Baltic Dry Index. 1151 -43 Brent Crude 83.22
Spot Gold 1921 US 2 Year Yield 4.95 -0.07
Central bank support for pandemic-hit economies looks to endure well past the recovery in output, leaving investors little option but to keep chasing a parabolic bull market until the fabled “punch bowl” is eventually removed.
Reuters February 19, 2021
In the stock casinos, the final bubble,
bubbles on. We are all going to get filthy rich via Artificial Intelligence. Some of us have operated on AI for years.
Asia markets rise
as investors assess central bank decisions in South Korea and Indonesia
UPDATED WED, AUG 23 2023 10:23 PM EDT
Asia-Pacific markets rose ahead of central bank
rate decisions from South Korea and Indonesia, although both central banks are
expected to hold their benchmark policy rates unchanged at 3.5% and 5.75%
respectively.
South Korea’s producer price
index climbed 0.2% year-on-year, the 13th straight month that growth in the PPI
has slowed.
Investors will also be assessing
chipmaker’s Nvidia’s
earnings that were released early Thursday. The company beat
estimates for the fiscal second quarter and issued optimistic guidance for the
current period.
Japan’s Nikkei 225 was
0.46% up, while the Topix climbed 0.13% on Thursday.
In Australia, the S&P/ASX 200 advanced
0.24%, while South Korea’s Kospi rose 0.85% and the Kosdaq was up 1.75%.
Hong Kong’s Hang Seng index also
rose 0.8%, while mainland Chinese markets were also up, with the CSI 300
gaining 0.43%.
On Wednesday, in the U.S., all three major
indexes gained ground, with the Dow
Jones Industrial Average closing 0.5% up.
The S&P 500 gained
1.1% and recorded its best daily performance since June 30, while the
tech-heavy Nasdaq Composite climbed
1.6%, for its third straight day of gains.
Asia markets rise as
investors assess central bank decisions in South Korea and Indonesia (cnbc.com)
Asian semiconductor stocks surge after Nvidia
posts stellar second-quarter results
Semiconductor-related stocks in Asia surged after
chipmaker Nvidia posted second-quarter
results that beat estimates and issued optimistic guidance for
the current period.
Most notably, Nvidia’s performance
was driven by its data center business, which includes the A100 and H100 AI
chips that are needed to build and run artificial intelligence applications
like ChatGPT.
Shares of Taiwan
Semiconductor Manufacturing Corp, which manufactures all of Nvidia’s advanced AI chips,
climbed as much as 1.81% on Thursday, while counterpart Samsung Electronics
gained as much as 2.24%.
In an Aug. 21 note,
Morgan Stanley analysts estimated that TSMC will generate 6% of revenue from
AI-related semiconductors in 2023.
The team also expects
Nvidia to see a 50% compounded annual growth rate in the segment for the next
five years, adding that it views the company’s outlook guidance “as a near-term
share price catalyst [for TSMC].”
Other stocks in the broader semiconductor sector
also rose with South Korean memory chip maker SK Hynix surging as high as 6.29%
above its last close.
Despite reports back in June that
the U.S. was weighing export
restrictions on Nvidia’s chips to China, Chinese semiconductor
stocks also were up on Thursday, with Hua Hong
Semiconductor advancing
2% and SMIC gaining
1.96%.
Asian
semiconductor stocks surge after Nvidia earnings (cnbc.com)
Oil down on weak
economic data, US Federal Reserve chief's speech in spotlight
NEW
DELHI, Aug 24 (Reuters) - Oil prices eased in early trade on Thursday amid
disappointing economic data from key economies and as investors await a speech
by U.S. Federal Reserve Chair Jerome Powell on Friday for cues on interest
rates.
Brent
crude fell 26 cents, or 0.3%, to $82.95 a barrel by 0359 GMT, while U.S. West
Texas Intermediate crude dropped 30 cents, or 0.4%, to $78.59 a barrel.
Manufacturing
data from a host of purchasing managers' index (PMI) surveys on Wednesday
painted a grim picture of the health of economies across the globe, raising
demand concerns, analysts said.
Japan reported shrinking factory
activity for a third straight month in August. Euro zone business activity also declined more
than expected, particularly in Germany. Britain's economy looked set to shrink in
the current quarter, in danger of falling into recession.
U.S. business activity approached the
stagnation point in August, with growth at its weakest since February.
Meanwhile, Federal Reserve officials and
policymakers from the European Central Bank, the Bank of England and the Bank
of Japan head to Jackson Hole where
higher-for-longer interest rate talk may dominate despite a dip in inflationary
pressures.
