Baltic Dry Index. 2289 -07 Brent Crude 81.75
Spot Gold 1797
Once the idea is accepted that money is something whose supply is determined simply by the printing press, it becomes impossible for the politicians in power to resist the constant demands for further inflation.
Henry Hazlitt.
Yesterday
the US Bureau of Lying Statistics Bureau of Labor Statistics employment
report underwhelmed to say the least.
Global stock casinos shuddered. 2022 is off to a poor to dismal start.
The bad US employment report didn’t diminish the likelihood of the Fed starting to raise interest rates as soon as their March meeting, however.
Below, how the casinos reacted to the US employment miss.
European stocks close lower as euro zone inflation hits record high; U.S. jobs data disappoints
Published Fri, Jan 7 2022 2:12 AM EST Updated Fri, Jan 7 2022 11:43 AM EST
LONDON — European stocks closed lower on Friday as investors digested euro zone inflation data and a weaker-than-expected U.S. jobs report.
The pan-European Stoxx 600 provisionally ended down 0.5%, with most sectors in negative territory and major bourses pointing in opposite directions.
It comes after inflation in the euro zone hit a new record high in December, raising more questions about the European Central Bank’s policy.
Preliminary data showed Friday that headline inflation came in at 5% for the month, compared to the same month last year. The figure represents the highest ever on record and follows November’s all-time high of 4.9%.
Travel and leisure stocks slide
Travel and leisure was the worst-performing sector, down by 1.6%. Basic resources, on the other hand, was the top performer, up almost 1.9%.
Looking at individual stocks, ST Micro was among the best performing, up by 3.7% after reporting higher-than-expected sales in the fourth quarter.
Deutsche Bank was also in the spotlight on Friday after positive statements that the German bank is on track to hit key profit targets, Reuters reported. Shares of the firm rose 1.8%.
In other stock news, Air France - KLM will need to raise fresh capital in 2022 of between 1 and 2 billion euros ($1.13 billion and $2.26 billion), Les Echos reported.
Jobs Report
Investors are also digesting new jobs data out of the U.S. Nonfarm payrolls grew by 199,000 in December, while the unemployment rate fell to 3.9%, according to Bureau of Labor Statistics data.
The data disappointed after economists had predicted that the U.S. economy would have added 422,000 jobs in December, according to data compiled by Dow Jones. The unemployment rate was expected to come in at 4.1%.
As a result, U.S. stock index futures turned lower on the news.
This comes after minutes from the Fed’s December meeting revealed Thursday a hawkish stance within the central bank. Officials said they are ready to not only increase rates and reduce bond buying, but also to have conversations about lower holdings of Treasurys and mortgage-backed securities.
The news sparked a sell-off in many markets around the world.
Back in Europe, investors are taking in new trade data from Germany.
Germany’s trade surplus dropped to its smallest level in November since 2011, according to Reuters. In addition, industrial production also fell 0.2% month-on-month.
“Supply chain frictions are keeping German industry in a stranglehold. Only exports are sending some glimmers of hope. However without production, the export revival will also be short-lived,” Carsten Brzeski, global head of macro at ING, said in a note.
https://www.cnbc.com/2022/01/07/european-stock-futures-markets-lack-direction-after-sell-off.html
S&P 500 and Nasdaq fall for a fourth day on spiking rates to cap the first trading week of 2022
Stocks fell on Friday to end a rough first trading week of the year, as tech shares were battered by rising interest rates.
The Nasdaq Composite dropped another 0.9% on Friday to close at 14,935.90. The S&P 500 fell 0.4% to 4,677.03 for its first four-day losing streak since September. The Dow Jones Industrial Average lost 4.81 points, or about 0.01%, to close at 36,231.66.
The tech-heavy Nasdaq posted its worst week since February 2021, down about 4.5% in the first five trading days of 2022. The S&P 500 was off by 1.8%, while the Dow lost only 0.29% as investors rotated into some value stocks amid the rise in rates.
----The 10-year Treasury yield topped 1.8% on Friday, continuing its 2022 run from a 2021 year-end level of just 1.51%. The release of the Federal Reserve’s December meeting minutes on Wednesday were the major catalyst for the rate move. The meeting notes showed the central bank is ready to dial back its economic help more rapidly than some had anticipated, including taking steps to shrink its balance sheet while raising rates.
“A shift in Fed policy often injects volatility into markets,” said Keith Lerner, chief market strategist at Truist.
Tech stocks lost ground further on Friday as yields jumped. With rates rising rapidly, investors are dumping riskier stocks trading on high valuations based on estimates of profit growth far off in the future.
