on a larger scale. To succeed in your business and complete each day’s, month’s and year’s goals, you need intense focus more so than a long period of focus.
Warren Buffet’s “2-List” strategy for focused attention is a perfect illustration of focus: defining your priorities and eliminating the rest. You write down your goals, and then circle the top five. Then you don’t just prioritize these — you eliminate the rest.
Commitments help you make that list and then define your top five. If you’re hyper-focused on a commitment, you can be focused on each of your business’s projects and goals, because they all lead to the one thing you’re most focused on. If something doesn’t align with your commitment, you eliminate it.
Commitment helps you set and achieve goals
A commitment is lifelong; it’s something you may never fully achieve. But you can set goals along the way to get you ever-closer to your commitment. And your business’s goals and success are intertwined with your commitment.
My leadership coach, Jose Bolanos, who trains leaders to form “noble commitments,” describes goals as “islands on the horizon.” Before you reach a shore, you will swim from island to island, focusing on something closer on your way to the far-off mainland.
These islands are steps towards your commitment, and these become your goals. Commitments matter to your business goals because they define what those goals will be and give them a larger purpose.
As a business owner, developing goals for yourself and your business will be easier when you create them in the context of a commitment. Instead of defining your success according to money, which as we know can be fickle, defining it based on a larger purpose will help you stay afloat in difficult times, and redirect accordingly.
Commitment gives your business a higher purpose
As I said before, having a higher purpose is important to business. Businesses with purpose are more successful, outperforming the stock market by 42 percent, according to the 2018 Global Leadership Forecast.
Because in theory, your business should be an extension of you and your life, your personal commitment should inform your business’s purpose and help it succeed. If your commitment was, “I want to impact others,” your business’s commitment should reflect this and put it into action.
Commitment makes you a better leader
Compartmentalizing your life won’t help your business succeed. Who you are and what you do as an individual should and does affect your professional life, and by extension the lives of others.
Having a personal commitment that you connect to your business’s purpose will intertwine your personal development and your company’s growth. As you work on yourself as an individual, you will become a better leader, because your purpose will be directly connected to your business’ vision.
How do you find and define a commitment?
Defining a commitment comes from answering three questions:
1. What do you want? Discovering your commitment comes from defining what you want. A commitment is going to be terrifying (and if it’s not, you may be doing something wrong) and require you to change.
3. Who does it benefit? It’s fine if the answer is just you for now, but you’ll find as you go that your commitment, especially as it becomes part of how you run your business, will begin to impact many people. If impacting people is part of your purpose, then this answer is even simpler.
Don’t be tempted to turn finding a commitment into a journey of self-discovery. Your business (and you) need a commitment sooner. Instead, define a commitment quickly, start working on it and evolve it.
A highly watched economic indicator with a good track record in predicting recessions cut its forecast for second-quarter gross domestic product growth this week, implying the nation has fallen into a technical recession despite economists widely calling for a return to growth in the second quarter.
The Federal Reserve Bank of Atlanta’s GDPNow model on Thursday projected the U.S. economy shrank 1% in the second quarter, slipping into negative territory after economic data showed consumer spending dropped in May, while domestic investments, another component of GDP growth, also fell.
The model, which estimates GDP growth using a methodology similar to the one used for the Bureau of Economic Analysis’ official estimates, has been steadily trimming its second-quarter GDP forecast based on updated economic data that’s fueled concerns of a prolonged economic downturn in recent weeks.
The U.S. economy unexpectedly shrank 1.6% in the first quarter as the omicron variant fueled a record surge in Covid cases, so another negative quarter would indicate the nation has slipped into a technical recession, which is defined as two consecutive quarters of negative GDP growth.
“The model’s long-run track record is excellent,” DataTrek analysts wrote in a note to clients Thursday night, pointing out its average error has been just 0.3 points since the Atlanta Fed started running it in 2011—but was zero through 2019, before the unprecedented volatility around the pandemic.
With an error margin of 1.2 points one month before the government’s first GDP estimate, the model may still ultimately forecast positive growth for the quarter, DataTrek’s Nicholas Colas and Jessica Rabe noted, though they add the indicator will be “important to watch” as its predictive ability improves with time.
Most economists are still predicting a return to growth, with average projections calling for GDP to increase more than 3% last quarter, but many have become increasingly bearish in recent weeks, with Bank of America’s Ethan Harris on Friday downgrading his forecast to zero growth last quarter (from 1.5% previously) after the weak spending data for May.
What To Watch For
The Bureau of Economic Analysis unveils its first estimate of second-quarter GDP growth—or decline—on July 28, but it won’t release a final estimate until September. Adjusted for inflation, consumer spending fell for the first time this year in May, according to Thursday’s data. The worse-than-expected decline makes a second straight quarterly decline in GDP “much more likely,” Pantheon Macro chief economist Ian Shepherdson wrote in a Friday note, forecasting that GDP would fall 0.5% in the second quarter.
