Monday 11 July 2022

A Difficult Week?

Baltic Dry Index. 2067 -06   Brent Crude 106.45

Spot Gold 1742          US 2 Year Yield 3.12 +0.09

Coronavirus Cases 02/04/20 World 1,000,000

Deaths 53,100

Coronavirus Cases 11/07/22 World 560,765,572

Deaths 6,373,137

 

In the stock casinos, a poor start to what looks like being a difficult week.

Hong Kong’s Hang Seng index down more than 2% as heavyweights Tencent, Alibaba plunge

SINGAPORE — Hong Kong’s Hang Seng index fell more than 2% after news that China has imposed fines on heavyweights Tencent and Alibaba.

The benchmark index declined 2.28%, with the Hang Seng Tech index dropping 3.22%.

China imposed fines on several companies, including tech giants Alibaba and Tencent, for not complying with anti-monopoly rules on disclosure of transactions, according to Reuters. Hong-Kong listed shares of Alibaba and Tencent lost 4.79% and 2.72% respectively.

Casino stocks in Hong Kong plunged following news that nearly all commercial and industrial businesses in Macao will shut for a week in a bid to stop the spread of Covid-19.

Shares of Wynn Macau in Hong Kong dropped 6.49%, Sands China fell 7.61% and Melco International Development slipped 6.42%. 

Mainland China markets traded lower. The Shanghai Composite shed 1.14%, while the Shenzhen Component lost 1.72%.

Chinese producer inflation rose 6.1% in June compared with the same period a year ago, official data released on Saturday showed. That was slightly above the expected rate of 6%, according to a Reuters poll, but slower than May’s print of 6.4%.

Consumer inflation increased 2.5% from a year earlier, also slightly higher than the 2.4% predicted in a Reuters poll.

Asia-Pacific markets

In other parts of the region, the Nikkei 225 in Japan rose as much as 2% and was last up 1.57%, while the Topix index gained 1.52%.

Japan’s ruling coalition is set to increase its majority in the upper house of the country’s parliament, local broadcaster NHK projected. Voters headed to the polls two days after former Prime Minister Shinzo Abe was assassinated while campaigning on behalf of the Liberal Democratic Party in the city of Nara.

Australia’s S&P/ASX 200 was down 0.6%.

South Korea indexes see-sawed in morning trade, and the Kospi was last down 0.28%. The Kosdaq was almost flat.

MSCI’s broadest index of Asia-Pacific shares outside Japan was 1.17% lower.

More

https://www.cnbc.com/2022/07/11/asia-markets-us-jobs-report-japan-election-currencies.html

European markets set to slide at the open as investors prepare for more U.S. inflation data

LONDON — European stocks are expected to open lower Monday as investors prepare for more key inflation data out of the U.S. this week.

The U.K.’s FTSE index is seen opening 65 points lower at 7,137, Germany’s DAX down 124 points at 12,879, France’s CAC 40 down 61 points at 5,969 and Italy’s FTSE MIB down 170 points at 21,428, according to data from IG.

The lower open for European stocks comes after the region’s markets closed higher last Friday as investors digested a stronger-than-expected jobs report out of the U.S., which showed that the economic downturn worrying investors has not yet arrived.

The jobs report, while good for the economy, could embolden the Federal Reserve to continue its aggressive rate hikes in the coming months to fight persistently high inflation. It will be tested with a slew of U.S. earnings from major banks and the latest consumer inflation reading coming up this week.

The June consumer price index on Wednesday is expected to show headline inflation, including food and energy, rising above May’s 8.6% level.

Elsewhere, investors in the U.K. will be watching developments surrounding the political uncertainty in the country after Prime Minister Boris Johnson announced last week that he would be resigning as Conservative Party leader. Johnson said he would stay on in the post while a successor was found and a number of high-profile Conservatives have announced their leadership bids over the weekend.

In Asia-Pacific markets overnight, Hong Kong’s Hang Seng index fell more than 2% after news that China has imposed fines on heavyweights Tencent and Alibaba.

