Federal Reserve Chair(man) Jerome Powell and Treasury Secretary Steven Mnuchin
testify before Congress on June 30 in what's expected to be a broad overview of
the economy and monetary policy. The Fed's John Williams and Charles Evans also
have speeches on the calendar and FOMC minutes are due out on July 1. (AKA
Canada Day. Laid back Canadians party, socialise, Bar B Q, and
speculate on what country’s national dress their Prime Minister will show up in
on TV, later in the day, to celebrate Canada Day. Happily, the rest of the
world gets on with a less complicated life.)
On the economic front, reports
on factory orders, trade balance, and manufacturing PMI will all pour in before
the June jobs report steals the show on July 2. Economists project a gain of 3M
jobs during the month to take the unemployment rate to 12.2% from 13.3%. If
payrolls look weak for June, the pressure could increase on President Trump and
Senate Republicans to pass another sweeping COVID-19 relief bill.
Source: Seeking Alpha.
Friday, the USA celebrates
Independence Day, when European Americans
broke free of the English, Mad “German” King George, and Scots “civilisation.”
Almost immediately, poor, thirsty, Americans were forced into (almost) fighting the whiskey war of 1791-1794. (Surprisingly,
most Brits now also celebrate Independence Day too, as it roughly corresponds
to the day when they stop working for HMG taxes, and start working for
themselves and their increasingly, downwardly mobile families.)
We
are at the half year dress up for stock markets. Normally it’s a Fed fuelled no
brainer of dressing up the technology stocks, which then drives the rest of the
stock indexes higher.
Add
in a few oily, soapy clichés about buy and hold, “V” shaped recoveries, the
bottom is in, the worst is over, things can only get better, and money manager
bonuses soar along with stocks.
This
year it’s a little harder to dress up the markets, though Chairman Powell and
the Fed’s team of NY market riggers will be trying their best.
With
Covid-19 cases surging along at over a million new cases a week, there’s
clearly no rapid end in sight for the global coronavirus crisis.
No
end to that, and no return to full planes of happy businessmen and tourists
flying all around the globe. No end to empty hotels, bars and theatres, cancelled
conventions, concerts and festivals. No return to dining out in anything like
old times.
With
a viable vaccine still probably about a year away and a logistical nightmare to
distribute, and massive unemployment and underemployment dragging on the global
economy, why take the risk of holding stocks here, when at best they will still
likely be priced here a year from now, and at worst face another collapse if a
second wave arrives in the autumn along with flu season.
Still,
it will be interesting this week to watch Chairman Powell and his Trump
re-election team do their best to spin that stocks and bonds are undervalued here,
buy more.
Asia stocks wary as coronavirus
threatens economic reopening
June 29, 2020 /
1:34 AM
SYDNEY
(Reuters) - Asian share markets began the week with a cautious tone on Monday
as the relentless spread of the coronavirus finally made investors question
their optimism on the global economy, benefiting safe harbour bonds and the
U.S. dollar.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS fell 0.6% and further away from a four-month top hit last week.
Japan's Nikkei .N225 shed 1.3% and Chinese blue chips
.CSI300 0.6%.
In a more promising sign, E-Mini futures for the S&P
500 ESc1 recouped their early losses to edge up 0.3% and EUROSTOXX 50 futures
STXEc1 added 0.2%. FTSE futures FFIc1 dipped 0.2%. Wall Street had faltered on Friday as some U.S. states
reconsidered their reopening plans. The global death toll from COVID-19 reached
half a million people on Sunday, according to a Reuters tally.
About one-quarter of all the deaths so far have been in the
United States, with cases surging in a handful of southern and western states
that reopened earlier.
“The increase in U.S. COVID-19 infection rates has dented
momentum across markets despite the improvements in the global economy, which
continues to beat most data expectations,” wrote analysts at JPMorgan in a
note.
“Our strategists remain sanguine and recommend to buy on
dips but also selectivity,” they added. “Traditional hedges like JPY vs USD,
USD vs EM FX, gold and quality stocks are still outperforming this month. We
stay overweight U.S. equities but move EM equities to neutral and stay neutral
U.S. credit.”
Sovereign bonds benefited from the shift to safety with
yields on U.S. 10-year notes US10YT=RR falling to 0.64%, having briefly been as
high as 0.96% early in June.
Stock futures little changed as
U.S. coronavirus cases surge to record levels
U.S. stock futures hovered around the flatline following an
earlier decline as coronavirus cases continue surging in the U.S., stoking
concerns about the economic reopening and recovery.
