Baltic Dry Index. 1065 -11 Brent Crude 75.97
Spot Gold 1949 US 2 Year Yield 4.70 +0.08 Fri.
Work is of two kinds: first, altering the position of matter at or near the earth’s surface relative to other such matter; second, telling other people to do so. The first kind is unpleasant and ill-paid; the second is pleasant and highly paid.
Bertrand Russell.
In the stock casinos more wobble or something more?
Could harsh economic reality be returning to the latest AI fantasy fuelled stock bubble?
Long before AI re-orders global society, a new bout of deflation seems more likely to hit the global economy led by a unfolding property disaster in China, and a just starting property crisis in the USA, Canada, UK and EU.
More US banking failures ahead in the USA. An unfolding residential mortgage problem for Europe including the UK.
European markets head for lower open as
confidence stalls
UPDATED TUE, JUN 20 2023 12:16 AM EDT
European markets are heading for a flat open
Tuesday as investor confidence stalls.
European markets fell at the
start of the new trading week as investors remained jittery over the economic outlook.
The benchmark Stoxx
600 index closed 1% lower Monday, with almost all sectors in
negative territory.
Asia-Pacific markets traded
mixed overnight as investors digested China’s central bank decision to cut its
one-year and five-year loan prime rate.
U.S. markets were closed for the
Juneteenth holiday on Monday, but stock
futures ticked lower overnight as investors looked ahead to a
holiday-shortened week of trading.
European
markets live updates: news, stocks, data, earnings (cnbc.com)
Asia
markets mixed as China cuts key lending rates
UPDATED MON, JUN 19 2023 10:58 PM
EDT
Asia-Pacific markets traded mixed Tuesday as
investors digested China’s central bank decision to cut its one-year and
five-year loan prime rate by 10 basis points each to 3.55% and 4.20%,
respectively. The move comes after the People’s Bank of China cut
some of its key
lending rates last week.
Mainland Chinese markets were
mixed following the announcement, with the Shanghai Composite down
0.22%, while the Shenzhen
Component up 0.24%. Hong Kong’s Hang Seng index slid
0.5%.
In Australia, the S&P/ASX 200 climbed
0.32%, extending gains from Monday as the Reserve Bank of Australia released
minutes from its June meeting.
In Japan, the Nikkei 225 reversed
earlier losses and gained 0.17%, while the Topix lost 0.36%.
South Korea’s Kospi also
continued its slide from Monday, falling 0.34%, along with the Kosdaq which saw
a 0.2% loss.
U.S. markets were closed for the
Juneteenth holiday on Monday, but stock
futures started the week lower as investors looked ahead to a
holiday-shortened week of trading.
Futures tied to the Dow Jones Industrial Average slipped
0.26%, while S&P
500 futures pulled back 0.16%. Nasdaq 100 futures declined
0.15%.
Asia markets mixed as
China cuts key lending rates (cnbc.com)
Stock futures inch lower as investors kick off
holiday-shortened week of trading: Live updates
UPDATED MON, JUN 19 2023 6:59 PM
EDT
Stock futures ticked lower on Monday evening as
investors looked ahead to a holiday-shortened week of trading.
Futures tied to the Dow Jones
Industrial Average slipped
93 points, or 0.3%, while S&P 500
futures pulled
back 0.2%. Nasdaq 100 futures declined
0.18%.
Markets were closed for the
regular trading session Monday due to the Juneteenth holiday.
Investors are coming off of a
strong week, even as the major averages had slipped
on Friday. The S&P 500 and
the Nasdaq Composite posted
their best weekly performances since March, with the broad-market benchmark
rising 2.6% and the tech-heavy index adding 3.25%. It was also the S&P
500′s fifth positive week in a row — a first since November 2021 — and the
Nasdaq’s eighth consecutive positive week, a feat it previously accomplished in
2019.