China imposed fines on several companies, including tech giants Alibaba and Tencent, for not complying with anti-monopoly rules on disclosure of transactions, according to Reuters.

There are no major earnings or data releases on Monday.

https://www.cnbc.com/2022/07/11/european-markets-open-to-close-jobs-report-inflation-data-fed.html

Shares on guard for U.S. inflation, earnings tests

SYDNEY, July 11 (Reuters) - Asian shares were mostly under water on Monday as investors braced for a U.S. inflation report that could force another super-sized hike in interest rates, and the start of an earnings season in which profits could be under pressure.

An upbeat U.S. June payrolls report already has the market wagering heavily on a rise of 75 basis points from the Federal Reserve, sending bond yields and the dollar higher.

Underlining the global nature of the inflation challenge, central banks in Canada and New Zealand are expected to tighten further this week.

While Wall Street did eke out some gains last week, the market mood will be tested by earnings from JPMorgan and Morgan Stanley on Thursday, with Citigroup and Wells Fargo the day after.

"Consensus expects 2Q S&P 500 EPS (earnings per share) growth of just +6% year/year," says Goldman Sachs analyst David J. Kostin. "While firms will likely clear this low bar, we expect cautious commentary will prompt cuts to forward estimates."

More

https://www.reuters.com/markets/europe/global-markets-wrapup-1-pix-2022-07-11/

In other news, Ukraine’s new wheat harvest is underway with very little place to store it. This problem will only get worse with each passing week.

Anxiety grows for Ukraine’s grain farmers as harvest begins

ZHURIVKA, Ukraine (AP) — Oleksandr Chubuk’s warehouse should be empty, awaiting the new harvest, with his supply of winter wheat already shipped abroad. Instead, his storage bins in central Ukraine are piled high with grain he cannot ship out because of the war with Russia.

The green spikes of wheat are already ripening. Soon, the horizon will look like the Ukrainian flag, a sea of gold beneath a blue sky. Chubuk expects to reap 500 tons, but for the first time in his 30 years as a farmer, he’s uncertain about what to do with it.

“Hope is the only thing I have now,” he said.

The war has trapped about 22 million tons of grain inside Ukraine, according to President Volodymyr Zelenskyy, a growing crisis for the country known as the “breadbasket of Europe” for its exports of wheat, corn and sunflower oil.

Before Russia’s invasion, Ukraine could export 6 million to 7 million tons of grain per month, but in June it shipped only 2.2 million tons, according to the Ukrainian Grain Association. Normally, it sends about 30% of its grain to Europe, 30% to North Africa and 40% to Asia, said Mykola Horbachov, head of the association.

With Russia’s blockade of Ukraine’s Black Sea ports, the fate of the upcoming harvest in Ukraine is in doubt. The U.N. Food and Agriculture Organization says the war is endangering food supplies for many developing nations and could worsen hunger for up to 181 million people.

Meanwhile, many farmers in Ukraine could go bankrupt. They are facing the most difficult situation since gaining independence in 1991, Horbachov said.

Turkish President Recep Tayyip Erdogan has said his country is working with the U.N., Ukraine, and Russia to find a solution, offering safe corridors in the Black Sea for wheat shipments.

For now, Ukraine is trying less-effective alternatives to export its grain, at least to Europe. Currently, 30% of exports go via three Danube River ports in southwestern Ukraine.

More

Anxiety grows for Ukraine's grain farmers as harvest begins | AP News

Next, yet more bad news, for Germany. And all because no one would give valid, binding security guarantees to Russia nor back President Macron’s attempt at last minute diplomacy.

In an interesting piece of trivia, Johnson’s gone but Putin’s still there.

 

"Social Peace Is In Great Danger": Germany Is Quietly Shutting Down As Energy Crunch Paralyzes Economy

SATURDAY, JUL 09, 2022 - 04:00 PM

Earlier today we wrote that Germany's largest landlord, Vonovia, had taken the unprecedented step of restrictring heating at night, a terrifying preview of what lies in stock for the "most advanced" European nation this winter. Alas, it's going to get worse, much worse.

