Baltic Dry Index. 1302 +06 Brent Crude 89.91
Spot Gold 1798
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 28/01/22 World 366,915,895
Deaths 5,656,955
When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe.
Frederic Bastiat.
We are near the end of a wild whipsaw week in the stock casinos. Will the indexes end higher or lower for the week and the month on Monday?
Asian markets say higher. The US bond market’s flattening yield curve suggests there’s a lot more trouble directly ahead.
While stocks cheered the US GDP figures, the fine print suggests it was mostly an unwanted inventory build-up.
In European war news, China backed Russia’s security concerns.
Japan stocks up 2%, Asia-Pacific markets mostly gain after volatile session on Wall Street
SINGAPORE — Asia-Pacific markets mostly traded higher on Friday, following a volatile session on Wall Street overnight where investors reacted to comments from the Federal Reserve and U.S. GDP data.
The Nikkei 225 in Japan gained around 2% after falling nearly 3% on Thursday, while the Topix was up 1.8%. South Korea’s Kospi reversed losses to rise 1.42%.
Australia’s ASX 200 advanced 1.97%.
Mainland Chinese markets inched up: the Shanghai Composite was marginally higher, while the Shenzhen Component rose 0.54%.
Hong Kong’s Hang Seng index declined 0.84%.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged 0.25% higher.
The Taiwan market is closed for a holiday on Friday. Hong Kong is slated to release its GDP report for the fourth quarter on Friday afternoon.
---- The tech-focused Hang Seng Tech index lost 2%. Some Hong Kong-listed Chinese tech giants fell: JD.com was down 3.49%, while Xiaomi shed 2.18%.
Stocks were volatile overnight on Wall Street as investors reacted to news from the Fed, as well as the newest GDP figures and corporate earnings.
U.S. gross domestic product grew 6.9% in the fourth quarter of 2021 compared to the year before, beating analyst expectations despite a surge in omicron cases.
Both the S&P 500 and Nasdaq retraced earlier gains to close lower, while the Dow Jones Industrial Average was up over 600 points at during intra-day trade, but closed almost flat at 34,160.78.
All three indexes are firmly in negative territory so far this month.
Spot gold slid to a two-week low of $1,790.20 on Thursday as the U.S. dollar rallied following signs that the Fed will hike interest rates soon, Reuters reported. It has since recovered and was last trading at $1,798 in Asia.
More
https://www.cnbc.com/2022/01/28/asia-markets-reaction-to-fed-russia-ukraine.html
TREASURIES-U.S. 2-year yields surge on Fed rate hike prospects, curve flattens
Thu, January 27, 2022, 7:58 PM
* U.S. 2-year yield hits highest since Feb. 2020 * U.S. 5-year yield rises to highest since December 2019
* U.S. yield curve flattens
* Fed funds futures price in nearly five hikes for 2022
* Fed funds price in 20% chance of 50 bps Fed hike in March
(NEW YORK, Jan 27 (Reuters) - U.S. yields on the shorter end of the curve soared on Thursday after Federal Reserve Chairman Jerome Powell flagged multiple interest rate increases this year, citing the economy's strong labor market and persistently high inflation. The surge in short-term yields and a corresponding decline in long-term rates flattened the yield curve, as traders braced for imminent rate hikes.
The U.S. 2-year yield, which reflects interest rate expectations, surged to 1.208%, a nearly two-year peak. The U.S. 5-year yield, which is also an indicator of the market's rate outlook, climbed to 1.701% overnight, the highest since December 2019. But 5-year yields have since traded little changed at 1.6518%.
Traders in the fed funds futures market moved to price in nearly five rate hikes this year in the wake of Powell's remarks on Wednesday, as the Fed held interest rates steady at its monetary policy meeting.
Prior to the Fed meeting, rate futures showed about four rate increases for 2022. For the March meeting, fed funds futures have factored in about 30 basis points of tightening, while a 50-basis point hike implied a 20% probability.
