Baltic Dry Index. 1128 +05 Brent Crude 85.26
Spot
Gold 1935 US 2 Year Yield
4.90 +0.02
“But it [the boom] could not last forever
even if inflation and credit expansion were to go on endlessly. It would then encounter
the barriers which prevent the boundless expansion of circulation credit. It
would lead to the crack-up boom and the breakdown of the whole monetary
system.”
Ludwig
von Mises.
In the stock casinos another wobble, or are higher
interest rates now draining funding from stocks into bonds and money market
funds?
No one really knows yet, but we will know by
Christmas if stocks, priced to perfection, are at the top of the central bankster’s
liquidity fuelled bubble.
My take, cautious investors, not bubble gamblers,
will/are now taking some stock profits to hedge off some risk by switching to
safer bonds.
After all, what if the global manufacturing recession
starts to widen out?
What if the rising distress in the housing and
commercial real estate sectors turns into crisis?
What if the US secondary banks bust starts to return
in the Autumn?
Banking sure profits always beats trying to pick up
nickels in front of a steam roller.
Asia markets
mixed as rising U.S. bond yields pressure equities
UPDATED THU, AUG 3 2023 11:09 PM
EDT
Asia-Pacific
markets were mixed on Friday as rising bond yields continue to put pressure on
equities in the wake of the U.S. credit downgrade.
IG market analyst Tony Sycamore
noted the yield on the U.S. 30 year bond rose by 14 basis points overnight to
4.30%, taking the yield towards its October 2022 4.42% high.
“The move higher in long end
yields is being driven by lumpy bond issuance, resilient data and Fitch’s
downgrade earlier in the week,” Sycamore said.
In Asia, the Reserve Bank of
Australia cut the growth outlook for the country in 2023, but said inflation
was “moving in the right direction”. The S&P/ASX 200 fell
marginally
Japan’s Nikkei 225 was
up marginally, while the Topix was also trading close to the flatline.
South Korea’s Kospi rose
0.26% and the Kosdaq climbed 0.19%.
Hong Kong’s Hang Seng index popped
1.8% on its open, while mainland markets were more mixed. The Shanghai Composite slid
marginally while the Shenzhen
Component was up 0.85%
Overnight in the U.S., all
three major indexes lost ground, with the S&P 500 falling 0.25%, while the Dow Jones Industrial Average lost 0.19%. The Nasdaq Composite inched down 0.1%.
Asia markets mixed as
rising U.S. bond yields pressure equities (cnbc.com)
Nasdaq 100
futures rise slightly as investors weigh Big Tech earnings, await key jobs
data: Live updates
UPDATED THU, AUG 3 2023 7:48 PM
EDT
Nasdaq 100
futures ticked higher Thursday night as Wall Street parsed the latest earnings
from big-name technology companies in the runup to a major employment report
due Friday morning.
Futures linked
to the tech-heavy index rose about 0.2%, as did S&P 500
futures. Futures tied
to the Dow Jones Industrial Average climbed 26 points, or 0.07%.
A deluge of earnings reports
released after the bell sent individual stocks moving. Amazon jumped
nearly 9% after trouncing
expectations on profit and offering positive guidance, while Apple lost
around 2% after revenue came
in lower than it did in the same quarter a year ago.
Beyond mega-cap tech, Airbnb slid
after the company said nights and experiences booked grew
at a slower rate than Wall Street anticipated. DraftKings and Dropbox rose
around 13% and 4%, respectively, on the back of reports that exceeded analysts’
expectations.
These are among the latest
reports this earnings season. Roughly 79% of S&P 500 companies have given
results, with about 80% surpassing Wall Street expectations, according to
FactSet.
Traders will follow jobs
data due Friday morning for further insights into the strength
of the labor market and economy. Investors are hoping slowed growth in hourly
earnings can signal to the Federal Reserve that previous interest rate hikes
have had their intended effects on the economy, according to Rob Haworth,
senior investment strategist, wealth management, at U.S. Bank.
“All eyes are on the jobs
report,” Haworth said. “We just want to see: Is the Fed getting some help here
on the inflation fight?”
Economists polled by Dow Jones
expect nonfarm
payrolls to grow by 200,000 in July. Meanwhile, the consensus
estimate shows the unemployment rate should hold steady at 3.6%. Economists are
expecting average hourly wages to rise by 0.3% from June and 4.2% on an
annualized basis.
