Baltic Dry Index. 1415 -59 Brent Crude 87.89
Spot Gold 1835
Stocks were hammered on Friday, with margin call Monday still to come. A correction has been long overdue in the stock casinos, but the fear now is that with rising interest rates likely for the rest of 2022 and 2023, that correction will turn into a general stock casino collapse.
With interest rates about to rise for up to two years, why buy stocks now?
And if global interest rates are set to rise for months ahead, how long before the G-7 economies enter recession or far more likely, stagflation?
What happens to China’s crumbling property companies?
With rising interest rates, what happens to the vast mountain of unrepayable corporate debt, much of it used merely to buy up stock to push up the stock price?
Stick around, one way or another we are all going to find out, starting with margin call Monday. Fed Chairman Powell to the rescue?
Nasdaq tumbles 2% Friday, notches worst week since 2020 and falls deeper into correction territory
U.S. stocks tumbled on Friday, closing out a losing week and continuing a rough start to 2022. The Nasdaq Composite was hit the hardest with Friday’s selling sending the tech-heavy index to its worst week since 2020.
The Nasdaq Composite declined 2.7% to 13,768.92 on Friday. The Dow Jones Industrial Average fell 450.02 points to 34,265.37. The S&P 500 slid 1.9% to 4,397.94.
The Nasdaq posted a 7.6% loss for the week, its worst since October 2020, and now sits more than 14% below its November record close. Both the Dow and S&P 500 closed out their third straight week of losses and their worst weeks since 2020. The S&P 500 is off more than 8% from its record close.
Netflix’s disappointing quarterly report is the latest setback for technology investors. Shares of the streaming giant tumbled 21.8% on Friday after the company’s fourth-quarter earnings report showed a slowdown in subscriber growth. Its competitors’ shares also declined, with Dow component Disney, which operates the Disney+ streaming service, off 6.9%.
Netflix is the first major tech stock to report earnings this season, with Apple and Tesla slated to post earnings next week. Tesla lost 5.3% on Friday. Other tech names like Amazon and Meta Platforms fell 6% and 4.2%, respectively.
The major losses in growth names have pushed the Nasdaq Composite further into correction territory as rising rates pressure technology stocks by making their lofty valuations look less attractive.
The Nasdaq is off to its worst start to a year, through the first 14 trading days, since 2008.
----The Nasdaq Composite’s struggle is largely due to a surge in government bond rates this week. The U.S. 10-year Treasury hit as high as 1.9% on Wednesday as investors focused on the Federal Reserve’s timeline for raising interest rates and broadly tightening monetary policy. However, bond yields retreated on Friday.
Investors will now be turning their attention to the Federal Reserve’s January two-day policy meeting, set to start on Tuesday.
More
https://www.cnbc.com/2022/01/20/stock-market-futures-open-to-close-news.html
Markets are expected to remain on edge as the Fed meets in the week ahead
Market turbulence is likely to continue in the week ahead as the Federal Reserve meets and the biggest of big tech —Apple and Microsoft — report earnings.
Stocks on Friday closed out their worst week since 2020, with big losses in technology and consumer discretionary names. FANG darling Netflix was ripped after its Thursday afternoon earnings, and traders are watching to see whether the same fate will take down other big tech names.
It was a painful week on Wall Street, with the Nasdaq slumping 7.6% for the week, its worst performance since March, 2020. The S&P 500 ended the week at 4,397, down 5.7%, and is now 8.7% from its Jan. 4 high.
The Nasdaq has fallen 15.5% from its high and is off to its worst start to the year, through the first 14 trading days, since 2008, according to FactSet.
The Federal Reserve’s meeting Tuesday and Wednesday trumps everything else for markets, as investors await any new clues on how much the central bank will raise interest rates this year and when it will start. Economists expect the Fed to steer markets to a quarter-percentage-point March rate hike.
There is also an avalanche of major earnings reports expected, including nearly half the Dow 30′s blue chips, such as 3M, IBM, Intel, Caterpillar and American Express. The two biggest stocks in terms of market capitalization, Microsoft and Apple, report Tuesday and Thursday respectively. Tesla reports Wednesday.
The economy will also be a focus with a first look at fourth-quarter GDP on Thursday, and Friday’s personal consumption expenditures data, which includes the Fed’s preferred inflation measure.
Stocks could be in for more volatile trading, after a wild week of seesaw action resulted in steep declines in major indexes. The weakest major sectors for the week were consumer discretionary, off 8.5%, followed by communication services and technology, both lower by about 7%.
Earnings season has been mixed so far with some high-profile negative stock reactions when investors did not like what they heard.
Netflix stock cratered Friday, losing 22% after a disappointing disclosure about subscriber data when it released earnings Thursday afternoon. JP Morgan Chase fell sharply a week earlier when it reported higher expenses and slower trading activity.
More
Cryptocurrencies tumble, with bitcoin falling 15% and ether down 20%
Bitcoin prices fell sharply on Friday, while ether prices also dived, wiping off nearly $150 billion from the crypto market.