More
Oil down on weak economic data, US Federal Reserve chief's speech in spotlight | Reuters
In other Asian news, nothing good. President Xi cuts a speech. China’s deflation is likely to spill out into the rest of the world. Japan starts dumping tons of “safe” nuclear water into the Pacific Ocean. Stock up on canned tuna and salmon now?
Rumours swirl after
Xi Jinping unexpectedly pulls out of summit speech
August 23, 2023
Chinese President Xi Jinping unexpectedly pulled
out of delivering a speech at the BRICS summit in South Africa - leading to
speculation he might be unwell.
The Chinese
leader was in
Johannesburg for the business forum but asked his commerce minister Wang Wentao
to deliver the remarks instead.
The
unusual move has sparked speculation that something was "amiss" but
it is unlikely the Chinese government will provide an explanation.
The president's speech brought an air
of confrontation to the summit in Johannesburg.
In a thinly-veiled swipe at the
United States, Mr Wang said "some country, obsessed with maintaining its
hegemony, has gone out of its way to cripple the emerging markets and
developing countries".
"Whoever is developing fast
becomes its target of containment. Whoever is catching up, becomes its target
of obstructions."
The remarks are another development
in the growing friction between the US and China - with Mr Xi having earlier
blamed the West for the difficulties faced by his country's economy.
Mr Xi had met with South African
president Cyril Ramaphosa on Tuesday before he pulled out of delivering his
speech.
Bill Bishop, author of Sinocism, a
popular newsletter about Chinese affairs, highlighted how there had already
been a long period this month with Mr Xi not making any public appearances.
----The China
Global South Project, a podcast exploring the country's involvement in Africa,
wrote: "To say [Xi's absence] is extraordinary is an understatement as
Chinese leaders never miss highly choreographed events like this."
Bonnie Glaser, managing director of
the Indo-Pacific Programme at the German Marshall Fund, wondered if his absence
meant something was "amiss".
James Palmer, deputy editor of
Foreign Policy magazine, wrote: "The odds are very heavily that Xi Jinping
just skipped that speech because he's sick."
The BRICS group of countries is made
up of Brazil, Russia, India, China and South Africa.
More
Rumours
swirl after Xi Jinping unexpectedly pulls out of summit speech (msn.com)
China’s
deflation could spill over into a global concern, economists say
China’s economic challenges have given rise to
deflationary pressures that present a global concern and are likely to
accelerate in the coming quarters, according to economists.
Beijing’s deteriorating economic
fundamentals have become starkly apparent in recent months, with July’s
data broadly missing expectations and the National Bureau of
Statistics suspending its publication of youth unemployment figures as numbers
soared to record highs.
Credit data for July also showed a slump in
borrowing demand from businesses and households and problems have persisted in
the country’s massive real estate sector, with once-healthy developer Country Garden on
the brink
of default and heavily indebted property giant Evergrande Group filing
for bankruptcy
protection in the U.S. earlier this month.
China’s headline
consumer price index fell 0.3% year-on-year in July to register deflation for
the first time in more than two years, presenting an opposing problem to that
faced by major economies in the West.
Though some of the
headline weakness could be attributed to transitory factors such as lower
energy and pork prices, core inflation has also been weighed down by falling
prices in shelter and related categories due to the ailing property sector.
“Despite changing
linkages between China and the global economy as Beijing tries to transition to
a consumption-led growth model and trade tensions remain elevated with the
West, China is still the world’s manufacturer,” said Pimco Economist and
Managing Director Tiffany Wilding.
“As a result, Chinese
economic weakness and falling prices (especially Chinese producer prices) are
likely to spill over into global markets — near-term good news for the Western
central banks’ fight against elevated inflation.”
---- Yet in a research note last week, Wilding and Pimco China
Economist Carol Liao noted that domestic demand has since faltered and left
China with idle capacity, while deleveraging in the property and local
government financing sectors have deepened disinflationary pressures and hit
domestic investment, leading to “broad-based excess capacity in manufacturing.”
“What’s more, the
government’s reaction to these weakening fundamentals has been far from
sufficient. Indeed, a government-led push to stimulate and stabilize growth
through easy credit, especially to state-owned enterprises and for
infrastructure investment, has not been enough to offset the drag from property
market, as the flow of new credit to the economy has contracted over the past
year,” the Pimco economists added.
China’s central bank
on Friday ramped up measures to arrest a rapid depreciation in its currency on
the back of the bleak round of data and fading consumer confidence, but the
market seemingly remained unconvinced that Beijing was doing enough to reverse
the recent trends.
