Baltic Dry Index. 2485 +73 Brent Crude 110.52
Spot Gold 1900
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 05/05/22 World 515,354,689
Deaths 6,269,587
"Why, sometimes I've believed as many as six impossible things before breakfast."
Fed Chairman Powell, with apologies to Lewis Carroll and Alice.
As long anticipated in the US stock casinos, the Fed raised its key interest rate by a half of one percent.
Stocks moved sharply higher when Powell said the central bank was not considering an even more aggressive hike in future meetings.
“So a 75-basis-point increase is not something that committee is actively considering,” Powell said. “I think expectations are that we’ll start to see inflation, you know, flattening out.”
Well, he would say that wouldn’t he. After all, telling the truth and predicting a crash landing for the US economy plus inflation continuing on into 2023 albeit eventually moderating somewhat, would be far to stressful for current gamblers in over priced stocks.
Still raising the Fed’s interest rate to 0.75-1.00 percent with US official inflation running at 8.5 percent, almost 16 percent when calculated by the old methodology of the 1970s and early 80s, will do little to contain inflation.
Besides, with a full on food crisis underway flirting with a food supply catastrophe, Chairman Powell is at the mercy of the next few weeks of northern hemisphere grain crops weather and growing conditions, about which he and his gang are powerless to do anything about.
Unlike fiat dollars created at the push of a computer button out of nothing, Chairman Powell and the rest of the central bankster Lords of the Universe, can’t create wheat or rice at the push of a computer button!
Below, an optimistic view of the summer, followed by some reality.
Dow rallies 900 points as investors bet the Fed can slow inflation without causing a recession
Stocks jumped sharply on Wednesday in a relief rally from their 2022 doldrums after the Federal Reserve raised rates by a widely anticipated half percentage point and Chairman Jerome Powell ruled out getting even more aggressive in the central bank’s inflation-fighting campaign.
The Dow Jones Industrial Average rose 932.27 points, or 2.81%, to close at 34,061.06. The S&P 500 gained 2.99% to 4,300.17. The tech-heavy Nasdaq Composite jumped 3.19% to 12,964.86. It was the biggest gain since 2020 for both the S&P 500 and the Dow.
The central bank announced that it was hiking its benchmark interest rate 50-basis-points, or 0.5 percentage point, and would start reducing its balance sheet in June. That is the biggest rate increase since 2000 for the Fed, but the move was widely expected by investors.
Stocks moved sharply higher when Powell said the central bank was not considering an even more aggressive hike in future meetings.
“So a 75-basis-point increase is not something that committee is actively considering,” Powell said. “I think expectations are that we’ll start to see inflation, you know, flattening out.”
That statement helped take some of the fear out of the market, said Kim Forrest, founder of Bokeh Capital.
-----The rate hike and rally follow a brutal April for stocks, which dragged the Nasdaq into bear market territory. The S&P 500 entered Wednesday more than 13% below its record high. Both of those indexes hit their lowest levels of the year earlier this week.
Former Goldman Sachs President Gary Cohn told CNBC’s “Closing Bell” that Powell “drove it right down the middle of the road” during his news conference.
“I think the market is starting to say, ‘OK. We’ve got this pretty well priced in.’ I don’t think there’s a lot of surprises out there. We’ve taken a lot of the fluff out of the market. We’ve taken a lot of the hot air out of the market. … We’ve now got some real value,” Cohn said.
Powell said he believed the Fed could slow economic growth without causing a jump in unemployment, citing the high number of job vacancies and strong household balance sheets.
More
https://www.cnbc.com/2022/05/03/stock-market-futures-open-to-close-news.html
China's services activity falls at second sharpest rate on record - Caixin PMI
May 5, 2022 6:10 AM GMT+1
BEIJING, May 5 (Reuters) - China's services sector activity contracted at the second-steepest rate on record in April, as tighter COVID curbs halted the industry, leading to sharper reductions in new business and employment, a private-sector survey showed on Thursday.
