UK Inflation Day. Is 2023 Really 2019?

Baltic Dry Index. 1037 -36              Brent Crude 79.40

Spot Gold 1975                        US 2 Year Yield 4.74 unch.   

What are the first two laws of economics? For each economist, there's exists an equal and opposite economist; the second law says that they're both wrong.

In the stock casinos, bubble on. Party like it’s ZIRP and NIRP 2010 – 2019 all over again.

But is 2023 really ZIRP 2019 again? 

How many US banks blew up in 2019?  How many Chinese property companies were on the verge of failing?

What was US, UK and EU inflation?  What were US, UK and EU key interest rates?

Was there a European discretionary war underway with no end in sight?

How full was the US strategic petroleum reserve compared to July 2023?

Were 40 million dead beat US student loan recipients about to get a September/October repayment shock?

Was some 300,000+ UPS delivery workers just about to go on strike August 1?

To this old dinosaur stock and commodities follower since 1968, 2023 doesn’t look healthy at all, and I’m not talking heatwaves.

But of course, this time it's different, right?

Asia markets rise as investors digest Wall Street’s strong earnings

UPDATED TUE, JUL 18 2023 10:32 PM EDT

Asia-Pacific markets mostly rose on Wednesday as investors digest better-than-expected results from Wall Street.

Overall, the earnings season was off to a strong start. Of the S&P 500 companies that have reported, 84% exceeded profit estimates, according to FactSet.

In Japan, the Nikkei 225 popped 1.07%, while the Topix was up 0.96%. Business sentiment among manufacturers in Japan declined for the first time in six months in July, according to the Reuters Tankan survey, which measures confidence among large Japanese companies.

South Korea’s Kospi climbed 0.2%, and the Kosdaq was up 0.46% after reaching its highest level in over 15 months on Tuesday.

In Australia, the S&P/ASX 200 rebounded from Tuesday losses and rose 0.59%. Australia will see its unemployment figures out Thursday, seen as critical to the central bank on whether it will continue to hike rates.

Hong Kong’s Hang Seng index extended its losses after falling over 2% on Tuesday, with the index sliding 1.12% in early trade.

Mainland Chinese markets were more mixed, with the Shanghai Composite up 0.19% and the Shenzhen Component down marginally.

Overnight in the U.S., all three major indexes climbed, with the Dow Jones Industrial Average up 1.06% and notching its seventh straight day of gains and its longest winning streak since March 2021. The Nasdaq Composite climbed 0.76%, while the S&P 500 gained 0.71%.

Asia markets rise as investors digest Wall Street's strong earnings (cnbc.com)

Stock futures are little changed after Dow posts a seventh straight day of gains: Live updates

UPDATED TUE, JUL 18 2023 8:03 PM EDT

U.S. stock futures were little changed Tuesday night after the Dow Jones Industrial Average notched its longest winning streak since 2021.

Dow Jones Industrial Average futures wavered near the flat line. S&P 500 futures and Nasdaq 100 futures dipped 0.05% and 0.1%, respectively.

Carvana shares dropped more than 9% in extended trading. The online auto retailer said Tuesday it will post second-quarter earnings results on Wednesday, moving the date of its report up from Aug. 3.

The Dow Jones Industrial Average notched a seventh straight positive session on Tuesday for its longest string of gains since March 2021. The Dow rose 366.58 points, or 1.06%. The S&P 500 gained 0.71%, while the Nasdaq Composite climbed 0.76%. All three major averages notched their highest closes since April 2022.

Second-quarter earnings season is off to a strong start. Of the 38 companies in the S&P 500 that have reported results, 82% have exceeded expectations, according to FactSet data. For many investors, the recent streak of gains bolsters the case for a soft-landing scenario. It’s an outlook that has gained traction after last week’s encouraging inflation data.

“I think that we have to take a hard-landing scenario off the table, and in part, as we approach 2024 it becomes more difficult for us to believe in a downward trajectory to earnings,” Alger’s Ankur Crawford said on CNBC’s “Closing Bell” on Tuesday.

---- Goldman Sachs is set to report before the open Wednesday. Other major companies such as Netflix, Tesla, IBM and United Airlines will post earnings after the close.

June housing data will release Wednesday at 8:30 a.m. ET. Housing starts are expected to have dropped by 9.3%, according to economists polled by Dow Jones. That would be down from the huge 21.7% jump in the prior month.

Meanwhile, June building permits are anticipated to have declined 0.7%, according to Dow Jones consensus estimates. That would be down from a 5.2% gain the previous month.

Stock market today: Live updates (cnbc.com)

Morning Bid: Britain's CPI the next frontier

July 19, 20235:33 AM GMT+1

A look at the day ahead in European and global markets from Tom Westbrook

British inflation data this morning could be the toast of trading desks if it follows updates from the U.S. and Canada and surprises on the downside.

