Sunday 31 December 2023

Goodbye 2023. 2024, Boom Or Bust? War Or Peace? All?

Baltic Dry Index. 2094  22/12/23 Brent Crude  77.04

Spot Gold 2063                   US 2 Year Yield 4.23 -0.03

“I want to share something with you, the three little sentences that will get you through 2024. Number one, ‘Cover for me.’ Number two, ‘Oh, good idea, boss!’ Number three, ‘It was like that when I got here.'”

With apologies to Homer Simpson.

In the stock casinos more bubbles, led for the most part in the USA, by seven technology stocks and a whole lot of AI hype repeating the internet bubble of 25 years ago?  Remember “NASDAQ, the stock market for the next hundred years.”

But if Bidenomics is so good for the US economy and via it, the global economy, why did the world’s central banks buy up a record amount of gold in 2023?

It couldn’t be that they see a US banking crash coming in 2024, with the Biden Fed about to guarantee all US deposits, whatever the trillions dollar cost?

Just why are US banks still borrowing record billions from the Fed’s emergency bailout scheme, the Bank Term Funding Program that’s supposed to end in March? If it does, how will US banks buy back their pledged collateral?

When Argentina’s new president said he was going to adopt the dollar as Argentina’s new currency, I don’t think he had in mind that the Biden dollar should become the new peso.

 

S&P 500 falls slightly Friday, but rides 9-week win streak to end 2023 with 24% gain: Live updates

UPDATED FRI, DEC 29 2023 4:42 PM EST

Stocks fell slightly on Friday, but the S&P 500 closed out 2023 with a surprising gain of 24% as inflation slowed, the economy remained strong and the Federal Reserve signaled an end to its rate-hiking campaign.

The S&P 500 rose for nine straight weeks to end the year, its best win streak since 2004. Big Tech stocks lifted the Nasdaq Composite to its best year since 2020 on AI enthusiasm.

The broad index fell 0.28% to settle at 4,769.83, with a 24.2% gain for the year. The S&P 500 ends 2023 just short of a new all-time high. At one point on Friday, it climbed within 9 points, or less than 0.2%, from its record close of 4,796.56 attained in January 2022.

The Dow Jones Industrial Average lost 20.56 points, or 0.05%, to close at 37,689.54 on Friday. It finished the year with a 13.7% gain and notched a new record during 2023. The Nasdaq Composite edged down 0.56% to 15,011.35 for the session, but rose 43.4% for its best year since 2020.

----- The S&P 500 added 0.3% on the week. The Dow and Nasdaq gained 0.8% and 0.1% for the week, respectively, to clinch their longest weekly winning streaks since 2019.

Stocks bounced back this year after a rough 2022. The story for the better part of the year was the excitement around artificial intelligence fueling big gains for the “Magnificent 7” stocks like Nvidia and Microsoft. The enthusiasm bolstered the indexes even as the average stock struggled amid rising interest rates and fueled the outperformance of the tech-heavy Nasdaq.

But with the Federal Reserve signaling it is likely done with rate hikes, and could even cut rates multiple times next year, the 10-year Treasury yield dove from above 5% in late October to less than 3.9% on Friday. As rates fell and labor data remained strong, investors ended the year growing more confident in a possible “soft landing” where the U.S. economy avoids a recession.

As a result, the market rally broadened out in the fourth quarter, with the industrial-heavy Dow making a string of record highs in December. The small-cap Russell 2000 rose more than 12% in December and clinched its best month since November 2020. It also notched its best quarter since the fourth quarter of 2020.

This expansion in market breadth will likely continue into the new year, although a period of consolidation isn’t out of the question as some of the high-fliers “recalibrate,” said Nancy Tengler, CEO & CIO of Laffer Tengler Investments.

Wall Street will also keep a watchful eye as more Fed speakers weigh in on the prospect of rate cuts ahead of January’s meeting, Mahajan said, which could lead to some early volatility in the new year.

“The risk with the Fed is that they will either wait too long, or move too quickly,” Tengler said. “If they cut too soon, and we do see inflation resurge, that’s going to be bad news for everybody.”

Stock market today: Live updates (cnbc.com)


Tech stocks just wrapped up one of their best years in past two decades after 2022 slump

Tech stocks rebounded from a disastrous 2022 and lifted the Nasdaq to one of its strongest years in the past two decades.

After last year’s 33% plunge, the tech-heavy Nasdaq finished 2023 up 43%, its best year since 2020, which was narrowly higher. The gain was also just shy of the index’s performance in 2009. Those are the only two years with bigger gains dating back to 2003, when stocks were coming out of the dot-com crash.

The Nasdaq is now just 6.5% below its record high it reached in November 2021.

Across the industry, the big story this year was a return to risk, driven by the Federal Reserve halting its interest rate hikes and a more stable outlook on inflation. Companies also benefited from the cost-cutting measures they put in place starting late last year to focus on efficiency and bolstering profit margins.

