Baltic Dry Index. 883 +67 Brent Crude 82.66
Spot Gold 1809 US 2 Year Yield 4.78 +0.12
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,103
Coronavirus Cases 27/02/23 World 679,726,820
Deaths 6,798,632
If you had to identify, in one word, the reason why the human race has not achieved, and never will achieve, its full potential, that word would be 'meetings.'
Dave Barry.
It
is almost the month-end, normally a time to start dressing up the stock casinos
for the all important money manager bonuses “related” to stocks rigging performance.
This month though, last Friday’s US inflation figures, the Fed’s preferred inflation figures, shocked to the upside, implying that the Fed’s inflation fight must go higher for longer if it wants to prevent inflation becoming a permanent part of the US economy. Not good for dressing up most stocks.
Worse, all the previous interest rate hikes are only now starting to drag on the economy. No oily words out of Berkshire Hathaway in Omaha, Nebraska are likely to make much difference in 2023.
No matter where global interest rates rise to, they will have little to no impact on food price inflation.
How much winter and spring crops Ukraine manages to plant and how much fertiliser they get will largely determine how much Ukraine can export in the second half of the year.
With much of Western Europe suffering a winter drought, Europe will not make up for any foodstuffs drop-off in Eastern Europe. Worse, it likely will lead to summer shipping problems again on the Great European Rhine-Danube river canal transport systems.
With drought affecting Argentina and Brazil, any relief must come from the USA and Canada. That probably means after the US wheat harvest starts in Texas in late June.
But the higher interest rates might have more success bringing down energy inflation especially if warmer spring weather coincides with a slowing global economy flirting with recession.
We open as usual with the Asia casinos.
Asia markets
trading mixed after Wall Street logs worst week for the year
FEB 26 2023 10:37 PM EST
Asia Pacific markets were mixed on Monday after
stocks on Wall Street marked their worst week for 2023 on Friday.
In Australia, the S&P/ASX 200 traded
1.22% lower, leading losses in the region. In South Korea, the Kospi fell 0.94%,
while the Kosdaq rose 0.25%.
Chinese markets were mixed, with
the Shenzhen Component down
0.14%, and the Shanghai
Composite up 0.21%. Hong Kong’s Hang Seng index reversed
earlier losses to rise 0.14%, and the Hang Seng Tech index saw a larger gain at
0.26% down.
In Japan, the Nikkei 225 fell
0.18% and the Topix rose marginally as the Bank of Japan governor nominee Kazuo
Ueda was scheduled to speak to the upper house later in the day.
Stocks on Wall Street ended the week on Friday
with sharp declines as the U.S. Federal Reserve’s preferred inflation gauge
showed a stronger-than-expected increase in prices last month.
The S&P 500 was
down 2.7%, marking its worst week since Dec. 9. The Dow Jones Industrial Average fell
almost 3.0% this week — its fourth straight losing week. The Nasdaq Composite closed
3.3% lower, notching its second negative week in three.
People’s Bank of
China maintains moderately dovish tone in report
The People’s Bank
of China maintained a moderately dovish tone in its quarterly report, reiterating its current
stance was considered appropriate to support economic growth and stability.
The central bank
reiterated its support for a cross-cyclical adjustment to boost demand and
provide stronger support for the economy.
It also repeated
its pledge to maintain sufficient liquidity and credit growth while keeping its
money supply and social financing growth at a similar pace as its nominal gross
domestic product.
The PBOC added its
required reserve ratio cuts last year were one of the tools the central bank
used to support lending, without elaborating further.
Can’t figure out
this economy? Walmart, Home Depot are having trouble, too
If you think the economy is confusing right now,
consider how baffling it must look to Home Depot and Walmart.
Last week, the two big retailers
sent cautious signals about the health of the U.S. consumer. In a nutshell: Walmart said
U.S. consumer spending started the year strong, but that it expect households
to back off through the year, producing weak
fiscal-year 2024 U.S. sales growth of 2 to 2.5 percent. Home Depot said
consumer spending is holding up, but that it expects
a flat sales-growth year overall, with declining profits.