A tentative rally in gilts is poised to extend and sterling could probably say goodbye to the strong side of $1.30.

Forecasts put Britain's annual CPI falling to 8.2% in June and core holding at 7.1%. Those are eye-watering levels so a return to surprises on the high side would be unpleasant.

Markets have already priced another 100 basis points of Bank of England rate rises this year, and following dovish remarks from the European Central Bank's Klass Knot it's possible the BoE would find itself hiking all alone and rather quickly.

New Zealand sounded a warning in the Asia session, with food prices keeping annual headline inflation higher than expected at 6%. Traders reckoned it meant NZ interest rates would need to stay higher for longer and briefly lifted the kiwi.

Under the hood in Canada, an average of the Bank of Canada's two core inflation measures has also hardly budged at 3.8%.

Elsewhere, China's slowing economy is casting a bit of shade over encouraging data and corporate earnings in the U.S.

The Hang Seng (.HSI) shed another 1% on Wednesday and is down about 5% for the year. Netflix (NFLX.O), Tesla (TSLA.O) and Goldman Sachs (GS.N) report results later in the day.

On Tuesday markets welcomed better-than-expected profits at Morgan Stanley (MS.N) and other big banks as well as Microsoft (MSFT.O) flexing its AI muscles by announcing new fees for features within its office software, sending shares up 4%.

Key developments that could influence markets on Wednesday:

Data: British CPI, Euro zone final CPI, U.S. housing starts

Speakers: Bank of England's Dave Ramsden

Earnings: Netflix, Tesla, Goldman Sachs

Morning Bid: Britain's CPI the next frontier | Reuters

Finally, it’s not just the Ukraine proxy war on Russia in Ukraine causing food price inflation.

Olive oil industry in crisis as Europe’s heatwave threatens another harvest

July 17, 2023

The olive oil industry is “in crisis”, with the heatwave in southern Europe threatening to inflict the second bad harvest in a row and gaps on shelves this autumn.

After a spring heatwave affected flowering in Spain, which produces about half the global olive crop, the harvest was forecast to be only 28% up on last year, which was the worst in almost a decade.

International Olive Oil Council predicted the country would produce 850,000 tonnes, compared with at least 1.3m tonnes in a typical year and just 660,000 last year. That forecast was issued before the current period of high temperatures.

The industry fears production could end up being even worse as a second heatwave in a week brings temperatures of up to 43C this week to some southern parts of Spain, prompting trees to drop unripe fruits in order to preserve moisture.

“In Spain we already know it is going to be another bad year but no one has got to grips with the what’s currently happening. The record temperatures are not going to help the situation,” said Walter Zanre, the chief executive of the UK arm of Filippo Berio, the world’s largest olive oil producer.

“I can’t share how much anxiety this is causing us. Last year, Spain came into crop with a bit of carry over [from the year before] which negated the shortfall somewhat. This year the barrels are dry. Even if Spain produces the predicted 850,000 tonnes the price situation is worse.”

Zanre said that the probable shortages meant prices were likely to rise further amid similarly poor harvests in Italy and Portugal. Wholesale prices have doubled since the beginning of 2022.In the UK, the retail price of olive oil was up 47% year on year to an average £6.16 for 500ml in May, according to the latest figures from the Office for National Statistics.

With the autumn harvest is unlikely to produce new oil until November and last year’s supplies are expected to run out by September at present rates of consumption. It is possible there could be shortages in supermarkets in the autumn.

Tomato producers in Italy are also concerned about the impact of the heatwave, after flooding wiped out more than 15% of the hectares of crop planted this year. If the extreme temperatures in the country last longer than a few days they could damage the remaining crops, which are almost ready for harvest.

More

Olive oil industry in crisis as Europe’s heatwave threatens another harvest (msn.com)

Extreme heat scorches Europe, world

Tue, July 18, 2023 at 11:14 PM GMT+1

Swathes of Europe baked Tuesday in a heatwave trailed by wildfires and health warnings, as parts of Asia and the United States also suffered under extreme weather.

Firefighters battled blazes in parts of Greece and the Canary Islands and Spain issued heat alerts, while some children in Italy's Sardinia were warned away from sports for safety reasons.

In the United States, the city of Phoenix broke a 49-year-old record with its 19th consecutive day of temperatures of 43.3 Celsius (110 Fahrenheit) or higher, weather officials said.

"You can't be in the street, it's horrible," said Lidia Rodriguez, 27, in Madrid.

From the Washington to Beijing, authorities have warned in recent days of the health dangers of the extreme heat, urging people to drink water and shelter from the sun.

Several local temperature records were broken in southern France, the weather service there said.

