Baltic Dry Index. 1534 -78 Brent Crude 95.77
Spot Gold 1645 U S 2 Year Yield 4.41 +0.11
"When you provide free money into a
system, manias will build," he said. "Now that we've taken money out
of the system, these manias will end, and you will find the market-clearing
price for a lot of securities."
Chamath Palihapitiya.
In
the stock casinos, more exit rallies, probably helped along by next Monday’s
dress up stocks and indexes for the all important, month-end money manager
bonuses.
But
next week brings yet another interest rate hike by the Fed adding to upward
dollar pressure.
As
winter looms, an economic winter also looms, especially across most of
continental Europe.
This
year, the old adage, sell in May go away, don’t come back till Labor Day, looks
like meaning Labor Day 2023.
Dow closes 800 points higher on Friday, registers fourth
straight week of gains
OCT 28 2022 5:33 PM EDT
Stocks rose on Friday despite a tumble in Amazon
shares after economic data pointed to slowing inflation and a steady consumer.
The Dow Jones Industrial Average closed 828.52
points, or about 2.6%, higher at 32,861.80. The S&P 500 added nearly 2.5%,
to close at 3,901.06. The Nasdaq Composite ended up about 2.9%, to close at
11,102.45.
On a weekly basis, the major indexes made notable
gains. It was the fourth positive week in a row for the Dow, a first since a
five-week streak ending in November 2021. The 30-stock index is up 5.7% this
week in its best performance since May. It’s also on track for its best month
since January 1976.
The S&P 500 and the Nasdaq are up 3.9% and
2.2%, respectively, for the week.
Stocks rose on Friday despite a tumble in Amazon
shares after economic data pointed to slowing inflation and a steady consumer.
The Dow Jones Industrial Average closed 828.52
points, or about 2.6%, higher at 32,861.80. The S&P 500 added nearly 2.5%,
to close at 3,901.06. The Nasdaq Composite ended up about 2.9%, to close at
11,102.45.
On a weekly basis, the major indexes made notable
gains. It was the fourth positive week in a row for the Dow, a first since a
five-week streak ending in November 2021. The 30-stock index is up 5.7% this
week in its best performance since May. It’s also on track for its best month
since January 1976.
The S&P 500 and the Nasdaq are up 3.9% and
2.2%, respectively, for the week.
More
Dow
closes 800 points higher on Friday, registers fourth straight week of gains
(cnbc.com)
Big Tech falters on dreary earnings and forecasts for
Q4— Meta has worst week ever, Amazon tumbles 13%
PUBLISHED FRI, OCT 28 2022 5:08 PM EDT
Other than Apple,
it was a brutal earnings week for Big Tech.
Alphabet, Amazon, Meta and Microsoft combined
lost over $350 billion in market cap after offering concerning commentary for
the third quarter and the remainder of the year. Between slowing revenue growth
— or declines in Meta’s case — and efforts to control costs, the tech giants
have found themselves in an unfamiliar position after unbridled growth in the
past decade.
Third-quarter results this week
came against the backdrop of soaring inflation, rising interest rates and a
looming recession. Apple bucked the trend after beating expectations
for revenue and profit. The stock on Friday had its best day in over two years.
On the opposite end of the spectrum was Meta,
which has seen its stock price collapse in
2022. Facebook’s parent came up short
on earnings, recorded its lowest average revenue per user in two
years and said sales in the fourth quarter will likely decline for a third
straight period.
“There are a lot of things going on
right now in the business and in the world, and so it’s hard to have a simple
‘We’re going to do this one thing, and that’s going to solve all the issues,’”
Meta CEO Mark Zuckerberg said
on the company’s earnings call on Wednesday.
Meta’s stock had its worst week
since the company’s IPO in 2012, plunging 24% over the past five days.
Microsoft fell 2.6% for the week, due to a 7.7% decline on Wednesday after the
company gave weak guidance for the year-end period and missed
estimates for cloud revenue.
Things were also bleak at Amazon,
which dropped
13%. A gloomy fourth-quarter forecast along with a dramatic slowdown
in its cloud-computing unit were largely to blame for the sell-off.
