Baltic Dry Index. 1112 -26 Brent Crude 74.56
Spot Gold 1908 US 2 Year Yield 4.87 +0.16
Faced with the choice between changing one's mind and proving
that there is no need to do so, almost everyone gets busy on the proof.
John Kenneth Galbraith.
In the stock casinos, it’s dress up Friday yet
again, although in America it has been dress up the casinos all week. Look away from that inverted US yield curve and China news now.
Asia markets
mixed after Wall Street’s banks jump on stress test results
UPDATED THU, JUN 29 2023 11:59 PM EDT
Asia-Pacific markets were mixed on the final
trading day of the first half of the year.
The Dow Jones Industrial Average rose,
lifted by shares of large banks jumping after passing the
Federal Reserve’s annual stress test. A revised U.S. gross domestic
product print also helped lift investor sentiment, alleviating recession fears
on Wall Street.
Investors will
look ahead to the latest data on personal consumption expenditures, the Federal
Reserve’s favored inflation gauge.
Mainland China
markets rose, with the Shanghai
Composite and the Shenzhen Component gaining
0.5% and 0.7%, respectively.
Factory activity
data in China contracted for a third straight month, according to the National
Bureau of Statistics release. Hong Kong’s Hang Seng index fell
0.2%.
Japanese stocks fell as investors digested
Tokyo’s core consumer price index, which remained at levels above the central
bank’s target for thirteen straight months.
The Nikkei 225 fell
0.5% and the Topix slid 0.8%. In South Korea, the Kospi rose 0.3% while the
Kosdaq was fractionally lower. Australia’s S&P/ASX 200 gained
0.1%.
Overnight on Wall Street, the Dow
rose 269.76 points, or 0.8% led by major banks. JPMorgan Chase and Goldman Sachs each
rose more than 3%, while Wells
Fargo advanced 4.5%.
The S&P 500 added
0.45% to end at 4,396.44, while the tech-heavy Nasdaq Composite closed
flat at 13,591.33.
Asia markets: China
purchasing managers index; Japan's Tokyo inflation (cnbc.com)
Stock
futures are little changed as investors await key inflation data: Live updates
UPDATED THU, JUN 29 2023 8:40 PM
EDT
U.S. equity futures were little changed on
Thursday evening as investors awaited the latest data on personal consumption
expenditures, the Federal Reserve’s favored inflation gauge.
Futures tied to the Dow Jones
Industrial Average inched
lower by 26 points, or 0.08%. S&P 500
futures ticked
lower by 0.03%, and Nasdaq 100 futures were
just above the flat line.
In Thursday’s regular
trading, the Dow jumped
nearly 270 points, or 0.8%, with help from major bank names. The S&P 500 added
close to 0.5%, and the Nasdaq Composite ended
the day flat.
Friday is a pivotal day for
investors, marking not just the end of the June, but also the conclusion of the
second quarter and the first half. Here is where the indexes stand as of Thursday’s
close.
- For
June: The S&P 500 has gained 5.18% and is on pace for its best monthly
performance since January. The Nasdaq has advanced 5.07%, and both it and
the broad-market index are heading for a fourth consecutive positive
month. The Dow has climbed 3.69%, and it’s on track for its best month
since November.
- For
the second quarter: The S&P 500 has risen 6.99% and is tracking for a
third straight quarter of gains. The Nasdaq touts a gain of 11.2% for
back-to-back positive quarters. The Dow has jumped 2.55%, but it’s also on
pace for a third winning quarter.
- For
year to date and the first half: The S&P 500 has popped 14.51%, and
it’s heading for its best first half since 2018. The Nasdaq has surged
nearly 30%, tracking for its best first half since 1983. The 30-stock Dow
has a more modest gain of 2.94%.
The three major averages are also
on pace for winning weeks, with the S&P 500 and Dow up more than 1% each,
and the Nasdaq tracking for a 0.7% increase.