A pop in
the 10-year U.S.
Treasury yield
weighed on stocks in Thursday’s session, with the three major indexes finishing
down.
With just Friday’s session left
in the trading week, the three major indexes are on pace to end lower. The Nasdaq Composite and S&P 500 —
down about 2.5% and 1.8%, respectively — are poised to post their worst weekly
performances since March. The Dow has
slid 0.7% on a week-to-date basis.
Stock
market today: Live updates (cnbc.com)
Back in the real economy, where people work for a
living, the global economy is still facing higher interest rates and higher
energy prices. Is China becoming the new Japan?
Bank of
England governor says cautious approach needed after ‘unwelcome surprises’ in
inflation data
Bank of England Governor Andrew Bailey
said Thursday that the central bank remains cautious in its battle to tame
stubbornly high inflation as U.K. data continues to offer “unwelcome
surprises.”
Bailey told CNBC that he was
encouraged by recent inflation figures, which prompted policymakers to raise
rates by a widely anticipated 25
basis points earlier Thursday, putting the main rate at 5.25%.
But he added that the central bank had no
intention of pausing rate hikes as has
been signaled by the U.S. Federal Reserve and European Central
Bank.
“I’m being more cautious because,
frankly, we are still seeing some surprises in the news, and I think we need to
get ourselves onto a more settled path,” Bailey told CNBC’s Joumanna Bercetche.
The Monetary Policy Committee voted
6-3 in favor of the quarter-point hike — the Bank’s 14th consecutive increase.
Two members erred toward a 50 basis point increase, while one voted to keep
rates unchanged.
It comes after policymakers voted
7-2 in favor of a surprise 50 basis point hike in June in response to stubborn
inflation and labor market numbers.
“We’ve seen some quite big
surprises in recent months,” Bailey said, citing “frankly unwelcome surprises”
in June.
---- “I’m encouraged by the fact that we’ve seen now quite a
decisive move in inflation and I expect more to come this year,” Bailey said.
The Bank also updated
its inflation forecast Thursday, saying it now expects inflation to dip to 4.9%
by the end of this year; a quicker decline than it had anticipated in May. In
its Monetary Policy Report, it said it sees inflation finishing 2024 at 2.5%
before reaching — and eventually falling below — its 2% target in 2025.
More
BOE
governor Bailey cautious amid 'unwelcome surprises' in inflation (cnbc.com)
Saudi Arabia to
extend voluntary 1 million barrel per day crude oil production cut into
September
Heavyweight producer Saudi Arabia
will extend a 1 million barrel per day voluntary crude oil output cut into
September, in the third month of such declines, the state-owned Saudi Press
Agency said Thursday.
“In effect, the Kingdom’s
production for the month of September 2023 will be approximately 9 million
barrels per day,” it said, citing a source from the Saudi Ministry of Energy.
The 1 million barrel per day cut,
which was also implemented in July and August, “can be extended or extended and
deepened,” the SPA said. It adds to 1.66 million barrels per day of other
voluntary production declines that some members of the Organization of the
Petroleum Exporting Countries are putting in place until the end of 2024.
Voluntary cuts fall outside of
the production policy agreed by OPEC and its allies, known as OPEC+. One of the
group’s technical committees — the Joint Ministerial Monitoring Committee —
meets virtually on Friday to review market fundamentals. The JMMC cannot
independently decide policy, but may call an extraordinary meeting of OPEC ministers
to do so.
Oil prices were little changed
shortly after the announcement of Saudi Arabia’s voluntary production cut
extension.
More
Saudi
Arabia to extend voluntary 1 million barrel per day oil production cut
(cnbc.com)
China's stubborn
savers risk precipitating liquidity trap
By Winni
Zhou and Rae Wee August 4, 20233:33 AM GMT+1
SHANGHAI/SINGAPORE,
Aug 4 (Reuters) - China's consumers and companies are tying up trillions of
yuan in longer-dated deposits with banks, effectively taking a vast pool of
money out of circulation and risking the kind of liquidity trap that hobbled
Japan's economy in the 1990s.
Latest official
data shows financial institutions issued 5.5 trillion yuan ($766.12 billion)
worth of long-term deposits known as certificates of deposit (CD) in the first
quarter of this year - the largest such quarterly issuance since the product
was introduced in 2015.
