German energy breakdown

Happy hump day, crew.?I'm Phil Rosen, reporting from New York.?

Caffeine is powering me through the morning and all I did was turn on a kettle. But Germany is going to great lengths to secure extra energy and is still playing catch-up.

Amid an intensifying supply crunch, the ongoing war in Ukraine, and uncertain politics of Russia, Europeans are feeling the squeeze.?

Below, I'm breaking down what Germany, specifically, has had to do to navigate all this.?

Let's get started.?

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1. A perfect storm is brewing in Europe's energy market —?and Germany is right in its path.

German baseload year-ahead power prices, the European benchmark, are?up almost 500% from a year ago, Bloomberg data shows, as costs have climbed for nearly a week straight.?

At the crux of the price jump is the surge in natural gas prices, which have spiraled higher as Russia has kept exports to Europe extremely minimal.?

The country's top regulator?already warned that Germany must dramatically?pull back its gas usage?to avoid a shortage this winter.?

Over the past week, the continent's biggest economy has made a flurry of moves in response to Russia's energy "blackmail" against Europe, including pushing off the?closure of its remaining three nuclear power plants.?

Each was slated to shutter by 2023, but?Russia's energy cut-offs?have opened the door to an extension.??

At the same time,?Germany inked a deal with natural gas hubs?to keep two terminals stocked through the winter ahead of any more potential cuts, Reuters reported.?

Meanwhile, a German refinery partly owned by Moscow?has started mixing US oil with Russian crude. About 20% of the Schwedt refinery's output is US crude, according to Bloomberg, which marks a pivot from before when it was?solely reliant on supplies from Russia.?

It's possible some relief may come from a new gas pipeline project that would connect the Iberian Peninsula to France.

Officials say it?could be ready in nine months, and that it would boost Spain's gas export capacity by 30% —?but Deutsche Bank doesn't seem to be betting on it.

In other news:

2. Bank of America recommended this batch of cheap stocks.?According to the firm's analysts, these names will profit as manufacturers reshore production back to the US.?See the list of 18 companies here.?

3. The director of wealth strategy at a $26 billion bank shared how to maximize returns for the future.?Despite recent rallies, stocks remain down roughly 10% on the year.?But Huntington Private Bank's Dan Griffith broke down two strategies investors can use to leverage their money for smart long-term investments.?

4. One of the youngest certified financial planners in the country said traditional retirement plans won't meet the needs of Gen Z workers.?Nate Hoskin, who earned his certification at 22, suggests younger clients should work on side hustles and passive income streams —?and explained why they can be more valuable than traditional IRA plans.

5. Bank of America's closely-watched Global Fund Manager survey showed investors are expecting a recession.?According to the Tuesday report, 58% of respondents said a downturn will hit in the next 12 months.?That's up from 47% last month, and marks the highest percentage since May 2020.?

And how about you? What do you think comes next for Germany's energy crunch? Let us know in the comments.

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