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Coronavirus
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Deaths 6,868,594
"We
shouldn't pour cold water on everything.
We, the eight or nine players in global investment banking, have a very
good future."
Deutsche Bank, CEO Josef Ackermann. Davos, January 2007.
To no one’s surprise the US central bank raised its key interest rate yesterday by a quarter of one percent. In their following guidance they hinted that this might be their last increase, at least for a while, but they didn’t hint at any pivot to interest rate declines.
Although widely anticipated, US stocks sold off, largely because stock punters in the gambling casinos now expect the US banking crisis to grow.
Which US bank will be next to fail under pressure from rising interest rates? Which will be “rescued” and which just allowed to fail?
But with US banks under pressure from higher interest rates, US bank lending will be restricted and come at a much higher price. The US economy is shifting from Easy Street to Skid Row.
Over the summer we will shortly find out who is insolvent and who is about to become insolvent, unable to rollover their debts at an affordable price.
Sell in May, go away looks especially
attractive this year, if only from the Great Disruption to come from Artificial
Intelligence rolling out with increasing speed.
Dow closes more
than 250 points lower Wednesday after Fed hikes rates for a 10th time: Live
updates
UPDATED WED, MAY 3 2023 7:21 PM EDT
Stocks fell Wednesday after the Federal Reserve
raised rates by 25 basis points, as was widely expected.
The Dow Jones Industrial Average closed
lower by 270.29 points, or 0.80%, to end at 33,414.24. The S&P 500 dropped
0.70% to close at 4,090.75. The Nasdaq Composite slid
0.46% to close at 12,025.33. The indexes notched three-day losing streaks.
Earlier bullish sentiment was
dented somewhat after Fed Chair Jerome Powell ruled out cutting interest rates
because he did not expect inflation to come down quickly enough.
“In determining the extent to
which additional policy firming may be appropriate to return inflation to 2
percent over time, the Committee will take into account the cumulative
tightening of monetary policy, the lags with which monetary policy affects
economic activity and inflation, and economic and financial developments,” the
Fed said in a statement.
However, traders noticed what the
Fed didn’t say this time in its post-meeting statement. The central bank
appeared to soften its language about future rate increases by dropping a line
from the March statement that said, “the Committee anticipates that some
additional policy firming may be appropriate.”
Powell commented to the press
after the statement’s release that dropping that language was a “meaningful
change” and that the central bank’s June decision would be driven by incoming
data.
Ed Moya, senior market analyst at
Oanda said Wednesday’s rate increase, which marks the central bank’s 10th
consecutive hike, “will likely be the last one in this cycle.”
“The Fed is concerned that
tighter credit conditions will weigh on economic activity and hiring, while
helping maintain disinflation trend,” Moya said. “Credit tightening is about to
cripple the economy and it appears that as long as we don’t get a perfect storm
of hotter-than-expected labor and inflation data, the Fed will keep rates on hold
for at the very least till the end of the year.”
The SPDR S&P Regional Banking ETF (KRE) declined
more than 1%. The regional banking ETF fell more than 6% during Tuesday’s
trading session. Shares of PacWest shed nearly 2% after losing about 28% the
prior day. Western Alliance shares were down 4.4%.
Stock
market today: Live updates (cnbc.com)
S&P 500 futures slip after the Federal Reserve hikes rates, bank contagion fears return: Live updates
UPDATED WED, MAY 3 2023 11:54 PM
EDT
S&P 500 futures fell after the Federal
Reserve hiked rates by another 25 basis points and investors’ fears of
contagion in the regional bank space returned.
Futures linked to the
broad-market index slipped 0.2%. Futures linked to the Dow Jones Industrial
Average dropped 88 points, or 0.2%. Nasdaq 100 futures traded near the flat
line, up 0.06%.
Shares of PacWest tanked
by more than 50% in after-hours trading. The decline came after news that the
California bank has been assessing
strategic options, including a possible sale, a person familiar told
CNBC. Bloomberg first reported that the bank
was weighing its choices. Regional bank shares sold off hard, with Western Alliance tumbling
23% and Zions
Bancorporation dropping
about 10%.
There likely won’t be a respite
for the embattled regional banking sector until the Fed cuts interest rates,
said Jeffrey Gundlach, CEO of DoubleLine. Since the closure of Silicon
Valley Bank in March, First
Republic has joined the ranks of failed institutions and was
recently taken over by JPMorgan Chase.
“Leaving rates this high is going
to continue this stress,” Gundlach said on CNBC’s “Closing Bell” Wednesday.
