Saturday 25 May 2024

Special Update 25/5/2024 NASDAQ Highs. Other Stocks Wobble.

Baltic Dry Index. 1796 +01            Brent Crude 82.12

Spot Gold 2334                U S 2 Year Yield 4.93 +0.02  

In the run up to the UK General Election on July 4, the LIR will play its part.

Q. What's the difference between a politician and a flying pig?

A. The letter "F".

In the US stock casinos, with Nvidia and AI hype, NASDAQ closed the week at a new closing high. Is “the stock market for the next hundred years” late 1990s  PR hype back? 

Away from the AI  and technology mania, more stocks suffered from a growing perception that the US central bank may not begin cutting their key interest rate until September at the earliest, though a September cut might look like US election interference in favour of President Biden Joe Biden.

In the non casino gambling world, welcome to the Monaco Grand Prix and Indy 500 weekend. Not an EV racer in sight at either location.

Nasdaq closes Friday at record high as Nvidia and the AI trade rallies on

UPDATED FRI, MAY 24 2024 4:20 PM EDT

The Nasdaq closed Friday at a fresh record high as gains in chipmaker Nvidia outweighed worries that the Federal Reserve will delay interest rate cuts.

The S&P 500 rose 0.7%, closing at 5,304.72, while the Nasdaq Composite advanced 1.1%, ending at 16,920.79. The Dow Jones Industrial Average edged up 4.3 points, or 0.01%, to finish at 39,069.59.

Week to date, the S&P 500 inched up just 0.03%. The tech-heavy Nasdaq outperformed, with a gain of 1.41%. Meanwhile, the Dow shed 2.33%, marking its first negative week in five.

Nvidia shares climbed around 2.6% Friday as enthusiasm continued over its blockbuster earnings report, pushing the shares above $1,000 for the first time. The bullish sentiment on the AI giant and other tech names powered the market higher, even as concerns the Fed will not lower rates this summer lingered.

After several strong economic and labor data releases this week, Goldman pushed its forecast for the Fed’s first rate cut back to September from July.

“Inflation is likely to be much improved by September, but hardly perfect, and still at a year-on-year rate that makes cutting a less than obvious decision,” wrote Goldman economist David Mericle.

Traders are now pricing in less than a 50% chance the central bank will cut rates at its September meeting, according to the CME FedWatch Tool.

Several tech names were higher on Friday. Advanced Micro Devices and Intel rose 3.7% and 2.1%, respectively. Meta and Netflix shares also rallied 2.7% and 1.7% each. Their performance helped Nasdaq log its eleventh record close of the year.

Stock market news for May 24, 2024 (cnbc.com)

European stocks close lower as interest rate outlook weighs on sentiment; Ocado up 6%

UPDATED FRI, MAY 24 2024 11:46 AM EDT

European markets closed lower on Friday, mirroring a global trend as the U.S. interest rate outlook weighed on sentiment.

The regional Stoxx 600 index was down by 0.17%, trimming some losses into the close. Most sectors finished in the red as utilities led losses for a second day, down 1.2%, while retail stocks rose 0.3%.

The pan-European benchmark closed down 0.26% for the week.

Wall Street’s Dow Jones Industrial Average had its worst session in more than a year on Thursday, after the minutes of the last Federal Reserve meeting and strong U.S. economic data reinforced a “higher for longer” narrative stateside. On Friday, U.S. stocks ticked higher at the end of a choppy week.

While the European Central Bank still looks on track to begin cutting interest rates in June, the Bank of England’s own course was thrown further into doubt this week by hotter-than-expected inflation figures.

European markets open to close: FTSE 100, DAX, CAC 40 (cnbc.com)

Finally, more on so you really, really, really, want an EV. Well maybe not an EV fire engine. Would you mind if we put out the fire in four hours after we recharge the battery?

About those 'all electric' 'zero emissions' fire trucks, they have diesel engines

May 23, 2024

(The Center Square) – When Albuquerque announced plans to acquire a new fire engine, New Mexico's governor lauded the "zero emissions" technology while a fire department spokesman called it "all electric" and KRQE 13 gushed about the "fully electric" fire truck.

San Diego's NBC 7 reported on what it called that city's first "all electric fire apparatus." When the electric fire engine debuted in Portland, NBC's KGW 8 quoted a fire department spokesman lauding the "monumental" "zero emissions" vehicle.

When an electric fire truck came to Gilbert, Arizona, FOX 10 quoted the fire chief saying that "There’s no cancer coming out of the tail pipe and I say it that way because diesel particulates are a contributor for cancers."

Viewers could be forgiven for thinking that the new fire trucks were all electric and zero emissions. They'd be wrong. All the fire trucks also have a diesel engine and a tailpipe releases those "cancer-causing particulates."

When the first Pierce Volterra Electric Fire Truck rolled out in Madison, Wisconsin, the vehicle was repeatedly called "all electric" or "zero emissions." You had to listen 8 minutes into the presentation to get to the part where a fire chief admits there's an internal combustion engine for pumping water on a fire.

