Baltic Dry Index. 1819 -18 Brent Crude 93.50
Spot Gold 1658 U S 2 Year Yield 4.49 -0.13
Dow
climbs more than 700 points on Friday as Wall Street clinches its best week
since June
UPDATED FRI, OCT 21 2022 4:59 PM EDT
Stocks climbed on Friday as Wall Street closed a
volatile week on a high note despite some disappointing earnings reports.
The Dow Jones Industrial Average gained 748.97
points, or 2.47%, to close at 31,082.56. The S&P 500 rose 2.37% to
3,752.75. The Nasdaq Composite added 2.31% to 10,859.72.
Friday’s moves extended the market’s gains for the
week. The S&P 500 and Dow gained 4.7% and 4.9%, respectively, while the
Nasdaq rose 5.2%. It was the best week since June for all three major averages.
The advance came despite the 10-year Treasury yield
surging to its highest level since 2008 and a mixed bag of corporate earnings
reports.
“I think at the end of last week market’s got a
little bit oversold technically. And as we’ve seen so many times in the past,
when things get negative enough it becomes some sort of a contrarian indicator
for a bounce,” said Randy Frederick, managing director of trading and
derivatives at the Schwab Center for Financial Research.
“But like every other bounce we’ve had, it hasn’t
been very well sustained. ... A bounce today doesn’t necessarily mean it’s
going to continue into next week. If it does, I suspect it won’t be more than a
day or two,” Frederick added.
Bank stocks were a bright spot on Friday, with
Goldman Sachs gaining 4.6% and JPMorgan Chase adding 5.3%.
Earnings reports limited gains for the market.
Dow components American Express and Verizon fell about 1.6% and 4.5%,
respectively, after their quarterly reports. In tech, social media company Snap
fell 28% after reporting a quarterly revenue of $1.13 billion, below
expectations.
Treasury yields fell from their
highs on Friday morning after a report
from the Wall Street Journal that some Fed officials are
concerned about overtightening with large rate hikes. That report appeared to
boost equities as well.
The central bank’s aggressive
rate hikes have been a major factor in stocks falling into a bear market this
year, and traders have continued raising their estimates of where the Fed will
stop.
“We really need a Fed pause. Not
so much that they would just outright disavow future rate hikes, but that they
would just say every meeting is live, and if the data go our way then after the
first half of ’23 we don’t have to do more,” said Stifel chief equity
strategist Barry Bannister on CNBC’s “Squawk on the Street.”
Inflation is not becoming
'embedded' in economy, Yellen says
October
21, 2022 6:51 PM GMT+1
HERNDON, Virginia, Oct 21 (Reuters) - Inflation is
not becoming a permanent part of the U.S. economic picture, Treasury Secretary
Janet Yellen told reporters Friday, addressing a growing concern that high
prices could be here to stay for Americans.
"I don't believe it's becoming embedded in the
U.S. economy," she said, when asked about recent consumer and producer
price reports which showed persistent price gains.
"The way inflation would become embedded is if
you saw expectations of inflation over the medium term rising to levels that
are inconsistent with 2% inflation, and then those higher inflation
expectations being built into wages and prices."
Yellen said while recent data showed more needs to
be done to bring inflation down, she did not believe it was entrenched. That
was one of the reasons why she "continues to believe that there is a path
to lowering inflation while maintaining a strong labor market," she said.
Yellen added that she saw some costs, including
production and shipping costs, coming down.
Inflation
is not becoming 'embedded' in economy, Yellen says | Reuters
U.S. budget deficit cut in half for biggest decrease
ever amid Covid spending declines
The U.S. budget deficit was sliced in half for
fiscal 2022, the biggest drop in history following two years of huge
Covid-related spending.
Though still large in historical terms, the budget
shortfall declined to $1.375 trillion, compared to the 2021 deficit of $2.776
trillion.
The decline would have been steeper had it not been
for the Biden administration’s student loan forgiveness program. Education
spending totaled $639.4 billion for the fiscal year, $408 billion higher than
estimated.
The 2022 fiscal year saw $4.896 trillion in revenue
against $6.272 trillion in outlays. The outlays number represented about a $550
billion decline in spending but an $850 billion increase in revenue. The
revenue total is by far the highest ever for the U.S. government.