“Once you have a Fed that’s backing off, no mas, in terms of rate hikes, you can get back to the business of pricing companies properly — how much money do they make, what kind of multiple do you put on it,” Kevin Simpson, founder of Capital Wealth Planning, told CNBC’s “Halftime Report” on Tuesday. “It can continue into 2024.”

While the tech industry got a big boost from the macro environment and the prospect of lower borrowing costs, the emergence of generative artificial intelligence drove excitement in the sector and pushed companies to invest in what’s viewed as the next big thing.

Nvidia was the big winner in the AI rush. The chipmaker’s stock price soared 239% in 2023, as large cloud vendors and heavily funded startups snapped up the company’s graphics processing units (GPUs), which are needed to train and run advanced AI models. In the first three quarters of 2023, Nvidia generated $17.5 billion in net income, up more than sixfold from the prior year. Revenue in the latest quarter tripled.

More

Tech stocks wrap up 2023 rally after last year's slump (cnbc.com)

 

Europe stocks end 2023 up 12.64% after climbing on last trading day

PUBLISHED FRI, DEC 29 2023 2:33 AM EST UPDATED FRI, DEC 29 2023 11:56 AM EST

LONDON — European stocks ended Friday’s session in the green, marking a positive end to a solid year.

The regional Stoxx 600 index provisionally finished 2023 up 12.64% on the year. It follows a fall of 12.9% in 2022.

On Friday, the Stoxx ended the day provisionally 0.1% higher, with almost all sectors up amid thin trade. London markets closed early, with the FTSE 100 in the green as the FTSE 250 dipped.

Spanish pharmaceutical group Grifols was the biggest stock mover, climbing around 8.4% after announcing it will sell a 20% stake in Shanghai RAAS, a blood products firm, to China’s Haier for approximately $1.8 billion.

Germany’s DAX has risen nearly 20% over 2023 despite the country’s gloomy economic picture, while France’s CAC 40 and the U.K.’s FTSE 100 have gained 16.4% and 3.64%, respectively.

More

Europe markets open to close: Stoxx 600 gains, S&P 500 chases high (cnbc.com)

U.S. crude oil sheds more than 10% for the year in first annual decline since 2020

PUBLISHED FRI, DEC 29 2023 11:19 AM EST UPDATED FRI, DEC 29 2023 2:55 PM EST

U.S. crude oil closed out the year more than 10% lower as bearish sentiment has taken over due to worries that the market is oversupplied from record production outside OPEC.

The West Texas Intermediate contract for February shed 12 cents, or 0.17%, to settle at $71.65 a barrel on Friday. The Brent contract for March lost 11 cents, or 0.14%, to settle at $77.04.

U.S. crude and the global benchmark booked the first annual decline since 2020 despite ongoing geopolitical risk in the Middle East due to the devastating war in Gaza. WTI is down 10.73% for the year, and Brent has lost 10.32%.

Oil prices rose nearly 3% on Tuesday on worries that militant attacks on shipping in the Red Sea would disrupt global trade and crude supplies. While fears of escalation in the Middle East have triggered brief spikes in crude prices, traders are primarily focused on the supply and demand balance.

Record U.S. production

The U.S. is producing crude at a record pace, pumping an estimated 13.3 million barrels per day last week. Output is also at a record in Brazil and Guyana. The historic production outside OPEC has collided with an economic slowdown in major economies, above all China.

OPEC and its allies, meanwhile, have promised to cut production by 2.2 million barrels per day in the first quarter of 2024, but traders apparently have little confidence that the bloc’s policy will bring the market into balance.

Oil production outside OPEC, above all in the U.S., is expected to more than cover demand growth in 2024, according to the International Energy Agency. Global oil demand growth is expect to fall by half to 1.1 million barrels per day next year, while output outside OPEC is expected grow by 1.2 mbd.

Profound impact on oil

The shift in crude supply from the Middle East to the U.S. and other Atlantic countries is “profoundly impacting the global oil trade,” the IEA said in its December outlook.

The U.S. was responsible for two-thirds of the growth in supply outside OPEC this year. This is challenging efforts by producers in the Middle East to defend their market share and lift oil prices, according to the IEA.

OPEC seems to have little room to maneuver, with production cuts falling on deaf ears. Brazil has agreed to ally itself with the bloc, but it is not clear what that means for markets.

More

U.S. crude oil sheds more than 10% in first annual decline since 2020 (cnbc.com)

China Dec factory contraction deepens, more stimulus on the cards

By Liangping Gao and Kevin Yao 

BEIJING, Dec 31 (Reuters) - China's manufacturing activity shrank for a third straight month in December and weakened more than expected, clouding the outlook for the country's economic recovery and raising the case for fresh stimulus measures in the new year.

The government has in recent months introduced a series of policies to shore up a feeble post-pandemic recovery, which is being held back by a severe property slump, local government debt risks and soft global demand. But the world's second-largest economy is still struggling to gain traction.

The official purchasing managers' index (PMI) fell to 49.0 in December from 49.4 the previous month, an official factory survey showed on Sunday, below the 50-mark separating growth from contraction and weaker than a median forecast of 49.5 in a Reuters poll.

