Baltic Dry Index. 681 +01 Brent Crude 84.49
Spot Gold 1927 US 2 Year Yield 4.21 -0.04
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,103
Coronavirus Cases 01/02/23 World 675,217,937
Deaths 6,762,458
Some people make things happen, some watch while things happen, and some wonder what happened? We do all three.
Fed Chairman Powell, with apologies.
After dithering for too long as US inflation soared, the US central bank is expected to raise its key interest rates one more time today.
But out in the real world far from the global stock casino gambling, all the central bank interest rate hikes finally seem to be impacting the global economy. A trade slowdown seems to be gathering pace.
More
highly paid technology layoffs keep coming too. To this old dinosaur markets
follower, I think we’re heading into the worst of all outcomes, stagflation. The next three months will likely tell.
Asia-Pacific
shares trade higher as investors gear up for Fed rate hike decision
UPDATED TUE, JAN 31 2023 9:59 PM EST
Asia-Pacific
shares traded higher as investors looked ahead to the Federal Reserve’s
Wednesday meeting, as well as some economic data in the region.
Australia’s S&P/ASX 200 was
up 0.71%. Japan’s Nikkei 225 gained
0.8% and the Topix climbed 0.7% even as Japan’s factory activity logs a third consecutive month of contraction in January.
South
Korea’s Kospi advanced
0.74% and the Kosdaq rose 0.78%, as South Korea’s export numbers in January
fell 16.6% on an annualized basis.
Hong
Kong’s Hang Seng index rose
0.47% in early trade. Mainland China’s Shanghai Composite added
0.34% and the Shenzhen
Component was up 0.73%.
Hong Kong is
set to release its fourth quarter GDP data later in the day.
Overnight
on Wall Street, major
indexes rose on the back of strong earnings and encouraging
inflation data.
On
Wednesday, the Fed will announce
how much it is increasing interest rates to tackle high
inflation, and markets are expecting a 25 basis point, or 0.25 percentage
point, bump from the central bank.
China’s factory
activity contracts again
China’s factory activity in January signaled a further contraction
from previous readings, albeit at a slower pace, marking the sixth monthly
contraction in a row.
The Caixin manufacturing Purchasing Managers’ Index for January
came in at 49.2 on Wednesday, a slightly higher reading than December’s 49.0
but still missing Reuters’ expectations of 49.5
“Both manufacturing supply and demand continued to shrink last
month. Fallout from the pandemic was a drag on production and sales,” Caixin
reported in the press release.
Asia-Pacific
shares, Fed, GDP (cnbc.com)
Stock futures
tick lower as traders await the Federal Reserve’s latest rate hike decision
UPDATED TUE, JAN 31 2023 6:57 PM
EST
Stock futures
slipped Tuesday evening as investors looked ahead to the Federal Reserve’s
Wednesday meeting.
Futures tied to the
Dow Jones Industrial Average shed 48 points or 0.14%. S&P 500 futures and
Nasdaq Composite futures were down 0.20% and 0.37%, respectively.
The moves come
after stocks jumped to end January on a strong note. The Dow Jones Industrial
Average ended the day nearly 369 points higher, rising by 1.09%. The S&P
500 gained 1.46% to cap its best January performance since 2019. The tech-heavy
Nasdaq Composite rose 1.67%, its best January performance in 22 years.
On Wednesday, the
Federal Reserve will announce how much it is increasing interest rates in its
latest effort to tame high inflation. Markets are expecting a 25 basis point,
or 0.25 percentage point, bump from the central bank. On Tuesday, the
employment cost index, a measure of wage increases, showed compensation rose 1%
in the fourth quarter, less than the 1.1% estimate by Dow Jones.
Still, traders may
be getting ahead of themselves in expecting a more dovish tone from the Fed, or
looking for signs that a pause in hikes or even a pivot is coming soon.
“Aggressive
tightening in 2022 has led to signs of decelerating inflation but from levels
that remain unacceptably high,” Ron Temple, chief market strategist at Lazard
said in a Tuesday note. “With a 25bps hike already discounted by markets,
Powell’s task is to unambiguously signal the Fed’s commitment to tame
inflation.”
