Baltic Dry Index. 2320 -22 Brent Crude 122.01
Spot Gold 1872
“The
more I read, the more I acquire, the more certain I am that I know nothing.”
Well it wasn’t exactly a “Black Friday” in the stock casinos yesterday, but as in October 1987, Friday’s action might lead to a “Black Monday” next week as gamblers face margin calls, higher interest rate rises all the way out to September, and a summer of US consumer retrenchment.
Better get the market riggers at the New York Fed’s trading desk in early on Sunday night.
Sell in May, go away, has never looked more relevant, although with global interest rates rising just about everywhere, the stock casinos are in for a crash landing. Returning to the stock casinos next Labour Day might be one or two years to early.
Dow dives 800 points, S&P 500 posts worst week since January after inflation hits 40-year high
Stocks dropped sharply on Friday after a highly anticipated inflation report showed a faster-than-expected rise in prices and consumer sentiment hit a record low.
The Dow Jones Industrial Average shed 880 points, or 2.73%, to close at 31,392.79. The S&P 500 fell 2.91% to settle at 3,900.86. The Nasdaq Composite sank 3.52% to 11,340.02.
The sell-off was broad, with nearly every member of the 30-stock Dow in the red. Declining stocks on the New York Stock Exchange outpaced advancing ones by more than 5 to 1.
Apple dropped nearly 3.9%, while Microsoft and Dow, Inc. slid about 4.5% and 6.1%, respectively. Salesforce sank 4.6%, and Amazon fell more than 5%.
Friday’s declines means Wall Street suffered its worst week in months. The Dow fell 4.58% for its 10th down week in the past 11. The S&P 500 and Nasdaq Composite lost 5.05% and 5.60%, respectively, for their ninth losing week in 10 and the worst week since January.
The May consumer price index report came in at its highest level since 1981, putting pressure on the stock market. The report showed prices rising 8.6% year over year, and 6% when excluding food and energy prices. Economists surveyed by Dow Jones were expecting year-over-year increases of 8.3% for the main index and 5.9% for the core index.
“It’s confirming some of the fears I’ve been hearing from investors this week,” said Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets. She said alarm over inflation has been driving stocks lower this week.
----The hot inflation readings have flamed concerns about a potential recession for the U.S. economy among investors and the general public. The preliminary June reading for the University of Michigan consumer sentiment index came in well below expectations, hitting a record low.
“It just reinforces the impact the CPI number had on consumer psyche. We can guess this is going to have a negative future impact on consumer spending. It’s a shocking number, but this is what inflation does when it’s running as hot as it is,” said Peter Boockvar of Bleakley Advisory Group.
Traders appeared to be preparing for a more aggressive Federal Reserve in response to the surge in prices. The 2-year Treasury yield, which is seen as one of the most sensitive to Fed rate hikes, jumped above 3% on Friday to hit its highest level since 2008.
Tech stocks were under pressure as investors grappled with higher rates and a potential recession. Shares of Netflix dropped more than 5% following a downgrade from Goldman Sachs. Chip giant Nvidia slid nearly 6%.
Banks and cyclical stocks also moved lower, possibly reflecting recession fears. Shares of Wells Fargo retreated by 6%, Goldman Sachs shed more than 5%. Boeing dropped 5%.
Stocks ended May with a rally off the 2022 lows on the speculation that maybe the worst of the inflation is behind us, but Friday’s CPI report dashed those hopes. The S&P 500 is back down nearly 19% from its record and sits roughly even with its May closing low for the year.
https://www.cnbc.com/2022/06/09/stock-market-news-open-to-close.html
Strong inflation, anxious consumers add up to more worries that recession has already arrived
The case that a recession is looming over the U.S. got stronger Friday, as blistering inflation and historic lows in consumer sentiment painted an increasingly dark economic picture.
As if the consumer price index increase of 8.6% wasn’t bad enough news, that release was followed later in the morning by the University of Michigan Index of Consumer Sentiment.
That widely followed gauge of optimism registered a paltry 50.2, the lowest in survey data going back to 1978. That’s lower than the depths of the Covid outbreak, lower than the financial crisis, lower even than the last inflation peak back in 1981.
