Software shares took their hardest hit since March 2020 as
investors shunned the priciest corner of the U.S. technology group that’s
particularly vulnerable to higher interest-rates and slower economic
growth.
Tech losses were huge on Thursday with the Nasdaq 100 Stock
Index sinking more than 5%. But for software makers such CrowdStrike Holdings Inc. , ZScaler Inc. and DocuSign Inc. it was brutal -- with
each falling more than 10% at one point on Thursday.
More
https://www.bloomberg.com/news/articles/2022-05-05/software-stocks-take-the-harshest-blows-in-brutal-tech-selloff?srnd=premium-europe
Asian shares hit 7-week low as
China doubles down on zero-COVID May 6, 2022 5:45 AM GMT+1
HONG KONG, May 6 (Reuters) - Asian shares tumbled to
their lowest in seven weeks on Friday but the dollar stood tall as investors
globally shunned riskier assets over fears that higher U.S. interest rates and
China's reinforcement of its zero-COVID policy could hit growth hard.
MSCI's broadest index of
Asia-Pacific shares outside Japan (.MIAPJ0000PUS) shed 2.54% on Friday morning and fell to
its lowest level since March 16, the day when Chinese vice premier Liu He
boosted shares by pledging to support markets and the Chinese economy.
The benchmark is down 3.6% from last Friday's close,
which would be its worst week since mid March. Japan's Nikkei (.N225)
bucked the trend, rising 0.8% on its return from a three-day holiday.
Chinese blue chips (.CSI300)
shed 2.6%, the Hong Kong benchmark (.HSI) lost 3.6%, and China's yuan tumbled
to an 18-month low in both onshore and offshore markets. ,
Dickie Wong, director of
research at Hong Kong brokerage Kingston Securities, attributed the falls to
the plunge in the U.S. market overnight as well as fears about the health of
the Chinese economy.
China will fight any comments and actions that distort,
doubt or deny the country's COVID-19 response policy, state television reported
on Thursday, after a meeting of the country's highest decision-making body. read more
Investors said that appeared to
rule out any easing in the zero-COVID policy, which is slowing Chinese economic
growth and snarling global supply chains.
More
https://www.reuters.com/business/global-markets-wrapup-1-2022-05-06/
Analysis: Buckle up, say traders
as Wall Street's wild ride shows no sign of end May 6, 2022 5:37 AM GMT+1
NEW YORK, May 6 (Reuters) - A massive two-day swing in
U.S. stocks highlights a trend that some market participants believe will be a
hallmark for months to come: intense volatility.
The S&P 500 index (.SPX)
dropped 3.6% on Thursday, a day after racing 3.0% higher on the Federal
Reserve’s monetary policy statement. Over the last five sessions, the index has
marked two of its biggest one-day drops since the pandemic roiled markets two
years ago, leaving the benchmark index down 13% so far in 2022. The Nasdaq (.IXIC)
plummeted 5%.
The gyrations come as investors are faced with an array
of potentially combustible factors, chief among them whether the Federal
Reserve will be able to tame surging inflation without driving the economy into
recession.
----"There is a lot of uncertainty with what is
going on, with inflation, oil, global macroeconomic events," said Matthew
Tym, head of equity derivatives trading at Cantor Fitzgerald. "I think we
are in for some volatility going forward, probably for the whole year."
The sharp selloff sent the Cboe
Volatility Index, known as Wall Street’s fear gauge, (.VIX)
up 5.78 points to 31.20, far above its long-term median of 17.63. Tym said he
believed it was unlikely the index would trade “a whole lot lower” anytime
soon.
Thursday's selloff was
extraordinarily broad with every S&P sector down on the day and more than
95% of the index constituents in the red.
"It's a clear 'get out now and
ask questions later' kind of thing," said Chris Murphy, co-head of
derivative strategy at Susquehanna International Group.
"Today's move is telling you,
the Fed can't talk its way out of this, you are going to have to take some pain
to fix this situation," Murphy said.