"We must step up policy support, otherwise the trend of slowing growth will continue," said Nie Wen, an economist at Hwabao Trust. Nie expects the central bank to cut interest rates and banks' reserve requirement ratios (RRR) in the coming weeks.

"Falling prices have greatly affected companies' profits and further affected people's employment and incomes. We may see a vicious cycle," he said.

China's central bank said on Thursday it would step up policy adjustments to support the economy and promote a rebound in prices, amid signs of rising deflationary pressures.

Earlier this month, top Chinese leaders at a key meeting to chart the economic course for 2024 pledged to take more steps to support the recovery next year.

Five of China's largest state banks lowered interest rates on some deposits on Dec. 22, the third round of such cuts this year, which could help the central bank move toward easing monetary policy.

The government, which in October unveiled plans to issue 1 trillion yuan ($140.89 billion) in sovereign bonds to fund investment projects, is likely to focus on more fiscal steps to support growth next year, analysts said.

WEAK DEMAND

China's consumer prices fell the fastest in three years in November while factory-gate deflation deepened, weighed by weak domestic demand.

"The current external environment is increasingly complex, severe, and uncertain," the statistical bureau said.

"Some companies in the survey reported that reduced overseas orders and insufficient domestic effective demand are the main difficulties faced by the companies."

The new orders sub-index was at 48.7, contracting for the third month, according to the PMI survey released by the National Bureau of Statistics.

Weak external demand also remained a major drag on factory activity, with new export orders index registering 45.8 in December, contracting for the ninth straight month.

More

China Dec factory contraction deepens, more stimulus on the cards | Reuters

“English? Who needs that? I’m never going to England.”

Justin Trudeau Homer Simpson.

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.

Brexit Britain to soar past Germany as Eurozone faces recession risk

December 30, 2023

The United Kingdom has been predicted to outpace Germany as the Eurozone faces the risk of a deeper recession due to higher interest rates.

Britain and Germany shrank in the three months to September, with Europe’s two largest economies potentially being plunged into a further fiscal slump.

However, analysts at UBS expect the UK will bounce back within a year.

Germany looks poised to continue to struggle as Berlin grapples with a budget crisis.

Olaf Scholz is facing further pressure after Germany’s top court ruled the Government broke the law by using Covid cash to fund net zero spending.

House prices in Germany recently suffered double-digit declines amid the nation's economic turmoil.

Berlin’s dependence on Moscow-produced gas has also had an impact.

Economists at UBS predict German growth of just 0.5 per cent next year, with 0.8 per cent anticipated in 2025.

In contrast, the UK will grow by 0.6 per cent in 2024 and witness 1.5 per cent growth the year after.

UBS expects the UK to grow by 1.3 per cent in 2026 and the Eurozone by 1.1 per cent, while Germany is the laggard on 0.9 per cent.

Traders have been backing the UK’s economic revival as many anticipate the Bank of England could cut interest rates from 5.25 per cent to 3.5 per cent by the end of the next year.

A change in economic fortune could assist Rishi Sunak as the Prime Minister is expected to call an election at some point in 2024.

Falling inflation would likely provide the Treasury with more space to cut taxes.

Reinhard Cluse, economist at UBS, said: “Manufacturing was especially weak, with new orders dragged down by lower Chinese demand.

“In addition, the energy crisis continued to leave its mark as production in energy-intensive industries was much weaker than in other sectors, even as energy prices declined.”

More

Brexit Britain to soar past Germany as Eurozone faces recession risk (msn.com)

Covid-19 Corner

This section will continue until it becomes unneeded.

COVID Mask Mandates Return Across US Hospitals

Masks are back in some locations in New York, Illinois, Massachusetts, and Washington state.

12/28/2023 Updated:  12/28/2023

 

Hospitals in places across the United States have reimplemented mask mandates because of what officials say is an uptick in COVID-19 and other respiratory infections.

For example, the NYC Health + Hospitals—officially the New York City Health and Hospitals Corporation that operates public hospitals and clinics in New York City—announced that mask mandates will be reimplemented at its hospitals.

“Due to an uptick in respiratory illnesses like COVID-19, flu & RSV in our communities & our hospital, we must return to mandatory masking. Please wear a mask when you visit us!” the hospital operator wrote on X, formerly known as Twitter, earlier this week.

The post showed a photo of staff members wearing masks.

A separate NYC Health + Hospitals post states that “mandatory masking” was reinstated at its Jacobi facility in the Bronx because of “the prevalence of COVID-19 in our communities.”

While the hospital and other medical facilities have cited recent U.S. Centers for Disease Control and Prevention (CDC) data showing an increase in COVID-19 cases, historical data from the same agency show that the increase has been relatively small compared to previous years. As of Dec. 16, the agency data show that more than 25,000 people are currently hospitalized for COVID-19 across the United States, whereas on Dec. 16, 2022, more than 36,000 were hospitalized.

Other Mask Mandates

UMass Memorial Medical Center in Worcester, Massachusetts, confirmed to local media that it would issue a monthlong mask requirement for its staff, effective on Jan. 2. Patients and visitors won’t be mandated to wear face coverings, however.

