Baltic
Dry Index. 1955 -53
Brent Crude 67.91
Spot Gold 4914 Spot Silver 77.09
US 2 Year Yield 3.57 unch.
US Federal Debt. 38.696 trillion US GDP 31.126 trillion.
At the heart of capitalism is creative destruction.
Joseph A. Schumpeter
With a deep stock casino technology slump underway and silver crashing again, the big question that needs answering is where are all the losses hiding?
A crash in the cryptocurrencies only adds to the hidden losses.
Because of the scale of the losses in 2026 so far, I suspect we will not have to wait much longer for the cockroaches to start appearing en-mass.
South Korea’s Kospi leads declines in Asia,
tracking Wall Street tech sell-off
Published Wed, Feb 4 2026 6:57 PM EST
South Korea markets led declines in
Asia-Pacific Thursday, tracking Wall Street losses as the tech sell-off gained
momentum.
Seoul’s Kospi index tumbled
3.66%, leading losses in Asia, as chip heavyweights Samsung and SK Hynix fell
5.68% and 5.44%, respectively.
Other top losers included defense giant
Hanwha Aerospace, which declined 5.36%. The small-cap Kosdaq was down 3.26%.
Japan’s Nikkei 225 was down 0.97%.
Investment firm SoftBank
Group Corp declined over 6.75% after chip designer Arm’s fiscal third
quarter licensing sales missed estimates.
However, Japanese electronics manufacturer
Panasonic jumped as much as 15.26%, even as the company reported worse revenue and net profit numbers for its fiscal
third quarter ended December.
Adjusted operating profit, however
increased to 159.1 billion yen ($1.03 billion), a 5.59% gain from the same
period a year before. The adjusted operating profit strips out restructuring
costs of 129.3 billion yen.
The broad-based Topix reversed gains after
being the only index in positive territory earlier, falling 0.32%.
Hong Kong’s Hang Seng index slumped
1.22%, with basic materials stocks lagging. The mainland Chinese CSI 300 was
down 0.83%.
Australia’s S&P/ASX 200 was down
0.45%.
Overnight in the U.S., the S&P 500 slid 0.51% for
back to back losses, while the Dow
Jones Industrial Average added 0.53%, and the Nasdaq Composite dropped
1.51%.
Notably, Advanced Micro Devices plunged
17% after its first-quarter
forecast underwhelmed some analysts. Broadcom and Micron
Technology also suffered major losses, falling about down 3.8%, while the
latter fell 9.5%.
Bitcoin declined more than
3%, hovering just above the $73,000 level, after falling below that mark
earlier.
Kospi
plunges almost 2%, dragged by tech sell-off, as Asia-Pacific markets mostly
fall
China’s Hong Kong-listed tech stocks enter bear
market as tax and AI fears take hold
Published Wed, Feb 4 2026 10:56 PM EST
China’s Hong Kong-listed technology stocks
slid into bear market territory on Thursday, marking a sharp reversal from last
year’s rally as tax worries and global risk aversion rattles investor
confidence.
The Hang Seng Tech Index, which
is dominated by mainland Chinese tech firms, fell more than 1%, taking the
index down a little over 20% from its October peak. The index is down for a
sixth straight session.
Market participants pointed to fears of a
possible increase in value-added tax on internet services as a key trigger
for the recent decline. The anxiety follows a VAT increase that has already
been implemented on certain telecom services, raising worries that internet
platforms could be next.
Speculation briefly extended to online gaming and
other digital transactions, amplifying fears of fresh policy headwinds for a
sector already scarred by years of regulatory tightening. Following a decline
in tech stocks, officials Tuesday dismissed the speculations of a levy on the gaming
industry.
“The sell-off in recent days is driven by
concerns over possible VAT tax increase on internet services, online gaming and
other online transactions. This follows the recent VAT increase on certain
telecom services,” said Qi Wang, investment strategist at UOB Kay Hian.
The pullback in China’s tech stocks has
also coincided with broader volatility in global technology markets, driven by
fears around artificial intelligence-driven disruption to software companies.
“To me it’s a barrage of negative news
globally,” said Phelix Lee, senior equity analyst at Morningstar.
