Baltic Dry Index. 2404 +01 Brent Crude 106.26
Spot Gold 1885
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 02/05/22 World 513,618,603
Deaths 6,261,800
I do not think it is an exaggeration to say history is largely a history of inflation, usually inflations engineered by governments for the gain of governments.
Friedrich August von Hayek
This week’s big story will likely be the Fed. How much they raise their key interest rate and the guidance they issue on inflation for the rest of the year and what they think it means for their key interest rate.
This month’s big story will probably be the food supply chain. Will North America, Europe and China get rains and favourable growing conditions for grains. Will India’s early heat dome end and bring relief to their grain harvest.
As go those two big issues, so will the stock casinos, bull or bear.
Wall St Week Ahead Rocky stock market faces Fed test with eyes on tightening plans
May 1, 2022 1:59 PM GMT+1
NEW YORK, April 29 (Reuters) - A volatile stock market faces a critical test next week, when the U.S. Federal Reserve is expected to raise interest rates and give more insight on its plans for tightening monetary policy to fight surging inflation.
Worries over an increasingly hawkish Fed have helped drag the benchmark S&P 500 index (.SPX)down 13.3% so far in 2022, , its steepest four-month decline to start any year since 1939.
While investors have ramped up expectations of how aggressively the central bank may tighten monetary policy, many are concerned the Fed will not be able to keep the economy afloat as it battles the worst inflation in nearly four decades.
Compounding concerns over monetary policy, investors have been riled by everything from rising bond yields to the war in Ukraine and more recently lockdowns in China. The market is also entering a historically weaker six-month period for stocks.
“We’re going to be in for, I think, more dicey, choppy, volatile markets here for a while longer, just because of the uncertainty,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas, who said that "things turned the other direction right at the beginning of the year,” coming off a strong fourth quarter at the end of 2021.
Investors widely expect the Fed to raise rates by 50 basis points when the central bank's meeting concludes on Wednesday. They are also bracing for signals from Fed Chair Jerome Powell about the future path of interest rates, the central bank's plans for reducing its balance sheet and its view on when inflation will recede. Policymakers raised rates in March by 25 basis points, the first increase since 2018. read more
“If the Fed continues to expect high levels of inflation and they don’t see it moderating in the future, that will be a concern for investors," said Michael Arone, chief investment strategist at State Street Global Advisors. "It will mean that the Fed will continue to raise rates and tighten monetary policy, which the market is expecting, but maybe even more aggressively."
Beyond next week's action, policymakers have coalesced around an overall increase of the federal funds rate to at least 2.5% by year end. read more
Crucial to the tightening plans will be how persistent officials view the current pace of inflation after March's consumer price index showed an annual increase of 8.5%, the largest rise in over 40 years.
More
It’s not just Russia – China’s also contributing to higher inflation worldwide, report says
Russia is guilty of creating a food security crisis and higher energy prices through its war with Ukraine, but China has — under the radar — also taken actions in three areas that are exacerbating inflation worldwide, said the Peterson Institute for International Economics.
“Russia’s war in Ukraine has taken a shocking toll on the region,” wrote PIIE analysts Chad Bown and Yilin Wang. “It has also contributed to a global food crisis, as Russia is blocking vital fertilizer exports needed by farmers elsewhere, and Ukraine’s role as the breadbasket for Africa and the Middle East has been destroyed.”
“But there is another, unappreciated risk to global food security,” they wrote in a note last week.
The analysts singled out restrictions and tariffs imposed by China in two major commodities — fertilizer and pork.
China’s curbs have extended beyond food. The Asian giant, one of the world’s biggest steel producers, has also slapped on restrictions on the material, the Washington-based think tank noted.
All those moves have led to higher prices elsewhere, even as they benefited China’s own people, according to the report.
“The trouble with China is that it continues to act like a small country. Its policies often have the desired effect at home — say, reducing input costs to industry or one set of Chinese farmers or by increasing returns to another,” the analysts wrote.
“But they can also be beggar-thy-neighbor, with China selecting the policy that solves a domestic problem by passing along its cost to people elsewhere,” they added.
Fertilizer
Prices of fertilizer in China and around the world started rising last year, as a result of strong demand and higher energy prices, but have since pushed even higher following the Russia-Ukraine war.
Last July, authorities ordered major Chinese firms to suspend exporting fertilizer “to ensure the supply of the domestic chemical fertilizer market,” PIIE noted. By October, as prices continued to rise, authorities started mandating additional scrutiny on exports.
The curbs have continued through this year, and are set to last till at least after the end of summer, Reuters reported.
“This combination of nontariff barriers led Chinese fertilizer exports to decline sharply. With more production kept at home, Chinese fertilizer prices leveled off and have since even started to fall,” the analysts wrote.