The stock selloff came as benchmark
10-year bond yields surged back above 3%. Higher yields can dull the allure of
stocks, particularly those in high-growth sectors such as technology, whose
companies’ cash flows are more weighted in the future and diminished when
discounted at higher interest rates.
“The bond market had started to
factor in inflation and central bank policy earlier and maybe more effectively
than the equity market," said Brooks Ritchey, co-chief investment officer
at K2 Advisors, pointing to macro hedge funds as those playing this theme.
"So we may need a bit more time or even a bit more pressure for the equity
market to be positioned for the new interest rate cycle."
Andrew Brenner, head of
international fixed income at National Alliance Securities, viewed Thursday's
sellers as funds that follow macro trends.
"It's pretty awful in the
equity markets," said Brenner, saying that the selling was a response to
Powell's remarks, as investors viewed him even more "behind the
curve" in raising rates.
The Fed is hardly the only worry
facing markets. Prices for oil and many other commodities remain sky high,
partially as a result of repercussions from the war in Ukraine. Markets remain
focused on inflation, with key U.S. consumer price data coming next week.
More
https://www.reuters.com/business/buckle-up-say-traders-wall-streets-wild-ride-shows-no-sign-end-2022-05-06/
Murphy's
Eighth Law: If everything is going well, you have obviously overlooked
something.
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our
spendthrift politicians, inflation now
needs an entire section of its own.
Turkey leads the way, but Biden and Powell are doing
their best to get the US economy to follow.
Turkey's inflation surges to 70%,
putting Erdogan in bind May 5, 2022
10:56 AM GMT+1
ISTANBUL, May 5 (Reuters) - Turkey's
annual inflation jumped to a two-decade high of 69.97% in April, according to
data on Thursday, fuelled by the Russia-Ukraine conflict and rising energy and
commodity prices after last year's lira crash.
The surge in prices has badly
strained households just over a year before presidential and parliamentary
elections that could bring the curtain down on President Tayyip Erdogan's long
rule.
Erdogan first came to power as prime
minister in 2003 before switching the country to a presidential system, and the
unorthodox interest rate cuts made last year under pressure from him have been
blamed for lighting a fire under inflation.
Month-on-month, consumer prices rose
7.25%, the Turkish Statistical Institute said, compared to a Reuters poll
forecast of 6%. Annually, consumer price inflation was forecast to be 68%.
"It's about food and energy
price increases but also the spectacular failure of monetary policy in Turkey -
and it's about the abject and total failure of Erdogan’s unorthodox monetary
policy," said strategist Timothy Ash at Bluebay Asset Management.
Last year's currency slide was
triggered by a 500 basis point-easing cycle which began last September under
pressure from Erdogan, prompting the sustained surge in consumer prices that
was stoked by fallout from Russia's invasion of Ukraine.
The surge in consumer prices was
driven by a 105.9% leap in the transportation sector, which includes energy
prices, and a 89.1% jump in food and non-alcoholic drinks prices, the data
showed.
Month-on-month, food and
non-alcoholic drink prices rose the most with 13.38% and house prices rose
7.43%.
The
lira dipped 0.9% to 14.8525 against the dollar after the release of the data.
More
https://www.reuters.com/world/middle-east/turkeys-inflation-surges-20-year-high-70-april-2022-05-05/
Column: Dry weather in Brazil
tests bumper corn crop outlook May 5, 2022
9:15 AM GMT+1
NAPERVILLE, Ill., May 4 (Reuters) -
Brazil has been slated for a record corn harvest this year after drought
ravaged the country’s soybeans just months ago and its corn a year ago, but
dryness once again threatens to curb potential on its second crop.
Brazil is typically the
second-largest corn exporter behind the United States, and those supplies
primarily stem from its second crop that accounts for three-quarters of the
full-year output.
Four states are responsible for at
least 87% of second corn production, and top grower Mato Grosso just
experienced one of its driest Aprils on record. Planting there was quicker than
normal this year with close to 90% done by the end of February.