“We have Anthropic reportedly rolling out
an AI plugin that automates bits of legal work, sparking fears in legaltech
firms and fueling the broader software sell down; then we have VAT hike rumors
on Chinese internet firms and risk-off sentiment builds in the hardware AI
trade as there are reports of rupture between Nvidia and OpenAI”
Despite the sharp drawdown, some investors
see the sell-off as a corrective move rather than the start of a deeper
downturn. Looking at the broader Hong Kong and China equity markets, the recent
weakness appears concentrated in pockets that had previously outperformed,
according to Morningstar.
“I regard the action as a healthy pullback
and it’s largely concentrated in sectors that have probably overshot fair
values,” said Lorraine Tan, director of equity research for Asia at the firm.
Other asset managers say the fundamental
outlook for Chinese tech has not materially deteriorated, even as near-term
positive triggers lack visibility. “Catalysts have been somewhat lacking for
the sector,” said Vey-Sern Ling, managing director at Union Bancaire Privée.
“Recently, there’s also been regulatory
noise in travel and e-commerce, which we think are specific rather than
systemic, as well as some worries about value-added tax,” Ling said.
“Fundamentally nothing has changed to
derail our positive outlook [for Chinese tech stocks]. Valuations continue to
be supportive, sector earnings have potential to rebound, and AI may provide a
stream of catalysts ahead.”
China
tech stocks enters bear market as tax, AI fears take hold
Shares of Arm plunge 8% after licensing revenue
misses estimates, Qualcomm outlook adds pressure
Published Wed, Feb 4 2026 10:01 PM EST
Shares of UK-based semiconductor
designer Arm Holdings plunged
7.48% in after-hours trading Wednesday after the company’s licensing revenue
missed Wall Street estimates.
Arm’s fiscal third-quarter licensing
revenue rose 25% from a year earlier to $505 million, but came in 2.9% below
the $519.9 million expected by analysts surveyed by FactSet.
Andrew Jackson, an equity analyst at Ortus
Advisors, said that investors were also reacting to Arm’s guidance only
slightly beating estimates, as well as a poor outlook delivered
by its chip design customer Qualcomm.
Shares of Qualcomm also nosedived 9.68%
after hours Wednesday. While the company’s fiscal first-quarter results beat
expectations, its forecast disappointed due to a global memory shortage.
Despite missing Wall Street estimates for
licensing revenue, Arm posted
record quarterly revenue of $1.242 billion for the last three months
of 2025, driven by artificial intelligence demand. That figure beat LSEG
SmartEstimates, which are weighted toward forecasts from analysts who are more
consistently accurate.
Arm’s chip designs power most of the
world’s smartphones and are increasingly used in AI data centers and edge
computing devices.
“ARM is trying to diversify into AI chips
used for DC/servers, but the success of this remains uncertain, and its
business model is still heavily reliant on royalties from chips used in
consumer products such as handsets,” Jackson said.
He added that if Chinese smartphone
production declines due to the memory shortages, Arm’s outlook could worsen
before improving.
Executives at both Qualcomm and Arm have
signaled that smartphone makers may scale back production volumes as supply
constraints persist.
Rolf Bulk, an analyst at Futurum Group,
told CNBC that such a scenario would also pressure Arm customers like Apple and Samsung.
Smartphones remain Arm’s largest end
market, accounting for roughly half of its revenues, even as exposure to data
centers increases, Bulk said.
Shares of Arm, which went public in 2023,
have also faced broader tech market pressures in the lead-up to earnings
and are down 4% year-to-date.
Shares
of Arm plunge 8% after licensing revenue misses estimates, Qualcomm outlook
adds pressure
Silver resumes its slide, plunging 13%, after
short-lived rebound
Published Wed, Feb 4 2026 11:51 PM EST
Silver prices slid as much as 16% on
Thursday, snapping a two-day rebound, as the white metal continues to reel from
excessive volatility.
Spot
silver prices are were last down 13% at $76.97 per ounce, while futures in New York were
over 8% lower at $77.28 per ounce.
Silver had been on a record-breaking spree
before crashing almost 30% last Friday. In 2025, it gained about 146%, data
from LSEG showed.
Analysts point to speculative flows,
leveraged positioning and options-driven trading, rather than physical demand,
as key drivers of the recent price swings.
“As prices fell, dealer hedging flipped
from buying into strength to selling into weakness, investor stop-outs were
triggered, and losses cascaded through the system,” Goldman Sachs said in a
note on Wednesday.
Silver’s correction has been larger than
gold’s due to tighter liquidity conditions in the London market, which
magnified price swings.