More
Stock
market today: Live updates (cnbc.com)
In China news, China’s economy is still
slowing. How long before China’s exporting deflation to the rest of the world
if that hasn’t already started?
China’s factory
activity shrinks for a third month as recovery momentum stalls
China’s factory
activity in June contracted for a third month, while non-manufacturing activity
was at its weakest since Beijing abandoned its strict “zero Covid” policy late
last year.
The latest data
points to a patchy recovery in the world’s second-largest economy as the growth
momentum fizzles.
The official
manufacturing purchasing managers’ index (PMI) came in at 49.0 in June —
compared to 48.8 in May and 49.2 in April — according to data from the National
Bureau of Statistics released on Friday. June’s reading was in line with the
median forecast in a Reuters poll.
Friday’s figures also
showed China posting its weakest official non-manufacturing PMI reading this
year, coming in at 53.2 in June — compared to 54.5 in May and 56.4 in April. A
PMI reading above 50 points to an expansion in activity, while a reading below
that level suggests a contraction.
“Economic momentum is
still quite weak in China. Recent data shows the global economy is slowing,
which will likely put further pressure on external demand in the coming
months,” said Zhang Zhiwei, Pinpoint Asset Management’s president and chief
economist.
“On the other hand,
the government’s growth target of 5% this year is quite modest given the low
base last year. It is not clear if the weak economic data would push the
government to launch aggressive stimulus measures soon,” he added.
More
China
June PMI: manufacturing activity shrinks dashing recovery hopes (cnbc.com)
Finally, a growing global crisis is now underway.
Pakistan, IMF reach
$3 billion staff-level agreement
June
30, 20235:36 AM GMT+1
ISLAMABAD, June 30 (Reuters) - The
International Monetary Fund (IMF) has reached a staff-level pact with Pakistan
on a $3 billion stand-by arrangement, the lender said, a decision long awaited
by the South Asian nation which is teetering on the brink of default.
The deal, subject to
approval by the IMF board in July, comes after an eight-month delay and offers
some respite to Pakistan, which is battling an acute balance of payments crisis
and falling foreign exchange reserves.
The $3 billion funding, spread over
nine months, is higher than expected for Pakistan. The country was awaiting the
release of the remaining $2.5 billion from a $6.5 billion bailout package
agreed in 2019, which expired on Friday.
The new stand-by
arrangement builds on the 2019 programme, IMF official Nathan Porter said in a
statement on Thursday, adding that Pakistan's economy had faced several
challenges in recent times, including devastating floods last year and
commodity price hikes following the war in Ukraine.
"Despite the
authorities' efforts to reduce imports and the trade deficit, reserves have
declined to very low levels. Liquidity conditions in the power sector also
remain acute," Porter said in a statement.
"Given these
challenges, the new arrangement would provide a policy anchor and a framework
for financial support from multilateral and bilateral partners in the period
ahead."
Pakistan,
IMF reach $3 billion staff-level agreement | Reuters
Factbox: Sri Lanka
unveils domestic debt restructuring plan, asks foreign investors for a 30%
haircut
June 29, 20238:15 AM GMT+1
June 29 (Reuters) - Sri Lanka
announced a
restructuring plan for its massive domestic debt on Thursday to meet
targets set by the International Monetary Fund (IMF) and aim to turn around its
economy, which has been hammered by a financial crisis.
The island nation is asking foreign
investors in its international sovereign bonds to take a 30% haircut and is
seeking similar concessions from holders of its other dollar-denominated bonds
as it seeks to restructure its massive debt, its central bank governor said on
Thursday.
A severe shortage of dollars tipped the
island nation of 22 million people into its worst financial crisis since
independence from Britain in 1948 last year, triggering its first foreign debt
default in May 2022.
WHAT HAS HAPPENED SO FAR?
