Evgo Inc (NASDAQ: EVGO) is up about 50% on Thursday after a JPMorgan analyst issued a super bullish note in its favour.

Bill Peterson upgraded the electric vehicle charging company to “overweight” this morning and said its shares could climb to $7, which translates to about an 80% upside on its previous close.

“Unlike hardware-software peers, Evgo’s fast charging owner-operator model has been scaling well with higher utilization and charge rates in the current muted EV environment,” he told clients in a research note on Thursday.

Evgo stock is trading at a year-to-date high of $6.0 at the time of writing. Our market analyst Crispus Nyaga also sees a favourable risk/reward in the company’s share price.

Evgo stock has regained sharply

The first half of 2024 wasn’t very kind for Evgo shares that traded at under $2.0 at one point only. Part of the reason was a slowdown in electric vehicle adoption that weighed on EV stocks.

But the share price has since recovered. The JPMorgan analyst is confident they’ll push further up after the California-based company received a conditional commitment for more than $1 billion loan guarantee from the Department of Education.

EVGO will use this debt financing to ramp up the buildout of its public fast-charging network across the United States.

According to Bill Peterson:

Evgo is expected to continue benefitting from higher utilization on every charger on its network, especially if competitor charging networks are unable to deploy chargers due to lack of demand.

Evgo stock does not, however, pay a dividend at present.

Evgo Inc is yet to turn a profit

Bill Peterson expects “core owner-operator players outperforming other charging peers” over the next few years, which is to say he’s not as bullish on other EV infrastructure companies as he is on Evgo.

The JPMorgan analyst is positive on EVGO also because it reported a record revenue of $66.6 million for its second quarter in August. At the time, Badar Khan – the company’s chief executive said:

We’re seeing record demand in the industry, which we’re well situated to capture given our position as an owner operator. We’re confident this momentum will result in strong returns for our shareholders.

And then there’s the loan guarantee from the Department of Education that does make it more exciting to own.

Nonetheless, it would be wise for investors to also consider the fact that Evgo Inc is not yet profitable – neither is it expected to turn a profit any time soon.

So, all in all, while Evgo stock may prove to be a lucrative investment, the ride will likely be a volatile one from here on out.

The post This EV stock could jump 80% in 12 months, JP Morgan analyst says appeared first on Invezz

The upcoming September jobs report is anticipated to provide further evidence of a labor market that has cooled in 2024.

However, the slowdown is unlikely to be severe enough to prompt a significant interest rate cut from the Federal Reserve in November.

Scheduled for release by the Bureau of Labor Statistics at 8:30 a.m. ET on Friday, the report is expected to show a modest rise in nonfarm payrolls, with an estimated increase of 150,000 jobs for the month.

The unemployment rate is predicted to hold steady at 4.2%, according to Bloomberg’s consensus forecasts.

Steady, but slower hiring trends

Despite the deceleration in job creation, the US labor market continues to add enough jobs to support consumer spending, which is crucial for sustaining the broader economy.

Over recent months, however, hiring has lost some of its previous vigor as businesses become more cautious about expanding their workforce.

For September, economists expect employers to have added around 140,000 jobs—closely mirroring August’s 142,000 increase—according to forecasts from FactSet.

“We’ll see modest employment gains—not spectacular—but enough to keep the economy progressing,” said Brian Bethune, an economist at Boston College, as reported by AP.

Resilient economy defies recession fears

The US economy has shown remarkable resilience, outperforming predictions that the Federal Reserve’s aggressive interest rate hikes would lead to a recession.

After raising rates 11 times between 2022 and 2023 to combat inflation, the Fed has so far avoided a downturn.

Instead, the economy has managed to grow despite higher borrowing costs for both businesses and consumers.

In an effort to support the job market, the Federal Reserve began cutting rates last month.

This strategic move aligns with an increasing likelihood of a “soft landing”—a scenario in which the Fed controls inflation without triggering a recession.

According to Bethune, this soft landing “is already secure.”

Economic concerns in the lead-up to election day

With the US presidential election approaching on November 5, economic issues remain a significant concern for voters.

While the job market’s resilience is clear, many Americans remain dissatisfied with high prices, which are still 19% higher than in February 2021, the starting point of the recent inflation surge.

