Baltic Dry Index. 1423 -02 Brent Crude 93.60
Spot Gold 1811
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 07/02/22 World 395,980,576
Deaths 5,758,701
“What is needed is the right to print what one believes to be true, without having to fear bullying or blackmail from any side.”
George Orwell.
In the stock casinos, sentiment has changed.
It was already changing ahead of last Friday’s US employment report, but Friday’s report and upward revisions confirmed that zero interest rates are over and what comes next is months and months of rising interest rates.
That spells trouble for many over-priced stocks in the global stock casinos. It probably ends in a new recession ahead and stagflation.
With rising interest rates, many firms will eventually have trouble servicing their gigantic debts.
Though none of this happens today, the stock market looks out to the future and makes bets today. That future just went from from bright and sunny plains of milk and honey, to a stormy rocky mountain road of uncertainty, pitfalls, and massive volatility.
With most professional money managers having never seen inflation nor a bear market, it’s trial and error for most.
Asia shares slip as U.S. jobs stunner hammers bonds
February 7, 2022 1:57 AM GMT
SYDNEY, Feb 7 (Reuters) - Asian share markets mostly eased on Monday after stunningly strong U.S. jobs data soothed concerns about the global economy but also added to the risk of an aggressive tightening by the Federal Reserve.
Geopolitics also remained a worry as the White House warned Russia could invade Ukraine any day and French President Emmanuel Macron prepared for a trip to Moscow. read more
The cautious mood saw MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) dip 0.1% in early trade. Japan's Nikkei (.N225) fell 0.9% and South Korea (.KS11) 0.8%.
Chinese markets returned from the Lunar New Year break with a bounce, with the blue-chip CSI300 (.CSI300) and Shanghai Composite (.SSEC) both up about 2% in morning trade, catching up with last week's gains in world equities. The Hang Seng (.HSI), which returned from the break on Friday, was flat.
S&P 500 futures and Nasdaq futures both eased slightly, after last week's market turmoil saw Amazon.com Inc gain almost $200 billion while Facebook-owner Meta Platforms Inc (FB.O) lost just as much.
BofA analyst Savita Subramanian noted company guidance for 2022 had weakened significantly with most stocks falling following earnings reports.
"Commentaries suggested worsening labour shortages and supply chain issues, with a bigger headwind expected in Q1 than in Q4," Subramanian said in a note. With wages being the biggest cost component for companies, margin pressure was set to continue.
The January payrolls report showed annual growth in average hourly earnings climbed to 5.7%, from 4.9%, while payrolls for prior months were revised up by 709,000 to radically change the trend in hiring. read more
More
https://www.reuters.com/markets/europe/global-markets-wrapup-1-pix-2022-02-07/
Goodbye Easy Money as Hawkish Central Banks Speed Up Rate Hikes
Sat, February 5, 2022, 9:00 PM
(Bloomberg) -- The end of easy money is upon us.
Two years after the pandemic sent the global economy into a deep but short recession, central bankers are withdrawing their emergency support -- and they’re moving faster than they or most investors had foreseen.
The U.S. Federal Reserve is preparing to raise interest rates in March, and last Friday’s jobs report fueled speculation it may need to move aggressively. The Bank of England just delivered back-to-back hikes, and some of its officials wanted to act even more forcefully. The Bank of Canada is set for liftoff next month. Even the European Central Bank may get in on the action later this year.
Rates are rising because policy makers judge that the global inflation shock now poses a bigger threat than further damage to growth from Covid-19. Some say it took them far too long to reach that conclusion. Others worry that the hawkish turn could slow recoveries without offering much relief from high prices, given that some of the surge is related to supply problems beyond the reach of monetary policy.
There are a couple of outliers among the biggest economies.
The People’s Bank of China appears headed in the opposite direction. It’s likely to make credit cheaper as new virus outbreaks and a property slump cloud prospects for the world’s second-largest economy. And the Bank of Japan is expected to keep policy unchanged this year, though traders are starting to wonder if it can hold the line.