Deficits in the previous two years soared as
Congress shelled out massive sums to combat the pandemic.
The shortfall hit a record $3.13 trillion in 2020
due to more than $5 trillion in CARES Act spending and other outlays. In 2019,
the deficit was $983.6 billion. Prior to 2020, the highest deficit ever was
$1.41 trillion in 2009 as the financial crisis came to a close. The U.S.
briefly ran a surplus from 1998 to 2001.
In fiscal 2021, legislators passed the American
Rescue Plan, a $1.9 trillion spending package that the White House said helped
get the nation through a severe health and economic crisis, but which critics
say was unnecessary and helped fuel the highest inflation rate in more than 40
years.
President Joe Biden, however, placed the deficit
blame on Republicans for approving the 2017 tax cut bill.
Elon Musk says a global recession could last until the
spring of 2024
Tesla founder and CEO Elon Musk thinks
the global economic decline could last for another year and a half.
In a Twitter exchange early Friday
morning Eastern time, the mercurial electric car executive and world’s richest
man said a recession could continue “until spring of ’24.”
The remarks came in response to a
tweet from Shibetoshi Nakamoto, the online name for Dogecoin co-creator Billy
Markus, who noted that current coronavirus numbers “are actually pretty low. i
[sic] guess all we have to worry about now is the impending global recession
and nuclear apocalypse.”
“It sure would be nice to have one year without a
horrible global event,” Musk replied.
Tesla Owners Silicon Valley, a Twitter account with
nearly 600,000 followers, then asked Musk how long he thought the recession
would last, to which he replied, “Just guessing, but probably until spring of
’24.”
Global GDP grew 6% in 2021 but is expected to
decelerate to 3.2% this year and 2.7% in 2023, according to the International Monetary Fund.
That would mark the weakest pace of growth since 2001 outside of the financial
crisis in 2008 and the brief plunge in the early days of the Covid pandemic.
The Federal Reserve projects GDP in the U.S.
to grow just 0.2% this year and 1.2% in 2023.
Musk becomes the latest corporate
titan to express reservations about the economy.
In a tweet Wednesday, Amazon
founder Jeff Bezos said it’s
time to “batten down the hatches” in preparation for rough
economic waters ahead. That tweet accompanied a video of Goldman Sachs CEO
David Solomon, who said
in a CNBC interview that he thinks there’s a “good chance” of a
recession in the U.S.
JPMorgan Chase CEO Jamie Dimon also has
been warning of economic turmoil ahead.
More
Elon Musk says a global recession could last until the spring of 2024 (cnbc.com)
Column: Unease ahead of 2023 grain
harvest as record U.S. dryness spreads
October
21, 2022 9:20 AM GMT+1
NAPERVILLE, Ill., Oct 20 (Reuters) - More than 80%
of the United States faces abnormally dry conditions, the biggest portion so
far this century, and the recent escalation of dryness across several key grain
states raises risks for the 2023 harvest.
Extreme fall dryness is more concerning for the
U.S. winter wheat crop since there is less recovery time. Excellent U.S. corn
crops have coincided with drought in the previous fall, though spring
replenishment is critical for a successful harvest.
Unusually dry fall weather has accelerated drought
conditions in central U.S. states. In the Midwest, September-October may
contend for top 10 driest ever, helping the Mississippi River reach
historically low levels and severely disrupting grain movement along the waterway.
According to the U.S. Drought Monitor, a
record-large 82% of the country is experiencing abnormal dryness, slightly more
than 2012’s high of 81%. Some 59% of the country has earned official drought
designation, a share seen in just a handful of other weeks, mostly in late
2012.
U.S. government forecasters said Thursday that the river situation might not improve during
the winter with drier than normal weather possible in the South. However,
chances for above-average precipitation in the eastern Midwest could provide
relief there.
The Drought
Monitor data goes back only to 2000, but some years in that period, like 2012,
offer a good comparison. Crop yields were horrendous that year amid one of the
worst-ever U.S. droughts, and although dryness covers a larger expanse today
than in 2012, the severity in the grain belt is luckily lower now.
The Drought Monitor’s Drought Severity and Coverage
Index, or DSCI, is measured from 0 to 500, with 0 representing complete lack of
dryness and 500 the worst possible drought at 100% coverage. Midwestern DSCI is
at 141 this week, the most for any week since early 2013.