“These changes are expected to remain in effect for approximately one month, at which time they will be reevaluated based on current trends,“ a spokesperson for the hospital said in the statement. ”The health and wellbeing of our patients, visitors, and employees is our top priority.”

More

COVID Mask Mandates Return Across US Hospitals | The Epoch Times

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.

NASA completes record sustained burn of revolutionary rocket engine

David Szondy  December 28, 2023

NASA has pushed forward a revolutionary new rocket technology at its Marshall Space Flight Center in Huntsville, Alabama. Engineers at the facility fired the 3D-printed Rotating Detonation Rocket Engine (RDRE) for a record 251 seconds with 5,800 lb (2,631 kg) of thrust.

For over six decades, NASA has relied on chemical rockets to launch its vehicles into space. It works, but chemical rockets suffer from the fact that they've been operating in the neighborhood of their theoretical limit since 1942. This isn't helped by the fact that most liquid rockets are essentially unchanged in their basic design since the days of the German V2s.

To squeeze a bit more performance out of rocket engines, NASA is looking at a fundamentally different design with the RDRE.

Instead of a combustion chamber where fuel and oxygen are fed in to burn at subsonic speed, in an RDRE these are introduced into a gap between two coaxial cylinders. When this mixture is ignited, they form a closely coupled reaction and shock wave. That wave travels inside the gap at supersonic speed, generating more heat and pressure.

If this burn can be sustained, it can produce a rocket thrust that is much more efficient. In fact, NASA says that the latest test firing was powerful enough and long enough that it could meet the requirements for a lander touchdown or deep space burn required for a mission to the Moon or Mars.

However, NASA stresses that the technology is far from mature and that test firings like this one are needed to scale up the combustor for different thrust classes. If this is successful, RDREs could find work in landers, upper stage boosters, and retropropulsion to land large payloads on the surface of Mars.

"The RDRE enables a huge leap in design efficiency," said Marshall combustion devices engineer Thomas Teasley. "It demonstrates we are closer to making lightweight propulsion systems that will allow us to send more mass and payload further into deep space, a critical component to NASA’s Moon to Mars vision."

The video below recaps the test firing

NASA completes record sustained burn of revolutionary rocket engine (newatlas.com)

Have a great New Year’s Day break. On to what looks likely to be an interesting year. Some 40 countries are holding elections in 2024, according to the BBC. With the big one Biden v Trump?

21st century adage: Is that true, or did you hear it on the BBC?

Saturday 30 December 2023

New Year 2024 - A very Happy, Healthy and Prosperous 2024 to all.

 

New Year 2024  - A very Happy, Healthy and Prosperous 2024 to all.


The LIR music find of the year. 1760s re-arranged 2016 style.  Approx. 10 minutes.

SOLER ANTONIO 1729 1783 Fandango L'Arpeggiata, Christina PLUHAR

SOLER ANTONIO 1729 1783 Fandango L'Arpeggiata, Christina PLUHAR (youtube.com)

 

And a plea for an end to our two tragic wars.  Approx. 4 minutes.

 

O Sanctissima - A Hymn of Praise to the Blessed Virgin Mary

Bing Videos

 

This weekend’s chess update. Approx. 11 minutes.

Carlsen vs Fedoseev || Just Your Casual Masterclass With Black || World Rapid Championship (2023)

Carlsen vs Fedoseev || Just Your Casual Masterclass With Black || World Rapid Championship (2023) (youtube.com)

 

This last weekend of 2023, math’s back. Approx. 25 minutes.

What's the curse of the Schwarz lantern?

What's the curse of the Schwarz lantern? (youtube.com)

 

Finally, Bill Gates on AI. Approx. 33 minutes. Sorry about all the “you knows,” you know.

Bill Gates Shocking New 2024 AI Prediction ( AGI + AI Agents)

Bill Gates Shocking New 2024 AI Prediction ( AGI + AI Agents) (youtube.com)

 

A politician needs the ability to foretell what is going to happen tomorrow, next week, next month, and next year. And to have the ability afterwards to explain why it didn't happen.

 

Winston Churchill.

+++++++

Friday 29 December 2023

Stocks, Bubble Nears Its 2024 Pin.

Baltic Dry Index. 2094  22/12/23 Brent Crude  77.56

Spot Gold 2075                  US 2 Year Yield 4.26 +0.06

There was a party of economists out mountain climbing in the Himalayas and they got lost. One of them took a look at the map and studied very carefully, compared it to distant landmarks and checked his compass. Finally, he said to the other economists, “Do you see that big mountain over there? According to the map, we’re standing on top of it.”

In the stock casinos, what bubbles up, must come down? China leads the rest? Wall Street delusional?

Wall Street bets big on the Chairman Powell US central bank. But will Chairman Powell deliver Wall Street's bet on 150 basis points of cuts?

 

Asia markets mixed on last trading day of 2023, investors assess China EV prospects after Xiaomi’s entry

UPDATED THU, DEC 28 2023 9:18 PM EST

Asia-Pacific markets were mixed on the last trading day of 2023, with investors assessing prospects of electric-vehicle companies after China’s Xiaomi unveiled its first EV.

