Baltic Dry Index. 1606 +158 Brent Crude 55.33
Spot Gold 1843
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 11/01/21 World 90,683,590
Deaths 1,943,17
"It is always important to know when something has reached its end. Closing circles, shutting doors, finishing chapters, it doesn't matter what we call it; what matters is to leave in the past those moments in life that are over."
Paulo Coelho
We have reached the last full week of President Trumpism. What more could possibly go wrong?
Below, Bloomberg, always a never Trump news outlet, (Mr Bloomberg spent 100 million dollars on his Presidential campaign to secure just the votes of American Samoa,) covers the looming Biden spending boom. Free money for all.
Dollar Rises; U.S. Futures Dip, Asia Stocks Mixed: Markets Wrap
By Sunil JagtianiUpdated on January 11, 2021, 4:55 AM GMT
· Traders assessing impact of rising bond yields; gold slips
The dollar climbed a third day against major peers and Treasury futures were flat. Japan’s equity market is shut for a holiday and cash Treasuries won’t trade until the London open. An Asian share gauge fluctuated as South Korea turned lower after earlier rising as much as 3.6%. S&P 500 futures dipped.
U.S. stocks hit a record Friday after Biden said he’ll lay out proposals this week for trillions of dollars in fiscal support to fight the economic toll of surging virus cases. Oil pared some of last week’s jump and gold fell further.
“After being bullish for several months, we are definitely becoming more cautious on the stock market up at these levels,” Matt Maley, the chief market strategist at Miller Tabak + Co., wrote in a note. He added the “dollar is so extremely oversold, over-hated, and over-shorted that it all but has to rally for a while at some point soon.”
The Democratic Party under Biden is set to control both houses of Congress once he takes charge, but winning assent for ambitious outlays -- such as $2,000 stimulus checks -- may yet be a challenge in a Senate that will be split 50-50 with Republicans. Meanwhile, President Donald Trump enters the final days of his presidency facing a possible impeachment resolution after being blamed for inciting last week’s deadly riot at the U.S. Capitol.
Biden’s looming policy tasks after his inauguration next week include handling escalating tension with Beijing. China’s state-run media called for retaliation after the Trump administration said the U.S. will remove self-imposed curbs on diplomatic interactions with Taiwan. China claims the island as its territory.
On the virus front, Japan said it found a new strain of the coronavirus with similarities to the variants in the U.K. and South Africa. The Asian nation said it’s difficult to immediately determine how infectious the strain is or the effectiveness of current vaccines against it.
Elsewhere, Bitcoin retreated from Friday’s high of about $42,000.
Here are some key events coming up:
- JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co., as well as firms ranging from Taiwan Semiconductor Manufacturing Co. to Infosys Ltd., are among those due to report earnings.
- EIA crude oil inventory report is due Wednesday.
- European Central Bank’s Christine Lagarde speaks at an online conference Wednesday.
- U.S. consumer-price inflation figures are due Wednesday.
- Biden plans to lay out proposals for fiscal support on Thursday.
- Fed Chair Jerome Powell takes part in a webinar on Thursday.
- U.S. initial jobless claims data are due Thursday.
- U.S. retail sales, industrial production, business inventories and consumer sentiment figures are due Friday.
These are some of the main moves in markets:
Stocks
- S&P 500 futures slid 0.7% as of 1:50 p.m. in Tokyo. The S&P 500 index rose 0.6% on Friday.
- Australia’s S&P/ASX 200 index fell 0.8%.
- South Korea’s Kospi index dropped 0.8%.
- Shanghai Composite index fell 0.2%.
- Hong Kong’s Hang Seng index rose 0.9%.
‘Full-Blown Mania’: Stock Market Jackpot Bells Just Keep Ringing
Joanna Ossinger, Lu Wang and Elena Popina
(Bloomberg) -- Like a slot machine paying off on every pull, the stock market’s most reliable bets lately have often been its riskiest.
Go long a company that sounds like something Elon Musk mentioned in a tweet (but wasn’t)? Signal Advance Inc. just soared 12-fold. Lend money to a software maker to buy Bitcoin? A Microstrategy Inc. convertible bond is up 50% in four weeks (its option is in the money). Back up the truck on bullish options after the Nasdaq 100 doubled in 24 months? Wednesday was the fourth-busiest day ever for call trading in the U.S. (the other three were last year).
Throw a dart, hit a winner, so it has lately seemed. Emboldened by Federal Reserve stimulus, vaccines and the psychological conditioning that arises when no bad patch lasts, everyone from retail newbies to institutional managers is rushing to cash in on the 10-month-old meltup. Of course, it’s possible that all of this could continue for weeks, if not months, without so much of even a little reversal. Predicting exactly when such fevers will break is a near impossible task. But bubble warnings are starting to blare from every corner.