In the emerging markets, many central banks started raising rates last year -- and they’re not done yet.
Just last week, Brazil delivered a third consecutive 150-point hike, while the Czech Republic lifted its benchmark to the highest in the European Union. Russia, Poland, Mexico and Peru may extend tightening campaigns this week, though some think the Latin American cycle may be peaking.
Economists at JPMorgan Chase & Co. estimate that, by April, rates will have gone up in countries that together produce about half of the world’s gross domestic product, versus 5% now. They expect a global average interest rate of about 2% at the end of this year -- roughly the pre-pandemic level.
All of this suggests the biggest tightening of monetary policy since the 1990s. And the shift isn’t confined to rates. Central banks are also dialing back the bond-buying programs they’ve used to restrain long-term borrowing costs. Bloomberg Economics calculates the combined balance sheet of the Group of Seven nations will peak by mid-year.
“The tables have turned,” Bank of America Corp. economist Aditya Bhave wrote in a report on Friday. “The surge in global inflation has pulled forward central bank hiking cycles and balance sheet shrinkage across the board.”
In the process, the pivot may end up having ended a pandemic boom in financial markets that was amplified by loose money.
More
https://finance.yahoo.com/news/goodbye-easy-money-hawkish-central-210001323.html
Finally, the USA, UK and NATO push Russia and China into an ever closer mutual dependency. China moves to cut out the USA’s oil and gas choke point at the Strait of Malacca. Both seek to diversify away from the US dollar.
Russia, China agree 30-year gas deal via new pipeline, to settle in euros
February 4, 2022 12:09 PM GMT
Feb 4 (Reuters) - Russia has agreed a 30-year contract to supply gas to China via a new pipeline and will settle the new gas sales in euros, bolstering an energy alliance with Beijing amid Moscow's strained ties with the West over Ukraine and other issues.
Gazprom , which has a monopoly on Russian gas exports by pipeline, agreed to supply Chinese state energy major CNPC with 10 billion cubic metres of gas a year, the Russian firm and a Beijing-based industry official said.
First flows through the pipeline, which will connect Russia's Far East region with northeast China, were due to start in two to three years, the source said in comments that were later followed by an announcement of the deal by Gazprom.
Russia already sends gas to China via its Power of Siberia pipeline, which began pumping supplies in 2019, and by shipping liquefied natural gas (LNG). It exported 16.5 billion cubic metres (bcm) of gas to China in 2021.
The Power of Siberia network is not connected to pipelines that send gas to Europe, which has faced surging gas prices due to tight supplies, one of several points of tension with Moscow.
Under plans previously drawn up, Russia aimed to supply China with 38 bcm of gas by pipeline by 2025.
The new deal, which coincided with a visit by Russian President Vladimir Putin to the Beijing Winter Olympics, would add a further 10 bcm, increasing Russian pipeline sales under long-term contracts to China. read more
----Russian gas from its Far East island of Sakhalin will be transported via pipeline across the Japan Sea to northeast China's Heilongjiang province, reaching up to 10 bcm a year around 2026, said the Beijing source, who asked not to be identified.
The deal would be settled in euros, the source added, in line with efforts by the two states to diversify away from U.S. dollars.
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.
Shanghai aluminium rises 3% on supply woes, low inventories
Feb 7 (Reuters) - Shanghai aluminium prices jumped 3% on Monday to hit a 3-1/2-month high, following a week-long Lunar New Year holiday, with the market bolstered by supply concerns and as inventories in London touched their lowest levels since 2007.
The most-traded March aluminium contract on the Shanghai Futures Exchange was up 2.8% at 22,245 yuan ($3,497.48) a tonne, as of 0325 GMT. Earlier in the session, the contract hit 22,305 yuan, a peak since Oct. 22 last year.
Three-month aluminium on the London Metal Exchange gained 1.6% to $3,121.5 a tonne, having earlier hit a peak since Oct. 19.