Across the economy, key indicators remain robust.

The US economy grew at a 3% annual rate between April and June, driven by consumer spending and business investment.

Looking ahead, the Federal Reserve Bank of Atlanta’s forecasting tool suggests a slightly slower, yet still strong, 2.5% growth rate for the July-September quarter.

On Thursday, the Institute for Supply Management (ISM) reported that US service sector activity grew for the third consecutive month in September, with an unexpected acceleration.

Given that the service sector represents more than 70% of US jobs, this is a critical indicator of economic health.

Job security and spending stay strong

Despite the cooling labor market, Americans are enjoying unprecedented job security.

Layoffs remain near record lows, and initial claims for unemployment benefits have stayed historically low.

Employers, cautious about expanding their workforce, are also reluctant to let go of current employees.

This dynamic is likely a response to the staffing shortages many companies faced during the economy’s rapid post-pandemic recovery.

From June to August, employers added an average of just 116,000 jobs per month, including a particularly weak 89,000 in July—the lowest three-month average since mid-2020.

This stands in stark contrast to the 2021 average of 604,000 jobs per month and the 2022 average of 377,000.

Additionally, job openings have steadily decreased, dropping to 8 million in August from a peak of 12.2 million in March 2022.

As a result, fewer workers feel confident enough to switch jobs, with the number of people voluntarily quitting their roles hitting its lowest level since August 2020.

Impact on wages and inflation

Job-hopping has also become less rewarding. Workers who changed jobs in September saw a 6.6% increase in pay compared to the previous year, a premium of just 1.9 percentage points over those who stayed in their positions.

This marks a sharp decline from the peak job-hopping premium of 8.8 percentage points in April 2022, according to data from ADP Research.

The job market’s cooling trend can be attributed to the Federal Reserve’s extended period of high interest rates.

However, there are signs that relief could be on the way.

Last month, the Fed implemented a significant half-percentage-point rate cut, its largest since the pandemic-induced recession in 2020.

Encouraged by declining inflation, the central bank has shifted focus toward stabilizing the job market.

Inflation was up 2.5% in August compared to a year earlier, close to the Fed’s 2% target and a sharp decline from its 9.1% peak in June 2022.

What to expect from the Fed and the job market

According to AP, Friday’s jobs report could bring further good news. KPMG’s chief economist, Diane Swonk, anticipates that average hourly wages rose by 0.2% in September, down from 0.4% in August.

That would amount to a year-over-year wage gain of 3.7%, near the 3.5% level many economists consider consistent with the Fed’s inflation target.

A moderation in wage growth could reduce the pressure on businesses to raise prices, further alleviating inflationary concerns.

As the Fed continues to adjust its monetary policy, it has signaled plans to cut its key rate twice more this year, with four additional cuts projected for 2025.

The prospect of lower borrowing costs could encourage businesses to resume hiring at a faster pace.

Bethune said:

There’s light at the end of this long monetary tightening tunnel.

The post September jobs report signals a new economic era: what’s next for the workforce? appeared first on Invezz

With the holiday season fast approaching, major retailers in the US are preparing for the busiest shopping period of the year.

However, despite the usual ramp-up in hiring, there’s a noticeable pullback in the number of seasonal workers being taken on for in-store assistance and online order fulfillment compared to previous years.

Amazon leads with steady hiring plans

Amazon announced plans on Thursday to hire 250,000 full-time, part-time, and seasonal employees, matching the figure from last year.

This mirrors hiring decisions by other major retailers like Bath & Body Works and Target, which are also holding steady with approximately 100,000 seasonal hires each.

Target has further committed to offering current employees the opportunity to work additional hours throughout the season.

Others scale back on holiday workforce

Some retailers, however, are scaling back on holiday hiring. Macy’s, for instance, revealed it will add over 31,500 seasonal positions across its various brands—down from the 38,000 hired last year.

Kohl’s and Walmart have both refrained from releasing specific hiring numbers, with Walmart opting to rely on its existing workforce for extra support during peak periods.

This year’s cautious approach comes amid concerns over a cooling US job market.

According to the Bureau of Labor Statistics, job openings have been declining since peaking at 12.2 million in March 2022.