Bitcoin fell about 15% and was trading around $36,000 late Friday, according to Coin Metrics. Ether, the second-largest cryptocurrency by market cap, dived about 20% to trade around $2,500.
The declines in cryptocurrencies follow Wall Street losses on Thursday.
Rising rates have prompted investors to shed positions in riskier assets. Earlier this week, the benchmark 10-year Treasury yield traded above 1.9%.
The Federal Reserve have also indicated it plans to begin reducing its balance sheet, as well as tapering of bonds and raising interest rates.
A common investment case for bitcoin is that it serves as a hedge against rising inflation as a result of government stimulus, but analysts are saying the risk is that a more hawkish Federal Reserve may take the wind out of bitcoin’s sails.
----Bitcoin prices have fallen sharply since November, tumbling more than 40% from a record high of about $69,000.
Some experts warn that the crypto market could be heading toward a downturn soon, as heightened regulatory scrutiny and intense price fluctuations dampened bitcoin’s prospects.
Regulators are cracking down on cryptocurrencies too. China completely banning all crypto-related activities and U.S. authorities are also clamping down on certain aspects of the market.
In a Thursday note, Oanda’s Moya had predicted that bitcoin could tumble below $40,000 as Russia’s central bank had proposed a ban over the use and mining of cryptocurrencies on Russian territory, claiming the digital currency poses a risk to “financial stability and monetary policy sovereignty.”
Russia is among the top three countries for bitcoin mining, he noted.
Warren Buffett.
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Farms Are Failing’ as Fertilizer Prices Drive Up Cost of Food
By in Singapore and in Bogotá, Colombia
Jan. 21, 2022 8:03 am ET
From South America’s avocado, corn and coffee farms to Southeast Asia’s plantations of coconuts and oil palms, high fertilizer prices are weighing on farmers across the developing world, making it much costlier to cultivate and forcing many to cut back on production.
That means grocery bills could go up even more in 2022, following a year in which global food prices rose to decade highs. An uptick would exacerbate hunger—already acute in some parts of the world because of pandemic-linked job losses—and thwart efforts by politicians and central bankers to subdue inflation.
“Farms are failing and many people are not growing,” said 61-year-old Rodrigo Fierro, who produces avocados, tangerines and oranges on his 10-acre farm in central Colombia. He has seen fertilizer prices double in recent months, he said.
Christina Ribeiro do Valle, who comes from a long line of coffee growers in Brazil, is this year paying three times what she paid last year for the fertilizer she needs. Coupled with a recent drought that hit her crop hard, it means Ms. do Valle, 75, will produce a fraction of her Ribeiro do Valle brand of coffee, some of which is exported.
There is also a shortage of fertilizer. “This year, you pay, then put your name on a waiting list, and the supplier delivers it when he has it,” she said.
The coffee beans won’t develop as they should for lack of fertilizer, she said—not just this year but also in 2023. “It’s like a child that’s malnourished,” she said.
Farmers in the U.S. are also feeling the pinch, with some shifting their planting plans. But the impact is expected to be worse in developing countries where smallholders have limited access to bank loans and can’t pay up front for expensive fertilizer.
Fertilizer demand in sub-Saharan Africa could fall 30% in 2022, according to the International Fertilizer Development Center, a global nonprofit organization. That would translate to 30 million metric tons less food produced, which the center says is equivalent to the food needs of 100 million people.
“Lower fertilizer use will inevitably weigh on food production and quality, affecting food availability, rural incomes and the livelihoods of the poor,” said Josef Schmidhuber, deputy director of the United Nations Food and Agriculture Organization’s trade and markets division.
As the pandemic enters year three, more households are having to cut down on the quantity and quality of food they consume, the World Bank said in a note last month, noting that high fertilizer prices were adding to costs. Around 2.4 billion people lacked access to adequate food in 2020, up 320 million from the year before, it said. Inflation rose in about 80% of emerging-market economies last year, with roughly a third seeing double-digit food inflation, according to the World Bank.
More
How Much Are You Willing to Pay for a Burrito?
Fri, January 21, 2022, 7:55 PM
On a chilly Tuesday afternoon this month, James Marsh stopped by a Chipotle near his suburban Chicago home to grab something to eat.
It had been a while since Marsh had been to Chipotle — he estimated he goes five times a year — and he stopped cold when he saw the prices.
“I had been getting my usual, a steak burrito, which had been maybe in the mid-$8 range,” said Marsh, who trades stock options at his home in Hinsdale, Illinois. “Now it was more than $9.”
----The pandemic has led to price spikes in everything from pizza slices in New York to sides of beef in Colorado. And it has led to more expensive items on the menus at fast-food chains, traditionally establishments where people are used to grabbing a quick bite that does not hurt their wallet.