In Mato Grosso’s crop-heavy north
region, April rains were the second-driest in more than two decades behind
2016. Coupled with hot temperatures, second corn yields dropped by 30% in 2016,
but late planting had also been an issue.
In the last couple of decades, Mato
Grosso’s corn yields were good in only one of six years where April rainfall
was notably low, and that was based on abundant May moisture. Showers could
arrive early next week, though weather models are mixed on those chances.
May rainfall is only one-third that
of April due to Mato Grosso’s seasonal patterns, though if the dry period
starts earlier than normal, ample rains are less likely to return. The
center-west state accounts for about 45% of the country’s second corn crop.
More
https://www.reuters.com/markets/commodities/dry-weather-brazil-tests-bumper-corn-crop-outlook-2022-05-05/
Steak Prices Will Keep Rising,
Major U.S. Meatpacker Says Wed,
May 4, 2022, 1:10 PM
(Bloomberg)
-- Beef will be getting even more expensive at U.S. grocery stores in the
months ahead, according to one of the country’s biggest meatpackers.
National Beef Co., controlled by the
Brazilian giant Marfrig Global Foods, sees relatively stable margins in the
next two quarters, according to Tim Klein, who heads Marfrig’s U.S. operations.
That means even though their costs to buy cattle are increasing, the company
will ultimately be able to pass that on to consumers in the form of pricier
steaks and burgers.
“Cattle prices will go up, and beef
prices will go up with them,” Klein said during an earnings interview.
The cost of meat has been a focus as
consumers grapple with the fastest inflation in four decades. The average price
for ground beef in America grocery stores has jumped 18% from a year ago,
according to the government data. American shoppers may adapt to inflation by
switching to less expensive cuts, according to Klein.
Marfrig beat analysts’ estimates for
earnings before items and revenue, posting a record for a first quarter. U.S.
operations drove the gains, while South America’s unit started a recovery amid
booming Chinese demand and improving cattle supply in Brazil, according to Miguel
Gularte, who heads operations in the region. Marfrig’s slaughterings in Brazil
rose 20% in the quarter, the double compared with the industry average, Gularte
said.
More
https://news.yahoo.com/major-u-beefpacker-says-steak-225637711.html
From coffee to ketchup, retailers
seek price 'shields' as inflation runs riot (May 05, 2022 01:27AM ET)
LONDON/NEW YORK (Reuters) - As
shoppers pay more for anything from coffee to ketchup, some retailers have
started to cut or cap the price of hundreds of products as they compete for
customers and set themselves up to do battle in negotiations with major
packaged food makers.
Eurostat said on Friday that euro
zone inflation for food, alcohol and tobacco rose by 6.4% in April versus last
year, compared with a 5% increase in March, as the rising cost of living in
Europe extends beyond expensive energy.
The head of Leclerc, France's
biggest retailer by market share, on Tuesday said it would identify the 120
items consumers buy most, including toilet paper, soap, rice and pasta, and
create a "shield" whereby Leclerc will guarantee the price of those
items from May 4 until July.
Price increases have been anywhere
between 6% and 20%. Pasta, for instance, has increased by 20%, as have some
brands of coffee and chocolate, Michel-Edouard Leclerc said in an interview
with French radio broadcaster franceinfo.
In March, European governments, some
facing elections this year, spent tens of billions of euros to shelter
households from energy costs.
There is little sign they will offer
similar help with food bills, which are a smaller part of domestic expenditure,
but politicians are nervous as household incomes are squeezed and consumer
groups have warned the poorest are having to choose between heating their homes
and eating properly.
As almost everyone becomes more
careful about how much they spend, supermarkets, which have experienced flat
margins, are anxious to avoid losing customers to the competition.
The CEO of British supermarket group
Sainsbury's told reporters last week shoppers were "watching every
penny".
An analysis of a varied basket of
goods created for Reuters by data firm Nielsen shows that prices for products
including beer, bottled water and ketchup are rising sharply, in many cases
extending big increases from last year.