Meteo France said a record 29.5 C (85 F) had been reached in the Alpine ski resort of Alpe d'Huez, which sits at an altitude of 1,860 metres (6,100 ft), while 40.6 C (105F) had been recorded for the first time in Verdun in the foothills of the Pyrenees.

----Northwest of the Greek capital Athens, columns of smoke loomed over the forest of Dervenohoria, where one of several fires around the capital and beyond was still burning.

Still burning was a forest fire by the seaside resort of Loutraki, where the mayor said 1,200 children had been evacuated Monday from holiday camps.

In the Canary Islands, some 400 firefighters battled a blaze that has ravaged 3,500 hectares of forest and forced 4,000 residents to evacuate, with authorities warning residents to wear face masks outside due to poor air quality.

Temperatures were unforgiving in Italy and in Spain, where three regions were put under hot weather red alerts.

The Italian islands of Sardinia and Sicily have been on watch to possibly surpass a continent-wide record of 48.8C (nearly 120F), recorded in Sicily in August 2021.

At Lanusei, near Sardinia's eastern coast, a children's summer camp was restricting beach visits to the early morning and forbidding sports, teacher Morgana Cucca told AFP.

----Tens of millions of Americans experienced dangerous heat levels on Tuesday.

In the town of San Angelo, Texas, where temperatures were expected to reach 104-108F (40-42C), the National Weather Service said it was "running out of ways to say that it's gonna be hot out there today."

"With temperatures across the area likely topping the 105 mark yet again, we implore you to continue to practice heat safety and try to stay as cool," the agency said on Twitter.

And in Arizona, the mercury at Phoenix Sky Harbor Airport again reached 110F on Tuesday, breaking the previous record of 18 consecutive days at or above that temperature, set in 1974.

The heat waves across Europe and the globe are "not one single phenomenon but several acting at the same time," said Robert Vautard, director of France's Pierre-Simon Laplace climate institute.

More

Extreme heat scorches Europe, world (yahoo.com)

 What did the economist say when someone asked him how his wife was doing? "Relative to what?"

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.

Long-feared corporate debt woes start to hit home

July 18, 2023

LONDON (Reuters) - The spectre of rising corporate debt defaults exacerbating a global economic slowdown has for months been largely brushed aside by resilient credit markets.

Now, long-feared corporate debt woes are starting to hit home, while more companies are being downgraded to a junk credit rating - facing higher borrowing costs as a result.

Retailer Casino, with 6.4 billion euros ($7.19 billion) of net debt, is in court-backed talks with creditors; Britain's Thames Water is in the headlines with its 14 billion pound ($18.32 billion) debt pile.

Swedish landlord SBB, downgraded to junk in May, is at the epicentre of a property crash that threatens to engulf Sweden's economy.

Yet the cost of insuring exposure to a basket of European junk-rated corporates last week briefly hit its lowest in just over a year, suggesting investors remain unperturbed by rising default risks.

"You have a lot of complacency in the market, if you think that statistics show that we have had already as many defaults globally in the first five months of 2023 as in the whole 2022," said Julius Baer's head of fixed income research Markus Allenspach.

"But there are still inflows into high yields (bonds)," he said.

S&P Global expects default rates for U.S. and European sub-investment grade companies to rise to 4.25% and 3.6% respectively by March 2024, from 2.5% and 2.8% this March.

Hopes the world economy will avoid a sharp downturn and that aggressive rate hikes will soon end explain the upbeat sentiment.

But analysts note the impact of rate rises has yet to be fully felt.

For some, this means corporate bond yields should command a higher premium. The current spread on the ICE BofA global high yield bond index is at 435 basis points (bps), down from 622 bps a year ago.

"Corporate credit spreads are still extremely tight and are not reflecting the risks that are out there," said Guy Miller, chief market strategist at Zurich Insurance Group.

Miller said 122 U.S. public and private companies with liabilities over $50 million have already filed for bankruptcy protection so far this year, implying a run rate that will cause bankruptcies to exceed 200 by year-end - comparable to that seen during the global financial crisis and COVID-19.

More

Long-feared corporate debt woes start to hit home (msn.com)

Cover Story: Fund Manager's Dark Arts Lift Lid on China's Debt Mess

July 17, 2023

China is doubling down on stymying the murky fund raising practices in the structured bond market that is exploited by shady fund managers and risky borrowers, as the government steps up efforts to tackle the debts amassed by local government financing vehicles (LGFV), which by some estimates have ballooned to 50% of the nation’s GDP.

Beijing fears that these LGFVs, who have been crucial in funneling investment into infrastructure projects, have dipped too far into this perilous segment of the bond market and may default, destabilizing the banking and financial sector and curtailing these key drivers of economic growth, which slowed to 3% last year, the second-weakest in decades.

More, subscription required.

Cover Story: Fund Manager's Dark Arts Lift Lid on China's Debt Mess (caixinglobal.com)

Covid-19 Corner

This section will continue until it becomes unneeded.

