Baltic Dry Index. 1746 +17 Brent Crude 90.14
Spot Gold 1660 US 2 Year Yield 4.02- +0.06
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 22/09/22 World 618,653,731
Deaths 6,534,713
I knew something was wrong somewhere, but I couldn’t spot it
exactly. But if something was coming and I didn’t know where from, I couldn’t
be on my guard against it. That being the case I’d better be out of the market.
Jesse Livermore.
As
expected the Fed raised their key interest rate by 0.75 percent yesterday, the
dollar rose and stocks were routed.
The
Dow fell 522 points, the S&P 500 fell 66 points, the NASDAQ fell 204
points.
Fed
Chairman Powell kept up his anti-inflation rhetoric suggesting he anticipates
interest rates rising into 2024 peaking at 4.50 percent.
In
the stock casinos, that largely means stay out of most stocks until early 2024,
a soaring dollar out to 2024.
The
inverted US yield curve widened more signalling recession directly ahead
although I think it has already started in Europe and is now starting in the
USA.
Today,
it’s the BOE and Swiss National Bank’s turn to raise their interest rates.
Fed raises rates
by another three-quarters of a percentage point, pledges more hikes to fight
inflation
The Federal Reserve on Wednesday raised
benchmark interest rates by another three-quarters of a
percentage point and indicated it will keep hiking well above the current level.
In its quest to bring down inflation running near its highest levels since the
early 1980s, the central bank took its federal funds rate up to a range of
3%-3.25%, the highest it has been since early 2008, following the third
consecutive 0.75 percentage point move.
Stocks
seesawed following the announcement, with the Dow Jones
Industrial Average most recently down slightly. The market swung as Fed
Chairman Jerome Powell discussed
the outlook for interest rates and the economy.
Traders have been concerned that the Fed is remaining more hawkish
for longer than some had anticipated. Projections from the meeting indicated
that the Fed expects to raise rates by at least 1.25 percentage points in its
two remaining meetings this year.
“My main message has not changed since Jackson
Hole,” Powell said in his post-meeting news conference, referring to his policy
speech at the Fed’s annual symposium in August in Wyoming. “The FOMC is
strongly resolved to bring inflation down to 2%, and we will keep at it until
the job is done.”
The increases that started in March
— and from a point of near-zero — mark the most aggressive Fed tightening since
it started using the overnight funds rate as its principal policy tool in 1990.
The only comparison was in 1994, when the Fed hiked a total of 2.25 percentage
points; it would begin cutting rates by July of the following year.
Along with the massive rate increases, Fed
officials signaled the intention of continuing to hike until
the funds level hits a “terminal rate,” or end point, of 4.6% in 2023. That
implies a quarter-point rate hike next year but no decreases.
More
Fed
rate hike September 2022: Rates raised by three-quarters of a percentage point
(cnbc.com)
'Fear
gauge' futures signals U.S. stock selling crescendo
September 21, 2022 10:21 PM GMT+1
NEW YORK, Sept 21
(Reuters) - Futures tied to Wall Street's fear gauge on Wednesday sent a signal
that has historically marked intense selling pressure in markets, but has
sometimes preceded stock market rebounds.
The October VIX
futures (.VIX) rose 0.28 points above the
November futures on Wednesday, the widest margin since mid-June, after Wall
Street's main indexes sold off following a 75 basis point interest rate hike by
the Federal Reserve., read more
VIX futures,
which plot volatility expectations for several months ahead, normally remain
upward sloping, with near-term futures relatively less pricey than those that
target coming months.
An inverted
curve, when near-dated contracts are more expensive than later dated ones, suggests
investors are growing more worried about near-term events, raising the cost of
hedging.
---- "It's usually a sign all the risk is being pulled
into the here and the now," said Chris Murphy, co-head of derivatives
strategy at Susquehanna International Group.
"That's why
often we will look at it as a capitulation indicator," Murphy said.
The two nearest
VIX futures last inverted in June, amid a bout of intense selling that drove
the S&P 500 <.SPX> to its bear market low. The index rebounded 17%
soon after, though most of that rally has been reversed on fears the Fed will
be more hawkish than previously anticipated.
More
'Fear
gauge' futures signals U.S. stock selling crescendo | Reuters
2-year Treasury
yield surges above 4.1% after Fed hike, highest level since 2007
The yield on the 2-year Treasury note topped 4.1%
after the Federal Reserve raised interest rates by another 0.75 percentage
point, and surged to its highest level since 2007.