Taken together, the data add up to an outlook that is not good for those hoping the U.S. could skirt its first recession since the brief pandemic downturn of 2020.
“I wouldn’t be surprised if it started in the third quarter of this year,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “You can say that we’re in the midst of it right now, in the beginning phase. Only in retrospect will we know for sure, but it should not surprise us at this point.”
How long it will take to get to that official recession is a matter of debate that only time will resolve. But the recent data suggest the moment of reckoning may be closer than many economists are willing to concede.
While consumer spending remains resilient, it’s come at the expense of a savings rate that has dipped to its lowest level since September 2008, the month Lehman Brothers crashed to set off the worst of the financial crisis.
Household net worth in the first quarter fell slightly, the first decline in two years, according to Federal Reserve data released earlier this week. That came as household debt rose 8.3%, the biggest annualized gain since 2006.
The Atlanta Fed is tracking second-quarter GDP growth of just 0.9%. Coming after Q1′s decline of 1.5%, a further deterioration in the current period would trigger a common rule-of-thumb for a recession — two consecutive quarters of contraction.
More
Traders Put 75 Basis Point Hike at Fed Meeting Next Week Back on the Table
nvesting.com -- An interest rate hike of 75 basis points is back on the table for next week's Federal Reserve meeting, after another surprisingly strong rise in U.S. consumer inflation in May.
The contract for 30-day Fed Funds futures on the CME, widely used for hedging short-term interest rate risk, fell by 13 basis points to 97.27 in the wake of the Labor Department's announcement that the consumer price index rose to a new four-decade high of 8.6%. That implies a hike of more than 50 basis points in the target range for fed funds when the central bank's policy-making committee meets on Tuesday and Wednesday.
"Together with another strong rise in core prices raises the odds that the Fed will need to extend its series of 50bp rate hikes into the fall, and even opens the door to a larger 75bp move at next week’s FOMC meeting," Capital Economics analysts said in a note to clients.
More
https://finance.yahoo.com/news/traders-put-75-basis-point-095635590.html
Oil falls as U.S. inflation data surges, China imposes lockdowns
June 10, 2022 9:07 PM GMT+1
NEW YORK, June 10 (Reuters) - Oil prices fell on Friday, after U.S. consumer prices rose more than expected and China imposed new COVID-19 lockdown measures.
Brent crude fell $1.06 to settle at $122.01 a barrel. U.S. West Texas Intermediate crude fell 84 cents to settle at $120.67 a barrel.
Both benchmarks still posted weekly gains, 1.9% for Brent and 1.5% for WTI.
For the day, oil prices sank along with Wall Street stocks after news that U.S. consumer prices accelerated in May. Gasoline prices have hit a record high and the cost of food has soared, leading to the largest annual increase in about 40 years. That raises expectations that the Federal Reserve will tighten policy more aggressively. read more
"The concern is that could be a forward indicator of consumer habits and even though gasoline demand is strong now, it's a sign in the future that if gasoline prices don't stabilize then consumers will be cutting back," said Phil Flynn, analyst at Price Futures.
In another red flag for demand, Shanghai and Beijing went back on COVID alert on Thursday. Parts of Shanghai imposed new lockdown restrictions and the city announced a round of mass testing for millions of residents. read more
China's crude oil imports in May were up nearly 12% from a year earlier, when they were low. read more
"This does not indicate that oil demand is picking up. Instead, China is likely to have acted opportunistically, buying crude oil from Russia at a significantly lower price than the global market level in order to replenish its stocks," Commerzbank analyst Carsten Fritsch said.
Oil had risen more than $1 earlier in the session from fears of a potential disruption in supplies in Europe and Africa.
More
“The
only man who never makes mistakes is the man who never does anything.”
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
“I can calculate the motion of heavenly bodies but not the madness of people.”
Wall Street Week Ahead: Dashed peak inflation hopes spell more pain for stocks and bonds
June 10, 2022 10:30 PM GMT+1
NEW YORK, June 10 (Reuters) - Blistering inflation is threatening to reignite twin declines in U.S. stocks and bonds, leaving investors with few places to hide from a Federal Reserve that appears headed for its most aggressive policy tightening in decades.