“I believe with a very high degree of probability there’s going to be further
regional bank failures.”
Indeed, as the Fed pushed through its
10th rate hike in this cycle and the central bank seemed to
soften its language on future increases, Chair Jerome Powell said that it may
be too soon to cut.
“We on the committee have a view
that inflation is going to come down not so quickly,” he said in his post-meeting
press conference. “It will take some time, and in that world, if
that forecast is broadly right, it would not be appropriate to cut rates and we
won’t cut rates.”
Stocks closed lower in Wednesday’s
regular session, with the Dow shedding 270 points, or 0.8%, and
the S&P 500 dropping 0.7%. The Nasdaq Composite lost roughly 0.5%.
Looming ahead are key economic
reports that will inform the Fed’s next steps from here. Initial jobless claims
are due Thursday. Friday’s main event will be April’s payrolls report, which
economists polled by Dow Jones predict will rise by 180,000.
In terms of earnings, investors
will be watching Moderna, which issues results before the opening bell
Thursday. Apple is slated to post earnings after the market’s close, along with
Lyft, DraftKings and Coinbase.
Stock
market today: Live updates (cnbc.com)
The market is looking for the next ‘domino’ to
fall, keeping banks under pressure
After an intense few days in which the fate of
ailing lender First Republic was
finally determined, veteran banking analyst Christopher McGratty was looking forward
to some calm.
So early Tuesday, more than 24
hours after U.S. regulators seized First
Republic and picked JPMorgan Chase to
take over most of its assets, McGratty headed to see a client in Manhattan. Minutes
after the start of regular trading, however, the regional bank stocks he covers
for KBW began plunging.
The sharp selloff in regional banks sparked by the
March failure of Silicon Valley Bank resumed Tuesday, catching Wall Street
analysts and investors off guard. The orderly resolution of First Republic by
the nation’s biggest lender was supposed
to quell concerns about the state of the American banking
system, not reignite them.
The steep declines — PacWest shares
tumbled 28% to a record low Tuesday, while Western Alliance lost
15% — amid a lack of new news had banking experts casting about for why this
was happening.
Fears about uninsured deposits,
worries about commercial real estate and coming regulation were all named
possible triggers.
---- “People are searching for answers, and no one has a good
one,” said McGratty, the head of U.S. bank research at KBW who has covered the
industry for nearly 20 years.
March madness
PacWest and Western
Alliance had recently disclosed first-quarter results and updated figures
through mid-April that initially calmed investor concerns about deposit
outflows. But the current moment is more about human emotions than the way banks
are evaluated in normal times, he said.
“The market is
looking for the next potential domino” to fall after the seizures of SVB, Signature and
First Republic, McGratty said.
“We’re in this
situation that feels a lot like March, where we’re trading stocks on fear and
sentiment and not fundamentals,” he added.
Which doesn’t make
the danger to mid-sized banks any less real. Pressure on bank stocks could
cause customers to again yank deposits from their institutions, according to
analysts including McGratty and Evercore ISI’s John Pancari.
“While we are
confident in liquidity and capital levels at the banks post 1Q, we cannot
ignore the risk that market pressures on bank stock valuations could feed a self-fulfilling
prophecy,” Pancari said Tuesday in a research note.
More
Regional
banks: Market looking for next domino to fall (cnbc.com)
PacWest
weighs its strategic options, sending bank shares in a tailspin
May
4, 2023 5:18 AM GMT+1
May 3 (Reuters) -
PacWest Bancorp (PACW.O) is exploring strategic options including a
sale or capital raising, a source familiar with the matter said, sending the
shares of the bank and several other U.S. regional lenders tumbling in
after-market trading.
Later
on Wednesday, Western Alliance Bancorp (WAL.N) sought to assure markets, saying
it had not experienced any unusual deposit flows and
had adequate liquidity.
The
Phoenix-based regional lender said it was "reaffirming its financial
strength as well as its deposit growth guidance in response to recent industry
events."
A PacWest spokesperson
declined to comment.
The
fall in shares, including a 52% plunge at PacWest and 23% decline in Western
Alliance, underscores how investors remain unconvinced about the health of
regional banks despite regulators' efforts to call an end to the banking crisis
that started with the collapse of Silicon Valley Bank and Signature Bank in
March.
The
sector jitters come after a period of relative calm, and could tighten credit
availability across America and hurt growth.
"Confidence
in a financial institution is built over decades and destroyed in days. As each
domino falls, the next weakest bank begins to wobble," billionaire
investor Bill Ackman wrote in a tweet.