Microchip Technology was one of the biggest decliners in the Nasdaq, down 3.9%. Other semiconductor stocks fell too, with Nvidia and AMD both down more than 3%. Netflix fell 2.2%. Twilio lost 3.5%.
On Friday, the Labor Department reported the U.S. economy added far fewer jobs in December than expected. The nonfarm payrolls report showed an increase of 199,000 in December, though economists had expected growth of 422,000, according to Dow Jones.
While the headline number disappointed, there were some things in this jobs report that pointed to an improving economic picture and higher inflation. Average hourly earnings increased by 0.6%, above expectations. And the unemployment rate fell to 3.9%, the lowest level since February 2020 and well below the 4.1% expected.
More
https://www.cnbc.com/2022/01/06/stock-market-futures-open-to-close-news.html
December jobs report is the worst of 2021 as US creates just 199,000 new payrolls during Omicron chaos
January 7, 2022
Hiring faltered again in December as the Omicron variant fueled yet another wave of coronavirus cases and economic restrictions.
The US added 199,000 nonfarm payrolls last month, the Bureau of Labor Statistics announced Friday. Economists surveyed by Bloomberg held a median forecast of 450,000 added jobs. The print reveals hiring slowed in the final weeks of 2021 as coronavirus case counts swung higher and fueled new concerns for the still-incomplete recovery.
November job growth was revised to 249,000 jobs from 210,000, according to the report. The latest count marks the worst month of job creation since December 2020, when the country shed 306,000 payrolls.
The unemployment rate slid to 3.9% from 4.2%, BLS said. That landed below the median forecast of 4.1%.
The report offers a gloomy look at how the labor market was performing as it entered the new year. The slump in job creation suggests the recovery isn't as resilient to Omicron as some hoped. The unemployment rate's steady decline still signals the labor market could return to pre-pandemic health by the end of 2022.
To be sure, the data only covers the recovery through mid-December. Daily virus case counts went parabolic later in the month as the more contagious variant proliferated amid holiday travel. Infections continued to surge higher in January and haven't yet shown signs of a consistent easing. While virus deaths are a fraction of the counts seen during last year's winter wave, the variant's contagion is still placing new pressure on businesses and Americans eyeing a return to the workplace.
The number of jobless Americans dropped by 483,000 to roughly 6.3 million, according to the report. On the payrolls front, the economy has about 3.6 million jobs to add before returning to its pre-pandemic total.
Labor force participation held flat at 61.9 in December, still 1.5% lower than the level seen before the pandemic. The measure, which tracks Americans working and in the process of finding work, has been among the slowest to recover.
More
In other news, the omicron surge is increasingly affecting the US economy. Given the time of year and that the omicron surge in the USA is still probably about two to three weeks from peaking, the economic drag is likely to get worse before it gets better.
FedEx warns of shipment delays as Omicron leads to staffing shortage
January 7, 20229:24 PM GMT
Jan 7 (Reuters) - FedEx Corp (FDX.N) warned on Friday that rising cases of Omicron variant has caused staff shortage and delay in shipments transported on aircraft.
"The explosive surge of the COVID-19 Omicron variant has caused a temporary shortage of available crew members and operational staff," the company said.
The delivery firm said severe winter storms around the country, including at its main air hub in Memphis, Tennessee, are posing challenges and it is implementing contingency plans and adjusting operations to minimize disruptions.
Rival United Parcel Service Inc (UPS.N) said that call-outs due to Omicron are not impacting their services, adding that contingency plans are in place.
"Recent weather events in the Louisville, Kentucky and Philadelphia, Pennsylvania areas caused some delivery delays," a UPS spokesperson said.
Severe winter weather and the rapid spread of the highly transmissible Omicron variant have led to a sharp rise in infections, forcing several U.S. airlines to cancel flights as pilots and crew quarantine.
Inadequate staffing and other issues had on Thursday forced the U.S. Postal Service, one of the largest civilian U.S. employers, to seek for its 650,000 employees a temporary relief from the Biden administration's new vaccine or testing requirements covering large businesses. read more
Friday brings more than 2,600 flight cancellations as disruption stretches into third week
, Jan. 7, 2022
Flight disruptions stretched into their third week on Friday with snow in the Northeast and Mid-Atlantic, prompting high numbers of flight cancellations in the New York City, Boston and Washington regions.
According to FlightAware, a flight-tracking website, more than 2,600 flights within, to and from the United States were canceled Friday. Southwest Airlines continued to be the hardest hit among major U.S. carriers, with more than 520 flights canceled, roughly 17% of scheduled departures.
