Stock futures are inching higher at the start of the week as investors seemingly cling to newfound optimism that a bond rout is ending, and the Fed’s rate-hike plans will get pruned due to a global slowdown.

Of course, that’s amid growing discontent around the world from high commodity prices that have driven up food prices, crimped U.S. summer driving plans and left some poorer countries in total crisis. “The real world where companies sell their products isn’t looking too special for H2,” writes OANDA’s Jeffrey Halley. 

That brings us to a literal off-the-grid call of the day from Cornerstone Futures’ Brynne Kelly who warns the next black swan for markets could be failing power grids and electricity shortages.

“Problems with power grids across the U.S., and other countries are a potential catalyst for chaos in energy markets that are underappreciated,” energy trader Kelly writes in a new analysis. 

She notes that while high-profile commodities like gasoline gets lots of media attention due to readily available price points, electricity lacks liquid benchmark futures, and utility rate structures are too complex to understand.

Her two charts below show futures curve shifts for major electricity markets — Pennsylvania/New Jersey/Maryland power grid and Texas’s ERCOT on the right. Both have seen “unprecedented” moves higher this year, but it largely stays under the radar, she notes.

That is, until something big happens, like the freak 2021 winter storm in Texas that knocked the state’s lucrative energy companies offline, along with transportation, water distribution and telecoms. 

“Simply stated, crude oil does not actually make electricity in today’s environment. However, power is needed to make oil. Said another way, a failing power grid COULD BE the next oil chain supply problem,” she says. 

Anything bigger than what was seen in Texas “could be potentially catastrophic,” she warns, as we enter the height of height of the summer cooling season amid rising temperatures. Tokyo’s warnings of heatwave-driven blackout warnings are food for thought. 

“There appears to be no plan in place. The power grid, therefore may be the soft underbelly of the entire economy,” said Kelly. She shared the below chart from the U.S. Chamber of Commerce, which showed summer electricity reliability risk and warned that the transition to clean energy was out of sync with realities.