Investors were
seemingly receptive toward the central bank’s decision to skip
a June rate hike last week. Federal Reserve Chairman Jerome Powell told a press
conference on Wednesday that the central bank has yet to make a decision on
policy ahead of the July meeting. However, policymakers are forecasting two
more quarter-point rate increases later this year. The decision
to skip a hike in June broke the Fed’s streak of ten consecutive interest rate
increases.
Despite Powell’s insistence that
future Fed policy will remain data dependent, stocks have been on an upswing.
Investors are trying to gauge how last week’s strong market sentiment will hold
up in a shortened trading week that is light on economic data. Housing starts
data will be out on Tuesday morning.
New York Fed President John
Williams will appear with Fed Vice Chair for Supervision Michael Barr at a corporate governance event in New York
City on Tuesday. Fed Chair Powell is set to testify in front of Congress on
Wednesday and Thursday.
In earnings, investors will look
toward a quarterly report from shipping giant FedEx on
Tuesday after the the closing bell.
Stock
market today: Live updates (cnbc.com)
China cuts two more key lending rates as economy
sputters
The People’s Bank of
China cut two more key lending rates on Tuesday for the first time in 10 months
to prop up growth in the world’s second largest economy.
The Chinese central
bank cut the one-year loan prime rate by 10 basis points from 3.65% to 3.55%,
and trimmed the five-year loan prime rate by 10 basis points from 4.3% to 4.2%
— for the first time since August.
“On their own, 10bps
cuts are too small to make a great deal of difference to monetary conditions,
especially since market interbank rates are already below policy rates,”
Capital Economics’ Julian Evans-Pritchard and Zichun Huang wrote in a note.
“But the PBOC tends
to use changes in policy rates as signaling tool, with the heavy lifting being
done by other tools such as adjustments to reserve requirements and bank loan
quotas,” they added. “The latest round of rate cuts suggests that these tools
will be deployed too.”
A gauge of Hong
Kong-listed Chinese developers, the Hang Seng mainland properties index, fell
more than 3%, with Country Garden slumping by about 5%. About half the
participants in a Reuters poll had forecast a deeper cut of at least
15 bps to the five-year rate.
Losses in the property sector weighed on stock benchmarks
in the mainland and Hong Kong, while the onshore and offshore Chinese yuan
traded at their lowest since late November.
The latest rate cut come on the
heels of two monetary easing moves last week. Last Thursday, the PBOC cut
its one-year medium-term loan facility for the first time in 10
months, and lowered
its seven-day reverse repurchase rate on Monday last week.
Most household and corporate loans in China are based on the PBOC’s
one-year loan prime rate, while mortgages are pegged to the five-year rate.
Tuesday’s move was widely expected after a
slew of economic data in the last few weeks — from
industrial production and fixed asset investment to retail sales and trade in
May — fell short of expectations. China appears to be teetering
on the brink of deflation as reopening optimism fizzles.
Top investment banks, including
Goldman Sachs and JPMorgan, recently cut
their full-year GDP estimates for China and warned of headwinds
ahead.
More
China
cuts two more key lending rates as economy sputters (cnbc.com)
Oil slips as China benchmark rate
cuts less aggressive than expected
June
20, 20234:21 AM GMT+1
TOKYO/BEIJING, June 20 (Reuters) - Oil
prices slipped on Tuesday after China cut benchmark lending rates less than
some expected, sowing further concern over the oil demand outlook in the
world's largest crude importer.
Brent crude was down
5 cents at $76.04 a barrel at 0310 GMT. U.S. West Texas Intermediate (WTI)
crude for July was down 99 cents from Friday's close at $70.79. The July
contract expires at the end of trade on Tuesday.
The more active WTI crude contract for
August delivery was down 71 cents from Friday at $71.22 per barrel. There was no
settlement in the WTI contract on Monday due to a public holiday in the United
States.
China on Tuesday cut two benchmark lending rates - its
one-year loan prime rate (LPR) and the five-year LPR - by 10 basis points each.
