Thursday, 24 November 2022

Despite All, A Day to Be Thankful.

 Baltic Dry Index. 1184 +35     Brent Crude 84.94

Spot Gold 1754          US 2 Year Yield 4.46 -0.01

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

Deaths 53,100

Coronavirus Cases 24/11/22 World 644,495,300

Deaths 6,631,233

Some hae meat and canna eat
And some wad eat that want it:
But we hae meat and we can eat,
And sae the Lord be thankit.

Robert Burns. Kirkcudbright Grace.

To all celebrating Thanksgiving in the USA today, a very happy, safe and thankful day for all our many Gog given blessings.

In the stock casinos, a false dawn. A great mis-reading of reality.

While the pace of interest rate hikes may start slowing, more interest rate hikes are still coming. Nothing good for most stocks comes from higher interest rate hikes.

Inflation may be slowing but is still rising nearly everywhere. Food price inflation looks to be with us through all of 2023.

In energy inflation, the G-7 is about to start playing Russian roulette, pardon the pun.

In China, the Great Covid-19 eradication policy seems to have failed. How China reacts will affect the global economy for better or worse, but most likely for worse.

 

Stocks close higher for a second day as Fed minutes signal smaller rate hikes ahead

UPDATED WED, NOV 23 2022 5:08 PM EST

U.S. stocks closed higher Wednesday in a choppy session as meeting minutes from the Federal Reserve showed that the central bank is looking to hand out smaller rate hikes in the coming months as inflation cools off.

The Dow Jones Industrial Average rose 95.96 points, or 0.28%, to 34,194.06. The S&P 500 gained 0.59% to close at 4,027.26, and the Nasdaq Composite increased 0.99% to 11,285.32.

Shares of Nordstrom fell 4.24% after the department store chain reaffirmed its forecast. However, Nordstrom beat profit and sales expectations in its latest results, according to consensus expectations on Refinitiv. Tesla rose 7.82% after Citi upgraded shares to neutral from sell. Deere surged 5.03% on an earnings beat.

Minutes from the Fed’s November meeting signaled that the central bank is seeing progress in its fight against high inflation and is looking to slow the pace of rate hikes, meaning smaller ones through the end of this year and into 2023.

“A substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate,” the minutes stated. “The uncertain lags and magnitudes associated with the effects of monetary policy actions on economic activity and inflation were among the reasons cited regarding why such an assessment was important.”

Earlier in November, the central bank approved a fourth consecutive 0.75 percentage point hike that brought rates to their highest level since 2008. Economists largely expect a 0.5 percentage point increase in December.

“What it really shows is you’ve got a market that’s jittery about one thing and one thing only, and that’s the Federal Reserve and what their thoughts are on monetary policy,” said Art Hogan, chief market strategist at B. Riley Financial. Any news that could shift the narrative around rate hikes going forward is important to markets, which are also seeing thin trading volume due to the holiday-shortened week.

Jobless claims data came in higher than expected at 240,000 for the week ending Nov. 19, where economists surveyed by Dow Jones expected 225,000. The result signals that the labor market may be weakening. At the same time, however, durable goods orders for October were stronger than anticipated, coming in at 1%, more than the 0.5% expected.

Markets will be closed on Thursday for the Thanksgiving holiday and will close early on Friday.

Stocks close higher for a second day as Fed minutes signal smaller rate hikes ahead (cnbc.com)

 

Bank of Korea opts for smaller hike; Asia markets rise after Fed signals slowing ‘soon’

UPDATED THU, NOV 24 2022 12:04 AM EST

Markets in the Asia-Pacific traded higher as the U.S. Federal Reserve said they expect to switch to smaller rate hikes “soon,” according to minutes released on Wednesday.

The Bank of Korea raised its benchmark interest rates by 25 basis points hike to 3.25%. The Kospi rose 0.54% and the Korean won slightly strengthened against the U.S. dollar to 1,332.49.