The Federal Reserve
will announce its decision Wednesday afternoon, followed by Chairman Jerome
Powell’s comments.
Earnings season
continues as well. Peloton and Meta Platforms are scheduled to report quarterly
results on Wednesday.
Stock
futures tick lower as traders await the Federal Reserve's latest rate hike
decision (cnbc.com)
Back
in the real economy, tinkering with interest rates may already be moot. The
global economy seems to be rolling over into recession.
PayPal to lay off
2,000 employees in coming weeks, about 7% of workforce
PayPal on
Tuesday announced plans to lay off 2,000 employees, or around 7% of its
workforce, according to a release posted to the company’s website.
President and CEO Dan Schulman wrote in the release that
PayPal is working to address the “challenging macroeconomic environment.” He
said the company has made progress focusing resources on core priorities and
rightsizing its cost structure, but that there is more work to be done.
---- The company’s layoffs announcement marks the latest round of job
cuts in the tech industry, as Workday also announced plans to cut 525
jobs Tuesday. Earlier this month, Google announced
plans to lay off more than 12,000
workers, Microsoft announced
plans to cut 10,000
employees and Salesforce announced
plans to lay
off 7,000 workers.
In its third-quarter earnings report, PayPal beat on earnings
and revenue expectations, but shares slid after the company’s Q4 revenue
estimate came in behind analysts’ expectations. But PayPal raised EPS guidance
for the full fiscal year, saying it’s benefited from “ongoing productivity
initiatives.”
More
PayPal
to lay off 2,000 employees in coming weeks, about 7% of workforce (cnbc.com)
South Korea posts
the worst trade deficit in its history
South Korea recorded
a trade deficit of $47.5 billion for 2022, official data from the customs
agency showed.
It marked the worst
trade deficit since the agency started compiling data in 1956 and far more than
the $20.6 billion trade deficit in 1996.
January exports fell
$46.3 billion, or 16.6% – declining more than expectations for a drop of 11.3%.
Imports fell $59 billion, or 2.6%, falling less than forecasts of a 3.6%
decline.
That resulted in a deficit of $12.7 billion for
January, more than the $9.27 billion expected by economists polled by Reuters.
The Korean won traded
at 1,232.24 against the U.S. dollar following the report.
“There’s some expectation that the
world economy won’t be facing as difficult of a situation as expected thanks to
China’s reopening and unexpected growth from surrounding economies,” South
Korea’s minister of economy and finance Choo Kyung-ho said in a meeting with
officials on Wednesday.
“The widening trade deficit seen in January is
widely seen to be due to seasonal factors such as an import in energy exports
for the winter, as well as a sudden drop in chip prices, leading to a worsened
picture,” Choo said.
This comes as global smartphone
shipments dropped 18% to 296.9 million units in the final quarter of 2022 as
demand fell, according to Canalys.
“Despite showing some stabilization
in Q3, Asia Pacific and Europe suffered their worst Q4 performances in history
in 2022,” said Canalys analyst Sanyam Chaurasia, adding shipments in
Asia-Pacific fell by 8% in 2022 despite resilience throughout the year.
On Tuesday, chipmaker Samsung
Electronics reported its worst quarterly profit in eight years,
while SK Hynix also posted a record loss for
the period.
South
Korea posts the worst trade deficit in its history (cnbc.com)
Global Inflation/Stagflation/Recession Watch.
Given
our Magic Money Tree central banksters and our spendthrift politicians,
inflation now needs an entire section of its own.
Grocery inflation
hits new record level, adding £788 to annual bill
January 30, 2023
Grocery inflation has hit a new record level since Christmas,
according to closely watched industry data which has abruptly ended hopes that
price falls would gain momentum.
The Kantar Worldpanel agency reported
an annual rate of 16.7% during the four weeks to 22 January.
It marked a steep increase on the
14.4% seen in December, when discounting by chains in the run-up to the festive
season helped temper the pace of price increases.
