Baltic Dry Index. 1009 +16 Brent Crude 78.47
Spot Gold 1925 U S 2 Year Yield 4.94 -0.05
I can calculate the motion of heavenly bodies,
but not the madness of people.
Sir Isaac Newton.
In
bad news for the overpriced bubbly stock casinos, yesterday’s US Employment
report implies more US interest rate hikes to come, probably as early as this
month’s Fed meeting at the end of July.
“Sell
in May, go away,” looks to have been the right Wall Street saying for 2023, as
bond yields will now increasingly attract money from stocks.
Worse, higher interest rates will greatly add to the developing crisis in commercial real estate and lead to a rise in defaults in Commercial Real Estate Mortgage Backed Securities (CMBS.) That in turn will create big problems for US regional, community and second tier banks.
With
Euroland and the UK heading into recession and already in a manufacturing
recession, any hope of avoiding a hard landing now relies on China.
But
China’s economic rebound from all the Covid lockdowns already seems to have
stalled.
If
the US central banksters lead the global charge into yet higher interest rates,
as seems all too likely, bad times lie directly ahead.
In
the UK, a property bust now lies directly ahead.
Payrolls rose by 209,000 in June, less than expected, as
jobs growth wobbles
PUBLISHED FRI, JUL 7 2023 8:31 AM
EDT
Employment growth eased in June, taking some steam
out of what had been a stunningly strong labor market.
Nonfarm payrolls increased 209,000 in June and the
unemployment rate was 3.6%, the Labor Department reported Friday. That compared
with the Dow Jones consensus estimates for growth of 240,000 and a jobless
level of 3.6%.
The total, while still solid from a historical perspective, marked
a considerable drop from May’s downwardly revised total of 306,000 and was the
slowest month for job creation since payrolls fell by 268,000 in December 2020.
The unemployment rate declined 0.1 percentage point.
Closely watched wages numbers were slightly stronger than
expected. Average hourly earnings increased by 0.4% for the month and 4.4% from
a year ago.
Job growth would have been even lighter without a
boost in government jobs, which increased by 60,000, almost all of which came
from the state and local levels.
Other sectors showing strong gains were health care
(41,000), social assistance (24,000) and construction (23,000).
---- The labor force participation rate, considered a key
metric for resolving a sharp divide between worker demand and supply, held
steady at 62.6% for the fourth consecutive month and is still below its
pre-Covid pandemic level. However, the prime-age participation rate — measuring
those between 25 and 54 years of age — rose to 83.5%, its highest in 21 years.
A more encompassing unemployment rate that includes
discouraged workers and those holding part-time jobs for economic reasons rose
to 6.9%, the highest since August 2022. At the same time, the unemployment rate
for Blacks jumped to 6%, a 0.4 percentage point increase, and rose to 3.2% for
Asians, a 0.3 percentage point rise.
In addition to a downward revision of 33,000 for
the May count, the Bureau of Labor Statistics sliced April’s total by 77,000 to
217,000. That brought the six-month average to 278,000, down sharply from
399,000 in 2022.
The jobs numbers are considered a key in
determining where Federal Reserve monetary policy is headed.
---- In recent days, Fed officials have provided
indication that more rate hikes are likely even though they decided against
moving at the June meeting.
Markets widely expect a quarter percentage point
increase in July that would take the Fed’s benchmark borrowing rate to a
targeted range between 5.25%-5.5%. The outlook was little changed following the
jobs data release, with traders pricing in a 92.4% chance of a hike at the July
25-26 meeting.
The June report “suggests labor market conditions
are finally beginning to ease more markedly,” wrote Andrew Hunter, deputy chief
U.S. economist at Capital Economics. “That said, it is unlikely to stop the Fed
from hiking rates again later this month, particularly when the downward trend
in wage growth appears to be stalling.”
Jobs report June 2023: (cnbc.com)
Stocks tumble on Friday, notching weekly losses, as
traders’ rate hike fears return: Live updates
UPDATED FRI, JUL 7 2023 5:51 PM EDT
Stocks fell on
Friday, and finished lower for the week, as Wall Street struggled to shake off
fears that the Federal Reserve may start hiking rates again later this month.