As of early morning trade on Monday, Dow Jones Industrial
Average futures traded 27 points lower. S&P 500 futures and Nasdaq-100
futures also stood little changed. Earlier in the session, Dow futures had
traded more than 100 points lower.
On Saturday, Florida reported a one-day record of cases of
9,636. The state reported an additional 8,577 on Sunday. Those
figures were released after Florida once again banned drinking at bars on
Friday. Texas — another state that has seen record spikes in coronavirus
infections — rolled back on Friday some of its reopening measures. Arizona Gov.
Dough Ducey said Friday cases in the state are “growing fast across all age
groups and demographics.”
Health and Human Services Secretary Alex Azar warned
on Sunday that the “window is closing” for the U.S. to
curb the coronavirus outbreak.
Oil falls in second straight
session as virus cools demand
June 29, 2020 /
1:33 AM
SINGAPORE (Reuters) - Oil prices fell for a second straight session on
Monday as coronavirus cases rose in the United States and other places, leading
countries to resume partial lockdowns that could hurt fuel demand.
Brent crude LCOc1 dropped 66 cents, or 1.6%, to $40.36 a barrel by 1150
GMT while U.S. crude CLc1 was at $37.86, down 63 cents, or 1.6%.
Brent crude is set to end June with three consecutive monthly gains as
OPEC+ supply cuts and as oil demand improved after countries across the globe
eased lockdown measures.
However, global coronavirus cases exceeded 10 million on Sunday as India
and Brazil battled outbreaks of over 10,000 cases daily. New outbreaks are
reported in countries including China, New Zealand and Australia, prompting
governments to impose restrictions again.
“The market continues to fret about the recovery in demand as
authorities reviewed reopening strategies,” ANZ analysts said, referring to the
three most populous U.S. states - Texas, Florida and California.
Despite efforts by the Organization of the Petroleum Exporting Countries
and their allies including Russia to reduce supplies, crude inventories in the
United States, the world’s largest oil producer and consumer, have hit all-time
highs.
The shale bust has reached a grim milestone by claiming the
pioneer of America’s drilling renaissance. But Chesapeake Energy Corp., which filed for bankruptcy protection on
Sunday, is just the latest in a long list of casualties.
More than 200 North American oil and gas producers, owing
over $130 billion in debt, have filed for bankruptcy since the beginning of
2015, according to a May report from law firm Haynes & Boone. This year alone,
at least 20 have gone under after oil prices plunged amid the Covid-19
pandemic.
Shale
Collapse
More than 200 North American oil explorers went bankrupt
since 2015
In other news, the news remains unrelentingly
grim. Far from a “V” shaped rebound we still probably haven’t hit the bottom in
unemployment.
British Airways sacks 350 pilots
and puts 300 in 'pool' for rehire - The Sun
June 28, 2020 /
2:58 PM
(Reuters) - British Airways, which has said it needs to cut 12,000 jobs
and proposed pay cuts for cabin crew, has reached a deal with its pilots that
will see 350 laid off and another 300 put in a ‘pool’ for rehiring when needed,
The Sun on Sunday reported.
Captains and first officers placed in the pool do not currently have an
aircraft to operate and will remain on half-pay, the report said, while all
other operating flight crew will take a 15% pay cut.
Once ‘pooled’ pilots return, operating flight crew members will get 7.5%
of their deducted pay back, while the rest of the pay cut will be lost, the
report added.
The majority of pilots being ‘pooled’ will be Boeing 747 jumbo jet first
officers.
British Airways, owned by International Consolidated
Airlines Group (ICAG.L),
which also owns Aer Lingus, Iberia and Vueling, said in an emailed statement
that “constructive talks are ongoing with (UK pilots union) BALPA to save as
many jobs as possible.”
BALPA did not immediately respond to a request for comment.
Reuters reported last week that British Airways has made a proposal to
its cabin crew on pay cuts. The airline plans to lay off a quarter of its
pilots.
Planes were grounded in March by lockdowns to curb the coronavirus
pandemic, tipping the industry into crisis.
Universal Studios Japan to delay
Nintendo-themed area opening - Kyodo
June 27, 2020 /
1:38 PM
TOKYO (Reuters) - Comcast’s (CMCSA.O) Osaka-based theme
park Universal Studios Japan is pushing back the opening of a Nintendo (7974.T) themed area from
this summer, and possibly into next year, due to the coronavirus outbreak,
Kyodo reported on Saturday.
The pandemic has affected operations at the park and
preparations for the new area, Kyodo said, without citing sources.
Universal Studios Japan and Nintendo were not immediately
available for comment outside normal business hours.
