Baltic Dry Index. 1576 -05 Brent Crude 79.74
Spot Gold 1984 US 2 Year Yield 4.04 -0.03
Coronavirus
Cases 01/04/20 World 1,000,000
Deaths 53,103
Coronavirus Cases 01/05/23 World 687,108,868
Deaths 6,863,787
“If you owe your bank a hundred pounds, you have a problem. But if you owe a million, it has.”
Many, if not most of the world’s gambling stock casinos are closed today, mostly celebrating Labour Day though a few celebrating Our Lady’s Start of May.
The US stock casinos have no truck with Labour Day and so will largely have to gamble on alone, second guessing the up coming Fed meeting and coming interest rate decision, while awaiting the still undisclosed fate of failed US bank First Republic.
That US authorities failed to complete a closure, takeover, or bailout over the weekend compares very unfavourably with the Swiss authorities handling of the Credit Swiss collapse.
Later
this week the ECB also meets and is expected to raise their key interest rate,
though probably by only 25 points rather than 50.
Australia and
Japan trade higher while most Asian markets close for Labor Day
UPDATED SUN, APR 30 2023 11:59 PM
EDT
Australian and Japanese markets are both trading
higher even as most Asian markets are closed for the Labor Day holiday Monday.
In Australia, the S&P/ASX 200 rose
0.62%, as the country saw its factory activity in April contracted at its
fastest pace in 35 months, with private surveys from Juno Bank showing its
purchasing managers index standing at 48.
In Japan, the Nikkei 225 was
last 0.69% higher, while the Topix was up 0.63%. Japan’s purchasing managers
index for April came in at 49.5, its softest contraction in six months,
according to the au Jibun bank.
Over the weekend, China’s factory
activity unexpectedly slipped into contraction territory with its official
manufacturing purchasing managers index at 49.2, in contrast to economists
expectations of 51.4.
On Friday, the three major indexes in the U.S. all closed
higher, with the Dow Jones Industrial Average gaining 0.8% to notch its best month since
January. The S&P 500 added 0.83%, while the Nasdaq Composite advanced 0.69%.
Australia expected to
hold inflation rate steady at 3.6%
Australia’s central
bank is expected to hold its benchmark policy rate at 3.6% when it announces
its decision Tuesday.
A Reuters poll of
34 economists revealed that 26 of them expect the Reserve Bank of Australia to
keep rates at current levels, while the remaining eight forecast a
25-basis-point hike.
If the RBA hikes
rates to 3.85%, that would be the highest level since April 2012.
Australia’s
inflation — a key data point for the RBA — eased to 7% in the first quarter,
lower than the 7.8% recorded at the end of 2022.
Australia,
Japan higher while most Asian markets close for Labor Day (cnbc.com)
Stock futures are
flat after Dow notches best month since January
UPDATED SUN, APR 30 2023 7:02 PM
EDT
U.S. stock futures were flat in overnight
trading Sunday after the major averages logged gains for April, and the Dow
Jones Industrial Average notched its best month since January.
Futures tied to the Dow dipped 30
points, while S&P 500 and Nasdaq-100 futures each inched 0.1% lower.
Stocks are coming off a winning
week and month. On Friday, the blue-chip index added 272 points, or
0.8%, while the S&P
500 rose 0.83%. The Nasdaq Composite advanced
0.69% as Big Tech earnings took center stage.
For the month, the Dow gained
2.5% to notch its best monthly stretch since January, while the benchmark index
gained 1.5%. The tech-heavy index posted marginal gains.
Earnings reports from major tech
companies dominated much of last week’s market debate, fueling the narrative
that earnings are faring better-than-feared, despite many widespread
macroeconomic concerns.
So far, a little over half of
S&P 500 companies have reported earnings, with more than 79% and about 72%
surpassing earnings and sales expectations, respectively. First-quarter
earnings are currently on track to fall 3.7% for the period, a smaller drop
than the 6.7% decline projected on March 31, according to FactSet.
