Electric vehicle (EV) sales set to hit an all-time high in 2022, IEA says

Tesla electric cars photographed in Germany on March 21, 2022. According to the International Energy Agency, electric vehicle sales are on course to hit an “all-time high” this year.

Sean Gallup | Getty Images News | Getty Images

Electric vehicle sales are on course to hit an all-time high this year, but more work is needed in other sectors to put the planet on course for net-zero emissions by 2050, according to the International Energy Agency.

In an announcement accompanying its Tracking Clean Energy Progress update, the IEA said there had been “encouraging signs of progress across a number of sectors” but cautioned that “stronger efforts” were required to put the world “on track to reach net zero emissions” by the middle of this century.

The TCEP, which is published yearly, looked at 55 parts of the energy system. Focusing on 2021, it analyzed these components’ progression when it came to hitting “key medium-term milestones by the end of this decade,” as laid out in the Paris-based organization’s net-zero pathway.

On the EV front, the IEA said global sales had doubled in 2021 to represent nearly 9% of the car market. Looking forward, 2022 was “expected to see another all-time high for electric vehicle sales, lifting them to 13% of total light duty vehicle sales globally.”

The IEA has previously stated that electric vehicle sales hit 6.6 million in 2021. In the first quarter of 2022, EV sales came to 2 million, a 75% increase compared to the first three months of 2021.

Read more about electric vehicles from CNBC Pro

The IEA said both EVs and lighting — where more than 50% of the worldwide market is now using LED tech — were “fully on track for their 2030 milestones” in its net-zero by 2050 scenario.

Despite the outlook for EVs, the IEA separately noted that they were “not yet a global phenomenon. Sales in developing and emerging countries have been slow due to higher purchase costs and a lack of charging infrastructure availability.”

Overall, the rest of the picture is a more challenging one. The IEA noted that 23 areas were “not on track” with a further 30 deemed as needing more effort.

“Areas not on track include improving the energy efficiency of building designs, developing clean and efficient district heating, phasing out coal-fired power generation, eliminating methane flaring, shifting aviation and shipping to cleaner fuels, and making cement, chemical and steel production cleaner,” the IEA said.

The shadow of 2015’s Paris Agreement looms large over the IEA’s report. Described by the United Nations as a “legally binding international treaty on climate change,” the accord aims to “limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels.”

Cutting human-made carbon dioxide emissions to net-zero by 2050 is seen as crucial when it comes to meeting the 1.5 degrees Celsius target.

Read more about energy from CNBC Pro

In a statement issued Thursday the IEA’s executive director, Fatih Birol, appeared cautiously optimistic. “There are more signs than ever that the new global energy economy is advancing strongly,” he said.

“This reaffirms my belief that today’s global energy crisis can be a turning point towards a cleaner, more affordable and more secure energy system,” he added.

“But this new IEA analysis shows the need for greater and sustained efforts across a range of technologies and sectors to ensure the world can meet its energy and climate goals.”

The IEA’s report comes at a time when the debate and discussion about climate goals and the future of energy has become increasingly fierce.

This week, the U.N. secretary general said developed economies should impose an extra tax on the profits of fossil fuel firms, with the funds diverted to countries affected by climate change and households struggling with the cost-of-living crisis.

In a wide-ranging address to the U.N. General Assembly in New York, Antonio Guterres described the fossil fuel industry as “feasting on hundreds of billions of dollars in subsidies and windfall profits while households’ budgets shrink and our planet burns.”

Main Street confidence hits all-time low on belief recession is here

Fg Trade | E+ | Getty Images

Small business confidence has hit an all-time low as the majority of Main Street expects runaway inflation and a Federal Reserve that is incapable of engineering a soft landing for the economy.

In fact, the majority of small business owners (57%) taking part in the CNBC/SurveyMonkey Small Business Survey for Q3 2022 think the recession has already begun, while another 14% predict recession before the end of the year.

