Baltic Dry Index. 1552 -24 Brent Crude 75.33
Spot Gold 2016 US 2 Year Yield 3.97 -0.17
Coronavirus
Cases 01/04/20 World 1,000,000
Deaths 53,103
Coronavirus Cases 03/05/23 World 687,343,663
Deaths 6,867,685
Jamie Dimon, CEO JP Morgan Chase.
It is Fed interest rate decision day. Will they chicken out and opt for Burnsian great cost push wage inflation or will they continue to pursue anti-inflation Volkerism?
By this time tomorrow we will know.
Look away from that massively inverting US Treasury yield curve, soaring gold price and collapsing oil price, now!
Does it matter in the long run anyway, as the banksters continue failing in the end run of the Great Nixonian Error of Fiat Money, communist money, as the Great Disruption of Artificial Intelligence arrives to replace human intelligence?
Who needs a money manager when pretty soon we will all have an AI money manager on our laptop and smart phone?
Asian
markets fall ahead of Fed policy decision, tracking losses on Wall Street
UPDATED WED, MAY 3 2023 12:34 AM
EDT
Asia-Pacific markets largely fell Wednesday as
investors look ahead to the U.S Federal Reserve’s policy decision overnight.
Most economists surveyed by
Reuters said said they expect the Fed to hike rates by 25 basis points, with
the remainder forecasting a pause.
Hong Kong’s Hang Seng index led
losses in the region and tumbled 1.75%, led by energy, industrials and
healthcare stocks, while the Hang Seng Tech index slid 2.38%.
In Australia, the S&P/ASX 200 fell
1.46%, while South Korea’s Kospi dropped
1% and the Kosdaq saw a smaller loss, falling 0.92%. Markets in Japan and
mainland China are closed for a holiday Wednesday.
Overnight in the U.S., all three major indexes
fell for a second-straight session as banking fears returned to Wall Street
ahead of the Fed rate decision.
The Dow Jones Industrial Average and Nasdaq Composite fell
1.08% each, while the S&P
500 saw a slightly larger loss and slid 1.16%.
Asian
markets fall ahead of Fed policy decision, tracking losses on Wall Street
(cnbc.com)
Bank of Korea governor says it’s ‘premature’ to
talk about rate cuts
Bank of Korea
Governor Rhee Chang-yong says it’s too early to start talking about rate cuts.
The
South Korean central bank was one of the first to pause its tightening cycle,
spurring market speculation that it could soon begin cutting rates. But Rhee
told CNBC’s Chery Kang at the
Asian Development Bank’s annual meeting Incheon that those expectations are
“premature.”
“We made it clear, given that our core inflation is still
well above our target, and our inflation is going below 4% ... so it’s going
down,” Rhee said Wednesday. “But still, I think that given that it’s above the
target, we have to wait and see and then you know, it would be a little bit
premature to talk about pivot at this moment.”
Rhee’s comments come
a day after the economy reported inflation reached a 14-month low of 3.7% while
hovering above the central bank’s target of 2%.
“We paused our
interest rate [hikes] in the last two meetings because we have increased our
interest rate by 300 basis points in 1½ years, very fast in pace. And we think
it’s the right time for us to kind of assess what is the accumulated impact
from this rapid increase,” Rhee said.
More
Bank of
Korea governor says it's 'premature' to talk about rate cuts (cnbc.com)
PacWest falls
more than 20% as regional bank stocks slide to new lows
Regional bank stocks fell sharply Tuesday as the fallout from the third
major bank failure this year continued to put pressure on the sector.
Shares of PacWest fell nearly 28% on Tuesday and was on track for its fourth-straight negative session. The stock was halted for volatility multiple times. steep declines deepened losses in the sector from Monday. Over the weekend, regulators seized troubled regional bank First Republic and sold it to JPMorgan Chase.
First Republic is the third failure
of a large regional bank this year, following Silicon Valley Bank and Signature
Bank in March.
The reasons for Tuesday’s declines
were not immediately clear. JPMorgan Chase CEO Jamie Dimon said Monday that the
initial phase of the regional bank crisis was “over,”
and there was cautious optimism among Wall Street analysts that the deposit
flight issues had been contained.
First Republic reported a decline
in deposits of about 40% during the first quarter, raising questions about how
the bank could survive on its own.
Most other regional banks reported smaller deposits declines, however, and
some, such as PacWest, reported that deposits began rebounding in late March.
The recent bank failures and
expected regulatory changes in response to them have also raised questions
about the long-term profit outlooks for mid-sized regional banks.
