Baltic Dry Index. 1094 -13 Brent Crude 85.90
Spot Gold 1945 US 2 Year Yield 4.90 +0.03
August 31, 1939. The Gleiwitz incident (German: Überfall auf den Sender Gleiwitz; Polish: Prowokacja gliwicka) was a false flag attack on the radio station Sender Gleiwitz in Gleiwitz (then Germany and now Gliwice, Poland) staged by Nazi Germany on the night of 31 August 1939. Along with some two dozen similar incidents, the attack was manufactured by Germany as a casus belli to justify the invasion of Poland.
We open on the last trading day of August with mixed economic news out of China. China’s manufacturing recession continues, albeit at a slightly slower pace.
While the mixed news from the world’s second largest economy probably won’t stop today’s final effort to dress up the stock casinos for the all important month-end stock figures, it does suggest the stock casinos and the global economy faces a very challenging four months ahead into 2024.
Next week’s G-20 summit in India looks likely
to be a bust.
China’s
factory activity shrinks for a fifth straight month in August
China’s factory activity in August shrank for a
fifth straight month, while non-manufacturing activity hit a new low for the
year — signs that the slowdown in the world’s second-largest economy may not
yet have bottomed out.
The official manufacturing
purchasing managers’ index rose slightly to 49.7 in August from 49.3
in July, according to data from the National Bureau of Statistics released
Thursday. This was better than the median forecast for 49.4 in a Reuters poll.
A PMI reading above 50 indicates
expansion in activity, while a reading below that level points to a
contraction.
“The survey results show that insufficient market demand is still the main problem that enterprises are facing, and the foundation for the recovery and development of the manufacturing industry needs to be further consolidated,” Zhao Qinghe, a senior NBS official, said in a statement.
While there were some green shoots in the
sub-indexes for China’s manufacturing PMI — with four of five registering
expansion — the non-manufacturing PMI, which covers the service sectors, fell
to 51.0 in August. That compares with 51.5 in July and 53.2
in June.
There are growing concerns that the
Chinese economy may not meet Beijing’s stated 5% growth target this year, amid
a festering crisis of confidence in the country’s property sector that’s
plagued by credit woes and weak sales.
Underscoring the
uneven recovery in the Chinese economy, Thursday’s data release showed
manufacturing-related sub indexes for production and new orders hitting
five-month highs, while the new orders sub-index for China’s non-manufacturing
sectors fell to 47.6.
The new order index
for the construction industry was 48.5, an increase from July when
construction starts were hampered by extreme weather. The new order index of
the service industry was 47.4 — a decrease of 1.0 percentage
points from the previous month.
Input prices for both
manufacturing and non-manufacturing sectors increased in August, translating to
higher output prices — which suggests inflationary pressures may be rebounding.
Recent data had pointed to disinflation or deflationary trends.
China
economy: Factory activity in August shrinks for a fifth month (cnbc.com)
China issues highest typhoon warning as Saola
moves towards Hong Kong
August
31, 20236:21 AM GMT+1
BEIJING,
Aug 31 (Reuters) - China issued the highest typhoon warning on Thursday as
Typhoon Saola, packing winds of more than 200 kph (125 mph), headed towards the
southeastern coastline, threatening Hong Kong and other major manufacturing
hubs in nearby Guangdong province.
Chinese
forecasters issued a typhoon red warning at 6 a.m. (2200 GMT). China's National
Meteorological Center said Saola, currently located about 315km (183 miles)
southeast of Guangdong province, will move northwest across the South China Sea
at a speed of about 10 kph (6 mph), gradually approaching the coast of
Guangdong, then slowly weaken in intensity.
China
Southern Power Grid said it is stepping up inspection of equipment and
strengthening measures to prevent water leakage in basement power rooms.
China
Railway has suspended several major train lines and Shanghai halted trains
heading to Guangdong, according to local media.
The
Hong Kong Observatory said it will raise its strong wind Signal to No. 3 - the
second lowest - later Thursday.
Saola
will also bring storm surges to coastal low-lying areas, the observatory noted,
estimating Saola is currently about 440km (270 miles) from the metropolis.
Until
8 a.m. (0000 GMT) Friday there will be heavy rainfall in parts of Fujian and
areas of Guangdong. Downpours could be 100-220mm (3.9 inches to 8.7 inches) in
some areas.
Saola's
winds are also affecting Fujian province, where videos on social media showed
waves crashing along the coastline. The meteorological administration of Shishi
city issued a typhoon blue warning.
