Tuesday, 28 February 2023

Dress Up Tuesday. US Oil Rolling Over.

 Baltic Dry Index. 935 +52                 Brent Crude 82.60

Spot Gold 1814                    US 2 Year Yield 4.78  unch.

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

Deaths 53,103

Coronavirus Cases 28/02/23 World 679,863,569

Deaths 6,799,565

“The nearest thing to eternal life we will ever see on this earth is a government program.”

Ronald Reagan.

It is the last trading day of February in the stock casinos, time to dress up stocks yet again.

In truth there's almost no reason to be long most stocks at present, let alone be buying more, unless you think the central banksters will wimp out on the inflation fight, setting off entrenched inflation in the global economy.

But that way lies near hyper-inflation, social disorder and collapse of currencies and countries in Asia, Africa and Latin America.

With a US presidential election coming up in 2024, that would be gifting the presidency back to one Donald J. Trump.  Something the US deep state loathes.

Below, the latest from the gambling casinos.


Asia markets mixed as Hong Kong announces to lift mask mandate, Japan’s factory output falls

UPDATED MON, FEB 27 2023 10:56 PM EST

Asia-Pacific markets were mostly higher on Tuesday as investors digested key economic data across the region.

The Hang Seng index rose 0.45% as Hong Kong’s Chief Executive John Lee announced to drop its mask mandate starting March 1. The Hang Seng Tech index meanwhile fell 0.5%

In mainland China, the Shenzhen Component inched up 0.2%, and the Shanghai Composite was fractionally higher.

South Korea’s Kospi gained 0.94%, leading gains in the region while the Kosdaq rose 1.26% as battery material maker L&F stocks jumped after winning a contract with Tesla.

The Nikkei 225 and the Topix both rose 0.2% as the country saw its worst decline in factory output in eight months, recording a 4.6% drop in January compared to December.

In Australia, the S&P/ASX 200 rose 0.47% as retail sales for January came in higher than expected at 1.9% compared to December, higher than expectations of a 1.5% rise.

India will release its gross domestic product for the fourth quarter of 2022 later today, forecasted to show a 4.6% rise.

Overnight in the US, stocks rose on Monday night as traders tried to recover some ground following the worst week of the year on Wall Street. All three major US indexes closed higher, with the Nasdaq Composite leading gains.

Asia markets, Australia retail sales, Hong Kong mask mandate, Bank of Japan (cnbc.com)

Stock futures inch higher as Wall Street braces for final trading day of February: Live updates

UPDATED MON, FEB 27 2023 11:30 PM EST

Stocks futures rose slightly in overnight trading as investors braced for the final trading day of February.

Futures tied to the Dow Jones Industrial Average gained 30 points, or 0.10%, while S&P 500 and Nasdaq 100 futures added 0.12% each.

Zoom Video surged nearly 8% in overnight trading on strong earnings, while Occidental Petroleum’s stock fell 1% after posting a top-and-bottom line miss.

The overnight moves followed an up session for all the major averages as Treasury yields eased. The Dow Jones Industrial average rose 72.17 points or 0.22%, while the S&P 500 and Nasdaq Composite gained 0.31% and 0.63%, respectively.

Tuesday marks the final trading day of February. Despite a solid start to the year, all the major indexes are on pace for their second negative month in three. As of Monday’s close, the Dow is down 3.5% for the month and the only major index negative for the year. Both the S&P 500 and Nasdaq are positive in 2023, but down 2.3% and 1%, respectively, in February.

February “will go down in history as the month where the market pulled back to digest a very strong rally you saw at the end of December into most of January,” said Adam Sarhan, CEO of 50 Park Investments. “This is a pullback month, it’s a rest month, and that’s good as long as support is defended and support holds, which is last week’s low.”

More retail earnings reports offering clues into the health of the consumer are slated for Tuesday, including results from Target, AutoZone, Rivian Automotive, Norwegian Cruise Line Holdings and AMC Entertainment.

On the economic front, investors also await consumer confidence data, wholesale inventories, Chicago PMI and the S&P Case-Shiller home prices index.  

Stock market today: Live updates (cnbc.com)

In other news, is the US oil boom slowly turning into bust? Tomorrow Russia’s new oil sales sanctions come into effect, but no one takes them seriously.

Column: US oil drilling falls in response to lower prices

LONDON, Feb 27 (Reuters) - U.S. oil drilling activity has begun to decline in response to the downturn in prices since the middle of 2022 - which will translate into slower production growth throughout the rest of 2023 and into 2024.

The number of rigs drilling for oil fell to 600 in the week ending on Feb. 24, down from a recent peak of 627 in the week ending on Dec. 2, oilfield services company Baker Hughes found.

The rig count has declined in five of the eight most recent weeks and is at the lowest level since the start of July 2022 (“North America rig count”, Baker Hughes, Feb. 24, 2023).

