Baltic Dry Index. 2098 -61 Brent Crude 103.83
Spot Gold 1769 US 2 Year Yield 2.82 -0.02
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 06/07/22 World 556,478,164
Deaths 6,364,560
“As government expands, liberty contracts.”
From stocks, to commodities to bonds, confusion rules in the gigantic mid-year battle between a new arriving recession and out of control central bankster caused inflation.
When elephants fight it’s best to get out of their way.
Below, time to exit most markets. What comes next could get very ugly mimicking the bitcoin collapse.
Greater China stocks lead losses as Covid concerns resurge; Asia-Pacific markets fall
SINGAPORE — Greater China stock indexes led losses as Covid concerns resurge, while Asia-Pacific markets traded lower on Wednesday. Oil futures rose after plunging overnight.
Hong Kong’s Hang Seng index slipped 1.37%, with heavyweights HSBC and CNOOC falling 3.93% and 5.58% respectively.
Mainland China markets also declined. The Shanghai Composite shed 1.34%, and the Shenzhen Component lost 1.08%.
“New rounds of Covid testing in Shanghai have increased fears of further lockdowns for China, which would have a ripple effect on other markets,” an ANZ Research note dated Wednesday said.
Shanghai will be conducting mass testing in several districts after Covid cases were detected earlier this week, a statement on the city’s WeChat account said.
Some 11 cities in China were restricting local movement as of Monday, up from five cities a week earlier, according to Ting Lu, chief China economist at Nomura.
Japan’s Nikkei 225 fell about 1% and the Topix index slipped 1.3%.
In South Korea, the Kospi declined 1.13%, but the Kosdaq gained 0.51%.
The S&P/ASX 200 in Australia was 0.34% lower.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.78%.
U.S. stock indexes initially fell sharply on Tuesday stateside before rallying in the afternoon. The Nasdaq Composite ended the session 1.75% higher at 11,322.24, while the S&P 500 was up 0.16% at 3,831.39.
The Dow Jones Industrial Average shed 129.44 points, or 0.4%.
The U.S. 10-year Treasury yield and the 2-year yield inverted on Tuesday in the U.S., a closely watched measure that signals recession. Longer duration yields are usually higher than shorter duration yields. But the 2-year yield was last at 2.8426, above the 10-year yield of 2.8364.
“There is no doubt that recession is the biggest issue markets are currently grappling with, both equity, fixed income and frankly commodity markets as well,” Ben Snider, a senior strategist at Goldman Sachs, told CNBC’s “Squawk Box Asia” on Wednesday.
In central bank news, Bank Negara Malaysia is expected to release its monetary policy statement today. Analysts polled by Reuters expect the bank to raise rates by 25 basis points.
https://www.cnbc.com/2022/07/06/asia-markets.html
In the crude oil market it’s recession v supply shortage. But if Russia retaliates against “unfriendly nations” by reducing their supply in any significant way, we will likely get recession and sky high crude oil and natural gas prices.
Oil prices bounce back from Tuesday tumble as supply concerns return
July 6, 2022 4:13 AM GMT+1
KUALA LUMPUR, July 6 (Reuters) - Oil prices rose as much as nearly 3% on Wednesday before paring some gains as investors piled back into the market after a heavy rout in the previous session, with supply concerns returning to the fore even as worries about a global recession linger.
Brent crude futures rose as much as $3.08, or 2.9%, to $105.85 a barrel in early trade after plunging 9.5% on Tuesday, the biggest daily drop since March. It was last up 92 cents, or 0.9%, at $103.69 a barrel at 0243 GMT.
U.S. West Texas Intermediate crude climbed to a session high of $102.14 a barrel, up $2.64, or 2.7%, after closing below $100 for the first time since late April. It was last up 46 cents, or 0.5%, at $99.96 a barrel.
"Today is sort of a reset. No doubt there is short covering and bargain hunters are coming in," said John Kilduff, partner at Again Capital LLC.
"The fundamental story regarding global tightness is still there ... The sell-off was definitely overdone," he added.
