Baltic Dry Index. 1078 +13 Brent Crude 76.26
Spot Gold 1934 US 2 Year Yield 4.68 -0.02
Some people make things happen, some watch while things happen, and some wonder what happened?
Anon.
In the stock casinos, more wobble ahead of Fed Chairman Powell’s coming two days of grilling by the US Congress. Will he make things happen? Will he be bullish for stocks or bearish?
With China’s economy slowing and an interest rate wipeout rolling out in commercial and residential real estate, whatever he says might largely be moot.
In the UK later today, the latest UK inflation figures get released. But with food price inflation triggering wage price inflation demands, the market expectation is for only a modest improvement.
Meanwhile the main stream media are busy covering a lost tourist submersible/Titanic story with the latest Canadian reports of hearing banging; plus President Biden’s son Hunter getting a walk.
Asia stocks slip as
suspense builds for China, Fed news
June
21, 20233:42 AM GMT+1
SYDNEY, June 21 (Reuters) - Asian
stocks were subdued on Wednesday as a lack of new stimulus steps from Beijing
frustrated investors, who were also wondering just how hawkish the world's most
powerful central banker would chose to be later in the session.
Federal Reserve
Chair Jerome Powell faces lawmakers in two days of testimony and is sure to be
questioned on whether rates will really rise again in July
and peak in a 5.5%-5.75% range as projected.
Markets have their doubts and currently
imply around a 78% chance of a hike to 5.25-5.5% next month, with that likely
being the end of the entire tightening cycle.
"The focus is
on whether the July meeting is truly "live" and if the Fed dot plot
of two more hikes is a true base case depending on the data, or doom-mongering
on inflation in an effort to ensure no premature easing in financial
conditions," said Tapas Strickland, head of market economics at NAB.
The uncertainty kept
S&P 500 futures and Nasdaq futures flat after a slight dip overnight.
EUROSTOXX 50 futures edged up 0.2% and FTSE futures 0.1%.
MSCI's broadest
index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) slipped 0.8%, with
South Korea (.KS11) off 0.5%.
Japan's
Nikkei (.N225) inched up 0.1% as the market consolidates
three months of hefty gains. A survey showed morale at big Japanese manufacturers edged up in June to stay in positive territory for a
second straight month.
Chinese
blue chips (.CSI300) eased 0.5% with investors still disappointed
by the extent of Tuesday's rate cuts, which also saw the yuan hit its lowest
for the year.
---- The pound faces a major test from
data on UK consumer prices later in the day, where any upside surprise would
add to pressure for the Bank of England (BoE) to hike by an outsized 50 basis
points at its policy meeting on Thursday.
Median forecasts
are for headline inflation to ease to 8.4%, but core to hold at 6.8%.
"We look for
the BoE to hike 25bps on Thursday, but given that recent data have surprised to
the upside, we see a good case for a 50bp hike," wrote analysts at
JPMorgan in a note. "We will be closely watching the CPI report for a
signal on the BoE's path to a terminal rate."
Futures currently
imply around a 25% chance of a half-point hike.
More
Asia
stocks slip as suspense builds for China, Fed news | Reuters
Stock futures are little changed Tuesday night
as market rally falters: Live updates
UPDATED TUE, JUN 20 2023 7:02 PM
EDT
U.S. stock
futures were near flat on Tuesday evening as investors took a breather from
last week’s market rally.
Futures tied to the Dow Jones
Industrial Average slipped
21 points, or 0.06%. S&P 500
futures inched
down by 0.06% and Nasdaq 100 futures
lost 0.03%.
Shares of FedEx fell
about 3% in extended trading after the shipping giant posted
weaker-than-expected revenue for its most recent quarter.
Earlier on Tuesday, stocks closed
lower for the second
trading day in a row. The Dow fell 245.25
points, or 0.72%. The S&P
500 slid 0.47%, and the Nasdaq Composite lost
0.16%.
Stocks are overbought and in need
of a catalyst, according to Quincy Krosby, chief global strategist for LPL
Financial. Indeed, last week the S&P 500 hit its highest level since April
2022 and posted its fifth consecutive positive week.
“With the S&P 500 and Nasdaq
marching higher and breaking through key resistance levels, and underpinned by
stronger volume and broader participation, markets reached short-term
overbought levels on Friday,” she said by email Tuesday. ”‘Triple witching’
options expiration on Friday added to volatility, but the sell-off on Friday
wasn’t overly dramatic, leaving markets to digest their gains, and wait for
another powerful catalyst.”
Homebuilding stocks bucked the
downtrend on Tuesday after the latest data on housing starts and building
permits came in stronger than expected. The iShares U.S. Home Construction ETF
(ITB) added 1%.
Elsewhere, Federal Reserve Chair
Jerome Powell is set to testify before the House Financial Services Committee at
10:00 a.m. ET.
More
Stock market today: Live updates (cnbc.com)
In other news.