LME warehouse inventories were at 775,475 tonnes, their lowest levels since February 2007.
The intensifying tensions over Ukraine has also raised concerns over exports from major aluminium producer Russia, while the market is already reeling under smelter closures in China and Europe amid soaring power prices. read more
U.S. Labor, Supply ‘Nightmare’ Seen Extending Into Second Half
Vince Golle Sat, February 5, 2022, 10:00 AM
The helter-skelter playing out on U.S. factory floors from labor and supply shortages, transportation bottlenecks and the coronavirus looks likely to persist into the second half of the year.
That’s the message from the heads of lumber producers and makers of air conditioners to homebuilders and apparel manufacturers. Recent corporate earnings calls have been replete with mentions of cascading and inflationary effects that are hampering companies’ ability to meet demand.
Perhaps the best color was offered up by PPG Industries Inc.’s Michael McGarry. The paint maker’s chief executive officer described a day in the life of a plant manager in the middle of omicron:
A Tale From the Factory Floor
“The toughest job in PPG right now is a plant manager. They wake up in the morning, check their phone to see how many people call off sick, then they get to work. They go through the dock area to see how many trucks didn’t get picked up, and then they go to the receiving area and then find out what didn’t come in that was supposed to. And then they move it into the plant and the supply chain people are telling me that they’re going to have to make smaller batches because of lack of raw materials. And then the sales team is telling them, ‘oh, my God, if we don’t get paint out the door, here’s how many customers we’re going to impact.’ So, by the time they get to their desk, before they even have a morning meeting, they’ve had to overcome a number of issues.”
The lack of sufficient labor, along with job switching and recent omicron-related absences, is wrecking havoc on nearly every U.S. industry. The latest employment report on Friday showed while the labor force participation rate -- the share of Americans that are either working or looking for work -- climbed in January, it’s still well below pre-pandemic levels.
The report, which also included the largest monthly increase in hourly pay since the end of 2020, suggested a further tightening in the job market that adds pressure on the Federal Reserve to raise rates. There was a decline in the number of people not in the labor force who wanted to work, as well as fewer people who didn’t look for a job because they were too discouraged.
Earlier in the week, the government reported 10.9 million vacant positions, just shy of a record.
More
https://www.yahoo.com/news/u-labor-supply-nightmare-seen-100000793.html
Rising costs and inflation are reshaping fast-food, forcing chains to cut portion sizes, eliminate deals, and hide the value menu
Fri, February 4, 2022, 3:31 PM
Fast food isn't as affordable as it used to be, and value menus are another victim of inflation and the pandemic.
Chains have to consider raising prices thanks to new and costly challenges that have emerged, like inflation and growing labor costs, Kalinowski Equity Research CEO Mark Kalinowski told Insider. They "don't necessarily want to discount as heavily" as they did a few years ago, so low-cost value menus can be the easiest choice to go.
One way to quietly raise prices is by swapping in lower-cost ingredients or shrinking portion sizes to make the meal seem cheaper, David Henkes of Technomic told CNBC. Domino's is adopting this strategy by downsizing its $7.99 wing deal from 10 pieces to eight pieces, CEO Richard Allison said. The pizza chain also made the deal exclusive to online orders, which Allison said is cheaper to process and gives Domino's access to more valuable customer data.
Despite projections for between eight and 10% inflation in 2022, Allison explained on CNBC that the chain decided not to increase the price, which customers were already familiar with. Burger King made a similar move, reducing nuggets in one menu deal from ten pieces to eight.
Other chains have been more open about raising prices on menu items. McDonald's, for example, is allowing franchise operators to sell sodas for higher prices after they were kept at a dollar for several years as part of a nationwide promotion, The Wall Street Journal reported.
Then, some chains opted to eliminate some of the lower-priced deals. Burger King is eliminating paper coupons and making around a dozen changes to US menus to increase profits, the chain said, including raising prices on nuggets, french fries, and bacon cheeseburgers. Denny's is reducing promotions of low-priced menu items, and has stopped advertising its value menu of items starting at $2, CEO John Miller said.