The CNBC/SurveyMonkey online poll was conducted July 25-31, 2022 among a national sample of 2,557 self-identified small business owners.

The pessimism on Main Street is more widespread than in the general population, according to the survey, which included a companion poll of nearly 12,000 non-business owners. Among this group, 45% believe the U.S. economy has entered a recession.

More than three-quarters (77%) of small business owners polled expect prices to continue going up. And while many large corporations continue to pass along price increases to customers and report healthy profits, only 13% of small businesses said now is a good time to raise prices.

While inflation in input costs, energy prices and labor have been a top concern for small business owners throughout the year, its dominance in the minds of entrepreneurs continues to climb. According to the Q3 survey, 43% of small business owners say inflation is the biggest risk to their business right now, up again from last quarter, when it was 38%, and the highest this reading has reached in the past four quarters of surveys.

Only a minority of small business owners (26%) have confidence in the Federal Reserve to successfully battle inflation — a finding that is consistent with the Q2 survey results.

The Fed has continued to message inflation as its top priority and that interest rates will continue to increase until it has prices under control, but Fed senior leadership including Chair Jerome Powell have said they do not believe the economy is in a recession.

“We’re not in a recession right now. … To some extent, a recession is in the eyes of the beholder,” St. Louis Fed President James Bullard told CNBC on Wednesday.

GDP has been negative for two consecutive quarters, a recession indicator based on history, but by some measures, the U.S. economy is proving resilient. While big box stores have been hit hard by shifting consumer behavior, overall consumer spending levels are still high. The labor market is strong, unemployment is low, and the latest macroeconomic data has given more support to the belief that recession may be avoided. The ISM non-manufacturing purchasing managers index, released Wednesday, showed a surprise rebound. The stock market, meanwhile, just turned in its best month since 2020.

Economists say that small business sentiment, similar to consumer sentiment, tends to be reactive rather than based on longer-term forecasting, and that can result in sharper, shorter-term shifts in sentiment. The current recession view on Main Street, as captured by the Small Business Survey, differs significantly from the Fed view. But in the details that make up the core confidence index, there is more general reflection of the economic slowdown that the Fed is attempting to engineer and that more optimistic economists call a soft landing.

According to SurveyMonkey, which conducts the poll for CNBC, nearly every index component worsened quarter-over-quarter, but the confidence indicator that looms largest this quarter is a weaker sales outlook on Main Street. As the Fed attempts to cool demand throughout the economy with higher interest rates, over one-quarter (28%) of small business owners expect their revenue to decrease over the next 12 months, up from 21% last quarter. This was the biggest swing factor in the overall confidence index hitting an all-time low in Q3.

More small businesses also anticipate cutting staff over the next year, up from 14% to 18% quarter over quarter.

The percentage of small business owners who describe business conditions as good (33%), went down again, from 36% in Q2 2022. Just over half (51%) of small business owners say the economy is “poor,” up from 44% last quarter.

Almost three-quarters (74%) expect higher interest rates to be a negative for their business.

The confidence index score was 42 out of 100, down from 46 in the second quarter. The previous low was a score of 43 during the first quarter of the Biden Administration. 

Partisan politics and the economy

The small business demographic skews conservative and the confidence index reflects some partisan sentiment and persistent gaps in survey answers based on politics. For example, 69% of Republican small business owners believe the economy is in a recession, compared to 34% of Democrats polled. This gap is even wider in how small business owners describe the economy, with 68% of Republicans using the word “poor,” compared with 19% of Democrats.

More troubling for President Joe Biden, though, is the significant percentage of small business owners who identify as Democrats and think inflation will continue to rise. While that figure is 89% among Republicans, and the partisan gap is wide, more than half of Democrats (51%) agree.

President Biden’s approval rating on Main Street hit the lowest level of his administration, with 31% of small business owners approving of how he has handled the job of president.