The Caixin services purchasing managers' index (PMI) fell to 36.2 in April, the second-lowest since the survey begun in November 2005 and down from 42 in March. The index hit 26.5 in February 2020 during the onset of the pandemic, representing the biggest contraction in activity on record.
The 50-point mark separates growth from contraction on a monthly basis.
The pessimistic findings from the survey, which focuses more on small firms in coastal regions, are in line with the government's official PMI, pointing to the fast deterioration in a sector that accounts for about 60% of the economy and half of urban jobs. read more
A sub-index for new business stood at 38.4, also the second-lowest on record and down from 45.9 the previous month, with services firms reporting the escalation of measures to contain the spread of COVID cases weighed heavily on customer demand at the start of the second quarter.
A China lockdown index compiled by Goldman Sachs increased by more than 14 points on average in April from March, as the commercial hub of Shanghai went into a city-wide lockdown, with 25 million residents confined to their homes.
The private-sector survey also showed employment declined for the fourth straight month in April, although the drop was marginal, compared with sizeable falls in activity.
More
From Estee Lauder to Apple, big companies say China’s Covid restrictions are hitting business
BEIJING — Several international corporations warned in the last week the drag from China’s Covid controls will hit their entire business.
Since March, mainland China has battled an outbreak of the highly transmissible omicron variant by using swift lockdowns and travel restrictions. The same strategy had helped the country quickly return to growth in 2020 while the rest of the world struggled to contain the virus.
Now the latest lockdown in Shanghai has lasted for more than a month with only slight progress toward resuming full production, while Beijing has temporarily closed some service businesses to control a recent spike in Covid cases.
International corporations have a host of other challenges to deal with, from decades-high inflation in the U.S. and a strong dollar, to the Russia-Ukraine war. But China is an important manufacturing base, if not consumer market, that many companies have focused on for their future growth.
Here is a selection of what some of the companies have told investors about China in the last week:
Starbucks: Suspending guidance
Starbucks said Tuesday same-store sales in China fell by 23% in the quarter ended April 3 from the same quarter last year. That’s far worse than the 0.2% increase analysts expected, according to FactSet.
The coffee giant suspended its guidance for the rest of the fiscal year, or the remaining two quarters.
“Conditions in China are such that we have virtually no ability to predict our performance in China in the back half of the year,” interim CEO Howard Schultz said on an earnings call, noting additional uncertainty from inflation and the company’s investment plans.
Starbucks said it still expected its China business to be bigger than the U.S. in the long term.
Apple: Shanghai lockdown to hit sales
Despite nearly all its final assembly plants in Shanghai restarting production, Apple said the lockdowns would likely hit sales in the current quarter by $4 billion to $8 billion — “substantially” more than in the last quarter. The other factor is the ongoing chip shortage, management said on an April 28 earnings call.
More
Column: Global manufacturers lose momentum as inflation worsens
May 4, 2022 2:00 AM GMT+1
LONDON, May 3 (Reuters) - Global manufacturing growth has started to decelerate as supply chain problems, the rising cost of energy and raw materials, and the conflict between Russia and Ukraine take their toll.
Slower growth in manufacturing output and freight transport is inevitable after the recovery from the pandemic, when consumer spending shifted to merchandise from services.
As quarantines and other social-distancing restrictions are lifted, spending is being redirected back towards services such as transport, tourism and hospitality, sapping some of the demand for goods.
Slower manufacturing and freight growth will be quietly welcomed by policymakers since it is likely to ease supply chain bottlenecks and take some of the heat out of energy prices and inflation.
But as the sector loses momentum, it will become more vulnerable to shocks or policy errors that could turn a mid-cycle slowdown into a cycle-ending recession.
The range of possible outcomes for growth and inflation is wide and the room for policy errors is very narrow.
U.S. manufacturers reported another fairly widespread expansion in business activity last month but fewer firms are reporting growth compared with 2021.
The Institute for Supply Management’s purchasing managers’ index slipped to 55.4 in April from 57.1 in March and 60.6 at the same point last year.
The composite indicator is in the 69th percentile for all months since 1980 down from the 96th percentile a year ago.