Perhaps journalists and fire department spokespeople were misled by Pierce Manufacturing's web site ,which reads in bold headline type: "Zero Emissions. Zero compromises."

Critics say it is because electric engines are being hyped beyond what they can deliver. "As we’ve seen time and time again, electric engines are not up to the powering a simple road trip, much less taking on a role as critical as public safety," said Larry Behrens, Communications Director for Power The Future. "The fact this over-hyped fire truck has a diesel engine is proof they know it needs power that won’t run out."

The new fire trucks come with a hefty price tag – 40% to 50% more than a comparable diesel fire truck. For example, the New Mexico hybrid fire truck that has been ordered costs the local government $1.8 million with $400,000 coming from a federal grant.

More

About those 'all electric' 'zero emissions' fire trucks, they have diesel engines (msn.com)

US safety probe into Waymo self-driving vehicles finds more incidents

By David Shepardson 

WASHINGTON, May 24 (Reuters) - The National Highway Traffic Safety Administration said Friday it has learned of nine additional incidents that raise concerns about the performance of Alphabet's Waymo (GOOGL.O) oself-driving vehicles.

Earlier this month, the U.S. auto safety regulator opened an investigation after 22 reports of its robotaxis exhibiting driving behavior that potentially violated traffic safety laws, or demonstrating other "unexpected behavior," including 17 collisions.

In a letter to Waymo released Friday, NHTSA said it has learned of 9 additional similar incidents.

The agency said several incidents under investigation "involved collisions with clearly visible objects that a competent driver would be expected to avoid."

NHTSA said "reports include collisions with stationary and semi-stationary objects such as gates and chains, collisions with parked vehicles, and instances in which the (automated driving system) appeared to disobey traffic safety control devices or rules."

The agency asked Waymo to answer a series of questions by June 11 about the incidents and provide video for all of the incidents.

Waymo, which did not immediately comment Friday, earlier this month did not address specific safety incidents cited by NHTSA but said it was "proud of our performance and safety record over tens of millions of autonomous miles driven."

NHTSA said it is concerned that Waymo self-driving vehicles "exhibiting such unexpected driving behaviors may increase the risk of crash, property damage, and injury" and added that a number of incidents occurred "in the proximity of other road users, including pedestrians."

The investigation is the first stage before the agency could demand a recall if it believes the vehicles pose an unreasonable risk to safety.

More

US safety probe into Waymo self-driving vehicles finds more incidents | Reuters

Global Inflation/Stagflation/Recession Watch. 

Given our Magic Money Tree central banksters and our spendthrift politicians,  inflation/recession now needs an entire section of its own.

Is electricity price rationing our future thanks to Generative AI?

Electricity grids creak as AI demands soar

21 May 2024

There’s a big problem with generative AI, says Sasha Luccioni at Hugging Face, a machine-learning company. Generative AI is an energy hog.

“Every time you query the model, the whole thing gets activated, so it’s wildly inefficient from a computational perspective,” she says.

Take the Large Language Models (LLMs) at the heart of many Generative AI systems. They have been trained on vast stores of written information, which helps them to churn out text in response to practically any query.

“When you use Generative AI… it’s generating content from scratch, it’s essentially making up answers,” Dr Luccioni explains. That means the computer has to work pretty hard.

A Generative AI system might use around 33 times more energy than machines running task-specific software, according to a recent study, external by Dr Luccioni and colleagues. The work has been peer-reviewed but is yet to be published in a journal.

It’s not your personal computer that uses all this energy, though. Or your smartphone. The computations we increasingly rely on happen in giant data centres that are, for most people, out of sight and out of mind.

“The cloud,” says Dr Luccioni. “You don’t think about these huge boxes of metal that heat up and use so much energy.”

The world’s data centres are using ever more electricity, external. In 2022, they gobbled up 460 terawatt hours of electricity, and the International Energy Agency (IEA) expects, external this to double in just four years. Data centres could be using a total of 1,000 terawatts hours annually by 2026. “This demand is roughly equivalent to the electricity consumption of Japan,” says the IEA. Japan has a population of 125 million people.

At data centres, huge volumes of information are stored for retrieval anywhere in the world – everything from your emails to Hollywood movies. The computers in those faceless buildings also power AI and cryptocurrency. They underpin life as we know it.

But some countries know all too well how energy hungry these facilities are. There is currently a moratorium preventing the construction of new data centres, external in Dublin. Nearly a fifth of Ireland’s electricity is used up by data centres, and this figure is expected to grow significantly in the next few years – meanwhile Irish households are reducing their consumption, external.

The boss of National Grid said in a speech in March that data centre electricity demand in the UK will rise six-fold in just 10 years, fuelled largely by the rise of AI. National Grid expects that the energy required for electrifying transport and heat will be much larger in total, however.

Utilities firms in the US are beginning to feel the pressure, says Chris Seiple at Wood Mackenzie, a consultancy.

