Friday, 3 February 2023

The Next Lehman? Earnings Miss. US Jobs

 Baltic Dry Index. 640 -28             Brent Crude 81.98

Spot Gold 1915                US 2 Year Yield 4.09 -unch.

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

Deaths 53,103

Coronavirus Cases 03/02/23 World 675,910,407

Deaths 6,767,601

"If the profit numbers on income statements are treated with such reverence, it was obviously only a question of time before some smart fellows would start building companies not around the logical progression of a business but around what would beef up the numbers."

“Adam Smith” aka George Goodman. The Money Game.

In the stock casinos, a rocky start. More and more signs arriving that the Magic Money Tree boom has turned to bust.

In Asia, is Adani the next FTX or Lehman?  Did Hindenburg just torch Adani?

 

Adani Enterprises plunges 25% as rout deepens in Hindenburg fallout; Asia stocks mixed

UPDATED FRI, FEB 3 2023 12:38 AM EST

Stocks in the Asia-Pacific traded mixed on Friday as shares of Adani Enterprises plunged 25%, continuing a sell-off triggered by allegations raised by short-seller firm Hindenburg.

The Nifty 50 in Mumbai traded 0.1% higher despite Adani companies continuing to drop sharply, while the S&P Sensex rose 0.4% in its early hours of trade.

Hong Kong’s Hang Seng index fell 1.5%. In mainland China, the Shanghai Composite fell 1.2% and the Shenzhen Component lost 1.2% as the Caixin purchasing managers’ index showed services activity in China picked up in January.

The Nikkei 225 in Japan rose 0.3% and the Topix traded 0.2% higher as the au Jibun Bank Japan Services Purchasing Managers’ Index for January marked further growth for the month.

In South Korea, the Kospi also rose 0.31% and the Kosdaq gained 0.07%.

In Australia, the S&P/ASX 200 rose 0.32% as investors digest new housing loan commitments for December that fell 4.3%. Singapore will release its retail sales for the final month of 2022 later in the day.

Adani Group founder and chairman Gautam Adani’s net worth fell further overnight, and now sits at #21 on the Bloomberg Billionaires Index. He lost a total of $59.2 billion in net worth year-to-date to $63.1 billion as of Thursday’s market close.

Overnight in the U.S., major indexes on Wall Street saw a rally driven by technology stocks. Meta surged 23%, marking its best day since 2013 after seeing a better-than-expected earnings report.

Adani Enterprises to be removed from Dow Jones sustainability indices

Adani Enterprises will be removed from the Dow Jones Sustainability Indices, effective Feb. 7, S&P said in an announcement.

“Adani Enterprises will be removed from the Dow Jones Sustainability Indices following a Media & Stakeholder Analysis triggered by allegations of stock manipulation and accounting fraud,” it said in a one-line notice.

Adani Enterprises was added to the Dow Jones Sustainability Emerging Markets Index as of Dec. 19, 2022, according to a list of components on S&P Global’s website.

Adani did not respond to CNBC’s request for comment. Shares traded 30% lower during Mumbai’s trading session on Friday.

Adani Enterprises plunges 25% as rout deepens in Hindenburg fallout; Asia stocks mixed (cnbc.com)

Stocks making the biggest moves after hours: Apple, Amazon, Ford and more

Apple — The consumer tech stock tumbled 4% in extended trading after the company reported weaker-than-expected results for its fiscal first quarter. The company reported $1.88 in earnings per share on $117.15 billion of revenue. Analysts surveyed by Refinitiv were expecting $1.94 in earnings per share and $121.10 billion of revenue. Sales were down 5% year over year.

Amazon — Shares of the e-commerce giant fell more than 3% in extended trading despite beating revenue estimates for the fourth quarter. Amazon reported $149.20 billion in revenue for the quarter, above the $145.42 billion expected, according to Refinitiv. The company reported just three cents in earnings per share. Amazon’s stock gained more than 7% during regular trading hours, and the midpoint of the company’s first-quarter revenue guidance was below expectations.

Alphabet — Alphabet dropped more than 5% in extended trading after the Google parent company missed expectations on the top and bottom lines for the fourth quarter, according to analyst estimates from Refinitiv. Revenues from YouTube advertising and its Google Cloud offering were both lower than analysts expected. Alphabet’s stock closed up by more than 7% in the previous trading session.