The S&P 500 lost
0.29% to end at 4,398.95, while the Nasdaq Composite dipped
0.13% to close at 13,660.72. The Dow Jones Industrial Average dropped
187.38 points, or 0.55%, to settle at 33,734.88.
All three major averages capped a
losing week. The S&P dropped 1.16%, while the Nasdaq declined 0.92%. The
Dow shed 1.96% for its worst weekly performance since March.
The Labor Department’s June
jobs report showed payrolls increased less than expected,
cooling down from
May. Nonfarm payrolls rose by 209,000, while the unemployment rate
came in at 3.6%. Economists polled by Dow Jones had anticipated 240,000
positions added and a similar jobless level.
But parts of the report,
including stronger-than-expected wage numbers, heightened fears that the
central bank may have reason to resume hiking later this month. Average hourly
earnings increased by 0.4% in June and 4.4% from a year ago. Meanwhile, the
unemployment rate declined from 3.7% in May.
“It’s kind of a mixed picture
today,” said Truist’s Keith Lerner. “It’s good news that the economy is not
falling apart, it’s still chugging along, but you still have these wage
pressures that are going to keep the Fed likely to raise rates at the end of
the month.”
Near term, Lerner said equities
are ripe for a pullback following a big June and second quarter. This could
lead to consolidation and choppy action as markets head into earnings season.
Following Friday’s big data
release, traders kept their bets on a resumption in hiking later this month,
pricing in a 92% chance of a quarter-point hike on July 26. Those are about the
same odds as a day ago, according to CME Group’s FedWatch tool. Policymakers indicated at their June gathering
that two more rate hikes could be ahead in 2023.
Stock
market today: Live updates (cnbc.com)
FTSE 100 posts worst week
in nearly four months on rate hike jitters
July 7, 2023
Reuters) -UK's FTSE 100 fell to near four-month
lows on Friday, as investors fret over the possibility of interest rates
staying higher for longer, though shares of Coca Cola HBC jumped after the
bottler raised its profit outlook.
The internationally-focused FTSE 100 lost 0.3%,
totalling to a 3.6% fall for the week, its worst showing in 16 weeks.
The more domestically-focussed FTSE 250 midcap
index added 0.5%, led by a 4.6% rise in Elementis after JPMorgan upgraded the
chemicals group to "overweight".
Data showed that while the U.S. economy added the
fewest jobs in 2-1/2 years last month, wage growth persisted, pointing to a
still-tight labour market.
"The latest jobs data really does mean that
there is an interest rate hike due for July and there could even be another one
still due in September," said Giles Coghlan, chief market analyst at HYCM.
"Although the headline figure has fallen, you
can see that the wages component of the print still shows there is more work to
be done."
All FTSE 350 sector indexes ended the week lower,
as rekindled fears of tighter monetary policy in the United States and weak
demand outlook from top commodities consumer China weighed on sentiment.
More
FTSE
100 posts worst week in nearly four months on rate hike jitters (yahoo.com)
Fed interest-rate hike seen a lock for July
July
7, 2023 2:20 PM GMT+1
July 7 (Reuters) -
The Federal Reserve will likely raise its benchmark interest rate later this
month to a 5.25%-5.5% range, traders bet on Friday, even as they priced in a
slightly lower chance of any further increase after a government report showed hiring
slowed more than expected in June.
Traders now see about a 20% chance of a rate hike in September and a 40% chance of one by November, after what is nearly universally expected to be a quarter-point increase at the U.S. central bank's late-July meeting.
Before the Labor Department report, they had seen a nearly even chance that rates would get to a 5.5%-5.75% range by November.
The report, which showed
employers hired 209,000 workers last month, is "consistent with steady and
gradual slowing of the labor market," wrote III Capital Management's Karim
Basta. While that's not enough to dissuade the Fed a July rate hike, he said,
an increase in September is "very much an open question."