Australia Ceases Reporting Cases of Myocarditis Post-COVID Vaccination

July 17, 2023

Australia’s therapeutic goods administration (TGA) has announced that reports on myocarditis and pericarditis cases following mRNA-based COVID-19 vaccines by Pfizer and Moderna are not necessary anymore and will no longer be provided.

Australia’s national drug authority says this is because the rates have stabilised.

However, the TGA will “continue to monitor and review these adverse effects and will communicate any updated safety advice if needed,” they said in a statement.

 

Both myocarditis (inflammation of the heart) and pericarditis (inflammation of the membrane around the heart) are considered side effects of mRNA vaccines manufactured by Pfizer and Moderna, according to the Food and Drug Administration.

 

The Centers for Disease Control and Prevention’s independent committee of vaccine experts has also found a link between heart inflammation and the mRNA vaccines after over 1,200 cases of heart inflammation were reported in people post-vaccination.

 

In Australia, the total number of pericarditis cases resulting from a COVID-19 vaccine is 3,823, with six resulting in death, based on the administration’s Database of Adverse Event Notifications (DAEN) as of July 17. 

There have been 1,330 cases of myocarditis to date, with 17 resulting in death.

Cardiac Deaths On the Rise in Australia

The decision to stop reporting the deaths comes as the Australian Bureau of Statistics (ABS) noted that deaths due to cardiac conditions that were not associated with ischaemic heart disease were 19.8 percent above the baseline average in March 2023.

However, they were 0.8 percent lower than in March 2022.

 

Additionally, other cardiac deaths from January to March 2023 were 17.5 percent higher than the baseline average and 1.9 percent higher than the same period in 2022.

 

‘The age-standardised death rate for deaths due to other cardiac conditions was 2.1 per 100,000 people in March 2023. This compares to a baseline average rate of 2.0 and a rate of 2.2 in March 2022,” the ABS said.

Myocarditis and mRNA Vaccines

The Spikevax (Moderna) came under close scrutiny by European countries after studies found an increased incidence of myocarditis or pericarditis after a second dose of the mRNA vaccines among adolescent and young adult males.

 

Soon after, Sweden and other Nordic countries, including Denmark, Norway, Finland, and Iceland, restricted the use of Moderna’s shots for young people.

 

Canada has also identified a higher risk, with the nation’s public health agency raising concerns that cases appear to occur the most frequently amongst:

 

·         adolescent and young adults

·         males

·         following a second dose

·         typically occurring within seven days after vaccination.

More

Australia Ceases Reporting Cases of Myocarditis Post-COVID Vaccination (theepochtimes.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.

PSA: More And More Thieves Are Stealing EV Charging Cables Now

July 18, 2023

No matter how technology evolves, thieves will always find something worth stealing in our cars and bikes. If it isn't the vehicles themselves, thieves will target valuable parts that can either be flipped for cash or scrapped for their metal. If before, catalytic converters were the subject of interest, this time around it’s something else – something that’s much easier to get to if you’re not careful.

Electric vehicles are growing in number and getting more and more high-tech, as more and more people buy electric cars and motorbikes each and every day. While you may be thinking that your precious EV is safe from the hands of thieves, as the motor and batteries are concealed under layers of bodywork, and for cars, the batteries tend to be really, really, heavy, well think again. A report by NBC Los Angeles reveals that electric vehicle charging cables are now the subject of theft.

The report cites an example of an individual by the name of Bob Schneiderman, who was a victim of EV charging cord theft recently. According to the report, a thief in a hoodie and a mask walked up to his driveway, and simply unplugged the cord from his car and wall socket, and took off on a bike.

As for why anyone would want to steal the charging cord of an EV, well, as it would turn out, they’re quite expensive. It’s speculated that thieves flip these charging cords on online selling platforms, or sell them for scrap, as these cables are full of valuable copper wiring. This problem is foreseen to go on, as charging cords for electric vehicles are extremely easy to get to, especially for folks who charge their cars outdoors. As for Bob Schneiderman, he had to fork out a rather hefty $2,700 USD to replace his lost cable.

With more than one million electric vehicles in California alone, this is by no means a small matter. Unfortunately, there’s little the authorities can do to safeguard your personal belongings, so the responsibility rests on your shoulders. If you’re the owner of an electric motorcycle or car, be sure to exercise caution on where and when you charge your EV. If you have the luxury of a gated driveway or locked garage, charge your vehicle in there. Otherwise, invest in security accessories, such as a padlocked outdoor wall socket for your EV. For more safety tips, check out the video from The Form Filler above.

PSA: More And More Thieves Are Stealing EV Charging Cables Now (msn.com)

Why did Karl Marx always prefer writing in lowercase? Because he really didn’t like  capitalism.