Baltic Dry Index. 3224 -61 Brent Crude 77.54
Spot Gold 1799
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 06/07/21 World 184,936,178
Deaths 4,000,779
For every complex problem there is an answer that is clear, simple, and wrong.
H. L. Mencken.
In a big surprise to casino expectations, OPEC+ decided not to meet yesterday and all scattered leaving no production agreement in place after next month.
While that might seen bearish setting off an oil production free for all from September, oil market experts took it as bullish thinking the existing production agreement likely continues rather than OPEC+ increasing oil production to meet a tightening oil demand/supply imbalance.
Wobbly Asian stock casinos weren’t so sure.
Oil prices jump to multiyear highs after OPEC+ talks yield no production deal
Oil jumped to its highest level in nearly three years on Monday after talks between OPEC and its oil-producing allies were postponed indefinitely, with the group failing to reach an agreement on production policy for August and beyond.
West Texas Intermediate crude futures, the U.S. oil benchmark, advanced 1.56%, or $1.17, to $76.33 per barrel, its highest level since October 2018. International benchmark Brent crude rose 1.2%, or 93 cents, to $77.10 per barrel.
Discussions began last week between OPEC and its allies, known as OPEC+, as the energy alliance sought to establish output policy for the remainder of the year. The group on Friday voted on a proposal that would have returned 400,000 barrels per day to the market each month from August through December, resulting in an additional 2 million barrels per day by the end of the year. Members also proposed extending the output cuts through the end of 2022.
The United Arab Emirates rejected these proposals, however, and talks stretched from Thursday to Friday as the group tried to reach a consensus. Initially, discussions were set to resume on Monday but were ultimately called off.
“The date of the next meeting will be decided in due course,” OPEC Secretary General Mohammad Barkindo said in a statement.
OPEC+ took historic measures in April 2020 and removed nearly 10 million barrels per day of production in an effort to support prices as demand for petroleum-products plummeted. Since then, the group has been slowly returning barrels to the market, while meeting on a near monthly basis to discuss output policy.
“For us, it wasn’t a good deal,” UAE Minister of Energy and Infrastructure Suhail Al Mazrouei told CNBC on Sunday. He added that the country would support a short-term increase in supply, but wants better terms if the policy is to be extended through 2022.
Oil’s blistering rally this year — WTI has gained 57% during 2021 — meant that ahead of last week’s meeting many Wall Street analysts expected the group to boost production in an effort to curb the spike in prices.
“With no increase in production, the forthcoming growth in demand should see global energy markets tighten up at an even faster pace than anticipated,” analysts at TD Securities wrote in a note to clients.
“This impasse will lead to a temporary and significantly larger-than-anticipated deficit, which should fuel even higher prices for the time being. The summer breakout in oil prices is set to gather steam at a fast clip,” the firm added.
Asia-Pacific markets mixed as oil stocks rise; Australia central bank’s rate decision ahead
SINGAPORE — Shares in major Asia-Pacific markets struggled for direction in Tuesday morning trade as investors look ahead to the Australian central bank’s interest rate decision.
The Nikkei 225 in Japan rose 0.29% while the Topix index advanced 0.3%. Over in South Korea, the Kospi gained 0.51%.
Mainland Chinese stocks, on the other hand, declined. The Shanghai composite slipped 0.27% while the Shenzhen component dipped 0.222%. Hong Kong’s Hang Seng index fell 0.5%.
Meanwhile, stocks in Australia climbed as the S&P/ASX 200 advanced 0.18%.
MSCI’s broadest index of Asia-Pacific shares outside Japan traded around the flatline.
Looking ahead, the Reserve Bank of Australia is set to announce its interest rate decision at 12:30 p.m. HK/SIN on Tuesday.
----Oil prices surged to multiyear highs on Monday after talks between OPEC and its oil-producing allies, known as OPEC+, were postponed indefinitely following a failure by the group to reach on agreement on production policy for August and beyond.
More
Up next, Wells Fargo came as near to a sell recommendation for tech stocks, as modern day stock promoters are allowed in our post 1987 stock crash world.
‘Day of reckoning’ is coming for high-flying tech stocks, Wells Fargo warns
Wells Fargo Securities’ Chris Harvey is doubling down on his Big Tech warning, saying a “day of reckoning” is ahead.
He’s urging investors to take profits in light of risks associated with rising interest rates.