---- Elsewhere, CNBC
reported over the weekend that regulators have called on banks
to submit a final offer for embattled lender First Republic,
under pressure from deposit flight in the wake of Silicon Valley Bank’s
collapse. JPMorgan Chase and PNC are
among the likely bidders.
The latest update comes after the
bank reported last week that deposits
tumbled more than 40% in the first quarter, triggering further
declines in the already struggling stock. Shares have cratered 97% since the
start of the year.
In other news, investors
anxiously await the latest rate hike decision from the Federal Reserve, due out
Wednesday at the conclusion of the central bank’s policy meeting. As of Sunday
evening, about 79% of traders anticipate a 25 basis point rate hike, according
to CME Group’s FedWatch tool. Wall Street
will closely monitor remarks from Fed Chair Jerome Powell, offering clues into
the central bank’s forward policy path.
Monday kicks off another busy
week for earnings, with results from Norwegian Cruise Line and MGM Resorts.
Reports from Pfizer, Starbucks, Advanced Micro Devices and CVS Health are
due out later in the week.
On the economic front, Wall
Street awaits ISM manufacturing data, construction spending and S&P Global
manufacturing PMI on Monday. April’s nonfarm payrolls report is on deck Friday.
Stock
futures are flat after Dow notches best month since January (cnbc.com)
PNC,
JPMorgan putting in final bids for First Republic Bank in FDIC auction
May
1, 2023 5:15 AM GMT+1
NEW YORK, April
30 (Reuters) - PNC Financial Services Group (PNC.N), JPMorgan Chase & Co (JPM.N) and Citizens Financial Group Inc (CFG.N) were among banks that submitted
final bids for First Republic Bank (FRC.N) on Sunday in an auction by U.S.
regulators, sources familiar with the matter said.
The
Federal Deposit Insurance Corp had been expected to announce a deal on Sunday
night, with the regulator likely to say at the same time that it had seized the
lender, three sources previously told Reuters.
As the process
dragged on late into the evening, one source familiar with the situation said
the regulators had come back multiple times with requests for bids to be
revised and specific criteria to be refined on assets that were being bid.
That
source said there was a sense a decision was nearing.
U.S.
regulators have been trying to clinch a sale of First Republic over the weekend,
with roughly half a dozen banks bidding, sources said on Saturday, in what is
likely to be the third major U.S. bank to fail in two months. Guggenheim
Securities is advising the FDIC, two sources familiar with the matter said on
Saturday.
More
PNC,
JPMorgan putting in final bids for First Republic Bank in FDIC auction |
Reuters
Charlie
Munger: US banks are ‘full of’ bad commercial property loans
April
30, 2023
Charlie
Munger has warned of a brewing storm in the US commercial property market, with
American banks “full of” what he said were “bad loans” as property prices fall.
The comments from the
99-year-old investor and sidekick to billionaire Warren Buffett come as turmoil
ripples through the country’s financial system, which is reckoning with a
potential commercial property crash
following a handful of bank failures.
“It’s not
nearly as bad as it was in 2008,” the Berkshire Hathaway vice-chair told the
Financial Times in an interview. “But trouble happens to banking just like
trouble happens everywhere else. In the good times you get into bad
habits . . . When bad times come they lose too much.”
Munger was
speaking on the veranda of his home in Greater Wilshire, a leafy neighbourhood
of Los Angeles where he has lived for 60 years since he designed the property
himself.
Dressed in a plaid
shirt, Munger held court from his wheelchair as the travails of ailing
California-based bank First
Republic were playing out in real time on a television screen
airing CNBC in the background.
Berkshire has
a long history of supporting US banks through periods of financial instability.
The sprawling industrials-to-insurance behemoth invested $5bn in Goldman Sachs
during the 2007-08 financial crisis and a similar sum in Bank of America in
2011.
But the
company has so far stayed on the sidelines of the current bout of turmoil,
during which Silicon Valley Bank and Signature Bank collapsed. “Berkshire has
made some bank investments that worked out very well for us,” said Munger.