“They’re getting hit with data centre demands at the exact same time as we have a renaissance taking place – thanks to government policy – in domestic manufacturing,” he explains. Lawmakers in some states are now rethinking tax breaks offered to data centre developers because of the sheer strain these facilities are putting on local energy infrastructure, according to reports in the US, external.

Mr Seiple says there is a “land grab” going on for data centre locations near to power stations or renewable energy hubs: “Iowa is a hotbed of data centre development, there’s a lot of wind generation there.”

More, much more.

Electricity grids creak as AI demands soar - BBC News

Covid-19 Corner       

This section will continue until it becomes unneeded.

This holiday weekend, something different.

MAY 20, 2024

Four Important Questions About Bird Flu, Answered

The virus has killed tens of millions of birds and infected hundreds of species of animals, including dairy cattle in the United States. Here’s what you should know about it

Over the past few years, avian influenza has touched almost every corner of the planet. Since 2021, outbreaks have impacted at least 320 species from 21 different orders, most of which are water birds. Tens of millions of poultry in dozens of countries around the world have died either from the disease itself or from preventative culling. The viral infection has also been spreading to mammals—and was detected in dairy cows in the U.S. for the first time in late March.

The Food and Drug Administration (FDA) has determined that milk and other dairy products from cows are safe to consume, since the pasteurization process seems to inactivate the virus. But genomic data suggests that bird flu has been spreading in cows for months, multiple outlets reported at the end of April. The finding suggests that infections are more widespread in the animals than previously known.

Still, the Centers for Disease Control and Prevention (CDC) says that the current health risk to the general public remains low. But with so many headlines about bird flu recently, we reached out to avian influenza experts and scoured the news to provide you with up-to-date answers on four key questions.

Researchers have been tracking bird flu since the late 19th century. The first recorded outbreak in U.S. poultry occurred in the 1920s, and outbreaks have periodically cropped up in the decades since. A million birds died in a 1968 pandemic. The H5N1 strain, which has spread widely in animals in recent years and was recently detected in cows, was first identified in 1996 in domestic waterfowl in southern China.

Over the last several years, the virus’ footprint has expanded. “Prior to 2020, this virus was largely restricted to Europe, Asia and Africa,” Michelle Wille, who studies avian influenza in wild birds at the University of Melbourne in Australia, writes via email. Since then, the virus has entered North America at least three different times and spread to South America, the sub-Antarctic and the Antarctic, she says.

More, much, much more.

Four Important Questions About Bird Flu, Answered | Smithsonian (smithsonianmag.com)

Technology Update.

With events happening fast in the development of solar power and graphene, I’ve added this section.

This weekend something different. Improving global shipping emissions and getting cost savings in addition.

Ridiculously simple idea cuts cargo ship emissions by 17.3% in first trials

Loz Blain  May 22, 2024

That's without any modification to the ships themselves, too. The ambitious 'Blue Visby Solution' proposes enormous fuel and emissions savings for cargo ships worldwide, simply by being smarter about speed and timing and eliminating inefficiencies.

Shipping is an extremely efficient way to move bulk goods around the planet, but it's responsible for around 3% of global man-made carbon emissions, and the unique energy requirements of long-haul cargo ships make them extremely difficult to decarbonize.

There are all manner of technological solutions in the pipeline: hydrogengreen ammonia and methanol powerplants, flettner rotorsheaving oscillators... There's even been a return to giant sail-wings, as well as giant autonomous kites designed to pull ships along and save fuel.

But that's what makes the Blue Visby Solution so fascinating; you don't have to alter the ships at all. You just pilot them differently.

Currently, according to the Blue Visby team, most cargo ships follow an operational practice known as "sail fast, then wait" (SFTW). That is, they go as quickly as they can from port A to port B, regardless of what the schedule's looking like at their destination. When they get there, they sit still and wait at idle, continuing to burn fuel, until it's time for them to dock and load/unload their cargo.

The Blue Visby Solution requires considerable connectivity, co-ordination and participation, from lots of different stakeholders, on a global scale – but where the rubber meets the road, it's incredibly simple. It simply tells the ships to slow down, so they arrive at port right on time.

Pushing all that bulk through the water at a slower speed cuts down hugely on hydrodynamic drag, so the engines burn considerably less fuel, with a corresponding drop in emissions. And the cargo delivery speed is totally unaffected; the ships still load and unload at exactly the same times.

How much of an efficiency gain are we talking here? The Blue Visby team studied the movements of 3,651 Panamax vessels taking 20,580 trips in 2022, and estimated these timing tweaks could cut emissions by a median rate of 23.2% without affecting customer outcomes.

----Now, the first sea trials are complete. Two bulk carriers, the M/V Gerdt Oldendorff and the M/V Begonia, deployed "all components of the Blue Visby Solution" including software, technical and operational systems, on voyages to Australia. The former recorded an estimated CO2 reduction of 28.2% against its standard SFTW speeds. The latter managed 12.9%, for an average of 17.3%.