Indeed, the latest inflation read
from last Friday’s core
personal consumption expenditures index was hotter than
expected, showing a consumer that continues to defy expectations. Friday’s PCE
showed consumer spending rose more than expected as prices increased, jumping
1.8% for the month compared to the estimate of 1.4%.
From the big-box retail earnings to declining
hopes that disinflation would be a straight line down in 2023, the latest news
from the markets and economy highlight just how hard a job the Federal Reserve
has in cooling the economy without causing a recession.
“The consumer is resilient right
now,” said CFRA Research retail analyst Arun Sundaram. “The consumer is still
spending, not as much as a year or two ago, but they haven’t quite
stopped.”
Consumer, retail stocks post a very bad week
The 2023
outlook from these two key consumer companies sent the Dow and S&P 500 down
on Tuesday, and the market’s recent losing streak continued through the end of
the week. It wasn’t a good week for the retail sector or consumer stocks,
either. The SPDR S&P
Retail ETF is
up 9% for the year, but was down roughly 7% last week, its worst five-day
stretch since July 2022. Consumer discretionary stocks turned in the worst
performance of any S&P 500 sector, down close to 4.5% for the week.
Getting a good read on the consumer has been a
question underlying markets’ debate about inflation, as investors wonder
whether households that last year lost 6.4% of their inflation-adjusted
disposable income — which rose more than 8% in the prior two
years, thanks to Covid relief programs — will keep spending. January’s
relatively-high inflation offset the boost to market sentiment from a
recent rip-roaring report on retail sales, leaving investors, and
even top stores, with different views of what comes next.
At the macro level, the January
retail sales increase of 3% more than reversed a December decline and, landing
6.4% higher than a year ago, basically matched inflation. The University of
Michigan’s consumer sentiment index has risen since November, and its latest read last Friday showed a
confidence boost for the third-straight month, led by a 12% improvement in
consumers’ outlook over the economy for the year ahead. The rival Conference
Board consumer conference survey says Americans thought conditions were
improving in January, but expect a recession later this year.
More
Can't
figure out economy? Walmart, Home Depot are having trouble, too (cnbc.com)
Finally, talking shop finishes talking! “U.S. Treasury Secretary Janet Yellen said
there were no "deliverables" from the meeting, which was mostly
organisational.” But a good time at taxpayer expense was had by all.
IMF
flags debt restructuring hurdles, says banning crypto should be an option
February
25, 2023 2:24 PM GMT
BENGALURU, Feb 25
(Reuters) - Group of 20 (G20) nations have some disagreements over restructuring
debt for distressed economies, the chief of the International Monetary Fund
(IMF) said on Saturday, adding that banning private cryptocurrencies should be
an option.
India's G20
presidency comes as its South Asian neighbours Sri Lanka, Bangladesh and Pakistan
are seeking urgent IMF funds due to an economic slowdown caused by the COVID-19
pandemic and the Russia-Ukraine war.
China, the
world's largest bilateral creditor, urged the group of big economies on Friday
to conduct a fair, objective and in-depth analysis of the causes of global debt
issues as clamour grows for lenders to take a large haircut, or accept losses,
on loans.
"On debt
restructuring, while there are still some disagreements, we now have the global
sovereign debt roundtable with consideration of all public and private
creditors," IMF Managing Director Kristalina Georgieva told reporters
after chairing the roundtable with Indian Finance Minister Nirmala Sitharaman.
"We just
finished a session in which it was clear that there is a commitment to bridge
differences for the benefit of countries."
U.S. Treasury
Secretary Janet Yellen said there were no "deliverables" from the
meeting, which was mostly organisational.