DSCI readings are unsettling in top winter wheat
state Kansas, where sowing for the 2023 harvest is in progress. The latest
value of 355 is topped only by a 2012-2013 stretch, and that number would need
to plummet significantly in the coming months for the 2023 crop to separate
itself from bad company.
Whenever DSCI was above 150 in April, Kansas had a
terrible wheat harvest. There are eight such instances since 2000, and wheat
yields ended anywhere from 14% to 37% below the long-term trend. Even if winter
months are dry there, exceptional rainfall in March could right the ship.
Analysis: India rice export curbs to
end a decade of price stability
October
21, 2022 10:04 AM GMT+1
MUMBAI/NEW DELHI, Oct 21 (Reuters) - India's recent
curbs on rice exports could trigger a rally in global prices after more than a
decade of stability, traders said, as New Delhi's protectionist move coincides
with falling output in other major producers and rising global demand.
Uneven monsoon rains hit rice planting in India,
prompting the export restrictions in September, and floods have cut output in
Pakistan even as consumption has grown in top importers such as Bangladesh and
the Philippines. That's why forecasters are saying global demand will outstrip
production in 2022/23.
This
is bad for Asian and African countries that use rice as a staple, some of which
import as much as 60% of
their supply.
Since
India - the world's biggest rice exporter - banned exports of broken rice and slapped a 20% export tax on some non-basmati
varieties, global rice prices have jumped more than 10%. Last month, the Food
and Agriculture Organization's global rice price index rose 2.2% to hit an
18-month high.
"The
international market has gone up and it will go up further," said Nitin
Gupta, vice president for Olam India's rice business.
Governments
worldwide had already been struggling to tame food inflation because of COVID-19
disruptions to production and supply chains, and then Russia's invasion of Ukraine removed millions of tonnes of foodstuffs from
global markets, pushing inflation to a record earlier this year.
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.
Japan's inflation hits 8-year
high in test of BOJ's dovish policy
October 21, 2022
TOKYO (Reuters) -Japan's core consumer inflation rate accelerated to a
fresh eight-year high of 3.0% in September, challenging the central bank's
resolve to retain its ultra-easy policy stance as the yen's slump to 32-year
lows continue to push up import costs.
The inflation data highlights the dilemma the Bank of Japan faces as it
tries to underpin a weak economy by maintaining ultra-low interest rates, which
in turn are fuelling an unwelcome slide in the yen.
The increase in the nationwide core consumer price index (CPI), which
excludes volatile fresh food but includes fuel costs, matched a median market
forecast and followed a 2.8% rise in August. It stayed above the BOJ's 2.0%
target for the sixth month, and was the fastest pace of gain since September 2014,
data showed on Friday.
The broadening price pressures in Japan and the yen's tumble below the
key psychological barrier of 150 to the dollar will likely keep alive market
speculation of a tweak to the Bank of Japan's dovish stance over coming months.
"The current price rises are driven mostly by rising import costs
rather than strong demand. Governor Kuroda may maintain policy for the rest of
his term until April, though the key is whether the government will tolerate
that," said Takeshi Minami, chief economist at Norinchukin Research
Institute.
The data heightens the chance the BOJ will revise up its consumer
inflation forecasts in new quarterly forecasts due at next week's policy
meeting, analysts say.
The yen's decline has been particularly painful for Japan due to its
heavy reliance on imports for fuel and most raw material, forcing companies to
hike prices for a wide range of goods including fried chicken, chocolates to
bread.
The so-called 'core-core' index, which strips away both fresh food and
energy costs, rose 1.8% in September from a year earlier, accelerating from a
1.6% gain in August and marking the fastest annual pace since March 2015.
The rise in the core-core index, which the BOJ closely watches as a key
gauge of the underlying strength of inflation, toward its 2% target casts doubt
on the central bank's view that recent price rises will prove temporary.
More
Japan's inflation
hits 8-year high in test of BOJ's dovish policy (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.
Rise in Covid-19 patients in England
may have levelled off
It
is too soon to know if the latest wave of the virus has peaked.
20 October, 2022
The current rise in the
number of people in hospital in England with
Covid-19 may have levelled off, new figures suggest.