The report said that the record new
rate meant that families faced a potential £788 annual rise in the cost of
their regular shopping basket as a result of the hike.
Overall take-home grocery sales rose
by 5.7% during the four week period, Kantar said.
It noted that while promotional
activity among the supermarket chains had dropped away, by the most since 2008,
intense competition for market share meant that value range price pledges and
loyalty schemes had now become the major battlegrounds.
Kantar's head of retail and consumer
insight, Fraser McKevitt, said of the price picture: "Late last year, we
saw the rate of grocery price inflation dip slightly, but that small sign of
relief for consumers has been short-lived.
"Grocery price inflation jumped a
staggering 2.3 percentage points this month to 16.7%, flying past the previous
high we recorded in October 2022."
Milk, eggs and dog food continued to
lead the way in the inflation stakes.
Food, along with the cost of many
other everyday products, has become more expensive largely due to the surge in
energy prices seen since the Russian invasion of Ukraine.
While the war can also be blamed for
many commodity costs, such as wheat, rising markedly, it is hoped that grocery
inflation will soon peak.
The main rate of inflation, the
consumer prices index (CPI), has slipped for two months in a row but is
expected to start easing markedly at the end of winter.
Food costs are among the reasons for
the CPI measure remaining stubbornly high.
At 10.5%, it is well above the Bank
of England's 2% target and policymakers are expected this week to impose a
further rise in the Bank's base interest rate, of 0.5 percentage points, to
maintain their pressure on inflation.
Grocery inflation
hits new record level, adding £788 to annual bill (msn.com)
Is Stagflation At The Door?!
1/28/2023 11:11:33 PM
Many
economists and analysts warn that the world may be on the verge of a
'stagflationary' period, i.e. the continuation of high inflation rates, as a
result of the rise in energy and food prices, with economic growth declining to
almost stagnation. Are these warnings accurate or not, and why is stagflation
usually associated with rising energy prices?!
Stagflation
happens because of the conflicting nature of the economic goals. When energy
prices rise - which is the main component of inflation in the various economies
of the world - inflation rates increase, and to confront them, central banks
resort to raising interest rates dramatically. This, in turn, eliminates the
possibilities of achieving economic growth rates, which leads to a decline in
economic growth accompanied by high rates of inflation, and the economy enters
what is known as stagflation. Recession means that the economy records a
decline in growth rates for two or three consecutive quarters. This is what
happened to the global economy in 1973 when oil prices rose, economic growth
declined and the world entered a state of stagflation.
In the first
quarter of this year, inflation in the United States, the world's largest
economy, reached its highest level in 40 years, at 8.5 per cent. As a result,
the Fed responded, much belatedly, because to its conviction that inflation was
temporary, by raising its benchmark interest rate by 25 basis points, with
several more rounds of hikes expected.
The Fed now
faces a dilemma, in which it is either raising interest rates too low to reduce
inflation, or too high for the economy to achieve positive high growth rates.
This applies to a large number of central banks in the developed and developing
countries in the world.
In China,
which is the second largest economy in the world, inflation rates did not
exceed 1.5 per cent, on an annual basis, in March of this year. On the other
hand, the Chinese government set the economic growth target for 2022 at about
5.5 per cent, which is lower than the previous year's 8.1 per cent, which
exceeded the government's 2021 target rate of 6 per cent.
In the euro
zone as a whole, the inflation rate recorded a new record in March, reaching
7.5 per cent; this rate is still driven by energy prices, which jumped 31.7 per
cent in February.
More
Is Stagflation At The Door?! | MENAFN.COM
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.
Growing Number of Doctors Say They
Won’t Get COVID-19 Booster Shots
Jan 30 2023
A growing number of
doctors say that they will not get COVID-19 vaccine boosters, citing a
lack of clinical trial evidence.
“I have taken my last COVID
vaccine without RCT level evidence it will reduce my risk of severe
disease,” Dr. Todd Lee, an infectious disease expert at McGill University,
wrote on Twitter.