Powell on Wednesday said there is "quite a bit of room to raise interest rates without threatening the labor market that is by so many measures historically tight." "The Fed could hike four to five times this year and that's not horrendous because it is expected. What they decide to do this year is not all that important, except as to how it sets up for next year," said Jim Vogel, senior rates strategist, at FHN Financial in Memphis, Tennessee. "If the rate hikes this year are not enough and the Fed has to keep raising rates again in 2023 because everything they have seen in inflation from just six weeks ago makes them more nervous, that's a problem," he added.
In afternoon trading, U.S. 2-year yields were last up nearly 8 basis points to 1.1683%, while 5-year yields were up 1 basis point at 1.6550%.
More
https://www.yahoo.com/news/treasuries-u-2-yields-surge-195848551.html
Finally, Russia says America’s written response to its security concerns “was not positive.” Why does Washington want to risk nuclear war?
In a rebuff to US Secretary of State Blinken, China backed Russia’s security concerns.
Sides taken, a February European war?
Kremlin offers frosty response to Blinken letter as world waits for Putin’s next move
Published Thu, Jan 27 2022 6:40 AM EST
The Kremlin has given its response to U.S. security proposals that were hand-delivered to Moscow on Wednesday, saying it believes Russian views have not been taken into account.
While President Vladimir Putin has read the documents and will take time to study them, “it cannot be said that our views were taken into account, or that a readiness to take our concerns into account was demonstrated,” Kremlin spokesman Dmitry Peskov told reporters Thursday, Reuters reported.
Likening current tensions in Europe as reminiscent of the Cold War, Peskov said it would take time for Moscow to review the U.S.′ response and that “it would be silly to expect a response on the next day.”
Talks between Russian Foreign Minister Sergei Lavrov and U.S. Secretary of State Antony Blinken are expected in the next few days, however, with Blinken noting Wednesday that he believed discussions would continue “after Moscow has had a chance to read the paper and is ready to discuss next steps.”
The reaction from the Kremlin comes a day after the U.S. delivered its written responses to Russia’s security demands — including that Ukraine is never allowed to join the U.S. and Europe’s military alliance NATO, and that the organization rolls back its deployments in Eastern Europe.
----‘No positive reaction’
Russia has repeatedly denied it is planning to invade Ukraine despite multiple reports that it has amassed around 100,000 troops and military hardware at various points along its border with Ukraine. Tensions have been high with its neighbor since 2014, when it invaded and annexed Crimea. It has also supported a pro-Russian uprising in eastern Ukraine, provoking low-level fighting between separatists and Ukrainian troops ever since.
Putin has said that Russia can place its troops wherever it likes on its territory, and Russia has accused the West of stoking hostilities and hysteria in the region.
The U.S. and NATO are not prepared to take Russia at its word. NATO has placed its forces on standby and reinforced its positions in Eastern Europe, with more ships and fighter jets being sent to the region. The U.S., meanwhile, has put thousands of troops on heightened alert, meaning they are ready to be deployed to the region if the crisis escalates.
Lavrov said Thursday that the U.S.′ response “allows us to expect the start of a serious conversation but on secondary issues.”
“On the main question, there’s no positive reaction in this document,” he said, according to the Interfax news service.
More
Russia's Military, Once Creaky, Is Modern and Lethal
MOSCOW — In the early years of Vladimir Putin’s tenure as Russia’s leader, the country’s military was a hollowed-out but nuclear-armed shell.
It struggled to keep submarines afloat in the Arctic and an outgunned insurgency at bay in Chechnya. Senior officers sometimes lived in moldy, rat-infested tenements. And instead of socks, poorly trained soldiers often wrapped their feet in swaths of cloth, the way their Soviet and Tsarist predecessors had.
Two decades later, it is a far different fighting force that has massed near the border with Ukraine. Under Putin’s leadership, it has been overhauled into a modern sophisticated army, able to deploy quickly and with lethal effect in conventional conflicts, military analysts said. It features precision-guided weaponry, a newly streamlined command structure and well-fed and professional soldiers. And they still have the nuclear weapons.