Goldman added that the timing of the
volatility suggested Western flows, rather than Chinese speculation, are behind
much of the build-up and unwind, noting that most of the more violent moves
occurred while Chinese futures markets were closed.
The volatility in silver prices has drawn
growing comparisons to meme stocks such as GameStop, the video-game retailer
that became a global phenomenon in 2021 after retail traders on Reddit piled in
en masse, sending its shares soaring far beyond what traditional valuation
models could justify.
Rhona O’Connell, head of market
Intelligence at StoneX, warned that prices had detached from sustainable
levels.
“Silver was massively over-valued and in a
self-fulfilling frenzy; it is however notoriously fickle and its history is
littered with examples of price crashes,” she said. “At present it is behaving
like Icarus and to extend the analogy there is a strong risk of other buyers
getting burned.”
Spot
gold and futures declined
a little over 1% to $4,887.03 and $4,887.40 per ounce, respectively.
Silver
resumes its slide, plunging 13%, after short-lived rebound
In other news.
We’ve been here before: What gold’s past bull runs
— and sell-offs — tell us about where it could go next
Published Wed, Feb 4 2026 3:47 AM EST
Precious metals remained in recovery mode
on Wednesday morning, with prices rising off the back of a historic sell-off.
By 3:45 a.m. ET, spot gold was edging
toward a rise of 3%, settling at around $5,079.4 an ounce. New York gold futures jumped 3.3%
to $5,093.80.
Gold — typically viewed as a safe haven
asset — has had a stellar 12 months, gaining 66% over the course of 2025 and
extending those gains into early 2026. Geopolitical tensions, unpredictable
trade policy and concerns over the independence of the Federal Reserve all
supported prices.
However, the bull run was derailed on
Friday when gold prices fell almost 10%,
with the downward pressure rippling through the wider precious metals markets,
taking silver, palladium and platinum significantly lower.
The sell-off, sparked by Kevin
Warsh’s nomination as the next Federal Reserve chair, continued into Monday’s
session, but by Tuesday, spot gold showed signs of recovery — gaining
more than 6% to settle at about $4,946.81 an ounce.
In the wake of the volatility, however,
many market watchers said they continue to see upside for gold, viewing last
week’s sell-off as a temporary pullback rather than an end of the bull market.
In a note on Monday, AJ Bell’s Investment
Director Russ Mould said gold is currently in the throes of its third major
bull run since 1971 — and noted that both of the previous bull markets had
“witnessed several major pullbacks.”
The 1971 to 1980 bull market — which began
with President Richard Nixon withdrawing the U.S. dollar from the Gold Standard
and was followed by a rising U.S. deficit, oil shocks and surging inflation —
saw gold “motored” from $35 an ounce to $835 an ounce at its 1980 peak, Mould
said.
During that period, gold prices also fell
multiple times, with the longest “correction” lasting 105 days, and the
sharpest resulting in a 19.4% price decline, according to data from AJ Bell and
LSEG.
After a period of “hibernation,” gold
began another bull run in 2001, winning over “a new generation of investors who
sought refuge from the ultra-loose monetary policies that followed the bursting
of the … telecoms bubble and then the Great Financial Crisis of 2007-09,” Mould
said.
During the 2001 to 2011 bull run, AJ
Bell’s data showed that there were five price corrections, each leading to
price declines of up to 16%.
The current bull run, which Mould pins as
beginning in 2015, had experienced five corrections before Friday’s pullback.
“A swoon of more than 20% caught some
bulls off guard in 2022, as the world emerged from lockdowns and 10%-plus
corrections in each of 2016, 2018, 2020, 2021 and 2023 warned that volatility
was never far away,” Mould said.
“Bulls of precious metals may therefore be
tempted to argue that this sudden dip is a chance to buy more, since
geopolitical uncertainty, sticky inflation and galloping government debts, form
the bedrock of the investment case for gold in particular, and none
of those issues are any different now from the end of last week.”
More
What gold's past
bull runs tell us about where price could go next
Spain becomes first country in Europe to ban
social media for under-16s
Published Tue, Feb 3 2026 9:27 AM EST
Spain announced plans on Tuesday to
introduce an Australia-style
social media ban for
under-16s as part of a broader crackdown on tech giants over systemic failures
to protect users from harm.