Health experts described the
news as “encouraging” and said it could reflect the impact of the autumn
booster campaign, which has now seen around six in 10 over-75s receive a fresh
dose of vaccine.
But the rate of increase has slowed in recent days,
with the latest figures showing the first week-on-week fall since September 18.
It is too soon to know for sure if the numbers have
peaked.
Covid-19 hospital data is published once a week on
a Thursday, so it will be some time before enough data is available to see
evidence of a clear trend.
Patient numbers topped 14,000 in mid-July of this
year at the peak of the wave of infections caused by the Omicron BA.4 and BA.5
subvariants of the virus.
This was well below the levels seen during the
early waves of the pandemic.
Separate figures from the UK Health Security Agency
(UKHSA) show Covid-19 hospital admissions in England have also fallen.
The rate of admissions stood at 11.8 per 100,000
people for the seven days to October 16, down from 12.5 in the previous week.
This is the first weekly fall since early September.
Rates remain highest among people aged 85 and over,
at 141.0 per 100,000, though this is down week-on-week from 148.9.
Around two-thirds of patients in hospital who test
positive for Covid-19 are being treated primarily for something else.
More
Rise in Covid-19 patients in England may have levelled
off | The Independent
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.
Directa Plus to supply graphene for 250
km Italian motorway road surfacing contract
Using
the Gipave asphalt ‘supermodifier’ for the A4 Torino-Milano motorway section is
designed to increase the lifespan of road surfaces as well as reducing energy
consumption and CO2 emissions compared to standard asphalt
07:44 Fri 21 Oct 2022
Directa
Plus PLC (AIM:DCTA, OTC:DTPKF) has said that its patented G+ graphene
will be used in the asphalt for a 250 kilometre (km) motorway section in Italy,
along with selected recycled hard plastics such as toys, fruit crates and
litter bins, to make a product called Gipave.
The contract to use the Gipave asphalt ‘supermodifier’ in the road
surfacing of the A4 Torino-Milano motorway section was won by the AIM-listed
company's Italian partner Iterchimica with motorway management and
infrastructure specialist ASTM Group.
Gipave uses Directa's graphene to improve resistance and life span
for road surfaces.
Giulio Cesareo, founder and chief executive of the AIM-listed
company, said the contract “is a significant validation of our product with no
significant impact on 2022 sales but a supply of several tons of material in
2023/2024”.
The asphalt used for the resurfacing of this motorway section by
ASTM will re-use 70% of milled material from existing pavement, the company
said, reducing the use of new natural aggregates to only 30%, while using
Gipave will also reduce energy consumption by 90mln kilowatt hours and CO2
emissions by 18.4mln kgs compared to standard asphalt.
The Torino-Milano contract follows a series of demonstration
projects in Italy and the UK to prove the benefits of Gipave, and one kilometre of paving of the new Ponte San Giorgio bridge
in Genova.
Demonstration projects in the UK included the re-surfacing of two sections of road in Oxfordshire, with the first
in 2019 showing that Gipave increased the lifespan of the surface by up to 70%
compared to conventional resurfacing methods, with reduced risk of rutting
under loads from heavy goods vehicles.
Gipave was developed by Directa Plus and Iterchimica and patented
in 2017, with an agreement signed by the two companies in 2020 that
provides for the exclusive supply of the G+ graphene product to Iterchimica in
the asphalt and bitumen sector worldwide for an initial duration of three
years.
ASTM is an Italy-headquartered industrial group focused on motorway
management, infrastructure engineering and construction projects, according to
its website, and is the second largest toll road operator in the world, with
concessions in Italy, Brazil and the UK.
This weekend’s music diversion. Telemann
again. Approx. 10 minutes.
G.
Ph. Telemann: Sonata in D major, TWV 44:1 – Bremer Barockorchester
G. Ph. Telemann: Sonata in D major, TWV 44:1 – Bremer Barockorchester - YouTube
This
weekend’s chess update. Approx. 12 minutes.
Youngest Ever Player
To Defeat Magnus Carlsen!
Youngest Ever Player To Defeat Magnus Carlsen! - YouTube
This
week’s maths update. Approx. 14 minutes.
Dungeon
Numbers – Numberphile
Dungeon Numbers - Numberphile - YouTube
Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some.
The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become ‘profiteers’, who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.
Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose.
John Maynard Keynes.
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