Tomorrow's Solar Eclipse Is a Big Test for Batteries

Renewable energy is about to be put to the test...

On Saturday, the annular solar eclipse – called a "ring of fire" eclipse – will cross the Americas. Its path will go through the Southwest part of the country and be at least partially visible in every state.

Eclipses are exciting phenomena. And this one is especially exciting because we'll get to see how our next-generation battery-storage systems hold up in a sunless sky.

But before we get to that, let's chat about the latest inflation data that was just released yesterday...

Headline No. 1:

The Consumer Price Index ("CPI") rose more than expected, but housing inflation is rolling over.

McCall's Call: The CPI increased 0.4% month over month and 3.7% year over year in September. That was slightly above Wall Street's estimate of 3.6% but matched August's increase.

The fact that inflation has continued to tick up from its June low of 3% sent stocks lower yesterday. The hotter-than-expected report led some investors to believe that inflation will stick around for longer.

But I'm not worried...

Shelter inflation accounted for more than half of the CPI's 0.4% monthly increase. That's a big deal considering it's the index's largest component. It makes up one-third of the CPI and has an outsized effect on the overall inflation number.

But remember that shelter inflation runs on a long lag. And the real-time data we're seeing is coming way down.

Both shelter and rent inflation peaked earlier this year and have started to come back down to Earth. According to Apartment List – an online marketplace for apartment listings – rents experienced their largest decline on record for the month of September.

That's only just starting to show up in the broader CPI.

I'm not saying we're back to normal yet. Shelter CPI is still rising more than 7% year over year. But given the lag between the CPI and real-time data, plus what we're seeing in that real-time data, I'm confident that we're moving in the right direction.

With shelter remaining such a huge part of the overall inflation number, I expect the headline CPI will tumble alongside shelter in the coming months. And that will act as a great tailwind for stocks.

Headline No. 2:

A solar eclipse will limit U.S. solar-power generation tomorrow. 

McCall's Call: Tomorrow, the skies will darken as the moon travels in front of the sun and blocks out most of its light. The CEO of the Electric Reliability Council of Texas described it as "a 6,000 mph shadow."

In certain parts of the country, it will look like this...

The eclipse won't last long – only a few hours. But it could knock out as much as 28,300 gigawatts of solar-power generation. That's enough power for about one in nine American homes.

California and Texas will be impacted the most. Those two states have installed more solar power than any other state in the nation.

But grid operators have planned ahead by adding natural gas and coal-powered generators.

They're also beefing up their battery-storage solutions...

These systems capture and store energy from renewable sources of power like solar and wind. Then, they redistribute that power when needed – like when the sun isn't shining or the wind isn't blowing. This is a win-win scenario. Folks have access to power all day long. And because the power is coming out of storage, it doesn't strain the grid further.

This is why it's so important to invest in both sides of the energy trend.

Clean energy and battery technology are the future. But we're not there yet. We still need "dirty" energies like oil, natural gas, and coal, so having some exposure to those commodities will balance your energy portfolio in the meantime.

I'm particularly excited about the advancements in battery technology.

Batteries and energy storage are a huge part of both the renewables and electric-vehicle trends. That's why I recently introduced McCall Report subscribers to my three favorite ways to profit as these technologies move closer to mainstream adoption.

The tailwinds fueling next-generation battery technology are inevitable. And that makes it a no-brainer to start building exposure to all the money flowing into this space now.

Click here to find out how to gain instant access to the names and ticker symbols of our newest portfolio.

Here's to the future,

Matt McCall
Editor, Daily Insight
October 13, 2023

Did You Miss My Latest Podcast?

There's a lot of fear and negativity in the air these days. Between geopolitical unrest, inflation, and a volatile market, it feels like things will only get worse from here. That's why on this episode of Making Money With Matt McCall, I welcome Grant Williams to the show to shed some light on the big-picture view of the world and the stock market.

Grant and I jump right into a discussion of the bond market. The yield on the 10-year Treasury recently hit a decade high. Folks are fearful that inflation will remain elevated for longer than previously anticipated and that the Federal Reserve will raise rates at least one more time before the end of the year. But Grant explains that interest rates have broken a four-decadelong downtrend. And that could be a major shift in how the economy and stock market perform in the next decade. Tune in for all the details.