“We believe that banks with assets
>$500B and <$60B are the clearest winners in the new world order, while
there is likely to be a no-man’s land between $80-120B, as banks in this range
may need to shrink to avoid new regulations or more actively engage in M&A
to increase scale and absorb regulatory costs,” KBW analyst David Konrad said
in a note to clients Sunday.
Another issue for the regional
banks is the possibility of more Fed rate hikes. Higher rates will make it more
costly for the banks to hold on to their deposits while also lowering the
market value of the long-dated bonds and loans on their books.
Concern about the market value of
those assets was one of the sparks for the initial run on Silicon Valley Bank in
March.
The central bank is expected to
raise its benchmark rate by 0.25 percentage points Wednesday.
PacWest
falls more than 20% as regional bank stocks slide to new lows (cnbc.com)
Take
your seat for the Bank of England, Federal Reserve and central banks’ final act
TUESDAY 02 MAY 2023 7:00 AM
This is the final act in central banks’ aggressive
interest rate hike cycle. Well, so say most analysts.
“There’s a growing sense that the recent banking stresses will leave their mark on the global economy, even if the acute phase of the crisis seems to be over,” Dutch bank ING’s experts said in a note recently, referring to the collapse of Silicon Valley Bank, Credit Suisse and, just yesterday, First Republic Bank.
“Cracks are starting to form in the
most interest-sensitive parts of the economy after what, in many cases, has
been the most aggressive central bank tightening cycle in decades,” they added.
Markets have a slightly different take than the
wonks in the research arms of investment banks and consultancies.
There’s unity though on suspecting the Bank of
England will send rates 25 basis points higher at its next meeting on 11
May.
That same day, we’ll get fresh economic forecasts from Threadneedle Street’s best and brightest.
---- Governor Andrew Bailey and his team are
grappling with the toughest inflation crunch of any rich nation – it’s still in
the double digits at 10.1 per cent, aided and abetted by falling wholesale
energy prices taking a while to filter through to consumer bills thanks to the
regulator-managed price cap.
There’s been calls to pause hikes now to avoid piling too much pressure on households and businesses. To do so risks denting the Bank’s inflation fighting credibility even more though.
---- Federal Reserve chair Jerome Powell’s in a
better position than Bailey. Inflation in the US has been falling since last
summer, mainly because the world’s largest economy has been less exposed to the
massive energy shock in Europe.
One more rate rise on 3 May of 25 basis points to a
range of five and 5.25 per cent and that’s it for the Fed, markets and analysts
reckon. Then Powell and co will keep them there probably until the autumn,
allowing the increases’ effects to spread through the US. Cuts will follow.
Powell is trying to avoid fashioning too sharp a
slowdown while bringing inflation sustainably back to two per cent – the
infamous “soft landing”. Bailey still needs to make a meaningful impact on
price rises in Britain.
Ongoing concerns about the health of the regional
American banking sector will probably stop the Fed from carrying on tamping
down on spending. First Republic Bank’s shares tanked last week after it said
in its results over $100bn was pulled from its vaults in the first months of
this year. It was handed over to JP Morgan yesterday.
European Central Bank (ECB) officials clearly don’t
want to be the lender of last resort for the eurozone anymore.
They are intent on firmly putting the era of cheap
money in the common currency bloc to the sword with a “higher for longer”
approach, keeping borrowing costs at their expected peak of anywhere between
3.5 and four per cent well into 2024.
The size of the ECB’s move on Thursday is contested
among market participants. Japanese investment bank Nomura ditched its call for
a 50 basis point increase at the end of last week. ING reckons it’ll be a 25
point jump.
Weaker spending in the eurozone, softer core
inflation and a rolling back of hawkish sentiment among officials are being
seen as signals the ECB could slow its tightening pace.
More
Take your seats
for central banks’ final act (cityam.com)
Finally, get ready and prepare for the Great Disruption. Who needs doctors when nurses working for a company with great computer technicians with access to AI computers will replace most of them. Economists, central banksters, teachers?
Tomorrow will not be like today, which was like yesterday. Tomorrow will be like when the world discovered, oil, the steam turbine and electricity. Or when stone age man invented the wheel and farming.
Cue the 21st century Luddites. Will we all become anarchic
Luddite France?
Chegg shares drop
more than 40% after company says ChatGPT is killing its business
Chegg shares
tumbled after the online education company said ChatGPT is hurting its growth.