More
China's
deflation could spill over into a global concern, economists say (cnbc.com)
Investors dump major
China stocks in record sell-off - latest updates
August 23, 2023
Global
investors have been offloading China’s flagship stocks in a record-selling
streak, showing the nation’s industry leaders are falling out of favour amid concerns
for the economy.
Foreign
investors sold 6.2bn yuan (£676m) of Kweichow Moutai from August 7 to 18,
making China’s largest spirits maker the most heavily sold stock via trading
links with Hong Kong.
It was
followed by 4.7bn yuan of selling each for leading renewables stock LONGi Green
Energy Technology and major lender China Merchants Bank.
Overseas funds
have been fleeing the Chinese market, offloading the equivalent of £7.3bn in a
twelve-day run of withdrawals to Tuesday, the longest since Bloomberg began
tracking the data in 2016.
The exodus
comes after China underwhelmed markets with its latest changes to interest
rates earlier this week.
The world’s
second-largest economy is dealing with a prolonged housing slump, making its
CSI 300 Index among the worst global performers this month with a 7pc loss. It
is now trading near the lowest since November.
Investors dump major China stocks in record sell-off -
latest updates (msn.com)
Japan expects big hit
from Hong Kong ban on most of its seafood
By Yoshifumi
Takemoto and Katya Golubkova August 23, 20239:49 AM GMT+1
TOKYO, Aug 23 (Reuters) - Japan expects
a "significant" impact from seafood import ban by Hong Kong and Macau
due to the upcoming release of treated water from the Fukushima nuclear plant,
an official from the Ministry of Agriculture, Forestry and Fisheries (MAFF).
Japan is to
start releasing more
than 1 million metric tons of treated radioactive water from the destroyed
Fukushima nuclear power plant into the sea on Thursday, more than a decade
after the accident and amid harsh criticism from China.
China, the biggest importer of Japanese
seafood, will take measures to protect its marine environment, food safety and
public health, the foreign ministry said on Wednesday. Beijing has already
banned imports from some Japanese regions.
In the latest set of
measures, the Asian financial centre of Hong Kong and the gambling hub of Macau
-- both special Chinese regions -- will ban aquatic
product imports from 10 Japanese regions including Tokyo and Fukushima from
Thursday.
The impact of the Hong Kong and Macau
seafood bans could not be immediately calculated but would be 'significant',
the official at MAFF said declining to be identified due to the ministry's
policy.
China, also Japan's top scallop buyer
and a major consumer of sea cucumbers, imported 87.1 billion yen ($600 million)
worth of Japanese seafood last year, or a fifth of Japan's total seafood
exports, according to the MAFF data.
Hong Kong, Japan's second biggest
seafood market after mainland China, which the ministry calculates separately,
bought 75.5 billion yen worth of seafood from Japan, the data shows. Japan
seafood export data includes pearl exports.
More
Japan expects big hit from Hong Kong ban on most of
its seafood | 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.
Slide in euro zone
service sector sharpens ECB's rates dilemma
By Jonathan Cable August 23, 202311:36 AM GMT+1
LONDON, Aug 23
(Reuters) - Euro zone business activity declined far more than thought in
August with the slide in Germany particularly fast, while some inflationary
pressures returned, surveys showed.
Wednesday's
purchasing managers' indexes complicate matters for the European Central Bank
which wants to control still rampant price rises without causing a recession.
It
is expected to pause interest rate hikes in September, according to a narrow
majority of economists polled
by Reuters, despite elevated inflation. A
further rise in rates by year-end remains on the cards, however, following the
central bank's most aggressive policy tightening cycle.
"The
continuing sharp drop in the PMI data will test the ECB's growth
optimism," said Mark Wall, chief European economist at Deutsche Bank.
"We are
expecting the ECB to pause in September, but it is not clear that inflation is
where the ECB wants it yet. A pause should not be misinterpreted as the
peak."
Activity in the
bloc's dominant services industry declined for the first time this year and the
contraction in manufacturing output continued, although there were some signs
of a turnaround for factories.
HCOB's flash
Composite Purchasing Managers' Index (PMI) for the bloc, compiled by S&P
Global and seen as a good barometer of overall economic health, dropped to 47.0
in August from July's 48.6, its lowest since November 2020.
That was well
below the 50 mark separating growth from contraction and lower than all
expectations in a Reuters poll which had predicted a slight dip to 48.5.
A chunk of that
activity was driven by firms completing old orders, with the backlogs of work
index falling to its lowest since June 2020 when the COVID pandemic was
cementing its grip on the world.
Business
activity in Germany, Europe's largest economy, contracted at the fastest
pace for more than three years as a deepening downturn in manufacturing output
was accompanied by a renewed contraction in services, an earlier survey showed.