The acceleration of drilling activity that started in August 2020 after the first wave of the pandemic appears to have paused or possibly ended.

Over the last three decades, changes in the rig count have generally followed changes in front-month WTI futures prices with an average lag of about 4-5 months (roughly 19 weeks).

When prices rise, delays reflect the time needed to confirm a change in price level is persistent rather than temporary, contract extra rigs, move them to the drill site, erect the equipment, and begin boring.

When prices fall, the lag reflects time needed to confirm the trend, finish part-drilled wells, drill wells already under contract, and idle unneeded rigs.

In this instance, WTI futures peaked at the start of June 2022, when they were more than 70% higher than at the same time a year before.

The number of rigs drilling for oil peaked in late November, roughly 25 weeks after prices peaked, slightly longer than average.

Since June 2022, however, prices have generally retreated, which has been reflected in a gradual turnover in drilling activity rates.

Prices are roughly 15% below year-ago levels and still trending lower, implying drilling is likely to continue falling through end of June 2023.

More

Column: US oil drilling falls in response to lower prices | Reuters

Finally, more on so you really, really, really want to drive an EV.

 

Ford Suspends Production of F-150 Lightning EV for Additional Week After Battery Fire


February 26, 2023Updated: February 26, 2023

Ford Motor Co. will halt on F-150 Lightning production until the end of next week following a battery problem that caused an EV truck to catch fire during a pre-delivery check, the company said on Friday.

“The teams worked quickly to identify the root cause of the issue,” Ford spokesperson Emma Bergg said in a statement Friday.

“We agree with SK On’s recommended changes in their equipment and processes for SK’s cell production lines.”

SK On, a South Korean EV battery maker and supplier, has started building battery cells again at a plant in Georgia.

However, it will take time “to ensure they are back to building high-quality cells and to deliver them to the Lightning production line.”

Ford will continue to hold completed trucks until engineering and production changes are made.

The company said it does not believe vehicles already in use by customers are affected by the fire issue.

Ford previously said that production at its Rouge Electric Vehicle Center in Dearborn, Michigan would be postponed until at least the end of this week as engineers identified the root cause of the battery problem.

The Feb. 4 fire happened at an outdoor lot near Dearborn, Michigan where vehicles are held for quality checks.

One Lightning caught fire and spread to two nearby vehicles, causing the company to halt production the next day. No injuries were reported.

The production halt comes at an inopportune time for Ford, which has struggled with quality issues, recalls, and high warranty costs for several years. The problem also stops the production of a popular product.

Bergg previously said the company is still working through a backlog of nearly 200,000 reservations for the F-150 Lightning since it stopped taking them in December 2021. Reservation holders put down $100 deposits, which Ford was converting to orders.

Last year, Ford sold more than 15,000 of the trucks in its first full year of production.

There have been previous problems with the lithium-ion batteries used in most electric vehicles. Fires in the batteries can burn very hot and take thousands of gallons of water to extinguish, which has caused difficulty for firefighters attempting to put out battery fires in several Teslas after crashes. General Motors, Hyundai, BMW, and others have issued recalls of the batteries.

Ford Suspends Production of F-150 Lightning EV for Additional Week After Battery Fire (theepochtimes.com)

Well, what do you know, another Segway?

Free Drive "bike-by-wire" system will soon be hitting the road

Ben Coxworth February 24, 2023

Two years ago we first heard about Schaeffler's Free Drive system, which uses a generator instead of a chain or belt to propel an ebike. The technology is now entering its first commercial use, in fleets of ebikes made for commuting and cargo-hauling.

Developed in partnership with two-wheel electric drive specialist Heinzmann, the Free Drive system incorporates a bottom-bracket-integrated generator, a rear hub motor, a lithium battery pack, and a handlebar-mounted control module.

As the rider pedals, they spin up the generator. Doing so converts their mechanical energy into electrical energy, which is fed into the motor. That motor converts the electrical energy back into mechanical energy, which is used to turn the wheel.

The generator regulates the amount of resistance that the rider experiences while pedaling, based on the level of pedaling effort they have selected in order to maintain cruising speed. Should they pedal harder than is necessary, the excess energy is stored in the battery. A regenerative braking system helps keep the battery topped up.

Although Schaeffler admits that Free Drive is about 5% less efficient than a chain drive at converting pedaling power into forward motion, the system also allows for much greater freedom when it comes to the design of pedal-powered vehicles – after all, the crankset only needs to be connected to the rear wheel via electrical wiring.

Additionally, Free Drive reportedly requires much less maintenance than a chain drive

Schaeffler has now announced that the system will be making its first commercial appearance in the mocci Smart Pedal Vehicle made by fellow German company CIP Mobility. The latter firm will be selling fleets of the mocci ebikes to corporate clients, who will in turn use them in bike-sharing projects, urban deliveries or other applications.