Pledging to put its mammoth debt burden
on a sustainable track, Sri Lanka locked down a $2.9 billion bailout from the
IMF in March. The domestic debt restructure is needed to help the country reach
the IMF programme goal of reducing overall debt to 95% of GDP by 2032.
On Thursday, the country's central bank
unveiled the restructuring plan, which includes exchanging treasury bills into
long-term bonds.
WHAT WILL THE DOMESTIC DEBT RESTRUCTURING
INCLUDE?
Under the domestic debt revamp, holders
of locally issued dollar-denominated bonds such as Sri Lanka Development Bonds
(SLDBs) will be given three options, central bank governor Nandalal Weerasinghe
said.
The first would be treatment similar to
investors in the country's international sovereign bonds -- a 30% principal
haircut with a 6-year maturity at a 4% interest rate.
"We are asking foreign debt
holders for a 30% haircut but that is still under discussion," Weerasinghe
said.
Sri Lanka currently has $12.5 billion
in international sovereign bonds.
Domestic bondholders will be given two
other options:
- Similar treatment to that being
proposed to bilateral dollar creditors: No principal haircut, with a 15-year
maturity and 9-year grace period at 1.5% interest rate.
- Exchange their holdings for local
currency denominated instruments: No principal haircut with a 10-year maturity
at the SLFR (Sri Lanka Standing Lending Facility Rate) + 1% interest rate.
More
Analysis: Dollar
drought haunts frontier economies
June 29, 20237:16 AM GMT+1
NAIROBI/LONDON, June 29 (Reuters) - As
Pakistan spiralled into crisis this year, Wilson Muthaura pressed its
government to put the tea Kenya's KTDA co-operative produces 3,400 miles away
on a list of essentials that would grant importers access to precious U.S.
dollars.
His urgent lobbying reflects anxiety
about a scarcity of dollars - the lifeblood of global trade - across emerging
market and developing economies (EMDEs) that is impeding commerce and piling
pressure on local currencies and sovereign debtors.
The World Bank estimates that one in
four EMDEs have effectively lost access to international bond markets, a key
source of hard currency needed to pay for oil and commodities like food.
It has halved growth forecasts for some
economies hurt by the credit squeeze, the product of a global flight to safety
as interest rates rose to combat inflation that surged last year when economies
reopened after COVID and Russia invaded Ukraine.
Affected countries are also likely to
see foreign direct investment being curbed, said Charlie Robertson, head of
macro strategy at FIM Partners in London.
Without dollars from KTDA's customers
in Pakistan, its biggest market, the co-op that produces 60% of Kenya's tea,
would have struggled to pay its own bills.
"We were actually hit,"
Muthaura said, explaining that KTDA had to rent extra warehouse space after
sales slumped. Kenyan shipments of tea - its major export - have fallen by a
fifth over the last year, according to the local regulator.
While customers usually pay up front
and in dollars, "we had to resort to letters of credit with those buyers
from Pakistan", said Muthaura.
His efforts in Islamabad paid off, but
KTDA is seeing similar strains emerging in Egypt, its second-biggest market,
where three steep currency devaluations have raised worries about Cairo's
ability to service dollar debt.
The spike in global interest rates has
already tipped Sri Lanka and Ghana into defaulting. Tunisia is teetering.
Nigeria could soon be spending half or more of government revenues on interest
payments. Even Kenya itself is seen at risk.
"Frontier economies are suffering
from surging import bills exacerbated by a tightening of global financial
conditions and a general flight to safety," said David Willacy, a foreign
exchange trader at StoneX in London.
More
Analysis: Dollar drought haunts frontier economies |
Reuters
Dry Weather Risks Shipping Bottlenecks in Panama, Germany
By Brendan Murray 29 June 2023 at 12:00 BSTThe Panama Canal will likely keep restrictions on
shipping companies in place this year as a drought lowers water
levels at its main lake to a four-year low, leading to bottlenecks of cargo
carriers lining up to transit the waterway.