While 81% of small business owners who are Democrats approve of Biden, pollsters have noted during this period of high inflation that presidents expect the vast majority of their party to offer support, often north of 90%. And as the CNBC/SurveyMonkey Small Business Survey has shown this year, Biden’s approval rating will not improve unless inflation goes down. Biden’s approval among important swing voters who identify as independents is at 29%.

Only 9% of Republicans approve of Biden’s handling of the presidency.

Consumer credit card debt nears an all-time high

To keep up with rising prices, many consumers are leaning on their credit cards.

Credit card balances rose year over year, reaching $841 billion in the first three months of 2022, according to data released Tuesday from the Federal Reserve Bank of New York.

Although balances fell slightly from where they stood at the end of 2021 following the peak holiday shopping season, they are expected to keep going up from here, according to researchers at the New York Fed. 

“There’s a good chance that Americans’ total credit card balances will soon reach a new record high, marking a sharp reversal from the precipitous drop that occurred in 2020 and early 2021,” said Ted Rossman, a senior industry analyst at CreditCards.com.

More from Personal Finance:
More Americans cash-strapped as cost of living rises
Why there’s a push to cancel student loans but not other debt
Americans say inflation may have a ‘big negative impact’

An additional 229 million new credit card accounts were also opened in the first quarter, up from the previous quarter and higher than prepandemic levels.

Many accounts were closed during the pandemic, so it’s not surprising to see more new accounts now, according to researchers at the New York Fed.

However, the rise in borrowing, together with auto loans, student debt and mortgages, propelled total household debt to a record $15.84 trillion at the beginning of the year.

After consumers paid off $83 billion in credit card debt during the pandemic, helped by government stimulus checks and fewer opportunities for discretionary purchases, credit card balances have steadily ticked back up amid higher prices for gas, groceries and housing, among other necessities.

“A lot of this is being driven by robust consumer spending, of course, but credit and debit cards have both been aided by the growth of e-commerce and the ongoing migration away from cash,” Rossman said. “This is great if you can pay in full, avoid interest and earn rewards, but potentially very costly if you’re paying interest every month.”

In fact, credit card rates will only head higher as the Federal Reserve hikes interest rates as it looks to tamp down inflation, which is running at its fastest pace in more than 40 years.

Since most credit cards have a variable annual percentage rate, there’s a direct connection to the Fed’s benchmark.

APRs are currently just over 16%, on average, but may be well over 18% by the end of the year — which would be an all-time record, according to Rossman.

To date, the record is 17.87%, set in April 2019. 

“With rampant inflation and rising interest rates, things are going to get worse before they get better,” said Matt Schulz, chief credit analyst for LendingTree.

If you’re carrying a balance, try calling your card issuer to ask for a lower rate, consolidate and pay off high-interest credit cards with a lower interest home equity loan or personal loan or switch to an interest-free balance transfer credit card, he advised.

“Consumers need to act now to knock down that credit card debt because it is only going to get more expensive — and in a hurry,” Schulz said.

To build better credit card habits, make sure to pay off your balance on time and in full every month and only make purchases you can afford to pay back, noted Holly O’Neill, president of retail banking at Bank of America.

“Spending within your means will leave more money at the end of every month and help reduce your debt,” she said. “As an added bonus, spending less than your limit allows will also help you build a stronger credit score.”

(Here’s why your credit score matters and five ways to improve it.)

Subscribe to CNBC on YouTube.

Bitcoin briefly dips below $30,000, drops more than 56% from its all-time high

Bitcoin dropped below the $30,000 level late Monday, breaching a symbolic price threshold.

At its lowest price point, the world’s most popular cryptocurrency was more than 12% lower on the day — and more than 56% off its November all-time high of around $69,000. It later recovered from some of those losses and was trading at $31,181.28 as of 10:38 p.m. ET Monday, according to data from Coin Metrics.