Qualcomm — Shares of the chipmaker dipped 1.5% in extended trading after Qualcomm reported $2.37 in adjusted earnings per share for its fiscal first quarter. That was three cents better than estimates, according to Refinitiv. However, Qualcomm’s adjusted revenue came in at $9.46 billion, below the expected $9.60 billion.

Starbucks — Shares fell about 1% after the coffee-shop chain missed expectations on both per-share earnings and revenue in its fiscal first quarter. Starbucks reported an adjusted 75 cents in earnings per share and $8.71 billion in revenue. Analysts surveyed by Refinitiv were expecting 77 cents per share and $8.78 billion of revenue. The company reported a 2% decline in comparable transactions year over year, thanks in part to weakness in China.

Ford — Shares of the automaker tumbled 6% in extended trading after fourth-quarter earnings fell far short of expectations, despite better-than-expected revenue. CEO Jim Farley said the company “left about $2 billion in profits on the table” during the fiscal year.

More

Stocks making big moves after hours: AAPL, AMZN, F (cnbc.com)

Stock futures fall after earnings reports from Apple, Alphabet disappoint investors

UPDATED THU, FEB 2 2023 7:07 PM EST

Stock futures slid on Thursday evening after several high-profile earnings misses cast doubt on the recent market rally.

Futures for the S&P 500 fell 0.6%, while Nasdaq 100 futures lost 1.4%. Dow Jones Industrial Average futures slumped 62 points, or 0.2%.

Struggles of major tech stocks weighed on the market. Apple and Google-parent Alphabet both missed estimates on the top and bottom lines for their December quarters. Alphabet’s stock fell nearly 4% in extended trading, while Apple shares were down 3.2%. Amazon’s stock also dipped about 4.2% after the e-commerce giant’s report.

The earnings picture wasn’t much better outside of tech, as Ford and Starbucks also missed estimates. Those stocks fell 6% and 2% respectively in extended trading.

The move in futures threatened to erase some large gains for the market on Thursday. The Nasdaq Composite rose 3.25% for its best day since November and is on track for a fifth-straight winning week. The S&P 500 gained 1.47%.

The Dow, however, finished Thursday slightly lower, weighed down by health-care stocks, but is still positive for the week.

---- In addition to insight from major companies on earnings calls, Investors will get a key data point about the U.S. economy on Friday morning with the January jobs report.

Stock futures fall after earnings reports from Apple, Alphabet disappoint investors (cnbc.com)

Strong U.S. job growth expected in January; wages seen cooling

WASHINGTON, Feb 3 (Reuters) - U.S. job growth likely remained strong in January amid a persistently resilient labor market, but an anticipated further slowdown in wage gains should give the Federal Reserve some comfort in its fight against inflation.

The Labor Department's closely watched employment report on Friday is also expected to show the unemployment rate ticking up to 3.6% last month from a more than 50-year low of 3.5% in December. It would allow the U.S. central bank, focused on wage inflation, to maintain a moderate pace of rate hikes and reduce the risk of a recession this year.

Fed Chair Jerome Powell told reporters on Wednesday that "the economy can return to 2% inflation without a really significant downturn or a really big increase in unemployment." With wages moderating and inflation trending lower, economists are increasingly agreeing with that sentiment.

"Wage growth is decelerating less than inflation," said Kate Bahn, chief economist at the Washington Center for Equitable Growth in Washington. "For the Fed, it really makes the case that you don't necessarily need to rely on tempering labor market growth to address inflation if the labor market is not the cause of inflation."

The survey of establishments will likely show that nonfarm payrolls increased by 185,000 last month after rising by 223,000 in December, according to a Reuters survey of economists.

Average hourly earnings are forecast rising 0.3% after a similar gain in December. That would lower the year-on-year increase in wages to 4.3% from 4.6% in December.

But great uncertainty surrounds the payrolls forecast, and estimates ranged from 125,000 to 305,000.

With January's employment report, the government will publish its annual "benchmark" revisions and update the formulas it uses to smooth the data for regular seasonal fluctuations in the establishment survey. It will also incorporate new population estimates in the household survey, from which the unemployment rate is derived. As such January's unemployment rate will not be directly comparable to December.

Last year, the Labor Department's Bureau of Labor Statistics (BLS) estimated the economy added 462,000 more jobs in the 12 months through March 2022 than previously reported. Payrolls data from April through December will also be revised based on the new benchmark level and updated seasonal factors. The revisions will also affect average hourly earnings and the workweek.

BLS will also revise their industry classification system, which would result in about 10% of employment reclassified into different industries. It warned last month that the revisions and industry reclassification "will affect more historical data than is typical in the annual benchmark process."