According to the FT, Germany is now rationing hot water, dimming its street lights and shutting down swimming pools as the impact of its energy crunch begins to spread like the proverbial Ice-Nine wave, from industry to offices, leisure centers and residential homes.

The reason behind Germany's slow motion paralysis is well-known: the huge increase in gas prices triggered by Russia’s move last month to sharply reduce supplies to Germany has plunged Europe’s biggest economy into its worst energy crisis since the oil price shock of 1973 (see "What's Unfolding In Europe In Recent Days Is A Fresh Big Negative Supply Shock")

Earlier today we wrote that Germany's largest landlord, Vonovia, had taken the unprecedented step of restrictring heating at night, a terrifying preview of what lies in stock for the "most advanced" European nation this winter. Alas, it's going to get worse, much worse.

According to the FT, Germany is now rationing hot water, dimming its street lights and shutting down swimming pools as the impact of its energy crunch begins to spread like the proverbial Ice-Nine wave, from industry to offices, leisure centers and residential homes.

The reason behind Germany's slow motion paralysis is well-known: the huge increase in gas prices triggered by Russia’s move last month to sharply reduce supplies to Germany has plunged Europe’s biggest economy into its worst energy crisis since the oil price shock of 1973 (see "What's Unfolding In Europe In Recent Days Is A Fresh Big Negative Supply Shock")

More

"Social Peace Is In Great Danger": Germany Is Quietly Shutting Down As Energy Crunch Paralyzes Economy | ZeroHedge

Finally, another bad news day for crypto-land. Does crypto-land ever have any other kind of days? A long read.

 

Investors Get Revenge on S&M Master Charged in Ponzi Scheme

Sun, July 10, 2022 at 1:00 AM

Greg—and we’ll just call him Greg, because he’s a little unsure about having his full name out there, for reasons that will soon become apparent—knew nothing about bitcoin when a friend told him it could change his life. A 54-year-old ex-pat working for a major international company in Europe, Greg had generally played it pretty safe with his investments. But in the fall of 2018, a college buddy told him about a man named David Saffron, who he claimed could double his money in crypto in a matter of weeks. “I resisted, I said I didn’t understand it, I didn’t understand crypto currency at all,” Greg told The Daily Beast. “But he kept showing me screenshots of David’s platform, that he was accruing more and more.”

Greg followed the price of bitcoin for the next few months, and when it stayed relatively stable, he reconsidered his skepticism. His friend introduced him to Saffron, who told him he was a computer programmer who had invented an artificial-intelligence trading bot that could beat the market. If Greg bought three bitcoins from him, Saffron said—the equivalent of about $12,000—he would give him 7.5 bitcoins back in three months.

More

Investors Get Revenge on S&M Master Charged in Ponzi Scheme (yahoo.com)

 

Global Inflation/Stagflation Watch.

Given our Magic Money Tree central banksters and our spendthrift politicians,  inflation now needs an entire section of its own.

Lumber prices—which warned us about inflation over a year ago—are again trying to tell us something

Sat, July 9, 2022 at 12:00 PM

Lumber markets were a harbinger of big economic shifts early on in the pandemic, and today’s slumping prices could be just as telling about the economy’s future.

Lumber prices hit a record $1,607 per thousand board feet in May 2021, due to soaring demand for new homesa boom in DIY home renovation activities, and production and supply chain issues stemming from the pandemic.

Twelve months later, lumber prices have collapsed, now going for $648, a more than 50% decrease from $1,464 in March.

High lumber prices in 2020 and 2021 were an early indicator that construction—and the economy in general—was set to go through some profound inflationary changes. Today’s slumping prices, and where lumber markets go over the next few months, could be an equally important indicator of where the economy is headed. The plummeting price of lumber might be telling us that inflation has peaked.

Lumber was kind of that kind of the canary in the coal mine that told us something was coming,” Darin Newsom, president and founder of the eponymous market analysis firm, told Fortune. “From April 2020 through May 2021, [lumber] basically led the inflation charts.”

The lumber bubble(s)

It’s been a wild ride for lumber prices over the past two years, as wood products became one of the most volatile commodities on the market throughout the pandemic.

