Baltic Dry Index. 1115 -09 Brent Crude 42.78
Spot Gold 1889
There can be few fields of human endeavour in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present.
John Kenneth Galbraith
Wall Street Week Ahead: Stock investors cast wary eye on yield rally
November 13, 2020 6:30 PM By David Randall
Yields on the 10-year Treasury, which move inversely to bond prices, rose to a seven-month high of 0.97% in the past week on hopes that breakthroughs in the search for a COVID-19 vaccine would eventually translate to a boost in economic growth.
That’s still low, by historical standards: yields are a full point below their levels at the start of January and below their 5-year average of 2.05%, according to Refinitiv data. The Federal Reserve has pledged to keep interest rates near historic lows for years to come in its bid to support growth, and past rallies in yields have faded in recent years.
Expectations that a vaccine against the coronavirus could fuel a broad economic revival, however, have also spurred bets that yields could continue edging higher. That could potentially weaken the case for holding shares that have become expensive during the S&P 500’s 58% rally from its lows of the year.
“If growth turns out better than anybody thought, the bad news is that the Fed might not have as much control over the extended curve,” said Ralph Segall, chief investment officer at firm Segall, Bryant & Hamill. “That would probably cause stocks to pause.”
Analysts at Goldman Sachs this week forecast Treasury yields will hit 1.3% by the end of next year and 1.7% by 2022. They also raised their forecast for the S&P to 4,100 by the middle of next year, a roughly 16% gain from recent levels.
For now, analysts believe yields have some way to go before they become an obstacle to further stock gains.
The benchmark S&P 500 has climbed by an average of 1.37% a month during rising rate environments when the yield 10-year Treasury remained at 3% or below, according to Sam Stovall, chief investment strategist at research firm CFRA.
The S&P 500 gained an average of 0.53% a month with yields above 3%, he said.
How quickly yields rise also matters, said Stephanie Link, chief investment strategist at Hightower Advisors.
A gradual increase as the economy improves allows companies time to roll over or refinance debt, while a sharp jump higher is more likely to shock the market, she said.
Technology stocks, which have led the market higher this year, could be the first sector to feel the weight of higher rates, said Segall.
US piles up record October budget deficit of $284.1 billion
WASHINGTON (AP) — The U.S. is starting the 2021 budget year the way the old year ended, with soaring deficits.
The Treasury Department reported Thursday that the federal government ran up a record October deficit of $284.1 billion, double the red ink of the same month a year ago, as revenues declined while spending to deal with the impact of the coronavirus soared.
The October deficit was double the $134.5 billion deficit logged in October 2019. It smashed the previous October record of a $176 billion deficit set in 2009, when the government was spending heavily to lift the country out of a deep recession caused by the 2008 financial crisis.
The deficit for the 2020 budget year, which ended Sept. 30, totaled a record $3.1 trillion, breaking the old mark for an annual deficit of $1.4 trillion set in 2009.
The Congressional Budget Office is projecting that this year’s deficit will remain above the $1 trillion level, coming in at $1.8 trillion, the second largest annual deficit on record but an improvement over the $3.1 trillion set in 2020.
Private economists said the actual deficit this year will depend on a number of factors including whether Congress is able to narrow the differences between Democrats and Republicans to pass more coronovirus relief measures.
“The outlook for the deficit for the full fiscal year depends heavily on the course of the pandemic, the economic recovery and whether additional stimulus measures are passed,” said Nancy Vanden Houten, lead economist at Oxford Economics. She said that if Congress approved another $1 trillion in economic support that could push the deficit to $2.5 trillion next year.
For October, spending totaled $521.8 billion, up 37.3% from a year ago and a record for the month. Big increases were seen in various government agencies working to blunt the economic downturn from the coronavrious pandemic.
Revenues fell by 3.2% to $237.7 billion, reflecting in part a $14 billion decline in personal income tax collections, as millions of people who have lost jobs during the pandemic are no longer having taxes withheld from paychecks.
More
Covid-19 Corner
This section will continue until it becomes unneeded.
World's top intensive care body advises against remdesivir for sickest COVID patients
November 13, 2020 9:55 AM By Francesco Guarascio
BRUSSELS (Reuters) - Antiviral remdesivir should not be used as a routine treatment for COVID-19 patients in critical care wards, the head of one of the world's top bodies representing intensive care doctors said, in a blow to the drug developed by U.S. firm Gilead GILD.O.