Domestic
investors have rushed into these CDs over the past year in a desperate search
for returns as they withdraw from real estate and the stock market, both
traditional investment options now looking treacherous because of regulatory
and economic problems.
Companies
have joined the scramble this year, adding to the drag on
China's economy as it effectively means both businesses and households are
hoarding cash rather than investing it, despite lower interest rates - a
classic liquidity trap that plagued Japan for years beginning in the 1990s.
"Based on
Japan’s experience in the 1990s, there is the risk that China is entering a
liquidity trap due to the risks of balance-sheet recession," said
Natixis's chief economist for Asia Pacific Alicia Garcia Herrero.
Analysts see the
same lack of confidence in today's Chinese households and companies that Japan
grappled with in the 1990s. But in China's case there is a key difference;
there is no deflationary threat yet, nor have banks switched off lending.
Fan Gang, a
prominent economist and former adviser to the central bank, told a forum in
June that China faces a liquidity trap but not a Japan-style deflationary
morass.
"It's like
money falling into a black hole, and that's what we're in right now, demand
from companies and households is not vibrant."
China's
policymakers have cut rates and encouraged banks to lend more in efforts to
revive economic growth after the pandemic.
Yet about 180
domestic A-share companies say in their stock filings that they have invested
in CDs this year.
A banker handling
retail accounts at a state lender said there was higher than usual demand for
CDs, "because who knows if the broad environment could get worse?"
she said.
More
China's
stubborn savers risk precipitating liquidity trap | Reuters
Finally, climate change or a Pacific Ocean El Nino weather event? The peak of Solar Cycle 25 arriving early? The El Nino plus an early and stronger Solar Cycle Peak? Some combination of all three? Just don’t tell the extreme left wing BBC or the anti-oil climate Druids.
South America sweats under
high temps -- in the middle of winter
Santiago
(AFP) – Far away from the extreme summer
temperatures of the northern hemisphere, Southern Cone countries such as Chile
and Argentina are also experiencing record heat, but in the middle of what is
supposed to be their winter.
Issued
on: 03/08/2023 - 04:14
On Tuesday, the mountain town of Vicuna
in central Chile hit 37 degrees Celsius (almost 99 degrees Fahrenheit).
"It's been more than 70 years
since a temperature like this was recorded" in Vicuna, Chilean
meteorologist Cristobal Torres told AFP.
Unusually high temperatures were also
recorded 450 kilometers (280 miles) south in the capital Santiago: 24C (75F) on
Wednesday, with similar levels forecast for Thursday and Friday.
Meanwhile in Buenos Aires, the
temperature exceeded 30C (86F) on Tuesday, making it the highest August 1
temperature since record-keeping began, according to Argentina's National
Meteorological Service. The average August temperature in Buenos Aires is
usually between 18C (64F) and 9C (48F).
Several cities across Uruguay also
recorded temperatures of 30C (86F) on Wednesday.
"What we are experiencing is the
combination of two phenomena: a global warming trend due to climate change plus
the El Nino phenomenon," said Chile's Environment Minister Maisa Rojas, a
climatologist.
"When El Nino ends, the global
weather situation should stop being so extreme," she said.
An El Nino event is characterized by
increased Pacific Ocean temperatures, causing rainfall, floods and avalanches
in western South America, as well as heat waves.
Santiago, Buenos Aires and Montevideo
are expected to return to normal temperatures in the coming days, but it is
believed that similar heat waves will occur with increasing frequency.
"It is very likely that the heat
record will be broken this year (in Santiago), and that is extraordinarily
abnormal. Ten years ago we had two heat waves a year and now we are talking
about nine," explained University of Santiago climatologist Raul Cordero.
One of the most significant impacts of
the warm weather is on snowpacks in the mountains, which are vital for the
water supply in Chile's capital.
"Winter heat waves have
devastating effects on glaciers and snow," Cordero said.
Rojas also warned about the effects of
heat at the poles.
"The ice around the polar areas is
at minimum levels," she said on X, formerly known as Twitter.
"Especially around Antarctica,
where at this time of year sea ice grows to reach a maximum in September, it is
at a historic minimum."
South America sweats under high temps -- in the middle
of winter (france24.com)
Solar maximum could hit us
harder and sooner than we thought. How dangerous will the sun's chaotic peak
be?