OPEC Secretary General Mohammad Barkindo said on Tuesday that the industry was "under siege" due to years of under-investment, adding shortages could be eased if extra supplies from Iran and Venezuela were allowed. read more
Russia's former president Dmitry Medvedev also warned that a reported proposal from Japan to cap the price of Russian oil at around half its current level would lead to significantly less oil in the market and push prices above $300-$400 a barrel
On the other hand, the Norwegian government on Tuesday intervened to end a strike in the petroleum sector that had cut oil and gas output, a union leader and the labour ministry said, ending a stalemate that could have worsened Europe's energy crunch. read more
By Saturday, the strike would have cut daily gas exports by 1,117,000 barrels of oil equivalent (boe), or 56% of daily gas exports, while 341,000 of barrels of oil would have been lost, the Norwegian Oil and Gas (NOG) employers' lobby said.
Worries about a recession, however, have continued to weigh on markets. By some early estimates, the world's largest economy may have shrunk in the three months from April through June. That would be the second straight quarter of contraction, considered the definition of a technical recession. read more
More G10 central banks raised interest rates in June than in any month for at least two decades, Reuters calculations showed. With inflation at multi-decade highs, the pace of policy-tightening is not expected to let up in the second half of 2022. read more
"Although crude oil still faces the problem of a supply shortage, key factors that led to the sharp selloff in oil yesterday remain," said Leon Li, a Shanghai-based analyst at CMC Markets. He cited policy tightening by global central banks and a likely interest rate hike by the U.S. Federal Reserve as pressuring commodities prices.
More
Finally, what does the Old Lady of Threadneedle Street know that we don’t?
Bank of England tells lenders to brace for economic storm
July 5, 202211:28 AM GMT+1
LONDON, July 5 (Reuters) - The Bank of England warned on Tuesday that the economic outlook for Britain and the world had darkened and told banks to ramp up capital buffers to ensure they can weather the storm.
"The economic outlook for the UK and globally has deteriorated materially," the BoE said as it published its latest Financial Stability Report, adding that developments around the war in Ukraine would be a key factor.
International forecasters like the IMF and OECD say Britain is more susceptible to recession and persistently high inflation than other Western countries, all of whom are grappling with global energy and commodity market shocks.
British banks were well-placed to weather even a severe economic downturn, the BoE said, although it noted their capital ratios - while still strong - were expected to decline slightly in the coming quarters.
Members of the Financial Policy Committee (FPC) confirmed that the BoE will double the counter-cyclical capital buffer (CCYB) rate to 2% July next year, and said it could vary the rate in either direction depending on how the global economy pans out.
The CCYB rate represents an extra buffer for banks that varies depending on the economic outlook.
Despite a worsening cost-of-living crunch, with inflation heading towards double digits, the BoE said banks were resilient to debt vulnerabilities among households and businesses.
The central bank also expressed unease over the health of core financial markets - such as U.S. and British government bonds - which were the subject of the March 2020 "dash for cash" when the COVID-19 pandemic prompted panic selling.
"Amid high volatility, liquidity conditions deteriorated even in usually highly liquid markets such as U.S. Treasuries, gilts and interest rate futures," the BoE said.
It noted that core British markets - while still functional - had become more expensive to trade, with bid-ask spreads on short-dated gilts more than doubling compared with their 2021 average.
More
Bank of England tells lenders to brace for economic storm | Reuters
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Australian central bank boosts rate for 3rd month in a row
5 July 2022
CANBERRA, Australia (AP) — Australia’s central bank on Tuesday lifted its benchmark interest rate for a third time in three straight months, changing the cash rate to 1.35% from 0.85%.
The Reserve Bank of Australia’s half a percentage point rise was the same size as its June increase.
When the bank lifted the rate by a quarter percentage point at its monthly board meeting in May, it was its first rate hike in more than 11 years.
Increases at the June and July board meetings were widely expected. Reserve Bank governor Philip Lowe said in May it was “not unreasonable” to expect the cash rate to climb to 2.5%.