That's a considerably larger affect than you'd get out of some of these huge sail systems, without modifying the ship at all. And from a scheduling tweak!

These initial results are incredibly promising, but eliminating SFTW thinking from the global shipping trade is no small task; according to Marine Log it's a practice that dates back to the age of sail. It's embedded in hard-fought, long-term contracts between shipping companies, customers, ports, dockworkers and all the many dependent services that plug into global logistics, sometimes with incentives.

More

Ridiculously simple idea cuts cargo ship emissions by 17.3% in first trials (newatlas.com)

Next, our latest new section, the world global debt clock. Nations debts to GDP compared.

World Debt Clocks (usdebtclock.org)

This weekend’s music diversion. Vivaldi season in major keys. Vivaldi at his best. Approx. 14 minutes.

VIVALDI | Suonata à Violino, Oboè, et Organo obligati | RV 779 in C major | 1708 manuscript

VIVALDI | Suonata à Violino, Oboè, et Organo obligati | RV 779 in C major | 1708 manuscript - YouTube

This weekend’s chess update. Approx. 13  minutes.

100 Year Old Trick!

100 Year Old Trick! - YouTube

This weekend’s final two YouTube EV diversions.  Both approx. 8 minutes.

EV Market LAYOFFS Are Here! Thousands LOSING Their Job!

EV Market LAYOFFS Are Here! Thousands LOSING Their Job! - YouTube

Chinese EV Problems With Safety Are So HUGE That They Can't Be CENSORED Anymore!

Chinese EV Problems With Safety Are So HUGE That They Can't Be CENSORED Anymore! (youtube.com)

A visiting constituent parked their car in London outside Parliament.

"You can't park here, sir" said a Policeman Policeperson. "This is where our politicians work."

"Don't worry, I've locked it.” The smart constituent replied.


Friday 24 May 2024

Nvidia Soars. Boeing Crashes. Stocks A Pause Or The Top?

Baltic Dry Index. 1796 -08     Brent Crude  81.38

Spot Gold 2334           US 2 Year Yield 4.91 +0.05

It takes some skill to spoil a breakfast - even the English can't do it. 

John Kenneth Galbraith.

Was that the top? It’s far to early to know, but it’s the giant question od the day, week and month as the stock casinos head into the last trading week of May.

In the real world economy, inflation might be coming back led by food price inflation and higher shipping costs.

The central banks might have to delay interest rate cuts until the end of the year.

Sell in May, go away, might be a good strategy in an increasingly iffy 2024.


Japan, Hong Kong stocks lead Asia markets lower; investors assess inflation data

UPDATED FRI, MAY 24 2024 10:30 PM EDT

Asia-Pacific markets fell on Friday, with markets in Hong Kong and Japan leading losses as investors digested inflation data.

The Nikkei 225 slid 1.24%, while the broad-based Topix fell 0.49%. Investors assessed April inflation from Japan for clues on the Bank of Japan’s monetary policy moves.

Japan’s core inflation — which strips out fresh food and energy — eased to 2.2% from 2.6% in March, in line with expectations. Headline inflation slowed to 2.5%, down from March’s 2.7% figure.

Hong Kong’s Hang Seng index fell 1.35%, while the mainland Chinese CSI 300 dipped 0.22%.

In South Korea, the Kospi was about 1% lower, dragged by heavyweight Samsung Electronics, while the small-cap Kosdaq lost 0.45%.

Heavyweight chipmaker Samsung Electronics shares fell 2.4% after Reuters reported that the South Korean tech giant’s latest high bandwidth memory (HBM) chips are not yet ready for use by U.S. chipmaker Nvidia.

The Australian S&P/ASX 200 also fell 1.06%.

Wall Street continued to extend losses, despite a post-earnings rally in tech darling Nvidia. The chipmaker’s shares rose 9.3% on Thursday, following a stellar earnings that topped expectations.

Overnight in the U.S., the Dow Jones Industrial Average marked its worst session of the year as it slid 1.53%, with aircraft manufacturer Boeing falling 7.6% — the biggest laggard in the index.

The S&P 500 dropped 0.74%, and the Nasdaq Composite tumbled 0.39%. Earlier in the session, both the broad-market index and the tech-heavy benchmark had hit record highs.

Asia markets live updates: Japan CPI, Nvidia earnings (cnbc.com)

Stock futures are little changed after Dow posts worst session since March 2023: Live updates

UPDATED FRI, MAY 24 2024 7:57 PM EDT

Stock futures were little changed on Thursday evening, following the worst session in more than a year for the Dow Jones Industrial Average.

Futures tied to the 30-stock Dow hovered near the flatline. S&P 500 futures ticked up by 0.06%, while Nasdaq 100 futures inched higher by 0.04%.

In after-hours trading, Intuit shares slid 6% on soft guidance for the current quarter.

During Thursday’s session, chipmaker Nvidia added more than 9%, propelled by strong guidance in addition to an earnings beat and a 10-for-1 stock split. Nvidia has become a key bellwether for the broader market, and it is the de facto leader of the so-called “Magnificent Seven.”