Remdesivir, also known as Veklury, and steroid dexamethasone are the only drugs authorised to treat COVID-19 patients across the world. But the largest study on remdesivir’s efficacy, run by the World Health Organization (WHO), showed on Oct. 15 it had little or no impact, contradicting previous trials.
In light of the new interim data from the WHO’s Solidarity trial “remdesivir is now classified as a drug you should not use routinely in COVID-19 patients,” the President of the European Society of Intensive Care Medicine (ESICM), Jozef Kesecioglu, said in an interview with Reuters.
Kesecioglu said the recommendation would be discussed in a scientific paper on COVID therapies that ESICM is preparing with the Society of Critical Care Medicine, another intensive care body, expected to be published by January.
The first version of the paper, released in March, said there was not enough information to recommend the use of remdesivir and other antivirals in critically ill COVID-19 patients.
---- While doctors and hospitals are not obliged to follow its advice, its recommendation could curb the use of remdesivir.
At the end of October, Gilead cut its 2020 revenue forecast, citing lower-than-expected demand and difficulty in predicting sales of remdesivir.
Kesecioglu said there was not enough data available about when remdesivir might be effective or for which patients, leading to the decision to discourage its routine use in intensive care.
This means doctors should use remdesivir only occasionally, and not as a standard treatment for COVID-19 patients.
Because of remdesivir’s unclear benefits, the critical care department at the University Medical Center of Utrecht in the Netherlands, where Kesecioglu works, has not used it to treat COVID-19 patients, he said.
More
Antidepressant might help prevent severe COVID-19
Nov. 12, 2020 / 3:42 PM
The antidepressant drug fluvoxamine -- best known by the brand name Luvox -- may help prevent serious illness in COVID-19 patients who aren't yet hospitalized, a new study finds.
The study included 152 patients infected with mild-to-moderate COVID-19. Of those, 80 took fluvoxamine and 72 took a placebo for 15 days.
By the end of that time, none of the patients who took the drug had seen their infection progress to serious illness, compared with six (8.3%) of the patients who took the placebo, according to researchers at Washington University School of Medicine in St. Louis.
"The patients who took fluvoxamine did not develop serious breathing difficulties or require hospitalization for problems with lung function," said first author Dr. Eric Lenze, professor of psychiatry.
"Most investigational treatments for COVID-19 have been aimed at the very sickest patients, but it's also important to find therapies that prevent patients from getting sick enough to require supplemental oxygen or to have to go to the hospital. Our study suggests fluvoxamine may help fill that niche," Lenze noted in a university news release.
Fluvoxamine -- widely used to treat depression, obsessive-compulsive disorder and social anxiety disorder -- is a type of drug called a selective serotonin-reuptake inhibitor (SSRI). This class of drugs also includes medicines such as Prozac, Zoloft and Celexa.
But unlike other SSRIs, fluvoxamine has a strong interaction with a protein called the sigma-1 receptor, which helps regulate the body's inflammatory response.
More
Finally, this weekend, something a little different. MedCram.com takes an in depth look at Pfizer’s mRNA vaccine. The vaccine segment starts about 2:30 in. The whole professional presentation is well worth the 22 minutes it takes.
Coronavirus Update 116: Pfizer COVID 19 Vaccine Explained
https://www.youtube.com/watch?v=_jwBxZMWrng
Next, some very useful vaccine links kindly sent along from a LIR reader in Canada. The links come from a most informative update from Stanford Hospital in California.
World Health Organization - Landscape of COVID-19 candidate vaccines. https://www.who.int/publications/m/item/draft-landscape-of-covid-19-candidate-vaccines
NY Times Coronavirus Vaccine Tracker. https://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html
Stanford Website. https://racetoacure.stanford.edu/clinical-trials/132
FDA information. https://www.fda.gov/media/139638/download
Regulatory Focus COVID-19 vaccine tracker. https://www.raps.org/news-and-articles/news-articles/2020/3/covid-19-vaccine-tracker
Some more useful Covid links.
Johns Hopkins Coronavirus resource centre
https://coronavirus.jhu.edu/map.html
Rt Covid-19
Covid19info.live
Winter Watch.
