Baltic Dry Index. 3289 +100 Brent Crude 111.24
Spot Gold 1843
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 20/05/22 World 525,904,563
Deaths 6,297,118
Sell in May, go away. Don’t come back till Labor Day.
Wall Street adage.
In the Asian stock casinos, a Friday rally spurred by a cut in China’s five year loan prime rate.
But with Bruno the bear knocking on the S&P’s door, it’s exit time for most still drinking in the last chance saloon.
With stagflation already surfacing in the US and European economies, global recession is probably only six months to a year away, depending on how fast Fed Chairman Powell raises the US central banks key interest rate.
That Wall Street adage has never looked so apt, although Labor Day this year may be one or two years to early to return to the stock casinos.
Recessions always find out who had already gone bust but was hiding it.
The Biden Bust gets closer.
Asia markets gain as Hong Kong’s Hang Seng jumps nearly 2%
SINGAPORE — Shares in the Asia Pacific markets rose on Friday, with Hong Kong stocks leading gains as a volatile trading week comes to a close.
The Hang Seng index jumped 2.2% in early trade and was last up 1.85%, while the Hang Seng Tech index spiked 3.55%. Chinese stocks listed in Hong Kong traded higher, with Xpeng up 6.49% and Baidu rising 4.51%.
In other developments, China kept its one-year benchmark lending rate on hold at 3.7%, but cut its five-year loan prime rate (LPR) by 15 basis points. It was the second cut this year.
“This is a long-anticipated move against the backdrop of Covid disruptions, and the reduction is more than the market expected,” said Chaoping Zhu, a global market strategist and JPMorgan Asset Management.
Bank loans have declined sharply, signaling a lack of confidence among businesses and households, Zhu said in an email. Friday’s LPR cut, together with the reserve requirement ratio cut in April, may help to boost demand in the property and land market, Zhu added.
Julian Evans-Pritchard, senior China economist at Capital Economics, said the five-year LPR cut was the largest reduction on record and is aimed at supporting housing demand.
Mainland Chinese stocks climbed on Friday. The Shanghai Composite was 1.11% higher, while the Shenzhen Component gained 1.33%.
----Japan’s Nikkei 225 rose 0.97%, and the Topix advanced 0.59%. Japan’s core consumer prices, which include energy costs but not fresh food, rose 2.1% in April compared to a year earlier, in line with economists’ estimates, Reuters reported.
The S&P/ASX 200 in Australia was 1.03% higher.
In South Korea, the Kospi gained 1.68%, while the Kosdaq climbed 1.44%. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.47%.
----Overnight on Wall Street, major U.S. stock indexes fell, with the S&P 500 moving closer to a bear market. Investors fear that the Fed hikes could tip the U.S. into a recession.
The S&P 500 fell 0.58% to 3,900.79, while the Dow Jones Industrial Average dropped 236.94 points, or 0.75%, to 31,253.13. The Nasdaq Composite was down 0.26% to 11,388.50. Those moves followed sharp drops on Wednesday.
More
https://www.cnbc.com/2022/05/20/asia-markets-china-benchmark-lending-rate-wall-street-losses.html
S&P 500 falls again on Thursday, inching closer to bear market territory
The S&P 500 fell Thursday as the benchmark inched closer to a bear market. Investors continued to dump equities on fears Federal Reserve rate hikes to fight rapid inflation would tip the economy into a recession.
The broad market index fell 0.58% to 3,900.79, after falling 4% on Wednesday. The index is teetering on bear market territory sitting about 19% below its record reached in January.
The Dow Jones Industrial Average dropped 236.94 points, or 0.75%, to 31,253.13 — a day after it too experienced the biggest one-day drop since 2020 in the prior session, losing 1,164 points. The Nasdaq Composite was down 0.26% to 11,388.50 — following a 4.7% decline on Wednesday.
----The S&P 500 and Nasdaq are both down more than 3% for the week, while the Dow has lost 2.9%. Those losses were driven in part by back-to-back quarterly reports from Target and Walmart that showed higher fuel costs and restrained consumer demand hurting results amid the hottest inflation in decades. Even after a 24% drop on Wednesday, Target shares were lower again Thursday by 5.1%.
