Baltic Dry Index. 967 -11 Brent Crude 82.93
Spot Gold 1961 US 2 Year Yield 4.81 -0.01
“The only
function of economic forecasting is to make astrology look respectable.”
It is Fed decision day on their key interest rate. Later today they will also give their guidance on how they see the US economy performing in H2 23.
But first, Asian stock casinos rally on promised relief for China’s failing property companies.
US recession odds change say economists.
Hong Kong stocks gain 3% as China vows support
for ailing property market
UPDATED MON, JUL 24 2023 10:19 PM EDT
Hong Kong
stocks saw a strong rebound and the Hang Seng index climbed
3% on Tuesday after China’s
Politburo pledged to “adjust and optimize policies in a
timely manner” for its ailing property sector.
Beijing’s top decision making
body also vowed to “elevate stable employment to a strategic goal,” along with
other pledges to boost consumption and tackle debt risks.
This comes after disappointing
economic data last week prompted renewed calls
for policy support to bolster growth.
Mainland Chinese stocks were also
all higher, with the Shenzhen
Component climbing almost 2% and the Shanghai Composite up
by 1.18%
Other Asian markets were also
mostly up. South Korea’s Kospi traded
close to the flatline, while the Kosdaq was 1% higher. This comes after
the country saw a 0.9% year-on-year growth in its second quarter gross domestic
product, according to advance estimates.
Australia’s S&P/ASX
200 extended
its gains from Monday, rising 0.33%. However, in Japan, the Nikkei 225 fell
0.18%, while the Topix rose 0.13%.
Overnight in the U.S., all three major indexes
rose as the Dow Jones Industrial Average extended
its winning streak to 11 days, its longest run since February 2017.
The Dow gained 0.52%, while the S&P 500 rose
0.40% and the Nasdaq
Composite added 0.19%.
Hong Kong stocks gain
3% as China vows support for ailing property market (cnbc.com)
Stock futures are little changed Monday
evening after Dow notches 11-day rally: Live updates
UPDATED MON, JUL 24 2023 8:23 PM
EDT
U.S. stock futures were flat on Monday night
after the Dow Jones Industrial Average registered its longest winning streak
since February 2017.
Dow Jones Industrial Average
futures inched down 12 points, or 0.03%. Futures linked to the S&P 500
slipped by 0.03%, and Nasdaq 100 futures ticked lower by 0.04%.
During regular trading, the Dow rose
more than 183 points, or 0.5%, marking its 11th consecutive winning session.
The 30-stock index also hit its highest level since April 2022 and had its
highest close since February 2022. The S&P 500 and
the Nasdaq Composite added
0.4% and 0.2%, respectively.
While a stronger-than-expected
earnings season has helped maintain the market rally, Wall Street is also
carefully awaiting the Federal Reserve’s policy decision on Wednesday. Fed fund
futures data shows a 98% probability of a quarter-point hike, according to the CME FedWatch Tool. Investors are waiting for
Chair Jerome Powell’s statements on his outlook for the economy as it tackles
inflation.
“Clearly, the market has a
significant amount of momentum. … But we think the fundamental backdrop is
still quite negative. Stocks are not bound by any sort of fundamentals,” Eric
Johnston, Cantor Fitzgerald’s head of equity derivatives and cross asset, said
on CNBC’s “Closing
Bell: Overtime.”
“We think that the economic risk
and the earnings risk [are] one-sided. Meaning that if everything remains okay,
then what you see right now – which is sort of subdued, but steady growth —
would remain. But we think the risk is really the downside for economic
growth,” Johnston added.
General
Electric, General Motors and Verizon are
set to report earnings Tuesday morning. Mega-cap tech names Alphabet and Microsoft are
scheduled to announce their quarterly results after the close. Wall Street will
also looking at July’s consumer confidence data.
Stock
market today: Live updates (cnbc.com)
Economists See US Recession Odds at 50% or Less in New Survey
July 24, 2023
(Bloomberg) -- A strong
majority of business economists now say the odds of the US entering a recession
in the next 12 months are 50% or less, according to a National Association for
Business Economics survey.
Some
71% of respondents reported such an outlook in results of the poll, published
Monday. That marks a sharp turnaround from NABE’s previous survey in April,
which showed an almost even split between those forecasting a downturn and
those who were not.
More
than one in four respondents in the July survey put the chance of a recession
in the next year at 25% or less.
Ongoing
strength in the labor market and a pullback in key consumer price metrics have
helped fuel the shift in sentiment. While economists have in recent months repeatedly altered
their forecasts for when a potential recession may begin, the NABE survey
results suggest many may now be changing their minds altogether on the
inevitability of one.