Along with its Free Drive drivetrain, some of the mocci's other features include sturdy one-piece monocoque wheels; a recyclable polyamide frame made using a unique injection molding process; a built-in telemetry system; plus multiple rack-mounting points and an optional cargo trailer.

Sources: SchaefflerCIP Group via Electrek

Free Drive "bike-by-wire" system will soon be hitting the road (newatlas.com)

Segway

---- The Segway PT, referred to during development and initial marketing as the Segway HT, was developed from the self-balancing iBOT wheelchair which was initially developed at University of Plymouth, in conjunction with BAE Systems and Sumitomo Precision Products.[3] Segway's first patent was filed in 1994 and granted in 1997,[4] followed by others,[5] including one submitted in June 1999 and granted in October 2001.[6]

Prior to its introduction, a news report[7] about a proposal for a book about the invention, development, and financing of the Segway[8] led to speculation about the device and its importance. John Doerr speculated that it would be more important than the Internet.[9] South Park devoted an episode to making fun of the hype before the product was released. Steve Jobs was quoted as saying that it was "as big a deal as the PC",[9] (he later expressed a negative opinion, saying that it "sucked", presumably referring to "the design" - but also referred to the (presumably high) price point, asking, "You're sure your market is upscale consumers for transportation?")[10] The device was unveiled on 3 December 2001, following months of public speculation,[11] in Bryant ParkNew York City, on the ABC News morning program Good Morning America,[12][13] with the first units delivered to customers in early 2002.[14]

More

Segway - Wikipedia

 

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.

Will eurozone core inflation remain stubbornly high?

February 26, 2023

Economists expect headline eurozone inflation to drop to close to a year low in February, but the core reading, which excludes volatile items like fuel, food and tobacco, is set to remain stickier.

The preliminary data released on Thursday will, according to a Reuters poll, show eurozone annual consumer price growth slowing to 8.1 per cent this month, down from 8.6 per cent in January. This would be well below the October peak of 10.6 per cent and the lowest since April 2022.

However, the decline is likely to be driven by lower energy price rises. Core inflation is set to remain at 5.3 per cent, the highest on record. Economists forecast the trend to continue throughout 2023.

Iaroslav Shelepko, economist at Barclays, said eurozone headline inflation this year would show a “sharp deceleration driven by further energy disinflation and its spillovers into food and non-energy goods inflation, as well as very negative base effects”.

But he warned that the easing in core inflation “is likely to be even more gradual as underlying strong momentum takes time to unwind”.

Stubborn underlying price pressures will continue to support the case for the European Central Bank to raise rates. Markets have priced in a half percentage point increase at the ECB meeting on March 16. That would take the deposit rate to 3 per cent. It was minus 0.5 per cent only last July.


On Thursday, the ECB will also publish its account of the February monetary policy meeting, which concluded with a half percentage point increase. Investors will monitor it to gauge more details on the planned path for rates beyond March.

Ellie Henderson, economist at Investec, noted that the minutes come just hours after the February flash inflation print for the eurozone: “an off-consensus print could steal the limelight in markets from the backward-looking account”, she said. Valentina Romei

More

Will eurozone core inflation remain stubbornly high? | Financial Times (ft.com)

Suppliers for retailers increase prices by more than double inflation

February 26, 2023

Suppliers for retailers have increased prices by more than double the rate of inflation.

Some have requested up to 30 per cent more despite their own costs having risen by just 15 per cent, according to business management consultant Inverto.

Boss Sushank Agarwal said some had been 'using inflation to grow their profit margins'.

Last month, household titans behind some of Britain's favourite brands – including Heinz baked beans and Head & Shoulders shampoo – were accused of 'greedflation' after cashing in monster profits while whacking customers with heftier prices.

Suppliers for retailers increase prices by more than double inflation | This is Money

Covid-19 Corner

This section will continue until it becomes unneeded.

Below, what has been pretty obvious to most scientists and LIR readers since at least March 2020.  The Chinese “gain of function” coronavirus research was being funded in China with US funds “laundered” through the NYC EcoHealth Alliance NGO, to get around US laws prohibiting highly dangerous gain of function research in the USA.

With almost 7 million dead globally, the USA and China both owe the rest of the world a massive apology. Don’t hold your breath.

Covid-19 likely came from lab leak, says news report citing US energy department

Updated finding comes with ‘low confidence’ and is a departure from previous studies on how virus emerged, Wall Street Journal reports

Sun 26 Feb 2023 17.46 GMT

The virus that drove the Covid-19 pandemic most likely emerged from a laboratory leak but not as part of a weapons program, according to an updated and classified 2021 US energy department study provided to the White House and senior American lawmakers, the Wall Street Journal reported on Sunday.