At Boston's Logan International Airport, about 42% of departures were canceled Friday, according to FlightAware. In the New York City area, nearly 200 departures were scrubbed, about 36% of those scheduled. John F. Kennedy International reported more than 130, or 22%, of departures were canceled Friday, while roughly 23% of flights out of Newark's Liberty International were canceled.
Delays also were reported at three Washington-area airports, which are still trying to rebound from a Monday storm that dumped more than 10 inches of snow in some parts of the region. Reagan National Airport received nearly seven inches of snow Monday, prompting the cancellation of more than 85% of flights that day.
On Friday, there were more than 90 flight cancellations at National, about 21% of scheduled departures, according to FlightAware. At Baltimore-Washington Marshall International, a major hub for Southwest, more than 40 flights, roughly 16% of those scheduled, were scrubbed. Meanwhile, at Washington Dulles International, 12% of flights were canceled.
----United, which also has struggled with staffing issues and weather impacts, warned customers whose itineraries included Denver and cities in the Northeast of potential issues via Twitter.
The Chicago-based carrier canceled 208, or 10%, of its scheduled departures Friday.
Airlines have blamed the cancellations on a combination of factors. Initially, staffing shortages due to rising numbers of coronavirus infections caused by the omicron variant forced airlines to reduce their schedules, but those shortages have been aggravated by bad weather in various parts of the country.
More
https://www.chron.com/news/article/Friday-brings-more-than-2-600-flight-16758178.php
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
The farmer has to be an optimist or he wouldn't still be a farmer.
Will Rogers.
Omicron’s Spread Means More Food Outages at U.S. Grocery Stores
Leslie Patton, Elizabeth Elkin and Deena Shanker Thu, January 6, 2022, 9:39 PM
(Bloomberg) -- The highly contagious omicron virus variant is disrupting already stressed food supply chains, sickening so many workers that more shortages at grocery stores are all but certain.
Supermarkets have been struggling to keep food fully stocked throughout the pandemic as a result of labor shortfalls in every part of the food system, from farms to manufacturers to distributors. Now omicron is bringing the problem to a new level. The variant is raging across the U.S. and raising health concerns that many thought vaccines had put to rest. Schools and daycares are seeing closures again, keeping more Americans from work.
All of that will help fuel wage increases and price surges for consumers, as well as 2020-style food outages.
“We’re already seeing bare shelves,” said Bindiya Vakil, chief executive officer of supply-chain consultant Resilinc Corp. “Labor shortages due to omicron are going to exacerbate the issue.”
Grand Rapids, Michigan-based grocery distributor and store operator SpartanNash Co. is seeing a tripling of cases in recent weeks among its staff. About 1% of its 18,000-person workforce reported having the virus in recent weeks, compared with about one-third of a percent a couple of months ago. The company has been able to fulfill orders, but with delays. The employees who are available are working more.
“It’s harder because we’re asking people to work overtime,” CEO Tony Sarsam said in an interview. “We’re stretching ourselves.”
On the receiving side, the company is having trouble getting supplies from food manufacturers, especially processed items like cereal and soup, Sarsam said. “The manufacturers can’t get labor,” he said.
Meat companies are in focus because major outbreaks at plants in 2020 led to shortages and spikes in prices. Currently, beef and pork producers aren’t reporting significant operations issues, but there are signs of declining productivity. For instance, the number of hogs slaughtered so far this week was down 5.5% from a year ago, and cattle slaughter was down 3.6%, according to U.S. Department of Agriculture data Thursday.
More food inspectors are calling in sick, too, said Paula Soldner, chair of the National Joint Council of Food Inspections Locals. “The Delta variant didn’t have a whole lot of impact on the workforce,” she said, but “Omicron is nailing us.” This comes at a time when inspectors are already in short supply throughout the country. In central Nebraska, for example, vacancies are as high as 35%, she said. Inspectors are integral in meat plants, where they look at every processed animal by law.
Food makers Conagra Brands Inc. and Campbell Soup Co. are seeing upticks in Covid-driven absenteeism among workers. Both companies are framing it as another disruption among many, and have been aggressively hiring for some time now.
----When it comes to farms, the story is the same: omicron is making it harder to produce food. Egg Innovations, one of the biggest U.S. producers of free-range eggs, has been short-staffed for about a year due to the pandemic, according to Chief Executive Officer John Brunnquell. Now, omicron is making it even more difficult to keep workers both in his business and across the industry.