On average, Europe's shoppers are
paying about 2 euros ($2.10) more for six essential food products, 8% higher
than last year. Retailers charged 8.6% more for instant coffee in the four
weeks to March 26, on average, while the price of baby milk rose by more than
21%.
More
https://www.investing.com/news/stock-market-news/from-coffee-to-ketchup-retailers-seek-price-shields-as-inflation-runs-riot-2816922
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
https://www.zerohedge.com/markets/environmental-disaster-ev-battery-metals-crunch-horizon-industry-races-recycle
Murphy's
Seventh Law: Left to themselves, things will go from bad to worse.
Covid-19 Corner
This
section will continue until it becomes unneeded.
'How did we catch it?': spread of
COVID baffles locked-down Shanghai residents May 6, 2022 12:09 AM GMT+1
SHANGHAI, May 6 (Reuters) - Veronica
thought she did everything right by sticking to all of the COVID-19 lockdown
rules in the Chinese city of Shanghai.
After the entire city was shut down
on April 1, her family of four scrupulously followed government orders to stay
at home, stepping out the front door only for mandatory PCR testing.
When curbs were relaxed slightly in
mid-April, letting residents walk about within their compounds, Veronica and
her neighbours all wore masks.
For weeks, their housing estate was
free of COVID.
But in late April, after what
Veronica thinks was her 12th PCR test, she, another member of her family, and a
handful of neighbours tested positive.
"I have no idea how we caught
it," said Veronica, who declined to give her full name, citing privacy.
Her building was declared
"sealed". She, her family and the others who tested positive were
sent into quarantine. Everyone else was ordered back indoors for another 14
days.
"I followed all the
rules," Veronica said from a quarantine centre where she and her family
are confined with hundreds of people in a vast hall.
Veronica is among thousands who have
caught COVID in compounds that had been free of the coronavirus and sealed off
for weeks.
The cases underscore how difficult
it is to stop the spread of the highly transmissible Omicron variant as China
clings to its zero-COVID policy, perpetuating a cycle of lockdowns, as well as
bafflement, anguish and anger.
Between April 21 and May 2,
residents at 4,836 different addresses found themselves in a similar situation,
with infections cropping up after weeks in the clear, according to a Reuters
examination of Shanghai government data.
On April 30 alone, 471 addresses
were recorded as having found at least one case, after registering none at all
in the previous 29 days. The number of residents at a given address varied from
a handful to hundreds.
More
https://www.reuters.com/world/china/how-did-we-catch-it-spread-covid-baffles-locked-down-shanghai-residents-2022-05-05/
Scattered, hidden COVID infection
sources remain in Beijing city-official May 5, 2022
10:46 AM GMT+1
BEIJING, May 5 (Reuters) - Beijing
city still has scattered and hidden sources of COVID-19 infections "at the
community level", and the transmission routes are yet to be blocked
entirely, a city disease and control official said on Thursday.
A total 39 new locally transmitted
COVID cases were found during the 24 hours ending at 3 p.m. Thursday (0700
GMT), adding the case count to 544 since April 22 in the current outbreak, Pang
Xinghuo, deputy director at Beijing Municipal Health Commission, told a news
briefing.
https://www.reuters.com/world/china/scattered-hidden-covid-infection-sources-remain-beijing-city-official-2022-05-05/
WHO: COVID continues to decline,
except in Americas, Africa Wed, May 4, 2022, 6:30 PM
GENEVA (AP) — The World Health
Organization said Wednesday that the number of newly reported coronavirus cases
and deaths globally continued to fall in the last week, continuing a decline
that first began in March.
In its weekly report on the
pandemic, the U.N. health agency said there were about 3.8 million new
infections and more than 15,000 deaths last week, a 17% and 3% drop on the week
respectively. But those figures are believed to be a significant underestimate
of COVID-19’s true toll as increasing numbers of countries abandon widespread
testing and surveillance.
Still, the WHO noted that cases rose
by about a third in Africa and 13% in the Americas. There was also a nearly 70%
jump in deaths reported in India, although that was attributed to delayed
reporting rather than a recent surge of disease.