A greater share of survey
respondents, who are employed at firms across a number of industries, reported
improved profit margins at their companies, and an increased share also said
they were passing some or all of recent cost increases on to consumers.
Inflation-related metrics were mixed.
While a majority of respondents reported that wages were unchanged at their
companies in the second quarter, 49% reported rising prices in that period — up
from 40% in the April poll. A greater share of panelists also expect prices to
rise in the next three months.
The survey reflects responses from 52
NABE members, collected between June 30 and July 12.
Economists See US Recession Odds at 50% or Less in New Survey (msn.com)
Up next, despite Brexit and all that far left BBC scaremongering, the sky didn’t fall after Brexit.
British exports to EU rise
|
British factories
are exporting more to the EU despite
warnings that Brexit could chill trade. Britain is facing a prolonged
economic slump caused by higher interest rates, economists have
warned. And Nestlé workers in Russia are at risk of being
conscripted into the Ukraine war. |
|
|
|
|
|
British factories
are exporting more to the EU despite warnings that Brexit could
chill trade with the bloc. British
exports to EU rise despite Brexit warnings (telegraph.co.uk) |
Next, more bad news from cryptoland.
Bitcoin falls sharply ahead of Fed meeting
and as investors weigh Binance concerns
The price of bitcoin fell sharply and suddenly to
start the week as investors awaited a major Federal Reserve policy decision and
digested concerns around Binance.
Bitcoin was
last lower by more than 3% at $29,121.60, according to Coin Metrics. Earlier,
it sank as low as $28,995.02, its lowest level in more than a month.
The reason behind the sharpness in the drop is unclear, although the move
coincided with a Wall Street Journal report augmenting recent anxiety from
investors around Binance. Specifically, CEO Changpeng “CZ” Zhao reportedly
suggested in private conversation in 2019 that Binance affiliates had accounted
for a portion of trading volume around the time it launched its U.S. trading
arm. There are questions about whether this activity constituted “wash trading”
aimed at inflating volume.
Binance is the largest crypto exchange in the
world. It was sued by the Securities and Exchange Commission last month and is
at the center of a Department of Justice investigation that’s likely to end
with a consent decree or settlement, CNBC previously
reported. Federal prosecutors have been weighing anti-money
laundering violations and sanctions evasion charges, allegations that would
make it difficult for Binance or founder Zhao to continue to get licenses to
operate.
Not everyone is convinced the big
move could be put on the Binance story, however.
“You could probably chalk it up to
technicals or flows,” said Callie Cox, analyst at investing firm eToro.
”$30,000 is a big deal, and it makes sense that bitcoin investors are feeling
more nervous around these levels. Recoveries aren’t always a straight line up.”
Elsewhere, investors are also
watching what the Federal Reserve does at the conclusion of its two-day meeting
on Wednesday.
More
Bitcoin falls sharply ahead of Fed meeting and as investors weigh Binance concerns (cnbc.com)
Finally, sadly, more trouble for Ukraine’s grain exports.
Russia attacks
Ukraine's vital Danube grain export route
July 24, 2023
KYIV (Reuters) -Russia
destroyed Ukrainian grain warehouses on the Danube River in a drone attack on
Monday, targeting a vital export route for Kyiv in an expanding air campaign
that Moscow began last week after pulling out of the Black Sea grain deal.
Last week's
attacks mostly struck the sea ports of Odesa but Monday's pre-dawn strikes hit
infrastructure along the Danube, an export route whose importance has grown
since the demise of the deal allowing Ukrainian grain transit via the Black
Sea.
"The
Russian terrorists have again attacked the Odesa region overnight. Port
infrastructure on the Danube river is the target this time," regional
governor Oleh Kiper wrote on the Telegram messaging app.
Global wheat
and corn futures rose sharply on fears that Russian attacks and more fighting,
including an overnight drone strike on Moscow, could threaten grain exports and
shipping.
News website
Reni-Odesa cited a local official as saying three grain warehouses had been
destroyed in the Danube port city of Reni during a drone attack.
Video footage
obtained and verified by Reuters showed a man cursing in disbelief at several
damaged grain warehouses at Reni, an important transport hub across the Danube
to NATO and European Union member Romania.
"This
recent escalation poses serious risks to the security in the Black Sea,"
Romanian President Klaus Iohannis said on Twitter, drawing attention to the
proximity of the attack to Romania's border.
Since Russia's
full-scale invasion in February 2022, Ukraine has expanded grain exports
overland via the EU to about 1 million tons a month, with large volumes being
exported from Romanian ports and along the Danube.
"Russia
has in the past months not attacked Ukraine's overland and inland waterways
grain infrastructure," one European trader said. "Any interruption of
this traffic could quickly hit international grain supplies.