The last time bitcoin traded below $30,000 was in July 2021, when the digital asset traded as low as $29,839.80. Yuya Hasegawa, a crypto market analyst at Japanese bitcoin exchange Bitbank, previously told CNBC that bitcoin would need to maintain a key psychological price level of $33,000 to stave off further deterioration of technical sentiment.

The price drop comes amid a broader, multi-day sell-off that has ensnared much of the crypto market and equities.

The crypto market, which trades 24-hours a day, is down nearly 10% in the last 24 hours, according to CoinMarketCap data. Meanwhile, all three major stock indexes closed Monday lower, with the S&P 500 falling to its lowest level in more than a year.

Stocks have been on a steady decline since Thursday, when the Dow Jones Industrial Average and Nasdaq Composite each posted their worst single-day drops since 2020.

For the last year, bitcoin and other major cryptocurrencies have tracked the movement of tech stocks, and some analysts say that this close correlation between bitcoin and the Nasdaq challenges the argument that the cryptocurrency functions as an inflation hedge.

Peloton shares hit all-time low as pressure mounts ahead of earnings

In this photo illustration the Peloton Interactive logo seen displayed on a smartphone screen.

Rafael Henrique | LightRocket | Getty Images

Peloton Interactive shares tumbled to an all-time low Friday as investors lose hope that the connected fitness equipment maker can turn itself around and post a profit, even under a new chief executive officer.

The stock dropped more than 13% after the market opened, amid a broader sell-off, to touch an all-time low of $14.70. That’s also well below Peloton’s IPO price of $29.

Peloton is set to report its quarterly results, now with Chief Executive Barry McCarthy at the helm, on Tuesday morning.

Its market capitalization has tumbled from roughly $50 billion early last year to under $5 billion.

On Thursday evening, The Wall Street Journal reported that Peloton is targeting potential investors, including industry players and private equity firms, to take a stake in its business of around 15% to 20%. The fresh capital could help Peloton as it attempts a turnaround, but there is no guarantee that such a transaction will be successful, the Journal said.

A spokesperson for Peloton declined to comment.

“Though it might be nice to get a vote a confidence … we don’t see this being too encouraging for those who own the stock,” said Gordon Haskett analyst Don Bilson, regarding the Journal report. “Moves like this are rarely made from positions of strength. Desperation is more like it.”

Activist firm Blackwells Capital has been ramping up pressure on Peloton to sell itself, recently contending that the changes put into place so far under McCarthy aren’t enough. Blackwells has argued that a better owner might be Amazon or Netflix.

In a bid to win new customers and make more money from existing ones, Peloton recently dropped the prices of its Bike, Bike+ and Tread machines, while it plans to raise its monthly all-access subscription fee next month.

BMO Capital Markets analyst Simeon Siegel said turbulence has been the “one true constant” at Peloton in recent months.

“From its initial success to its ongoing strategic tests, the company has yet to find a sense of normalcy that can smooth out the recurring volatility,” he said.

Peloton shares have fallen more than 52% so far this year.

What investors should know as bitcoin drops 50% from its all-time high

The cryptocurrency market selloff continues on Monday, with its overall value down $130 billion in the last 24 hours alone.

Bitcoin fell below $34,000 Monday morning, and is currently trading at around $36,011, Coin Metrics data shows. Ether is also tumbling, now priced at around $2,373. The two leading cryptocurrencies by market value have dropped about 50% from their all-time highs in November, when bitcoin hit around $69,000 and ether hit $4,878 during a rally on November 10.

This is a possible response to a few factors, including the Federal Reserve’s December meeting, where the central bank indicated that it might start to reduce its balance sheet, dial back its monetary policy support and potentially raise interest rates.

Though the current plunge might be jarring, this volatility isn’t unusual for the cryptocurrency market.

“Long downturns like this are normal with crypto,” Tyrone Ross, CEO of Onramp Invest, which provides crypto asset management technology for financial advisors, tells CNBC Make It. “Folks should know that going in, and if you have the means, you should work with an advisor to guide you through these markets.”