“It’s a full-blown mania, and the bull’s relative youth doesn’t make it ‘safer’ to climb aboard,” Doug Ramsey, Leuthold Group’s chief investment officer, wrote in a Jan. 8 report to clients -- which went on to note his firm has also been among the buyers. “We’re just as guilty as the others in chasing this momentum”
More
https://finance.yahoo.com/news/full-blown-mania-stock-market-190645446.html
Next a glimpse of our eventual future. No one knows when the government gravy train ends, but end it will and in all G-7 nations. We need to start preparing now. But once on free money for all, can we ever get off free money for all?
For many firms, a Covid reckoning is coming, and it won’t look pretty
Many businesses currently on life support may not make it – what emerges on the other side of Covid will be a very different looking economy
tructural economic change is almost invariably painful, but the repeated lesson of history is that it is best not to try and get in its way; the sooner such change is allowed to take its course, the sooner resources are released to invest in the new, allowing the economy to transition to a different and hopefully better form.
Yet governments nearly always attempt obstruct it. Voter pressure inevitably makes saving the past a more pressing political concern than galvanising the new.
Rewind to Seventies Britain, and we see a case study in what not to do when companies and even whole industries become uncompetitive and therefore unviable.
Huge amounts were spent supporting lame duck businesses and sectors; it delayed the reckoning, certainly, but only made it very much more painful when finally it was ushered in under the deliberately cleansing policies of one Margaret Thatcher.
That very same, political choice is once again fast approaching.
The UK Treasury has characterised its various Covid related business support measures – furlough, tax reliefs, bounce back loans and the coronavirus business interruption loan scheme – as a “bridge” to help businesses across to the other side of the pandemic.
Many firms have in effect been mothballed, in the hope of waking them up again once the disease has gone. Rightly, the Government feels under a moral duty, not just an economic one, to provide such aid. If a company is forced to close by government diktat, then the government is also obliged to provide compensation.
Yet we are now into a much longer form of Covid than anyone remotely imagined when the schemes were initiated, prompting repeated lockdowns and extensions. The cost to the public purse is spiralling upwards, together with the public indebtedness to pay for it all.
At the same time, long Covid has had the effect of embedding wide ranging behavioural changes, very substantially shifting the pattern of household expenditure on a likely permanent basis. Many of the enterprises currently on life support are not going to make it. What emerges on the other side of Covid will be a very different looking economy.
More
Finally, it’s an ill wind and all that. Maybe Germany should get on with completing the Nordstream 2 gas pipeline after all.
Asian Freeze Sends Natural Gas Cargo Prices Into the Stratosphere
By Ann Koh, Anna Shiryaevskaya, Andy Hoffman, and Stephen StapczynskiJanuary 8, 2021, 3:02 PM GMT Updated on January 8, 2021, 4:11 PM GMT
· Exxon sold cargo for later in January to Kyushu for mid-$30s
The rally in liquefied natural gas shows no signs of slowing as a cold snap is forcing Asian utilities to pay prices never seen before.
Freezing temperatures across the Northern Hemisphere, a shortage of the fuel as well as vessels to move it sent spot prices soaring more than 10-fold since April. It was just last spring that the market was on its knees because of an unprecedented glut caused by the pandemic.
On Friday, Exxon Mobil Corp. sold a spot cargo for delivery to Kyushu Electric Power Co. in the second half of January at a level of mid-$30s per million British thermal units, according to traders with knowledge of the tender. A rally in Asia, the biggest LNG consumer, echoed through Europe, where the regional gas benchmark is near a two-year high and prices in Spain hit a record as a rare snowfall covered Madrid.
Spanish Gas Price Surges to Record as Snow Blankets Madrid
“LNG prices have had a roller coaster year,” said Richard Holtum, global head of LNG and gas at Trafigura Group. “This is evidence of the increased seasonality and volatility” for the fuel increasingly used together with renewables.
Japan’s utilities are struggling to secure prompt LNG supplies as the cold weather is draining inventories. Temperatures in Beijing plunged to the lowest since 1966, while strong winds accompanied by icy weather are disrupting LNG deliveries. South Korea’s peak power demand recently rose to a record
Ships are increasingly hard to come by because of delays transiting the Panama Canal. The route is used a lot by tankers carrying U.S. cargoes that don’t have restrictions on their destination.
In Europe, freezing temperatures are pushing up prices to records and curbing opportunities to ship any extra supply to Asia.
The Exxon cargo came with a hefty premium to spot levels because it was sold so close to the delivery period. Tenders now normally cover deliveries from February to April.
The Japan-Korea Marker, Asia’s LNG benchmark, rose to $21.453 on Friday, the highest since S&P Global Platts began assessments in 2009.
In other developments on Friday, Trafigura bid $27.80 per million British thermal units for an early-February cargo to South Korea on the S&P Global Platts Market on Close.
More
Covid-19 Corner
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