The new orders measure, which is the most forward-looking component of the index, has slipped to the 35th percentile from the 93rd a year ago.
The relative weakness of new business likely portends a further slowdown in manufacturing growth over the next six months.
In the eurozone, manufacturers also reported a slower expansion last month, with the purchasing managers’ index down to 55.5 in April from 56.5 in March and 62.9 last year
----In China, manufacturers have already been hit far harder than in the other regions because they are also struggling with increasingly frequent coronavirus outbreaks and lockdowns.
China’s manufacturing index slipped to 47.4 in April from 49.5 in March and 51.1 in April 2021, according to the country’s National Bureau of Statistics.
The index has fallen to its lowest since February 2020, when the first wave of the pandemic was raging, and before that January 2009, when the economy was in the midst of the recession caused by the financial crisis.
China’s manufacturers already appear to be on the brink of recession as lockdowns close factories and disrupt supply chains.
“We’re all mad here. I’m mad. You’re mad.”
Fed Chairman Powell, with apologies to Lewis Carroll.
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Urgent action needed to tackle surge in food insecurity, U.N. agency says
May 4, 2022 9:05 AM GMT+1
LONDON, May 4 (Reuters) - Conflict, extreme weather and economic shocks increased the number of people facing food crises by a fifth to 193 million last year and the outlook will worsen without urgent action "on a massive scale," a humanitarian agency said on Tuesday.
The Global Network Against Food Crises, set up by the United Nations and the European Union, said in its annual report that food insecurity had nearly doubled in the six years since 2016 when it began tracking it.
"The outlook moving forward is not good. If more is not done to support rural communities, the scale of the devastation in terms of hunger and lost livelihoods will be appalling," the GNAFC report said.
"Urgent humanitarian action is needed on a massive scale to prevent that from happening."
Defined as any lack of food that threatens lives, livelihoods or both, acute food insecurity at crisis levels or worse grew by 40 million people or 20% last year.
Looking ahead, the report said Russia's invasion of Ukraine - both countries are major food producers - poses serious risks to global food security, especially in food crisis countries including Afghanistan, Ethiopia, Haiti, Somalia, South Sudan, Syria and Yemen.
In 2021, Somalia got more than 90% of its wheat from Russia and Ukraine, the Democratic Republic of the Congo received 80%, while Madagascar imported 70% of the food staple from the two countries.
"Countries already coping with high levels of acute hunger are particularly vulnerable to (the war) due to their high dependency on imports of food and (their) vulnerability to global food price shocks," the report said.
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.
Omicron as severe as previous COVID variants, large study finds
May 5, 2022 4:30 AM GMT+1
May 5 (Reuters) - The Omicron variant of the SARS-CoV2 virus is intrinsically as severe as previous variants, unlike assumptions made in previous studies that it was more transmissible but less severe, a large study in the United States has found.
"We found that the risks of hospitalization and mortality were nearly identical between periods," said four scientists who conducted the study based on records of 130,000 COVID-19 patients, referring to times in the past two years when different variants were dominant across the world.
The study, which is undergoing peer review at Nature Portfolio and was posted on Research Square on May 2, was adjusted for confounders including demographics, vaccination status, and the Charlson comorbidity index that predicts the risk of death within a year of hospitalization for patients with specific comorbid conditions.
The studies that assumed that the Omicron variant was less severe were conducted in various places including South Africa, Scotland, England, and Canada, said the scientists from Massachusetts General Hospital, Minerva University and Harvard Medical School.
They said their study could have several limitations, including the possibility that it underestimated the number of vaccinated patients in more recent COVID waves, and the total number of infections, because it excluded patients who performed at-home rapid tests.
Beijing curbs public transport as COVID spreads in China
May 4, 2022 9:16 AM GMT+1
BEIJING/SHANGHAI, May 4 (Reuters) - The Chinese capital Beijing shut dozens of metro stations and bus routes on Wednesday in its campaign to stop the spread of COVID-19 and avoid the fate of Shanghai where millions of residents have been under strict lockdown for more than a month.
