Deciphering Lynas, page-1069

Green technology as well as technological stocks in general are extremely interest rate sensitive.

The Fed minutes released today confirmed what an overbought market did not want to hear.

Rates in the USA will not head lower until at least the end of 2024. In PRACTICAL terms, that means that the US EV Federal incentives (up to $7500) are only worth $2500, as these higher rates will offset the incentives by 2/3. In REAL terms, the average consumer does not bother what a car costs. They buy cars based on the monthly payment. (own or lease). This is the problem. That, along with profit taking as I had mentioned before, is beating us and the markets up this week. Monthly car payments with these rates are extremely high.

Few sectors will be immune for the next week or so. I'm not worried about the price action. I expected it. Even posted here about it. My big fear is the December Jobs Report due this Friday. I expect a decent (+) number. That coupled with the Fed minutes of today could really hit hard, as the fear of the Fed having to raise further could be very concerning. The "chatter" number for jobs reports is 160,000+. Lower and we are OK. Higher, and we could have a brutal Friday in the USA. I see 185,000+. 200,000+ would kick us all in the arse.

I think we are in for a rough quarter in LYC profit margin % but will be off-set by the much higher volume produced by Kalgoorie and the LAMP working in tandem. The higher sales volume will be bullish as output is seen increasing, and profit will be consistent with prior quarters. At this point, that is the "saving grace" in this world of slow demand generated by these higher interest rates. We will simply make up for a sluggish consumer through increases in volume.