By Harry Baker published June 24, 2023
---- If so many clues point to solar
maximum being stronger and earlier than predicted, why didn't scientists see it
coming? Part of the problem is the way the prediction panels come up with their
forecasts, Scott McIntosh told Live Science.
NASA and NOAA's models have barely changed in the last 30 years,
"but the science has," McIntosh said. The models use data from past
solar cycles such as sunspot number and cycle length, but do not fully account
for each cycle's individual progression, he added.
"It's kind of like a big game of pin the tail on the donkey,"
McIntosh said, where the "donkey" is the upcoming solar maximum and
the prediction panel has blindfolded themselves by not using all available
methods at their disposal.
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.
Wall Street reversal: More and
more economists are changing their minds and declaring US recession fears dead
Aug
2, 2023, 4:40 PM BST
It's
the ultimate will-they won't-they: Will the American economy slide into
recession this year? After much hemming and hawing from economists and Wall
Street, Bank of America is the latest to revise its predictions — and says a
severe economic downturn isn't likely.
"Recent
incoming data has made us reassess our prior view that a mild recession in 2024
is the most likely outcome for the US economy," BofA economists wrote in a
note on Wednesday, per Bloomberg, pointing to solid economic growth, and the
near-record low unemployment rate.
In
doing so, BofA is joining a rising chorus saying that fears of a recession were
unfounded. All of the potential harbingers of recession haven't actually
brought the downturn that many were forecasting, and, as Neil Dutta wrote
for Insider, "the economic doomsday clock has been reset."
The
bank also joined Goldman Sachs' Chief Economist Jan Hatzius, who predicted in
a July bank note that the odds of recession in the next 12 months now stand at
20%, down from its earlier 25% forecast.
Last month, the Federal
Open Market Committee announced it was raising
interest rates by 25 basis points, following a June pause during which rates were held steady.
While Federal Reserve Chair Jerome Powell said during the July press conference
that the rate increase was necessary to continue inching toward the central
bank's 2% inflation target, he also noted the committee changed tune with its
recession outlook — and it
no longer has a severe economic downturn in its forecast for this year.
----
With the committee predicting a chance of recession at its previous meetings
since the beginning of the year, its new outlook suggests a soft landing — in
which the Fed can continue fighting inflation while avoiding recession — is
even more achievable. It's something Treasury Secretary Janet Yellen has
expressed, as well, saying during an interview last month that "I
don't expect a recession. The most recent inflation data were quite
encouraging."
Of
course, there are still some major players wary of a downturn. Fitch, which
suddenly and unexpectedly downgraded the US's credit rating two months after a
major debt ceiling battle yielded a deal that will carry through 2025, is
still anticipating a downturn. The firm — whose downgrade
decision was criticised by government officials and economists—
is warning of more turmoil ahead, forecasting a mild recession in the last
quarter of 2023 and the first quarter of 2024.
Covid-19 Corner
This section will continue until it becomes unneeded.
What's behind the
recent Covid-19 surge in US?
August 2, 2023
America
is recording its first surge in Covid hospitalizations this year, but experts
say it is nothing to worry about.
Data
from the Centers for Disease Control and Prevention (CDC) showed 8,000 patients admitted to hospitals
across the country last week, up 12 percent on the previous seven-day spell and
the first week-on-week rise since December.
Despite
the rise, rates remain at historic lows. For comparison, there
were 150,000 Covid admissions per week at the height of the pandemic
in January 2021 and hospitalizations reached as high as 44,000-a-week
earlier this year.
Deaths
have also remained static and are at their lowest levels since Covid emerged,
at around 500 per week.
Experts
say the rise in hospitalizations may be down to the natural waning of immunity, which happens around six months after the
previous wave of infections.
Some concerns were raised by more
nervous experts that the rush to see Barbie and Oppenheimer in crowded theaters
could fuel the spread of the virus.
But it is still too early to tell whether
this has had an effect because it takes several weeks for infections to show up
in hospitals.
Nonetheless, even the CDC is not
concerned by the possibility with officials from the agency noting just this
week that deaths have fallen to the lowest they've been since records began.
Newly discovered antibodies could
be the key to fighting off every strain of Covid.
Dr
Brendan Jackson, a Covid incident manager for the CDC in Atlanta, Georgia,
said: 'If you sort of imagine the decline in cases looking like a ski slope —
going down, down, down for the last six months — we're just starting to see a
little bit of an almost like a little ski jump at the bottom.'