That was in stark contrast to the situation worldwide, where fertilizer prices continued to soar more than twice the levels seen a year earlier, the think tank said.
China’s share of global fertilizer exports was 24% for phosphates, 13% for nitrogen and 2% for potash — before the restrictions, according to PIIE.
PIIE analysts said that China’s decision to take fertilizer supplies off world markets only “pushes the problem onto others.”
When there is less fertilizer, less food is grown, and that “could hardly come at a worse time” given that the Russia-Ukraine war is already threatening global food supply, they added. Russia and Ukraine are major exporters of crops such as wheat, barley, corn and sunflower oil.
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.
Labor issues, idle trains leave U.S. grain and food stranded -shippers
Thu, April 28, 2022, 9:54 PM
CHICAGO (Reuters) - Rail backlogs in the United States are delaying shipment of grains as well as processed flour and corn syrup, contributing to the national problem of inflation, food and grain companies said at a hearing this week.
Russia's invasion of Ukraine has increased prices of wheat, corn and vegetable oils after the COVID-19 pandemic disrupted supply chains, and rail delays could further add to costs that are weighing on consumers.
"This is the price of bread going up. This is ethanol not getting mixed with gasoline, and the price at the pump going up," said Martin J. Oberman, chairman of the Surface Transportation Board (STB), which oversees Class I rail carriers and held the hearing.
Included in the hearing were Berkshire Hathaway Inc's BNSF Railway, Union Pacific Corp, Norfolk Southern Corp, CSX Corp, Canadian National Railway Company and Canadian Pacific Railway Ltd.
Jon Setterdahl, the product and services Leader at Landus Cooperative, said in a letter to the STB that rail transit times from the farmer-owned cooperative have more than doubled.
Landus buys grain from 7,000 farmers across Iowa and described turning away farmer loads of corn and soybeans as country grain storage elevators waited 20 days for rail carriers to pick up loaded grain cars, up from a week and a half.
"This delay in March consisted in a total five trains being delayed into April, which is a total shortage of grain shipments in that month alone of 2.250 million bushels," said Setterdahl.
U.S. food prices rose 8.8% in March from a year earlier, according to the Bureau of Labor Statistics.
Rail carriers said the delays are due to recent extreme weather and a surge in shipping demand at the end of 2021.
But shippers blame cost-saving measures at the railways before the pandemic, including labor force cuts, storing locomotives to save fuel and stretching train length to as long as 3 miles (4.8 km), which they say have increased congestion, downtime and delays.
More
https://www.yahoo.com/news/labor-issues-idle-trains-leave-205457138.html
Reckitt price hikes drive better than expected sales growth
April 29, 2022 8:33 AM GMT+1
LONDON, April 29 (Reuters) - Reckitt Benckiser Group (RKT.L) beat first-quarter sales expectations on Friday, having increased prices to offset soaring raw material costs and flat volumes.
Consumer goods manufacturers from Procter & Gamble (PG.N) to Nestle (NESN.S) have for months sought to raise prices in the face of higher supply chain and commodity expenses, with Russia's invasion of Ukraine having also driven energy prices to record highs.
The maker of Lysol cleaning products and Durex condoms said that cost inflation has increased to percentages in the "high teens". The company had said in February that full-year costs had risen by about 11% and it expected expenses to be higher in 2022. read more
"The input environment remains highly volatile and unpredictable," Reckitt said. "It has become more adverse since our last market update in February due to the ongoing war in Ukraine."
Reckitt raised prices by 5.3% during the quarter and said it now expects full-year like-for-like net revenue growth towards the upper end of its forecast of 1-4%.
More
https://www.reuters.com/business/reckitt-price-hikes-drive-56-first-quarter-sales-growth-2022-04-29/
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.
Setback for Shanghai's COVID battle; Beijing focus on mass testing
May 2, 2022 5:28 AM GMT+1
SHANGHAI/BEIJING, May 2 (Reuters) - China's commercial capital of Shanghai was dealt a blow on Monday as authorities reported 58 new COVID-19 cases outside quarantine areas while Beijing pressed on with testing millions of its people on a May Day holiday few were celebrating.
Tough coronavirus measures in Shanghai have stirred rare public anger, with millions of the city's 25 million people confined indoors for more than a month, some sealed inside fenced off residential compounds, and many struggling to secure daily necessities.
Shanghai residents breathed a sigh of relief at the weekend on news that no cases had been confirmed outside quarantine areas for two days, but bad news came on Monday with the report of the 58 new infections.
Authorities did not comment on the new cases at a media briefing but members of the public weighed in online.
