Roger S. Conrad

Fortum OYJ (Finland: FORTUM, OTC: FOJCF) is breaking its annual dividend for calendar 2023 into two semi-annual payments for April and October. The total of 91 Euro cents is an effective 20 percent cut from 2022’s annual payment of EUR1.14 per share. Management telegraphed a reduction late last year, when the largesse of the German government allowed it to escape the meltdown of Uniper SE. The company ultimately exited the power generation company and energy retailer it had spent years pursuing with a loss of roughly EUR6 billion.

No doubt about it: The so-called culture war has spread to energy. And as a result, pretty much everyone has an opinion on complex challenges that have historically been left to engineers, physicists and finance guys. The inevitable result: There are literally voices attacking every available energy resource. And from the basic economics of various energy sources to environmental impact it’s all seemingly up for debate.

Four more Conrad’s Utility Investor portfolio companies have now reported their Q4 results and updated guidance and all of them generally affirmed longer-term earnings growth guidance.

The S&P 500’s nearly 9 percent year-to-date return and the resilient labor market are raising hopes the US will avoid a recession and deeper slide for stocks this year. I’m not entirely convinced.

Inflation remains untamed and the Federal Reserve will keep pushing interest rates higher to rein it in. And Q1 results we’ve seen so far show pressure on earnings, including some essential services companies.

Mexico’s Peso is up almost 9 percent against the US dollar since the beginning of 2022. That’s as the US Dollar Index (DXY) is up 8 percent, and has gained even more against the Euro and other developed world currencies. The Peso’s strength has made Aggressive Holding America Movil (Mexico: AMXL, NYSE: AMX) a sector outperformer over the past year.

Major infrastructure projects are vulnerable to big cost increases in inflationary times. So while disappointing, TC Energy’s (TSX: TRP, NYSE: TRP) announcement this month of a 30 percent increase in construction costs for its Coastal GasLink natural gas pipeline is hardly surprising.

There’s nothing like a solid start to the year to get investors excited for what’s to come. Some use January’s results as a benchmark, others the first six weeks of the year. But whatever the gauge, at this point it looks like the S&P 500 is off to one of its better beginnings in 2023.