A French
trader called it a "major development and a major blow" to Ukrainian
exports, adding: "Without the Black Sea corridor and now with attacks on
alternative routes, it will be hard to take Ukrainian grains out of the
country."
Kiper said:
"Russia is trying to fully block the export of our grain and make the
world starve."
More
Russia attacks Ukraine's vital Danube grain export
route (msn.com)
“Fools, as it
has long been said, are indeed separated, soon or eventually, from their money.
So, alas, are those who, responding to a general mood of optimism, are captured
by a sense of their own financial acumen. Thus it has been for centuries; thus
in the long future it will also be.”
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.
Sharp slowdown in
private sector growth surprises economists
July 24, 2023
The UK’s private sector appears to
have slammed the brakes on growth so far this month, as it fell well short of
expectations in a closely followed survey.
According to the purchasing managers
index, the economy is still growing, but has fallen behind compared to previous
months.
The survey, compiled by S&P
Global and CIPS showed that it sank to its weakest point in six months.
It scored 50.7 in July, down sharply
from 52.8 last month.
Although the figures indicate that
the economy is still growing, anything over 50 is positive, it is a sharp
slowdown and much worse than the 52.3 that experts had forecast.
The lower the figure goes the worse
it is for the economy.
The companies who filled out the
survey said that they had been hit by rising interest rates, still high levels
of inflation and caution among customers.
It dampened the post-pandemic rebound
in what households spend on leisure activities, the survey found.
“The
UK economy has come close to stalling in July which, combined with gloomy
forward-looking indicators, reignites recession worries,” said Chris
Williamson, chief business economist at S&P Global Market Intelligence.
More
Sharp slowdown in private sector growth surprises
economists (msn.com)
UK
inflation will top Bank of England two per cent target until end of 2024, EY
claims
MONDAY 24 JULY 2023 6:00 AM
Inflation will top the Bank of England’s two per
cent target for over a year, hobbling UK economic growth and eroding workers’
finances, new forecasts out today claim.
Prices are set to ease much slower than previously expected due to food and energy costs remaining elevated, according to consultancy the EY Item Club.
UK inflation will average 7.6 per
cent this year, above the 6.2 per cent forecast by the group in April,
extending the squeeze on family finances, with annual pay growth not projected
to beat price increases until 2025.
Households will come under further pressure after
the Bank raises interest rates two more times to a peak of 5.5 per cent from
their current level of five per cent, the report said.
Higher prices and interest rates will be a slow
burning drag on the UK economy, mainly driven by consumers reining in spending
and businesses shunning investment.
As a result, the EY Item Club has more than halved
their 2024 GDP growth forecasts to 0.8 per cent from April’s 1.9 per cent
forecast, although the country is on track to dodge a recession.
The Bank of England has lifted interest rates at
the most aggressive pace since the 1980s, up to five per cent from near zero in
December 2021, in response to sky-high inflation.
Monetary policy operates with a lag, meaning it
takes time to constrain growth, convincing the EY Item Club to downgrade their
medium-term GDP forecasts. Rate cuts are not pencilled in until the second half
of 2024.
Output is poised to expand slightly
quicker than feared this year at 0.4 per cent.
More
Inflation will top Bank of England target until end of
2024, EY claims (cityam.com)
Recession latest: Industry
forecasts get bleaker and bleaker
July 24, 2023
The
Construction Products Association (CPA) says that the construction industry
will experience an acute recession this year driven by double-digit falls in
private housing new build and private housing repair, maintenance, and
improvement (RMI) – the two largest sectors of the construction industry in the
UK.
UK
construction output to fall by 7.0% in 2023 before recovering slowly in 2024
with growth of just 0.7%, according to the CPA’s Summer Forecasts published
today.
These latest
forecasts are in stark contrast to what the CPA was predicting this time last
year. Twelve months ago the CPA said that construction output would grow by
1.6% in 2023 and a further 2.5% in 2024. But that was before Liz Truss had a go
at being prime minister and before Russia invaded Ukraine – two economic shocks
that no one had predicted.
Since last
summer the CPA’s quarterly forecasts have got successively gloomier. In
February this year it was saying that output would decline by 4.7%, then by
6.4% in May and now 7.0%.
The lesson
being that all economic forecasts should be taken with a bag of salt.
More
Recession latest: Industry forecasts get bleaker and
bleaker (theconstructionindex.co.uk)
Covid-19 Corner
This section will continue until it becomes unneeded.