The rise in the artificial intelligence darling did not help the market, however, with more than 400 stocks in the S&P 500 closing lower. The broad market index lost 0.74%, while the Nasdaq Composite fell 0.39%. The Dow suffered a 1.53% decline for its worst session since March 2023, weighed down by a 7.6% drop in Boeing.

“Markets tend to take breather heading into a long holiday weekend,” said Jamie Cox, managing partner at Harris Financial Group. “The Fed minutes provided the catalyst and not even Nvidia could refocus markets on the positives.” Indeed, at their latest meeting, central bank policymakers had expressed worries over the lack of progress in tamping down inflation.

Robust economic data on Thursday further dented investors’ hopes for rate cuts from the Federal Reserve. May services and manufacturing data surpassed forecasts from economists, while initial jobless claims for the week ending May 18 came in at 215,000. Economists surveyed by Dow Jones expected a reading of 220,000.

To that end, the S&P 500 is tracking for a weekly loss of 0.7%, while the Dow is on pace to drop about 2.4%. The Nasdaq is the outperformer, with a modest gain of 0.3%.

On Friday, traders will be watching for April’s durable goods report and May’s reading of the University of Michigan’s consumer sentiment index.

Stock market today: Live updates (cnbc.com)

 

Dow falls 600 points in worst day of 2024 as Nvidia’s blockbuster earnings fail to lift broader market: Live updates

UPDATED THU, MAY 23 2024 4:36 PM EDT

Stocks fell Thursday, with the Dow Jones Industrial Average registering its worst day of 2024, as a post-earnings rally in Nvidia failed to lift the broader market.

The 30-stock Dow slid 605.78 points, or 1.53%, and closed at 39,065.26 for its worst session of the year. Boeing was the biggest laggard in the Dow, falling 7.6%. The S&P 500 dropped 0.74%, closing at 5,267.84, and the Nasdaq Composite tumbled 0.39% to end at 16,736.03. Earlier in the session, both the broad-market index and the tech-heavy benchmark reached record highs.

---- Nvidia’s results have been a focal point for Wall Street, as traders hoped for signs that the excitement around AI is not waning. With its market cap of more than $2.5 trillion, Nvidia also has considerable sway over the broad S&P 500.

However, the majority of the stocks in the broad market index turned negative Thursday, indicating a lack of market breadth. More than 400 names in the S&P 500 were lower, and information technology was the only positive sector for the day.

Stronger than expected economic data also evaporated the rally on Thursday as investors cut their odds of a rate cut in September. Services and manufacturing data for May both topped economists’ expectations, according to purchase manager surveys from S&P Global released Thursday. Initial jobless claims for the week ending May 18 came in at 215,000, while economists polled by Dow Jones called for 220,000. The results added to investors’ concerns that the Federal Reserve will not lower interest rates soon.

Traders are currently pricing just a 51% chance the Fed will cut rates in its September meeting, down from 58% a day ago and nearly 68% in the prior week, according to the CME FedWatch Tool. When the probability falls below 60%, it’s viewed as no longer likely that the Fed will take action.

The market has “some loose footing,” Piper Sandler chief market technician Craig Johnson wrote in a Thursday note. “This market’s strange mix of leadership, combined with breakdowns in transportation stocks and mediocre breadth readings, makes us not so confident that a new leg higher will be sustained from current levels.”

Stock market news for May 23, 2024 (cnbc.com)

In real US economy news, far from the Wall Street stock casinos, Bidenomics isn’t working for many.


Deere announces more Iowa layoffs as sales slow amid gloomy farm income forecast

May 23, 2024

The John Deere plant in Waterloo is laying off 192 workers effective June 22.

The company posted the notice on Iowa's Worker Adjustment and Retraining Notification, or WARN, website. 

The latest announcement follows layoffs of 308 in Waterloo announced in late March as well as layoffs of 150 workers from Deere's Ankeny facility the same month.

In a statement to KWWL-TV in Waterloo, Deere said managers met with employees to inform them of the layoffs.

"Each John Deere factory balances the size of its production workforce with the needs of the individual factory to optimize the workforce at each facility," it said.

It said Deere employs 5,200 people in Waterloo, with about 3,300 of them working in production and maintenance.

Plunge in farm income leads to inventory backup

Net sales for Deere’s production and precision agriculture segment dropped 16% to $6.6 billion during the second quarter of 2024, compared to $7.8 billion during the same period last year, primarily due to lower shipment volumes. Large agriculture equipment sales in the U.S. and Canada are expected to be down 15% for the year.

Farm income is expected to slide 25.5% to $116.1 billion this year from 2023, according to the U.S. Department of Agriculture, set for a second consecutive annual drop, as corn and soybean prices plummet and production costs increase.

Higher interest rates also have piled pressure on farmers, prompting some equipment dealers to offer discounts or auction off machines at lower prices to manage bloated inventories, forcing Deere and peers to cut production.