More

Strong U.S. job growth expected in January; wages seen cooling | Reuters

Global Inflation/Stagflation/Recession Watch.

Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.

Today, did the BOE and ECB just make a policy mistake yesterday in not following the Fed’s rate increase easing? I think both did, with the ECB promising another mistake at their next meeting.

Aggressively tightening into a likely recession when they had cover to follow the Fed’s lead, is a gamble that China’s economic reopening will undo much of the effect of the aggressive tightening. It might, but why pass up the cover for a lighter touch?

Bank of England hikes rates by 50 basis points, now sees ‘much shallower’ recession than feared

PUBLISHED THU, FEB 2 2023 7:06 AM EST

LONDON — The Bank of England on Thursday hiked interest rates by 50 basis points and dialed back some of its previous bleak economic forecasts.

The Monetary Policy Committee voted 7-2 in favor of a second consecutive half-point rate hike, taking the main Bank rate to 4%, but indicated in its decision statement that smaller hikes and an eventual end to the hiking cycle may be in the cards in coming meetings. The two dissenting members voted to leave rates unchanged at this meeting.

Crucially, the Bank also dropped the word “forcefully” from its rhetoric around continuing to raise rates as necessary to rein in inflation. It sees a forthcoming easing in the annual Consumer Price Index:

“Annual CPI inflation is expected to fall to around 4% towards the end of this year, alongside a much shallower projected decline in output than in the November Report forecast,” the Bank said.

“In the latest modal forecast, conditioned on a market-implied path for Bank Rate that rises to around 4½% in mid-2023 and falls back to just over 3¼% in three years’ time, an increasing degree of economic slack, alongside falling external pressures, leads CPI inflation to decline to below the 2% target in the medium term.”

However, the MPC noted that the labor market remains tight and domestic price and wage pressures have been stickier than expected, suggesting risks of “greater persistence in underlying inflation.”

U.K. inflation came in at 10.7% in December, down slightly from the previous month’s 41-year high of 11.1% as easing fuel prices helped to ease price pressures. However, high food and energy prices continue to squeeze U.K. households and drive widespread industrial action across the country.

The Bank on Thursday revised its economic outlook to forecast a shorter and shallower recession than previously set out in the November projections.

More

Bank of England hikes rates by 50 basis points, now sees 'much shallower' recession than feared (cnbc.com)

European Central Bank raises rates by 50 basis points, pledges further hike in March

PUBLISHED THU, FEB 2 2023 8:19 AM EST

The European Central Bank on Thursday confirmed expectations of a 50 basis point interest rate increase, taking its key rate to 2.5%.

In a statement, it pledged to “stay the course in raising interest rates significantly at a steady pace” and, in unusually firm language, said it intended to hike by another 50 basis points in March.

It said keeping rates at restrictive levels would control price rises by dampening demand and keeping inflation expectations under constrained. Decisions at future meetings will be data-dependent, it added.

The move follows four hikes in 2022 which brought euro zone rates out of negative territory for the first time since 2014.

Euro zone inflation fell for the third straight month in January, flash figures published Wednesday showed, but headline inflation remained high at 8.5%. Core inflation, which excludes energy and food, was flat at 5.2%.

---- On Thursday, it said that in line with current practice it would continue partial reinvestments of its maturing debt.

“The remaining reinvestment amounts will be allocated proportionally to the share of redemptions across each constituent programme of the APP (Asset Purchase Programme) and, under the public sector purchase programme (PSPP), to the share of redemptions of each jurisdiction and across national and supranational issuers,” its statement said.

European Central Bank raises rates by 50 basis points, pledges further hike in March (cnbc.com)

Fed's Powell says no rate cuts this year, and markets hear it differently

Feb 2 (Reuters) - Federal Reserve Chair Jerome Powell had a clear message on Wednesday: as "gratifying" as it is that inflation has begun to slow, the central bank is nowhere near to reversing course or declaring victory.

"It's going to take some time" for disinflation to spread through the economy, Powell said in a news conference following the Fed's latest quarter-point interest rate increase. He said he expects a couple more rate hikes still to go, and, "given our outlook, I just I don't see us cutting rates this year."

Investors ignored him, keeping bets on just one more rate hike ahead and piling further into bets that rates will be lower by year's end than they are now.

It's not obvious which view will prove right: neither the Fed nor markets have a great predictive record since the central bank's current round of rate hikes began last March.