The policy-sensitive 2-year Treasury rose
15 basis points to 4.113%, to a level not seen since October 2007 when it hit a
high of 4.138%. Meanwhile, the yield on the benchmark 10-year Treasury rose
to a high of 3.64%, its highest level since February 2011.
2-year
Treasury yield surges above 4.1% after Fed hike, highest level since 2007
(cnbc.com)
European markets
set to slide at the open after latest Fed hike
UPDATED THU, SEP 22 2022 12:21 AM
EDT
European stocks are
expected to open in negative territory on Thursday as investors digest another
big rate hike from the U.S. Federal Reserve, which implemented a third
consecutive 0.75 percentage point rate hike yesterday.
Policymakers
pledged to continue raising rates as high as 4.6% in 2023 before pulling back
in the fight against inflation, spurring fears on Wall Street that the economy
could tip into a recession.
U.S. stock futures fell on Wednesday
night following a volatile session for the major averages stateside while
overnight in Asia, markets
also traded lower.
In Europe, attention will be on
the Bank of England and Swiss National Bank, with both expected to hike rates
today. Earnings come from Manchester Utd football club and data releases
include consumer confidence figures for the euro zone in September.
European
markets open to close, BOE and SNB rate decisions (cnbc.com)
Yen weakens after Bank of Japan holds rates;
Asian markets sink on hawkish Fed
UPDATED THU, SEP 22 2022 12:10 AM
EDT
Asia markets traded lower on Thursday after the U.S.
Federal Reserve raised interest rates and signaled further hikes ahead. U.S.
stocks were volatile
and closed sharply lower following the announcement.
In Hong Kong, the Hang Seng index fell
1.88%, with the Hang Seng Tech index dropping 2.07%. The Shanghai Composite in
mainland China shed 0.31% and the Shenzhen Component dipped
0.57%.
The Nikkei 225 in
Japan slipped 0.79%, and the Topix index fell 0.38%.
Japan’s central bank kept
interest rates unchanged, in line with expectations.
South Korea’s Kospi dropped
1.15% and the Kosdaq lost 1.46%. MSCI’s broadest index of Asia-Pacific shares
outside Japan fell 1.37%.
Australia’s market was closed for
a holiday.
The U.S. Federal Reserve is expected to continue hiking interest
rates to as high as 4.6% in 2023, according to its median forecast.
Asia
markets: Fed hike, Bank of Japan, interest rates, currencies (cnbc.com)
Global Inflation/Stagflation/Recession
Watch.
Given
our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its
own.
A recession is now
likely in 2023. Here's what could trigger a sharp downturn in the economy.
Wed, September 21, 2022 at 10:01 AM
When it’s still sunny and mild, it’s
tough to imagine a winter storm brewing in the distance.
But it’s probably coming.
The economy is still on seemingly
sturdy footing. Job growth remains solid. Consumer and business spending have
held up despite historically high inflation and sharply rising interest rates.
And yet there are mounting warning
signs. Employment gains are slowing. Savings cushions are wearing thin.
Price increases remain high and corporate profits, which had stayed strong,
appear to have softened, underscored by a bleak FedEx warning last week that
contributed to a massive stock market selloff.
Perhaps the darkest cloud over the
economy, economists say, is that aggressive Federal Reserve interest rate hikes
designed to tame inflation are likely to take a bigger toll on growth in the
months ahead.
“The seeds of recession have been
sown,” says economist Troy Kudtka of research firm Natixis.
In an interview, Oxford Economics'
chief U.S. economist, Kathy Bostjancic, said the Fed is “on a mission…They’re
raising interest rates (sharply) until inflation slows down” even if it
triggers a downturn.
The odds of a slump are growing.
Economists surveyed this month by Wolters Kluwer Blue Chip Economic Indicators
say there’s a 54% chance of recession next year, according to their average
estimate, up from 39% in a June survey.
More
More
sectors flash recession warning amid spending cooldown
21 September 2022
More sectors of the UK economy are flashing recession signals
caused by consumers cutting spending in response to surging prices, a fresh
survey published today reveals.
Some 11 sectors out of the 14 tracked by Lloyds Bank recorded
a slump in both demand and output last month.
It is the fourth month in a row
additional sectors have reported a slowdown in spending, indicating the cost of
living crunch is weighing on businesses’ bottom lines.