Chinese consumer electronics company Xiaomi on Thursday detailed plans to enter China’s oversaturated electric-vehicle market. Hong Kong shares of the company fell more than 3% after open.

The company seeks to compete with automaker giants Tesla and Porsche with a car model it says it spent more than 10 billion yuan ($1.4 billion) to develop.

Hong Kong’s Hang Seng index was flat at open, while China’s CSI 300 index rose 0.16%.

China and Hong Kong indexes rallied more than 2% each in the previous session, but were still set to be the biggest percentage losers for the year among major Asia-Pacific markets.

China’s CSI 300 index is down 11.8% for the year, while the Hang Seng has plunged 13.8% in 2023.

Japan’s Nikkei 225 fell 0.19%, but the index has gained 28.5% so far this year, making it Asia’s top-performing market.

The broader Topix was 0.24% higher, after having surged over 25% in 2023.

South Korea markets were shut on Friday, with the Kospi up 18.7% for the year and the Kosdaq jumping 27.5%.

Australia’s S&P/ASX 200 index dipped 0.22%, cooling off from two straight sessions of gains, but was still up 7.76% for the year.

Overnight, the S&P 500 finished marginally higher Thursday, closing in on a new all-time high in the penultimate trading day of what’s been a strong year for stocks.

The broad market index added 0.04% to finish at 4,783.35, putting it within striking distance of its highest closing level of at 4,796.56 set in January 2022.

The Dow Jones Industrial Average rose 0.14% to notch a fresh record closing high. The Nasdaq Composite inched down 0.03%.

Live updates: Asia markets mostly higher, Aussie stocks open lower (cnbc.com)

Stock futures are flat ahead of final trading day of 2023 with S&P 500 on cusp of record: Live updates

UPDATED THU, DEC 28 2023 8:18 PM EST

Stock futures were little changed on Thursday evening as Wall Street looks to end a winning year on a high note and possibly a new milestone.

S&P 500 futures rose less than 0.1%. Dow Jones Industrial Average futures ticked up 17 points, or less than 0.1%, while Nasdaq-100 futures were also marginally higher.

The S&P 500 enters the final trading day of 2023 less than 0.5% from a new record high, which could serve as an exclamation point on a rally that has gained strength in the final months of the year.

The S&P 500 is up 24.6% in 2023, with Dow rising 13.8%. The Nasdaq Composite has led the way with a gain of 44.2% on the year — on pace for its biggest annual increase since 2003.

The story for much of 2023 was the excitement around artificial intelligence fueling big gains for the “Magnificent 7” stocks like Nvidia and Microsoft, which bolstered the indexes even as the average stock struggled amid rising interest rates and fueled the outperformance of the tech-heavy Nasdaq.

But with the Federal Reserve signaling it is likely done with rate hikes and could even cut rates multiple times next year, the 10-year Treasury yield dove from above 5% in late October to less than 3.9% on Thursday. Investors have also grown more confident in a possible “soft landing” where the U.S. economy avoids a recession.

As a result, the market rally has broadened out in the fourth quarter, with the industrial-heavy Dow already making a string of record highs this month. The small-cap Russell 2000 is up almost 14% in December, on track for its best month since November 2020.

Ryan Detrick, Carson Group chief market strategist, pointed out on Thursday’s “Closing Bell” that gains of 10% or more in final two months of a year is historically a signal that there is more room to run for stocks.

“A big end of year rally like this is not consistent with the end of a bull market. It usually means that upward momentum, that slingshot, is going to continue,” Detrick said.

Stock market today: Live updates (cnbc.com)

Foreign investors unwind $33bn bet on China growth rebound

Almost 90% of money that flowed into Chinese stocks in 2023 has left amid concern about economy

December 28, 2023

Nearly nine-tenths of the foreign money that flowed into China’s stock market in 2023 has already left, spurred by mounting doubts about Beijing’s willingness to take serious action to boost flagging growth.

Since peaking at Rmb235bn ($33bn) in August, net foreign investment in China-listed shares this year has dropped 87 per cent to just Rmb30.7bn, according to Financial Times calculations based on data from Hong Kong’s Stock Connect trading scheme.

Traders and analysts said the reversal reflected pessimism over the outlook for the world’s second-largest economy among global fund managers. International investors have been persistent net sellers since August, when missed bond payments by developer Country Garden revealed the severity of a liquidity crisis in the country’s property sector.

“The confidence issue goes beyond real estate, although real estate is key,” said Wang Qi, chief investment officer for wealth management at UOB Kay Hian in Hong Kong. “I’m referring to consumer confidence, business confidence and investor confidence — both from domestic and foreign investors.”

Chinese shares have continued to underperform global peers in recent weeks despite a run of positive economic data, signs of a thaw in US-China relations and moves to give the financial system a stronger buffer against slowing growth by cutting the rates most lenders pay on deposits.

Yet in contrast to a 4.7 per cent rise by the S&P 500 index this month, China’s benchmark CSI 300 index of stocks listed in Shanghai and Shenzhen has fallen more than 3 per cent. Net foreign sales of China-listed shares have reached about Rmb26bn in December.