China
issues highest typhoon warning as Saola moves towards Hong Kong | Reuters
Exclusive:
China's Xi likely to skip G20 summit in India - sources
By Krishn Kaushik, Laurie Chen and Martin Quin Pollard
NEW DELHI/BEIJING, Aug 31 (Reuters) - Chinese President Xi Jinping is likely to skip a summit of G20 leaders in India next week, sources familiar with the matter in India and China told Reuters.
Two Indian officials, one diplomat based
in China and one official working for the government of another G20 country
said Premier Li Qiang is expected to represent Beijing at the Sept. 9-10
meeting in New Delhi.
Spokespersons for the Indian and Chinese
foreign ministries did not respond to requests for comment.
The summit in
India had been viewed as a venue at which Xi may meet with U.S. President Joe
Biden, who has confirmed his attendance, as the two superpowers seek to
stabilise relations soured by a range of trade and geopolitical tensions.
Xi last met
Biden on the sidelines of the G20 summit in Bali, Indonesia last November.
Russian
President Vladimir Putin has already announced that he will not be travelling
to New Delhi and will send Foreign Minister Sergei Lavrov instead.
One senior
government official from host India told Reuters that “we are aware that the
premier will come”, in place of Xi.
In China, two
foreign diplomats and a government official from another G20 country said that
Xi will likely not be travelling for the summit.
The sources in
China, two of whom said they were informed by Chinese officials, said they were
not aware of the reason for his expected absence.
All officials
spoke on condition of anonymity as they were not authorised to speak to the
media.
Anticipation of
a meeting between Xi and Biden has been fuelled by a stream of top U.S.
officials visiting Beijing in recent months, including a trip by Commerce
Secretary Gina Raimondo earlier this week.
Another
upcoming summit mooted for face-to-face talks between the two leaders is an
Asia-Pacific Economic Cooperation Leaders Meeting in San Francisco on Nov.
12-18.
Xi, who secured
a precedent-breaking third term as leader last October, has made few overseas
trips since China abruptly dropped strict pandemic-induced border controls this
year.
He did,
however, attend a meeting from leaders of the BRICS group of major emerging
economies - Brazil, Russia, India, China and South Africa - in South Africa
last week.
Several G20
ministerial meetings in India ahead of the summit have been contentious as
Russia and China together opposed joint statements which included paragraphs
condemning Moscow for its invasion of Ukraine last year.
Xi and Indian
Prime Minister Narendra Modi held a rare conversation on the sidelines of the
BRICS meeting in Johannesburg and discussed reducing tensions in the bilateral
relationship that soured after clashes along their Himalayan frontier in 2020
left 24 soldiers dead.
Exclusive:
China's Xi likely to skip G20 summit in India - sources | Reuters
European
markets close slightly lower after Germany and Spain data; Orsted down 24%
UPDATED WED, AUG 30 2023 11:51 AM EDT
LONDON — European stock markets closed slightly
lower on Wednesday as investors reacted to economic data from Germany and
Spain.
The pan-European
Stoxx 600 index ended down 0.2%, paring earlier gains. Sectors and major
bourses were spread across positive and negative territory, with utilities down
1.9%, while media stocks rose 0.7%
Spain reported
flash inflation up 2.6% year on year for August, in line with analyst
expectations, while Germany reported a 13.2% drop in imports for the year to
July, the sharpest drop since January 1987.
Markets closed
higher Tuesday, tracking global counterparts as investors look ahead to a fresh
round of economic data this week.
U.S. stocks were bolstered by tech gains on the
back of chipmaker Nvidia announcing
a partnership with Google.
Across the Atlantic, euro zone
bond yields declined Tuesday following weak economic data out of the U.S.,
which supported expectations that the Federal Reserve may pause future interest
rate hikes.
U.S. stocks ticked higher on Wednesday, marking the latest leg in an
end-of-month rally as investors try to mitigate August’s losses. Asia-Pacific markets mostly rose.
European
markets lower after Germany and Spain data; Orsted down 24% (cnbc.com)
Morning Bid: Markets
brace for EU, US inflation data blitz
August 31,
20235:32 AM GMT+1
A look at the day ahead in European and
global markets from Brigid Riley
A slew of economic data is set to roll
out on Thursday, including preliminary euro zone CPI numbers and U.S. personal
consumption data, with markets hankering for further inflation relief as
central bank policy meetings march closer into view.
Reports on Wednesday showed inflation
slowed at a disappointingly sluggish pace in Germany and Spain, encouraging
bets that the European Central Bank (ECB) may have to raise rates again in
September.
The pan-European
STOXX 600 index (.STOXX) closed
lower and the euro jumped in the aftermath of the data, with markets now
bracing for the last day of a gloomy August.