“In the first part of the year, we
saw no noticeable impact from ChatGPT on our new account growth and we were
meeting expectations on new sign-ups,” CEO Dan Rosensweig said during the
earnings call Monday evening. “However, since March we saw a significant spike
in student interest in ChatGPT. We now believe it’s having an impact on our new
customer growth rate.”
The company, which provides homework assistance and online
tutoring, said revenue would be between $175 million and $178 million this
quarter, far below FactSet’s analyst consensus estimate of $193.6 million.
Chegg shares closed down 48.41% to $9.08 on Tuesday.
Otherwise, Chegg beat first-quarter expectations
on the top and bottom lines, with earnings per share ex-items of 27 cents above
analysts’ 26 cent estimate, and revenue of $188 million topping a $185 million
consensus.
Following the results, Morgan
Stanley analyst Josh Baer slashed his price target to $12 from $18. The analyst
said that AI “completely overshadowed” the results.
Meanwhile, Jefferies downgraded
the stock to hold from buy, citing the threat artificial
intelligence poses to Chegg. The Wall Street firm slashed its price target to
$11 from $25.
More
Chegg shares drop 40% after company says ChatGPT is killing its business (cnbc.com)
My daughter asked me when she came home from school, "What's the financial crisis?" and I said, it's something that happens every five to seven years.
Jamie Dimon, CEO JP Morgan Chase.
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.
Inflation in countries using euro
currency inches higher to seven per cent
Inflation in European
countries using the euro currency inches higher to 7% in April as the squeeze
on households extends.
Updated: 02/05/2023 - 12:46
Europe's painful inflation inched higher last month, extending the
squeeze on households and keeping pressure on the European Central Bank to
unleash another large interest rate increase.
Consumer prices in the 20 countries using the euro currency jumped 7% in
April from a year earlier, just down from the annual rate of 6.9 per cent in
March, the European Union statistics agency Eurostat said Tuesday.
Food prices eased a little, falling to an annual 13.6 per cent from
March’s 15.5 per cent, while energy prices rose a more modest 2.5per cent.
Core inflation, which excludes volatile food and fuel, slowed slightly
but was still high at 5.6 per cent, underlining the expectation that the ECB
will press ahead with its campaign to beat inflation into submission with rate
hikes. The question is: How quickly will the bank go?
Analysts say the ECB's meeting Thursday in Frankfurt could end in an
increase of a quarter- or a half-percentage point.
A quarter-point hike would be a moderation in the bank's
series of rapid increases, while a half-point would underline concern that
inflation is still not heading back toward the bank's goal of two per cent
considered best for the economy.
Inflation in
countries using euro currency inches higher to seven per cent | Euronews
Slowing
demand for fuel adds to fears of looming US recession
Sales
of diesel are down and American motorists are starting to hold back spending
May
2, 2023
As growth slows in the US economy, warning signs in the energy markets are
adding to investor fears that a recession is looming over the world’s biggest
fuel guzzler.
Demand
for diesel, the lifeblood of the industrial economy, has fallen sharply in
recent months as freight markets cool. And there are indications that petrol
demand may be beginning to wane as motorists look to dial back spending.
Taken
together, analysts said, these suggest a deceleration in the world’s leading
economy could soon give way to contraction.
“If you were looking at it in the closet, and not knowing what the wider
economy was doing, you would say we’re seeing some sort of an industrial
recession,” said Tom Kloza, global head of energy analysis at the Oil Price
Information Service.
US
economic growth slowed considerably in the first quarter of the year, according
to official figures released last week, adding 1.1 per cent on an annualised
basis. That was down from 2.6 per cent in the last three months of 2022 and
marked a greater drop-off than economists had anticipated.
While
US consumers continue to spend despite the broader economic cooldown, there are
signs that they may be beginning to tighten their belts.
Demand
for distillates including diesel, which is used to power the trucks and trains
that transport goods around the country, was about 6 per cent lower in the
first quarter of 2023 compared with the same period last year as a trade
slowdown bites, according to government data crunched by S&P Global
Commodity Insights.
“Simply stated, we’re in a freight recession,” said Shelley Simpson, chief
executive of trucking group JB Hunt on a recent earnings call. UPS boss Carol
Tome suggested the trend would continue, pointing to a retail slowdown and
saying she expected “volume to remain under pressure”.
Meanwhile,
petrol demand, which is more closely linked to consumer travel, has held up so
far, with consumption in the first quarter off by 2 per cent versus last year.
But there are indications that it is beginning to slip.
“What
we’re seeing is this ongoing narrative of persistently . . . resilient
consumers, and this flagging industrial and business investment sector — which
is where you see diesel demand falling off, you see gasoline demand remaining
firm,” said Rory Johnston, who runs Commodity Context, a market research
service.