However, he notes the National Bureau of Economic Research—“the semi-official arbiter” whose declarations are accepted by the government—“very probably will not” declare a recession unless employment, which remains one of the economy’s strongest pillars, starts declining as well. Rather than purely going off technical recessions, the NBER vaguely defines a recession as “a significant decline in economic activity that is spread across the economy and lasts more than a few months.”
Despite growing bearishness, many economists aren’t convinced the U.S. will fall into recession—at least not imminently. In a research note on Monday, analysts at S&P Global Ratings said the economy has enough momentum to avoid a recession this year, but warned “what’s around the bend next year is the bigger worry.” The economists put the odds of a recession in 2023 at 40%. One week earlier, Morgan Stanley put them at 35%.
Fueled by government stimulus and the war in Ukraine, prolonged levels of high inflation pushed the Fed to embark on the most aggressive economic tightening cycle in decades—crashing markets and sparking recession fears. “People are really suffering from high inflation,” Fed Chair Jerome Powell testified before Congress last week, noting it remained “absolutely essential” for the Fed to restore price stability, before acknowledging it would be “very challenging” to avoid a recession while doing so.
The bad news on inflation just keeps coming. At more than 9% year on year across the rich world, it has not been this high since the 1980s—and there have never been so many “inflation surprises”, where the data have come in higher than economists’ forecasts (see chart). This, in turn, is taking a heavy toll on the economy and financial markets.
Central banks are raising interest rates and ending bond-buying schemes, crushing equities. Consumer confidence in many places is now even lower than it was in the early days of the covid-19 pandemic. “Real-time” economic indicators of everything from housing activity to manufacturing output suggest that economic growth is slowing sharply.
What consumer prices do next is therefore one of the most important questions for the global economy. Many forecasters expect that annual inflation will soon ebb, in part because of last year’s sharp increases in commodity prices falling out of the year-on-year comparison. In its latest economic projections the Federal Reserve, for instance, expects annual inflation in America (as measured by the personal-consumption-expenditure index) to fall from 5.2% at the end of this year to 2.6% by the end of 2023.
You might be forgiven for not taking these prognostications too seriously. After all, most economists failed to see the inflationary surge coming, and then wrongly predicted it would quickly fade. In a paper published in May, Jeremy Rudd of the Fed made a provocative point: “Our understanding of how the economy works—as well as our ability to predict the effects of shocks and policy actions—is in my view no better today than it was in the 1960s.” The future path of inflation is, to a great extent, shrouded in uncertainty.
Some indicators point to more price pressure to come in the near term. Alternative Macro Signals, a consultancy, runs millions of news articles through a model to construct a “news inflation pressure index”. The results, which are more timely than the official inflation figures, measure not just how frequently price pressures are mentioned, but also whether the news flow suggests that pressures are building up. In both America and the euro area the index is still miles above 50, indicating that pressures are continuing to build.
Inflation worry-warts can point to three other indicators suggesting that the rich world is unlikely to return to the pre-pandemic norm of low, stable price growth any time soon: rising wage growth, and increases in the inflation expectations of both consumers and companies. If sustained, these could together contribute to what the Bank for International Settlements, the central bank for central banks, describes in a report published on June 26th as a “tipping point”. Beyond it, warns the bis, “an inflationary psychology” could spread and become “entrenched”.
Evidence is mounting that workers are starting to bargain for higher wages. This could create another round of price increases as firms pass on these extra costs. A survey by the Bank of Spain suggests that half of collective-bargaining deals signed for 2023 contain “indexation clauses”, meaning that salaries are automatically tied to inflation, up from a fifth before the pandemic.
In Germany ig Metall, a trade union, has asked for a 7-8% pay rise for nearly 4m workers in the metals and engineering sector (it will probably get about half that). In Britain rail workers went on strike as they sought a 7% pay rise, though it is unclear whether they will succeed. All this will make wage growth hotter still. Already, a tracker for the g10 group of countries compiled by Goldman Sachs, a bank, is rising almost vertically (see chart). A measure of pay pressure from Alternative Macro Signals is similarly animated. And wage floors are rising, too.
The Netherlands is bringing forward a rise in the minimum wage; earlier this month Germany passed a bill increasing its minimum by one-fifth. On June 15th Australia’s industrial-relations agency raised the wage floor by 5.2%, more than double last year’s increase. Faster wage growth in part reflects public’s higher expectations for future inflation—the second reason to worry that inflation might prove sticky. In America expectations for average price increases in the near term are rising fast.
The average Canadian says they are braced for inflation of 7% over the next year, the highest of any rich country. Even in Japan, the land where prices only rarely change, beliefs are shifting. A year ago a survey by the central bank found that just 8% of people believed that prices would go up “significantly” over the next year (consumer prices, indeed, rose by only 2.5% in the year to April). Now, however, 20% of Japanese people reckon that will happen.
The third factor relates to companies’ expectations. Retailers’ inflation expectations are at an all-time high in a third of eu countries. A survey by the Bank of England suggests that clothing prices for Britain’s autumn and winter collections will be 7-10% higher than a year ago. The Dallas Fed does find tentative evidence that customers are less willing to tolerate price increases than before; a respondent in the rental and leasing business complained that “it is getting tougher to pass on the 20-30% price increases we have received from manufacturers.” But that merely points to a lower level of high inflation.