“While ag prices have increased a bit recently, most crop prices remain much lower than 2023, suggesting that revenues will continue to be stressed in the year ahead. Interest rates will also likely remain higher into 2025 as ag credit conditions could be limited for some time,” Nationwide Senior Economist Ben Ayers wrote.

Deere, the world's largest maker of farm machinery, is headquartered in Moline, Illinois, in the Quad Cities, but most of its U.S. production is in Iowa.

With sales slowing, Deere lays off more in Iowa (desmoinesregister.com)

Finally, in commodities news, a growing shortage of robusta coffee.


World heads for fourth year of shortages for instant coffee beans

Volcafe forecasts a global robusta deficit of 4.6 million bags in 2024/25, smaller than the 9-million-bag deficit seen in the previous season.

By Ilena Peng and Dayanne Sousa, Bloomberg 23 May 2024  08:30 

Volcafe, one of the world’s top coffee traders, sees an “unprecedented” fourth year of deficits for robusta beans used in instant coffee, as top producer Vietnam continues to face dry weather.

The crop potential for Vietnam in the 2024/25 season is seen at 24 million bags, the lowest in 13 years, according to a Volcafe report seen by Bloomberg. Poor rainfall in Vietnam has caused “irreversible damage” to coffee blossoms, while lower fertiliser use and the expansion of durian trees at the expense of coffee acreage have also weighed on production.

Volcafe forecasts a global robusta deficit of 4.6 million bags in 2024/25, smaller than the 9-million-bag deficit seen in the previous season. Each bag of coffee is 60 kilograms. Supply tightness has fueled a robusta rally this year, with futures traded in London surging to a fresh intraday high above $4,300 in late April.

Futures have since pared back, but “a solution to the current robusta deficit requires higher prices” to pressure demand or prompt buyers to use more arabica coffee, Volcafe said in the report.

The forecast is unwelcome news for coffee drinkers, who are already paying more for their daily brew. The world is facing a shortage of the cheaper robusta variety as El Niño weather conditions continue to harm crops in Southeast Asia.

Still, demand for robusta beans — driven by the rising popularity of instant coffee — hasn’t weakened in emerging markets, but is projected to slow once price increases are passed on, the report said.

“Coffee prices for robusta heavy product blends remain at a substantial discount to arabica containing blends and thereby consumers seeking value continue to choose the former for now,” the report said.

Industry demand has begun to move toward arabica beans in the last six months, but a bigger shift or more robusta demand destruction is needed to remove tightness, according to the report.

Record exports in the prior season from Brazil, the world’s second-largest robusta producer, are offsetting the robusta supply shortfall in Asia, but output from the country is also expected to drop in 2024/25. Severe drought and heat waves last fall reduced crop potential, Volcafe said.

The supply outlook for the arabica variety is brighter, and global coffee supplies are still expected to exceed consumption in the 2024/25 season. But the “surplus has practically disappeared” to just 700 000 tons as poor weather affects crops in Brazil, Vietnam and Central America, Volcafe said.

World heads for fourth year of shortages for instant coffee beans - Moneyweb

Global Inflation/Stagflation/Recession Watch.

Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.

Sudden container crunch sends ocean freight rates soaring, setting off global trade alarm bells

A perfect storm in global trade is creating a shipping container capacity crunch, fueling a sudden and surprise spike in ocean freight rates.

The beginning of peak shipping season, coupled with the longer transits to avoid the Red Sea, and bad weather in Asia, have hit the flow of trade on key routes. Ocean carriers are skipping ports or decreasing their time at port, and not picking up empty containers, in an effort to keep vessels on track for delivery.

The supply chain cost issues come at a time when consumer goods for back to school and the holidays are set to be moved on the water.

“From the Far East into the U.S. West Coast, it is likely spot rates will surpass the level seen at the height of the Red Sea crisis earlier this year, which demonstrates how dramatic the recent increases have been,” said Emily Stausbøll, senior shipping analyst at Xeneta.

Xeneta ocean freight rates show the rallying spot market and the widening spread between spot and long-term rates. “The bigger the spread between long and short term rates, the greater the risk of cargo being rolled, which we know is already happening,” she said. 

Spot rates had fallen after the sharp rise triggered by Red Sea tensions in early 2024, but since the end of April they began spiking by as much as $1,500, on average, on routes to the U.S. coasts, and now some of the highest contract rates charged by shippers are over double the rates of just a month ago.

---- Early Xeneta data suggests rates will increase further at the start of June.

DHL has been warning about about a container crunch since January because of the longer routes needed to avoid the Red Sea since the Houthi attacks began. Containers are out on the water longer and as a result not available to be reloaded. The availability of containers has been slowed even further by the bad weather impacting port operations in China, Malaysia, and Singapore.

---- Judah Levine,  Freightos’ head of research, says that in March and April, ocean carriers were able to use idle vessels as well as ships from other lanes to help offset the longer voyages, keep containers moving and for the most part keep to weekly departure schedules. “But this has meant there is no excess capacity in the market,” he said.

