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- President Trump's trade wars are causing more farmers to default on loans as their net income has fallen by half since 2013, and their debt has risen to the most since the farm crisis in the 1980s. (Politico)
- Iran's president called the White House "mentally retarded" and leaders said a path to diplomacy with the U.S. had closed after the Trump administration put sanctions on its supreme leader and other top officials. (Bloomberg)
1 big thing: Southern states lead 2019's stock market solar rally
Solar panels? For investors in solar power stocks and ETFs so far this year, it's been more like solar profits.
What's happening: Invesco's solar ETF, up 51% year-to-date, has returned about 4 times the S&P 500's gain for 2019 and has even delivered almost double the average return of other clean energy ETFs, after a tough 2018.
- Individual solar companies are charging even higher, as companies like Sunrun (77%), SolarEdge (71%) and SunPower (107%) generate particularly outsize returns.
"Things look a lot better so far this year," Tom Heggarty, senior analyst at Wood Mackenzie Power & Renewables (WoodMac), tells Axios. "I suspect stocks are doing better because the industry is expected to grow significantly."
By the numbers: A new report from WoodMac and the Solar Energy Industries Association (SEIA) finds that Q1 saw U.S. solar installations (combined utility-scale, residential, commercial and more) rise 10% versus the same period in 2018.
- The 2.7 gigawatts of solar PV (panels that convert sunlight into electricity) installed made it the best Q1 ever, though other quarters have seen higher growth, and it was a 37% drop from Q4.
- Analysts expect installed U.S. PV capacity to more than double over the next 5 years.
- The survey forecasts 25% growth in 2019 compared with 2018.
- The U.S. solar market saw more than 2 million installations, 3 years after the market surpassed 1 million installations. The industry is expected to hit 3 million installations in 2021 and 4 million installations in 2023.
The intrigue: Solar stock prices have outpaced other renewable energy options thanks to major pickups in residential installation of solar panels, particularly in the South. The uptick has come from states like Florida and Texas, so-called emerging markets in the industry, that are now beginning to see a changing regulatory environment pay dividends.
- Maryland recently removed a cap on the amount of energy that solar system owners can exchange on the grid and passed a bill requiring the state to generate 50% of its electricity from renewable energy by 2030.
- Almost a third of new residential capacity in Q1 came from states outside the top 10 markets in cumulative capacity, the highest share ever, data from SEIA report shows.
Yes, but: Non-residential installations fell to the lowest quarterly level since Q1 2017, dropping for a second year in a row. The report suggests policy shifts in states like California, Massachusetts and Minnesota may be stifling commercial growth.
- The report does project non-residential installations will pick up again in 2020.
Bonus: Reaping the benefit of corporate investment
"The first quarter reflected bit of a rebound for rooftop solar, and perhaps more importantly the amount of corporate investment in solar by companies such as Anheuser Busch, Starbucks, Facebook, Target, Walmart and many others," SEIA spokesman Dan Whitten tells Axios in an email.
- Anheuser-Busch recently announced a 15-year virtual power-purchase agreement with Recurrent Energy for a 222-megawatt (AC) project in West Texas as part of its pledge to purchase 100% renewable electricity by 2025. It also has projects in New York and Oklahoma.
- Starbucks in April unveiled a partnership with U.S. solar developer Cypress Creek on 8 Texas solar projects that will provide energy to 360 stores across the state.
2. Apple doubles down on buybacks
Apple again led S&P 500 companies in buybacks, spending a new record $23.8 billion in Q1, more than doubling its spend from the previous quarter, data from S&P Global shows.
- Apple has long been a buyback behemoth. The company holds 8 of the 10 all-time records for quarterly buybacks, and has spent more than $75 billion on buybacks over just the past year.
- It has spent $234.7 billion over the most recent 5-year period, and $284.3 billion over the last 10-year period.
- Apple accounted for 23% of share buybacks made by the top 20 S&P 500 companies.
The big picture: While Apple has increased its buyback spending, other S&P 500 companies have slowed from 2018's record pace.
- Companies bought back just $205.8 billion worth of their own shares, a 7.7% decline from Q4 2018, S&P reported. That ended the streak of 4 consecutive quarters of record buybacks.
Yes, but: Buybacks rose 8.9% from Q1 2018, which set a record at the time.
- Outside analysis of the broader stock market, beyond just the S&P, shows announced buyback spending was higher in Q1 2019 than Q4 2018.
What they're saying: Ratings agency Moody's warned last month that companies are spending more on share buybacks and dividends than they were paying in taxes before the 2017 tax cut. The tax savings "can be wiped out entirely by even a modest change in share buybacks," Christina Padgett, senior vice president at Moody's, told Axios at the time.
- S&P 500 companies, at least, may be heeding the warning.
Go deeper: Apple needs a next act
3. Turkey at a crossroads
Investors are again getting bullish on emerging markets, as the Fed is expected to cut interest rates and the dollar is expected to fall in value. That should mean a strong environment for EM economies to perform.
- But things have gotten tougher for many of the world's largest emerging countries, especially Turkey, which finds itself at a major crossroads following elections in Istanbul.
Driving the news: The lira saw the biggest gains in the global FX market, rising nearly 2% against the dollar Sunday after the city's mayoral election was again won by a candidate running against Turkish President Recep Tayyip Erdogan's party. (The same candidate won in March, but Erdogan ordered a mulligan, claiming fraud.)
- However, much of the luster wore off Turkey's currency in trading Monday, and the lira shed most gains.
- It was "a classic relief rally, but its durability is questionable at this stage," Piotr Matys, a strategist at Rabobank in London, told Bloomberg. "Apart from fixing the economy, the Erdogan administration must find a solution to the diplomatic conflict with the U.S. over the Russian S-400 defense system to avoid sanctions."
Background: It's been exactly 1 year since Erdogan won re-election and his handling of the economy, central bank and foreign policy have put investors on edge.
- Analysts expect the central bank, led by Erdogan loyalists, will soon cut interest rates, after inflation fell below 20% in May.
- There is also growing fear about a confrontation between Erdogan and President Trump at the G20 summit this week after Turkey purchased a missile defense system from Russia.
- Turkey's stock market is at its lowest level in nearly a decade in dollar terms, largely because the lira has lost about a quarter of its value since 2017.