The Arctic winter sea-ice expansion and northern hemisphere snow cover. From around mid-October, the northern hemisphere snow cover usually rapidly expands, while the Arctic ice gradually expands back towards its winter maximum.
Over simplified, a rapid expansion of both, especially if early, can be a sign of a harsher than normal arriving northern hemisphere winter. Perhaps more so in 2020-2021 as we’re in the low of the ending sunspot cycle, which possibly also influenced this year’s record Atlantic hurricane season.
Adding to this year’s winter concerns, a developing La Nina weather pattern in the Pacific. While the La Nina effect on the winter weather of western Europe is weaker than that of an El Nino pattern, which tends to make for a milder winter, a La Nina pattern tends to make for a colder winter.
Northern Eur-Asia turned snowy fast in mid-October. The Arctic sea ice expansion was slow, and from a very low level at the end of September, but with the vastly expanded snow cover, sea ice formation sped up.
With the Kara and Laptev sea ice speeding up fast now, especially in the Laptev Sea which is virtually back to normal, at the end of the second week of November I’m starting to think that it will likely be a normal to slightly colder winter ahead for western Europe.
The failure of the Kara Sea ice to return to normal, would lead me to bet on a normal western European winter ahead.
US National Ice Center.
Technology Update.
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.
Battery recycling breakthrough bolsters case against heavy metals
The majority of today’s lithium batteries use a rare and expensive metal called cobalt as part of the cathode component, but mining this material comes at a great cost to the environment. One of the greener alternatives is known as lithium iron phosphate, and a new breakthrough could boost the eco-credentials of this cathode material even further by restoring it to its original condition once it is spent, using just a fraction of the energy of current approaches.
The research was carried out by nanoengineers at the University of California (UC) San Diego, and focuses on recycling techniques for batteries with cathodes made from lithium iron phosphate. By doing away with heavy metals such as nickel and cobalt, these types of batteries can help avoid the degradation of landscapes and water supplies where these materials are mined, along with the exposure of workers to dangerous conditions.
Increasing awareness of the problems associated with cobalt is driving a shift in the industry, with many looking to alternative battery designs, including big names like IBM and Tesla, who this year started selling a Model 3 with lithium iron phosphate batteries. These are safer, have longer lifetimes and are cheaper to produce, though one shortcoming is that it is expensive to recycle them once they are spent.
----The recycling breakthrough focuses on a couple of mechanisms behind the deteriorating performance of lithium iron phosphate batteries. As they are cycled, this process drives structural changes that see empty spaces created in the cathode as lithium ions are lost, while the iron and lithium ions also trade places in the crystal structure. This entraps the lithium ions and prevents them from cycling through the battery.
The team took commercially available lithium iron phosphate battery cells and depleted them to half their storage capacity. They then disassembled the cells and soaked the resulting powder in a solution with lithium salt and citric acid, before rinsing it off, drying it and then heating it at temperatures of around 60 to 80 °C (140 to 176 °F). This powder was then fashioned into new cathodes and tested in coin and pouch cell batteries, where the team found the performance to be restored to its initial state.
This is because the recycling technique not only replenishes the battery’s stocks of lithium ions, but enables the lithium and iron ions to revert back to their original spots in the cathode structure. This is thanks to the addition of citric acid, which feeds the iron ions with electrons and reduces a positive charge that normally repels them from moving back to their original spot. The upshot of all this is that the lithium ions can be released and cycled through the battery once again.
More
https://newatlas.com/energy/battery-recycling-breakthrough-heavy-metals/
This weekend’s musical diversion. Dresden’s vastly under appreciated Johann David Heinichen.
J.D. HEINICHEN: «Flavio Crispo» [Act II: Sinfonia], Il Gusto Barocco
https://www.youtube.com/watch?v=HrROrVrYjDM
This weekend’s great chess game.
Most Beautiful Chess Game Ever Played - "The Evergreen Game"
https://www.youtube.com/watch?v=uqzxnz6d7JM
This weekend’s maths update from Manhattan. I have driven through many of these squares and watched the chess games in Washington Square Park on many sunny Sundays. The good old days.
The Best Square Square in New York
https://www.youtube.com/watch?v=yfR1Jkl5R8A
Nothing is so admirable in politics as a short memory.
John Kenneth Galbraith.
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