New evidence has emerged that China's uncompromising battle against the coronavirus, believed to have emerged in a market in the city of Wuhan in late 2019, is undermining its growth and hurting the international companies invested there.
Late on Tuesday, another city announced work-from-home and other COVID curbs for the coming week. The central city of Zhengzhou, home to 12.6 million people and a factory of Apple's iPhone manufacturer Foxconn (2354.TW), joins dozens of big cities in full or partial lockdown.
The capital shut more than 40 subway stations, about a tenth of the network, and 158 bus routes, service providers said. Most of the suspended stations and routes are in the Chaoyang district, the epicentre of Beijing's outbreak.
With dozens of new cases a day, Beijing is trying to avoid a full lockdown, as Shanghai also did initially, instead hoping that mass testing will find and isolate the virus before it can spread.
The city of 22 million people has closed schools as well as some businesses and residential buildings in high-risk areas, and many people are stocking up in case a full lockdown does come. read more
Twelve out of 16 Beijing districts were conducting the second of three rounds of tests this week, having done three mass screenings last week.
In Shanghai, there's no end in sight for the lockdown.
After more than a month, most people in mainland China's biggest city and its financial centre are still not allowed to leave their housing compounds.
Some of Shanghai's 25 million people have benefited from a tentative easing of precautions since Sunday, with usually just one member of a household allowed out for a quick stroll, some fresh air and a bit of shopping at supermarkets.
According to the latest data, Shanghai found 63 new cases outside areas under the strictest curbs, suggesting the city has a way to go to reach the goal of no cases for several days before curbs can ease significantly.
Authorities say the zero-COVID policy aims to save as many lives as possible, pointing to the millions of COVID deaths outside China, where many countries are throwing off precautions to "live with COVID" even as infections spread.
But the policy is hurting domestic consumption and factory output, disrupting key global supply chains and shrinking revenues for some of the biggest international brands, such as Apple (AAPL.O), Gucci-parent Kering (PRTP.PA) and Taco Bell-owner Yum China (9987.HK). read more
Capital Economics estimates COVID has spread to areas generating 40% of China's output and 80% of its exports - all facing various degrees of restrictions.
More
https://www.reuters.com/world/china/beijing-curbs-public-transport-covid-spreads-china-2022-05-04/
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.
Turkey to become one of top solar panel producers: Minister
Neşe Karanfil- ANKARA May 04 2022 07:00
Turkey aims to increase its solar power panel production capacity to 9,110 megawatts by 2023 and become one of the top three producers in the world in this field, Energy and Natural Resources Minister Fatih Dönmez has said.
Increasing the share of renewables in total installed electricity production capacity is crucial for ensuring energy security and investments made in this field are yielding results, Dönmez said.
“However, only boosting renewables’ share is not enough, the technology related to renewables must also be developed. Turkey has succeeded in this. We have become one of the leading countries in the world in wind power and solar power.”
With new investments Turkey aims to become one of the three top producers of solar panel producers, Dönmez said.
The world’s solar panel production capacity presently is 185,000 megawatts, with China topping the list at 124,000 megawatts, followed by Vietnam at 14,000 megawatts. South Korea ranks third at 9,200 megawatts, while Turkey follows this country with its production capacity of 7,960 megawatts.
Meanwhile, the country has been boosting its use of solar power over the past decade. According to data from the Energy and Natural Resources Ministry, Turkey’s installed solar power capacity rose from 40 megawatts in 2014 to more than 8,000 megawatts in 2022.
Turkey has increased its installed electricity production capacity from 31,846 megawatts in 2002 to more than 100,000 megawatts as of end-March 2022. In line with the increase in installed capacity, the renewable sources raised their share in total power generation rose over the years. The share of renewables rose from 38 percent in 2002 to 54 percent.
The wind power installed capacity in Turkey reached 10,864 megawatts. Turkey is producing a wage range of components of the equipment, including turbines, that are used for wind power generation locally.
No comments:
Post a Comment