“The premium that you’re paying is still exceptionally high,” the firm’s head of equity strategy told CNBC’s “Trading Nation” on Friday. “We believe that premium has got to compress. Two, we think that the next 25 basis point move in the 10-year [Treasury Note yield] is… up not down.”
After a surge earlier this year, the 10-year yield is trending lower. It ended the week at 1.43% on Friday, down almost 17% over the past three months. The drop has been benefitting growth stocks, particularly Big Tech.
But Harvey warns a significant reversal is virtually unavoidable, citing the fundamental economic backdrop. Rising rates will set the stage for a double-digit pullback in momentum growth stocks. He predicts it could happen later this summer or early fall.
“The tech companies and the growth companies that are selling at very high multiples,” he noted. “Even though they have high growth rates, the high multiples are what’s going to do them in.”
Harvey called the March rebound in Big Tech a “head fake” on “Trading Nation” in late April. He’s sticking with the call and is signaling more concern now with stocks in rally mode.
More
Another day and another stock warning, this time about owning Chinese tech stocks by someone who ought to know about risk and opportunity.
Veteran strategist David Roche explains why he thinks it’s ‘too risky’ to own Chinese tech stocks
Published Mon, Jul 5 20212:42 AM EDT
Veteran investment strategist David Roche said it’s “too risky” to own Chinese technology stocks given an ongoing regulatory crackdown in China and the geopolitical rivalry between Washington and Beijing.
“There are a lot of issues to do with politics. There are a lot of issues to do with the availability of technology, which personally I don’t want to take those risks in a portfolio at the present time,” Roche, president and global strategist at Independent Strategy, told CNBC’s “Squawk Box Asia” on Monday.
U.S.-China relations were already rocky as President Joe Biden took office, and some observers have warned that tensions between the two countries could worsen.
Biden has kept many restrictions on Chinese tech companies imposed by his predecessor Donald Trump. That includes export controls on Chinese telecommunications equipment maker Huawei and top chipmaker Semiconductor Manufacturing International Corp.
Tensions with the U.S. and its allies mean that China “will have problem in accessing the high end of things like robots and the high end, in particular, of semiconductors,” said Roche.
At the same time, Chinese regulators have stepped up scrutiny on some of the country’s largest tech firms — including e-commerce giant Alibaba and ride-hailing app Didi. Roche said the crackdown adds uncertainty and makes companies, such as those in the financial technology space, less profitable and less attractive to investors.
Investment case for Taiwan
While China aims to become self-reliant in tech — particularly semiconductors — it will take years before the country can catch up to industry leaders such as Taiwan, said the veteran strategist.
Roche said Taiwan produces 70% of all “really high-end” chips in the world, while China only accounts for about 5% of the global share. That’s one factor underpinning the investment case for Taiwan on a two- to three-year horizon, he added.
“The big asset of Taiwan is ... its research and technological ability to produce high-end chips,” the strategist said.
“So essentially, Taiwan is the golden egg for China. It is also the golden egg for the United States because it supplies the United States, which has lost its leadership in this section. So, that puts Taiwan in a very special place,” added Roche.
But he warned that Taiwan is geopolitically very vulnerable.
The ruling Chinese Communist Party in Beijing has never controlled Taiwan, but it claims the self-ruled, democratic island as a renegade province that must be one day reunited with the mainland. The CCP doesn’t rule out the use of force to take over Taiwan.
Chinese President Xi Jinping last week pledged “complete reunification” with Taiwan in a speech to mark the Communist Party’s 100th year — which drew a strong rebuke from Taiwan.
Roche said a move by Xi on Taiwan is “most definitely on the cards for the next five years, but it is probably not on the cards for the next two to three years.”
https://www.cnbc.com/2021/07/05/investing-david-roche-on-china-tech-stocks.html
Finally, more on the increasing insanity of modern dumbed down GB. Standard Life Aberdeen renames itself abrdn. I hope that they didn’t pay anyone any money to turn themselves into a nasty joke. Sukrs!
Time for the shareholders to get a new CEO and Board. With this crew, it might be safer owning Chinese tech stocks.
Standard Life Aberdeen officially changes name to abrdn
Monday 5 July 2021 8:58 am
Standard Life Aberdeen has officially changed its name to abrdn, the company announced this morning.
The firm’s stock market ticker was changed from SLA to ABDN at 8.00am today.