Expectations are still hovering around
a 50-50 chance of another ECB hike, with the focus on preliminary euro zone CPI
data due later in the day. Estimates point to a slight cooling, to a
year-over-year level of 5.1%.
Painfully high prices have spurred
France to seek some relief for consumers, with the government seeking to double the amount of products subject to price cuts
this year. A whole host of data due out on Thursday, including final GDP
numbers for the second quarter, will shed more light on the state of the French
economy.
Across the Atlantic, softer data from the U.S. economy this
week has bolstered market expectations that the Federal Reserve will take a
breather from rate hikes, at least at the next policy meeting in September.
The core PCE for July due later in the
day is expected to show a mere 0.2% increase from the previous month, while
estimates put annual core numbers at 4.2%, up from 4.1%.
Meanwhile, Chinese
stocks were looking glum again in the Asian morning after an official factory
survey showed manufacturing activity slowed for a fifth month straight.
More
Morning
Bid: Markets brace for EU, US inflation data blitz | Reuters
A stormy September for
U.S. stocks may lie ahead. What investors need to know about Wall Street’s
worst month.
A fierce artificial
intelligence-led rally in the U.S. stock market ran out of steam in August,
with the S&P 500 index on pace to suffer its worst month in six and the
Nasdaq Composite set for biggest monthly decline this year, but expect
September, which is just two trading days away, to be even more volatile if the
past several decades are any guide.
Since 1945, the large-cap S&P 500 index SPX has delivered an average monthly return of
negative 0.73% in September, the worst average performance of any month, said
Sam Stovall, chief investment strategist at CFRA Research. It was also the only
month to see the S&P 500 suffer a monthly decline more frequently than it
rose, with a “win rate” of just 44% (see chart below).
September has also seen the technology-heavy Nasdaq
Composite COMP record its only negative average return since
1971. The index rallied only 52% in the same period, with an average return of
negative 0.86%, according to CFRA.
“As a result of September’s track record for benchmark
beatings, we remind investors to prepare for the possibility of disappointing
results for both the S&P 500 and Nasdaq in the month ahead,” Stovall said
in a Monday note.
The U.S. stock
market’s rapid climb this year has stalled in August after recent strong
economic data has raised concern that the Federal Reserve will keep interest
rates higher for longer than anticipated, which triggered a jump in
longer-dated Treasury yields.
The S&P 500 has
lost nearly 2% so far this month, on course for its biggest monthly decline
since February. However, when the large-cap index falls 2% or more in August,
the returns in September are often worse, according to Dow Jones Market Data.
More
Finally, a Hurricane Idalia early update.
Hurricane Idalia hits Florida
with 125 mph winds, flooding streets, snapping trees and cutting power
Updated 4:12 AM GMT+1,
August 31, 2023
PERRY, Fla. (AP) — Hurricane Idalia tore into Florida at the speed of a
fast-moving train Wednesday, splitting trees in half, ripping roofs off hotels
and turning small cars into boats before sweeping into Georgia and South
Carolina as a still-powerful storm that flooded roadways and sent residents
running for higher ground.
----After coming ashore,
Idalia made landfall near Keaton Beach at 7:45 a.m. as a high-end Category 3
hurricane with maximum sustained winds near 125 mph (205 kph). The system
remained a hurricane as it crossed into Georgia with top winds of 90 mph (150
kph). It weakened to a tropical storm by late Wednesday afternoon, and its
winds had dropped to 60 mph (96 kph) by Wednesday night.
As the eye moved
inland, high winds shredded signs, blew off roofs, sent sheet metal flying and
snapped tall trees. One person was killed in Georgia. No hurricane-related
deaths were officially confirmed in Florida, but the Florida Highway Patrol
reported two people dying in separate weather-related crashes just hours before
Idalia made landfall.
The storm brought
strong winds to Savannah, Georgia, Wednesday evening as it made its way toward
the Carolinas. It was forecast to move near or along the coast of South
Carolina through Wednesday night and then just off the coast of North Carolina
on Thursday before heading out into the Atlantic Ocean.
Idalia spawned a tornado that
briefly touched down in the Charleston, South Carolina, suburb of Goose Creek,
the National Weather Service said. The winds sent a car flying and flipped it
over, according to authorities and eyewitness video. Two people received minor
injuries.
Along South Carolina’s coast, North
Myrtle Beach, Garden City, and Edisto Island all reported ocean water flowing
over sand dunes and spilling onto beachfront streets Wednesday evening. In
Charleston, storm surge from Idalia topped the seawall that protects the
downtown, sending ankle-deep ocean water into the streets and neighborhoods
where horse-drawn carriages pass million-dollar homes and the famous open-air
market.