Fed
interest-rate hike seen a lock for July | 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.
German economy faces uphill climb as industrial output falls
July
7, 2023
BERLIN (Reuters) - A swift economic recovery for
Germany appeared less likely on Friday as data showed a surprise fall in
industrial production.
Output fell by 0.2% in May compared with the
previous month, the federal statistical office said. Analysts polled by Reuters
had predicted that output would stagnate.
Carsten Brzeski, chief economist at ING, pointed to
a "toxic combination" of poor outlook, thin order books and the need
to build up inventories further, as well as structural factors such as the war in
Ukraine and the transition towards cleaner energy.
"The country's international competitiveness
has already deteriorated in recent years and is likely to deteriorate
further," Brzeski said.
The industrial production data was a reminder of
the uphill climb in Europe's biggest economy if it is to shake off recession,
after a surprise increase in May orders fuelled some optimism on Thursday.
"After yesterday's very good figures on
incoming orders, today we are again faced with disillusionment," said
Jens-Oliver Niklasch of LBBW bank.
"We may just see stagnation in the second
quarter, but much more likely a renewed decline in economic output," he
added.
The office offers a breakdown of the data on
industrial production on its website.
German economy
faces uphill climb as industrial output falls (msn.com)
London house prices fall at fastest rate
since 2009 as rising rates dents demand
FRIDAY 07 JULY 2023 7:34 AM
UK house
prices fell for the third consecutive month with properties in London and the
south east coming under the most pressure.
According
to the Halifax House Price Index, the average house price fell by 0.1 per cent
from the month before, taking the average price to £285,932. This means that
over the last year, house prices have fallen 2.6 per cent overall.
London also saw a fall of 2.6 per cent over the past year,
wiping £15,000 off the average property. This was its weakest performance since
October 2009 and took the average house price in London to £533,057.
The south of England is the region facing the most
“downward pressure”. The south east saw a three per cent fall, its worst
performance since July 2011.
The West Midlands actually saw a 1.5 per cent rise
while Yorkshire also eked out marginal gains.
Kim Kinnaird, director at Halifax Mortgages, said:
“The annual drop of -2.6 per cent(-£7,500) is the largest year-on-year decrease
since June 2011. With very little movement in house prices over recent months,
this rate of decline largely reflects the impact of historically high house
prices last summer”.
The housing market has been hit by rising interest
rates. The Bank of England has hiked up rates 13 times in a row, taking the
base rate to five per cent.
However, inflation remains stubbornly above
target, suggesting that the Bank will have to hike a few more times to bring it
back under control.
As
Kinnaird noted, “concerns about persistent inflation have led to a significant
increase in the cost of funding. Coupled with base rate rising by another 50bp,
this contributed to a big jump in typical mortgage rates over the last month.”
The
average cost of a two-year fixed mortgage deal increased to 6.52 per cent on
Thursday, according to Moneyfacts. An average five-year deal rose above six per
cent for the first time this year earlier this month.
More
London house prices fall at fastest rate since 2009
(cityam.com)
Tesla starts to lay off some workers at China factory -
Bloomberg News
July 7, 2023
(Reuters) - Electric car maker Tesla Inc is laying
off some battery production workers at its Shanghai plant, Bloomberg News
reported on Thursday, citing people familiar with the matter.
It's not clear how many workers may be let go, or
the specific reasons behind the layoffs, according to the report.
Tesla starts to lay off some workers at China factory
- Bloomberg News (msn.com)
Below,
why a “green energy” economy may not be possible, and if it is, it won’t be
quick and it will be very inflationary, setting off a new long-term commodity
Supercycle. Probably the largest seen so far.
The
“New Energy Economy”: An Exercise in Magical Thinking
https://media4.manhattan-institute.org/sites/default/files/R-0319-MM.pdf
Mines,
Minerals, and "Green" Energy: A Reality Check
https://www.manhattan-institute.org/mines-minerals-and-green-energy-reality-check
"An
Environmental Disaster": An EV Battery Metals Crunch Is On The Horizon As
The Industry Races To Recycle
by Tyler Durden Monday, Aug 02, 2021 - 08:40 PM
Covid-19
Corner
This section
will continue until it becomes unneeded.