“Super Nintendo World” had been due to open by the Tokyo
2020 Olympic Games - which were scheduled to start in late July but have been
pushed back to next year.
Finally,
some uncommon sense about trade deals. Good news if it actually happens, though
far more 2021-2022 at the earliest.
No need to have all-encompassing
trade deal with UK initially - U.S. housing secretary
June 28, 2020 /
10:32 AM
LONDON (Reuters) - U.S. Housing and Urban Development Secretary Ben
Carson said on Sunday the United States and Britain could agree a trade deal
that did not cover all sectors straight away, instead leaving the more
difficult issues for a later date.
Asked by the BBC whether, in his opinion, a UK-U.S. trade deal would
have to cover every single sector all at once, Carson told the Andrew Marr
Show: “I don’t see any reason that it does. There are areas where President
(Donald) Trump and Prime Minister (Boris) Johnson have a lot of agreement and
there are some areas where there needs to be further discussion.
“I don’t see why you can’t work on the areas where you have agreement,
get that done, with an eye to solving the other problems subsequently,” he
said, adding he was not in charge of the trade negotiations.
Though
hopefully, we are passing/have passed the peak of new cases, at least of the
first SARS-CoV-2 outbreak, this section will continue until it becomes
unneeded.
We will be living with the
coronavirus pandemic well into 2021
The virus is winning. That much is certain more than six months into a
shape-shifting pandemic that’s killed 450,000 people worldwide, is gaining
ground globally and has disrupted lives from Wuhan to Sao Paulo.
While promising, fast-moving vaccine projects are underway in China,
Europe and the U.S., only the most optimistic expect an effective shot to be
ready for global distribution this year.
If, as most experts believe, an effective vaccine won’t be ready until
well into 2021, we’ll all be coexisting with the coronavirus for the next year
or longer without a magic bullet. And this next phase of the crisis may require
us to reset our expectations and awareness and change our behavior, according
to public-health professionals.
In their view, success isn’t defined as returning to life as it was in
2019. Rather, it’s about buying time and summoning the staying power and policy
flexibility to limit the destructive capacity of an expanding pandemic, which
may result in global deaths of more than one million according to one estimate,
until there are medical tools to effectively treat and immunize against the
virus.
“People are fatigued. They mistakenly feel that things were going away,”
said Cameron Wolfe, an infectious-disease doctor and associate professor of
medicine at Duke University. “We’re going to have to figure out a way to live
with this.”
Complicating
matters, the perceived threat varies from neighborhood to neighborhood, let
alone country to country. Much depends on the severity of local outbreaks and
the effectiveness of testing, contact tracing, social distancing, hospital
systems and public-health messaging that is free of political shading.
---- Yet that progress came at the cost of
economic contraction, soaring unemployment and trillions of dollars in fiscal
and monetary stimulus measures. Governments are likely to be reluctant to
resort to wholesale lockdowns again in anything short of a catastrophe.
Instead, the biggest economies seem intent on reopening, even if the
pace varies. That, in turn, means more social mobility and more opportunities
for the virus to spread. Already, scientists who track virus trends are seeing
signs that re-opening is leading to a spike in cases.
“I understand there is a perception of the need to balance on these
economic considerations,” said Ada Adimora, an epidemiologist and professor of
medicine in infectious diseases at the University of North Carolina School of
Medicine. “But to the extent that we open up society and have people going to
restaurants — you can’t wear a mask while you eat — you are not really working
to control the threat of the virus.”
The ability to coexist with SARS-CoV-2, as the virus is known, will
increasingly ride on how individuals assess risks and make decisions.
“No activity will be without the risk of coronavirus,” said Amesh
Adalja, a senior scholar at Johns Hopkins Center for Health Security in
Baltimore. “It’s just how much risk people think is worth assuming.”
How the Coronavirus
Short-Circuits the Immune System
In a disturbing parallel to H.I.V., the coronavirus can
cause a depletion of important immune cells, recent studies found.
June 26, 2020
At the beginning of the pandemic, the coronavirus looked to be another
respiratory illness. But the virus has turned out to affect not just the lungs,
but the kidneys, the heart and the circulatory system — even, somehow, our
senses of smell and taste.
Now researchers have discovered yet another unpleasant surprise. In many
patients hospitalized with the coronavirus, the immune system is threatened by
a depletion of certain essential cells, suggesting eerie parallels with H.I.V.