Friday gave a hint of what investors may see in coming weeks. The benchmark S&P 500 index (.SPX) fell nearly 3% while yields on the benchmark 10-year Treasury hit their highest level since early May after stronger-than-expected inflation data ramped up forecasts for more aggressive Fed rate hikes later this year. Bond yields move inversely to prices. read more
"Today, the inflation data was disappointing. Many hopes for a peak are now dashed," said Ryan Detrick, chief market strategist at LPL Financial. "The fears over inflation and the potential impact of profits in Corporate America are adding to the worries for investors here."
Stocks and bonds have fallen in lockstep for most of the year as tighter Fed policy lifted yields and dried up risk appetite, pummeling investors who had counted on a mix of the two assets to buffer declines in their portfolios. read more
Those moves partially reversed over the last few weeks on hopes that a potential peak in inflation would allow the Fed to turn less aggressive later this year. read more
But with markets now betting policymakers will hike rates by at least 50 basis points in their next three meetings, expectations of a less hawkish Fed are fading and investors believe more declines are on the way.
"Given that price pressures in the U.S. show little sign of easing, we doubt that the Fed will take its foot off the brakes anytime soon," analysts at Capital Economics wrote on Friday. "We therefore suspect that more pain is yet in store for U.S. asset markets, with Treasury yields rising further and the stock market remaining under pressure."
The S&P is down 18.2% year-to-date, again approaching the 20% decline from record highs that many investors consider a bear market. Yields on 10-year U.S. government bonds - a benchmark for mortgage rates and other financial instruments - have more than doubled. read more
Phil Orlando, chief equity market strategist at Federated Hermes, has beefed up cash positions in the portfolios he manages to 6% – the largest allocation he has ever held – while cutting holdings in bonds. In equity markets, he is overweight the sectors expected to benefit from rising prices, such as energy.
"You have a very difficult picture for financial markets for the next several months," he said. "Investors (have) to accept that the consensus view was wrong and inflation is still a problem."
Orlando sees fears of stagflation - a period of slowing growth and high inflation - as a key market driver.
Overall, 77% of fund managers expect stagflation in the global economy over the next 12 months, the highest level since August 2008, according to a survey by BoFA Global Research taken before Friday's inflation data.
HAWKISH VIEWS
Friday's white-hot print – which showed consumer prices rising 8.6% in May – is pushing some Wall Street banks to raise forecasts for how much the Fed will need to hike rates to stanch inflation in coming months, potentially maximizing the pain for investors.
Barclays now sees policymakers delivering their first 75- basis-point increase in 28 years when they meet next week, while Goldman Sachs strategists forecast 50-basis-point hikes at each of the next three meetings.
More
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.
Diabetes may increase long COVID risk; COVID while pregnant linked to baby brain development issues
Thu, June 9, 2022 at 7:32 PM
(Reuters) - The following is a summary of some recent studies on COVID-19. They include research that warrants further study to corroborate the findings and that has yet to be certified by peer review.
Diabetes may increase long COVID risk
Diabetes may increase the risk of long COVID, new analyses of seven previous studies suggest.
Researchers reviewed studies that tracked people for at least four weeks after COVID-19 recovery to see which individuals developed persistent symptoms associated with long COVID such as brain fog, skin conditions, depression, and shortness of breath. In three of the studies, people with diabetes were up to four times more likely to develop long COVID compared to people without diabetes, according to a presentation https://eppro02.ativ.me/web/page.php?page=IntHtml&project=ADA22&id=1683 on Sunday at the annual Scientific Sessions of the American Diabetes Association. The researchers said diabetes appears to be "a potent risk factor" for long COVID but their findings are preliminary because the studies used different methods, definitions of long COVID, and follow-up times, and some looked at hospitalized patients while others focused on people with milder cases of COVID-19.
"More high-quality studies across multiple populations and settings are needed to determine if diabetes is indeed a risk factor" for long COVID, the researchers said. "In the meantime, careful monitoring of people with diabetes... may be advised" after COVID-19.
COVID-19 in pregnancy linked with babies' learning skills
Babies born to mothers who had COVID-19 while pregnant may be at higher than average risk for problems with brain development involved in learning, focusing, remembering, and developing social skills, researchers have found.