The canal authority said it will aim to keep draft
restrictions, which limit how deep a vessel can sit in the water, at no lower
than 44 feet (13.4 meters) for large, Neopanamax ships throughout this year’s
drought, Ricaurte Vasquez, authority administrator, said in an interview from
Panama City.
Currently about 30-31
ships are traversing the waterway per day, down from 36-37 on a good day,
Vasquez said. (Read more of what he told Bloomberg’s Michael
McDonald here.)
Dry weather threatens
to cause transport problems in Europe, too. Water levels at a chokepoint on the
Rhine River in Germany have fallen to a seasonal low, hampering shipments of diesel inland from Europe’s
oil-trading hub. At Kaub, a narrow point on the river where vessels can
struggle to pass, the water forecast to get even shallower through July 1.
In Panama, the restrictions have caused longer wait times for ships
crossing the canal with 59 vessels currently in line for transits,
according to canal data. Vasquez said the canal authority will prioritize
ships that booked transit slots while handling unbooked ships on a standby
basis.
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.
Maybe
KC3 needs to start a crowd funding page or cut a deal with Netflix.
Inflation Gets Us All
In The End – Even King Charles
Thu, 29 June 2023 at 7:04 am BST
Royal spending rose by 5% to
£107.5 million, with staff costs up significantly.
Soaring inflation has
even hit the the British royals – with King Charles ordering the
heating to be turned down to save money and the planet.
The sovereign grant report
reveals the royal family’s taxpayer-funded spending and income each year – and
the latest update shows “inflationary pressures” have squeezed the new monarch.
The accounts show the royal homes such as Windsor Castle spent £2.7
million on gas and electricity last year, up from £1.4 million in the previous
12 months – despite energy consumption falling by 14 per cent.
The report goes on to state the
monarch has said thermostats should be turned down to 19C (66F) – and 16C (F)
in empty rooms – in an effort to cut greenhouse gas emissions.
In a press release accompanying
the report, Michael Stevens, the royal treasurer, said: “You will not
need me to remind you that this reporting period relates to a year in which
inflationary pressures saw the price of many goods and services increase
significantly for all organisations, in particular with regards to the cost of
fuel and energy.”
Last week, the Bank of
England raised interest rates for the 13th month in a row after data showed
the downward trajectory of inflation
has stalled at 8.7%.
The rising cost of living saw
royal spending rise by 5% to £107.5 million, with staff costs up significantly.
Meanwhile, the sovereign grant - money paid to the royals from the government -
remained at £86.3 million.
The last year has been one of the
busiest for the royal family in generations, with celebrations for Queen
Elizabeth’s 70th year on the throne last June, followed by her death in
September and the coronation of King Charles in May.
The report said £1.6 million had
been spent by the royals on the queen’s funeral and related events. The British
government said in May it had cost an estimated £162 million overall, which
includes the cost of policing and security.
“The funeral service itself was believed to have been viewed
by the largest worldwide audience for any live event in television history,”
said Stevens.
Inflation Gets Us All In The End – Even King Charles (yahoo.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
Thousands of COVID-19 cases still reported every week | Fact check
Wed,
June 28, 2023 at 3:18 PM GMT+1
The claim: COVID-19 'literally just disappeared'
A June 23 Instagram post (direct link, archive link)
claims a disease responsible for a worldwide pandemic has vanished.
"Isn't it crazy how covid
literally just disappeared?" reads the post. "The people who were on
the wrong side of that one should not be forgiven, ever."
The post was liked more than
31,000 times in three days.
Our rating: False
Health agencies continue to
report thousands of confirmed cases of COVID-19 every week in the U.S. and
worldwide. The World Health Organization recently declared the COVID-19 global
health emergency over, but its leader said the disease remains a threat.
Thousands hospitalized each week with COVID-19
In early May, the WHO declared
COVID-19 was no longer a global health emergency, saying the pandemic had been on a downward trend for more than a year. The public health emergency
declared in the U.S. due to COVID-19 ended that same month.