Further
discussions of the panel, which includes major bilateral creditors including
China, India and the G7 countries, several debtor countries, are planned around
the time of the IMF and World Bank spring meetings in April.
---- Apart from
restructuring debt, regulating cryptocurrencies is another priority area for
India, which Georgieva agreed with.
"We have to
differentiate between central bank digital currencies that are backed by the
state and stable coins, and crypto assets that are privately issued,"
Georgieva said.
"There has
to be very strong push for regulation... if regulation fails, if you're slow to
do it, then we should not take off the table banning those assets, because they
may create financial stability risk."
Yellen said she
had not suggested the "outright banning of crypto activities, but it was
critical to put in place a strong regulatory framework."
IMF
flags debt restructuring hurdles, says banning crypto should be an option | Reuters
When the outcome of a meeting is to have another meeting, it has been a lousy meeting.
Herbert Hoover.
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.
Huge 'unprecedented'
coffee shortage to hit UK supermarkets
February
25, 2023
An 'unprecedented' shortage
of coffee could hit the UK soon. Challenging weather conditions and labour
shortages in Central and South America mean there could soon be a limit on the
amount of coffee available for sale.
This comes as there is an ongoing shortage of fruit and vegetables in UK supermarkets. According to a trader in one of the key coffee-producing countries, there is expected to be a strain on the amount of coffee beans exported for an 'unprecedented' third year in a row, reported Upday.
Due to a lower-than-expected harvest
in Brazil - the world's largest coffee producer - it has been said that the
demand for beans and similar products will not be satiated by the available
supply for the next season.
As well as the weather, many
labourers are reportedly leaving behind their lives in Central and South
America to find better living conditions elsewhere.
One farmer
based near the Honduran capital told AFP: "Many of our coffee pickers now
go to the United States, to other countries, for a lack of opportunities"
at home.
Preliminary
data published by Brazil's Trade Ministry showed that green coffee exports
averaged 6,000 tonnes per day (100,000 60-kg bags) up to the third week of
February, compared to a daily average of 10,960 tonnes (182,660 bags) for the
full month of February in 2022.
Huge 'unprecedented' coffee shortage to hit UK
supermarkets (msn.com)
Supermarket value range
shoppers bearing brunt of food price inflation – Which?
The
price of value items was up 21.6% in January on a year before, well in excess
of overall grocery inflation of 15.9%.
February
24, 2023
Shoppers
relying on the cheapest supermarket ranges are bearing the brunt of grocery
inflation with price rises on value items far outstripping those of branded and
premium products, figures show.
The price of
value items was up 21.6% in January on a year before, well in excess of overall
grocery inflation of 15.9%, Which? found.
In comparison,
branded goods rose by 13.2% over the year, own-label premium ranges were up
13.4% and standard own-brand items increased 18.9%.
Which? analysed inflation on more than 25,000 food and drink products
at eight major supermarkets – Aldi, Asda, Lidl, Morrisons, Ocado, Sainsbury’s, Tesco and Waitrose.
Its findings suggest those who are likely to be already struggling
to feed their families and pay their bills during the cost-of-living crisis are
being hit disproportionately with the sharpest food price increases.
Some of the
biggest price increases on supermarket value items include Sainsbury’s muesli
rising 87.5% from £1.20 to £2.25, tins of sliced carrots up 63% from 20p to 33p
at Tesco, and pork sausages up 58.2% from 80p to £1.27 at Asda.
The butter and
spreads category continued to show significant inflation, up 29.9%, as did
milk, which went up by 26.1% on average across all eight supermarkets.
The price of
cheese went up by 23.8% overall, but some individual examples surged by as much
as 96.6%.
More
Supermarket value range shoppers bearing brunt of food price inflation – Which? | The Independent
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.
Protection From New COVID-19 Vaccines Drops Sharply
Within Months: CDC
Feb 24 2023
The new COVID-19 vaccines provide a boost to
protection against hospitalization but that shielding wanes within months,
according to unpublished data presented on Feb. 24.
