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Faced with the choice between changing one's mind and proving
that there is no need to do so, almost everyone gets busy on the proof.
John Kenneth Galbraith.
Today, we focus on Asia. Basically, China’s economy slips yet again, with a little better news from Japan.
Trouble directly ahead for the wider global
economy.
Asia markets
mixed as Japan GDP beats expectations
UPDATED MON, AUG 14 2023 11:05 PM EDT
Asia-Pacific
markets were mixed on Tuesday ahead of key economic data out from China, which
will release its industrial output and retail sales figures for July.
Japan’s Nikkei 225 climbed
0.62%, while the Topix was up 0.48% after the country saw its second quarter
gross domestic product beat expectations.
The economy grew 1.5% quarter on quarter
and 6% on an annualized basis, compared to expectations of 0.8% and 3.1%
respectively, according to economists polled by Reuters.
In Australia, the S&P/ASX 200 climbed
0.42%. Investors will be watching the Reserve Bank of Australia’s minutes for
its August monetary policy meeting, where it unexpectedly held its benchmark
rates at 4.1%.
Hong Kong’s Hang Seng index extended
losses and slid 0.96%, while the CSI 300, a benchmark index for mainland
Chinese markets, fell marginally. South Korea’s markets are closed for a public
holiday.
Overnight in the U.S., all three major indexes
gained, with the S&P
500 and the Nasdaq
Composite rebounding due to a rebound in chip stocks and tech
names.
The broad market index added
0.58%, while the tech-heavy Nasdaq gained 1.05%. Meanwhile, the Dow Jones Industrial Average advanced
by 0.07%.
Asia markets mixed as Japan GDP beats expectations (cnbc.com)
China
reports big data miss in July, stops releasing youth unemployment numbers
BEIJING — China reported July data that broadly
missed expectations. The National Bureau of Statistics report also did not
include the unemployment figure for young people, which has soared
to record highs in recent months.
Retail sales rose by 2.5% in July
from a year ago, below expectations for a 4.5% increase, according to analysts
polled by Reuters.
Industrial production rose by 3.7% in July from a year ago, below the 4.4%
increase analysts had expected.
Fixed asset investment rose by 3.4%
for the first seven months of the year from a year ago, below the 3.8% forecast
by the Reuters poll.
The urban unemployment rate ticked
up to 5.3% in July from 5.2% in June.
Contrary to prior
reports, the latest release did not break down unemployment by age. The age 16
to 24 category has seen unemployment far above the overall jobless rate,
reaching a record high of 21.3% in June.
A spokesperson for
the National Bureau of Statistics said the bureau is suspending the youth
unemployment number release due to economic and social changes, and is
reassessing its methodology.
On a year-to-date
basis, real estate investment fell by 8.5% from a year ago as of July, a
greater decline than as of June.
Online retail sales
of physical goods rose by 6.6% in July from a year ago, a sharp slowdown from
double-digit increases in recent months, according to CNBC calculations of
official data.
Within retail sales,
catering saw the biggest increase of 15.8%, while sports and entertainment
products saw a 2.6% year-on-year increase. Big-ticket items such as autos and
home appliances saw sales declines in July from a year ago.
Jewelry saw sales
drop by 10% during that time.
Retail sales posted
the slowest growth since a decline in December, according to official
data.
The statistics bureau
noted an “intricate and complicated” situation overseas and domestically, and
“insufficient” domestic demand.
---- After an initial rebound from the pandemic earlier this
year, China’s economy has come to grips with long-standing problems and slowing
global demand for its products.
Exports
plunged by 14.5% year-on-year in July, following a 12.4% drop in
June. Factory activity contracted
for a fourth-straight month in July, according to an official
survey.
Domestic demand has remained muted
outside of summer tourism. Imports fell by 12.4% year-on-year in July and have
mostly declined each month from the same period in 2022.
The
consumer price index fell in July, adding to growing worries about
deflation.
More
China
economy: July industrial output, fixed asset, retail miss expectations
(cnbc.com)
China cuts key rates
as weak batch of July data darken economic outlook
By Kevin Yao and Ellen Zhang August 15, 20234:29 AM GMT+1
BEIJING,
Aug 15 (Reuters) - A broad array of Chinese data on Tuesday showed the economy
slowed further last month, intensifying pressure on already faltering growth and
prompting authorities to cut key policy rates to shore up activity.
Less than an hour before the release of a batch of July
data, China's central bank unexpectedly
cut key policy rates for the second time in three months, underlining
the rapid loss of the post-COVID economic rebound that has shaken global
financial markets.
