Baltic Dry Index. 2358 -11 Brent Crude 104.65
Spot Gold 1938
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 01/04/22 World 488,615,516
Deaths 6,167,083
“Rule No. 1 is never lose money. Rule No. 2 is never forget Rule No. 1.”
Warren Buffett.
Well the end of month and end of quarter came with a late attempt at dressing up the US stock indexes, but the reality is that the stock casinos look to be so last year’s play.
With a new recession looming, inflation soaring, the new needless European war settling into a war of attrition, and a global economy switching from decades of falling interest rates to years of rising interest rates, most stocks are in for a hammering. Some will default on their debt that was used to goose up the stock price and executive bonuses.
Below, the new reality sets in. Look out below.
Asian shares slip on gloomy outlook as Ukraine, recession risks weigh
April 1, 2022 3:38 AM GMT+1
SHANGHAI, April 1 (Reuters) - Asian shares fell on Friday following the biggest quarterly drop in global equities in two years, as investors worried about the impact of the Russian-Ukrainian war and rising risks of recession.
On Thursday, Russian President Vladimir Putin struck back at Western sanctions on Moscow, threatening to halt contracts supplying Europe with a third of its gas unless they are paid in roubles. The move prompted Germany, the most reliant on Russian gas, to accuse him of "blackmail" as it activated an emergency plan that could lead to rationing. read more
Reflecting the gloomy mood as a result of supply disruptions and surging raw material costs, Japanese business confidence hit a nine-month low in the first quarter according to a Bank of Japan survey, with companies indicating they expect conditions to worsen further. read more
In Tokyo, the Nikkei (.N225) was down 0.75% in morning trade, while MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was 0.70% lower.
Hong Kong's Hang Seng (.HSI) dipped 1.1%, while Seoul's Kospi (.KS11) lost about 0.6%. Chinese blue-chips turned around from a lower open to rise 0.7%.
MSCI's global share index (.MIWD00000PUS), and U.S. and European shares all notched their biggest quarterly drops since the outbreak of the COVID-19 pandemic in 2020 in the quarter that ended on March 31. Investors have been worried that surging price pressures could force global central banks into aggressive rate hikes, potentially triggering recessions.
----Investors will be watching U.S. March jobs data later on Friday for indications of wage inflation, in addition to the headline jobs figure.
The closely watched spread between U.S. two-year and 10-year notes was barely above zero on Friday morning, after briefly inverting.
An inversion in this part of the U.S. yield curve is viewed as a reliable signal that a recession may follow in one to two years.
----In energy markets, oil prices stabilised following a plunge on Thursday triggered by Washington's announcement that it would make the largest-ever release from U.S. emergency oil reserves, part of a broad effort to rein in galloping inflation. read more
While U.S. crude was last down about 0.1% at $100.18 per barrel, global benchmark Brent crude edged 0.12% higher to $104.84.
More
https://www.reuters.com/business/global-markets-wrapup-1-2022-04-01/
A dozen S&P 500 stocks just had their worst quarter ever, as tech stocks sloughed off nearly $2 trillion in value
Facebook, Etsy, PayPal and others had a bad start to the year as pandemic darlings and highly valued tech stocks sold off in the worst quarter for the Nasdaq Composite in more than three years
A stock selloff to start 2022 led to the worst quarter in history for a dozen S&P 500 stocks, as investors punished pandemic darlings and highly valued tech companies, subtracting roughly $2 trillion in market cap.
Tech companies took the brunt of a first-quarter selloff that was felt throughout Wall Street, as the Nasdaq Composite Index COMP, -1.54% lost $1.99 trillion in market cap through Wednesday’s close, its worst quarterly performance since the fourth quarter of 2018, according to Dow Jones Market Data Group. More broad-based indexes also lost more than $1 trillion in market cap but held up better than the tech-heavy Nasdaq, with the S&P 500 index SPX, -1.57% declining by $1.46 trillion.
Dow Jones Market Data Group found 12 stocks that suffered their worst quarterly percentage decline, and roughly half could be considered tech companies: Etsy, PayPal, Facebook parent company Meta Platforms, Keysight Technologies, Match Group and Charter Communications. Others that may not be considered “tech companies” were still harmed by some of the same dynamics that damaged those stocks, however — Xylem, which sells controls technology and other supplies to the water industry, saw its margins slammed by increasing costs of components for those systems.
The 12 stocks combined to lose nearly half a trillion dollars in market cap on their own, a total of $494.19 billion. The bulk of that came from Facebook, which dropped more than $300 billion in valuation as investors chopped off roughly a third of its stock price.
