Baltic Dry Index. 2031 -24 Brent Crude 100.24
Spot Gold 1960
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 12/04/22 World 500,043,851
Deaths 6,206,056
“In a bull market and particularly in booms the public at first makes money which it later loses simply by overstaying the bull market.”
Jesse Livermore.
Barring something of a miracle later today, Black Tuesday looms for today’s stock casinos.
Food price inflation, see the inflation section, is soaring.
China’s property section is back in distress again. More omicron lockdown.
Global interest rates are rising, generating debt repayment pressure for deeply indebted companies and governments. Keep an eye on gold.
That unnecessary new European war that Washington, London and NATO failed to prevent, looks like starting to widen. The west seems determined to fight to the last Ukrainian. No one anywhere, seems to have any sort of peace plan!
All in all, not a promising start to Tuesday in Holy Week unless you happen to be short in the stock casinos, or long a mountain of stock casinos summer put options. Greed is getting replaced by fear.
Stay long commodities, especially basic foodstuffs and metals.
Asia-Pacific stocks slip as investors watch China’s Covid situation, yen weakening
SINGAPORE — Shares in Asia-Pacific slipped in Tuesday trade, as investors continue monitoring developments surrounding the Covid situation in mainland China as well as movements in the Japanese yen.
U.S. inflation data is also expected to be out later Tuesday stateside and could provide more clues on the outlook for Federal Reserve policy.
Chinese markets largely struggled to recover from Monday’s heavy losses.
The Shanghai composite shed early gains to decline 0.66% while the Shenzhen component slipped 0.531%.
Over in Hong Kong, the Hang Seng index sat 0.5% lower. Shares of Tencent and NetEase in the city outperformed as they rose 2.32% and 3.16%, respectively, after Chinese regulators approved new games for monetization following a months-long freeze.
The World Health Organization said Monday it is monitoring the Covid situation in mainland China, where officials have been battling a major surge in cases.
The major Chinese city of Shanghai has accounted for most of mainland China’s new Covid cases and was in lockdown about a week after a two-part shutdown was originally supposed to end. The U.S. State Department also ordered all non-emergency government staff and their family members in Shanghai to leave amid the Covid surge.
Australian stocks also declined, with the S&P/ASX 200 trading 0.55% lower. South Korea’s Kospi shed 1.19%.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.61%.
Elsewhere, the Nikkei 225 in Japan led losses among the region’s major markets as it fell 1.77%, with shares of robot maker Fanuc dropping 5%. The Topix index dipped 1.39%.
---- Overnight stateside, the Dow Jones Industrial Average shed 413.04 points to 34,308.08 while the S&P 500 slipped 1.69% to 4,412.53. The tech-heavy Nasdaq Composite lagged, dropping 2.18% to 13,411.96.
The U.S. consumer price index for March is set to be released during ET time Tuesday, with the White House warning that it expects the report to show inflation that is “extraordinarily elevated.” Economists polled by Dow Jones expect the data to show an 8.4% annual increase in prices, the highest since December 1981.
“Very high US inflation will keep alive market expectations for aggressive FOMC tightening in our view,” said Carol Kong, senior associate for currency strategy and international economics at Commonwealth Bank of Australia.
More
https://www.cnbc.com/2022/04/12/asia-markets-covid-in-china-us-inflation-data-currencies-oil.html
Treasuries Slump Ignites Global Selloff as Rate Hikes Gain Focus
(Bloomberg) -- Long-term U.S. Treasury yields jumped to a three-year high, fueling a global rise in borrowing costs as traders intensified bets on aggressive rate hikes from major central banks.
Ten-year U.S. yields climbed through 2.75% for the first time since March 2019 as investors priced in the impact of the Federal Reserve’s tightening plan and accelerating inflation. Traders are betting the Fed will enact about nine more quarter-point rate hikes by year-end, which would be the fastest policy tightening since 1994.
Long-term debt was weighed down ahead of the U.S. Treasury department’s sales over the coming two days of 10- and 30-year debt, with yields typically rising ahead of auctions to entice buyers. Treasuries were also pressured Monday after Amazon.com Inc. kicked off a 7-part debt offering.
Short-dated rates in the U.K. hit the highest in more than a decade as money markets ramped up bets on Bank of England rate increases by year-end. German yields rose to the highest in almost seven years.
Meanwhile, France’s 10-year yield premium over Germany fell for the first time in three days. Investors looked past results of the first round of France’s election -- which put President Emmanuel Macron and far-right candidate Marine Le Pen in a second-round runoff later this month -- and turned their attention back to growing expectations for the European Central Bank to end an era of negative rates by December.