‘Don’t watch every tick of the price’

Review your investment strategy

Only invest what you can afford to lose

Bitcoin network hashrate hits all-time high after China crypto ban

Whinstone CEO Chad Harris takes CNBC on a tour of the largest bitcoin mine in North America.

Bitcoin mining has totally recovered from the Chinese crypto crackdown that took more than half the world’s miners offline virtually overnight earlier this year.

The recovery is measured by looking at hashrate, a term used to describe the computing power of all miners in the bitcoin network. China had long been the epicenter of this industry, with past estimates indicating that 65% to 75% of the world’s bitcoin mining happened there. But after Beijing effectively banished the country’s cryptocurrency miners in May, more than 50% of bitcoin’s hashrate dropped off the global network.

As of Friday, data from Blockchain.com shows that the network has completely pared back those loses. The network’s hashrate is up about 113% in five months.

“Bitcoin withstood a nation-state attack of China actually banning mining, and the network shrugged it off,” said Kevin Zhang of digital currency company Foundry, which helped bring over $400 million of mining equipment into North America.

The upward momentum in hashrate may bode well for the price of the world’s most popular cryptocurrency, which is down 30% over the last month. China’s ban was a clear “buy” signal, just as it was with Google and Facebook before it, according to bitcoin mining engineer Brandon Arvanaghi, who now runs Meow, a company that enables corporate treasury participation in crypto markets.

But for Arvanaghi, the biggest takeaway of this entire ordeal is the fact that bitcoin mining survived its greatest stress test yet with little drama.

“The bitcoin network withstood an attack by a major superpower and emerged stronger than ever six short months later. How can anyone ever argue, ‘But what if nations ban it?’ again?” he said.

Bitcoin’s speedy recovery

When half the bitcoin network went dark this spring, many experts said that miners would come back online in North America. A lot of predictions were also made about the timeline to restore the network to its previous high.

No one that CNBC spoke to thought the network would bounce back by the end of the year.

Texas bitcoin miner and engineer Marshall Long — who is the head of architecture at Rhodium Enterprises, a fully integrated bitcoin miner using liquid-cooled infrastructure — tells CNBC he was a bit surprised by the pace of its recovery.

“I figured we would be here sometime in late January, early February,” he said. Others thought it would take even longer than that, tacking another six to twelve months onto Long’s prediction.

According to Zhang, the bitcoin network’s speedy recovery came about because the U.S. laid the groundwork to become a new mecca for mining. Zhang says that in the States, there is a “huge appetite for growth, building infrastructure, and leveraging stranded power.”

Companies in the U.S. have been quietly boosting their hosting capacity for years, gambling that if adequate infrastructure were in place, miners would set up shop in the U.S. when the time was right.

When bitcoin crashed in late 2017 and the wider market entered a multi-year crypto winter, there wasn’t much demand for big bitcoin farms. U.S. mining operators saw their opening and jumped at the chance to deploy cheap money to build up the mining ecosystem in the States. 

“The large, publicly traded miners were able to raise capital to go make big purchases,” said Mike Colyer, CEO of Foundry.

Core Scientific founder Darin Feinstein agrees there has been a serious growth of mining infrastructure in America. “We’ve noticed a massive uptick in mining operations looking to relocate to North America, mostly in the U.S.,” he said.

Companies like Core Scientific kept building out hosting space all through the crypto winter to ensure the capacity to plug in new gear.

Alex Brammer of Luxor Mining, a cryptocurrency pool built for advanced miners, points out that maturing capital markets and financial instruments around the mining industry also played a big role in the industry’s quick ascent in the U.S. Brammer says many American operators were able to start rapidly expanding once they secured financing by leveraging a multi-year track record of profitability and existing capital as collateral.

Covid played a role, too.

Though the global pandemic shut down large swaths of the economy, government stimulus money proved a boon for U.S. mining companies.

“All the money printing during the pandemic meant that more capital needed to be deployed,” explained Arvanaghi. 