He
called on regulators to put in a broad deposit guarantee.
PacWest stock has
lost almost 90% of its value since the regional banking crisis started on March
8. Other regional lenders, whose shares have been under
pressure this week, also fell, giving up gains from earlier in the
day.
Zion
Bancorp (ZION.O), First Horizon (FHN.N) and Comerica (CMA.N) each slumped more than 7% and the
SPDR S&P Regional Banking ETF (KRE.P) dropped 5%.
Zion
and First Horizon were not available for comment after business hours on
Wednesday.
More
PacWest
weighs its strategic options, sending bank shares in a tailspin | Reuters
IBM to Pause Hiring
for Jobs That AI Could Do
Mon, May 1, 2023 at 10:08 PM GMT+1
(Bloomberg) -- International Business Machines Corp. Chief
Executive Officer Arvind Krishna said the company expects to pause hiring for
roles it thinks could be replaced with artificial intelligence in the coming years.
Hiring in back-office functions —
such as human resources — will be suspended or slowed, Krishna said in an
interview. These non-customer-facing roles amount to roughly 26,000 workers,
Krishna said. “I could easily see 30% of that getting replaced by AI and
automation over a five-year period.”
That would mean roughly 7,800 jobs
lost. Part of any reduction would include not replacing roles vacated by
attrition, an IBM spokesperson said.
As artificial intelligence tools have
captured the public imagination for their ability to automate customer service,
write text and generate code, many observers have worried about their potential
to disrupt the labor market. Krishna’s plan marks one of the largest workforce
strategies announced in response to the rapidly advancing technology.
More mundane tasks such as providing
employment verification letters or moving employees between departments will
likely be fully automated, Krishna said. Some HR functions, such as evaluating
workforce composition and productivity, probably won’t be replaced over the
next decade, he added.
More
IBM to Pause Hiring for Jobs That AI Could Do (yahoo.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.
China's
skidding factory sector taps brakes on economic recovery
May
4, 2023 5:11 AM GMT+1
BEIJING, May 4
(Reuters) - China's factory activity unexpectedly contracted in April as orders
fell and poor domestic demand dragged on the sprawling manufacturing sector, a
private survey showed on Thursday, imperilling the broader economic outlook for
the second quarter.
The
Caixin/S&P Global manufacturing purchasing managers' index (PMI) fell to
49.5 in April from 50.0 in March. The 50-point index mark separates growth from
contraction on a monthly basis.
The reading
missed expectations of 50.3 in a Reuters poll and marked the first contraction
since January when the exit from zero-COVID policies led to a wave of
infections across China and briefly hit production lines.
It
echoes a similarly disappointing official PMI released on
Sunday and reflects the unevenness of China's economic recovery, with the
services sector so far outperforming manufacturing and helping the world's second-largest
economy grow a robust 4.5% year-on-year in the
first quarter.
Data
this week showed tourism spending during the five-day May Day holiday that
ended on Wednesday rebounded to pre-COVID-19 levels. However,
given a subdued property market and weak demand from overseas, analysts say the
economy faces persistent headwinds as the government aims to achieve full-year
growth of around 5%.
More
China's
skidding factory sector taps brakes on economic recovery | Reuters
France's Le Maire
wants to break food price inflation "spiral" by autumn
May
3, 2023
PARIS
(Reuters) - Finance Minister Bruno Le Maire said on Wednesday that he would
meet with retailers and suppliers next week to discuss ways to break the food
price inflation "spiral" by autumn, which is a major concern for
cash-strapped consumers.
Le Maire also
told Franceinfo radio that economic growth remained solid in France despite
recent strikes and protests against President Emmanuel Macron's legislation to
raise the retirement age by two years to 64.
French food
retailers and their suppliers agreed a 10% average increase in prices in annual
negotiations in March, which both sides said was necessary to cover higher
production costs.
Le Maire has
since repeatedly called on both sides to reopen negotiations to ensure that a
recent fall in global wholesale food prices is passed on to consumers. Le Maire
has even threatened to take action if they do not respond to his calls.
France's
headline inflation rate rose to 5.9% in April from 5.7% in March. The French
inflation level stood at 6.9%, as measured by a European Union-harmonised
consumer price index.
Bank of France
governor and European Central Bank member Francois Villeroy de Galhau said last
month he expected food price inflation to start easing in the second half of
this year.
Commenting on
the impact on the French economy of recent strikes against pension reform, Le
Maire also said: "There is no significant impact from the social
protests...French growth remains solid."