Lowe said on Tuesday that inflation in Australia was high, although not as high as it is in many other countries.
“Global factors account for much of the increase in inflation in Australia, but domestic factors are also playing a role,” Lowe said in a statement.
“Strong demand, a tight labor market and capacity constraints in some sectors are contributing to the upward pressure on prices,” he said, adding that recent floods were also affecting some prices.
The board expected to take further steps “over the months ahead,” he said.
“The size and timing of future interest rate increases will be guided by the incoming data and the board’s assessment of the outlook for inflation and the labor market,” Lowe added.
More
https://apnews.com/article/inflation-australia-70480c994b9a22ba7a38aa0edfd2297a
German trade balance pushed into deficit as exports fall
04 Jul, 2022 11:48
German exports fell last month, official data showed on Monday, pushing the country’s trade balance into a surprise deficit.
According to Destatis, the Federal Statistics Office, German exports were down 0.5% in May, while imports rose 2.7% on a calendar and seasonally-adjusted basis, when compared with April.
In total, Germany exported goods worth €125.8bn and imported goods worth £126.7bn, giving it a trade deficit of €1.0bn compared to a revised surplus of €3.0bn in April. Analysts had been expecting a surplus of around €2.7bn.
It is the first time the Eurozone’s largest economy – which is heavily reliant on exports – has reported a monthly deficit since 1991.
Exports to the European Union eased 2.8% compared to April, while imports rose 2.5%. Outside of the bloc, exports rose 2.3% and imports by 2.9%. Exports to the Russian Federation rose 29.4%, following a near 60% slump in April., while imports fell 9.8%.
Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics, said: “Germany’s trade surplus has now evaporated, thanks mainly to soaring imports, offsetting otherwise decent momentum in exports. We always thought the consensus looked a bit too optimistic, given the clear risk of mean reversion in exports.
More
German trade balance pushed into deficit as exports fall - Sharecast.com
Italy declares state of emergency in drought-stricken north
Issued on: 05/07/2022 - 04:09
Italy declared a state of emergency in five northern regions and announced emergency funds on Monday over a worsening drought that has plagued the Po Valley in recent weeks.
The cabinet approved a state of emergency in five regions—Friuli-Romagna, Friuli-Venezia Giulia, Lombardy, Piedmont and Veneto—until December 31, the government said in a statement that also announced a 36.5 million-euro ($39.5 million) fund to help those affected.
Italy is facing an unusually early heatwave and a lack of rainfall, particularly in the northern agricultural Po Valley, which has been hit by its worst drought in 70 years.
The state of emergency provides “extraordinary means and powers” to help guarantee public safety, compensation for losses while seeking to guarantee normal living conditions for those in the area.
According to the country’s largest agricultural union, Coldiretti, the drought threatens more than 30 percent of national agricultural production, and half of the farms in the Po Valley, where Parma ham is produced.
Lakes Maggiore and Garda were also hit by lower than normal water levels for this time of year, while further south the Tiber River, which runs through Rome, also dropped.
The Po represents the peninsula’s largest water reservoir, much of which is used by farmers.
In recent days, several municipalities have announced restrictions.
Verona, a city of a quarter of a million people, has rationed the use of drinking water, while Milan has announced the closure of its decorative fountains.
Another consequence of the drought is that hydroelectric power production has fallen sharply.
More
Italy declares state of emergency in drought-stricken north (france24.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
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.
Covid variants: How many strains are in circulation and on the rise around the world? (cloned)
Omicron sub-variants driving up coronavirus cases in UK and being monitored closely
5 July 2022
The UK is currently facing its fifth wave of Covid-19 infections, experts have warned, as cases hit 1.7m in the latest weekly figures, a 23 per cent climb week-on-week (w-o-w).
More worryingly, hospitalisations have increased 31 per cent w-o-w, climbing at a higher rate than the last Omicron revival back in March.