“The sharp sell-off in these companies (as well as other goods/consumer companies this quarter) shows that inflationary pressures are finally having an impact on earnings,” Maneesh S. Deshpande, head of U.S. equity strategy at Barclays, said in a Thursday note. “Despite heightened inflation for a better part of a year, [S&P 500] margins and forward earnings have remained resilient, which no longer seems to be the case.”
Cisco was the latest major company to plunge on results with the tech bellwether down 13.7% on Thursday. Cisco said after the bell Wednesday that quarterly revenue fell short of analysts expectations and it warned revenue would disappoint in the current quarter.
----Stocks have been under pressure all year with investors first pivoting away from highly-valued tech stocks with little profits. But the sell-off has since spread to more sectors of the economy, including banks and retail, as growing fears of a recession spooked investors.
A number of notable stocks in the S&P 500 hit new 52-week lows on Thursday. Target shares are trading at lows not seen since November 2020. Walmart shares are trading at their lowest point since July 2020. Shares of Bank of America and Charles Schwab dropped to their worst level since February 2021. Intel shares have fallen to lows not seen since October 2017.
“The issue now is there really appears to be nowhere to hide,” wrote Jonathan Krinsky, chief market technician with BTIG. On Wednesday, “they came for consumer names, but they still sold beaten down growth. In other words, money is rotating into cash instead of between different sectors.”
“While it won’t be a straight line, [this] is confirmation that selling rallies in bear markets is much easier than buying dips,” Krinsky said.
Several Wall Street strategists issued some dire forecasts for stocks should the Fed’s rate increases tip the economy into a recession. GDP in the first quarter decreased at a 1.4% rate so some slowing is already being seen.
Deutsche Bank cut its official target for the S&P 500 overnight, but said a recession would bring even bigger losses.
“In the event we slide into a recession imminently, we see the market selloff going well beyond average, i.e., into the upper half of the historical range and given elevated initial overvaluation, -35% to -40% or S&P 500 3000,” wrote Binky Chadha, Deutsche Bank’s chief global strategist in a note.
Meanwhile, U.S. weekly jobless claims rose to 218,000 for the week ending May 14, the Labor Department said Thursday, the latest hint that economic growth is slowing.
https://www.cnbc.com/2022/05/18/stock-market-futures-open-to-close-news.html
Age of Scarcity Begins With $1.6 Trillion Hit to World Economy
Thu, May 19, 2022, 5:01 AM
Bloomberg) -- The ties that bind the global economy together, and delivered goods in abundance across the world, are unravelling at a frightening pace.
Russia’s invasion of Ukraine and China’s Covid Zero lockdowns are disrupting supply chains, hammering growth and pushing inflation to forty-year highs. They’re the chief reasons why Bloomberg Economics has lopped $1.6 trillion off its forecast for global GDP in 2022.
But what if that’s just an initial hit? War and plague won’t last forever. But the underlying problem – a world increasingly divided along geopolitical fault lines — only looks set to get worse.
Bloomberg Economics has run a simulation of what an accelerated reversal of globalization might look like in the longer term. It points to a significantly poorer and less productive planet, with trade back at levels before China joined the World Trade Organization. An additional blow: inflation would likely be higher and more volatile.
For investors, a world of nasty surprises on growth and inflation has little to cheer equity or bond markets. So far in 2022, commodities – where scarcity drives prices higher – have been among the big winners, along with companies that produce or trade them. Shares in defense firms have outperformed too, as global tensions soar.
“Fragmentation is going to stay,” says Robert Koopman, the WTO’s chief economist. He expects a “reorganized globalization” that will come with a cost: “We won’t be able to use low-cost, marginal-cost production as extensively as we did.”
For three decades, a defining feature of the world economy has been its ability to churn out ever more goods at ever lower prices. The entry of more than a billion workers from China and the former Soviet bloc into the global labor market, coupled with falling trade barriers and hyper-efficient logistics, produced an age of abundance for many.But the last four years have brought an escalating series of disruptions. Tariffs multiplied during the US-China trade war. The pandemic brought lockdowns. And now, sanctions and export controls are upending the supply of commodities and goods.All of this risks leaving advanced economies facing a problem they thought they’d vanquished long ago: that of scarcity. Emerging nations could see more acute threats to energy and food security, like the ones already causing turmoil in countries from Sri Lanka to Peru. And everyone will have to grapple with higher prices.