At a Chipotle in Costa Mesa, California, the price of a chicken burrito — nothing fancy, hold the guacamole — about a year ago was $7.25. These days, that same burrito costs around $7.95, according to price data collected by analysts. In Ann Arbor, Michigan, a ShackBurger at Shake Shack used to cost $5.69; now it’s $6.09. And in Oklahoma City, an order of 50 bone-in wings from Wingstop that cost $41.99 early last year is now $47.49, a 13% increase.
Last year, the price of menu items at fast-food restaurants rose 8%, the biggest jump in more than 20 years, according to government data. And, in some cases, portions have shrunk.
More
https://www.yahoo.com/news/much-willing-pay-burrito-195500961.html
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 off a new long-term commodity Supercycle. Probably 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
"An Environmental Disaster": An EV Battery Metals Crunch Is On The Horizon As The Industry Races To Recycle
by Tyler Durden Monday, Aug 02, 2021 - 08:40 PM
“Predicting rain doesn’t count, building the ark does.”
Warren Buffett.
Covid-19 Corner
This section will continue until it becomes unneeded.
There are lies, damned lies and statistics.
Dr. John Campbell and some surprising UK Covid death statistics. Approx. 17 minutes. Why no mainstream media coverage?
Freedom of information revelation
https://www.youtube.com/watch?v=9UHvwWWcjYw
Europe considers new COVID-19 strategy: Accepting the virus
MADRID (AP) — When the coronavirus pandemic was first declared, Spaniards were ordered to stay home for more than three months. For weeks, they were not allowed outside even for exercise. Children were banned from playgrounds, and the economy virtually stopped.
But officials credited the draconian measures with preventing a full collapse of the health system. Lives were saved, they argued.
Now, almost two years later, Spain is preparing to adopt a different COVID-19 playbook. With one of Europe’s highest vaccination rates and its most pandemic-battered economies, the government is laying the groundwork to treat the next infection surge not as an emergency but an illness that is here to stay. Similar steps are under consideration in neighboring Portugal and in Britain.
The idea is to move from crisis mode to control mode, approaching the virus in much the same way countries deal with flu or measles. That means accepting that infections will occur and providing extra care for at-risk people and patients with complications.
Spain’s center-left prime minister, Pedro Sánchez, wants the European Union to consider similar changes now that the surge of the omicron variant has shown that the disease is becoming less lethal.
More
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
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
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.
Liquid metal catalyst quickly converts carbon dioxide into solid carbon
Michael Irving January 18, 2022
Researchers at RMIT have developed a new method for quickly converting carbon dioxide into solid carbon, which can be stored indefinitely or turned into useful materials. The technology works by bubbling CO2 up through a tube of liquid metal, and it’s designed to be easy to integrate into the source of emissions.
Reducing carbon dioxide emissions is crucial for the future of the planet, and a major part of that may involve finding ways to capture it at the point of emission. Current methods in development include filtering the gas through absorbent materials like magnetic sponges, bubble-like membranes, zeolite foam, or materials made of clay or coffee grounds.
The RMIT team’s new system uses liquid metal, specifically an alloy called Eutectic Gallium-Indium (EGaIn), which is heated to between 100 and 120 °C (212 and 248 °F). Then, carbon dioxide is injected into the mix, and as the bubbles rise, the CO2 molecules split into flakes of solid carbon. These float to the top, making it easy to collect the material.
The team says that the design of the system should be relatively easy to scale up and implement at the point of emission. The reaction occurs quickly and efficiently, and the heat required is also relatively low, and could be supplied by renewable sources. All of these are improvements on the team’s earlier work, which required more hands-on steps.
But perhaps the biggest advantage is that the end result is solid carbon. Many other forms of carbon capture keep it as gaseous CO2, which can be trickier to store and transport, and prone to leak back into the air. Even attempts to stash it underground, where it can turn back into solid rock within a few years, isn’t foolproof, with large proportions remaining in gas form, ready to belch back out if the seal is broken.
Solid carbon, on the other hand, is stable, and could be stored more or less indefinitely without risk of leakage. The team says this could be buried again, or, more promisingly, used for other industrial applications, such as making concrete.
The next steps for the team are to scale up the system to a modular prototype that’s about the size of a shipping container.
The research was published in the journal Energy & Environmental Science, and the team demonstrates the technique in the video below.
Liquid metal instantly converts CO2 to solid carbon | RMIT University
Source: RMIT
This weekend’s musical diversion. The almost forgotten JSE. Approx. 11 minutes.
Johann Samuel Endler (1694-1762) - Sinfonia (in D) à 6 strumenti (1757)
https://www.youtube.com/watch?v=27TeXKrX8FE
This weekend’s chess update. Approx. 10 minutes.
Always Be Ready When Luck Shows Up
https://www.youtube.com/watch?v=xj4l0uZdnh0
This weekend’s maths update. Approx. 15 minutes. A repeat but worth it, two proofs in one.
Do you understand this viral very good math movie clip? (Nathan solves math problem X+Y)
https://www.youtube.com/watch?v=04x4ZdLpN-0
“The investor of today does not profit from yesterday’s growth.”
Warren Buffett.
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