The situation first became apparent in the aftermath of the four-day public holiday to celebrate the Queen’s Platinum Jubilee when a 43 per spike in coronavirus cases was reported and it is feared that other major summer gatherings like Glastonbury, Notting Hill Carnival and the Edinburgh Festival could all amount to super-spreader events if proper precautions are not taken.
The surge is reportedly being driven by the BA.4 and BA.5 sub-variants of Omicron, the strain that spread rapidly across the UK in December 2021 and January 2022 before gradually falling away.
These latest incarnations were first discovered in South Africa in January and February respectively and are effectively the grandchildren of Omicron.
They feature three mutations to their spike proteins, which, it is feared, enable them to retrain their attack on human lung cells.
That means they have more in common with the earlier, more dangerous Alpha and Delta variants than the highly transmissible but milder Omicron, which targeted upper respiratory tract tissue.
Potentially, these mutations might also enable the sub-variants to sidestep antibodies from past infections or vaccination and therefore overcome immunity.
Preliminary data captured by Professor Kei Sato of the University of Tokyo in Japan appears to indicate as much, prompting the virologist to comment: “Altogether, our investigations suggest that the risk of [these] Omicron variants, particularly BA.4 and BA.5, to global health is potentially greater than that of original BA.2.”
While immunity is high in Britain, with 87.1 per cent of the population having had two vaccine doses and 68.6 per cent of people having received a booster jab, the public has largely behaved as though the pandemic never happened since the last of Boris Johnson’s government’s unpopular restrictions were repealed a month ahead of schedule on 24 February, abandoning face masks and distancing and returning to life as normal.
More
https://www.independent.co.uk/news/health/covid-19-variants-list-uk-b2116016.html
Covid-19 deaths at low level despite growing wave of infections
The latest wave is being driven by the newer variants Omicron BA.4 and BA.5.
5 July, 2022
Covid-19 deaths in England and Wales remain at a low level, despite the latest wave of infections, new figures show.
There were 285 deaths registered in the week to June 24 where coronavirus was mentioned on the death certificate, according to the Office for National Statistics (ONS).
More
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
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.
New energy-dense lithium-sulfur battery works at extreme temperatures
Nick Lavars July 04, 2022
As part of their research into next-generation battery technology, scientists at University of California, San Diego are exploring designs that can function at extreme temperatures, and they're beginning to make some significant inroads. In their latest study, the team demonstrates a lithium battery that can not only operate at freezing cold and scorching hot temperatures, but may store double the energy of current devices and be friendlier to the environment while it's at it.
Last year, we looked at an interesting breakthrough from the same group of researchers, which stemmed from an ability to manipulate the movement of ions in a lithium battery. This is facilitated by a reinvented electrolyte solution, which ferries the lithium ions between a battery's two electrodes, the cathode and anode.
The team found success with an electrolyte that formed weaker bonds with the lithium ions, which allowed for a more uniform distribution of them during charging. This weak-binding electrolyte was integrated into an experimental lithium battery with a high-density metal anode and a sulfur-based cathode that was able to operate at sub-zero temperatures while retaining much of its capacity.
By continuing to experiment with its electrolyte recipe, the scientists have now developed a version that operates at the other end of the spectrum as well. The new electrolyte features lithium salt and dibutyl ether, a chemical compound with a boiling point of 141 °C (286 °F), enabling the electrolyte to remain liquid at high temperature.
In proof-of-concept experiments with this electrolyte, the batteries were able to retain 87.5 percent of their capacity at -40 °C (-40 °F) and 115.9 percent of their capacity at 50 °C (122 °)F. They also demonstrated high Coulombic efficiencies of above 98 percent at these temperatures, which relates to their ability to handle more charge cycles before the end of the lives.
A battery with an ability to function at cold temperatures could make for electric vehicles with greater ranges in cold climates. Conversely, a battery that can safely operate at higher temperatures could eliminate the need for cooling systems to prevent overheating, in addition to other advantages.
More
I have wondered at times what the Ten Commandments would have looked like if Moses had run them through the US Congress.”
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