But COVID-19 hasn't vanished, as
the post claims.
The Centers for Disease Control
and Prevention's COVID Data Tracker shows an average of more than 6,000
people in the U.S. are still
being hospitalized with COVID-19 every week. More than 1 million people have
died of COVID-19 in the U.S. since the pandemic began, and hundreds of additional deaths continue to be tallied on a weekly basis.
The WHO, meanwhile, reported more
than 174,000 confirmed cases of COVID-19 worldwide for the week of June 12,
along with more than 1,200 deaths. There have been more than 768 million
confirmed cases of COVID-19 globally and nearly 7 million deaths, according to
the organization's website.
More
Thousands of COVID-19 cases still reported every week
| Fact check (yahoo.com)
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.
27 June 2023
University of Manchester hosts largest European graphene event
More than 700 graphene industry and academic professionals are
coming together this week to exhibit and celebrate revolutionary graphene
technologies at Graphene 2023, the 13th edition of the Graphene Conference
series - the largest European event in Graphene and 2-dimensional materials at
the University of Manchester.
The Mayor of Greater Manchester, Andy Burnham,
inaugurated the conference, which sees more than 30 companies exhibiting their
revolutionary graphene technologies. More than 200 experts from academia and
industry will also deliver lectures at the conference.
“We’re proud to welcome businesses and researchers from across the
world to Greater Manchester for Graphene 2023”, said the mayor of Greater
Manchester, Andy Burnham. “Our city-region has been the driving force behind
cultural and scientific innovations for over 200 years, and it’s fitting that
we host the world’s 2D materials community as we approach 20 years since
graphene was first discovered. I hope delegates get a sense of the exciting
work happening right here in Greater Manchester to commercialise advanced
materials.”
The conference is held in the newly opened Manchester
Engineering Campus, the new home of Engineering and Materials at the
University. Unrivalled in scale as a hub of engineering and materials expertise
here in the UK, it combines Manchester's industrial heritage with new,
purpose-built facilities, ideal for discovery and solving some of the world's
most pressing issues. Delegates are also be offered tours of the National
Graphene Institute (NGI) and the Graphene
Engineering Innovation Centre (GEIC), the flagship facilities for graphene
and 2D materials research and development.
Professor Vladimir Falko, the Director of the NGI, said,
“Manchester’s National Graphene Institute and Graphene Engineering Innovation
Centre stay at the forefront of graphene and 2D materials research and
commercialisation, and we are glad that a major pan-European graphene
conference is coming to the UK, despite all the uncertainties created by
Brexit.”
Professor Aravind Vijayaraghavan, the lead local organiser added,
“We are placing special emphasis on attracting industrial and academic
partnerships from around the world to invest and collaborate with the
University, and this conference is the ideal opportunity for us to showcase our
world-leading facilities and expertise in advanced materials and manufacturing
which is key to a green, equitable and healthy future for us all.”
The conference takes place at the University of Manchester on 27-30
June 2023. The conference marks 20 years since the first isolation of graphene
at the University, by Professor Sir Andre Geim and Professor Sir Kostya
Novoselov, who were awarded the 2010 Nobel Prize in Physics “for
ground-breaking experiments regarding the two-dimensional material
graphene”.
University of Manchester hosts largest European
graphene eve
Another weekend and the start of a
very iffy H2 23 for much if not most of the world. As the northern hemisphere
crop harvests get underway, we will shortly know how global food price
inflation is going to play out.
Twice during this week, the major
central banksters have promised more interest rate hikes ahead. I think that’s
a mistake, but I also think it’s a mistake our central banksters are about to
make. Have a great weekend everyone.
In central banking as in diplomacy, style, conservative
tailoring, and an easy association with the affluent count greatly and results
far much less.
John Kenneth Galbraith.