Stephen Bird, CEO of abrdn plc, says: “I’m very excited to have reached this milestone. abrdn is so much more than a new name, it’s about our business coming together under a single global brand with a determined focus on enabling our clients and customers to be better investors”.
More to follow.
https://www.cityam.com/standard-life-aberdeen-officially-changes-name-to-abrdn/
Nobody ever went broke underestimating the taste of the abrdn Board.
With apologies to H. L. Mencken.
Global Inflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Top pay at US law firms climbs to over £150k for London’s new solicitors
Monday 5 July 2021 8:44 am
Legal practice for the elite has thrived in London despite the pandemic, as an increasing number of US law firms have upped their pay for new solicitors.
Houston-based firm Vinson & Elkins last month confirmed its new starting pay of £153,400, up four per cent from the year prior.
The Texan firm topped the ranks for London firms with the best pay for those newly qualified.
Fellow US firm Quinn Emanuel Urquhart & Sullivan also bolstered its pay last week, which swelled by £11,000 – meaning its new lawyers would start with £146,000 a year.
After Vinson & Elkins, the top five salaries paid to newly qualified solicitors in the City are at Sidley Austin at £148,000, Washington’s Akin Gump Strauss Hauer & Feld at £145,000, Chicago’s Kirkland & Ellis at £145,000 and Los Angeles-based Latham & Watkins at £145,000.
Meanwhile, the London firms with the highest pay still lag behind their US counterparts. City firms Allen & Overy, Clifford Chance and Freshfields Bruckhaus Deringer all pay £100,000 for new solicitors.
City law firm wages dwarf that of investment banking, which has been known for its lofty graduate salaries.
According to the Institute of Student Employers, starting salaries at the big banks teeter slightly over £40,000.
The legal sector had a record-breaking month in March as it raked in total revenue of £4.06bn, according to the Office for National Statistics (ONS), up nearly 20 per cent on March last year
https://www.cityam.com/top-pay-at-us-law-firms-climbs-to-over-150k-for-londons-new-solicitors/
Wise exec: London tech scene already at 'critical mass' despite Brexit
Monday 5 July 2021 8:38 am Andy Silvester
A senior exec at London fintech darling Wise has said Brexit “won’t get in the way” of the capital’s tech ecosystem continuing to thrive.
Speaking on City A.M.’s podcast, the firm’s Chief Financial Officer Matt Briers said that while many elements including recruiting have become “harder,” the tech climate is “already at critical mass.”
Wise are set to list in the capital on Wednesday.
There remain fears that Brexit may make life more challenging for tech firms, particularly with regards to finding the right people.
But Briers remains bullish on the capital’s prospects.
“You have to step back and look at fundamentals. Is London going to be a great place for people to come and work? I think so.
“Is it going to be harder than it used to be? Probably.
“But we’re still able as a tech firm to attract, and we are successfully hiring in London, and we haven’t seen that slowdown yet.”
Data on how many Londoners have left the capital over the course of the Covid-19 pandemic remains unclear.
“With all the great tech firms we’ve now got in London, tech firms are coming out of those tech firms. People move on, they start their own companiess, they create capital, I think there’s an eco-system with technology that Brexit (isn’t) going to get in the way of that.
“I think it’s already at critical mass, which is good.”
https://www.cityam.com/wise-exec-london-tech-scene-already-at-critical-mass-despite-brexit/
Lower-Wage Workers See Biggest Gains From Easing of Covid-19 Pandemic
Hiring and wage growth are the strongest for restaurant, hotel and retail jobs, reflecting consumers’ desire to get out
July 4, 2021 5:30 am ET
A fading pandemic and heating U.S. economy appear to be paying off for lower-wage workers.
New jobs at restaurants, hotels, stores, salons and similar in-person roles accounted for about half of all payroll gains in June, according to the Labor Department. And workers in those industries are seeing larger raises than other employees.
“Americans are becoming more mobile and dining out more,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors. “Retailers and restaurants are having to pay more to hire workers to meet that demand.”
Restaurants and other hospitality businesses added a seasonally adjusted 343,000 jobs in June, the department said Friday. Retailers added 67,000 jobs last month, including strong gains at clothing stores, indicating Americans are getting dressed up to go out and back to offices. Similarly, personal-services businesses such as salons and dry cleaners added 29,000 jobs. Overall, employers added in 850,000 jobs last month, the best monthly gain since August 2020.