Lee was pointing to the lack of
randomized clinical trial (RCT) results for the updated boosters, which were
cleared in the United States and Canada in the fall of 2022 primarily based
on data from experiments with mice.
Lee, who has received three
vaccine doses, noted that he was infected with the Omicron virus variant—the
vaccines provide little protection against infection—and described himself as a
healthy male in his 40s.
Dr. Vinay Prasad, a professor
of epidemiology and biostatics at the University of California, San Francisco,
also said he wouldn’t take any additional shots until clinical trial data
become available.
Allison Krug, an epidemiologist
who co-authored a study that found teenage boys were more
likely to suffer heart inflammation after COVID-19 vaccination than COVID-19
infection, recounted explaining to her doctor why she was refusing a booster
and said her doctor agreed with her position.
She called on people to “join the
movement to demand appropriate evidence,” pointing to a blog post from Prasad.
“Pay close attention to note this
isn’t anti-vaccine sentiment. This is ‘provide [hard] evidence of benefit to
justify ongoing use’ which is very different. It is only fair for a 30 billion
dollar a year product given to hundreds of millions,” Lee said.
Dr. Mark Silverberg, who founded
the Toronto Immune and Digestive Health Institute; Kevin Bass, a medical
student; and Dr. Tracy Høeg, an epidemiologist at the University of
California, San Francisco, joined Lee and Prasad in stating their opposition to
more boosters, at least for now.
Høeg said she did not need
clinical trials to know she’s not getting any boosters after receiving a
two-dose primary series, adding that she took the second dose “against my will.”
----
The U.S. Food and Drug Administration (FDA) granted emergency use authorization
to updated boosters, or bivalent shots, from Pfizer and Moderna in August 2022
despite there being no human data.
Observational data suggests the
boosters provide little protection against infection and solid shielding against severe illness, at least
initially.
Five months after the
authorization was granted, no clinical trial data has been made available for
the bivalents, which target the Wuhan strain as well as the BA.4 and BA.5
subvariants of Omicron. Moderna presented efficacy estimates for a different
bivalent, which has never been used in the United States, during a recent meeting. The company estimated the booster
increased protection against infection by just 10 percent.
The FDA is preparing to order
all Pfizer and Moderna COVID-19 vaccines be replaced with the bivalents. The
U.S. Centers for Disease Control and Prevention, which issues recommendations
on vaccines, continues advising virtually all Americans to get a primary series
and multiple boosters.
More
Growing Number of
Doctors Say They Won’t Get COVID-19 Booster Shots (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.
Fuel Costs of Electric Vehicles Overtake Gas-Powered Cars: Study
January 28, 2023 Updated: January 30, 2023
The cost to fuel electric
vehicles in the United States is higher than gas-powered cars for the first
time in 18 months, a consulting company said.
“In Q4 2022, typical mid-priced
ICE (Internal Combustion Engine) car drivers paid about $11.29 to fuel their
vehicles for 100 miles of driving. That cost was around $0.31 cheaper than the
amount paid by mid-priced EV drivers charging mostly at home, and over $3 less
than the cost borne by comparable EV drivers charging commercially,” Anderson
Economic Group (AEG) said in an analysis.
However, luxury EVs still
enjoy a cost advantage against their gas-powered counterparts.
It costs luxury EV owners $12.4
to drive every 100 miles on average if they charge their cars mostly at home or
$15.95 if they charge their cars mostly at commercial charger stations in the
4th quarter of 2022.
Meanwhile, the fuel costs for luxury gas-powered cars are $19.96 per 100 miles on average.
AEG is a consulting firm based in Michigan that
offers research and consulting in economics, valuation, market analysis, and
public policy, according to the company’s website.
The fuel costs in the analysis are based on
real-world U.S. driving conditions including the cost of underlying energy,
state taxes charged for road maintenance, the cost of operating a pump or
charger, and the cost to drive to a fueling station, AEG said.
More
Fuel Costs of Electric Vehicles Overtake Gas-Powered
Cars: Study (theepochtimes.com)
Over
a long weekend, I could teach my dog to become a central bankster.
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