There’s seemingly no solution. Brunnquell said he can’t mandate vaccinations without taking a hit to his operations.
More
https://www.yahoo.com/news/omicron-spread-means-more-food-213954183.html
COLUMN-Europe's power crunch sparks aluminium smelter meltdown: Andy Home
Thu, January 6, 2022, 2:46 PM
LONDON, Jan 6 (Reuters) - It's turning into a winter of discontent for Europe's aluminium smelters as they struggle to cope with rocketing power prices across the region.
Four operators have announced curtailments totalling over half a million tonnes of annual production capacity, with others flexing output to mitigate power-load price spikes.
European aluminium consumers are already paying the price. Physical premiums have surged, the CME's duty-paid spot contract jumping from $290 per tonne at the start of December to a current $423.
That's over and above the London Metal Exchange (LME) aluminium price, which has also opened 2022 with a bang, hitting a two-month high of $2,938.50 per tonne on Wednesday.
Aluminium was the second best performer among the core LME industrial metals last year as the market priced in power-related curtailments in China.
The market's power problems have now spread to Europe.
POWERING DOWN
Smelting aluminium is an energy-intensive process, power typically representing at least 30% of total production costs, albeit with significant variability depending on source, supplier structure and local energy market.
European power prices have hit multiple record highs over recent months and the regional energy crunch https://www.reuters.com/markets/commodities/weak-winds-worsened-europes-power-crunch-utilities-need-better-storage-2021-12-22 is now morphing into an aluminium smelter crisis.
More
https://www.yahoo.com/news/column-europes-power-crunch-sparks-144646022.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
Covid-19 Corner
This section will continue until it becomes unneeded.
Omicron day 45. Discovered November 24, 2021.
Where did omicron come from? Approx. 20 minutes.
Omicron from mice
https://www.youtube.com/watch?v=aH1u1GIPU2A
If, and it’s a big if, SARS-CoV-2 was developed as a weaponized virus in a lab, the chances are high that such a lab would also have been working on a kill mechanism for use after the weapon was released on an unsuspecting enemy. Humanised mice probably.
After an accidental SARS-CoV-2 release probably in October 2019, that lab would move Heaven and Earth to finish an “omicron,” kill switch and quietly release it. Where better than the “dark continent?”
Now that couldn’t happen could it?
Seaweed extract shows ability to prevent COVID-19 infection
January 7, 2022
TEL AVIV, Israel — A substance in edible marine algae — or seaweed — is capable of blocking COVID-19 from infecting the cells, a new study reveals. Researchers at Tel Aviv University say “ulvan” may provide scientists with a new weapon in the fight to end the pandemic.
The team adds that this seaweed extract is an affordable and natural material which can solve the problem of limited vaccine access in certain countries. Research into ulvan is still in the early stages, but study authors are hopeful their discovery will lead to a new drug that can stop new COVID variants from spreading.
“It is already clear today that the coronavirus vaccine alone, despite its effectiveness, will not be able to prevent the global spread of the pandemic. As long as the lack of access to vaccines remains unaddressed for billions of people in underprivileged communities, the virus is expected to develop increasingly more variants, which may be resistant to vaccines – and the war against the virus will continue,” says Prof. Alexander Golberg from the Porter School of the Environment and Earth Sciences in a university release.
“It is very important to find affordable and accessible solutions to suit even economically weak populations in developing countries. With this aim, our lab tested a substance that could be extracted from a common seaweed.
Ulvan is extracted from marine algae called Ulva, an edible ‘sea lettuce’ common in places like Japan, New Zealand and Hawaii,” Golberg adds.
More
https://www.studyfinds.org/seaweed-extract-prevent-covid/
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
This weekend’s musical diversion. J. S. Bach again with probably his best known Brandenburg Concerto. Approx. 16 minutes.
Bach: Brandenburg Concerto No. 2 | Claudio Abbado & the Orchestra Mozart
https://www.youtube.com/watch?v=VC24gV1o7XQ
This weekend’s chess update. Approx. 18 minutes.
Greatest Queen Sacrifice of 2021!
https://www.youtube.com/watch?v=ugHGotF7tR0
This weekend’s science update. Nearly everything you think about electricity is wrong. Shocking. Approx. 15 minutes.
The Big Misconception About Electricity
https://www.youtube.com/watch?v=bHIhgxav9LY
If a government resorts to inflation, that is, creates money in order to cover its budget deficits or expands credit in order to stimulate business, then no power on earth, no gimmick, device, trick or even indexation can prevent its economic consequences.
Henry Hazlitt.
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