“It’s so counterintuitive — the data is getting better and the general environment should be quite positive for Chinese stocks,” said Alicia GarcĂ­a-Herrero, chief Asia-Pacific economist at Natixis. “Frankly there’s no reason for this other than investors basically giving up and saying: ‘We don’t see the upside’.”

The exit by offshore investors has been facilitated by widespread share buybacks from listed companies in China and by large-scale purchases from domestic investment funds and state-run financial institutions — all of which are under pressure from Beijing to prop up sagging valuations.

The protracted foreign sell-off threatens to end the year on a sour note for Chinese markets. When markets close on Friday, they are set to record the smallest annual foreign inflow since 2015, the first full year of the Stock Connect programme. The cross-border trading scheme, run out of Hong Kong, is the dominant channel through which offshore investors trade mainland-listed equities.

 Traders said a nascent recovery in market sentiment had been stymied on Friday by a sharp sell-off of gaming stocks, including Tencent and NetEase, after Beijing announced tough new regulations for the sector.

More

Foreign investors unwind $33bn bet on China growth rebound (ft.com)

 

US bond bulls look to 2024 Fed pivot to sustain searing rally

By Davide Barbuscia 

NEW YORK, Dec 27 (Reuters) - As bonds emerge from a historic selloff, some investors expect better times in the U.S. fixed income market next year - as long as the Federal Reserve’s rate cuts play out as anticipated.

A fourth-quarter rally saved bonds from an unprecedented third straight annual loss in 2023, following the worst-ever decline a year earlier. The late year surge came after Treasuries hit their lowest level since 2007 in October.

Fueling those gains were expectations that the Fed is likely finished with rate increases and will cut borrowing costs next year - a view that gained traction when policymakers unexpectedly penciled in 75 basis points of easing in their December economic projections amid signs that inflation continued to cool.

Falling rates are expected to guide Treasury yields lower and push up bond prices - an outcome that a broad swathe of investors are anticipating. The latest fund manager survey from BofA Global Research showed investors are holding their biggest overweight position in bonds since 2009.

Still, few believe the path to lower yields will be a smooth one. Some worry the over 100 basis point drop in Treasury yields since October already reflects expectations for rate cuts, leaving markets vulnerable to snap backs if the Fed doesn’t cut soon enough or fast enough.

The market has priced some 150 basis points in cuts next year, twice what policymakers have penciled in, futures tied to the Fed’s main policy rate show. Benchmark 10-year Treasury yields stood at 3.88% last week, their lowest level since July.

Many are also watchful for the return of the fiscal worries that helped drive yields to their 2023 peaks but ebbed in the later part of the year.

“As long as the Fed doesn't totally have this wrong, we should expect to see some rate cuts next year,” said Brandon Swensen, a senior portfolio manager on the BlueBay Fixed Income team at RBC Global Asset Management. However, “it could be a bumpy path."

More

US bond bulls look to 2024 Fed pivot to sustain searing rally | Reuters

Finally, more de-dollarisation for a weaponised fiat global reserve dollar. Not to worry though, Argentina has just dropped the Peso for the fiat dollar, well so they say. But with massive dollar debts and no actual dollars, they will need to borrow the dollars from Uncle Scam Sam.


Russia, Iran Officially Ditch U.S. Dollar for Trade

By Tom Kool - Dec 27, 2023, 4:30 PM CST

Russia and Iran have finalized an agreement to trade in their local currencies instead of the U.S dollar, Iran's state media has reported.  Both countries are subject to U.S. sanctions.

 

"Banks and economic actors can now use infrastructures including non-SWIFT interbank systems to deal in local currencies," Iran’s state media has declared. 

Moscow has lately been cozying up to Tehran, with Iran revealing in November it will provide Russia [Iran?] with Su-35 fighter jets, Mi-28 attack helicopters and Yak-130 pilot training aircraft.

The global de-dollarization drive has been going on for years with BRIC countries and the so-called pariah states trying to ditch the American dollar in favor of other currencies. 

Back in 2019, Putin declared that time was ripe to review the dollar’s role in trade. At that time, Russia and China considered switching to the euro, the world’s second most dominant currency, as an acceptable stalemate, with the ultimate goal being to use their own currencies. 

 

Earlier in the current year, Russia paid dividends from the Sakhalin 1 and 2 oil projects in Chinese yuan instead of the dollar. Last year, Russia was cut off from the US dollar-dominated global payments systems following sweeping sanctions off the Ukraine war. 

Russia has declared it will no longer accept the American currency as payment for its energy commodities but will instead switch to Chinese and Emirati currencies. 

More

Russia, Iran Officially Ditch U.S. Dollar for Trade | OilPrice.com

 

Finally, bring on 2024.

 

‘Sitting on a powder keg’: US braces for a year, and an election, like no other

Wed 27 Dec 2023 16.00 GMT

The 60th US presidential election, which will unfold in 2024, will be quite unlike any that has gone before as the US, and the rest of the world, braces for a contest amid fears of eroding democracy and the looming threat of authoritarianism.