More

Lumber prices—which warned us about inflation over a year ago—are again trying to tell us something (yahoo.com)

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

Covid-19 Corner

This section will continue until it becomes unneeded.

With Covid-19 starting to become only endemic, this section is close to coming to its end.

Macau closes casinos, most businesses as Covid outbreak worsens

Issued on: 09/07/2022 - 15:22

Hong Kong (AFP) – Macau on Saturday announced a weeklong shutdown of its casinos and non-essential businesses as the Chinese gambling hub confronted its worst coronavirus outbreak yet.

Macau will enter "static management" for a week starting July 11 and residents must stay home, with rulebreakers liable to be jailed for up to two years, top city official Andre Cheong said at a press conference.

Some public services and businesses such as supermarkets and pharmacies can stay open, but casinos -- which in normal times accounted for around 80 percent of government revenue -- will need to close their doors.

Macau on Saturday reported 71 new Covid cases, bringing the total of infections to 1,374 since the latest wave began on June 18, low by global standards but the city follows mainland China's strict zero-Covid policy.

Health officials said imposing "static management" coupled with intensive PCR testing in the outbreak's third week would help prevent a resurgence.

Last month Macau closed most of its businesses, ranging from bars to cinemas, as it adheres to China's zero-Covid strategy which seeks to stamp out the virus through lockdowns, strict border controls and mass testing.

Despite stringent health policies, the city's casinos had managed to stay open after an initial 15-day shutdown around the start of the pandemic.

But last week authorities locked down one of Macau's most famous casinos, the Grand Lisboa, and trapped more than 500 people inside after finding 13 infections linked to the venue.

The 600,000 residents of the former Portuguese colony have been told to minimise unnecessary activity outside the home and have undergone multiple rounds of citywide Covid testing.

Macau hosts a casino industry bigger than that of Las Vegas, accounting for more than half the city's gross domestic product and employing nearly one-fifth of the population.

More

Macau closes casinos, most businesses as Covid outbreak worsens (france24.com)

Meet ‘Centaurus,’ the new ‘stealth Omicron.’ It was just found in the U.S. and may escape immunity more than any other COVID strain

Thu, July 7, 2022 at 7:51 PM

A new Omicron subvariant on the radar of the World Health Organization—one some experts say could be the most immune-evasive yet—has been identified in the U.S., the Centers for Disease Control and Prevention told Fortune on Thursday.

There have been two cases of BA.2.75, dubbed “Centaurus,” detected in the U.S., with the first being identified on June 14, a spokesperson for the CDC said.

The CDC does not publicly report on emerging variants until they comprise 1% of cases. Thus, current cases of BA.2.75 are being reported on the agency’s data tracker under BA.2 cases, which comprised less than 3% of reported U.S. cases last week, according to data released on Tuesday.

Centaurus has recently risen to prominence in India, competing with the BA.5 Omicron subvariant that is sweeping the globe. WHO officials said they were tracking the ultra-new subvariant at a Wednesday press conference and released some information about it via Twitter on Tuesday.

Centaurus has recently risen to prominence in India, competing with the BA.5 Omicron subvariant that is sweeping the globe. WHO officials said they were tracking the ultra-new subvariant at a Wednesday press conference and released some information about it via Twitter on Tuesday.

BA.2.75 has been reported in “about 10 other countries” and has not been declared a variant of concern, Dr. Soumya Swaminathan, WHO's chief scientist, said in a Tuesday tweet. Transmissibility, severity, and potential for immune evasion are currently unknown, she added.

But some experts are raising potential red flags. Dr. Eric Topol, a professor of molecular medicine at Scripps Research and founder and director of the Scripps Research Translational Institute, said Monday the new subvariant’s mutations “could make immune escape worse than what we’re seeing now” with BA.5 and BA.4, both of which are subvariants known to evade immunity from both vaccination and prior infection.

More

https://www.yahoo.com/news/meet-centaurus-stealth-omicron-just-185116816.html

Next, some vaccine links kindly sent along from a LIR reader in Canada.