The cuts, the first in 10 months, were less aggressive than forecasts, with 50%
of respondents to a Reuters poll anticipating a 15-bps cut to the 5-year LPR.
"The rate cuts
... were widely expected, hence it did not offer a bullish push to the oil
markets," said Tina Teng, a markets analyst at CMC Markets in Auckland.
"Oil traders may need to see a
materialized strong economic rebound in China to improve their outlook on oil
demand," Teng said.
The rate reductions
follow recent economic data that showed China's retail and factory sectors are
struggling to sustain the momentum seen earlier this year.
The Chinese
government met last week to discuss measures to spur
growth in the economy, and several major banks have cut their 2023 economic growth forecasts for
China amid concerns its post-COVID recovery is faltering.
More
Oil slips as China benchmark rate cuts less aggressive than expected | Reuters
Finally, is the UK about to become another
Iceland but without the ice? Well, maybe but not anytime soon, if at all, due
to costs.
UK’s first deep geothermal energy project for 37 years
switched on
Plant
at Eden Project in Cornwall highlights opportunities of drawing heat from
Earth’s core
June
19, 2023
The
UK’s first deep geothermal energy project in nearly four decades will start
operating on Monday, a scheme that proponents hope will bolster the case for
geothermal energy despite its high costs.
Reaching
almost 5km below the Earth’s surface, the geothermal well at the Eden Project
in Cornwall will tap into water of temperatures up to 200C and provide heating
to nearby greenhouses and enclosed rainforest biomes.
“A
rainforest is an expensive thing to heat,” explains Gus Grand, chief executive
of Eden Geothermal, adding that the system will reduce the energy bills of the
Eden Project by about 40 per cent.
The project comes at a time of growing interest in geothermal energy in the UK,
including from the National Health Service, which is planning to use geothermal
heating for some hospitals to reach its net zero goals.
A
government white paper on deep geothermal energy is expected in coming weeks,
which will assess the its potential in the UK and make policy recommendations.
Drawing
heat from the Earth’s core by tapping into hot water underground, geothermal
power is reliable round-the-clock energy and has very low emissions.
Although the UK flirted with the idea of
geothermal projects during the energy crisis of the 1970s, there is no specific
policy support for geothermal energy.
Unlike
shallow geothermal projects, which represent most of the UK’s existing
geothermal projects, deep wells of more than 500m reach water that is extremely
hot and can be used for heating and generating electricity.
When
switched on, the Eden geothermal well will be the only operational deep
geothermal well in the UK.
“This
will have a lot of eyes on it, and rightly so,” says Professor Jon Gluyas,
executive director of the Durham Energy Institute. “It will demonstrate that
deep geothermal can generate low-carbon heat to customers around the region.”
Other
efforts under way include the United Downs Deep Geothermal Power Project, also
in Cornwall, which will produce both power and heat, and has finished drilling
two deep wells with plans for another plant under way.
The
UK’s first deep geothermal energy system came online in Southampton in 1986.
However, it is currently closed for repairs.
A persistent challenge for geothermal energy
in the UK has been the cost of drilling wells. Unlike Iceland, the UK is not
located near tectonic plate boundaries, which means the heat is further away
from the Earth’s surface.
More
UK’s first deep geothermal energy project for 37 years switched on | Financial Times (ft.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.
Goldman
Sachs cuts China growth forecast as property slowdown bites
June 19, 2023 7:15 AM GMT+1
SINGAPORE, June 19 (Reuters) - Goldman
Sachs (GS.N) analysts
have cut forecasts for China's economic growth, citing persistently weak
confidence and the cloud over the property market as stronger-than-expected
headwinds.
The U.S. investment bank lowered its
full-year real gross domestic product growth forecast for the world's second
biggest economy from 6% to 5.4%, according to a note published late on Sunday.
It also lowered its 2024 growth forecast from 4.6% to 4.5%.