More
Big
Tech falters on Q3 2022 results as Meta has worst week ever (cnbc.com)
Wall St Week Ahead Hopeful U.S. stock
rally set for date with Federal Reserve reality
October 29, 2022 1:52
AM GMT+1
NEW YORK, Oct 28 (Reuters) - A bounce in U.S.
stocks that has defied a barrage of major earnings disappointments faces a key
test in the coming week, when the Federal Reserve's next meeting could shed
light on how long it will stick to the aggressive monetary policies that have
crippled asset prices in 2022.
Betting on a less hawkish Fed has been a dangerous
undertaking this year. Stocks have repeatedly rebounded from lows on
expectations of a so-called Fed pivot, only to be crushed anew by fresh
evidence of persistent inflation or a central bank bent on maintaining its pace
of rate increases.
Pockets
of softness in the U.S. economy have fueled recent hopes of a tempering of rate
hikes, along with signs that some of the world’s central banks may be nearing
the end of their rate hiking cycles. Meanwhile, cash-heavy investors afraid of
missing out on a sustained rally have contributed to the bullish move, market participants said.
“The
market is starting to believe that there is an endgame in sight for this huge
global tightening cycle,” said Keith Lerner, co-chief investment officer at
Truist Advisory Services.
More
Wall
St Week Ahead Hopeful U.S. stock rally set for date with Federal Reserve
reality | Reuters
In
other news, time to prepare for economic winter.
Nobel laureate Paul Krugman warns the US economy's rebound
won't last - and flags housing and exports as key worries
October
28, 2022
Paul Krugman has shrugged off
data showing US growth rebounded last
quarter, as he expects a housing-market slump and weaker exports to shrink the
economy down the line.
"While
this report made all the people who screamed 'recession!' look as foolish and
partisan as they were, it was not, if you look under the hood, a sign that the
worst is over," he said in a Twitter thread on
Thursday.
"It
suggests, at least to me, that there's a lot of contraction still in the
pipeline," Krugman added.
The
Nobel Prize-winning economist noted that a smaller trade deficit fueled the
2.6% annualized increase in US gross domestic product (GDP) in the third
quarter. He expects that growth driver to disappear as the US dollar's surge
this year has made American exports less competitive, and overseas
recessions could sap demand for US products.
Krugman pointed to the Federal Reserve hiking
interest rates from near zero in March to above 3% today as the key reason why
he's still worried about an economic downturn. He noted that higher rates have
created a trade headwind by boosting the dollar, and eaten into Americans'
finances and their ability to buy houses by raising mortgage costs.
----The New York Times columnist
and economics professor added that real residential investment has only fallen
by 12.5% since the fourth quarter of last year. He deemed that a fairly small
decline when mortgage rates have soared and mortgage applications have plunged.
"So
there's probably a significant amount of housing contraction still ahead,"
he said.
Krugman recently argued the Fed has already done enough to beat
back inflation, as the impact of its hikes on housing demand and trade will
relieve upward pressure on prices. He warned any further hikes would increase
the risk of a painful recession.
The
veteran economist has also pointed to a shrinking ratio of job vacancies to workers
as evidence the US economy is "just at the beginning of a large
Fed-induced cooling/contraction."
Larry Summers Says Consensus View That Inflation Will Come
Way Down Is 'Outside Range Of Normal Historical Experience'
October
28, 2022
Former Treasury
Secretary Lawrence H. Summers believes
if one looks at the history of developed nations in the 1970s, it is clear that
prospects of bringing down inflation are not very encouraging.
What Happened: “The history of developed countries since 1970 is very discouraging
about the prospects of bringing down 8 percent inflation,” Summers tweeted.
Historical Experience: The former Treasury Secretary also explained
how historical experience may be too optimistic a guide to current times,
especially when labor markets are very tight.
"Populism has never been stronger. Labor markets are super tight.
Government debt ratios are at peak levels. Globalization is certainly no longer
spreading and may be receding,” Summers said in his tweet.