It will be a fight marked by numerous unwanted firsts as the oldest president in the country’s history is likely to face the first former US president to stand trial on criminal charges. A once aspirational nation will continue its plunge into anxiety and divisions about crime, immigration, race, foreign wars and the cost of living.

 

Democrat Joe Biden, 81, is preparing for the kind of gruelling campaign he was able to avoid during coronavirus lockdowns in 2020. Republican Donald Trump will spend some of his campaign in a courtroom and has vowed authoritarian-style retribution if he wins. For voters it is a time of stark choices, unique spectacles and simmering danger.

“It feels to me as if America is sitting on a powder keg and the fuse has been lit,” said Larry Jacobs, the director of the Center for the Study of Politics and Governance at the University of Minnesota. “The protective shield that all democracies and social orders rely on – legitimacy of the governing body, some level of elite responsibility, the willingness of citizens to view their neighbors in a civic way – is in an advanced stage of decline or collapse.

“It’s quite possible that the powder keg that America’s sitting on will explode over the course of 2024.”

US politics entered a new, turbulent era with Trump’s shocking victory over Hillary Clinton in 2016. The businessman and reality TV star, tapping into populist rage against the establishment, was the first president with no prior political or military experience. His chaotic four-year presidency was scarred by the Covid-19 pandemic and ended with a bitter defeat by Biden in a 2020 election that was itself billed as an unprecedented stress test of democracy.

More

‘Sitting on a powder keg’: US braces for a year, and an election, like no other | US politics | The Guardian

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.

Well, an economist’s guess is as good as anyone else’s.

The forecast for the UK's economy is 'far rosier' than for France or Germany with inflation set to fall rapidly next year, report suggests

December 28, 2023

Britain's economic prospects are looking 'far rosier', with inflation set to fall rapidly in 2024 and growth to outpace a number of G7 rivals, a forecast suggests.

The report from accountancy giant PwC proposes that 2024 'will be the year the UK turns a page'.

The wide-ranging look-ahead even sees sporting success to add to Britain's lustre in the coming 12 months, predicting a third-place finish for Team GB in the medals table at the Paris Olympics.

The report is the second this week to argue that the UK's near-term future looks brighter than doom-mongers suggest.

It says that while gross domestic product (GDP) growth will remain weak, it will sit firmly in the middle of G7 nations when measuring how well countries have done compared to pre-Covid levels.

PwC predicts that UK growth between 2019 and 2024 of 2.7 per cent will put it ahead of France (2.4 per cent), Japan (1.5 per cent) and Germany (1.2 per cent). But it is expected to trail behind the US, which is forecast to enjoy a 9.6 per cent expansion, Canada 5.2 per cent and Italy 3.7 per cent.

PwC predicts that the UK economy will be 2.7 per cent bigger in 2024 than it was in 2019, outperforming France, Japan and Germany. And it also forecasts that inflation will hit the Bank of England's 2 per cent target by early 2025. That is a more optimistic outlook than that of the Bank itself which does not expect the target to be reached until late 2026.

Falling inflation should help many of those worst hit by the cost of living squeeze feel better off in real terms as their money goes further, especially with the increase in the national living wage to £11.44 an hour. 

The report also sees house prices falling by only 2 per cent, a milder decline than some others were predicting. PwC chief economist Barret Kupelian said: 'Following the post-pandemic challenges, 2024 will be the year the UK turns a page.

More

The forecast for the UK's economy is 'far rosier' than for France or Germany with inflation set to fall rapidly next year, report suggests (msn.com)

Turkey’s 49% Minimum Wage Hike Balances Between Unions, Markets

December 28, 2023

Bloomberg) -- Turkey will raise the minimum wage by 49% in the new year, close to a level that several Wall Street lenders have warned would complicate the central bank’s efforts to curb inflation. 

The monthly net minimum salary will be set at 17,002 liras ($577) as part of a single adjustment, Labor Minister Vedat Isikhan said in a televised news conference in Ankara on Wednesday. Goldman Sachs Group Inc. and Morgan Stanley have suggested the central bank could further tighten policy should the hike be higher than 40%-50%.

“We fulfilled our promise not to allow our workers to be crushed by inflation,” the minister said. 

The government is looking to take some of the pressure off living costs before local elections in a country where consumer price increases are on track to surpass 70% in the months ahead. For President Recep Tayyip Erdogan, the choice was a compromise between the competing demands of labor unions and investors wary of rampant inflation.

Turkey’s Labor Unions Confederation, which represented the workers during talks with the government, was asking for an increase to 18,000 liras and a two-time hike next year, according to its president, Ergun Atalay.

The challenge is how to placate a population enduring a cost-of-living crisis but without getting in the way of an effort to cut inflation almost in half by the end of next year. 

Chronic inflation that last year reached the fastest in almost a quarter century is eroding the purchasing power of Turks, prompting the government to raise the lowest salaries to retain popular support. This year, two adjustments resulted in an increase of more than 100%. 