More
Below, why a “green energy” economy may not be possible, and if it is, it won’t be quick and it will be very inflationary, setting of a new commodity Supercycle, if not the largest seen so far.
The “New Energy Economy”: An Exercise in Magical Thinking
https://media4.manhattan-institute.org/sites/default/files/R-0319-MM.pdf
Mines, Minerals, and "Green" Energy: A Reality Check
https://www.manhattan-institute.org/mines-minerals-and-green-energy-reality-check
It is hard to believe that a man is telling the truth when you know that you would lie if you were in his place.
H.
L. Mencken.
Covid-19 Corner
This section will continue until it becomes unneeded.
Indonesia turns to telemedicine for COVID-19 as hospitals struggle
July 5, 20217:06 AM BST
JAKARTA, July 5 (Reuters) - Indonesia will provide free telemedicine services to coronavirus patients with mild symptoms, its health minister said on Monday, in an effort to reduce pressure on a healthcare sector inundated by record numbers of COVID-19 cases.
With records most days last week and deaths surpassing 500 on several of those, Indonesia is battling one of Asia's worst COVID-19 epidemics, fueled by the highly contagious Delta variant first identified in India.
Remote services will be provided from Tuesday by telehealth firms such as Alodokter and Halodoc and will include free consultations and medication delivery, Health Minister Budi Gunadi Sadikin told a news conference.
"Positive COVID-19 patients can get medical services on time without waiting in line at hospitals, so that hospitals can be prioritised for patients with medium, heavy, and critical symptoms," he said.
Finance Minister Sri Mulyani Indrawati on Monday said health spending would be raised again to 193.93 trillion rupiah ($13.39 billion) for coronavirus treatment, testing, tracing, drugs, vaccines and protective gear.
Hospital bed occupancy was at 75% nationwide as of July 2, the health ministry said, but some hospitals on the most populous island of Java have reported over 90% capacity, including in the capital Jakarta.
Oxygen shortages have also been reported, which authorities attributed to distribution hurdles and limited production capacity.
Sardjito hospital on Java said 63 patients died after it nearly ran out of oxygen at the weekend, although a spokesman could not determine whether all were coronavirus patients.
More
Japan’s vaccination drive is picking up steam. That’s good news for the retail sector, says EY
Published Mon, Jul 5 2021 1:51 AM EDT
Japan’s vaccination efforts are gaining some momentum now after a slow start, and that’s good news for retailers, said EY’s Nobuko Kobayashi.
“The vaccination, finally, is picking up steam in Japan. Government says that all who wants to be vaccinated can be by October, November,” Kobayashi, Asia-Pacific strategy execution leader at EY, told CNBC’s “Street Signs Asia” on Friday.
Looking ahead, the short-term milestone will be if Japan’s vaccination rollout reaches a level whereby “everyone feels comfortable to go out again,” she said. Kobayashi said the consumption outlook on balance is positive, even taking into consideration concerns about Covid variants like delta.
Following a sluggish rollout earlier in the year, vaccination rates in Japan have risen substantially in recent weeks. Daily Covid-19 vaccine doses administered even crossed the one million mark in June, according to Our World in Data.
Japan’s doses per 100 people reached an average of 0.77 for the seven days ending July 1, according to Our World in Data. That’s higher than the 0.48 and 0.32 doses per 100 in the United Kingdom and the U.S., respectively, over the same period.
Still, only 12.65% of Japan’s population has been fully vaccinated against Covid, as compared with the U.K. and U.S. which have both inoculated more than 40% of their population. In 2020, Japan had a population of more than 125.83 million, according to World Bank data.
Olympics ‘positive’ for Japan retail
Japan is just weeks away from hosting the Summer Olympics, but Tokyo prefecture remains under priority measures intended to limit the spread of the virus. Some aspects of the games remain undecided. Japanese Prime Minister Yoshihide Suga said Thursday that they could be held without spectators, according to local news agency Kyodo News.
More
Mild COVID-19 symptoms linked to prior exposure to the common cold
Rich Haridy July 04, 2021
A new study from Stanford University researchers has found previous recent exposure to common coronaviruses could help explain why some people infected with SARS-CoV-2 only suffer mild symptoms. The research showed specific immune cells from patients with mild cases of COVID-19 exhibit signs of prior encounters with common-cold-causing coronaviruses.