The U.S. Federal
Reserve is set to announce its monetary policy next week, and market
participants have already started factoring in a relatively less aggressive
central bank.
The SPDR
S&P 500 ETF Trust (NYSE: SPY) has gained 2.55% over the last month, while the Vanguard
Total Bond Market Index Fund ETF (NASDAQ: BND) has
shed over 1.61%.
On Consensus: Summers also cited a chart to explain how consensus
about inflation coming down in present times is outside the range of normal
historical experience.
The former Treasury
Secretary believes inflation will persist for some time. “We don’t have any
experience with soft landings from high inflation without recessions,” Summers
said.
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.
U.S. inflation still running hot, key PCE price gauge shows
Last
Updated: Oct. 28, 2022 at 8:39 a.m. ET
The
numbers: A key gauge of U.S.
inflation rose a mild 0.3% in September, aided by the lower cost of gas. Yet
prices are still going up even if they aren’t climbing as fast as they were
earlier in the year.
Another
measure of inflation that omits volatile food and energy costs rose a sharp
0.5% last month. Wall Street had forecast a 0.5% increase in the so-called core personal consumption expenditures
price index.
The Federal Reserve
views the PCE index as the best barometer of inflation trends. What it’s shown
lately are easing but still-high price pressures.
Key
details: The cost of gasoline
fell in September for the third month in a row, though prices have started to
rise again. That could show up in future inflation reports.
Food prices increased
in September, as did the cost of housing and transportation.
The overall rate of
inflation in the past year was unchanged at 6.2% compared to the prior month.
The core rate of inflation in the past 12 months
climbed to 5.1% from 4.9%. That leaves it just a few ticks below a 40-year high
of 5.4% in February.
Unlike it’s better-known cousin, the consumer price
index, the PCE gauge takes into account how consumers change their behavior due
to rising prices.
They might substitute cheaper goods such as ground
beef for more expensive ones like ribeye to keep their costs down. Or stay at a
cheaper “airbnb” instead of a hotel.
The CPI showed inflation rising at a 8.2% yearly
rate in September.
U.S. inflation still running hot, key PCE price gauge
shows - MarketWatch
Discontent
Rises in Europe as Economic War With Russia Pushes Up Cost of Living
Governments
fear protests against high energy prices could weaken public support for
Ukraine
Updated Oct. 27, 2022
10:01 am ET
A wave of protests triggered by rocketing living costs and a looming recession is
sweeping across Europe, testing the resolve of governments that have so far
maintained unity in their costly economic war with Russia.
The public backlash against high prices
for electricity and heating as temperatures begin to fall is also fueling
tensions between European capitals over richer nations’ larger relief packages,
which poorer neighbors say are distorting the market and compounding the
crisis.
On Thursday, thousands of people took to the streets
across France to demand higher wages. Striking teachers, railway and health
workers staged marches in dozens of cities, including Paris, snarling traffic
and disrupting public transport.
In Belgium, the Czech Republic, Hungary and Germany,
tens of thousands have marched in recent weeks, demanding pay rises to offset inflation,
more state support, government intervention in the energy market and, in some
instances, an end to sanctions against Russia.
Despite measures to support households and businesses
totaling 264 billion euros, equivalent to $266 billion, according to
Brussels-based think tank Bruegel—by far the largest such package in
Europe—Germany has seen weekly protest rallies since the end of the summer,
many of them concentrated in the country’s former communist east.
Popular support for Ukraine remains high across
Europe and the protests in France haven’t targeted Paris’s Ukraine policy. Yet
demonstrators in eastern Germany have been more political, demanding an end
to Western sanctions against Russia in a warning to
Europe about the political risks it could face should Moscow’s war on Ukraine
drag on.
----- The German protests have so far
been widespread but comparatively small. Yet some moderate parties and union
leaders have begun organizing rallies in the rest of the country to demand more
state aid for people, in a sign that economic discontent—if not opposition to
supporting Ukraine—is spreading despite the government’s relief measures.