More
In other news, it looked like trouble ahead even before Russia invaded Ukraine. But the needless European war is making that bad outlook very much worse.
A key inflation gauge sets 40-year high as gas and food soar
WASHINGTON (AP) — An inflation gauge that is closely monitored by the Federal Reserve jumped 6.4% in February compared with a year ago, with sharply higher prices for food, gasoline and other necessities squeezing Americans’ finances.
The figure reported Thursday by the Commerce Department was the largest year-over-year rise since January 1982. Excluding volatile prices for food and energy, so-called core inflation increased 5.4% in February from 12 months earlier.
Robust consumer demand has combined with shortages of many goods to fuel the sharpest price jumps in four decades. Measures of inflation will likely worsen in the coming months because Thursday’s report doesn’t reflect the consequences of Russia’s invasion of Ukraine, which occurred Feb. 24. The war has disrupted global oil markets and accelerated prices for wheat, nickel and other key commodities.
Squeezed by inflation, consumers increased their spending by just 0.2% in February, down from a much larger 2.7% gain in January. Adjusted for inflation, spending actually fell 0.4% last month. The decline partly reflected a shift away from heavy spending on goods to a focus on services, such as health care, travel and entertainment, which consumers had long avoided during the worst of the pandemic.
More
https://apnews.com/article/business-prices-inflation-c9d81525f808b25ecd37e5c91d6bb0e5
Gas in Germany, flour in Greece, sunflower oil in Spain: European countries take steps towards rationing as the war in Ukraine adds to the global supply crunch
Thu, March 31, 2022, 12:18 AM
Russia’s invasion of Ukraine has threatened the supply of critical commodities in Europe and thrown global supply chains, which were already struggling amid COVID-19, into complete chaos.
As a result, the prices of everything from wheat to oil have soared, leading to multi-decade high inflation rates in places like Germany and Spain. The supply crunch in Europe is now so bad it’s causing governments to begin laying the groundwork for rationing, with some stores already limiting supplies.
The German government took the first formal steps toward rationing its natural gas supplies this week as it attempts to wean itself off a decades-long reliance on Russian energy. And in Spain and Greece, supermarkets are rationing food including flour, milk, and sunflower oil.
While current European rationing has largely been preventative, as governments and businesses hope to limit the risk of panic buying and further shortages, Europeans are facing a volatile environment ahead as geopolitical tensions persist and COVID-19 lockdowns continue abroad.
German gas
Germany pulled the first lever on its three stage emergency plan to conserve its natural gas supply on Wednesday, fearing a potential showdown with Russia over gas flows.
The move came after Russian President Vladimir Putin demanded natural gas payments in Russian rubles last week, twisting the West’s sanctions against itself.
More
https://www.yahoo.com/news/gas-germany-flour-greece-sunflower-231852883.html
Chinese manufacturing, services contract together for first time since 2020
March 31, 2022 6:11 AM GMT+1
BEIJING, March 31 (Reuters) - Activity in Chinese manufacturing and services simultaneously contracted in March for the first time since the height of the country's COVID-19 outbreak in 2020, adding to the urgency for more policy intervention to stabilise the economy.
The official manufacturing Purchasing Managers' Index (PMI) fell to 49.5 from 50.2 in February, the National Bureau of Statistics (NBS) said on Thursday, while the non-manufacturing PMI eased to 48.4 from 51.6 in February. read more
The last time both PMI indexes simultaneously were below the 50-point mark that separates contraction from growth was in February 2020, when authorities were racing to arrest the spread of the coronavirus, first detected in the central Chinese city of Wuhan.
The world's second-largest economy revved up in January-February, with some key indicators blowing past expectations, but is now at risk of slowing sharply as authorities restrict production and mobility in COVID-hit cities, including Shanghai and Shenzhen.
More
IMF warns Russia sanctions threaten to chip away at dollar dominance – FT
March 31, 2022 6:13 AM GMT+1
March 31 (Reuters) - Financial sanctions imposed on Russia threaten to gradually dilute the dominance of the U.S. dollar and could result in a more fragmented international monetary system, Gita Gopinath, IMF's First Deputy Managing Director, told The Financial Times.
Russia has been hit with a plethora of sanctions from the United States and its allies for its late-February invasion of Ukraine. Russia has called the invasion a 'special operation' to disarm its neighbour.