About 96 percent of Americans have a level of
immunity to Covid, estimates suggest, via a combination of past infections and
vaccinations.
More
What's behind the recent Covid-19 surge in US?
(msn.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.
Floating Solar Panels Turn Old
Industrial Sites Into Green Energy Goldmines
Thu, 3 August 2023 at 5:00
am BST
(Bloomberg) -- Putting
solar panels on water to generate power sounded like a dangerous gimmick to
Benedikt Ortmann when he first heard about the idea.
“Every child
knows electricity and water don’t mix,” said Ortmann, the top solar executive
at Munich’s Baywa r.e., one of Europe’s biggest renewable energy developers.
When Ortmann
installed his first array of floating panels back in 2018, Baywa r.e.’s
business was mostly made up of traditional ground-mounted solar. But five years
later, the company is now Europe’s leading producer of floating photovoltaics,
otherwise known as FPVs, or “floatovoltaics” in industry parlance. While
floating solar represented less than 1% of all panels installed globally last
year, their use has grown more than 2,000% in the last decade.
And
increasingly, they’re being installed on bodies of water in former coal pits
and stone quarries, and in hydropower lagoons.
One driving
factor behind this shift is the explosive uptake of solar panels on European
rooftops over the past two decades, which has put pressure on finding new real
estate for renewables. Subsequent efforts to build in rural areas have been
complicated by pushback from farmers and locals upset at the prospect of panels
spoiling their views. “Agriculture still sees solar panels as a threat that
competes for the same land,” said Matthias Taft, chief executive officer of
Baywa r.e.
Floatovoltaics
sidestep this issue, and are able to breathe life into sites that have fallen
into neglect. “Most of these former gravel and sand pits aren’t used anymore.
They’re low-hanging fruit,” Taft said.
Baywa r.e. has
already installed floating panels capable of generating half a gigawatt of
energy in Europe and Asia, and is assessing new sites in South America. Its
overall project pipeline currently stands at 28 gigawatts — a peak output
equivalent to a few dozen nuclear reactors — which the company expects will
triple by 2025.
To meet
mounting demand for FPVs, European governments, businesses, and utilities are
scouring out-of-use industrial areas for available bodies of water. At the top
of the list are ponds and lakes that don’t attract many visitors, and which
have steady water levels that won’t disappear beneath snow pack in winter.
Access to
infrastructure and proximity to population centers are also essential. “Right
now, the main constraint for solar build in Europe is a shortage of places with
an easy grid connection and land permits,” said BloombergNEF solar analyst
Jenny Chase.
The World Bank
figures that Europe could cover at least 7% of its annual power consumption by
deploying floating solar panels on just 10% of artificial lake surfaces. If
this were scaled globally, the amount of electricity generated would rise to
5,211 terrawatt hours a year — more than all the electricity consumed annually
by the US, the world’s largest economy.
More
Floating Solar Panels Turn Old Industrial Sites Into
Green Energy Goldmines (yahoo.com)
Another weekend and a weekend of worry
for stocks. What if this is as good as
it gets? What if that long delayed recession finally starts to show up? What if
US inflation starts to pick up again in H2 23? What if China’s slowdown widens
out into the rest of the world economy?
Have a great weekend everyone.
"This first stage
of the inflationary process may last for many years. While it lasts, the prices
of many goods and services are not yet adjusted to the altered money relation.
There are still people in the country who have not yet become aware of the fact
that they are confronted with a price revolution which will finally result in a
considerable rise of all prices, although the extent of this rise will not be
the same in the various commodities and services. These people still believe
that prices one day will drop. Waiting for this day, they restrict their
purchases and concomitantly increase their cash holdings. As long as such ideas
are still held by public opinion, it is not yet too late for the government to
abandon its inflationary policy.
But then, finally, the
masses wake up. They become suddenly aware of the fact that inflation is a
deliberate policy and will go on endlessly. A breakdown occurs. The crack-up
boom appears. Everybody is anxious to swap his money against 'real' goods, no
matter whether he needs them or not, no matter how much money he has to pay for
them. Within a very short time, within a few weeks or even days, the things
which were used as money are no longer used as media of exchange. They become
scrap paper. Nobody wants to give away anything against them."
Ludwig
von Mises.
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