Slowing Chinese
economy of more concern to EU firms than geopolitics - survey
June
21, 20232:12 AM GMT+1
BEIJING, June 21 (Reuters) - A slowdown
in both the Chinese and global economies is the biggest issue affecting
European firms in China, beating political tensions with the United States and
decoupling, according to the European Chamber of Commerce in China.
The number of
European firms that see China as a top-three destination for future investment
was at its lowest total on record, the chamber's annual position paper released
on Wednesday said. The EUCCC has recorded this figure since 2010.
As rising interest rates and inflation
squeeze demand in Europe and the United States, companies in China are in
contrast battling a sharp decline in prices as the risk of deflation weighs on
the world's second-largest economy.
The number of
European companies reporting their China-sourced revenues had decreased in 2022
was three times higher than in 2021, the report said, while the importance of
China to companies' global profits fell for a second consecutive year.
"The
deterioration of business sentiment that has taken place over the last three
years has been significant and cannot be reversed over night," the chamber
said.
More
Slowing
Chinese economy of more concern to EU firms than geopolitics - survey | Reuters
Squeeze
on UK tenants tightens as rents outpace incomes, survey shows
June 20, 2023 2:33 PM GMT+1
LONDON, June 20 (Reuters) - Britain's
housing market strains are spreading to the rental sector with the proportion
of household income spent on rent hitting the highest in a decade in May, data
showed on Tuesday, adding to wider cost-of-living pressures.
Asking and agreed rents continued to
outpace incomes with tenants spending 28.3% of their pre-tax earnings on rent
last month, above the 10-year average of 27%, Zoopla said.
May's figures marked the 19th month in
a row that rental price growth outstripped incomes.
"The cost of renting is at its
highest for a decade with emerging signs of stress for some renters, especially
those on lower incomes," Zoopla Executive Director Richard Donnell said.
Renters in London bore the brunt of the
affordability squeeze with rent averaging 40% of gross earnings.
Donnell said the "chronic
imbalance" between supply and demand continued to push up rental prices.
He expected affordability strains to slow the pace of rental growth in 2024.
Homeowners looking to remortgage and
prospective buyers are facing rising
mortgage rates as high inflation and strong wage growth increase the
likelihood of further Bank of England interest rate increases.
The BoE is expected to raise its Bank
Rate to 4.75% on Thursday in an effort to bring inflation, which was a
higher-than-expected 8.7% in April, back to its 2% target. Inflation data for
May is due to be published on Wednesday.
Mortgage lenders including Nationwide,
HSBC and Halifax have repriced or pulled home loan offerings in recent weeks.
More
Squeeze on UK tenants tightens as rents outpace incomes, survey shows | 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.
Russia willing to continue grain supplies to poorest African
countries - Kremlin
20 Jun 2023 11:50
MOSCOW. June
20 (Interfax) - Russia stands ready to supply grain to African countries
regardless of the future of the grain deal, Russian presidential press
secretary Dmitry Peskov said.
Asked by
journalists whether direct supplies of Russian grain without the country's
involvement in the grain deal were discussed at the latest meeting in St.
Petersburg with African leaders, the Kremlin spokesman said, "The
importance of grain supplies, primarily Russian grain, to the African
continent, to the poorest countries was emphasized, and the importance of
continuing these supplies was highlighted."
Russia willing to continue grain supplies to poorest African countries - Kremlin (interfax.com)
UK
grocery inflation edges lower for third straight month -Kantar
June 20, 20238:05 AM GMT+1
LONDON, June 20 (Reuters) - British
grocery inflation eased slightly for the third month in a row in June, industry
data showed on Tuesday, providing a modicum of comfort for consumers worn down
by a cost of living crisis into its second year.
Market researcher Kantar said annual
grocery inflation was 16.5% in the four weeks to June 11, down from 17.2% in
its May
data set.
It said prices rose fastest for
products such as eggs,
cooking sauces and frozen potatoes.
----
“This is the lowest rate of grocery price inflation we’ve seen in 2023, which
will be a relief to shoppers and retailers," said Fraser McKevitt, head of
retail and consumer insight at Kantar, noting it was still the sixth-highest
monthly figure in the past 15 years.
"Price rises are now being
compared to the increasing rate of grocery inflation seen last summer, which
means that it should continue to fall in the coming months," he said.
Market leader Tesco (TSCO.L) said
on Friday food inflation was starting
to ease and it was hopeful it would moderate through the year. It and
most other major grocers have cut
the prices of some products in recent weeks.
UK households are changing their
behaviour to cut costs. Many are cutting back, trading down to the cheapest own
label products, preparing simpler dishes with fewer ingredients and
increasingly using microwaves.
The Kantar data for June provides the
most up to date snapshot of UK grocery inflation.
Official data for overall
UK inflation in May will be published on Wednesday. It was running at 8.7% in
April, with the measure for food and drink at 19.1%.