"The dollar would remain the major global currency even in that landscape but fragmentation at a smaller level is certainly quite possible," Gopinath told the newspaper in an interview, adding that some countries are already renegotiating the currency in which they get paid for trade.
She said that the war will also spur the adoption of digital finance, from cryptocurrencies to stablecoins and central bank digital currencies.
The IMF did not immediately respond to a Reuters request for comment.
Gopinath told the FT that the greater use of other currencies in global trade would lead to further diversification of the reserve assets held by national central banks.
She had earlier said the sanctions against Russia do not foreshadow the demise of the dollar as the reserve currency and that the war in Ukraine will slow global economic growth but will not cause a global recession.
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
March 31, 2022
Russian forces are deliberately trying to damage Ukraine’s agriculture sector, a main source of income, President Volodymyr Zelensky told Dutch lawmakers. Troops have placed landmines in fields and agricultural equipment has been destroyed, he said.
Russians are “doing everything to ruin our agriculture potential and to provoke a food crisis not only in Ukraine but in the world,” Zelenskiy said.
Global food security faces “serious threats” including the potential loss of production in Ukraine, according to Syngenta, the Swiss seed and fertilizer business owned by ChemChina. Ukraine and Russia account for more than a quarter of the world’s annual wheat sales.
Ukraine Needs Fast Help to Rebuild Farming, World Bank Head Says
French Inflation Jumps More Than Expected to Hit New Record
Author of the article: William Horobin Publishing date: Mar 31, 2022
French inflation accelerated more than expected to reach another record, reflecting the economic repercussions of Russia’s invasion of Ukraine and the growing challenges facing policy makers.
European Union-harmonized consumer prices rose 5.1% from a year ago in March — the most since the data series began in 1997. The median estimate in a Bloomberg survey of economists was 4.9%. Out of 19 surveyed, 13 expected a lower reading.
Thursday’s data follow unexpectedly high readings the previous day from Germany and Spain, with the latter reporting a number approaching 10%. France, the euro area’s second-largest economy, has done more to shield consumers from spiking energy costs.
The ramp-up in euro-zone prices is heaping pressure on the European Central Bank to raise interest rates from record lows. But while some ECB officials are pushing for one or more hikes this year, President Christine Lagarde has stressed the need for a gradual approach amid “significant risks” to economic growth.
What Bloomberg Economics Says…
“French inflation rose by more than anticipated in March, but it’s still lower than in other major European economies. A government imposed cap on gas and electricity prices should mean it stays that way in 2022, keeping French consumers sheltered from the worst of the cost-of-living crisis and limiting downside risks to growth.”
NEW STUDY: NEARLY HALF OF AMERICANS WORRY ABOUT FEEDING
THEIR HOUSEHOLDS DUE TO INFLATION & RISING COSTS OF GROCERIES
Mar. 31, 2022 Source: WhyHunger news release
New York - a
leader in the movement to end hunger and advance the human right to nutritious
food in the U.S. and around the world - today released results from its '2022
Hunger and Food Insecurity Survey,' which examined Americans' perceptions on
hunger.
The survey found that inflation and rising costs of
groceries are a persistent concern among Americans, with 47% report worrying
about being able to feed themselves and their families. In addition, over one
third (35%) feel they are not getting adequate nutrition because thereтАпis not
enough money to regularly afford healthy and nutritious food.
Further, 90% of Americans say ending hunger in the
U.S. is a solvable problem, and 69% say ending hunger in the U.S. is a
political choice.
The survey comes on the heels of the announcement of
funding for a White House Conference on Food, Nutrition, Hunger & Health,
which would explore challenges within the current food system and take a
holistic (or "whole of") governmental approach to ending hunger and
combatting nutrition insecurity in America by 2030.
This comes over 50 years after the first, and only,
White House Conference on Food, Nutrition & Health, which resulted in more
than 1,800 policy recommendations to reduce hunger and promote nutrition and
health. According to the survey, nearly 85% of Americans are in support of the
White House making ending hunger a top priority and convening a conference.
"We live in the wealthiest nation in the world
with access to so much, yet we continue to face alarming hunger rates.
For far too long the U.S. emergency food system has
been unreasonably tasked to meet rising demands when we know for certain it
will take a lot more than handing out food to make a lasting impact on food
insecurity levels. At its core, the problem has never been lack of food, but a
lack of access and a lack of social justice. Until we uphold the protections of
food as a basic human right for all, this long persistent hunger narrative will
continue to prevail," said Noreen Springstead, executive director at
WhyHunger.