Pedro Sanchez, the prime minister of
Spain, spoke at the World Government Summit in Dubai and decried the misconduct
of social media platforms. Sanchez said teens under 16 will be unable to access
social media platforms starting next week as part of a series of five
government measures targeting the platforms.
“Social media has become a failed state, a
place where laws are ignored, and crime is endured, where disinformation is
worth more than truth, and half of users suffer hate speech,” Sanchez said. “A
failed state in which algorithms distort the public conversation and our data
and image are defied and sold.”
He explained that to enforce a ban for
under-16s, “platforms will be required to implement effective age-verification
systems — not just checkboxes, but real barriers that work.”
Sanchez added: “Today, our children are
exposed to a space they were never meant to navigate alone: a space of
addiction, abuse, pornography, manipulation, and violence. We will no longer
accept that. We will protect them from the digital wild west.”
Spain is the first European country to
officially introduce a ban after Australia’s Online
Safety Amendment Act came
into effect in December.
It effectively required platforms such
as Meta’s Instagram,
ByteDance’s TikTok, Alphabet’s YouTube,
Elon Musk’s X, and Reddit to implement age-verification measures or face a
fine of up to 49.5 million Australian dollars ($32 million) for
non-compliance.
Spain has yet to define which firms are
affected by its new rules, but Sanchez criticized major platforms, including
TikTok, for allowing accounts to share “AI-generated child abuse materials,”
Elon Musk’s X for enabling its AI chatbot Grok to “generate illegal sexual
content,” and Instagram for “spying on millions of Android users,” amongst
other misdoings.
CNBC has reached out to TikTok, X and
Instagram regarding these claims and is awaiting comment.
Spain’s four other measures focus on legal
accountability for executives who fail to remove unregulated or hateful
content, and turning “algorithmic manipulation and the amplification of illegal
content” into a new criminal offense.
Sanchez mentioned that five other European
countries had joined Spain in enforcing stricter rules on social media
platforms.
France’s National Assembly recently voted
in favor of a bill that would restrict social
media access for
under-16s, but the bill still needs to be approved by the Senate before it
officially passes. Similarly, the U.K. House of Lords backed a ban on social
media for
under-16s, but it must first pass through the House of Commons for approval.
More
Spain to ban
social media for under 16s in crackdown on tech giants
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.
Euro
zone inflation cools to 1.7% in January, flash data shows
Published
Wed, Feb 4 2026 5:15 AM EST
Euro
zone inflation cooled to 1.7% in January, flash data from statistics
agency Eurostat
showed Wednesday.
Economists
polled by Reuters had expected the inflation rate to dip to 1.7%, down from 2%
in December.
Core
inflation, which excludes more volatile energy, food, alcohol and tobacco
prices, stood at 2.2% in January, down a touch from the 2.3% seen in the year
to December.
The
latest data shows the key inflation rate has now dipped below the European
Central Bank’s 2% target, meaning it’s likely to steer clear of any more rate
cuts for the foreseeable future.
Cautious
approach
The
central bank next meets on Thursday and is expected to hold its benchmark
interest rate at 2%. Economists expect no change in the coming months either,
but note that there are a few factors that might change the ECB’s stance.
Lorenzo
Codogno, founder and chief economist at Lorenzo Codogno Macro Advisors,
said these could include an escalation of geopolitical tensions, a sharp
appreciation of the euro, or somewhat higher-than-expected inflation prints.
“The ECB remains
in a ‘good spot’ or ‘good place,’ but ECB speakers may become more
reluctant to use such wording amid global uncertainty and fragility,” he said
in emailed comments Tuesday.
“I
continue to see a small downside risk for policy rates in the near term and
some upside risk in the medium term. Yet the baseline scenario remains the
same: no change in 2026 and 2027, with the bar for action high,” he noted.
Paul
Hollingsworth, head of DM Economics at BNP Paribas Markets 360, agreed that the
threshold for any policy action this year was high, and the next move could
well be a hike.
More
Euro zone
inflation cools to 1.7% in January
Senate Banking Democrats demand delay on Warsh nomination until Powell
and Cook investigations end
Published Tue, Feb 3 2026 7:10 PM EST Updated Tue,
Feb 3 2026 7:16 PM EST
Democrats on
the Senate Banking Committee demanded that Chair Tim Scott delay
the nomination of Kevin Warsh to lead the Federal Reserve until a pair of
investigations into central bank Chair Jerome Powell and
Governor Lisa Cook conclude.