EXCLUSIVE: CDC Changed
Definition of Breakthrough COVID-19 After Emails About ‘Vaccine Failure’
July 22, 2023 Updated: July 23, 2023
The
U.S. Centers for Disease Control and Prevention (CDC) altered its definition of
COVID-19 cases among the vaccinated, leading to a lower number of cases
classified as a breakthrough, according to documents obtained by The Epoch
Times.
The
CDC in early 2021 defined the post-vaccination cases as people testing positive
seven or more days after receipt of a primary vaccination series, according
to one of the documents.
The
definition was changed on Feb. 2, 2021, to only include cases detected at least
14 days after a primary series, another document shows.
“We
have revised the case definition,” Dr. Marc Fisher, the lead of the CDC’s
Vaccine Breakthrough Case Investigation Team, wrote to colleagues at the time.
The
rationale for the change was redacted.
A CDC
spokesperson defended the altered definition.
“CDC
made the change to the definition of a breakthrough infection time period due
to the most current data that showed that the 14-day period was required for an
effective antibody response to the vaccines,” Scott Pauley, the spokesman, told
The Epoch Times in an email.
“That,
in combination with the data showing that many cases of COVID-19 were
incubating for up to two weeks before becoming symptomatic, required the change
to refine the time period to eliminate cases where exposure happened before the
vaccination response would be effective,” Mr. Pauley added.
Dr.
Harvey Risch, professor emeritus of epidemiology at the Yale School of
Public Health, said there was “no cogent rationale” for excluding early cases
and other events among the vaccinated, whether they occurred within seven days
or 14 days.
“With
either of these delays, CDC addressed what is the theoretical best that the
vaccination could achieve. If the vaccines don’t work for the first 7 or 14
days or increase risk of getting Covid-19 during that period, that is part of
what happens when they are deployed in a population,” Dr. Risch told The Epoch
Times via email.
Dr.
Jay Bhattacharya, professor health policy at Stanford University, said that the
CDC should have been focused on advising people that they weren’t as protected
immediately after vaccination.
“Rather
than playing games with the definition of breakthrough cases,” Dr. Bhattacharya
told The Epoch Times in an email, the CDC should have warned “recently
vaccinated vulnerable older people that they were at higher risk for being
infected during that period.”
More
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.
World's largest wind turbine is now fully operational
and connected
Loz Blain July 19, 2023
Three
Gorges Energy has connected the world's first 16-megawatt monster offshore wind
turbine to the power grid. With a mind-boggling 260-meter (853-ft) rotor
diameter, this towering colossus will supply clean energy for about 36,000
Chinese homes.
It doesn't
look all that out of place, standing in a field of other, lesser goliaths, but
this MingYang Smart Energy MySE 16-260 is the largest ever connected to the
grid. The "engine room" and generator housed in the hub on top of its
152-m (500-ft) tower weigh in at a gargantuan 385 tons, and each of its three
123-m (404-ft) blades adds another 54 tons, hanging off one side of the
generator shaft.
Every time it
completes a full revolution, it sweeps about 50,000 sq m (540,000 sq ft) of air
(that's seven-odd soccer fields in the internationally accepted layman's
units), and sends up to 34.2 kWh of energy into the Chinese power system.
Annually, it's expected to contribute about 66 gigawatt-hours.
This demonstration
unit sits in the Fujian offshore wind farm in the Taiwan Strait, where it'll
take advantage of a natural wind tunnel effect. According to the Three Gorges Group,
this location experiences level 7 "near gale" conditions with winds
exceeding 32 mph (51 km/h) more than 200 days each year.
Indeed, the area is
prone to typhoons, so this enormous turbine has an opportunity to prove its
mettle against the elements. It's designed to withstand winds up to 179 mph
(287 km/h) – that leaves a margin over the most violent conditions ever
measured in the Western North Pacific: Typhoon Tip, which featured sustained
winds of 160 mph (260 km/h) in 1979. Mind you, the way weather systems are
flying off kilter as climate change continues to advance, it's hard to know
what to expect going forward.
Offshore wind
turbines will continue to grow in size; the China State Shipbuilding
Corporation was already building an 18-megawatt turbine back in January and it
seems reasonable to expect a 20-MW announcement any day now.
The area of a circle being pi
times the square of the radius, every meter added to the length of a turbine's
blades has an outsized effect on the swept area from which energy can be
harvested, so bigger is definitely better.
The engineering and logistics
involved in manufacturing and deploying these things are thus getting wilder by
the day, and both Mingyang and the Three Gorges Group have earned themselves a beer
by getting this monster completed and into service.
Source: Three Gorges Corporation via Xinhua
World's largest wind turbine is now fully operational
and connected (newatlas.com)
“There are two kinds of forecasters: those who
don’t know, and those who don’t know they don’t know.”
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