Markets have repeatedly had to scrap bets for a quick pivot, pushing those expectations out farther as the central bank charged ahead with the most aggressive policy tightening in 40 years.

For their part, Fed policymakers each quarter through last year kept ratcheting up their own estimates for how high they'd push interest rates as inflation proved stronger and stickier than anticipated. Not once did they signal rates would get cut this year.

How the current disconnect resolves will largely come down to whether inflation drops faster than the central bank expects, or labor markets soften further than it hopes.

More

Fed's Powell says no rate cuts this year, and markets hear it differently | Reuters

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.

Biophytis Announces Positive Final Results of the Phase 2-3 COVA Study with Sarconeos (BIO101) in Severe COVID-19

Thu, February 2, 2023 at 7:20 AM GMT

  • COVA study met primary end point with 44% significant reduction in the risk of respiratory failure or early death
  • Filing for Early Access Programs to Sarconeos (BIO101) is being initated while preparing for Marketing Authorisation in Europe and the USA

PARIS, FRANCE / CAMBRIDGE, MA / ACCESSWIRE / February 2, 2023 / Biophytis SA (NasdaqCM: BPTS, Euronext Growth Paris:ALBPS) (the "Company" or "Biophytis"), a clinical-stage biotechnology company focused on the development of therapeutics that slow the degenerative processes associated with aging, including severe respiratory failure in patients suffering from COVID-19, today released the final results from its phase 2-3 COVA clinical study evaluating Sarconeos (BIO101) in the treatment of COVID-19-related respiratory failure. Biophytis announces today final results following the reintegration of data from 54 patients, among 233 patients treated, that were missing in the Top Line analysis released on September 7, 2022. The final analysis demonstrates that COVA study met the primary endpoint, with a 44% statistically significant reduction (p = 0.043) in the risk of respiratory failure or early death in hospitalized patients with severe COVID-19, in line with positive Post-Hoc analysis released on November 3, 2022.

Stanislas Veillet, CEO of Biophytis, said: " The COVA study is positive, with a statistically significant reduction of 44% in the risk of respiratory failure or early death, demonstrating the therapeutic potential of Sarconeos (BIO101) in the treatment of severe COVID-19. This huge success is the result of Biophytis scientific excellence and hard work of the clinical and medical teams involved in the COVA clinical study in France, Belgium, the USA and in Brazil.

This is tremendous news for patients worldwide, especially for the elderly with co-morbidities, who are at high risk of developing severe COVID-19, despite the great progress made in vaccination and anti-viral treatments now available. While there is a resurgence of COVID-19 patients in China and still unacceptable levels of patients dying from COVID-19 in Europe, the USA and Brazil, Sarconeos (BIO101) may offer an effective therapeutic option to reduce further the threat of COVID-19 pandemic.

We are now accelerating the start of our Early Access Program, with the target to give access to Sarconeos (BIO101) in Brazil and France in the second half of 2023, while preparing for filing conditional Marketing Authorisation (CMA) in Europe and Emergency Use Authorization (EUA) in the USA. "

Biophytis is nowinitiating key regulatory activities to give access to Sarconeos (BIO101) to hospitalized patients with severe COVID-19 at risk of respiratory failure and death in 2023.The strategy to give access to Sarconeos (BIO101) as quickly as possible is to file for Early Access Programs (EAP) in France and Brazil, while filing for conditional Marketing Authorisation (CMA) in Europe and Emergency Use Authorization (EUA) in the USA.

An EAP has already been approved in 2022 in Brazil to treat COVID-19 patients at critical stage in Intensice Care Units (ICU) and the request to lift the hold given completion of the study and positive results is pending.

The filing of the request for starting the EAP program in France is being prepared and will be made in Q1 2023 with the objective to be granted approval in Q2 2023.

Requests for pre-submission meetings regarding conditional Marketing Authorisation in Europe and Emergency Use Authorization in the USA are under preparation and will be sent in Q1 2023, targeting an approval later in 2023, depending on feedback from authorities.

Biophytis will present the results in detail at the American Thoracic Society conference in Washington, DC, USA in May 2023 and at the European Respiratory Society Lung Science meeting in Estoril, Portugal, in March 2023.

More

Biophytis Announces Positive Final Results of the Phase 2-3 COVA Study with Sarconeos (BIO101) in Severe COVID-19 (yahoo.com)

Immune Exhaustion Emerges After 3rd Vaccine Dose: Current Findings

Finding suggests how little we know about the immune system

Jan 30 2023

Vaccines have been upheld as the best strategy for dealing with infectious diseases, but that’s largely because of a limited understanding of the immune system and how to best complement and support its function. Our bodies are normally able to separate the wheat from the chaff when it comes to invading pathogens or when a vaccine stimulates an immune reaction, but there are factors that can compromise that.