Covid-19 Corner
This section will continue until it becomes unneeded.
China locks down city of 3.5 million near Vietnam border
Issued on:
Beijing (AFP) – A Chinese city of 3.5 million near the border with Vietnam was on lockdown Monday after more than 70 coronavirus cases were discovered there over the past three days.
China, the only major world economy still sticking to a staunch zero-Covid policy, is on high alert for any outbreaks as it hosts the Beijing Winter Olympics.
Local officials in the city of Baise in the southern Guangxi region announced Sunday that no one would be allowed to leave the city, while residents of some districts would be confined to their homes.
"Citywide traffic controls will be implemented," vice-mayor Gu Junyan told a briefing.
"In principle, vehicles and people cannot enter or leave the city... with personnel control strictly enforced and no unnecessary movement of people."
Residents of some neighbourhoods in smaller rural cities and counties under Baise's jurisdiction have been placed under strict home confinement, while others cannot leave their district, Gu added.
Baise, located about 100 kilometres (62 miles) from the Vietnamese border, on Friday discovered its first local case -- a traveller who had returned home for the week-long Lunar New Year holiday, according to officials.
Since the pandemic, China has built a heavily enforced wire mesh fence along its southern border to keep out illegal migrants from Vietnam and Myanmar -- as well as potential Covid-19 infections.
Mass testing is already under way for residents, authorities said.
Since the coronavirus pandemic first emerged two years ago in Hubei province's Wuhan, China has used strict local lockdowns, mass testing and contact-tracing apps to try and eliminate outbreaks as soon as cases are detected, sparing the country the mass deaths witnessed around the rest of the world.
Millions were confined to their homes in multiple Chinese cities in the run-up to the Olympics after cases involving both the Delta and Omicron coronavirus variants flared. The outbreaks were mostly stamped out.
More
Australia to welcome back international tourists after nearly two yrs
February 7, 2022 4:52 AM GMT
SYDNEY, Feb 7 (Reuters) - Australia will fully reopen its borders to all vaccinated visa holders from Feb. 21, Prime Minister Scott Morrison said on Monday, nearly two years after he shut the border to non-citizens to slow the spread of the new coronavirus.
Australia closed the border in March 2020 but began allowing skilled migrants, international students and backpackers to enter the country in December.
"If you're double-vaccinated, we look forward to welcoming you back to Australia," Morrison said during a media briefing in Canberra.
The relaxation of border rules will be a boost for airlines, hotels and other tourism businesses - the sectors worst affected by lockdowns and other tough curbs.
The news sent shares of travel and airline stocks surging, with Qantas (QAN.AX) up more than 5% and travel operator Flight Centre (FLT.AX) rising more than 7% in afternoon trade.
Strict border controls and snap lockdowns had helped Australia to keep its coronavirus numbers far lower than many comparable countries, but cases have hit record highs in recent weeks fuelled by the fast-spreading Omicron variant.
More
New Zealand reports record 243 new COVID cases
February 5, 2022 6:17 AM GMT
Feb 5 (Reuters) - New Zealand reported a record 243 new COVID-19 community cases on Saturday, as officials warned more cases of the highly transmissible Omicron variant are expected but urged people in the highly vaccinated nation not to panic.
The country of five million people has kept its borders closed since early 2020. Prime Minister Jacinda Ardern said on Thursday a full reopening will happen only by October.
The border closure, combined with lockdowns and strict social distancing rules have limited the spread of the coronavirus, with just over 17,000 infections and 53 related deaths.
But with Omicron spreading in the Pacific nation, health officials said the caseload will grow.
----Health ministry data show 93% of those eligible above the age of 12 have been fully vaccinated and 49% of eligible adults have received a booster shot.