---- "All the main activity
indicators undershot consensus expectations in July, with most either stagnant
or barely expanding in month on month terms," said Julian Evans-Pritchard,
economist at Capital Economics.
With financial troubles at real estate developers such as Country Garden likely to drag on the housing market in the near-term, he warned that the economy could slip into a recession unless policy support is ramped up soon.
Asian stocks
were down and the dollar held firm after the weak Chinese data and
latest policy easing measures.
Following
the rate cuts, China's major state-owned banks were seen selling U.S. dollars
and buying yuan in a bid to stem rapid declines in the currency, three people
with direct knowledge of the matter said. Sovereign bond yields fell to
three-year lows, but benchmark stock indexes were only slightly weaker,
possibly on expectations of more stimulus.
Policymakers last month released a batch of stimulus
measures, from boosting auto and home appliances consumption, relaxing
some property restrictions to pledging support to the private
sector, as a post-COVID rebound lost steam since the second quarter.
However,
the persistent drag in the property sector, mounting local government debt
pressure, high youth jobless rate and cooling foreign demand continue to be
major impediments to fostering a sustainable economic revival.
More
China
cuts key rates as weak batch of July data darken economic outlook | Reuters
Finally, a little better news from Japan,
with the emphasis on little.
Japan's Q2 GDP beats
forecasts as exports zoom
By Tetsushi Kajimoto and Kantaro Komiya August 15, 20233:25 AM GMT+1
TOKYO, Aug 15
(Reuters) - Japan's economy grew much faster than expected in April-June, as
brisk auto exports and tourist arrivals helped offset the drag from a slowing
post-COVID consumer recovery, although global recession prospects cloud the
outlook.
The 6.0%
annualised growth in Japan's economy translated into a quarterly gain of 1.5%,
much bigger than median estimates of 0.8% in a Reuters poll and bringing gross
domestic product (GDP) to a record high.
It was the
fastest expansion since the final quarter of 2020 and followed a revised 3.7%
expansion in January-March.
While the
headline GDP data provides some relief to policymakers seeking to balance
economic growth with sustainable inflation, it masks underlying weakness in the
household sector.
Marcel Thieliant, head of Asia-Pacific at Capital
Economics, said the export-driven momentum in growth is unlikely to be
sustained.
"And while
capital goods exports bounced back in June as the largest falls in overseas
investment are now behind us, we do not expect a vigorous recovery,"
Thieliant said.
Private
consumption, which makes up more than half of the economy, fell 0.5%
quarter-on-quarter in the April-June period, as price hikes hit sales of food
and household appliances.
Japanese
automakers have benefited from a weaker
yen, which has helped prop up profits amid declining sales in China and an
increasingly tough shift to electric vehicles.
Strong
U.S. and European demand has also supported exports while the post-COVID boom
in foreign
tourists has given the economy a much-needed tailwind.
That boost in
external demand, or net exports, added 1.8 percentage points to second quarter
growth. However, that net contribution was also flattered by a decline in
imports for a third straight quarter, which have struggled due to yen weakness.
"The biggest
factor was a decline in imports that pushed up GDP. It doesn't mean a strong
recovery in Japanese economy," said Takumi Tsunoda, senior economist at
Shinkin Central Bank Research Institute.
More
Japan's Q2 GDP beats forecasts as exports zoom | 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.
Up
next, “despite Brexit,” as the extreme left wing BBC would say, the paymaster
of Euroland has turned into the weak economy of Europe.
No sustained recovery
on horizon for German economy -econ min
August 14, 2023
BERLIN
(Reuters) - Germany's economy is not likely to see a sustained recovery in the
coming months based on early indicators such as new orders and business
climate, the economy ministry said on Monday.
"On the domestic
front, the expected cautious recovery in private consumption, services and
investment is showing the first signs of hope, which are likely to strengthen
as the year progresses," said the ministry in its monthly report.
"At the
same time, the still weak external demand, the continuing geopolitical
uncertainties, the still high rates of price increases and the increasingly
noticeable effects of monetary tightening are dampening a stronger economic
recovery."
No sustained recovery on horizon for German economy
-econ min (msn.com)
Inside Germany's
slipping economy as two million people now rely on foodbanks to get by
August 11, 2023
Germany,
once regarded as the powerhouse of the European economy, is
grappling with severe economic challenges that are leaving a profound impact on
its social fabric.
The nation's economic
struggles have manifested in a distressing rise in poverty rates, increased
reliance on food banks, and a worrying decline in industrial output,
particularly within the renowned car manufacturing sector.
Recent data reveals that more
than two million Germans are now dependent on foodbanks for their daily
sustenance.