They studied 7,772 infants delivered in Massachusetts between March and September 2020, tracking the babies until age 12 months. During that time, 14.4% of the babies born to the 222 women with a positive coronavirus test during pregnancy were diagnosed with a neurodevelopmental disorder, compared to 8.7% of babies whose mothers avoided the virus while pregnant. After accounting for other neurodevelopmental risk factors, including preterm delivery, SARS-CoV-2 infection during pregnancy was linked with an 86% higher risk of a neurodevelopmental disorder diagnosis in offspring, the researchers reported on Thursday in JAMA Network Open https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2793178.
More
https://www.yahoo.com/news/diabetes-may-increase-long-covid-183212832.html
World Health Organization - Landscape of COVID-19 candidate vaccines. https://www.who.int/publications/m/item/draft-landscape-of-covid-19-candidate-vaccines
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 more useful Covid links.
Johns Hopkins Coronavirus resource centre
https://coronavirus.jhu.edu/map.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.
Lithium-ion batteries that last longer in extreme cold
Date: June 8, 2022
Source: American Chemical Society
Summary: When temperatures fall below freezing, cellphones need to be recharged frequently, and electric cars have shorter driving ranges. This is because their lithium-ion batteries' anodes get sluggish, holding less charge and draining energy quickly. To improve electrical performance in the extreme cold, researchers have replaced the traditional graphite anode in a lithium-ion battery with a bumpy carbon-based material, which maintains its rechargeable storage capacity down to -31 F.
Lithium-ion batteries are great for powering rechargeable electronics because they can store a lot of energy and have long lifespans. But when temps fall below freezing, these energy sources' electrical performance declines, and when conditions are cold enough, they can fail to transfer any charge. It's why some people living in the U.S. Midwest have trouble with their electric cars in the dead of winter, and why it's risky to use these batteries in space explorations. Recently, scientists determined that the flat orientation of graphite in the anode is responsible for the drop in a lithium-ion battery's energy storage capacity in the cold. So, Xi Wang, Jiannian Yao and colleagues wanted to modify the surface structure of a carbon-based material to improve the anode's charge transfer process.
To create the new material, the researchers heated a cobalt-containing zeolite imidazolate framework (known as ZIF-67) at high temperatures. The resulting 12-sided carbon nanospheres had bumpy surfaces that demonstrated excellent electrical charge transfer capabilities. Then the team tested the material's electrical performance as the anode, with lithium metal as the cathode, inside a coin-shaped battery. The anode demonstrated stable charging and discharging at temperatures from 77 F to -4 F and maintained 85.9% of the room temperature energy storage capacity just below freezing. In comparison, lithium-ion batteries made with other carbon-based anodes, including graphite and carbon nanotubes, held almost no charge at freezing temperatures. When the researchers dropped the air temperature to -31 F, the anode made with bumpy nanospheres was still rechargeable, and during discharge, released nearly 100% of the charge put into the battery. Incorporating the bumpy nanosphere material into lithium-ion batteries could open up the possibilities for using these energy sources at extremely low temperatures, the researchers say.
The authors acknowledge funding from the Fundamental Research Funds for the Central Universities (China), the National Natural Science Foundation of China, the Ministry of Science and Technology of China, the Science and Technology Project of Guangdong Province, the Chemistry and Chemical Engineering Guangdong Laboratory and Beijing Jiaotong University.
This weekend’s musical diversion. Approx. 11 minutes.
Concerto Del Vivaldi / RV 257 in E♭ major (Autograph score)
https://www.youtube.com/watch?v=gGC_qST0cuk
This weekend’s chess update. Approx. 11 minutes.
THE BEST WORST QUEEN SACRIFICE EVER
https://www.youtube.com/watch?v=x7EwlAZa1Qs
This week’s maths update. Approx.8 minutes.
BULGARIAN MATHEMATICAL OLYMPIAD | Algebra Problem
https://www.youtube.com/watch?v=X3OiHW98QTE
Finally, origins. Approx. 11 minutes.
Origins of Fruits and Vegetables
https://www.youtube.com/watch?v=yZK1HcHZWDU
“The only true wisdom is in knowing you know nothing.”
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