A bivalent Pfizer or Moderna booster
increased protection against hospitalization initially by 52 percent, but that
protection dropped to 36 percent beyond 59 days, U.S. Centers for Disease Control and
Prevention (CDC) researchers
said.
The researchers separately looked at the protection
people who had received two or more monovalent doses, or doses of the original
vaccines, and no bivalent booster. They found that people aged 18 to 64 had
just 19 percent protection against COVID-19 associated hospitalization and
those aged 65 and older had just 28 percent protection.
That means the protection after two months was around 60
percent in total for the elderly and goes below 50 percent for all other
adults.
The data came from the CDC’s VISION network.
Data from a different CDC-run network, called IVY, showed “minimal to no residual protection” against hospitalization from the original vaccine, Dr. Amadea Britton, a CDC official, said.
Two or more monovalent doses provided just 17 percent protection, with uncertain confidence intervals.
A bivalent vaccine on top of a monovalent primary series brought the protection to just 55 percent at seven or more days after the booster.
Waning wasn’t measured in the IVY network.
The bivalent
vaccines were authorized and recommended in the fall of 2022 despite no
clinical trial data being available. Clinical efficacy data remains unavailable
at present.
The COVID-19
vaccines are authorized in the United States to prevent COVID-19 disease but
officials have increasingly described the goal of vaccination as preventing
severe disease, because the vaccines have performed worse and worse against
symptomatic infection as newer variants have emerged.
More
Protection From New COVID-19 Vaccines Drops Sharply
Within Months: CDC (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.
Interesting, but how much electricity
will be available and how many charging points will be needed?
Indonesia Battery
Corp eyes surge in electric scooters sales on incentive plan
February
25, 2023
JAKARTA
(Reuters) - State battery company Indonesia Battery Corporation (IBC) is
targeting a local market share of up to 30% for electric motorbikes, its chief
executive said on Friday, as the government tries to jumpstart the adoption of
electric vehicles.
The government
is aiming to reach 2 million sales of electric motorbike in 2025 as the
Indonesia attracts billion of dollars of investment in processing its rich
nickel reserves into battery materials.
Indonesia sold
less than 40,000 electric motorbikes between 2019 and 2022, while its total
motorbike sales in 2022 alone were 5.22 million units, industry data showed.
IBC last year
acquired majority stakes in PT Wika Industri Manufaktur, producer of electric
scooters Gesits, which currently has production capacity of 40,000 units per
year.
"In the
next few years the capacity could reach 75,000 to 100,000 units. So of the
total government target, our target is to have 25% to 30% market share, which
is already pretty good," IBC chief executive Toto Nugroho told Reuters.
Indonesia is planning to
contribute 7 million rupiah ($459.92) to the purchase of each electric scooter
to incentivise sales, which Toto said would result in a demand surge.
This is what
happened in China 10 years ago. Now their (annual) electric motorbike sales
have reached more than 30 million," he said.
Indonesia's
government is targeting as much as 300,000 units of electric motorbike sales
for 2023.
An IBC study
found pricing was one of the main issues affecting electric scooter adoption,
followed by concern about charging infrastructure and higher interest rates on
EV loans, Toto said.
IBC is a local
partner for global battery maker giants such as China's CATL Group and South
Korea's LG, who are planning to build major facilities in Indonesia to develop
batteries.
LG in 2021
started construction of its $1.1 billion battery plant, which Toto said had
reached around 70% completion and was on track to start production in 2024.
The plant
would have 10 Gigawatt hour capacity which would be enough to power 200,000
electric cars or up to 2.5 million electric scooters.
IBC would also
assemble its own battery packs which could help lower the price of its electric
bikes by around 15%, Toto said.
Indonesia Battery
Corp eyes surge in electric scooters sales on incentive plan (msn.com)
Meetings are indispensable when you don't want to do anything.
John Kenneth Galbraith.
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