Among the survey's additional findings:
Х The Face of Hunger: According to the survey, 49%
of Americans know someone who has experienced hunger in the past year. In
addition, when asked about personal experience, 17% say their household
experienced food insecurity for the first time during the pandemic, 10% say
their household experienced food insecurity at the same level compared to
before the pandemic and 11% say their household experienced food insecurity at
a heightened level compared to before the pandemic.
More
https://www.agrimarketing.com/s/140383
House price growth hits highest level since 2004 with record average of £265.3k
Thursday 31 March 2022 7:14 am
Annual house price growth has increased to 14.3 per cent, from 12.6 per cent in February.
According to Nationwide’s house price index, this was the strongest pace since November 2004.
The price tag of the average home hit a new record of £265,312, an increase of more than £33,000 in the past year.
Prices have also surged some 21 per cent since pre-pandemic levels in early 2020.
Nationwide’s chief economist Robert Gardner said: “The housing market has retained a surprising amount of momentum given the mounting pressure on household budgets and the steady rise in borrowing costs. “
The number of mortgages given the green light for house purchase remained high in February at around 71,000, nearly 10 per cent above pre-pandemic levels.
“A combination of robust demand and limited stock of homes on the market has kept upward pressure on prices,” Gardner added.
The housing market was likely to slow in the coming months, Nationwide forecast.
“The squeeze on household incomes is set to intensify, with inflation expected to rise further, perhaps reaching double digits in the quarters ahead if global energy prices remain high,” Gardner added.
“Moreover, assuming that labour market conditions remain strong, the Bank of England is likely to raise interest rates further, which will also exert a drag on the market if this feeds through to mortgage rates.”
More
https://www.cityam.com/house-price-growth-hits-highest-level-since-2004/
Covid-19 Corner
This section will continue until it becomes unneeded.
As Shanghai expands COVID lockdown, life on hold in city of 26 million
April 1, 2022 4:06 AM GMT+1
SHANGHAI, April 1 (Reuters) - China's commercial hub of Shanghai ground to halt on Friday after the government locked down most of the city's 26 million residents to stop the spread of COVID-19, even as official numbers put local cases falling for the second day in a row.
The city government late on Thursday extended an existing lockdown in eastern districts, just as western parts of the city were shut down as scheduled.
Fresh official guidance indicated that many in China's most populous city will now be required to stay home as long as it takes to control the outbreak - instructed not to cross their doorsteps even to dispose of rubbish or walk their dogs.
Public transport in most of the city has been suspended, while businesses considered non-essential, like restaurants and shopping malls, have also had to close.
The lockdown, designed to stop an outbreak of the highly transmissible Omicron variant that started about a month ago, began on Monday and was originally due to last 10 days in total. Areas east of Shanghai's Huangpu River were to be closed for five days, before reopening as western districts began a five-day shutdown.
But the city government said it would lift the curbs in east Shanghai in stages instead. read more
This means the majority of districts are now under a lockdown that covers the office towers of the Lujiazui district, China's answer to Wall Street, and factories including Volkswagen's (VOWG_p.DE) joint venture with SAIC Motor (600104.SS) and U.S. automaker Tesla's (TSLA.O) plant. read more
China's outbreak is small by global standards. But Shanghai, now accounting for three out of every four local asymptomatic cases across the country, has emerged as a test bed for the national government's handling of COVID - a "dynamic clearance" approach which aims to test for, trace and centrally quarantine all positive case. read more
More
WHO says most likely scenario shows COVID severity will decrease over time
Wed, March 30, 2022, 5:02 PM
(Reuters) -The World Health Organization on Wednesday released an updated plan for COVID-19, laying out three possible scenarios for how the pandemic will evolve this year.
"Based on what we know now, the most likely scenario is that the COVID-19 virus continues to evolve, but the severity of disease it causes reduces over time as immunity increases due to vaccination and infection," Director-General Tedros Adhanom Ghebreyesus said during a briefing.
However, the WHO head cautioned that periodic spikes in cases and deaths may occur as immunity wanes, which may require periodic boosting for vulnerable populations.
Talking about the other two potential scenarios, Tedros said either less severe variants will emerge and boosters or new formulations of vaccines will not be necessary, or a more virulent variant will emerge and protection from prior vaccination or infection will wane rapidly.
The updated Strategic Preparedness, Readiness and Response Plan https://www.who.int/publications/m/item/strategic-preparedness-readiness-and-response-plan-to-end-the-global-covid-19-emergency-in-2022 sets out the strategic adjustments that every country needs to make to address the drivers of SARS-CoV-2 transmission, lessen the impact of COVID, and end the global emergency.