The modernized military has emerged as a key tool of Putin’s foreign policy: capturing Crimea, intervening in Syria, keeping the peace between Armenia and Azerbaijan and, just this month, propping up a Russia-friendly leader in Kazakhstan. Now it is in the middle of its most ambitious — and most ominous — operation yet: using threats and potentially, many fear, force, to bring Ukraine back into Moscow’s sphere of influence.
“The mobility of the military, its preparedness and its equipment are what allow Russia to pressure Ukraine and to pressure the West,” said Pavel Luzin, a Russian security analyst. “Nuclear weapons are not enough.”
More
https://www.yahoo.com/news/russias-military-once-creaky-modern-124721425.html
China Backs Russia in Strongest Display Yet of Support Over Ukraine
Jon Jackson
Chinese Foreign Minister Wang Yi has called for restraint in the Ukraine crisis while also asserting that the U.S. should be more mindful of Russia's security concerns.
Wang made the comments during a telephone call late Wednesday—Thursday in Beijing—with Secretary of State Antony Blinken. His remarks represent China's strongest public statement of support yet for Russia's involvement in Ukraine.
Beijing's statement following the conversation quoted Wang as telling Blinken that "Russia's reasonable security concerns should be taken seriously and resolved."
More
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
U.S. Natural Gas Prices Climb Most Ever In Single Day
Thu, January 27, 2022, 9:57 PM
U.S. natural gas future prices skyrocketed 72% on Thursday on forecasts of colder weather. It was the sharpest one-day climb for the commodity since the contract launched in 1990, CME Group data confirmed.
The 72% surge in prices came before the expiry of the February contract for nat gas as weather forecasts now look colder. The March contract’s price rise paled compared to the February contract rise. But the 10% rise for the March contract—on any other day—would have been more noticeable.
Natural gas futures were trading below $4.50 per million British thermal units for most of the trading day, but some time after 12:45 p.m. EST, prices scrambled for the $7 mark, with the contract eventually settling at $6.265.
The huge spike in the February contract is a clear sign that bearish bets were being squeezed out of the market.
Natural gas prices have been particularly volatile as of late, with nat gas prices surging 6% just a day earlier as cold weather in many parts of the United States boosted demand and the Russia-Ukraine conflict spooked the market into fearing disruptions to the flow of natural gas from Russia to Europe.
More
https://www.yahoo.com/news/u-natural-gas-prices-climb-215700312.html
HWWI global index for energy resources rises 5.7% in December / Natural gas surges 25% / Crude oil cheaper
Published on 25.01.2022
The
rally continues: the index for energy resources determined by the German-based Hamburg
Institute for International Economics (HWWI; www.hwwi.de)
continued to rise in December 2021, with the US dollar index increasing 5.7% to
279.7 points. The institute said prices developed inconsistently, with a
further increase for natural gas and coal and a decline in the cost of crude
oil.
According to the HWWI researchers, falling crude prices reflected market
uncertainty regarding increasing Covid-19 infections worldwide, which suggest
demand will fall. In addition, supply rose in December, strengthened by three
factors: First, despite low prices, OPEC is sticking to its monthly schedule
for ending production cuts, and the cartel increased daily output a further
400,000 bbl as planned; second, the US government brought crude to market from
state reserves; and finally, US refiners expanded production as high crude
prices in the fall made shale oil production appear lucrative one again.
Coal prices, on the other hand, rose month-on-month in December largely due to
an increase in Australian prices.
Quotations for natural gas also increased in December versus the previous month
(see Plasteurope.com of 13.12.2021), and
considerably so, with European natural gas up almost 26%. The rise was rooted
in the shortage of European natural gas supplies from Russia’s Gazprom.
In addition, the winter season has further increased European natural gas
consumption, which has caused prices to skyrocket as natural gas storage
facilities are increasingly depleted.