“[But]
if the business sector continues to retrench, that will inevitably, eventually
feed into the consumer side.”
Data
at the pump suggests that may be beginning to happen, as America’s motorists
become more conscious of their spending.
According to Opis, which tracks activity
across 40,000 stations nationwide, petrol volumes sold in the week to April 22
were down about 3 per cent versus the same week last year, 6 per cent versus
the same week two years ago and 20 per cent versus the same week in 2019, before
the pandemic hit.
More
Slowing demand for
fuel adds to fears of looming US recession | Financial Times (ft.com)
Morgan Stanley to cut another 3,000 jobs as banking layoffs continue
TUESDAY 02 MAY 2023 10:56 AM
Morgan Stanley is reportedly set to
cut thousands of jobs before the midway point of the year, as the largest
round of banking layoffs since the financial crisis looks set to continue.
The bank is looking to lay off 3,000 staff, Bloomberg reported, representing about five per cent of the bank’s staff. They are expected to be concentrated in the banking and trading group.
Morgan Stanley declined to comment on the report.
While many banks have
recently reported bumper profits thanks to rising interest rates, banks that
concentrate more on investment banking, such as Morgan Stanley, have
suffered.
In its first quarter results profit
slipped 19 per cent year-on-year to $3bn. Investment banking revenue in
particular fell 24 per cent while fixed income – which was a bright spot for
many banks this quarter – slipped 12 per cent.
Although Morgan
Stanley’s chief executive James Gorman said there was a “growing M&A
pipeline”, he admitted “it largely remains a back half 2023 and full year 2024
story.”
As the slump in
dealmaking has continued into 2023, many banks have tried to cut costs.
Already a range of different banks
have made large scale redundancies, including Goldman Sachs, Barclays and Citi.
Just last week investment bank Lazard said it would reduce its workforce by 10
per cent this year as a result of the freeze in IPOs and mergers.
Across the industry, job cuts in 2023
have been the steepest since the financial crisis.
Morgan Stanley to
cut another 3,000 jobs as banking layoffs continue (cityam.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
Due to its importance I will leave this up through the week. Of course, much more research is needed, plus some research in combination with Ivermectin and other drugs too. Approx. 21 minutes.
Cannabidiol
and covid
Cannabidiol
and covid - YouTube
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.
Electric vehicle battery state of
health monitoring could be made mandatory
02/05/2023
New EU vehicle
regulations could make battery state of health (SOH) monitoring standard for
all new electric vehicles (EVs), according to the Office for Zero Emission
Vehicles (OZEV).
Abdul
Chowdhury, head of vehicle policy at OZEV spoke at a recent Vehicle Remarketing
Association (VRA) meeting.
Chowdhury
explained that because the battery forms a large part of a used EV’s value and
performance, providing information on its health would support consumers in
making informed comparisons between vehicles and help alleviate concerns over
battery degradation.
He said: “The
UK government has been working with the United Nations Economic Commission for
Europe (UNECE) and other international partners to develop technical
regulations on SOH monitors and minimum battery performance standards, and is
currently analysing options for adopting these regulations into UK law.
“The EU is
also considering options, and its Euro 7 proposals look set to bring SOH
monitors in from July 2025.”
Minimum performance levels for EV
batteries
Battery
SOH is an estimate of a battery’s remaining total capacity, compared to the
total capacity at the EV’s production.
The
Global Technical Regulations on EV batteries developed at UNECE, where many
international automotive standards and regulations are set, cover two key
aspects.
The
first is to mandate installation of SOH monitors on EVs which must be
accessible to the consumer, meet accuracy requirements and be validated through
in-service testing.
The
second is to set a minimum performance standard of 80% SOH from 0-5 years old
or 100,000 km, whichever comes first, and 70% SOH for vehicles between 5-8
years old or 100,000 to 160,000 km, whichever comes first.
Other
areas where OZEV is looking to provide support to the used EV sector include
providing standardised EV information to customers at the point of sale and
helping to ensure that sufficient numbers of technicians were trained to repair
EVs.
He
said: “The used market is critical to the UK’s transition to zero emission
vehicles and meeting our net zero ambitions.
“It is
where 80% of all cars are bought and sold, and as we move from early EV
adopters to a mass transition, its health is critical to ensuring a fair and
equitable transition for all.
More
Don't do anything stupid. And don't waste money. Let everybody else waste money and do stupid things; then we'll buy them.
Jamie Dimon, CEO JP Morgan Chase.
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