The cut follows similar
moves by global peers, though still leaves Goldman among the most
optimistic, as data shows China's post-pandemic recovery faltering. The bank
had also lately, like others, cut its outlook for
China's currency.
"No reopening boosts have faded as
quickly as in China," said the analysts, headed by economist Hui Shan,
citing the property downturn and its flow-on effects as the main reason.
"We judge that growth headwinds
are likely persistent while policymakers are constrained by economic and
political considerations in delivering meaningful stimulus."
China's government has set a modest GDP
growth target of about 5% for this year after badly missing its 2022 goal and
state media reported the cabinet met
on Friday to discuss measures to spur growth.
It has lowered several key interest
rates slightly in recent days, seen as paving the way for a cut in benchmark
loan prime rates on Tuesday.
Goldman Sachs cuts
China growth forecast as property slowdown bites | Reuters
Mortgage mayhem goes on as two-year rates cross 6% threshold
June
19, 2023
Homeowners are
set to face even more mortgage pain, as the average interest rate on a two-year
fixed-rate deal broke the 6% barrier.
Those higher
rates will come without fresh government support, as Rishi Sunak this morning
said there won’t be extra help for people struggling to make payments.
According to
new data from Moneyfacts, the rate for a two-year fix increased from 5.98% to
6.01% on Friday. That’s the highest rate since the aftermath of Kwasi
Kwarteng’s disastrous mini-Budget last Autumn, when rates skyrocketed to peak
at 6.65%.
Five-year
rates were also up from 5.62% to 5.67%. Buy-to-let rates rose even faster, with
two-year rates up from 6.21% to 6.3% and five-year rates up from 6.17% to
6.23%, meaning renters and landlords will likely pay more too.
The latest
price rises followed a surge in gilt yields — the return on government debt
which lenders use to price their mortgage offerings — after inflation proved
‘stickier’ than expected in April and wage growth accelerated.
That prompted
all major lenders to reprice their mortgage products, with some doing so twice.
Homeowners had hoped to see fresh government support to deal with their higher payments, but Rishi Sunak ruled out additional help today.
Levelling Up
Secretary Michael Gove suggested the Government was considering fresh help,
saying he was “concerned” by events in the mortgage market.
Mr Gove told
Sky News’s Sophy Ridge On Sunday show: “When it comes to mortgages, it’s the
independent Bank of England’s interest rate decisions that will govern that,
but we are looking at everything that we can do in order to help homeowners
through this difficult period.”
But speaking
on ITV’s Good Morning Britain, Sunak said the Government needs to “stick to the
plan” rather than offer new help.
He said: “I
know the anxiety people will have about the mortgage rates, that is why the
first priority I set out at the beginning of the year was to halve inflation
because that is the best and most important way that we can keep costs and
interest rates down for people.”
Even higher
rates could be on the way, as another 240 mortgage products were taken off the
market on Friday.
The Bank of
England will announce its latest interest rate decision on Thursday, with a
13th consecutive rise is all but certain. The Bank is expected to keep hiking
rates this year, with markets pricing in a 50% chance that rates hit 6% in
early 2024.
More
Mortgage mayhem goes on as two-year rates cross 6% threshold (msn.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
Study Reveals 23 Percent Lower
COVID Risk in Those ‘Not Up-to-Date’ With Vaccinations
Jun 17 2023
In a compelling
counter-narrative to prevailing views on COVID-19 immunization, a recent study from the Cleveland Clinic
Health System reveals that individuals not considered “up-to-date” with their
COVID-19 vaccinations, as per the Centers for Disease Control’s (CDC)
definition, may have a lower risk of contracting the virus compared to their
“up-to-date” counterparts.
This unexpected finding emerges
as the dominant XBB lineages of the virus circulate, leading researchers to
question the efficacy of bivalent vaccines against these new variants and the
existing CDC guidelines for determining vaccination adequacy.
The research in question is a retrospective cohort study carried out at the Cleveland Clinic Health System (CCHS), dating back to January 23, 2023. The point of reference was when the XBB lineages became the dominant strains in Ohio. It concentrated on CCHS employees, specifically those present when the XBB lineages took center stage.