Unlike in Europe, US consumers enjoyed falling natural gas prices in December as supply exceeded domestic demand. Thanks to the high price level in Europe, increasing amounts of natural gas are being transported from the New World to the Old.
https://www.plasteurope.com/news/ENERGY_COSTS_t249483/
IMF sees potential for further market turbulence as central banks hike rates
Published Thu, Jan 27 2022 2:21 AM EST
The International Monetary Fund has warned of further turbulence ahead for financial markets, particularly as governments around the world shift gears into recovery mode.
Central banks’ moves to tighten monetary policy and curb rising inflation could push riskier stocks deeper into the red even as policymakers pledge a smooth transition, the IMF’s Tobias Adrian, financial counsellor and director of monetary and capital markets, told CNBC’s Geoff Cutmore.
“We could certainly see further tightening of financial conditions, and that means that risk assets such as equities could sell off further,” Adrian said.
The market reaction will hinge largely on central banks’ ability to communicate their intentions, Adrian said, urging order and transparency.
On Wednesday, the Federal Reserve signaled that it could halt its asset purchasing program and start raising interest rates as soon as March.
“This is hopefully not going to be disorderly, but it’s going to be an orderly adjustment in terms of valuations,” he said.
“We are estimating, for example, for an unexpected further tightening of 50 basis points you could see a substantial further sell-off in the equity markets,” he added, noting that some sectors would be worse affected than others.
Such disruption could translate into crypto markets too, Adrian said, which have exhibited an “increase in correlations” with traditional financial markets and have witnessed a major sell-off this year.
Adrian’s comments come as the IMF released on Thursday its Global Financial Stability report. It follows the release of its World Economic Outlook earlier this week, which downgraded global growth to 4.4% in 2022.
More
Covid-19 Corner
This section will continue until it becomes unneeded.
Los Angeles Sees First Cases Of New “Stealth” Omicron Strain, BA.2, One Day After California Reports 11 Infections
Thu, January 27, 2022, 11:02 PM
UPDATED, 3:02 PM: Los Angeles County Public Health Director Barbara Ferrer confirmed today that the new strain of Omicron, dubbed BA.2, has been found in the Southern California metropolis.
For the week of January 2-8, she announced BA.2 was detected in 4 cases in the county. That’s a very small number of cases, given that 25% of the tens of thousands of tests administered each day are analyzed for variants.
Still, the fact that BA.2 has spread rapidly in countries such as Denmark, where it now accounts for at least 60% of new infections, is cause for concern.
“We’ve likely passed the peak of Omicron in Los Angeles County,” said Ferrer today, noting that new cases, test positivity and hospitalizations are all falling. She then warned Angelenos to be careful, given that “in places that have already passed their peak, it does appear that BA.2 is causing a new surge.”
PREVIOUSLY on Wednesday: Two days after the first cases of an offshoot of the more transmissible Omicron variant was discovered in the U.S., 11 cases of the strain, dubbed BA.2, were reported in California on Tuesday. Two of those cases were identified in one of the state’s most populous counties, Santa Clara, according to multiple reports.
It’s early days, but based on the rate of spread in countries such as Denmark and the U.K., some experts are saying that BA.2 is likely to be at least a bit more transmissible than the original Omicron (BA.1).
More
https://www.yahoo.com/news/california-reports-11-cases-stealth-193217405.html
Germany reports new daily record for COVID-19 infections
January 27, 2022 10:14 AM GMT
BERLIN, Jan 27 (Reuters) - Germany reported another record number of daily new COVID-19 infections on Thursday, crossing the 200,000 threshold for the first time, as the country debates whether to impose compulsory vaccinations.
The Robert Koch Institute for infectious diseases reported 203,136 positive tests in the last 24 hours, 69,600 cases more than the same day a week ago.
The seven-day incidence per 100,000 people rose to 1,017 from 941 the previous day, while another 188 people died, bringing the death toll since the start of the pandemic to 117,314.
