The heavy-metal band is using natural gas and vegetable oil to power its 7,200-mile journey, but filling trucks up on sustainable fuels still has a long way to go
3 minMetallica, the band that blazed a trail for thrash metal with rugged guitar riffs and relentless drumbeats, is trying to do something similar for trucks powered by sustainable fuels.
The group, a rock music mainstay since their 1986 hit album “Master of Puppets,” is looking to burnish its bona fides on social issues by using rigs powered by fuels including biomethane and vegetable oil on its European tour this summer.
Working with European truck maker Iveco, the authors of songs including “Battery” and “Fuel” (sample lyric: “Fuel is pumping engines / Burning hard, loose and clean / And I burn, churning my direction / Quench my thirst with gasoline.”) aim to show that sustainable transportation in heavy-duty trucking is possible on European highways dotted with alternative-fuelling stations.
But the trucks’ limitations and the workarounds the band’s logistics providers are undertaking on the meticulously-planned 7,200-mile journey winding through the continent from Sweden to Spain also illustrate how far trucking is from using cleaner fuels in regular operations.
“You have limited options because of the lack of the infrastructure,” said Natasha Highcroft, a director of Suffolk, U.K.-based Transam Trucking, which provides logistics for Metallica and other bands. “We use alternative fuels as and when we can, as much as possible, but until the infrastructure is there it’s very difficult.”
The trucks run on natural gas, vegetable oil, electricity and hydrogen fuel cells, and will be hauling giant video screens, lighting and instruments across nine countries.
The workhorses of Metallica’s tour will be 10 heavy-duty trucks powered by renewable natural gas—such as methane from landfills—and four heavy-duty trucks running on biodiesel or hydrogenated vegetable oil. The trucks, dramatically decked out in Metallica’s fierce logo, can travel about 1,000 miles between refuelling.
Both fuels provide a significant reduction in emissions compared with regular diesel, although emissions experts say they aren’t nearly as clean as battery-electric or hydrogen fuel cell technologies.
The tour was due to kick off this week in Munich, Germany, and over the next two months will cover the continent from Italy and Spain in southern Europe to Denmark and Norway. The longest journey between shows, from Warsaw to Madrid, covers almost 1,800 miles.
Iveco, which is providing the eco-friendly trucks for Metallica’s tour, makes both battery-electric and hydrogen fuel cell big-rig engines, the types that governments in Europe and the U.S. are trying to press on truckers as soon as possible. But because of the lack of charging and fuelling stations on the long legs between gigs, the battery-electric and hydrogen trucks will be mostly for promotional use at concerts, said Gerrit Marx , chief executive of the Italian truck maker.
Marx said Iveco wants to highlight that renewable natural gas and hydrogenated vegetable oil are “more available and ready” than batteries and hydrogen while also being “way better than fossil diesel.”
Europe has hundreds of liquefied natural gas and hydrogenated vegetable oil, or HVO, refuelling stations. A representative for British energy major Shell , which is working with Iveco on the tour, said Metallica’s low-carbon journey wouldn’t have been possible even a couple of years ago.
Shell says its customers can access HVO in five European countries and renewable natural gas in Germany and in the Netherlands. That means that when low-carbon options aren’t available, the Iveco trucks will be fuelled with regular LNG and the HVO trucks will be fuelled with regular diesel.
A Shell representative said the Metallica tour will buy carbon credits to offset “unavoidable emissions“ generated by the low-emission trucks.
U.S. companies are also using renewable natural gas and biodiesel to reduce carbon emissions. But trucking specialists say the fuels aren’t available in sufficient quantities to power the world’s fleets, which is why regulators are pushing battery-electric and hydrogen fuel cell vehicles.
Trucking executives say the costs of operating those technologies are double or triple those of diesel and that they aren’t workable in a highly-competitive, low-margin industry like trucking.
Lars Stenqvist , chief technology officer at truck maker Volvo Group , said it is important that high-profile performers like Metallica amplify the capabilities of sustainable fuels.
Truckers will only adopt the technology when customers demand it, he said, so “This is music to my ears.”
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Wall Street’s hottest momentum trade has reversed sharply, as former winners tumble and heavily shorted stocks surge.
3 min
Wall Street’s hottest trade has gone ice cold.