----About $6 trillion of goods — equivalent to 7% of global GDP — are traded between democratic and autocratic countries. To illustrate the risks of the great unraveling, Bloomberg Economics introduced a 25% tariff on all that traffic into a model of the global economy. That’s equal to the highest rates that the US and China have leveled against each other, and it can stand in for other kinds of friction too, like sanctions and export bans.
The result: global trade plunges by some 20% relative to a scenario without the decoupling — falling back to its levels at the end of the 1990s, before China joined the WTO, as a share of GDP. That’s a huge and wrenching change.
More
https://news.yahoo.com/age-scarcity-begins-1-6-040109341.html
“There is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again.”
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.
In rising global foodstuffs inflation, it doesn’t look good for northern hemisphere grain harvest supply relief.
Wheat Tour Wrap: 39.7 bushels per acre
If realized, Kansas crop would be lowest since 2014.
By Successful Farming Staff 5/19/2022
The 2022 Kansas wheat crop is projected to average 39.7 bushels per acre - down 19 bushels per acre from 2021. The 261 million bushel total wheat crop estimate from the nation’s largest winter wheat-producing state is less than the 271 million bushels USDA projected in May and if realized, would be the lowest since 2014, when Kansas farmers grew 246.4 million bushels from 8.8 million harvested acres.
- READ MORE: Wheat Tour Day 2: 37 bushels per acre
It’s also the lowest projection from the Wheat Quality Council’s annual Hard Winter Wheat Tour of Kansas since 2018, when tour participants projected the crop to tally 38 bushels per acre.
The results, announced Thursday in Manhattan, Kansas, came after 84 participants totaled 550 field stops over six pre-determined routes throughout the state.
The final day tour included 48 field stops between Wichita and Manhattan, and groups found yield potential in that region of between 22 and 113 bushels per acre.
More
https://www.agriculture.com/news/crops/wheat-tour-wrap-397-bushels-per-acre
AccuWeather's 2022 Europe summer forecast
Hot weather will once again be prevalent across most of Europe following the continent’s hottest summer on record in 2021. AccuWeather meteorologists break down where the weather will be hotter than normal and which areas will be stormier than others.
By AccuWeather meteorologist and staff writer
Published May 18, 2022 11:00 AM BST | Updated May 17, 2022 8:05 PM BST
Summer is fast approaching and many people across Europe could be facing another summer that rivals the record-setting heat experienced in 2021, but the warm weather is only part of the story of the weather pattern across the continent in the coming months.
AccuWeather's team of long-range forecasters has been analyzing the weather patterns around the globe to piece together what will unfold across Europe in the weeks and months ahead. Both Senior Meteorologist Tyler Roys and Senior Meteorologist Alan Reppert believe that this summer could be hotter than normal for most of the continent.
Roys said that an upper-level ridge, which promotes dry, warm weather, will be "a large player" in the weather pattern over Europe throughout the summer months.
---- The widespread warmth could have a direct impact on millions of Europeans in the form of higher cooling costs.
"Energy, in general, can be a concern this summer," Roys said, "especially in the Balkans to France and Germany."
What part of the summer will be the hottest? And will severe thunderstorms disrupt summer holidays? The answers to that and more can be found below in a complete region-by-region breakdown of the 2022 Europe summer forecast:
More
https://www.accuweather.com/en/weather-forecasts/accuweather-2022-europe-summer-forecast/1188325
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.
Link between COVID-19 and Parkinson’s disease risk grows with new findings
Rich Haridy May 18, 2022
A few years after the 1918 Spanish Flu pandemic doctors around the world began to notice an increase in new Parkinson’s disease cases. This link between viral infection and increased Parkinson’s risk has been an ongoing mystery to scientists for well over a century. And the association isn’t just limited to the H1N1 influenza virus behind the 1918 pandemic. A variety of other viral infections have been linked to increased Parkinson’s risk, from Japanese encephalitis to HIV.
Early in 2020, as the novel coronavirus SARS-CoV-2 swept across the world, scientists warned of a potential spike in neurodegenerative disease in the coming years. Around five years after the 1918 pandemic new Parkinson’s diagnoses had almost tripled, and considering how pervasive COVID-19 infections have been even just a mild increase in Parkinson’s cases could lead to tens of millions of extra diagnoses over the coming decade.