“We’ve had some disappointment in banks, too. It’s not that damned easy to run
a bank intelligently, there are a lot of temptations to do the wrong thing.”
Their
reticence stems in part from lurking risks in banks’ vast portfolios of
commercial property loans. “A lot of real estate isn’t so good any more,”
Munger said. “We have a lot of troubled office buildings, a lot of troubled
shopping centres, a lot of troubled other properties. There’s a lot of agony
out there.”
He noted that banks were already pulling back from lending to
commercial developers. “Every bank in the country is way tighter on real estate
loans today than they were six months ago,” he said. “They all seem [to be] too
much trouble.”
More
Charlie Munger: US Banks Are ‘full Of’ Bad Commercial Property Loans - WorldNewsEra
Finally,
more bad news for ending soaring food price inflation in 2023.
Spain,
Portugal swelter as April temperature records broken
April
28, 20235:08 PM GMT+1 Last Updated April 29, 2023
CORDOBA, Spain, April 28 (Reuters) -
Mainland Spain and Portugal have broken temperature records for April, as the
Iberian neighbours swelter in an early-season heatwave that has exacerbated a
long drought in some regions.
Spain's southern city of Cordoba
registered 38.8 Celsius (101.8 Fahrenheit) at its airport on Thursday, beating
the previous record of 38.6 C in the eastern city of Elche in 2011, weather
agency AEMET said on Friday.
Spain's absolute April record remains
the 40.2 C reached in 2013 on Gran Canaria in the Canary Islands.
In neighbouring Portugal, the
temperature in the central town of Mora reached 36.9 C, breaking the record of
36.0 C set in April 1945, its weather agency said.
Temperatures started dropping on Friday
in Portugal but the heatwave persisted in parts of Spain.
On Friday, Madrid opened its urban
"beach" - a series of splash fountains along the Manzanares river - a
month earlier than usual.
---- The Iberian Peninsula is suffering
a long-running drought, with an almost 25% drop in rainfall since October on
top of the previous year being one of Spain's driest on record.
That has contributed to earlier-than-usual
wildfires, stoking fears of a repeat of last summer's extreme wave of fires,
which was widely attributed to climate change.
Authorities in Portugal have meanwhile
put two municipalities, Proenca-A-Nova in the centre and Tavira in the south on
extreme alert for wildfires.
Spain, Portugal swelter as April temperature records broken | 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.
China’s factory
activity unexpectedly cools in April
PUBLISHED SUN, APR 30 2023 12:37
AM EDT
China’s manufacturing activity
unexpectedly shrank in April, official data showed on Sunday, raising pressure
on policymakers seeking to boost an economy struggling for a post-Covid
lift-off amid subdued global demand and persistent property weakness.
The official manufacturing
purchasing managers’ index (PMI) declined to 49.2 from 51.9 in March, according
to data from the National Bureau of Statistics, below the 50-point mark that
separates expansion and contraction in activity on a monthly basis.
That missed expectations of 51.4
tipped by economists in a Reuters poll and marked the first contraction since
December, when the official manufacturing PMI was at 47.0.
The world’s second-biggest
economy grew faster than expected in the first quarter thanks to robust
services consumption, but factory output has lagged amid weak global growth.
Slowing prices and surging bank savings are raising doubts about demand.
The Politburo, a top
decision-making body of the ruling Communist Party, on Friday stressed that
restoring and expanding demand is the key to a durable recovery and cautioned
the current improvement is mainly restorative “with weak momentum and
insufficient demand.”
“A lack of market demand and the
high-base effect from the quick manufacturing recovery in the first quarter”
were among factors that led to the contraction in April, said senior NBS
statistician Zhao Qinghe.
New export orders edged down to
47.6 from 50.4 in March, the PMI showed.
The manufacturing sector, which
employs about 18% of China’s workforce, remains under pressure due to slack
global demand. Some exporters told Reuters at the country’s biggest trade fair
they have frozen investments and some have cut labor costs in response.