More

Turkey’s 49% Minimum Wage Hike Balances Between Unions, Markets (msn.com)

Covid-19 Corner

This section will continue until it becomes unneeded.

Study Finds COVID Vaccination Independently Associated With Long COVID Syndrome

Developing long COVID appears to be more likely after two doses of a COVID-19 vaccine, suggesting that the spike protein may contribute to the phenomenon. 

12/27/2023 Updated: 12/27/2023

 

People who receive two doses of a COVID-19 vaccine may be more likely to develop long-COVID, a new study finds.

In the study published in PLOS One, researchers examined data from 487 and 371 individuals at four weeks and six months post-SARS-CoV-2 infection, respectively, to estimate the incidence, characteristics, and predictors of long COVID among patients. Long COVID symptoms were reported by 29.2 percent of participants four weeks following infection. This number dropped to 9.4 percent at six months, indicating symptoms may diminish over time.

Researchers found that the greater the severity of infection a patient had, the more likely they were to experience long COVID. The incidence of long COVID at four weeks of follow-up in those who experienced mild/moderate disease was 23.4 percent compared with 62.5 percent in those with severe cases.

At six months, the incidence of long COVID was considerably lower. For those with mild/moderate infection, only 7.2 percent reported symptoms compared with 23.1 percent in those with severe/critical cases. The most commonly reported symptom was fatigue. Other symptoms included cough, cognitive dysfunction or brain fog, and loss of taste and smell.

During the four-week follow-up, patients were more likely to experience long COVID if they had preexisting medical conditions, a higher number of symptoms during the acute phase of COVID-19 illness, if their infection was more severe or resulted in hospitalization, or if they had received two COVID-19 vaccine doses.

Although previous vaccination was associated with long COVID, the authors could not find “any interaction effect of COVID-19 vaccination and acute COVID-19 severity on causing Long COVID.”

This implies that prior vaccination "was independently associated with the occurrence of long-COVID," cardiologist Dr. Peter McCullough explained in a recent Substack post.

 

---- One theory is that vaccination may cause some people to generate a second round of antibodies that target the first. These antibodies could function like spike protein, which targets the angiotensin-converting enzyme 2 (ACE2) receptor—a cell surface protein—and enables the virus to enter cells. Like spike protein, these “rogue antibodies” might also bind to the ACE2 receptor and disrupt ACE2 signaling, which can cause conditions associated with long COVID.

“In my practice, the most severe cases of long-COVID are in vaccinated patients who also had severe and or multiple episodes of SARS-CoV-2 infection,” Dr. McCullough wrote on X. In his recent Substack post, he said he believes long COVID symptoms are due to the retention of SARS-CoV-2 spike protein in cells and tissues after SARS-CoV-2 infection.

More

Study Finds COVID Vaccination Independently Associated With Long COVID Syndrome | The Epoch Times

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.

Breakthrough battery powers electric car for 1,000km from a single charge

Mass production of Nio’s next-generation battery is set to begin in April 2024

December 28, 2023

An electric car maker in China has demonstrated a new battery capable of powering a vehicle for more than 1,000km on a single charge.

Shanghai-based Nio claims that the next-generation battery will enter mass production in April 2024, offering a longer range than any other electric or fuel-powered car currently on the market.

Nio chief executive William Li drove the all-electric ET7 vehicle 1,044km (649 miles) during a 14-hour live-stream, which saw the car travel from Zhejiang province to Fujian province on Sunday at an average speed of 84km/h. A separate test of the breakthrough battery reportedly saw it cover 1,145km, however this was not broadcast.

“The completion of this endurance challenge proves the product power of the 150kWh ultra-long endurance battery pack,” Mr Li wrote in a post on the Chinese social media site Weibo.

“This battery is currently the battery pack with the highest energy density in mass production in the world and has excellent safety performance. More importantly, all models on sale can be flexibly upgraded to 150kWh batteries through the Nio battery swap system.”

Nio takes an unorthodox approach to charging vehicles, favouring a battery-swap system rather than plugging the car into an outlet and waiting for the battery to recharge.

A unique mechanism built into the vehicle means that an empty battery can be swapped with a fully charged battery in less than three minutes – roughly the amount of time it takes to refill a fuel-powered vehicle.

Customers are able to buy a vehicle without a battery and then pay a monthly subscription fee to use batteries within Nio’s network.

Nio’s president Qin Lihong said that buying the new battery outright would cost 298,000 yuan (£33,000) – roughly equivalent to the price of a Tesla Model 3 – which is why the company advocates the use of a hire scheme for its customers as well as for the electric vehicle industry as a whole.

More

Breakthrough battery powers electric car for 1,000km from a single charge | The Independent

Another weekend and a holiday year-end weekend too. What will 2024 bring to our war racked, stocks bubble, US Presidential election year world? Have a great weekend everyone.

A central banker walks into a pizzeria to order a pizza. When the pizza is done, he goes up to the counter get it. There a clerk asks him: "Should I cut it into six pieces or eight pieces?" The central banker replies: "I'm feeling hungry right now. You'd better cut it into eight pieces."