For years, it paid off to buy stocks that were rising in price—and bet against struggling shares. The momentum trade was especially profitable this year, as investors piled into hot stocks including Micron Technology, Nvidia, Advanced Micro Devices and other artificial-intelligence darlings while wagering against those likely to be hurt by the embrace of AI.
The S&P 500 Momentum Index soared 44% in the second quarter, its best quarterly performance on record, and it surged 133% over the past five years, nearly double the broad market’s performance.
Mega funds and rookie investors alike piled into the trade, some using leverage and options contracts in an effort to amplify their returns, propelling the underlying shares higher.
“It is a self-fulfilling prophecy,” said Matthew Tym, managing director at Cantor Fitzgerald, of the trade.
Suddenly, the trade is a loser. The momentum index has tumbled more than 9% since July 1, lagging behind the S&P 500’s 2.8% gain. The index—which tracks stocks in the S&P 500 based on a “momentum score”—is on track for the biggest quarterly underperformance in 25 years. July was the second-worst month for the momentum trade in around 40 years, according to Bank of America estimates; the only month worse was April 2009, in the teeth of the global financial crisis.
Hedge funds that bought momentum shares while shorting low-momentum stocks suffered even more. At the same time, a basket of the most popular stocks held by hedge funds tracked by Goldman Sachs recorded its biggest one-month underperformance in July relative to the S&P 500 in more than 20 years, according to the bank’s analysts.
Momentum trading is based on a rather simple observation: Investments that go up tend to keep outperforming; those that underperform often remain laggards. This kind of trading might seem too simple a stock-picking strategy to work. Yet it often has.
“For decades, it didn’t take a lot of sophistication to run a momentum strategy and make a decent living at it,” says Agustin Lebron, senior researcher at EquiLibre, a trading firm.
Part of the reason: It takes a while for corporate and other information to spread to various investors, so they slowly build positions, producing buying momentum.
“A huge pension fund can’t flip around its positions in a day,” says Lebron. “Behavioral biases also account for some of the effect, as well—people tend to sell their winners too early and hold losers too long.”
Fans of the strategy point to the human tendency to extrapolate from past results—and chase investment returns—noting that momentum patterns have been evident in markets for decades, even centuries. They also say that some of the worst months for momentum strategies are during longer periods of outperformance.
Some have been doing the trade by buying the strongest investments in a sector while shorting the weakest; others lean in to rising markets or asset classes. Still others use a quantitative approach or turn to banks or others who sell ways to make distinct wagers on momentum as a “tradable factor” or a “thematic basket.”
The fans remain believers. “Any strategy has disappointing periods,” says Antti Ilmanen, global co-head of the portfolio solutions group at AQR Capital Management.
The surge in Moderna and other biotech stocks helped crush the momentum trade. These shares were among the most heavily shorted in recent years, but positive news on a cancer vaccine from Moderna and Merck sent those stocks flying, crushing some quant and other hedge funds. Moderna is up around 150% so far this month.
These traders had an especially rough day on Aug. 19, which Goldman Sachs told its clients was the worst day for “systematic long-short managers” in more than two years. About half of the losses were because of momentum trades, the bank said.
Some traders have begun to short, or bet against, the very stocks that propelled the momentum trade earlier this year. Net short positions in futures tied to the Nasdaq-100 index among speculators recently climbed to some of the highest levels of the past two decades, according to data from the Commodity Futures Trading Commission.
The about-face is a sign of how markets have become more treacherous for investors, even as indexes keep climbing. Part of the issue: the recent meltdown of Situational Awareness, a hedge fund that had piled into some of the most popular momentum shares, including chip stocks. After a period of market tumult, Nvidia shares rocketed almost 9% after its earnings, showing how quickly sentiment can shift.
Some investors say the run-up in share prices driving tech stocks higher reminds them at times of the dot-com frenzy decades ago.
Mike Ogborne, the founder of San Francisco-based Ogborne Capital Management, said he has grown more cautious on technology stocks and is keeping more of his portfolio in cash than he typically does.
And he is nervous about the surge in spending by technology giants and quarterly capital expenditures that keep rising.
“It is a little bit like Cinderella and the clock striking midnight. You don’t know when midnight is going to come around,” Ogborne said. “They don’t send a memo around telling you when the capex cycle is over.”