Bad weather in East Asia at the end of April created some further delays, which was one factor leading ocean carriers to skip some port calls or shorten their turnaround at destination ports to make up time. That also means fewer empty containers have been brought back to China.

More

A sudden container crunch is sending ocean freight rates soaring (cnbc.com)

Bundesbank warns of inflation risk as wages rise more than expected

May 22, 2024

FRANKFURT (Reuters) - Wages in Germany have been rising faster than expected, casting some doubt on expectations for a continued fall in inflation, the country's central bank said Wednesday.

The European Central Bank is all but certain to begin lowering interest rates next month, with President Christine Lagarde saying on Tuesday she was "really confident" inflation was now "under control".

But the ECB's biggest shareholder, Germany's Bundesbank, struck a more cautious tone on Wednesday, warning of inflation risks from higher wages as Europe's largest economy recovers.

"There are still risks to the fundamental disinflation process," the Bundesbank said in its monthly report. "Wage growth has recently been stronger than expected. This could mean that the still high price pressure on services in particular could last longer."

It said collectively agreed earnings, including fringe benefits, rose by 6.2% year-on-year in the first quarter of the year, compared to 3.6% in the last three months of 2023.

Excluding one-off payments, collectively agreed wages increased by 3.0% annually in the last quarter, also faster than three months earlier.

"This extends the upward trend in real earnings since spring 2021, which has been quite high in a long-term context," the Bundesbank added.

The Bundesbank expects German inflation to rise in May from April's 2.4% and hover at slightly higher level in the coming months, mainly due to an unfavourable comparison to last year, when train ticket prices had been slashed and fuel costs had fallen.

It also sees Europe's largest economy continuing to recover in the second quarter of the year thanks to a rebound in services.

Bundesbank warns of inflation risk as wages rise more than expected (msn.com)

Most Americans falsely think the U.S. is in recession, poll shows

May 22, 2024

More than half of Americans think the United States is in an economic recession, although gross domestic product has been increasing for the past several years.

According to a new Guardian/Harris poll, 56% of respondents said they believe the U.S. is in a recession and 58% say that President Joe Biden is responsible for what they see as an economic downturn.

A recession is an extended period of economic decline, usually designated when GDP has declined for two or more consecutive fiscal quarters.

Under those terms, the U.S. is definitively not in a recession.

GDP grew by 1.6% in the first quarter of 2024. Granted, that is a decelerated rate from the 3.3% growth of the fourth quarter of 2023, but it is not recessionary. U.S. GDP growth has been outpacing that of other developed nations.

"America has the best economy in the world," Biden told NBC's "TODAY" in April.

The Guardian/Harris poll is yet another example of an ongoing gap between economic data and economic feelings that has nagged the Biden administration in recent months.

Despite some positive signals that the economy is recovering from the pandemic chaos that disrupted supply chains and sent inflation skyrocketing, consumer attitudes have lagged, often driven by the high costs of daily living caused by stubbornly high inflation.

More

Most Americans falsely think the U.S. is in recession, poll shows (msn.com)

Covid-19 Corner

This section will continue until it becomes unneeded.

Could FLiRT Variants Cause Another Covid-19 Surge?

May 21, 2024

A new Covid-19 variant known as KP.2, or FLiRT, began to emerge in the United States in early March of this year. At that time, KP.2 represented only 0.4% of all SARS-CoV-2 strains being sequenced, but it has skyrocketed in the last two months to become the predominant strain of the virus, making up 28.2% of sequences as of May 11. This dramatic rise signals that KP.2 has properties that promote viral transmission and has experts discussing whether another Covid-19 surge is on the horizon.

What Is A FLiRT Variant?

Since the Covid-19 pandemic began, the virus has undergone genetic changes—or mutations—as the number of human infections has increased. In 2022, the Omicron variant emerged as the dominant strain, leading to dramatic rise in cases worldwide. The KP.2 variant is a descendant of Omicron and has several mutations in the gene encoding for the spike protein, which facilitates binding of the virus to receptors on a host cell. The spike protein is also the target for antibodies generated in response to Covid-19 vaccination.

Several mutations in KP.2 have led to amino acid changes in the spike protein—an “F” to “L” mutation and an “R” to “T” mutation—thus giving the variant family the name FLiRT. These mutations likely allow the virus to evade neutralizing antibodies produced in response to prior infection or vaccination. In some ways, it’s like the virus has put on a disguise, allowing it to go unrecognized by the immune system.

Do FLiRT Variants Cause Worse Disease?

Although it may be too early to know for sure, it does not appear that KP.2, or other members of the FLiRT variant group, cause unique symptoms or more significant disease. If symptoms do occur, KP.2 infection tends to be associated with a fever, sore throat, cough and body aches. Loss of taste or smell can also occur, as well as “brain fog,” which has been described for past variants.