The S&P/ASX 200 in Australia rose 0.26%. The Nikkei 225 rose 1% and the Topix also rose 1.3%.

In mainland China, the Shanghai Composite fell 0.11% while the Shenzhen Component traded marginally lower. Hong Kong’s Hang Seng index rose 0.52%.

Overnight in the U.S., stocks closed higher for a second day on hopes the central bank is seeing progress in its tight to tackle high inflation. Markets stateside are closed on Thursday for the Thanksgiving holiday and will close early on Friday.

Asia-Pacific markets: Fed minutes, Bank of Korea decision, Sri Lanka (cnbc.com)

 

China may have ‘passed the point of no return’ as Covid infections soar

BEIJING — Surging Covid infections across mainland China make it harder for the government to achieve zero-Covid without reverting to a harsh lockdown, Macquarie’s Chief China Economist Larry Hu said.

In the last few days, the daily case count has climbed to around or more than 28,000 — near levels seen in April during a stringent lockdown in Shanghai, according to CNBC calculations of Wind Information data. The figures showed the last time mainland China saw only a handful of daily infections was in June, shortly after Shanghai eased its restrictions.

The latest Covid wave has hit the southern city of Guangzhou, the capital city of Beijing and many central parts of China — prompting local officials to tighten restrictions on business and social activity this month.

“China might have already passed the point of no return, as it’s unlikely to achieve zero Covid again without another Shanghai-style hard lockdown,” Hu said in a report Tuesday. “What policymakers could do now is to slow the spread of virus, i.e. flatten the curve, by tightening the Covid controls for the time being.”

Hu pointed to slight changes this month in government policy and propaganda as signs authorities are preparing for reopening in the next six to nine months. But he noted that “the road to reopening is set to involve lots of back-and-forth.”

Markets have speculated for weeks about the timing of China’s departure from its stringent zero-Covid policy. The controls have weighed on the economy, which barely eked out growth while Shanghai was locked down and has posted growth of only 3% during the first three quarters of the year.

In GDP terms, nearly 20% of China’s economy was negatively affected by Covid controls as of Monday, close to the high of 21.2% recorded in mid-April during Shanghai’s lockdown, Nomura’s Chief China Economist Ting Lu said, citing the firm’s model.

“Beijing has recently shown early signs of willingness to reopen, and it has rolled out some fine-tuning measures, but the reopening may be a prolonged process with discomfort,” Lu said in a separate report this week.

He said Vietnam’s unwinding of its Covid restrictions since fall last year could shed light on the path forward for China. He noted how the Southeast Asian country saw “no immediate surge in infections after the pivot,” while its GDP rebounded.

Local authorities in China have faced the difficult task of trying to make Covid measures more targeted, while controlling infections.

As of Monday, about 412 million people were affected by lockdown measures in mainland China, according to Nomura estimates. That’s up from 340 million the prior week, the report said.

The Nomura analysts noted that many lockdowns or controls are implemented without public announcement. “We believe [the southwestern municipality of] Chongqing is currently experiencing the most severe local lockdown in China, based on our observation of numerous mobility metrics,” the report said.

Covid controls in Beijing alone have tightened since Tuesday.

Authorities announced requirements for more frequent virus testing, and ordered more restaurants to suspend in-store dining. More shopping malls have closed, as have large parks. Various apartment compounds have been locked down.

State media said Tuesday the city’s tech-focused Zhongguancun Forum that was scheduled to kick off this week will be postponed to next year. The conference had already been delayed from September.

More

China may have 'passed the point of no return' as Covid infections soar (cnbc.com)

Finally, a worrying start to ending food price inflation next year.

 

Column: Argentine crops on alert as planting pace, vegetation among worst in decades

NAPERVILLE, Ill., Nov 21 (Reuters) - Argentina soybean and corn planting is off to an unusually slow start as farmers there face a third consecutive growing season featuring a drought-supportive La Nina.