Preliminary data showed the
Wednesday evening high tide reached just over 9.2 feet (2.8 meters), more than
3 feet (0.9 meters) above normal and the fifth-highest reading in Charleston
Harbor since records were first kept in 1899.
Florida had feared the worst while
still recovering from last year’s Hurricane Ian,
which hit the heavily populated Fort Myers area, leaving 149 dead in the state.
Unlike that storm, Idalia blew into a very lightly inhabited area known as
Florida’s “nature coast,” one of the state’s most rural regions that lies far
from crowded metropolises or busy tourist areas and features millions of acres
of undeveloped land.
That doesn’t mean that it didn’t do
major damage. Rushing water covered streets near the coast, unmoored small
boats and nearly a half-million customers in Florida and Georgia lost power. In
Perry, the wind blew out store windows, tore siding off buildings and
overturned a gas station canopy. Heavy rains partially flooded Interstate 275
in Tampa and wind toppled power lines onto the northbound side of Interstate 75
just south of Valdosta, Georgia.
More
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.
I believe there is something out there watching us. Unfortunately, it's the government.
Woody Allen.
US consumer confidence wanes
with prices still high and signs of a cooling job market
Updated 10:36 PM GMT+1, August 29, 2023
Americans are feeling less
confident financially as summer comes to a close and high prices and interest
rates weigh on their willingness to spend.
There were also signs Tuesday
of cooling in what has been a very resilient U.S. jobs
market.
The Conference Board, a
business research group, said its consumer confidence index tumbled to 106.1 in
August from a revised 114 in July. Analysts were expecting a reading of 116.
August’s swoon — which has somewhat mirrored the
stock market decline this month — erased gains from June and July.
The index measures
both Americans’ assessment of current economic conditions and their outlook for
the next six months. Both measures saw significant declines in August.
Consumers’ view of current conditions fell to 144.8
from 153, and the index for future expectations slid to 80.2 from 88 in July.
Readings below 80 for future expectations historically signals a recession
within a year.
Consumer spending
accounts for around 70% of U.S. economic activity, so economists and investors
pay close attention to their mood to gauge how it may affect the broader
economy.
Confidence appeared
to rebound late in the spring as inflation eased in the face of 11
interest-rate hikes by the Federal Reserve. But this month’s downturn reflects
consumer anxiety over spending on non-essential goods, particularly if they
have to put it on a credit card with an elevated interest rate.
The cost of every day,
essential items also has consumers frustrated.
“Write-in responses showed that
consumers were once again preoccupied with rising prices in general, and for
groceries and gasoline in particular,” said Dana Peterson, chief economist at
The Conference Board. She said the retreat in consumer confidence was evident
across all age groups.
The downturn in spending has
showed up in the earnings reports of many high-profile retailers. Target
recently reported its first quarterly sales decline in six years earlier
this month, dragged down by cautious spending. Home Depot, the nation’s largest
home improvement retailer, said that sales continue to decline, with a fall-off in big-ticket
items like appliances and other things that often require financing.
On Tuesday, Best Buy reported
that its sales and profits slid in the second quarter as the
nation’s largest consumer electronics chain continues to wrestle with a
pullback in spending on gadgets after Americans splurged during the pandemic.
More
US consumer confidence wanes with prices still high
and signs of a cooling job market | AP News
Mortgage approvals sink in July as market
continues to cool on rising rates
LAURA
MCGUIRE WEDNESDAY 30 AUGUST 2023 11:57 AM
The number of mortgage approvals fell sharply
in July, dropping to 49,400 from 54,600, as the housing market continues to
cool off the back of rising interest rates.
Many high street banks have started to cut their mortgage rates in the last few weeks, but the data shows that this has not yet had an impact on the market.
“Mortgage rates only steadied and began easing during the
final ten days of the month, which has helped to improve sentiment, but only to
a point,” Simon Gammon, managing partner at Knight Frank Finance, said.
“Fixed rates are generally still in the fives,
which is far higher than borrowers are used to and is constraining their
ability to meet current asking prices. That will continue to weigh on activity
for the time being,” he added.
Figures from Zoopla published yesterday said the number of housing sales completed
over 2023 is on track to sink to its lowest level since 2012.
Sales are also set to be 21 per cent down on last year, with the number of
mortgage lead sales on homes projected to be 28 per cent lower than last year.
“The affordability squeeze from high mortgage rates and high inflation
remains acute, leaving many prospective buyers with no choice but to step back
from the fray until they can make the numbers work,” Myron Jobson, senior
personal finance analyst, interactive investor, told City A.M
“For many, the decision to buy or not to buy hinges on where mortgage
interest rates land,” he said. “Put simply, if inflation continues to move
meaningfully lower, this takes the pressure off the Bank of England to continue
raising interest rates, so mortgage rates could follow.”