Last month,
data from statistics agency INSEE showed GDP edged up 0.2% in the first quarter
after a flat fourth quarter, helped by household consumption, which was steady
after falling one percent in the last three months of 2022.
France's Le Maire
wants to break food price inflation "spiral" by autumn (msn.com)
But,
as we covered last month, breaking global food price inflation is easier said
than done.
Global
rice shortage is worst in two decades: Report
Bad
weather in Pakistan, China strains supplies, prices
Thursday, April 20, 2023
Unfriendly weather patterns in major rice-producing countries have
created what a new report Thursday is calling the worst global rice shortage in
20 years.
Market analysis firm Fitch Solutions told CNBC
that there’s a deficit of 8.7 million metric tons of rice produced in the
2022-23 growing season. The shortfall is causing rice prices to rise to an
abnormally high average of $17.30 per cwt through the rest of the year. Cwt is
a unit of measurement for commodities such as rice.
“At the global level, the most evident impact of the global rice deficit has been, and still is, decade-high rice prices,” Fitch Solutions’ commodities analyst Charles Hart told the network.
The last time rice experienced such a shortfall was in 2003-04, when there was a deficit of 18.6 million metric tons of the staple produced that year.
Poor weather in rice-producing nations such as China and Pakistan is seen as the primary driver of the deficit.
A wet second half of the year in China combined with heavy floods in Pakistan cut into production for two nations that together contribute about 12% of the world’s rice supply, according to World’s Top Exports. China was also hit by extreme droughts for a portion of last year.
Major consumers of rice, particularly countries in Asia and Africa, will
be the most affected by the shortage. However, analysts expect the supply
strains to moderate by 2024 and for production to move into a surplus again by
2025.
Global rice shortage is worst in two decades: Report - Washington Times
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.
Well if they say so, I suppose.
New Chemix AI-Based EV Battery Development Reduces Or
Eliminates Cobalt
May 2, 2023
California tech
startup Chemix is ready to mix
it up in the electric vehicle battery space announcing a new artificial
intelligence-based platform called MIX aimed at vastly accelerating battery
development, imporoving performance and discovering new, more sustainable,
battery chemistries.
“AI and batteries are,
you know, the two most important technologies of this century and we basically
have to find a way that you practically apply AI to advance the better
development so that the pace at which the battery innovation moves finally
catches up with the pace at which the batteries aren't currently scaled up,”
said Kaixiang Lin, co-founder, and CEO of Chemix in an interview.
He likens MIX to an umbrella under which several AI engines Chemix
developed work in concert.
One is called “material discovery” which calls on AI to predict the
performance of certain materials that are then tested, Lin explained.
Another key engine is aimed at specific batteries to deal with the
typically lengthy testing process.
“We actually build an AI machine learning engine that can you know,
significantly speed up the iteration by predicting how the batteries will last,
essentially giving us a kind of instantaneous decision making power,” said Lin.
The results, Lin
asserts, are faster development and discovering of materials that could
potentially reduce reliance on elements such as lithium, nickel and cobalt that
must be mined and extracted.
More
New Chemix
AI-Based EV Battery Development Reduces Or Eliminates Cobalt (forbes.com)
Opinion: EVs have
failed many times before. Why do we think this time it will work?
The
electric vehicles go back to the early 1800s
Author of the article: Special to Financial Post
Published
May 02, 2023
Many people, including many politicians, clearly think
electric vehicles are the way of the future. But they’re also the way of the
past. Vehicle electrification goes back to 1832, years before the pioneering
work of Étienne Lenoir and Nikolaus Otto on internal combustion (IC) engines.
Electrification gained early traction in the horseless carriage era due to its
distinct operational advantages over early steam- and gasoline-powered cars.
Without government mandates or subsidies, EVs were all the
rage in the U.S. by the turn of the 20th century, accounting for around a third
of all vehicles on the road. Yes, you read that correctly: one third. Early EV
boosters such as Thomas Edison and Ferdinand Porsche, contributed,
respectively, to battery improvements and the building of the first hybrid EV.
In the years before the First World War, many women chose electric cars because
they started instantly without hand cranking and had no hard-to-shift
transmission. Clara Ford herself, wife of Henry Ford, drove a 1914 Detroit Electric, one of 13,000 built by the Anderson Electric Car Company
between 1907 and 1939.
More
Opinion: EVs have failed many times before | Financial
Post
Success is the ability to go
from one failure to another with no loss of enthusiasm.
Winston Spencer Churchill.
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