“This is merely the silence before the storm—the
discontent is great, and people do not have any sense that the government has a
plausible strategy to master the crisis,” said Manfred Güllner, head of Forsa,
a pollster.
----- The German economy is facing a difficult winter, said Clemens
Fuest, head of the Ifo Institute, an economic think tank that advises the
government. Every fourth company is considering layoffs and the prospect of
permanently high energy prices is forcing industrial investors to consider
whether it is still sensible to invest in Europe, Mr. Fuest said.
More
Discontent Rises in Europe as Economic War With Russia Pushes Up Cost of Living - WSJ
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.
China Covid: Millions back in lockdown as Beijing doubles down
on zero-Covid
28 October, 2022
Dozens of cities across China, including Wuhan where the coronavirus was first recorded, have gone into lockdown - as the country pursues leader Xi Jinping's zero-Covid policy.
More than 800,000 people in one district in Wuhan were told to stay at home until 30 October.
"We feel numb to it all. We feel more and more
numb," one local told Reuters.
The city of Zhengzhou, home to the world's largest iPhone manufacturing plant, was also affected.
It comes as China reported a third straight day of more than 1,000 cases.
Earlier this month Mr Xi signalled that there would be no easing up of the zero-Covid policy, calling it a "people's war to stop the spread of the virus".
As of Oct 24, some 28 cities across the country
were implementing some degree of lockdown measures, analysts Nomura told news
agency Reuters - with around 207 million people affected in regions responsible
for almost a quarter of China's GDP, it added.
Across the country, around 200 lockdowns have been implemented in recent days - the majority of this affecting communities that have been marked as high or medium risk. Residents in different areas are subject to different rules, depending on whether they are in a low, medium or high-risk zone.
Wuhan reported up to 25 new infections a day this week, with more than 200 cases over the past two weeks.
In Zhengzhou, a "small number of employees" from Foxconn - a major manufacturer for Apple - have been "affected by the pandemic", the manufacturer told the BBC, adding that quarantined employees were being provided with "material supplies, psychological comfort and responsive feedback". It comes at a critical period for Apple - which is now making the new iPhone 14.
Earlier this week, in-person schooling and dining in at restaurants were suspended in the southern Chinese hub of Guangzhou - which on Thursday reported 19 new virus cases, Some neighbourhoods in the city also remain subject to various control measures.
Even further-flung regions such as Tibet have been affected, after footage emerged earlier this week showing rare large-scale protests against strict zero-Covid measures in the regional capital Lhasa.
The city has been under lockdown for nearly three months
as it battles the virus - local officials on Thursday had said eight new Covid
cases were reported in Lhasa.
Multiple videos on social media showed hundreds demonstrating and clashing with police. They were said to be mostly ethnic Han Chinese migrant workers. A Lhasa resident confirmed to the BBC that the demonstration had taken place in the city on Wednesday.
Though seen as relatively small outbreaks in other
parts of the world, China adheres to a strict zero-Covid policy, where
authorities try to wipe out outbreaks.
The adherence to the policy comes despite increasing
public fatigue and anger over lockdowns and travel restrictions. The country's
economy has also taken a hit as a result - with GDP falling by 2.6% in the
three months to the end of June from the previous quarter.
China Covid: Millions back in lockdown as Beijing doubles down on zero-Covid - BBC News
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.
Kamikaze
drone Iran Shahed 136 | How it Works - YouTube
This weekend’s music diversion. The
music of Sir William Herschel, The King’s astronomer, discoverer of the planet
Uranus. Approx. 11 minutes.
William
Herschel (1738-1822) - Symphony No.12 in D
William Herschel
(1738-1822) - Symphony No.12 in D - YouTube
This
weekend’s chess update. Approx. 12 minutes.
KNIGHTZ
ARE TRICKY BASTARDS!
KNIGHTZ ARE TRICKY
BASTARDS! - YouTube
This
week’s maths update. Approx. 16 minutes.
The
Kakeya needle problem (the squeegee approach)
The Kakeya needle
problem (the squeegee approach) - YouTube
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