"They announced that they stamped out cases at the community level too early," one person commented on the Weibo social media platform.
But many people also took heart from data that showed an encouraging trend with 32 new deaths on Sunday, compared with 38 a day earlier, and 6,606 new asymptomatic cases, from 7,084 the previous day.
More
South Africa seeing another Covid surge, this time from new omicron subvariant
Published Sat, Apr 30 2022 3:16 AM EDT Updated Sat, Apr 30 2022 3:17 AM EDT
South Africa is seeing a rapid rise in Covid-19 cases driven by yet another version of the coronavirus, health experts say.
Cases had been dropping in the country since February. But a new omicron subvariant that scientists call BA.4 began pushing up cases last week and they have risen rapidly since, said Salim Abdool Karim, who previously advised the government on its Covid-19 response.
So far, there has been only a slight rise in hospitalizations and no increase in deaths, said Abdool Karim, who is a public health expert at the University of KwaZulu-Natal.
South Africa is recording just over 6,000 Covid-19 cases a day, up from a few hundred just a few weeks ago. The proportion of positive tests jumped from 4% in mid-April to 19% Thursday, according to official figures. Wastewater surveillance has also shown increases in coronavirus spread.
The new mutant appears to be quickly achieving dominance over the original omicron and other versions of the virus, but Abdool Karim said “it’s too early to tell whether BA.4 is going to cause a fully-fledged wave.”
Still, the new version is notable because the omicron variant first emerged in November in South Africa and Botswana before sweeping around the world.
There is one concerning trend, said Helen Rees, executive director of the Reproductive Health and HIV Institute at the University of Witwatersrand in Johannesburg: Children are the first to be winding up in hospitals, just like during the original omicron surge.
More
Pfizer says COVID treatment Paxlovid fails to prevent infection of household members
April 29, 2022 11:29 PM GMT+1
April 29 (Reuters) - Pfizer Inc (PFE.N) on Friday said a large trial found that its COVID-19 oral antiviral treatment Paxlovid was not effective at preventing coronavirus infection in people living with someone infected with the virus.
The trial enrolled 3,000 adults who were household contacts exposed to an individual who was experiencing symptoms and had recently tested positive for COVID-19. They were either given Paxlovid for five or 10 days or a placebo.
Those who took the five-day course were found to be 32% less likely to become infected than the placebo group. That rose to 37% with 10 days of Paxlovid. However, the results were not statistically significant and thus possibly due to chance.
Pfizer said safety data in the trial was consistent with previous studies, which had shown the pills to be nearly 90% effective at preventing hospitalization or death in COVID patients at high risk of severe illness when taken for five days shortly after symptom onset.
“While we are disappointed in the outcome of this particular study, these results do not impact the strong efficacy and safety data we’ve observed in our earlier trial for the treatment of COVID-19 patients," Pfizer Chief Executive Albert Bourla said in a statement.
More
Covid deaths no longer overwhelmingly among unvaccinated as toll on elderly grows
Covid deaths no longer overwhelmingly among unvaccinated as toll on elderly grows
Fri, April 29, 2022, 2:21 PM
WASHINGTON — Unvaccinated people accounted for the overwhelming majority of deaths in the United States throughout much of the coronavirus pandemic. But that has changed in recent months, according to a Washington Post analysis of state and federal data.
The pandemic's toll is no longer falling almost exclusively on those who chose not to get shots, with vaccine protection waning over time and the elderly and immunocompromised - who are at greatest risk of succumbing to covid-19, even if vaccinated - having a harder time dodging increasingly contagious strains.
The vaccinated made up 42% of fatalities in January and February during the highly contagious omicron variant's surge, compared with 23% of the dead in September, the peak of the delta wave, according to nationwide data from the Centers for Disease Control and Prevention analyzed by The Post. The data is based on the date of infection and limited to a sampling of cases in which vaccination status was known.
----A key explanation for the rise in deaths among the vaccinated is that covid-19 fatalities are again concentrated among the elderly.
Nearly two-thirds of the people who died during the omicron surge were 75 and older, according to a Post analysis, compared with a third during the delta wave. Seniors are overwhelmingly immunized, but vaccines are less effective and their potency wanes over time in older age groups.
---- The bulk of vaccinated deaths are among people who did not get a booster shot, according to state data provided to The Post. In two of the states, California and Mississippi, three-quarters of the vaccinated senior citizens who died in January and February did not have booster doses. Regulators in recent weeks have authorized second booster doses for people over the age of 50, but administration of first booster doses has stagnated.
More
https://www.yahoo.com/news/covid-deaths-no-longer-overwhelmingly-132139645.html
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.
No update today.
The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.
Friedrich August von Hayek.
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