Last week, authorities in South Africa said they had noted an uptick
in COVID-19 cases attributable to the BA.4 mutant of omicron, although they
said it was too early to tell if that would result in a significant new wave of
disease. Although the BA.4 version of COVID-19's omicron variant appears more
infectious than omicron, the WHO said there was no evidence yet that it was
leading to substantially higher rates of hospitalization or death.
Salim Abdool Karim, a public health expert at the
University of KwaZulu-Natal, said that while only a “modest” rise in cases had
been noted, South Africa was also in the middle of a holiday period and testing
had dropped significantly. He said the cases were slowing and were “not
following a rocket-like upward trajectory we would expect” in another spike of
disease.
At
a press briefing on Wednesday, WHO emergencies chief Dr. Michael Ryan said it
was soon to tell if COVID-19 was entering a seasonal pattern and warned against
countries dropping all of their restrictions too quickly — as many in the West
have done.
More
https://www.yahoo.com/news/covid-continues-decline-except-americas-173004586.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
https://rt.live/
Centers for Disease Control
Coronavirus
https://www.cdc.gov/coronavirus/2019-ncov/index.html
The Spectator
https://data.spectator.co.uk/city/national
Murphy's Eleventh Law: It is impossible to make
anything fool proof because fools are so ingenious.
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.
Recycled soot coating captures
solar heat better than graphene By Michael Irving May 01, 2022
Tackling
climate change doesn’t just require efforts like renewable energy – we need to
clean up existing processes too. Now, engineers have developed a way to use
soot from emissions to improve solar thermal devices, making them not only
cheaper to produce but more efficient than using materials like graphene.
Gathering
energy from the Sun doesn’t have to just involve photovoltaic solar cells –
collecting its heat can also be used to generate
electricity , purify water , cook food , or warm buildings . The
best materials for absorbing this heat are dark in color, so different forms of
carbon are most often used, including graphene or carbon nanotubes – the latter
of which is used to make some of the blackest materials
on Earth .
The problem is, producing these carbon materials in bulk
can be fiddly and expensive. So for the new study, researchers at the
University of Houston and Universidad Intercultural Indígena de Michoacán
(UIIM) in Mexico have experimented with a far more common carbon form – soot.
A by-product of burning materials like coal, wood and
hydrocarbon fuels, soot is an amorphous, impure form of carbon that wreaks
havoc on the environment
and human
health . Collecting it from the point of emission can reduce these negative
effects, and using it to improve renewable energy helps close the loop and cut
costs.
“There is no energy involved in
producing soot because it is an abundant byproduct, and its
circular-reutilization can only reduce carbon footprints,” said Francisco
Robles-Hernández, corresponding author of the study. “The cost is near-zero,
which makes it cost-effective and ideal for solar to heat conversion.”
In the study, the researchers built
a prototype solar stove. The device consisted of a mirrored dish that reflected
and focused sunlight onto its center, where a container sat. This container was
coated in a black solar-absorbing paste made with either soot or other forms of
carbon, such as graphene, nanotubes and fullerene, to compare how well they worked.
And sure enough, soot outperformed
the other materials in a few key areas. Its solar absorptivity was 96 percent
higher than commercial products, its light emission was 85 percent higher, and
it was 15 times cheaper. Compared to pristine carbon forms like graphene, soot
coatings were up to 1,000 times cheaper.
The researchers say that soot-based heat-absorbing
materials could be used for solar stills, heating for water pipes or homes,
water purifiers, and industrial drying processes.
The research was published in the journal Carbon
Source: University of Houston
https://newatlas.com/environment/recycled-soot-coating-solar-heat-capture/
Another weekend and sadly another war weekend in the Ukraine.
Though everyone is frantically trying to arm Ukraine against Russia, no one is
willing to address the issues that caused this war. Trying to bring about
peace. Instead, we are stumbling our way into World War Three. But for what?
Have a great weekend everyone.
Murphy's Thirteenth Law: Every
solution causes a new problem.
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