“A move this profound from a corner of markets that has such pervasive effects -- from pricing of credit to the determination of ‘risk free returns’ is a cause for major risk re-pricing, one would suspect,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank Ltd. “I think the impact of such sustained and strong moves in Treasury yields will be hard to dodge for anyone.”
Borrowing costs on European debt surged, with money markets pricing two quarter-point ECB rate hikes by October. The rate on 10-year German bonds surged as much as 11 basis points to 0.82%, the highest since September 2015. Money markets are pricing two-quarter point ECB rate hikes by October, and they are two basis points away from wagering on a third such increase by December. The German yield curve steepened, led by 30-year rates, which surged to the highest since 2018.
More
https://finance.yahoo.com/news/treasury-10-yield-rises-2-022036814.html
China Junk Bonds, Property Stocks Drop Again: Evergrande Update
Tue, April 12, 2022, 5:20 AM
(Bloomberg) -- Chinese high-yield dollar bonds declined for a second day, as a three-week rally loses steam amid a worsening Covid outbreak and fading optimism over policy support measures.
The bonds dropped 0.5 cents to 2 cents on the dollar Tuesday morning, according to credit traders. Country Garden Holdings Ltd.’s 3.3% dollar note due 2031 fell 1.3 cents to 62.7 cents as of 9:29 am in Hong Kong, after posting the biggest decline in more than three weeks, according to Bloomberg-compiled prices.
A Bloomberg gauge of developer stocks slipped as much as 2.1%, poised to extend Monday’s 4.4% tumble on concerns over the impact of Covid lockdowns in Shanghai.
Property developers need to transform their growth model as their market potential declines, supply of low-cost housing increases and regulation on their financial health tightens, the Securities Daily said in a commentary.
A recent rebound in Chinese property bonds won’t last, and investors are adopting more hedging while diversifying through indexes, according to an executive at one of China’s top brokerages.
“Because developers remain beset by a negative sales outlook and prolonged pandemic, the recent rebound in their bonds will be temporary,” said Yang Chen, executive director at the fixed income, currency and commodities department of CITIC Securities Co. Investors seeking steady returns should instead pay attention to bonds issued by local government financing vehicles, banks’ perpetual debt and index-linked products, she added.
China’s property developers need to transform their growth model as their market potential declines, supply of low-cost housing increases and regulation on their financial health tightens, the Securities Daily said in a commentary.
A consensus among China’s top 10 developers, as reflected by what’s been said at their earnings briefings, is market size will shrink to 10 trillion yuan in the next 5-10 years, according to the newspaper, which is backed by the official People’s Daily.
More
https://finance.yahoo.com/news/zhenro-unit-investors-vote-repayment-020124587.html
Finally, prepping for a wider new European war? World War Three?
China makes semi-secret delivery of missiles to Serbia
Sun, April 10, 2022, 2:38 PM
BELGRADE, Serbia (AP) — Russian ally Serbia took the delivery of a sophisticated Chinese anti-aircraft system in a veiled operation this weekend, amid Western concerns that an arms buildup in the Balkans at the time of the war in Ukraine could threaten the fragile peace in the region.
Media and military experts said Sunday that six Chinese Air Force Y-20 transport planes landed at Belgrade's civilian airport early Saturday, reportedly carrying HQ-22 surface-to-air missile systems for the Serbian military.
The Chinese cargo planes with military markings were pictured at Belgrade's Nikola Tesla airport. Serbia's defense ministry did not immediately respond to AP’s request for comment.
The arms delivery over the territory of at least two NATO member states, Turkey and Bulgaria, was seen by experts as a demonstration of China’s growing global reach.
“The Y-20s’ appearance raised eyebrows because they flew en masse as opposed to a series of single-aircraft flights,” wrote The Warzone online magazine. “The Y-20′s presence in Europe in any numbers is also still a fairly new development.”
Serbian military analyst Aleksandar Radic said that “the Chinese carried out their demonstration of force.”
Serbian President Aleksandar Vucic all but confirmed the delivery of the medium-range system that was agreed in 2019, saying on Saturday that he will present “the newest pride” of the Serbian military on Tuesday or Wednesday.
He had earlier complained that NATO countries, which represent most of Serbia’s neighbors, are refusing to allow the system’s delivery flights over their territories amid tensions over Russia’s aggression on Ukraine.
Although Serbia has voted in favor of U.N. resolutions that condemn the bloody Russian attacks in Ukraine, it has refused to join international sanctions against its allies in Moscow or outright criticize the apparent atrocities committed by the Russian troops there.
Back in 2020, U.S. officials warned Belgrade against the purchase of HQ-22 anti-aircraft systems, whose export version is known as FK-3. They said that if Serbia really wants to join the European Union and other Western alliances, it must align its military equipment with Western standards.