Firms there
remained pessimistic about the outlook as rising interest rates, customer
uncertainty and high inflation continued to weigh on demand.
In France, the
dominant services sector contracted further as falls in demand and new orders
hinted there would be a contraction in the euro zone's second-biggest economy
this quarter.
More
Slide in euro zone service sector sharpens ECB's rates
dilemma | Reuters
PMIs:
UK economy slips hard in August as recession warning lights flash
WEDNESDAY 23 AUGUST 2023 9:38 AM
The UK economy has contracted
significantly this month according to a closely-watched index.
S&P Global’s Purchasing Managers’
Index (PMI) for the UK economy came in at 47.9 – far below the 50 reading which
indicates flat growth. The PMI assesses the health of an economy’s services and
manufacturing sector.
Analysts had predicted a reading of 50.3 this
month.
The all important services sector
slipped from 51.5 last month, indicating expansion, to a seven month low of
48.7. Manufacturing meanwhile continued to fall, slumping to a 39-month low of
42.5.
The slowdown in growth will please
some in the Bank of England, who are attempting to take the heat out of the UK
economy and bring down persistently high inflation.
Many companies recoded a reluctance
among clients to spend due to higher interest rates and stretched disposable
incomes. Looking forward, service providers also flagged concerns that higher
rates would continue to dent consumer spending.
Chris Williamson, chief business
economist at S&P Global Market Intelligence, said “the fight against
inflation is carrying a heavy cost in terms of heightened recession risks.
“A renewed contraction of the economy
already looks inevitable, as an increasingly severe manufacturing downturn is
accompanied by a further faltering of the service sector’s spring revival. The
survey is indicative of GDP declining by 0.2 per cent over the third quarter so
far,” he said.
The survey also
suggested that inflationary pressures continued to moderate in August, with
input costs rising at the slowest pace for two and a half years.
However, businesses
also reported that wage pressures were persistently strong.
The Bank is expected
to announce at least one more interest rate hike at its next meeting in
September, bringing the rate to 5.5 per cent.
Those rate increases
have placed a wet blanket over the economy with the cost of credit increasing.
The impact has so far
been mostly seen in the housing market, where property prices have slipped
significantly. August
marked the worst summer month for five years, according to the latest data.
Williamson said “the
August PMI data will add to speculation that rates could soon peak.”
UK economy slips hard in August as recession warning
lights flash (cityam.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
Nothing
new to report today.
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.
NASA discovers sunspot so big it can be seen from Mars
that could release solar storms that knock out Earth's power grids next WEEK
NASA's Mars rover discovered a giant sunspot that will
face Earth next week
Experts warn the size means intense solar storms that
knock out power grids
21:26, 22 August 2023
NASA has identified a giant sunspot on the sun that will likely
continue to grow and move across the surface until it faces Earth next week.
Experts have warned that the
dark region, which is cooler than the surrounding area, could release energetic
explosions capable of knocking out our planet's power grids.
The exact measurements of the
sunspot are unknown, but NASA's Perseverance rover snapped images of the spot
as it sits more than 152 million miles from the sun.
The rover observed the
sunspot on August 17 through August 20 while exploring the Jezero Crater
on the Red Planet.
'Because
Mars is orbiting over the far side of the sun, Perseverance can see approaching
sunspots more than a week before we do. Consider this your one-week warning: A
big sunspot is coming,' Spaceweather shared in a blog post.
The images, which have been
turned into an animation, show a dim sun hanging in the blackness of space with
a blurry, dark formation moving across the surface.
'It takes a large sunspot to
show up in these low-resolution images,' Spaceweather shared.
---- And sunspots appear dark because they are at
least 4,000 degrees F cooler than the surrounding area.
However, the sun's outer atmosphere can reach more than one million
degrees.
NASA shared stunning images of our giant star in February, showing the
range of temperatures surrounding it.
Using the Nuclear Spectroscopic Telescope Array (NuSTAR), the American
space agency captured various X-rays emitted by the hottest material in our
star's atmosphere.
High-energy X-rays were observed in only a few locations, while
low-energy X-rays and ultraviolet light were detected across the ball of gas's
entire face.
Scientists hope the new views will help them solve one of the sun's
biggest mysteries: why its outer atmosphere reaches more than a million degrees
- at least 100 times hotter than its surface.
“When the music stops, in terms of liquidity, things will be
complicated. But as long as the music is playing, you’ve got to get up and
dance. We’re still dancing,” he said in an interview with the FT in Japan.
The Citigroup chief executive told the Financial Times
that the party would end at some point.
Citi CEO Chuck Prince, July 10, 2007.
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