In neighbouring Australia, which has been struggling with an Omicron wave for several weeks, 81 deaths were reported by late Saturday, with Queensland reporting 21, the state's highest in the pandemic.
An estimated 2,000 people protested in Canberra, Australia's capital, against vaccination mandates and other restrictions.
More
Japan to consider early approval for Shionogi COVID pill, says PM Kishida
February 7, 2022 4:45 AM GMT
TOKYO, Feb 7 (Reuters) - Japanese Prime Minister Fumio Kishida said on Monday the government would consider granting conditional early approval for the oral COVID-19 treatment being developed by Shionogi & Co Ltd (4507.T).
Kishida told a televised parliamentary committee meeting that provided the drug's safety and efficacy are confirmed by clinical trials "we would like to review it promptly".
The Mainichi newspaper reported earlier that Japan is considering allowing Shionogi to start selling the antiviral oral tablets as early as this spring after giving the pharmaceutical company special permission to skip the final stage of the clinical trial.
Shionogi said on Jan. 17 it started a Phase III trial in Japan of its COVID-19 vaccine candidate S-268019 that will compare its results to that of an approved vaccine.
South Korea surpasses 1 million total COVID cases with daily record
February 6, 2022 2:07 AM GMT
SEOUL, Feb 6 (Reuters) - South Korea on Sunday surpassed one million cumulative COVID-19 cases since the pandemic began, as health officials reported a daily record of 38,691 new infections driven by an Omicron variant outbreak.
South Korea saw its first confirmed COVID-19 case on January 20, 2020, and soon became the first country outside China to battle a major outbreak.
An aggressive strategy of tracking, tracing, masking and quarantining helped South Korea to blunt that initial wave and keep overall cases and deaths low without widespread lockdowns, but the spread of the Omicron variant is driving case numbers to new highs.
Deaths have remained low in the highly vaccinated country, however, with 15 new deaths reported as of midnight Saturday, according to the Korea Disease Control and Prevention Agency.
Daily cases are nearly five times higher than two weeks ago, when the Omicron variant began to dominate, but serious infections have remained at manageable levels so far, authorities have said.
Officials on Friday announced they would extend social distancing measures for at least another two weeks, including a 9 p.m. curfew on businesses and a six-person limit for private gatherings.
Overall, South Korea has reported 1,009,688 COVID-19 cases, with 6,873 deaths.
Nearly 86% of the country's 52 million population is fully vaccinated, with more than 54.5% having received booster shots.
Next, some vaccine links kindly sent along from a LIR reader in Canada.
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.
Today, a “must read” article by Jack Lifton of the ever informative Investorintel.com, on the harsh reality coming in technology metals as we try for all the wrong reasons, to switch to electric vehicles.
Will Technology Metals’ Supply Meet the Demand for EVs?
Jack Lifton | February 04, 2022
Since market economics’ common sense was codified by Adam Smith in the 18th century, people have been aware of the fact that the price for a good or service is what a willing buyer will pay a willing seller. Of course, the seller must be able to get the good or perform the service and the buyer must have or be able to get the money. These last requirements seem to have escaped the notice or understanding of the market manipulators also known as Western politicians.
The global OEM transportation vehicle market is really not free. It is being politically manipulated by climate change politics, based on the belief that eliminating the carbon dioxide output from the use of fossil fuels in vehicle powertrains, based on internal combustion engines (ICEs) and replacing them with onboard stored electricity in batteries driving electric motors (BEVs) will have a significant “positive” effect for humans on the earth’s climate. Whether or not this cause-and-effect hypothesis is true the total conversion of the world’s transportation fleet to battery electric power is not possible for the size of the present fleet and its projected growth. This is because the (battery) technology metals necessary to effect this change simply do not exist in sufficient quantities that are accessible to mankind’s engineering abilities, willingness to deploy capital, and the real global energy economy.
More, much, much more. But for that you must visit the website!
“The most effective way to destroy people is to deny and obliterate their own understanding of their history.”
George Orwell.
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