Soybeans were only 17% planted in the top soy product exporter as of last Thursday versus last year’s relatively normal 31%. Corn at 32% complete was down sharply from 48% a year ago, and the sowing paces for both crops are the slowest in at least two decades.

Excessively dry conditions can be blamed for the delays, though some showers over the last several days may have allowed for additional fieldwork. Forecasts show chances for more rain showers next week, but very hot temperatures late this week into next may zap soils of recently acquired moisture.

Drought has already slashed Argentina’s wheat crop by nearly 40% from last year under La Nina, which occurs when surface waters in the equatorial Pacific Ocean are cooler than normal. The cycle can cause extended dry conditions for the country’s soybeans and corn, often leading to lower crop yields.

Forecasts suggest La Nina may fade into a neutral phase midway through Argentina’s growing season, but it is too early to say with certainty. Current trade wind and ocean temperatures, including those in the Indian Ocean, could support further strengthening of La Nina in the coming weeks.

But that should not necessarily heighten concerns since crop impacts are not perfectly correlated with La Nina strength. Argentina’s very worst corn and soybean yields (including in 2009 and 2018) occurred during moderately strong La Ninas, not the strongest ones. The last two seasons’ episodes were of moderate strength.

The Vegetation Health Index (VHI), a U.S. government product, shows most of Argentina’s grain belt classified well into the stressed zone. The same product shows drought coverage in key provinces such as Buenos Aires, Cordoba and Santa Fe is at, near or has recently reached the highest levels in at least a decade.

Argentina’s VHI has not looked this bad for late November since 2008 and 2009, both years with extensive drought. Rain during the 2008-09 growing season was less than two-thirds of normal, resulting in terrible crop yields, particularly for soybeans. It was also a moderate La Nina year.

More

Column: Argentine crops on alert as planting pace, vegetation among worst in decades | Reuters

 

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.

Today, Mish, one of the best covers the recession signalling US yield curve and more.

The 2-10 Yield Curve Inversion Recession Signal is the Strongest in Over 40 Years

The recession bells keep ringing louder and louder.

November 22, 2022

  • There was no 30-year long bond issuance in the yellow highlighted interval.
  • The 10-year to 3-month inversion is 64 basis points, the deepest since January of 2001.
  • The 30-year to 3-month inversion is 57 basis points, the deepest since November  of 2000.
  • The 10-year to 2-year inversion is 71 basis points, the steepest since October 1981 (see chart below). 

10-Year Minus 2-Year Treasury Yield 

Never before have we seen such strong inversions except right before or in recessions.

It will not be different this time. A recession is on the way, assuming it's not already started.

On November 18, I commented Existing Home Sales Decline 9th Month, Down Another 5.9 Percent

Existing Home Sales Crash

  • Existing home sales are down 28.4% from one year ago.
  • Existing home sales are down 31.7% since January.

That's a crash. And never have we seen such declines other than in recessions. 

California Faces a $25 Billion Budget Problem With Ongoing Deficits

Please note California is spending like the tech boom would last forever. Ahead of Recession, California Faces a $25 Billion Budget Problem With Ongoing Deficits

Governor Newsom is unofficially running for president in 2024. It will be official the day president Joe Biden announces he will not run for reelection.

Had Democrats retained the House, free money bailouts to California, Illinois, New York, New Jersey, etc., would have been massive.

Huge Layoffs Including Thousands at Amazon and FedEx in Peak Shipping Season

Amazon, Facebook, Redfin, FedEx, Stripe, Twitter and tech companies in general are all laying off workers.

Not to worry, Biden says there is no recession and the economy is strong. Not only is it different this time, it's very different this time. 

The 2-10 Yield Curve Inversion Recession Signal is the Strongest in Over 40 Years - Mish Talk - Global Economic Trend Analysis

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.  