Mortgage
approvals sink in July as market continues to cool on rising rates (cityam.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
“The vaccine should be tested on politicians first. If they
survive, the vaccine is safe. If they don’t, then the country is safe.”
Monika Wisniewska, Polish politician.
EXCLUSIVE:
Whistleblower Who Disclosed Myocarditis Spike in Military After COVID Vaccine
Rollout Goes Public
8/27/2023 Updated: 8/29/2023
A service
member who earlier this year blew the whistle and disclosed data from a
Pentagon medical database showing a spike in the rate of myocarditis in
the military in 2021, after the rollout of COVID-19 vaccines, is going public.
The
whistleblower is active-duty Navy Medical Service Corps officer Lt. Ted Macie.
He has also revealed new data showing a substantial rise in accidents,
assaults, self-harm, and suicide attempts in the military in 2021, compared to
the average from 2016 to 2021.
This includes
a 147 percent increase in intentional self-harm incidents among service
members and an 828 percent increase in injuries from assaults.
Lt. Macie told
The Epoch Times that he began “keeping an eye on" a defense medical
database when another whistleblower alerted him to a rise in health-related
incidents in the winter of 2021/2022.
The Defense
Medical Epidemiology Database (DMED) is a depository of all
diagnoses—recorded using International Classification of Diseases (ICD)
codes—when an active service member is seen on or off base by a military or
civilian provider. The database doesn't include any personally
identifiable information of service members.
In January, Lt.
Macie and his wife traveled to Washington with a report of the data that he
collected from DMED.
It showed that
diagnoses of myocarditis, a form of heart inflammation, increased in 2021 by
130.5 percent over the average number of cases in the five-year period from
2016 to 2020. Myocarditis is a serious condition that can lead to death.
All four of
the COVID-19 vaccines authorized in the United States can cause myocarditis,
according to U.S. officials. COVID-19 can also cause myocarditis, though
some experts say that the data on that front is weaker.
U.S. Defense
Secretary Lloyd Austin mandated the vaccines in 2021, a requirement that
remained in place until Congress forced its withdrawal in late 2022.
The data also
showed spikes in diagnoses of pulmonary embolism (41.2 percent), blood clots in
the lungs, ovarian dysfunction (38.2 percent), and "complications and
ill-defined descriptions of heart disease" (37.7 percent).
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.
Why the EV industry is talking about ‘black
mass’
The metallic powder is made by crushing and shredding
batteries or battery cells, extracting unwanted elements, then refining the
remainder.
August 28, 2023 01:15 PM
Spent batteries will account for a bigger share of
total scrap supply
“There is definitely increasing interest from
automakers in black mass now,” said Jesline Tang, analyst at S&P Global
Commodity Insights. Some have already announced partnerships or joint ventures
to explore EV battery recycling opportunities, such as BMW, Ford Motor Co. and
Mercedes-Benz.
Glencore unveiled a plan in May with Canadian
recycling firm Li-Cycle to process black mass in Sardinia, Italy. BASF expects
to produce black mass in Germany next year. And last week, an affiliate of
trader Mercuria Energy Trading agreed a joint venture with a U.S. recycler to
help sell its black mass worldwide.
The metallic powder is made by crushing and
shredding batteries or battery cells, extracting unwanted elements, then
refining the remainder. For now, factory scrap generated in the production of
batteries makes up the majority of the input material.
Recycled materials will account for 15 percent of
the global supply of lithium, 11 percent for nickel and 44 percent for cobalt
by the end of this decade, according to estimates from S&P Global Commodity
Insights.
Still, there are plenty of headwinds to
overcome.
The growing popularity and improved performance of
lithium-iron-phosphate cells — or “LFP” — has helped reduce costs and spur
adoption of EVs. But LFP chemistry is a less attractive proposition for
recycling.
Different chemistries, different values
Recycling of LFP battery cells needs to be low-cost
because — without nickel or cobalt — their market value is typically
lower.
At recent prices, nickel-cobalt-manganese batteries contain an average
metal value of about $10,040 for every ton of cells, according to Fastmarkets.
Materials based on LFP chemistry have a much lower value of $3,935 per ton, but
can be more costly and technically challenging to process into black mass. That
means less room for recyclers to make profit.
More
What is ‘black
mass’ and what does it mean for the EV industry? | Automotive News
(autonews.com)
Confidence is what you have before you understand the problem.
Woody Allen.