The Chinese missile system has been widely compared to the American Patriot and the Russian S-300 surface-to-air missile systems although it has a shorter range than more advanced S-300s. Serbia will be the first operator of the Chinese missiles in Europe.
More
https://www.yahoo.com/news/china-makes-semi-secret-delivery-133801459.html
“Never buy at the bottom, and always sell too soon.”
Jesse Livermore.
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.N. REPORTS FOOD PRICES ARE AT THEIR HIGHEST PRICES
EVER, UP 14% IN MARCH ALONE
Apr. 11, 2022
Source: Food and
Agriculture Organization of the United Nations (FAO) news release
Rome - World food commodity prices made a
significant leap in March to reach their highest levels ever, as war in the
Black Sea region spread shocks through markets for staple grains and vegetable
oils, the Food and Agriculture Organization of the United Nations (FAO)
reported today.
The FAO Food Price Index averaged 159.3 points in
March, up 12.6 percent from February when it had already reached its highest
level since its inception in 1990. The Index tracks monthly changes in the
international prices of a basket of commonly-traded food commodities. The
latest level of the index was 33.6 percent higher than in March 2021.
The FAO Cereal Price Index was 17.1 percent higher
in March than in February, driven by large rises in wheat and all coarse grain
prices largely as a result of the war in Ukraine. The Russian Federation and
Ukraine, combined, accounted for around 30 percent and 20 percent of global
wheat and maize exports, respectively, over the past three years. World wheat
prices soared by 19.7 percent during the month, exacerbated by concerns over
crop conditions in the United States of America. Meanwhile, maize prices posted
a 19.1 percent month-on-month increase, hitting a record high along with those
of barley and sorghum. Contrasting trends across the various origins and
qualities kept the March value of FAO's Rice Price Index little changed from
February, and thus still 10 percent below its level of a year earlier.
The FAO Vegetable Oil Price Index rose 23.2 percent,
driven by higher quotations for sunflower seed oil, of which Ukraine is the
world's leading exporter. Palm, soy and rapeseed oil prices also rose markedly
as a result of the higher sunflower seed oil prices and the rising crude oil
prices, with soy oil prices further underpinned by concerns over reduced
exports by South America.
The FAO Sugar Price Index rose 6.7 percent from
February, reversing recent declines to reach a level more than 20 percent
higher than in March 2021. Higher crude oil prices were a driving factor, along
with currency appreciation of the Brazilian Real, while favorable production
prospects in India prevented larger monthly price increases.
The FAO Meat Price Index increased by 4.8 percent in
March to reach an all-time high, led by surging pig meat prices related to a
shortfall of slaughter pigs in Western Europe. International poultry prices
also firmed in step with reduced supplies from leading exporting countries
following avian flu outbreaks.
The FAO Dairy Price Index rose 2.6 percent and was
23.6 percent higher than in March 2021, as quotations for butter and milk
powders rose steeply amid a surge in import demand for near and long-term
deliveries, especially from Asian markets.
https://www.agrimarketing.com/s/140509
London cost of living soars as firms raise prices amid inflation crunch
Monday 11 April 2022 6:00 am
Londoners’ cost of living is rising rapidly driven by the capital’s firms hiking prices at the quickest pace ever to stay afloat amid swelling costs, reveals a closely watched survey released today.
Businesses across the capital and the UK are being stung by a higher tax burden and swelling operating costs on top of trying to repair their balance sheets after the pandemic dealt a heavy blow to their financials.
As a result, London companies have launched the steepest price hike cycle since records began a quarter of a century ago, according to NatWest and S&P Global’s purchasing managers’ index (PMI) for last month.
Businesses’ costs climbed at the second quickest pace on record in March.
Russia’s invasion of Ukraine has sent energy and raw material prices soaring, adding to existing cost pressures emanating from the UK jobs market that were already hitting firms’ bottom lines.
The government has saddled firms with a 1.25 percentage point national insurance hike, while hospitality firms are having to pay the normal 20 per cent rate of VAT after a pandemic relief scheme ended.
Activity among London businesses remained high at 63.5, up from 63, indicating consumers are still willing to swallow higher prices. The cost of living squeeze is expected to cool the London PMI in the coming months.
Business confidence in the capital shrank to a 17-month low on fears consumers will cut spending amid the worst cost of living squeeze since the mid 1950s.
More
https://www.cityam.com/london-cost-of-living-soars-as-firms-raise-prices-amid-inflation-crunch/
BMW's CEO expects chip shortage to last into 2023
April 11, 2022 5:07 AM GMT+1
BERLIN, April 11 (Reuters) - A shortage of semiconductors is likely to remain a problem for the auto industry into 2023, German carmaker BMW's (BMWG.DE) Chief Executive Oliver Zipse said in an interview with newspaper Neue Zuercher Zeitung (NZZ) published on Monday.