A new study, from researchers at Thomas Jefferson University and New York University, is trying to understand how SARS-CoV-2 could increase a person’s risk of Parkinson’s disease. Richard Smeyne, first author on the study, said the most common explanation is called the “multi-hit hypothesis.” A viral infection doesn't directly cause neurodegenerative disease, but instead it makes the brain more susceptible to other risk factors that can trigger disease.
“We think about a ‘multi-hit’ hypothesis for Parkinson’s – the virus itself does not kill the neurons, but it does makes them more susceptible to a ‘second hit’, such as a toxin or bacteria or even an underlying genetic mutation,” said Smeyne.
A previous study by Smeyne found mice infected with the H1N1 influenza virus were more likely to experience neurodegeneration when exposed to MPTP, a molecule used to simulate Parkinson’s-like neurodegeneration in animal models. MPTP particularly targets dopamine-producing neurons in the basal ganglia so it has been used consistently for several years as a way of modeling Parkinson’s degeneration in animal studies.
The new research looked to a novel mouse model, engineered with certain human receptors to allow it to be infected with SARS-CoV-2. The animals were exposed to a dose of the virus that corresponded with a mild COVID-19 infection in humans.
The animals were allowed to recover from the acute viral infection, and then about one month later were injected with a small dose of MPTP. The dose of MPTP was so low that healthy control mice not exposed to SARS-CoV-2 did not display any neuron damage.
However, in the animals exposed to the coronavirus, the MPTP was enough to trigger a pattern of neuron damage in the basal ganglia similar to what is seen in Parkinson’s disease. The animals exposed to SARS-CoV-2 were as sensitive to MPTP damage as those animals in the prior H1N1 study.
So how could a SARS-CoV-2 infection make these neurons more susceptible to the neurodegeneration associated with Parkinson’s disease? That’s the big unanswered question.
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
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.
Isotope-pure silicon nanowires could make computer chips much cooler
Michael Irving May 17, 2022
Where there’s electricity, there’s usually heat – and that’s a major hurdle for shrinking electronic devices. Scientists have now found that nanowires made of a certain isotope of silicon can conduct heat 150 percent better than regular silicon, potentially leading to drastically cooler computer chips.
In a busy electronic system, electrical currents generate plenty of heat, which can damage components if allowed to build up. As such, cooling technology has advanced at a rapid pace too, but as electronics get smaller and smaller, it gets harder to dissipate heat effectively.
In the new study, the researchers discovered a new phenomenon that could one day be used to make computer chips with far superior cooling properties. The key is a particular isotope of silicon, known as silicon-28 (Si-28). Isotopes are atoms of a particular element that contain different numbers of neutrons.
The majority – around 92 percent – of silicon already exists as Si-28, while five percent is silicon-29 and the remaining three percent is silicon-30. In a computer chip, these isotopes have the same general electronic functions, but previous studies have found that “impurities” of Si-29 and Si-30 can interrupt the flow of heat.
In the past, scientists have found that making components out of pure silicon-28 in bulk can improve heat conduction by around 10 percent – not bad, but not really worth the extra cost. For the new study, the researchers examined how well nanowires made of pure Si-28 would conduct heat.
The team placed a Si-28 nanowire measuring just 90 nanometers wide between two microheater pads, and applied an electric current to one so the generated heat would flow through the nanowire into the other. The scientists expected the improvement to be in the realm of 20 percent or so – but to their great surprise, it performed 150 percent better than nanowires of natural silicon.
Closer examination revealed a layer of silicon dioxide had formed on the outside of the nanowire, effectively smoothing out a usually rough surface that scatters heat. On the inside, the lack of defects of other isotopes kept the heat on track to travel through the core of the nanowire.
The researchers say their work could pave the way for new computer chips that can more effectively shuttle heat away, even at tiny scales. There is one major problem, however – it remains expensive and difficult to isolate silicon-28 from other isotopes. But future advances could be made in that area too, especially with some new reasons to do so.
The research was published in the journal Physical Review Letters.
Source: Berkeley Lab
Another weekend, yet another war weekend of injury, destruction and death. And all because Biden, Johnson and Co., couldn’t negotiate a security treaty with Russia. So now millions of innocents will go hungry, unknowable thousands will starve. Millions of poor Ukrainians now refugees or displaced persons within Ukraine. All totally foreseeable before this unnecessary war was forced on misled Ukraine.
Have a great weekend everyone.
“No person can play the market all the time and win. There are times when you should be completely out of the market, for emotional as well as economic reasons.”
Jesse Livermore.
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