“People were looking for places to park their cash. The appetite for large-scale investments had never been bigger. A lot of that likely found its way into bitcoin mining operations in places outside of China,” continued Arvanaghi.

That gamble has paid off. Data from Cambridge University shows that the U.S. is now the number one destination for bitcoin miners, eclipsing China for the first time ever.

But the picture may not be as simple as it looks.

According to multiple sources, many miners who didn’t have the resources to relocate stayed put in China, moving their operations underground. Some went “behind the meter,” drawing power directly from sources like hydro dams in the southern province of Sichuan. Others divided their mining operations into much smaller farms across the country that the authorities were less likely to notice.

Whatever the cause behind bitcoin’s faster-than-expected bounceback, bitcoin miner Alejandro de la Torre — who has spent years minting crypto all over the world, including in China and most recently in Austin, Texas — tells CNBC that the bigger lesson here is the resilience of the global mining industry.

“I’m confident any black swan events that may come to bitcoin mining in the future will also be a non-event,” de la Torre said.

Bitcoin and ether hit new all-time highs

Bitcoin and ether hit new all-time highs on Monday evening.

Bitcoin’s price at one point rose above $67,700 – eclipsing a previous record set in late October – while ether, the native token of ethereum’s blockchain, surpassed $4,800 for the first time ever.

These record-breaking moves come amid a wider rally in the crypto market. So-called “ethereum killers” Solana and Cardano are up 23% and 9% respectively in the last seven days.

The ProShares Bitcoin Strategy ETF, which launched in October and tracks bitcoin futures contracts pegged to the future price of the cryptocurrency, was up more than 8% on Monday.

While it is difficult to link short-term price movements to any specific event – and cryptocurrency price charts are often rife with volatility – some analysts think that both bitcoin and ether will continue to trend upward in the weeks ahead.

In a note sent on Monday, Mikkel Morch, executive director at crypto hedge fund ARK36, said a $70,000 price for bitcoin now “seems imminent.”

Others have bolder projections for where bitcoin is headed, as JPMorgan recently doubled down on its prediction that bitcoin would ultimately hit $146,000, with a shorter-term price target of $73,000 for this year.

Read more about cryptocurrencies from CNBC Pro

Next week, bitcoin rolls out its biggest upgrade in four years.

The software upgrade is known as Taproot. It will mean greater transaction privacy and efficiency – and crucially, it will unlock the potential for smart contracts, a key feature of its blockchain technology.

Meanwhile, ether has been on an upswing since it implemented Altair, a network upgrade that went live in late October.

Altair was largely seen as a non-event to most everyone except validators — that is, the people on the ethereum network who verify transactions. But the upgrade was a pivotal step in implementing ethereum 2.0 or Eth2, which has been in the works for years and will fundamentally overhaul the entire network.

Ethereum 2.0 would have the network switch from the energy-intensive “proof-of-work” mining system, where miners solve difficult math equations to create new coins, to “proof-of-stake,” which just requires users to leverage their existing cache of ether as a means to verify transactions and mint new tokens.

Eth2 aims to make ethereum more scalable, secure and sustainable. This change will be huge not just for ethereum, but for the wider cryptocurrency community at large.

Tesla (TSLA) shares hit all-time high

Tesla CEO Elon Musk gestures as he visits the construction site of Tesla’s Gigafactory in Gruenheide near Berlin, Germany, August 13, 2021.

Patrick Pleul | Reuters

Tesla shares hit an all-time high on Friday, surging above $900 a share shortly after market open, nearly two days after the company reported record revenue and profits in the third quarter.

Shares were trading at roughly $902 at noon.

It marks the first time since January the company made an intraday record.

Tesla’s strong earnings results stemmed from improved gross margins of 30.5% on its automotive business and 26.6% overall. The stock dropped under 2% in after hours trading on Wednesday.

Tesla’s market cap stood at roughly $850 billion at noon.