Pubs, bars and restaurants notched
the biggest drop in demand, suggesting cash-strapped Brits are ditching
non-essential purchases as their budgets are squeezed by high inflation.
“The slowdown in activity spread to
more sectors of the UK economy in August,” Jeavon Lolay, head of economics and
market insight at Lloyds Bank, said.
Firms are grappling with soaring
energy bills fuelled by the international energy market being jolted by
Russia’s invasion of Ukraine.
Higher interest rates caused by the
Bank of England trying to tame inflation are also crimping businesses’
finances.
More
More sectors flash
recession warning amid spending cooldown (msn.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.
Canada
to drop vaccination demand and random Covid tests
21 September 2022
Canada,
which currently has some of the strictest Covid travel restrictions in the western world, is to
drop its requirement for vaccinations – and scrap the random testing of
arrivals.
At present Canada demands
that overseas visitors show proof of having completed a course of vaccination,
with certificates uploaded to the ArriveCan app. In addition, international
arrivals at the four biggest Canadian airports – Montreal, Toronto, Calgary and
Vancouver – may be randomly selected for a Covid test. If it is positive, the
international arrival must go into 10 days of hotel quarantine at the Canadian
government’s expense.
But the Toronto-based Globe and Mail is
reporting that the policy will be eased on Friday 30 September.
The journal says four sources
have told it that the vaccination requirement, random testing of arrivals and
mandatory completion of the ArriveCan app will be dropped by the end of the
month – though the changes, which will apply to all ports of entry, have yet to
be confirmed by Justin Trudeau’s cabinet.
Canada’s current vaccination
requirement aligns with the United States. But the random post-arrival test
injects a degree of uncertainty not usually found elsewhere.
It was
introduced in July 2022. In response, the International Air Transport
Association (Iata) said:
“Canada has become a total outlier in managing Covid-19 and travel.
“While governments across the globe are rolling
back restrictions, the government of Canada is reinstating them.”
More
Canada to drop vaccination demand and random Covid tests (msn.com)
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.
MIT
tech could keep items cool without using any electricity
Ben Coxworth September 20, 2022
In some of the world's hottest
countries, where cooling systems are most needed, the infrastructure required
to power such setups is often lacking. A new system could help in that regard,
as it provides multiple cooling effects but uses no electricity.
Building on previous research, the MIT-designed system combines evaporative cooling, radiative cooling, and thermal insulation. It provides up to 19º F (10.5º C) of cooling from the ambient temperature, and takes the form of a panel made up of three layers of different materials.
That panel can be
placed over/around an item that needs to be kept cool, such as a box containing
perishable goods like food or medication. According to MIT, the technology
could "permit safe food storage for about 40% longer under very humid conditions,"
or "triple the safe storage time under dryer conditions." It could
also be used to cool the water utilized in air conditioners, allowing those
devices to consume less power while staying just as effective.
The system's bottom
layer is a mirror-like material, which reflects incoming sunlight. This keeps
the infrared radiation within the sun's rays from heating the covered item. In
the middle is a porous hydrogel, composed mostly of water. As that liquid water
is heated, it evaporates into vapor which rises to the top layer.
That top layer is a
type of aerogel, made up mostly of air pockets contained within polyethylene
cavities. Both the water vapor and the reflected infrared rays are able to pass
through the aerogel, providing evaporative and radiative cooling, respectively.
That said, the
aerogel also serves as an insulating layer, keeping ambient heat from reaching
the item below. Additionally, like the bottom layer, it's also very
solar-reflective. Unfortunately, it's currently rather expensive to produce –
further research will focus on methods of bringing down the aerogel's
production costs.
The other materials
used in the system are "readily available and relatively
inexpensive." Maintenance would consist solely of adding more water to the
hydrogel, which would reportedly only need to be done once every four days in
very dry, hot environments, or only once a month in more humid regions.
The research is being led by
Zhengmao Lu, Arny Leroy, Jeffrey Grossman, Evelyn Wang, Lenan Zhang and Jatin Patil.
It is described in a paper that was recently published in the journal Cell Reports Physical Science.
Source: MIT
MIT tech could
keep items cool without using any electricity (newatlas.com)
I did exactly the wrong thing. The cotton showed me a loss and I
kept it. The wheat showed me a profit and I sold it out. Of all the speculative
blunders there are few greater than trying to average a losing game. Always
sell what shows you a loss and keep what shows you a profit.
Jesse Livermore.
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