America's Natural Gas Boom Expands

NATURAL GAS
America's Natural Gas Boom Expands

Under the incoming Trump administration, America’s natural-gas industry is poised for expansion, shifting focus from drilling to building infrastructure. Toby Rice, CEO of EQT, one of the largest U.S. gas producers, emphasizes the new mantra: “Build, Baby, Build.”

After years of regulatory hurdles and low prices impacting profits, the industry sees potential growth fueled by a White House promising streamlined approvals for new liquefied natural gas (LNG) facilities and pipelines. The U.S., already the world’s leading LNG exporter, is expected to launch several projects starting next year, with more planned through 2028.

While the Biden administration prioritized climate initiatives and clean energy, warning of rising emissions from unfettered exports, Rice and industry advocates argue that expanding LNG exports can help replace Russian gas in Europe and reduce global coal reliance. Despite concerns of overbuilding and potential market gluts, Rice sees rising global demand as an opportunity for the U.S. to lead in energy solutions.

With shifting political and market dynamics, America’s natural-gas footprint is on track for significant growth, sparking debates over its long-term impacts on the environment and economy.

TECH
Chinese Cars Reshape Mexico’s Market

Affordable and comfortable Chinese vehicles are rapidly gaining ground in Mexico, challenging established brands like Mercedes-Benz and BMW. Once stigmatized, Chinese automakers are now thriving due to competitive pricing, advanced technology, and shifting consumer preferences toward SUVs and pickup trucks.

Sales of traditional luxury brands have slumped, with Mercedes-Benz down 9.8% and Audi declining 21.9% from January to November. Meanwhile, Chinese brands such as Jetour saw a staggering 131% increase, according to the Mexican Association of Automotive Distributors (AMDA). Chinese automakers now command 9.3% of the market, offering premium features at significantly lower prices.

Miguel Reyes, a Mexican retiree, exemplifies the trend, citing a Chinese SUV’s affordability at $27,000—nearly half the price of comparable Western models. Industry experts note that with approximately 30 Chinese brands in Mexico, they provide options across all price ranges, including premium electric vehicles.

This surge comes amid geopolitical tensions, with claims that Mexico serves as a gateway for Chinese products to the U.S., a charge denied by Mexican officials. President Claudia Sheinbaum has proposed a regional import substitution plan, emphasizing Mexico’s minimal reliance on Chinese components. As Chinese automakers reshape Mexico’s automotive landscape, their influence continues to grow.

FINANCE
Treasury Yields Climb After Jobless Data

The 10-year Treasury yield climbed back above 4.6%, rising 3 basis points to 4.607% after mixed jobless claims data. Initial claims dropped to 219,000, below expectations, but continuing claims hit their highest level since 2021. The 2-year Treasury yield also edged higher to 4.334%. Traders anticipate a hawkish Federal Reserve in 2025, driving a 40-basis-point rise in the 10-year yield this month. Markets now await Friday's wholesale inventory data and the Fed’s January meeting.

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.