German lawmakers debated on Wednesday whether to impose compulsory COVID-19 shots, while protesters gathered outside the parliament building. read more
Around 75% of the German population have received at least one dose of a vaccine - less than in western European peers such as France, Italy or Spain, where the equivalent figures are 80%, 83% and 86%.
Chancellor Olaf Scholz backs compulsory vaccines for over-18s but his coalition government is divided on the issue and he has told lawmakers to vote according to their conscience.
Poland reports new daily record of 57,659 COVID cases
January 27, 2022 12:41 PM GMT
WARSAW, Jan 27 (Reuters) - Poland reported a record 57,659 new daily COVID-19 infections on Thursday, the health ministry said, as the Omicron variant takes hold.
Authorities have said the latest wave will drive case numbers to levels not yet seen in Poland, with estimates of the peak ranging from 60,000 to as many as 140,000 daily infections.
Older primary school students and high school students were due to move to remote learning on Thursday, the education ministry said earlier in the week.
The government has other limited restrictions in place, including wearing masks in enclosed public spaces, but they are not strictly enforced. read more
Poland's health ministry also announced on Thursday that children aged 12 through 15 will be allowed to receive booster shots from Friday.
Poland, a country of around 38 million people, has reported 4,695,435 COVID-19 cases and 104,636 deaths. Over 1 million people are quarantined, the health ministry said on Thursday.
https://www.reuters.com/world/europe/poland-reports-new-daily-record-57659-covid-cases-2022-01-27/
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.
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 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.
Atomic Armor for accelerators enables discoveries
Advancement in single-atom layer graphene coatings improves accelerator electron source lifespans
Date: January 25, 2022
Source: DOE/Los Alamos National Laboratory
Summary: Protective coatings are common for many things in daily life that see a lot of use: we coat wood floors with finish; apply Teflon to the paint on cars; even use diamond coatings on medical devices. Protective coatings are also essential in many demanding research and industrial applications.
Protective coatings are common for many things in daily life that see a lot of use: we coat wood floors with finish; apply Teflon to the paint on cars; even use diamond coatings on medical devices. Protective coatings are also essential in many demanding research and industrial applications.
Now, researchers at Los Alamos National Laboratory have developed and tested an atomically thin graphene coating for next-generation, electron-beam accelerator equipment -- perhaps the most challenging technical application of the technology, the success of which bears out the potential for "Atomic Armor" in a range of applications.
"Accelerators are important tools for addressing some of the grand challenges faced by humanity," said Hisato Yamaguchi, member of the Sigma-2 group at the Laboratory. "Those challenges include the quest for sustainable energy, continued scaling of computational power, detection and mitigation of pathogens, and study of the structure and dynamics of the building blocks of life. And those challenges all require the ability to access, observe and control matter on the frontier timescale of electronic motion and the spatial scale of atomic bonds."
The challenge of photocathodes
Current electron-beam accelerators generally use thermionic emission -- the heating of material to release electrons. The next generation of accelerators will generate electron sources from photons, using photocathodes -- materials that can convert photons to free electrons and thus electron beams. The nature of that process produces corrosive gases that add significant wear and tear on the photocathodes, interrupting research for service and adding time and cost to projects.
---- Graphene provides promising results
Researchers sought a material that could protect the photocathode while also allowing electrons to be emitted. They found their answer in graphene.
"As far as I know, there is no other material which can both transmit electrons and at the same time protect the material," said Yamaguchi. "A very porous material will allow electrons to transmit, but then you can't protect the material from corrosive gas. The uniqueness of graphene is that it's atomically thin enough to transmit electrons, but the atomic structure is also packed just enough so that no corrosive gas can permeate it."
Coating the bialkali photocathodes presented an ambitious technical challenge.
More
Another weekend and the end of January almost here. The end of Europe almost here too, if war in Europe ends up going nuclear. Have a great weekend everyone, while we still can.
“More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly.”
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