To boost trade and employment,
the cabinet last week unveiled plans, including supporting auto exports,
facilitating visas for overseas businesspeople and providing subsidies to firms
that hire college graduates.
Confidence in the property
sector, for years a pillar of China’s growth, remains fragile. Multiple crises
since mid-2020 have included developers’ debt defaults and stalled construction
of pre-sold housing projects.
More
China's factory
activity unexpectedly cools in April (cnbc.com)
Surveillance:
It’s Getting Harder to Pretend Stagflation Can’t Happen
The
combination of sticky inflation and slowing growth is giving rise to a nightmare
scenario of stagflation
28 April 2023 at 15:39 BST
Worst
of All Worlds
Four
months into 2023 and we've already cycled through no-landing, hard-landing
and soft-landing scenarios. But something potentially even more insidious keeps
creeping up: What happens if inflation remains higher than in the past and
growth keeps slowing? Or, to put it another way, we just get a period of
stagflation.
"Stagflation is the worst case scenario," said
Seema Shah of Principal Asset Management. It's not an impossible outcome by any
means, especially with the employment cost index coming in higher than
expected. While higher wages will support consumer spending and growth more
broadly, it's clear that growth is slowing down, in some cases materially.
As Jon noted, there's a growing belief that the
economy will lose momentum in the second quarter, and Tom kept going back to
the classic "sell in May and go away" mantra which has some historic
basis.
"We're expecting negative GDP prints in the third and
fourth quarter of this year," said Phil Orlando of Federated Hermes.
This is opening up the door to a softening in the stance of
central bankers who until now have been dead-set on killing inflation. Tides
are shifting heading into next week's Fed and ECB meetings. And Kamakshya
Trivedi of Goldman Sachs doesn't see a different playbook among the global
central banks. "Central banks want to pause or want to step down the pace
of tightening they have been delivering," said Trivedi.
60-40
At Risk
If inflation stays high, it'll create a challenging
environment, especially for those relying on the classic 60/40 portfolio
model of investing.
“I’ve looked at this going back 150 years and when the inflation rate
trends is sustained above the historical average, which is 3%, then the 60/40
doesn’t work,” says Jurrien Timmer of Fidelity Investments.
Timmer explains that on a 10-year rate-of-change basis, inflation was at
about 2%, now it’s about 2.5%. “It really comes down to whether the
inflation situation remains structural or transitory.”
More
Stagflation Risks
Rise As Growth Ebbs and Inflation Sticks Around - Bloomberg
Covid-19 Corner
This section will continue until it becomes unneeded.
CDC Will Stop Tracking Covid-19 Community Levels, Here Are The Problems
Apr 29, 2023,10:02pm EDT
It’s about to get a
whole lot harder to anticipate and prevent another Covid-19 surge or outbreak
in U.S. With the U.S. declaration of Covid-19 as a public health emergency
scheduled to expire on May 11, the U.S. Centers for Disease Control and
Prevention (CDC) is planning to cease reporting Covid-19 Community Levels as it has been doing, according to Brenda Goodman reporting for CNN. The CDC won’t abandon all Covid-19 surveillance and
will reportedly continue to display what’s happening with Covid-19
hospitalizations and deaths. But hospitalizations and deaths tend to increase
only after the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) has
already increased in an area. So unless you have a time machine or can somehow
enter the quantum realm like the Avengers did, such measures won’t really going
to help anyone prevent another Covid-19 uptick. Yep, the U.S.’s reactive rather
than proactive approach to the Covid-19 pandemic is about to get even less
proactive.