NY Times Coronavirus Vaccine Trackerhttps://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html

Regulatory Focus COVID-19 vaccine trackerhttps://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.

Thin mica shows semiconducting behavior, say scientists in new study

Mica, a well-known insulator, has been found to behave as a semiconductor when thinned down to a few molecular layers

Date:  July 7, 2022

Source: Shibaura Institute of Technology

Summary: Muscovite mica (MuM) is a highly stable mineral that is commonly used as an insulator. However, the electrical properties of single-layer and few-layered MuM are not well understood. Now, a group of researchers reports and explains unusually high conductivity in MuM flakes that are only a few molecule layers thick. Their findings could open doors to the development of two-dimensional electronic devices that are robust against harsh environments.

In 2004, researchers from the University of Manchester used adhesive tape to pull sheets of single carbon atoms away from graphite to make graphene -- a material that is 1000 times thinner than human hair yet stronger than steel. This ground-breaking exfoliation technique paved the way for the development of a wide range of two-dimensional materials with distinct electrical and physical characteristics for the next generation of electronic devices.

One such material of interest has been muscovite mica (MuM). These minerals have the general formula KAl2(AlSi3O10) (F, OH)and have a layered structure consisting of aluminum (Al), potassium (K), and silicon (Si). Like graphene, MuM has gained attention as an ultra-flat substrate for building flexible electronic devices. Unlike graphene, however, MuM is an insulator.

However, the electrical properties of MuM are not altogether clear. In particular, the properties of single and few-molecule-layer thick MuMs are not clearly understood. This is because in all the studies that have probed the electrical properties of MuM so far, the conductivity has been dominated by a quantum phenomenon called "tunneling." This has made it difficult to understand the conductive nature of thin MuM.

In a recent study published in the journal Physical Review Applied, Professor Muralidhar Miryala from Shibaura Institute of Technology (SIT), Japan, along with Professors M. S. Ramachandra Rao, Ananth Krishnan and Mr. Ankit Arora, a PhD student, from Indian Institute of Technology Madras, India, have now observed a semiconducting behavior in thin MuM flakes, characterized by an electrical conductivity that is 1000 times larger than that of thick MuM. "Mica has been one of the most popular electrical insulators used in industries for decades. However, this semiconductor-like behavior has not been reported earlier," says Prof. Miryala.

In their study, the researchers exfoliated thin MuM flakes of varying thickness onto silicon (SiO2/Si) substrates and, to avoid tunneling, maintained a separation of 1 µm between the contact electrodes. On measuring the electrical conductivity, they noticed that the transition to a conducting state occurred gradually as the flakes were thinned down to fewer layers. They found that for MuM flakes below 20 nm, the current depended on the thickness, becoming 1000 times larger for a 10 nm thick MuM (5 layers thick) compared to that in 20 nm MuM.

To make sense of this result, the researchers fitted the experimental conductivity data to a theoretical model called the "hopping conduction model," which suggested that the observed conductance is due to an increase in the conduction band carrier density with the reduction in thickness. Put simply, as the thickness of MuM flakes is reduced, the energy required to move electrons from the solid bulk to the surface decreases, allowing the electrons easier passage into the "conduction band," where they can freely move to conduct electricity. As to why the carrier density increases, the researchers attributed it to the effects of surface doping (impurity addition) contributions from K+ ions and relaxation of the MuM crystal structure.

The significance of this finding is that thin exfoliated sheets of MuM have a band structure similar to that of wide bandgap semiconductors. This, combined with its exceptional chemical stability, makes thin MuM flakes an ideal material for two-dimensional electronic devices that are both flexible and durable. "MuM is known for its exceptional stability in harsh environments such as those characterized by high temperatures, pressures, and electrical stress. The semiconductor-like behavior observed in our study indicates that MuM has the potential to pave the way for the development of robust electronics," says Prof. Miryala.

Thin mica shows semiconducting behavior, say scientists in new study: Mica, a well-known insulator, has been found to behave as a semiconductor when thinned down to a few molecular layers -- ScienceDaily

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