The Daily Chase: Earnings from Roots; When will oil demand peak?

Here are five things you need to know this morning.

That quote was written in 1921 by a former president of the Colorado School of Mines – and for the next 100 years, various experts proclaimed we are approaching peak oil production. Today’s talk is not about production, but about demand. According to the IEA World Energy Report from today, we will hit peak demand by 2030 as we shift to more renewable sources of energy. So, in the span of eight years, we will go from record demand to demand growth stalling. The world is definitely on this path, but as with peak oil production, the margin of error could be plus or minus 100 years.

Here are five things you need to know this morning:

Thin gruel: Markets are pulling back modestly after a rally on Monday. Andrew Brenner at National Alliance thinks the markets could be coiling here for a big move following the release of U.S. CPI data tomorrow. Consensus is expecting headline inflation to increase to 3.6 per cent from 3.2 per cent, and the market is now pricing in a 52 per cent chance of a rate hike come December.  Big show, small move: Apple is set to debut its latest phone this afternoon. The iPhone is a teenager now and investors will think about whether the iPhone 15 can boost sales after slumping three quarters in a row. Historically though, Apple shares don’t do much on launch day. Leading up to the event, shares of Apple have underperformed the S&P 500 for the last three months. The last time that happened was the end of 2020, according to Liz Ann Sonders at Charles Schwab. Shares ripped higher after.  Investors yell at cloud: Shares of Oracle are plunging after cloud sales increased only 30 per cent, which is a slowdown from the 54 per cent growth last quarter. While the oracle of Oracle Larry Ellisson cited AI order demand worth US$4 billion for cloud services, investors aren’t satisfied by the sales forecast, which was lighter than expected.  Roots: Sales at iconic Canadiana retailer Roots grew 3.4 per cent, but its losses widened more than expected. The retailer was hit by a one-two punch of higher business costs and higher promotional activity to clear inventory. The bright spot is that inventory grew far less than in previous quarters. There is a decent short position on this one (nearly six per cent, which is big for a Canadian company). The stock has been remarkable in how unremarkable it has been. It has basically clung to C$3/share for the past 2.5 years. We will speak to the CEO on Morning Markets at 11:30 a.m. EDT.  Do the Doo: Citi is upgrading ski-doo maker BRP to buy and thinks it could be good for a pair trade against Polaris (neutral). The analyst thinks there is an opportunity to trade the “significant” price-to-earnings discount to Polaris.