Relying on
hospitalizations and deaths to determine what to do can be sort of like saying
that you are going to wait until you’re fired or the company is bankrupt before
determining whether you need to improve your job performance. Or waiting until
the divorce papers arrived before saying, “Hmm, maybe I should start doing the
dishes and not do all that that cheating stuff?” Hospitalizations tend to occur
about one to two weeks after people have gotten infected. That’s because people
don’t typically say, “Oh, someone with Covid-19 coughed in my face. Time to
rush to the hospital.” Deaths come even further out after the virus has spread
and after hospitalizations happen because that’s how time works. So once
hospitalizations and deaths have risen, it’s kind of too late to reinstitute
Covid-19 precautions such as face mask requirements. The horse is already out
of the barn. The cat is already out of the bag. The Senator has already left
for Cancun.
There will still be
wastewater testing in communities. But it’s not yet clear what portions of the
U.S. will have this available and how this will be reported. Goodman’s article
did mention that the CDC will still track Covid-19 sort of like how it tracks the
flu. There’s one itty, bitty, long problem with that. Covid-19 is not the flu.
Experts have been trying to tell everyone for over three years now that the
SARS-CoV-2 is not like the influenza. You don’t see too many people saying that
they have long flu. While the Covid-19 hospitalization and death rates have
come down, they are still higher than that of the flu. The SARS-CoV-2 can go
airborne in ways that influenza virus cannot. Plus, the SARS-CoV-2 hasn’t
become seasonal like the flu yet. It may be moving that direction but, and
here’s a big but you cannot lie, there are still plenty of Covid-19 in the
Spring and Summer unlike the flu.
CDC Will Stop
Tracking Covid-19 Community Levels, Here Are The Problems (forbes.com)
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.
Graphene Market: Increasing
Demand For High-Performance Materials To Drive Industry Growth Analysis By 2030
Date 4/28/2023 2:31:50 PM
Graphene market size is projected to
reach $876.8 million by 2027, growing at a CAGR% of 40.2% from 2020 to 2027
OREGON, PORTLAND, UNITED STATES,
April 28, 2023 /einpresswire.com / -- According to the report published by
Allied Market Research, the graphene market by Type (Mono-layer and Bi-layer
Graphene, Few Layer Graphene, Graphene Oxide, Graphene Nano Platelets), by
Application (RFID, Composites, Sensors, Research and Development, Energy
storage, Functional Ink, Polymer Additives, Tire, Coatings, Others), and
Region: Global Opportunity Analysis and Industry Forecast, 2020-2030. The
global graphene market generated $87.5 million in 2019, and is expected to
reach $876.8 million by 2027, witnessing a CAGR of 40.2% from 2020 to 2027. The
report provides a detailed analysis of changing market dynamics, top investment
pockets, key segments, competitive landscape, value chain, and regional
scenario.
The surge in manufacturers of
graphene, rise in demand for electronics applications, and utilization of
composites & coatings drive the growth of the global graphene market.
However, fatal effects on the environment restrain the market growth. On the
other hand, increase in R&D activities across the globe and large-scale
production using renewable sources offer opportunities in the next few years.
Get inside Scoop of the report,
request for sample PDF:
Leading players of the global
graphene market analyzed in the research include ACS Material LLC, CVD
Equipment Corporation, Bluestone Global Tech, Graphenea S.A., Graphene Nanochem
PLC, Haydale Limited, G6 Materials, Vorbrck Materials, Nanotek Instruments
Inc., and XG Sciences.
Covid-19 Scenario:
Production activities of graphene
have been stopped due to lockdown across many countries. Moreover, supply chain
in the chemical sector has been disrupted up to a major extent.
The demand has been decreased
considerably from the automotive industry as utilization of composites,
batteries, and others have been hindered. However, the demand would surge
steadily as manufacturing plants start day-to-day activities.
The report offers detailed
segmentation of the global graphene industry based on type, application, and
region.
By type, the graphene nano platelets
segment accounted for more than three-fifths of the total market share in 2019,
and is projected to maintain its lead position during the forecast period.
However, the mono-layer & bi-layer graphene segment is expected to grow at
the fastest CAGR of 42.0% from 2020 to 2027.
More
“When the capital development of a country
becomes a by-product of the activities of a casino, the job is likely to be
ill-done”
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