The findings suggest that a popular treatment to tamp down the immune
system in severely ill patients may help a few, but could harm many others. The
research offers clues about why very few children get sick when they are
infected, and hints that a cocktail of drugs may be needed to bring the
coronavirus under control, as is the case with H.I.V.
Growing research points to “very complex immunological signatures of the
virus,” said Dr. John Wherry, an immunologist at the University of Pennsylvania
whose lab is taking a detailed look at the immune systems of Covid-19 patients.
In a separate study, the investigators identified three patterns of immune defects, and concluded
that T cells and B cells, which help orchestrate the immune response, were
inactive in roughly 30 percent of the 71 Covid-19 patients they examined. None
of the papers have yet been published or peer reviewed.
But whether this means such areas are seeing a second wave remains
unclear, largely due to the ambiguity of the term, experts say.
Many caution against declaring a new rise in case numbers in areas or
countries where cases had appeared to decline as a “second wave”, since an
uptick of cases as social distancing restrictions are relaxed did not
necessarily mean the start of a new cycle – or the end of old one – especially
if there was still a significant amount of transmission.
Anthony Fauci, director of the US National Institute of Allergy and
Infectious Diseases, speaking in a June 18 interview with The Washington
Post, said the United States was still in the first wave, even as case
rates decline and increase at different times in various regions of the country.
John Mathews, an honorary professor at the
University of Melbourne’s School of Population and Global Health, said a second
wave would typically be characterised by a dramatic decline followed by a
sudden comeback in the numbers of cases.
With events happening
fast in the development of solar power and graphene, I’ve added this section.
Updates as they get reported. Is converting sunlight to usable cheap AC or DC
energy mankind’s future from the 21st century onwards.
Chemists achieve breakthrough in
the synthesis of graphene nanoribbons
Summary:
Graphene Nanoribbons might soon be much easier to produce. An international
research team has succeeded in producing this versatile material for the first
time directly on the surface of semiconductors. Until now, this was only
possible on metal surfaces.
Graphene Nanoribbons might soon be much easier to produce. An
international research team led by Martin Luther University Halle-Wittenberg
(MLU), the University of Tennessee and Oak Ridge National Laboratory in the
U.S. has succeeded in producing this versatile material for the first time
directly on the surface of semiconductors. Until now, this was only possible on
metal surfaces. The new approach also enables scientists to customise the
properties of the nanoribbons. Storage technology is one of the potential
applications of the material. The research team reports on its results in the
upcoming issue of Science.
For years, graphene has been regarded as the material of the future. In
simple terms, it is a two-dimensional carbon surface that resembles a
honeycomb. This special structure gives the material distinctive properties:
for example, it is extremely stable and ultra-light. There is a particular
interest in graphene nanoribbons as they are a semiconductor material that
could be used, for instance, in the electrical and computer industry.
"This is why many research groups around the world are focusing their
efforts on graphene nanoribbons," explains chemist Professor Konstantin
Amsharov at MLU.
These ribbons, which are only nanometres in size, are made up
of just a few carbon atoms wide. Their properties are determined by their shape
and width. When graphene research was just beginning, the bands were produced
by cutting up larger sections. "This process was very complicated and
imprecise," says Amsharov.
He and colleagues from Germany, the U.S. and Poland, have now succeeded
in simplifying the production of the coveted nanoribbons. The team produces the
material by joining together individual atoms, which enables the properties to
be customised. The researchers have succeeded for the first time in producing
the ribbons on the surface of titanium oxide, a non-metallic material.
"Until now, the ribbons were mainly synthesised on gold surfaces. This is
not only comparatively expensive, but also impractical," explains
Amsharov. The problem with this approach is that gold conducts electricity.
This would directly negate the properties of the graphene nanoribbons, which is
why this method has only been used in basic research. However, the gold was
needed as a catalyst to produce the nanoribbons in the first place. In
addition, the nanoribbons had to be transferred from the gold surface to
another surface -- a very tricky undertaking. The new approach discovered by
Amsharov and his colleagues solves this set of problems.
"Our new method allows us to have complete control over how the
graphene nanoribbons are assembled. The process is technologically relevant as
it could also be used at an industrial level. It is also more cost-effective
than previous processes," says Amsharov, in summary. There are numerous
areas of application for the nanoribbons: they could be used in future storage
and semiconductor technology and they play a crucial role in the development of
quantum computers.
Following the markets on both sides of the Atlantic since 1968. A dinosaur, who evolved with the financial system as it was perverted from capitalism to banksterism after the great Nixonian error of abandoning the dollar's link to gold instead of simply revaluing gold. Our money is too important to be left to probity challenged central banksters and crooked politicians.
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