Cardiologists Come to the Same Conclusion Regarding COVID Jab Side Effects

John Leake  Dr. Peter A. McCullough  Nov 20 2022

“The Covid mRNA vaccine has likely played a significant role or been a primary cause of unexpected cardiac arrests, heart attacks, strokes, cardiac arrhythmias, and heart failure since 2021…”

 

Until the British cardiologist, Dr. Aseem Malhotra, expressed grave concern about the safety of Covid mRNA vaccines, he was one of the most celebrated doctors in Britain. In 2016 he was named in the Sunday Times Debrett’s list as one of the most influential people in science and medicine in the UK in a list that included Professor Stephen Hawking. His total Altmetric score (measure of impact and reach) of his medical journal publications since 2013 is over 10,000 making it one of the highest in the World for a clinical doctor during this period.

 

In the early days of the COVID-19 vaccine rollout in Britain, he advocated the injections for the general public. However, in July of 2021, he experienced a terrible personal loss that caused him to reevaluate the shots—namely, the sudden and unexpected death of his 73-year-old father. His father’s death made no sense to him because he knew from his own examination that his father’s general and cardiac health were excellent. As he put it in a recent interview:

 

His postmortem findings really shocked me. There were two severe blockages in his coronary arteries, which didn’t really make any sense with everything I know, both as a cardiologist—someone who has expertise in this particular area—but also intimately knowing my dad’s lifestyle and his health. Not long after that, data started to emerge that suggested a possible link between the mRNA vaccine and increased risk of heart attacks from a mechanism of increasing inflammation around the coronary arteries. But on top of that, I was contacted by a whistleblower at a very prestigious university in the UK, a cardiologist himself, who explained to me that there was a similar research finding in his department, and that those researchers had decided to essentially cover that up because they were worried about losing funding from the pharmaceutical industry. But it doesn’t stop there. I then started looking at data in the UK to see if there had been any increase in cardiac arrest. My dad suffered a cardiac arrest and sudden cardiac death at home. Had there been any change in the UK since the vaccine rollout? And again those findings were very clear. There’s been an extra 14,000 out of hospital cardiac arrests in 2021 vs 2020.

The more Dr. Malhotra looked into it, the more he felt the same concern about the safety of the mRNA vaccines that Dr. Peter McCullough had felt since the spring of 2021. The alarming incidence of sudden, unexpected deaths during the latter half of 2021 and the first eight months of 2022—especially among the young and fit—strengthened his grave concern and suspicion.

In September of 2022,—after a thorough investigation of the growing volume of data—he came to his conclusion:

The Covid mRNA vaccine has likely played a significant role or been a primary cause of unexpected cardiac arrests, heart attacks, strokes, cardiac arrhythmias, and heart failure since 2021 until proven otherwise.

 

His conclusion, including his precise verbal formulation of it, was identical to the conclusion drawn by Dr. Peter McCullough. Though the two doctors ultimately established contact to compare notes, they reached their conclusions based on their own, independent inquiries, before they spoke with each other.

More

Cardiologists Come to the Same Conclusion Regarding COVID Jab Side Effects (theepochtimes.com)

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.

No technology update today.  Today more on that FTX/Fund the Democrats fraud.

Approx. 9 minutes.

CME Group CEO Terry Duffy reacts to FTX collapse, called Sam Bankman-Fried an 'absolute fraud'

CME Group CEO Terry Duffy reacts to FTX collapse, called Sam Bankman-Fried an 'absolute fraud' - YouTube

For those with the time FTX’s excruciating American advertising. Approx. 28 minutes.

Crypto - FTX Collapse, 11 Celebrities Face Damages Claim in Class-Action Lawsuit as Crypto Crashes

Crypto - FTX Collapse, 11 Celebrities Face Damages Claim in Class-Action Lawsuit as Crypto Crashes - YouTube

"It is never difficult to distinguish between a Scotsman with a grievance and ray of sunshine." 

P. G. Wodehouse.

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