The department’s finding – a departure from previous studies on how the virus emerged – came in an update to a document from the office of National Intelligence director Avril Haines, the WSJ reported. It follows a finding reportedly issued with “moderate confidence” by the FBI that the virus spread after leaking out of a Chinese laboratory.

The conclusion from the energy department – which oversees a network of 17 US laboratories, including areas of advanced biology – would be significant despite the fact that, as the report said, the agency made its updated judgment with “low confidence”.

Conflicting hypotheses on the origins of Covid-19 have centered either on an unidentified animal transmitting the virus to humans or its accidental leak from a Chinese research laboratory in Wuhan.

The spread of Covid-19, just one in a line of infectious coronoviruses to emerge, caught global health bodies unawares in early 2020. It has since caused close to 7 million deaths worldwide, according to the World Health Organization, and disrupted trade as well as travel.

Former US president Donald Trump politicized the issue, calling it the “China virus”, triggering a racialization of a pandemic that his Democratic successor Joe Biden has sought to avoid. But political polarization remains under the surface of efforts to establish its origins.

The energy department’s updated findings run counter to reports by four other US intelligence agencies that concluded the epidemic started as the result of natural transmission from an infected animal. Two agencies remain undecided.

US officials, the Journal said, also declined to expand on new intelligence or analysis that led the energy department to change its position. They also noted that the energy department and FBI arrived at the same conclusion for different reasons.

More

Covid-19 likely came from lab leak, says news report citing US energy department | Coronavirus | The Guardian

Hong Kong to scrap Covid mask mandate from March 1

Hong Kong will drop its Covid-19 mask mandate, chief executive John Lee said on Tuesday, in a move to lure back visitors and business and restore normal life more than three years after stringent rules were first imposed in the financial hub.

The measure will take effect from Wednesday, Lee told a press briefing. The special administrative region of Hong Kong is one of the last places globally that still imposes a mask mandate.

Hong Kong and Macao both followed China’s zero-Covid policy for much of the past three years. Hong Kong started unwinding its stringent Covid rules last year but mask-wearing has remained constant since 2020.

More

Hong Kong to scrap Covid mask mandate from March 1 (cnbc.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.

Solar set to overtake other energy sources by 2027

Cheaper installation costs and energy security concerns are driving expansion

February 27, 2023

A little more than a decade ago, solar power was an also-ran in the global energy race. At less than 1 per cent, it had the smallest share of generation capacity of any major power source.

But all that has changed. Next year, solar photovoltaic capacity will leapfrog that of hydropower, according to the International Energy Agency. In three years, it will overtake gas-fired generation. And, in four years, it will push past coal — to boast the largest share of generation capacity of any power source.

A buildout of solar installations — from Arizona in the US to Anhui, China — has been at the forefront of a renewable energy charge that has muscled-in on the old energy order.

Now, as Russia’s invasion of Ukraine pushes energy security concerns centre stage, the development of solar is set to pick up speed — with record breaking numbers of installations forecast in each of the next five years.

“There is a boom, there is exponential growth, there is acceleration,” says Heymi Bahar, senior analyst for renewable energy markets and policy at the IEA. “Solar accounts for almost 60 per cent of every power installation that will be built in the coming five years.”

While its intermittent nature means solar will not immediately produce more electricity than coal or gas — which can be turned on and off as required and will churn out electrons whatever the weather — the scale of the installation boom underlines the seismic shift in electricity generation.

Fast falling costs have been the primary driver of the solar buildout in recent years. The average unsubsidised lifetime cost to build and operate utility-scale solar was just $36 per megawatt hour in 2021, according to financial advisers Lazard — down about 90 per cent since 2009. That compares with $108/MWh for coal, $60/MWh for combined cycle gas, and $38/MWh for wind.

Costs picked up last year as the price of component parts, most notably polysilicon, soared. But utility-scale solar was still the cheapest option for new electricity generation in most parts of the world. The rate of installations grew by more than half last year, says the consultancy S&P Global Commodity Insights.

Aggressive climate targets and accompanying policies, with generous subsidies in jurisdictions across the world, have helped.

Vladimir Putin’s weaponisation of gas exports, to hit allies of Ukraine, has further encouraged the setting of tough targets in the EU, as the bloc tries to wean itself off its reliance on Russian fossil fuels by 2027. Russia supplied the continent with 155bn cubic metres of gas in 2021, or 40 per cent of its consumption, primarily in power and heating.

Under its RePower EU plan, released last May, the bloc now wants to generate 45 per cent of its power from renewables by 2030, with a focus on more than doubling solar installations to 320GW by 2025 and 600GW by 2030. That alone will cut gas consumption by 9 bcm by 2027, Brussels estimates.

More

Solar set to overtake other energy sources by 2027 | Financial Times (ft.com)

“I have wondered at times about what the Ten Commandment’s would have looked like if Moses had run them through the U.S. Congress.”

Ronald Reagan.


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