With post-pandemic demand stabilizing, companies are no longer scrambling to fill vacancies at the same rate as in the past two years.

Holiday sales expected to grow—but inflation looms

Despite the cautious hiring outlook, retailers remain optimistic about consumer demand during the upcoming holiday season.

Deloitte forecasts a 2.3% to 3.3% increase in US retail sales between November and January, with total sales expected to hit $1.59 trillion.

Similarly, EY-Parthenon predicts a 3% growth in sales during the November-December period, as per a report in AP.

However, they warn that inflation could account for much of that growth, with real volume sales anticipated to rise by just 0.5% year-over-year.

E-commerce continues to be a bright spot for retailers, with Adobe projecting online sales to grow 8.4%, reaching a record $240.8 billion.

This reflects the ongoing shift in consumer behavior, with more shoppers opting to buy online rather than in stores.

Hiring events and recruitment efforts ramp up

Retailers are still actively recruiting through nationwide hiring events.

Macy’s and JCPenney, for instance, are conducting on-the-spot interviews to quickly fill positions.

Macy’s has already hosted its first event and is planning three more in the coming weeks, while JCPenney aims to bring on 10,000 seasonal workers, in line with last year’s numbers.

UPS is also preparing for the holiday rush, announcing plans to hire 125,000 seasonal employees—an increase from 100,000 the previous year.

Radial, an e-commerce logistics company, is adopting a more flexible hiring strategy, scaling its workforce based on real-time demand to avoid overcommitting.

Economic pressures could impact holiday spending

While retailers are optimistic about the holiday season, signs of economic strain are emerging among consumers.

Rising credit card debt and decreasing savings rates suggest that many shoppers may approach the season with caution.

Retailers have already observed consumers gravitating towards store brands and looking for deals, a trend that could shape spending in the months ahead.

Further complicating the outlook is the possibility of higher prices due to ongoing labor disruptions.

A port workers’ strike has already shut down key dockyards along the US Eastern Seaboard and Gulf Coast.

Should the strike continue, it could lead to significant delays and price hikes on goods just as holiday shopping ramps up.

Despite the uncertainties in the labor market and broader economy, the holiday shopping season remains a crucial period for retailers.

Companies are preparing to meet demand while balancing cautious hiring strategies with inflationary pressures and potential supply chain disruptions.

How consumers respond to these challenges will be critical in determining the overall success of the retail sector in the final quarter of the year.

The post Amazon, Macy’s, and Target lead the charge with over 500,000 jobs for holiday rush appeared first on Invezz

The Reserve Bank of India (RBI) is anticipated to keep the repo rate unchanged at 6.5% in its upcoming October 2024 meeting, despite the recent interest rate cut by the US Federal Reserve.

The Fed reduced its policy rate by 50 basis points (bps), bringing it down to 4.75-5% for the first time in four years.

However, the RBI is expected to focus more on domestic factors, including inflation and economic growth, than to mirror the Fed’s move.

In its last meeting in August too, the Indian central bank had kept its rate unchanged for a ninth consecutive meeting citing persistent food inflation as a significant threat to retail inflation. 

Analysts say food inflation is expected to remain elevated in September, diminishing chances of a rate cut.

Also, looking at the data for almost the past 10 years, it has been noted that while Fed action is an important guidance factor for other central banks, it is not a deciding factor.

The decision to cut or hike rates is driven more by domestic factors. 

Sonal Badhan, Economist at Bank of Baroda, noted,

Fed action is more of a guiding factor for other central banks, but RBI Governor Shaktikanta Das has repeatedly clarified that domestic factors take precedence. We believe the RBI will keep policy rates steady, with the earliest possibility of a rate cut in December 2024.

RBI to consider domestic inflation dynamics

Analysts have highlighted that the RBI’s decision will be based on the current inflation trends and domestic risks.

Consumer Price Index (CPI) inflation fell below 4% in July and August due to base effects, but it is expected to rebound in September.

ING Think predicted that the central bank would likely maintain its stance in October, waiting for more clarity on inflation risks.

Rahul Bajoria, Head of India and ASEAN Economic Research at BofA Securities India, stated,

RBI is set to remain on hold for the tenth consecutive Monetary Policy Committee (MPC) meeting. The central bank’s optimistic growth projections for FY25—7.2%—and inflation estimate of 4.5% leave little room for policy change in October.