This figure highlights the
stark reality that many individuals and families are facing in a country that
has historically prided itself on its economic stability and social safety net.
Furthermore, approximately 14
million Germans, equivalent to one in six of the population of 88 million, are
classified as living in poverty.
This statistic underscores the widening gap
between economic classes, with many individuals and families struggling to make
ends meet due to a combination of rising living costs and stagnant wages.
The industrial sector, which has long been a driving force behind
Germany's economy, is experiencing significant setbacks.
Industrial output has fallen for the second consecutive month, with the
automobile industry being hit particularly hard.
The car manufacturing sector, renowned worldwide for its quality and
innovation, has been hampered by a combination of factors, including global
supply chain disruptions and shifts in consumer preferences.
Amid these challenges, official economic forecasts point toward a
recession in Germany this year.
The combination of declining industrial output, rising poverty rates,
and increased food bank dependency has led economists to anticipate a
contraction in the overall economy.
Germany's economic struggles are also contributing to Europe's broader
economic decline. As Europe's largest economy, Germany's economic performance
has far-reaching implications for the continent.
Inside Germany's slipping economy as two million people now rely on foodbanks to get by (msn.com)
Interest rate hikes in the balance as
economists predict crucial figures this week will show inflation falling again
despite economy warming up
August
14, 2023
Interest rates in the balance as markets brace for inflation
figures on Wednesday
Mortgage-holders
face a crunch week with inflation figures set to indicated whether interest rates
have peaked.
The
July figure for CPI is due on Wednesday as the Bank of England mulls whether more action is needed to
curb prices.
Economists
polled by Reuters are expecting the headline rate to come in at 6.7 per cent,
slightly lower than Threadneedle Street previously anticipated.
However,
analysts were surprised by the resilience of the economy in GDP data last week,
and there are signs that wages are still rising strongly - adding to
inflationary pressures.
Research
by the Chartered Institute of Personnel and Development (CIPD) today suggested
that the labour market remains tight.
Employers
believe pay rises will be around 5 per cent over the next year, and large
numbers report they are making counter-offers to try to hang on to staff.
Figures on Friday showed the economy
bounced back in June, growing 0.5 per cent after a 0.1 per cent decline in May
- when output was depressed by the extra bank holiday for the coronation.
The ONS pointed to warm evenings,
cold pints and stadiums packed with screaming music fans at Beyonce and Harry
Styles concerts as the drivers behind the growth. A surprise boost in
manufacturing also helped.
More
Covid-19 Corner
This section will continue until it becomes unneeded.
Today, something different. Legalised murder spreads in the west. Just don’t expect to see it covered on the extreme far left BBC. Approx, 14 minutes.
Importance
of human life
Importance of human life - YouTube
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.
Maize crops shown to improve wheat yields, by
boosting soil microbes
Ben Coxworth August 11, 2023
Farmers have long known that
it's a good idea to rotate crops, and that concept is now getting a new spin. A
Swiss study indicates that wheat yields are boosted when those crops are
planted in fields previously used to grow maize, which altered the soil's
microbiome.
As maize plants grow, their roots release chemicals known as
benzoxazinoids. Deposited into the soil, these chemicals in turn affect what
types of beneficial bacteria and fungi thrive there. Even after the plants have
been harvested, the microbes remain in the soil.
In previous studies
conducted at the University of Bern, lab tests showed that when wheat plants
were grown in soil previously used to grow maize, they grew better than control
plants. Led by professors Matthias Erb and Klaus Schläppi, a team of scientists
from the university recently set out to see if the same effect would occur in a
real-world agricultural setting.
In order to do so,
they grew two types in maize in test plots – one was normal maize, while the
other had been altered to not produce benzoxazinoids. After
those crops had been harvested, three types of winter wheat were planted and
grown in the same plots.
Over a two-year period, it
was found that wheat grown in the benzoxazinoid-boosted soil had a 4% better
yield. As an added bonus, the plants were less infested by pests. Although more
research needs to be conducted, it is hoped that the findings could ultimately
lead to reduced use of fertilizers and pesticides.
"A yield increase of 4%
may not sound spectacular, but it is still significant considering how
challenging it has become to enhance wheat yields without additional
inputs," said Erb. "Whether effects of this kind actually make a
significant difference for overall agricultural productivity and sustainability
remains to be seen, however, as yield also depends on many other factors."
The research is described in
a paper that was recently published in the journal eLife.
Maize crops shown to improve wheat yields, by boosting
soil microbes (newatlas.com)
In any
great organization it is far, far safer to be wrong with the majority than to
be right alone.
John Kenneth
Galbraith.
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