The big hope for lower inflation relates to the price of goods. Fast increases in the prices of cars, fridges and the like, linked in part to supply-chain snarls, drove the initial inflationary surge last year. Now there is some evidence of a reversal. The cost of shipping something from Shanghai to Los Angeles has fallen by a quarter since early March. In recent months many retailers spent big on inventories in order to ensure their shelves stayed full. Many are now cutting prices to shift stock.
In America car production is finally picking up, which could unwind some of the outrageous price increases for used vehicles seen last year. Falling goods prices could, in theory, help douse the inflationary flames in the rich world, easing the cost-of-living crisis, giving central banks breathing room and buoying financial markets. But, with enough indicators of future prices pointing the other way, the odds of that happening have lengthened. Don’t be surprised if inflation roars for a while yet.
The crude oil markets have slammed into the top of a triangle that I have marked on the charts as we continue to see bullish pressure. The question now is whether or not we can break out?
WTI Crude Oil Technical Analysis
The West Texas Intermediate Crude Oil market rallied significantly during the trading session on Friday to reach the $110 level. The downtrend line, of course, comes into the picture and offers a lot of selling pressure. If we can break above the highs of the last couple of weeks, the market is likely to continue going higher, perhaps reaching the $120 level. Alternately, if we could see this market turn around and fall back to the 50 Day EMA.
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It will be interesting to see how this plays out but pay close attention to those highs that we are approaching because that will be key to telling you where we are going in the short term. Longer-term, it almost certainly looks as if oil will at least try to go higher.
Brent Crude Oil Technical Analysis
Brent markets also have slammed into the top of a triangle, showing signs of trying to break out as well. Ultimately, this is a market that I think given enough time will probably pull back into the triangle, but I believe that the 50 Day EMA should come into the picture for support, as well as the uptrend line of the triangle.
At this point, the market continues to show a lot of volatility, and I think that given enough time we will more than likely will find a “buy on the dip” type of situation. The market will continue to pay close attention to these trendlines and make a bigger move once we finally break out. At this point, it certainly looks as if the buyers have much more momentum than anything else.
Oil Price Forecast 2025 to 2050
The EIA predicts that by 2025 Brent crude oil’s nominal price will rise to $66/b. By 2030, world demand is seen driving Brent prices to $89/b. By 2040, prices are projected to be $132/b. By then, the cheap oil sources will have been exhausted, making it more expensive to extract oil. By 2050, oil prices could be $185/b.
WTI per barrel price is expected to rise to $64 per barrel by 2025, increasing to $86 by 2030, $128 by 2040, and $178 by 2050.The EIA assumes that demand for petroleum flattens out as utilities rely more on natural gas and renewable energy. It also assumes the economy grows around 1.9% annually, while energy consumption decreases by 0.4% a year.
The Russian Invasion of Ukraine
Russia is the third-largest producer of liquid fuels and petroleum, so when the country invaded Ukraine in late February 2022, it had immediate impact on Brent crude oil futures prices. As the conflict continued, the prices of crude oil settled in out on an upward trajectory, reaching nearly $130/b in early March, and staying well above $100/b into April.
US Oil Supply
The coronavirus pandemic and natural events are still affecting oil demand and supply. The U.S. experienced a drop in production following Hurricane Ida in September as the storm shut at least nine refineries.
The EIA estimates that U.S. crude oil production will average 12.01 million b/d in 2022 and 12.95 million b/d in 2023.11
Diminished OPEC Output
Oil price increases also reflect supply limitations by the Organization of the Petroleum Exporting Countries (OPEC) and OPEC partner countries. In 2020, OPEC cut oil production due to decreased demand during the pandemic. It gradually increased oil output through 2021 and into 2022. Supply chain disruptions in late 2021 affected global trade as well.
At its most recent meeting in December 2021, OPEC stated it would continue to gradually adjust oil production upward by 0.4 million barrels per day (mb/d) in January 2022.
Natural Gas
Countries in Asia have relied on coal to generate power, but recent shortages have turned them to natural gas. Higher temperatures in parts of Asia and Europe have led to high demand for natural gas to generate power.
COVID-19 has hampered Europe’s natural gas production, and a colder-than-expected heating season in early 2021 reduced supplies further.
As a result, natural gas prices soared in 2021 and are expected to remain high in 2022, and affected countries have turned to gas-to-oil switching to reduce power generation costs.
Global Inventory Draw
As a reduction in oil production continues globally, countries are forced to draw from their stored reserves (not including the strategic petroleum reserves). This steady draw of oil is contributing to the increase in prices, because inventories are decreasing.
getty
Those trends have many suppliers eager to break into the electrification scene, but few know how to effectively penetrate the market. When we committed to breaking into the electric vehicle market in 2015, we were well positioned for the space because of our experience in designing and manufacturing for safety-critical sectors such as aerospace, defense and medical devices. We also did extensive research on the electric vehicle industry…..Continue reading…