More
https://www.yahoo.com/news/whos-tedros-says-most-likely-160247586.html
End of COVID may bring major turbulence for US health care
WASHINGTON (AP) — When the end of the COVID-19 pandemic comes, it could create major disruptions for a cumbersome U.S. health care system made more generous, flexible and up-to-date technologically through a raft of temporary emergency measures.
Winding down those policies could begin as early as the summer. That could force an estimated 15 million Medicaid recipients to find new sources of coverage, require congressional action to preserve broad telehealth access for Medicare enrollees, and scramble special COVID-19 rules and payment policies for hospitals, doctors and insurers. There are also questions about how emergency use approvals for COVID-19 treatments will be handled.
The array of issues is tied to the coronavirus public health emergency first declared more than two years ago and periodically renewed since then. It’s set to end April 16 and the expectation is that the Biden administration will extend it through mid-July. Some would like a longer off-ramp.
Transitions don’t bode well for the complex U.S. health care system, with its mix of private and government insurance and its labyrinth of policies and procedures. Health care chaos, if it breaks out, could create midterm election headaches for Democrats and Republicans alike.
----Medicaid, the state-federal health insurance program for low-income people, is covering about 79 million people, a record partly due to the pandemic.
But the nonpartisan Urban Institute think tank estimates that about 15 million people could lose Medicaid when the public health emergency ends, at a rate of at least 1 million per month.
Congress increased federal Medicaid payments to states because of COVID-19, but it also required states to keep people on the rolls during the health emergency. In normal times states routinely disenroll Medicaid recipients whose incomes rise beyond certain levels, or for other life changes affecting eligibility. That process will switch on again when the emergency ends, and some states are eager to move forward.
More
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.
Concrete made with old tires proves itself in real-world setting
Nick Lavars March 30, 2022
With a notoriously large carbon footprint, concrete is a prime target for researchers developing greener materials for the future of construction. A number of studies have shown how old rubber tires can be used to make versions that are stronger, more heat-resistant and flexible enough for use as a road material. A new study has assessed its value in real-world settings by using concrete containing old tires as a residential slab and monitoring its performance over several years, where it outshone conventional concrete in a number of ways.
The type of concrete at the center of this study is known as crumb rubber concrete, and its production involves grinding rubber tire down into crumbs of a similar consistency to sand. These crumbs can then be used to replace a certain proportion of the sand typically mixed in with the cement, water and other ingredients to form concrete, lessening the reliance on the natural material and giving the discarded rubber a second life.
Scientists at the University of South Australia and Melbourne's RMIT University have sought to take this material from the "lab to the slab," noting that while it has shown a lot of promise in laboratory testing, its reliability in real-world construction requires further exploration.
To investigate its practical application in residential settings, the scientists poured two crumb rubber-reinforced concrete slabs at the University of South Australia campus in 2018, along with two conventional concrete slabs. These formed the entrances to a civil engineering laboratory that sees a lot of foot traffic, with the team closely monitoring the materials' performance over time.
“We found that reinforced crumb rubber concrete (with up to 20 percent sand replacement by volume) is superior to conventional concrete in some ways, with higher impact resistance, toughness and ductility, a higher damping ratio, better thermal and acoustic insulation, and a lighter weight," said study author Dr Osama Youssf. “With respect to pumping, screeding, or finishing the concrete surface using a power trowel, contractors also reported no difference between using the crumb rubber concrete and conventional concrete, saying that the crumb rubber mix actually required less physical effort across all aspects."
Factors like impact resistance and toughness bode well for the longevity of the concrete, which is a key focus for scientists working in this area. Concrete is incredibly carbon-intensive to make, so when it begins to crack, degrade or fail and structures need to be replaced, it places yet more strain on the environment. Making more durable forms of it while putting old, non-biodegradable tires to use could therefore be beneficial on a couple of fronts.
“The results clearly show that crumb rubber cement is a viable and promising alternative to conventional concrete in the residential concrete market,” said study author Professor Yan Zhuge. “We strongly recommend that the concrete industry considers crumb rubber concrete as a sustainable alternative to conventional concrete in reinforced residential constructions in Australia.”
Another weekend and sadly another weekend of European war, misery, displacement, injury and death. The end result of those who blocked Macron’s attempt to block this outcome via diplomacy.
“Price is what you pay, value is what you get.”
Warren Buffett.
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