SBI Funds Management noted that the RBI is likely to maintain its focus on domestic challenges, particularly the misaligned credit-to-deposit ratio within banks and persistently high food inflation.

“Key indicators suggest that monetary easing in India is still some distance away. These include: a) the 60 bps upward revision in the Q2FY25 CPI forecast; b) the clear emphasis on the role of food inflation in shaping overall inflation expectations; c) ongoing difficulties in securing stable long-term deposits within the banking system; and d) the July OMO sale to keep the overnight rate in line with the repo rate,” the report stated.

Rate cut likely in December if inflation risks ease

While some analysts had predicted a twin rate cut of 25 bps each starting in October, others, like IDFC First Bank, believe the first cut may occur in December 2024.

IDFC analysts expect inflation to ease as food supplies improve after the monsoon season, potentially allowing the RBI to shift its stance to neutral by year-end.

However, they warned that inflation pressures, particularly from rising vegetable prices, remain a risk in the short term.

The post RBI expected to hold policy rates in October despite Fed rate cut, experts say appeared first on Invezz

Global oil markets are on edge as Goldman Sachs cautions that crude prices could skyrocket by $20 per barrel if Iranian oil production suffers from potential Israeli retaliation following heightened regional tensions.

US crude futures surged by 5% on Thursday, with continued upward momentum on Friday, driven by concerns that Israel might strike Iran’s oil sector.

This follows a recent missile attack by Tehran, which has intensified conflict in the region and raised alarms about potential disruptions to global oil supplies.

“If you were to see a sustained 1 million barrels per day drop in Iranian production, that could lead to a peak boost in oil prices next year of around $20 per barrel,” said Daan Struyven, co-head of global commodities research at Goldman Sachs, speaking on CNBC’s ‘Squawk Box Asia’.

This projection assumes that oil cartel OPEC+ does not step in to offset the loss with increased production.

OPEC+ could mitigate the surge

Struyven noted that if key OPEC+ members, such as Saudi Arabia and the UAE, decide to ramp up production, the potential spike in oil prices might be tempered.

In this scenario, the increase could be closer to $10 per barrel, reducing the severity of the impact.

Since the start of the Israel-Hamas conflict in October of last year, oil markets had seen limited disruptions.

However, that may be changing with Iran’s recent missile strike on Israel, which has triggered fears of broader supply shocks.

Iran’s oil exports and global impact

Iran plays a crucial role in the global oil market, producing nearly 4 million barrels of oil per day.

If Israel targets Iran’s oil infrastructure, as tensions escalate, the world could lose access to about 4% of its oil supply.

This scenario has raised significant concerns among market analysts.

Saul Kavonic, senior energy analyst at MST Marquee, warned that Iran’s Kharg Island, which handles 90% of the country’s crude exports, could be a potential target.

“The bigger concern is whether this leads to a wider conflict that impacts transit through the Strait of Hormuz,” he told CNBC.

Strait of Hormuz: a critical oil chokepoint

The Strait of Hormuz is a strategically vital waterway between Oman and Iran, where nearly 20% of the world’s oil passes each day.

Iran has previously threatened to block this crucial channel in response to attacks on its oil sector.

Any disruption to the flow of oil through this narrow strait would have far-reaching consequences for global energy markets.

President Joe Biden, when asked about potential US support for an Israeli strike on Iran’s oil facilities, responded ambiguously, leaving the door open for further escalation.

Potential for a full-scale conflict

According to Fitch Solutions’ BMI, a full-scale war in the region could push Brent crude prices above $100 per barrel, with disruptions in the Strait of Hormuz potentially driving prices to $150 per barrel or higher.

While the likelihood of such a war remains low, the risks of a miscalculation have grown, leaving the global oil market vulnerable to further shocks.

Though some believe OPEC+ could fill the gap in the event of Iranian production losses, much of the world’s spare capacity is concentrated in the Gulf region, which itself could be at risk if the conflict escalates further.

The post Oil prices could surge by $20 as tensions in Iran escalate, warns Goldman Sachs appeared first on Invezz