"We are still in the height of the chip shortage," Zipse was quoted as saying. "I expect us to start seeing improvements at the latest next year, but we will still have to deal with a fundamental shortage in 2023."
BMW said during its annual press briefing in mid-March that it expected the chip shortage to last throughout 2022.
Zipse's comments echoed similar statements by Volkswagen's CFO Arno Antlitz on Saturday who said he expected that supply of chips would not be able to meet demand until 2024. read 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 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.
Guangzhou closes to most arrivals as China’s outbreak grows
April 11, 2022
BEIJING (AP) — The manufacturing hub of Guangzhou closed itself to most arrivals Monday as China battles a major COVID-19 surge in its big eastern cities.
Shanghai has taken the brunt of the surge, with another 26,087 cases announced on Monday, only 914 of which showed symptoms. The city of 26 million is under a tight lockdown, with many residents confined to their homes for up to three weeks.
No such lockdown has yet been announced for Guangzhou, a metropolis of 18 million northwest of Hong Kong that is home to many top companies and China’s busiest airport. Just 27 cases were reported in the city on Monday.
However, primary and middle schools have been switched to online after an initial 23 local infections were detected last week. An exhibition center was being converted into a makeshift hospital after authorities said earlier they would begin citywide mass testing.
Only citizens with a “definite need” to leave Guangzhou can do so, and only if they test negative for the virus within 48 hours of departure, city spokesperson Chen Bin said in a social media announcement.
China has stuck to its “zero-COVID” strategy of handling outbreaks with strict isolation and mass testing, despite complaints in Shanghai over shortages of food and medical services.
China’s government and the entirely state-controlled media are growing increasingly defensive about complaints over the COVID-19 prevention measures, censoring content online and rebuking foreign critics.
Foreign Ministry spokesperson Zhao Lijian on Sunday said China had “lodged solemn representations with the U.S.” after the State Department advised Americans to reconsider traveling to China due to “arbitrary enforcement” of local laws and COVID-19 restrictions, particularly in Hong Kong, Jilin province and Shanghai. U.S. officials cited a risk of “parents and children being separated.”
More
https://apnews.com/article/covid-health-business-guangzhou-beijing-e4c1df45c9906cd6818ddeee4d855b3e
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, among other things, I’ve added this section. Updates as they get reported.
Maze-like material keeps even the smallest insects from reaching crops
Ben Coxworth April 08, 2022
Instead of using insecticides, farmers will sometimes cover their plants with a mesh fabric. A new such material has now been developed, which keeps out a wider range of bugs while still allowing crops to get enough sunlight and water.
With all crop-cover materials, the size of the gaps in the mesh determines the size of the pests that are kept out. Unfortunately, tiny insects like tobacco thrips are small enough that they can simply pass through the gaps in existing products. If the gaps were made small enough to stop the thrips, then not enough air, water or sunlight would be able to reach the plants.
Seeking a more effective alternative, scientists at North Carolina State University have developed an experimental "Plant Armor." It consists of three knitted layers.
On the outside and the inside are layers made of transparent plastic yarn. Sandwiched between them is another knitted layer, the fibers of which run perpendicular to those of the other two layers. The idea is that even if insects are small enough to make their way past the surface of the material, its maze-like internal structure will make it very difficult for them to get all the way through.
In one lab test, groups of 10 thrips were placed in a Petri dish along with a cabbage leaf that was protected by either a piece of Plant Armor or an existing crop cover material. It was found that the insects took three hours to get through the Plant Armor, whereas they got through the other product in just 12 minutes.
In another test, both Plant-Armor-covered and unprotected potted cabbage plants were placed in a cage along with unfed caterpillars. The unprotected plants were quickly infested and almost completely eaten, while no caterpillars were found on the protected plants, even after 10 days.
Finally, when cabbage plants were grown in a field either covered or uncovered, the covered plants were on average three time larger and heavier after a three-month growth period.
Importantly, because the Plant Armor doesn't simply rely on small gap size, sufficient amounts of water, air and light are still able to pass through. Additionally, doctoral candidate Grayson Cave (first author of the study) told us that the material is not only reusable, but it can also be made from recycled materials.
"We found it’s possible to use this new technology to protect against insects we didn’t think we could protect against," he said. "We’ve shown we can use a mechanical barrier that will protect against tobacco thrips and possibly other insects, allowing the plant to grow and thrive underneath."
The research is described in a paper that was recently published in the journal Agriculture.
Source: North Carolina State University
“All through time, people have basically acted and re-acted the same way in the market as a result of: greed, fear, ignorance, and hope"
Jesse Livermore.
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