Nothing
new today, so a repeat of yesterday’s YouTube update.
More bad news on the Pfizer
vaccines. Approx. 17 minutes.
Viral Vaccine paper
Technology Update.
With events happening fast in the
development of solar power and graphene, I’ve added this section.
‘Revolutionary’ solar power cell innovations break key energy
threshold
July 6, 2023
Solar
power cells have raced past the key milestone of 30% energy efficiency, after
innovations by multiple research groups around the world. The feat makes this a
“revolutionary” year, according to one expert, and could accelerate the rollout
of solar power.
Today’s
solar panels use silicon-based cells but are rapidly approaching their maximum
conversion of sunlight to electricity of 29%. At the same time, the
installation rate of solar power needs to increase
tenfold in order to tackle the climate crisis, according to
scientists.
The breakthrough is adding a layer of perovskite,
another semiconductor, on top of the silicon layer. This captures blue light
from the visible spectrum, while the silicon captures red light, boosting the
total light captured overall. With more energy absorbed a cell, the cost of
solar electricity is even cheaper and deployment can proceed faster to help
keep global heating under control.
The perovskite-silicon “tandem” cells have been
under research for about a decade, but recent technical improvements have now
pushed them past the 30% milestone. Experts said that if the scaling-up of
production of the tandem cells proceeds smoothly, they could be commercially
available within five years, about the same time silicon-only cells reach their
maximum efficiency.
wo groups published the details of their
efficiency breakthroughs in the journal Science on Thursday, and at least two
others are known to have pushed well beyond 30%.
“This year is a revolutionary year,” said Prof
Stefaan De Wolf, at King Abdullah University of Science and Technology in Saudi
Arabia. “It’s very exciting that things are moving rapidly with multiple
groups.”
The current efficiency record for silicon-only solar
cells is 24.5% in commercial cells and 27% in the laboratory. The latter may
well be as close the cells can practically get to the theoretical maximum of
29%.
But one group, led by Prof Steve Albrecht at the
Helmholtz Center Berlin for Materials and Energy in Germany, has now published information about how they achieved
efficiencies of up to 32.5% for silicon-perovskite cells. The other group, led
by Dr Xin Yu Chin at the Federal Institute of Technology in Lausanne,
Switzerland, demonstrated an efficiency of 31.25% and said tandem cells
had the “potential for both high efficiency and low manufacturing costs”.
‘Revolutionary’ solar power cell innovations break key
energy threshold (msn.com)
This weekend’s music
diversion. Marc-Antoine Charpentier’s
March of Triumph. Approx. 5 minutes.
Charpentier
- Marche de Triomphe H.547
Charpentier - Marche de Triomphe H.547 - YouTube
This weekend’s chess update. Approx.
10 minutes.
Legendary
Rivals Face-Off Again || Carlsen vs Anand || Croatia (2023)
Legendary
Rivals Face-Off Again || Carlsen vs Anand || Croatia (2023) - YouTube
This weekend maths update. Something a
little different. Approx. 13 minutes.
Bell's
Inequality: The weirdest theorem in the world | Nobel Prize 2022
Bell's
Inequality: The weirdest theorem in the world | Nobel Prize 2022 - YouTube
John Stewart Bell
John Stewart Bell FRS[2] (28
July 1928 – 1 October 1990)[3] was
a physicist from Northern Ireland and the originator of Bell's theorem,
an important theorem in quantum physics regarding hidden-variable
theories.[4][5][6][7][8]
In 2022, the Nobel Prize in
Physics was awarded to Alain Aspect, John Clauser,
and Anton Zeilinger for
work on Bell inequalities and the experimental validation of Bell's theorem.[a][9]
Too much sanity may be madness and the maddest
of all, to see life as it is and not as it should be.
Miguel de Cervantes. Don Quixote.
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