More
UK grocery
inflation edges lower for third straight month -Kantar | Reuters
Drought
doubles down on US row crops
June 20, 2023
WEATHER maps suggest the
US is about to enter the hottest month of the summer, with sizeable
soil-moisture deficits across much of the Corn Belt. This does not bode well
for the USDA’s current corn yield projection of a record 181.5 bushels per
acre, or even matching the current record of 176.7 bushels per acre. Some in
the trade are already talking low 170s, and the market reaction was evident
late last week with US corn futures bid up strongly.
Interestingly, murmurs
of corn production issues in China, the world’s second biggest producer and
biggest importer, stoked Dalian corn futures to a one-month high last week as
domestic consumers also get concerned about 2023-24 supply.
Drought
continues to tighten its grip across the US Corn Belt, with several states
seeing significant falls in soil-moisture ratings in the latest US Drought
Monitor update. Rainfall across the Midwest has been well below average for
months. A stagnant, blocking, dry-weather pattern has now led to the rapid
expansion of drought conditions in many row cropping states, with the prospect
of rain pushed out to the back end of the 15-day forecast.
Precipitation
in the first half of June has been quite sporadic for the corn belt, with falls
more concentrated west of the Mississippi River, favouring the High Plains and
Southern Plains states. The first full week in June, commencing Saturday 4
June, was reportedly the third driest first week of June for the US Corn Belt
in more than 30 years, building soil moisture deficits and crop stress.
The 13 June
national drought snapshot saw the drought worsening across much of the Midwest
but improving in Texas, Oklahoma and Kansas. A strong upper-level ridge of high
pressure continues to dominate the central portions of North America. According
to last week’s report, moderate to exceptional drought now covers 20.9pc of the
US, up from 18.3 percent the prior week. However, the agricultural areas are
particularly hard hit.
Drought now covers 57pc of the corn area, up from 45pc a week
earlier and 17pc in the same week last year. The soybean story is similar, with
51pc now drought-affected, up from 39pc last week and just 9pc a year prior.
The sorghum picture has improved marginally, with the drought-declared area
down two percentage points week on week to 64pc, much better than the 77pc at
the same time in 2022.
More
Drought doubles down on US row crops - Grain Central
Covid-19 Corner
This
section will continue until it becomes unneeded.
10 reasons we KNOW that COVID-19 leaked from the Wuhan Lab
June 19, 2023 5:35pm
At this
point, the only people who believe COVID did not leak from a Wuhan lab are diehards with I (Heart) Fauci bumper stickers.
The evidence is clear: The
pandemic was the result of irresponsible science. Here are 10 reasons why:
1. The “suicide” of the Wuhan lab collaborator,
Dr. Yusen
A key Chinese
scientist who collaborated with the Wuhan Institute of Virology, Dr. Zhou Yusen, filed for a patent for a COVID vaccine on February 24, 2020, according to documents
obtained by The Australian.
The early timing of his filing
raises concerns that the unnamed vaccine was in development months before the
COVID-19 pandemic became public.
Yet less than three months after
filing his patent, Dr. Zhou Yusen died under mysterious circumstances.
The Chinese media said he died
from “falling off the roof” of the Wuhan lab.
2. Wuhan lab workers were the first COVID
patients
In an April 2020 interview, I
told Fox News that an infected Wuhan lab worker was most likely patient zero of
the pandemic.
The National Institutes of
Health called it a conspiracy theory and Facebook and Google censored it,
calling it misinformation.
New evidence
published this month confirms that what I said was true and identifies the first infected lab workers by name.
More
10
reasons we KNOW that COVID-19 leaked from the Wuhan Lab (nypost.com)
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.
US startup Carbon
Rivers says graphene is the answer to toxic tyre chemical
June 16, 2023
(Reuters) -
Graphene added to tyres could replace the toxic chemical 6PPD, U.S. startup
Carbon Rivers says, as pressure mounts on the auto industry to eliminate the
widely-used compound that has polluted waterways and been found to be lethal to
some fish.
Later this
year, California is expected to be the first authority to demand tyre-makers
demonstrate they are seeking an alternative to 6PPD.
The
antioxidant and antiozonant is found in all tyres today because it stabilises
them and reduces cracking, but scientific research published in 2020 found the
chemical was to blame for mass deaths of Coho salmon off the U.S. West Coast.
Carbon Rivers,
based in Knoxville, Tennessee, says adding graphene nanoflakes to tyres could
reduce emissions by 28% and replace most or all of the 6PPD.
Tyre-makers
are under pressure to find a solution as the extra weight of electric vehicles
(EVs) means quantities of 6PPD released as tyres make contact with the road are
set to surge.
Carbon Rivers'
Chief Strategy Officer David Morgan said testing using graphene nanoflakes in
tyres has already shown a "tremendous reduction" in 6PPD.
The company is
working with regulators and testing could begin in the first quarter of 2024,
Morgan said, adding the company's graphene nanoflakes could be used in tyres on
the road as soon as 2025.
More
US startup Carbon
Rivers says graphene is the answer to toxic tyre chemical (msn.com)
Over a long weekend, I
could teach my dog to become an investment banker.
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