Although FLiRT variants do not seem to cause more severe disease, it is important to highlight that as the number of infections increase, the likelihood of a susceptible individual (e.g., an immunocompromised host) becoming infected and developing severe symptoms also increases.

More

Could FLiRT Variants Cause Another Covid-19 Surge? (forbes.com)

Technology Update.

With events happening fast in the development of solar power and graphene, among other things, I’ve added this section. Updates as they get reported.

Electric cars kill pedestrians at twice the rate of petrol or diesel vehicles, study finds

May 22, 2023

Electric cars kill pedestrians at double the rate of petrol or diesel vehicles, a study in a BMJ journal has found.

Experts said that electric or hybrid cars were twice as likely to be involved in a road accident with a bystander than a petrol or diesel car over the same distance. 

The researchers suggested the vehicles’ quieter engines were a significant factor in higher fatality rates and called on the Government to mitigate the risks as it phases out petrol and diesel cars in pursuit of net zero.

The study looked at the number of casualties from road collisions in Britain between 2013 and 2017 using Road Safety Data and calculated the number of pedestrians that had been hit by different types of cars. 

Over the period, 96,285 pedestrians were hit by a car or taxi. While three-quarters of these people had been hit by a car with a combustion engine, this was because they covered significantly more miles.

To overcome this, the researchers calculated the rate of casualties per 100 million miles covered by electric and hybrid cars compared with petrol and diesel cars.

They found that 5.16 people on average were hit by an electric or hybrid car for every 100 million miles that type of vehicle had driven, compared with 2.4 people for petrol and diesel cars.

The road accident data were cross-referenced with annual mileage figures from the National Travel Survey, with 32 billion miles of electric and hybrid vehicle travel and three trillion miles of petrol and diesel vehicle travel included in the analysis.

Two per cent of the pedestrian casualties were caused by an electric vehicle, while 24 per cent of the accidents did not have a record of the engine type.

The researchers said that even in an “extreme case” scenario where all of these were accidents involving traditional combustion engine cars, the casualty rate would have been 3.16 per 100 million miles, still 63 per cent lower than seen with electric cars.

More

Electric cars kill pedestrians at twice the rate of petrol or diesel vehicles, study finds (msn.com)

Fire burns for five days at huge lithium-ion energy storage facility

Lithium-ion battery fires are rare but extremely hard to put out and have blackened image of key clean energy technology

Published 20 May 2024, 11:05

A fire at a California lithium-ion battery energy storage facility once described as the world’s largest has burned for five days, prompting evacuation orders.

The fire broke out on Wednesday at the 250MW Gateway Energy Storage facility owned by grid infrastructure developer LS Power in San Diego.

A fire crew managed to get the blaze at the 16,000-square foot facility under control after around 24 hours, lifting evacuation orders that were made.

But the fire has twice re-ignited and has now caused “major damage” to the building, including burning through part of the roof, prompting evacuation orders to be reinstated.

The California fire department said that “harmful gases” were making access an issue for firefighters.

In a Sunday evening update, the fire department said conditions have “improved greatly, though light wispy smoke is still visible.”

It has taken 40 firefighters to contain the blaze, it said.

The San Diego battery facility came online in 2020 and was billed at the time by grid infrastructure developer LS Power as the largest battery energy storage project in the world.

Using LG Chem Lithium-ion cells, it beat the previous record held by a 150MW project in Australia, although has since been surpassed by other facilities.

Rev Renewables, the LS Power subsidiary that owns and operates the Gateway facility, said in a statement to The Dan Diego Union-Tribune on Sunday that it has been in contact with the fire department over the blaze.

Lithium-ion battery fires are rare but have blackened the image of a clean energy technology essential to the energy transition.

Such fires are difficult to put out because lithium-ion battery fires generate their own oxygen. So while water-based fire extinguishers help cool down blazing batteries they only rarely put out fires entirely, as demonstrated by the recent blaze.

Concerns over fires and the toxic gasses they can emit are now a frequent source of opposition to lithium-ion energy storage facilities near residential areas.

The energy storage sector meanwhile continues to come up with alternatives marketed as safer options to lithium-ion, which has long been the industry-leading battery storage technology.

Energy storage is crucial to the energy transition, as it saves excess wind and solar power for when the sun isn’t shining and the wind isn’t blowing.

The International Energy Agency estimates that 1,500GW of energy storage capacity, six times today’s level, is needed to help the world meet its goal of tripling renewable energy by 2030.

Fire burns for five days at huge lithium-ion energy storage facility | Recharge (rechargenews.com)

Next, our latest new section, the world global debt clock. Nations debts to GDP compared.    

World Debt Clocks (usdebtclock.org)

Another weekend and the first general election campaign weekend in the UK. Still as Mark Twain reputedly quipped, “if voting made any difference, they wouldn’t let us do it.” Have a great weekend everyone. If in the UK, watch out for on the make Pols out to steal your vote.

Q. What do you get it you ask a politician to tell 'the truth, the whole truth, and nothing but the truth'?

A. 3 different answers.