One big mystery of SARS-CoV-2, the novel coronavirus that appeared in late 2019, is the variability of effects it generates from person to person. Mark Davis, director of Stanford University’s Institute for Immunity, Transplantation and Infection, wondered if the answer lay in a type of immune cell known as a killer T-cell.
“A lot of people get very sick or die from COVID-19, while others are walking around not knowing they have it,” says Davis. “Why?”
----SARS-CoV-2 is the seventh coronavirus found to affect humans. Four of these are relatively harmless, responsible for many instances of the common cold. However, the others (MERS, SARS and now SARS-CoV-2) are responsible for some of the most concerning viral outbreaks of the past 20 years.
To investigate whether killer T-cells previously trained to target common coronaviruses could explain why some people experience only mild cases of COVID-19 the researchers first needed to develop a new immune cell screening platform. As SARS-CoV-2 is somewhat related to other coronaviruses, the researchers mapped out several peptide sequences that were shared by the viruses.
A panel of 24 different peptide sequences was created. Some of the sequences were unique to SARS-CoV-2, while others were shared with known seasonal coronaviruses.
Blood samples taken from subjects before the pandemic began were analyzed and the researchers discovered some killer T-cells quickly kicked into gear when exposed to SARS-CoV-2, targeting those shared coronavirus peptide sequences. Instead of taking a few days to identify and destroy a novel pathogen, these immune cells swiftly recognized SARS-CoV-2 due to its similarities to other coronaviruses. Davis says this crucial factor could be playing a role in differentiating those mild COVID-19 cases from the more severe ones.
More
Next, some 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
Regulatory Focus COVID-19 vaccine tracker. https://www.raps.org/news-and-articles/news-articles/2020/3/covid-19-vaccine-tracker
Some other useful Covid links.
Johns Hopkins Coronavirus resource centre
https://coronavirus.jhu.edu/map.html
Rt Covid-19
Centers for Disease Control Coronavirus
https://www.cdc.gov/coronavirus/2019-ncov/index.html
The Spectator Covid-19 data tracker (UK)
https://data.spectator.co.uk/city/national
Technology Update.
With events happening fast in the development of solar power and graphene, I’ve added this section. Updates as they get reported.
Normal service resumes tomorrow, but this needs to stand out today.
Israel data 'preliminary signal' Delta variant can bypass vaccine: expert
July 5, 2021
Rising coronavirus cases in Israel, where most residents are inoculated with the Pfizer/BioNTech vaccine, offer "a preliminary signal" the vaccine may be less effective in preventing mild illness from the Delta variant, a top expert said Monday.
But Ran Balicer, chairman of Israel's national expert panel on COVID-19, stressed it was "too early to precisely assess vaccine effectiveness against the variant" first identified in India in April that is surging across the globe.
That is partly due to the overall low number of cases among fully vaccinated Israelis, and because exposure to the virus and the likelihood of being tested are not evenly distributed across the population, further complicating efforts to reach conclusions about the data.
Balicer, also the chief innovation officer at Clalit, Israel's largest health maintenance organisation (HMO), told AFP that the Delta variant's emergence as the "dominant strain" in the country has led to a "massive shift in the transmission dynamic".
Israel's vaccine rollout that began in December was one of the world's fastest, making the Jewish state a closely-watched case study on whether mass inoculation offers a path out of the pandemic.
Vaccinations had brought transmission down to about five local new cases per day, but that figure has risen to around 300 in recent days, with the Delta variant raging.
About half of the daily cases are among children, and half are among mostly vaccinated adults.
"To some extent that could be expected since 85 percent of Israeli adults are vaccinated," Balicer said.
"But the rates in which we see these breakthrough cases make some believe they extend beyond that expected point and suggest some decrease in vaccine effectiveness against mild illness—but not severe illness—is likely."
The number of severe cases among vaccinated Israelis has risen in recent days from roughly one every two days up to five cases per day, Balicer said.
He said it was also too early to draw conclusions about the vaccine's effectiveness against serious illness caused by the Delta variant.
But, he added, experts "remain hopeful that the vaccine effectiveness against serious illness will remain as high as it was for the alpha strain" identified for the first time in Britain in December.
More
https://medicalxpress.com/news/2021-07-israel-preliminary-delta-variant-bypass.html
When a new source of taxation is found it never means, in practice, that the old source is abandoned. It merely means that the politicians have two ways of milking the taxpayer where they had one before.
H.
L. Mencken.
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