And that’s where we’re headed with our call of the day from Citigroup, whose strategists have stock ideas to play what they expect will be one of the ten fastest-growing markets through 2040.

They are talking about the global fuel cell industry, a direct play on the green energy debate, and “reaching the part that batteries cannot.”

“Fuel cells enable both de-carbonization and energy resilience, and we see them as crucial in harder-to-abate sectors like commercial vehicles and marine,” a Citi team led by research analyst Martin Wilkie told clients in a note on Tuesday.

Their base case sees this market reaching 50 gigawatts (GW) and $40 billion by 2030, offering a compound average growth rate of more than 35% in dollar terms, with further acceleration to 500GW/$180 billion by 2040.

They admit they’re on the bullish side with these projections, and note fuel cell stocks are on average down around 70% since their January 2021 peaks . 

“The fuel cell equity story has had false starts before, but we see the impetus from emissions policy as well as announced hydrogen plans as creating attractive opportunities,” said the Citi analysts, highlighting policies such as the U.S. Inflation Reduction Act, which aims at beefing up renewable energy and a recent EU move to offer more green-energy research and development subsidies.

While passenger cars were a big source of demand for the growing fuel cell market in 2021, they don’t think it can be a big competitor to battery electric. However, stationary power, such as distributed and backup power generation and heavy-duty transport, think commercial vehicles, off-road and later marine are set to become key fuel-cell markets.

U.K.-based Ceres Power Plug Power Belgium’s Umicore and Japan’s Toyota are Citi’s buy-rated stocks with high exposure to the fuel-cell theme.

Other names they mention, include Daimler Truck and Volvo which are working with Germany’s Traton on a joint venture called Cellcentric that aims to develop that technology for trucks, with a production goal of 2025. Others are outsourcing fuel-cell tech, such as Italy’s Iveco Group which has teamed up with South Korea’s Hyundai and U.S.-based Paccar with Toyota

The markets

Stock futures are lower, with bond yields rising, and the dollar keeping its grip on the green. Oil prices are also under pressure.

The buzz

Shares of the world’s biggest chip maker, TSMC fell 8% in Taiwan where stocks dropped more than 4% following new limits by the U.S. imposed on exports of semiconductors and chip-making equipment to China.

The Bank of England made the second move this week to try to bring down surging bond yields, saying Tuesday it will expand its bond purchases to index-linked U.K. bonds. So far, those yields are continue to creep higher.

The National Federation of Independent Business small-business index showed confidence rising in September, but inflation a nagging problem. At noon Eastern we’ll hear from Cleveland Fed President Loretta Mester.

The U.S.’s third-biggest railroad union will be back at the negotiating table with employers on Tuesday, after rejecting a deal and raising the possibility of crippling strikes.

The Kremlin’s war hawks were thrilled at the devastating strikes across Ukraine on Monday. Now they want more. G-7 leaders are holding an emergency meeting to discuss the ramping up of the war.

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The chart

This graphic by Visual Capitalist’s Truman Du, shows Disney’s streaming empire — Disney+, Hulu, ESPN+ — is “giving Netflix a run for its money.”

The tickers

These were the top searched tickers on MarketWatch as of 6 a.m. Eastern Time:

TickerSecurity name
Tesla
GameStop
AMC Entertainment Holdings
Apple
NIO
Bed Bath & Beyond
AMC Entertainment Holdings preferred shares
Nvidia
Twitter
Advanced Micro Devices
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