The study’s fundamental outcome was time to COVID-19, defined as the time it took for a positive SARS-CoV-2 test result to emerge. The subjects were under close observation until May 10, 2023, facilitating an evaluation period of 100 days from the study’s onset.
The study included 48,344 participants, from which 1,445 were omitted due to employment termination. By the study’s conclusion, 12,841 participants were “up-to-date” with their COVID-19 vaccination. Most received the Pfizer vaccine, while a smaller group was administered the Moderna vaccine. Over the study period, 1,475 employees tested positive for SARS-CoV-2.
Participants
were relatively young, with an average age of 43 years. Around 46 percent had
previous COVID-19 history, and the Omicron variant infected 34 percent.
Notably, 87 percent of the study population received at least one vaccine dose,
and 92 percent had been exposed to SARS-CoV-2 either via vaccination or
infection.
The study
concluded that the risk of contracting COVID-19 was 23 percent lower in the
“not up-to-date” group as compared to their “up-to-date” counterparts. The
study found no apparent difference in COVID-19 risk between the two groups when
stratified by the most recent infection date.
More
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.
Origami solar panel collapses small for fast, light
travel anywhere
C.C. Weiss June 16, 2023
Reaching
far beyond the cutesy paper sculptures of grade school, the age-old art of
origami has underpinned some cutting-edge breakthroughs in design and
engineering. From space
dwellings, to watercraft, to water
bottles, to camping
furniture, origami techniques have been called upon to
create hardware that packs up tiny and performs on demand. Utah startup Sego
Innovations now uses it to create the most packable solar charger around, with
a standalone panel that packs down to an eighth of its size within about a
second. Slide it in a backpack or suitcase and carry renewable off-grid power
anywhere.
NASA, in
particular, has used origami to rather impressive effect, applying it to a wide
array of projects spanning everything from James Webb mirrors, to small, deployable
robots, to massive telescope star shades. In 2013, the American space agency partnered
up with researchers at Brigham Young
University on the design of a rocket-mounted solar panel that could compact
down for launch and expand to 10 times its original size once in space. BYU's
continued compliant mechanism research has since spawned other designs,
including a bulletproof
safety shield for law enforcement that made its
way to
market.
NASA, in
particular, has used origami to rather impressive effect, applying it to a wide
array of projects spanning everything from James Webb mirrors, to small, deployable
robots, to massive telescope star shades. In 2013, the American space agency partnered
up with researchers at Brigham Young
University on the design of a rocket-mounted solar panel that could compact
down for launch and expand to 10 times its original size once in space. BYU's
continued compliant mechanism research has since spawned other designs,
including a bulletproof
safety shield for law enforcement that made its
way to
market.
The Sego
panel is designed to carry as a 7.5-in (19-cm) square that's just over an inch
(2.5 cm) thick, unfurling with a simple two-handed pull into a thin, hexagonal
panel. It offers 2.56 square feet (0.24 sq m) of surface area when expanded.
---- The back of the Sego panel features a charger module
with a USB-C port to connect directly to a device that needs charging or to a
portable power pack for storage. A separate port is there to chain multiple
solar panels together. Sego estimates a charging time of one to two hours for a
smartphone, three to four hours for a tablet, or 3.5 to 7 hours for a
10,000-mAh portable power pack, assuming optimal sun conditions.
The folded Sego
panel isn't quite small enough for a shirt pocket but will easily stow in a
backpack, duffel bag, cargo box or vehicle. It weighs an estimated 3 lb (1.4
kg), which might be too much for an ultralight fastpacker, but is easy enough
to handle for less weight-conscious types of backcountry (or front country)
travelers.
More
Origami solar
panel collapses small for fast, light travel anywhere (newatlas.com)
Next to “ I win, I told
you so,” are the sweetest words.
Gore Vidal.
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