The Department of Justice is investigating
potential criminal wrongdoing by Powell related to cost overruns on the
renovation of the Fed’s headquarters. They are separately probing Cook, whom
President Donald
Trump has tried to fire,
over allegations of mortgage
fraud. Trump nominated
Warsh last week to succeed Powell at the end of his
term in May.
The Democratic resistance all but assures that any
one Republican senator will be able to hold up Warsh’s confirmation until the
probes end. The Banking Committee is comprised of 13 Republicans and 11
Democrats, meaning one Republican defection on a nomination, along with all
Democrats, will deadlock the panel and prevent the nomination from reaching the
floor.
“We demand that you delay any nomination
proceedings for Mr. Warsh until after the pretextual criminal investigations
involving Chair Powell and Governor Cook have been closed,” the Democratic
senators, led by ranking member Elizabeth Warren,
D-Mass., wrote.
“The Administration’s apparent effort to seize
control of the Fed through criminal prosecutions is dangerous and
unprecedented,” the letter reads. “It would be absurd on its face to
allow President Trump to handpick the next Chair of the Federal Reserve as his
Department of Justice actively pursues criminal investigations of not one, but
two sitting members of the Federal Reserve Board.”
The eleven Democrats on the panel are not enough
alone to block Warsh’s nomination in the Banking Committee, from which he will
need to advance. But they have help from Sen. Thom
Tillis, R-N.C., a Banking Committee member who has vowed
to stonewall any Fed nominees until the investigation concludes.
“My position has not changed: I will oppose the
confirmation of any Federal Reserve nominee, including for the position of
Chairman, until the DOJ’s inquiry into Chairman Powell is fully and
transparently resolved,” Tillis said on X after the Warsh nomination was
announced.
Senate
Banking Democrats demand delay on Warsh nomination
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.
China set to attend India’s upcoming AI summit signaling improving
relations with New Delhi
Published Tue, Feb 3 2026 2:30 AM EST Updated
Tue, Feb 3 2026 6:35 PM EST
BEIJING — China plans to send a
delegation to India’s upcoming AI summit in the latest sign of improving ties
between the two neighbors, CNBC has learned.
A vice minister from China’s Ministry of
Science and Technology will lead the delegation, said George Chen, partner and
co-chair of digital practice at consultancy The Asia Group, citing
conversations with his government contacts. He added that the Indian embassy in
Beijing had reached out to China to arrange the visas.
The Asia Group frequently engages with
Chinese policymakers about AI regulatory development.
It’s the first public confirmation that
China will attend the event in New Delhi, scheduled for Feb. 16 to 20. Chinese
state media in late December had cited Indian media as saying that New Delhi
had extended an official invitation to Beijing to attend the AI Impact Summit.
Representatives for the Indian embassy
and China’s Ministry of Science and Technology did not immediately respond to a
request for comment. The science ministry has four vice ministers.
China’s Foreign Ministry declined to
comment, while broadly calling for joint contributions to AI development, with
shared benefits.
The planned visit, with Chinese
businesses expected to participate, comes as China’s relations with India
appear to be on the mend after a few turbulent years.
Following a border skirmish in 2020
between the two countries that resulted in fatalities, India had banned dozens
of Chinese mobile apps including TikTok, citing security concerns.
Bilateral tensions started easing last
year, with the resumption of direct flights and
tourist visas, after Indian Prime Minister Narendra Modi met with Chinese
President Xi Jinping ahead of the Shanghai Cooperation Organization summit in
Tianjin in August.
Modi also posed with Xi and Russian
President Vladimir Putin in a widely-shared video of the
three laughing together on the sidelines of the summit.
China has used the SCO and other events
as platforms for increasing Beijing’s influence in AI development worldwide.
Several U.S. business leaders, including
Bill Gates and Anthropic CEO Dario Amodei, are slated to join the AI summit in India this month.
Its dates coincide with China’s biggest holiday of the year, the Lunar New Year
festival.
China set to attend India's upcoming AI summit signaling improving
relations with New Delhi
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt Clocks
(usdebtclock.org)
The function of entrepreneurs is to reform or revolutionize the
pattern of production by exploiting an invention or, more generally, an untried
technological possibility for producing a new commodity or producing an old one
in a new way, by opening up a new source of supply of materials or a new outlet
for products, by reorganizing an industry and so on.
Joseph A. Schumpeter