 

A study published in Science Immunology in January 2023 (but first submitted in August 2022) shows that incremental doses of the mRNA COVID-19 vaccine boosters may be one such factor, based on how they train our immune systems. In this case, the immune system seemed to gain a false sense of security from dealing with the booster version of the vaccine, which is supposed to teach the immune system how to deal with the virus. Unfortunately, in this case, it seemed that the immune system has learned that it doesn’t need to mount a strong counterattack. Worse, the vaccine boosters might not even induce any effect in people at high risk of severe infection.

 

According to the study, the third dose of the mRNA vaccines seems to be linked with a class switch in subtypes of immunoglobulin G (IgG), the dominating serum antibody in our immune system, which raises the question of immune exhaustion. Class switching is when B cells redirect their efforts toward producing IgG. To start, they produce generic immunoglobulin cells such as IgM. But once they find that the invading pathogen is tougher than they thought, they switch to producing the more effective IgG to ward off the infection.

IgG is an important serum antibody that makes up roughly 80 percent of all antibodies in our immune system. After class switching occurs, B cells release different types of IgG instead of other less-effective immunoglobulin cells. Depending on the severity of the infection, the ratio of IgG may also vary.

IgG is the more effective fighter in our immune system, as it has the ability to opsonize and fixate complements, meaning that it attaches to infected cells or pathogens and instructs killer cells to swallow intruders up through phagocytosis. It’s also the only antibody that crosses into the placenta, playing a critical role in protecting the unborn fetus.

More

Immune Exhaustion Emerges After 3rd Vaccine Dose: Current Findings (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.

Scientists Use Graphene to Construct Tractor Beam

By Jessica Hall on January 31, 2023 at 9:23 am

Physicists in China report that they have built a tractor beam capable of moving objects on the macroscale. It’s counter-intuitive; like laser cooling, the system does the opposite of what you might expect when you point a laser at it. Instead of pushing, the laser pulls.

In the latest issue of Optics Express, the group reports that when using a 90mW laser, their tractor beam in a box can produce about a micronewton of pulling force. The setup is deceptively simple. The scientists vapor-coated a sliver of glass with reflective gold, and then stuck a flake of cross-linked graphene to the other side. Then, they pointed blue, cyan, and green lasers at the flake of graphene. Lo and behold, it moved toward the laser emitter.

The setup is built on established technology. Optical tweezers and solar sails also use light to move things around. However, optical tweezers usually confine themselves to objects the size of single molecules. Not so for this experiment, says the team.

“In previous studies, the light-pulling force was too small to pull a macroscopical object,” said research team member Lei Wang from China’s Qingdao University of Science and Technology. “With our new approach, the light pulling force has a much larger amplitude. In fact, it is more than three orders of magnitude larger than the light pressure used to drive a solar sail, which uses the momentum of photons to exert a small pushing force.”

Spooky Action at a Distance

The device works partly by way of graphene’s unique properties. Graphene is optically absorptive, meaning it retains some percent of the energy when photons hit it. It’s also a semiconductor and an effective heat pipe. So effective, the paper concludes, that when the scientists pointed the laser at the graphene sandwich, the graphene carried that energy right to the far side of the piece. Thermodynamics says that hot things emit more energy than cold things, all else being equal. In the lab environment, that differential heating was enough to make the object move.

More

Scientists Use Graphene to Construct Tractor Beam - ExtremeTech

Another weekend and the start of the EU-G7 Russian oil products cap on the 5th. How long before a lack of diesel brings the EUSSR to a halt? Have a great weekend everyone.

"Such a corporation is called a "conglomerate" or a "free-form" company, very popular when the market gets to tulip-time.  A conglomerate is a company that grows by acquiring other companies, and other companies can be in wildly different businesses.  Conglomerate managers are supposed to be a new breed of brilliant wheeler-dealers, and the idea of the whole game is to take an ice-cream freezer company and merge it into a valve company and merge with a flour mill.  The valves and the flour and the ice cream never get together except on a balance sheet and an income statement, but Wall Street does look for growing earnings, and with the right accountant this whole process can make the earnings grow like crazy.  Capitalism enters a new stage."

“Adam Smith” aka George Goodman.

 

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