Baltic Dry Index. 1136 +08 Brent Crude 86.24
Spot Gold 1943 U
S 2 Year Yield 4.78 -0.12
Democrats are the only reason to vote for Republicans.
Will Rogers.
In the stock
casinos, more wobble. Though the experts say no US or global recession is
possible, are they right?
This is
the group that parroted the central banksters “no inflation and then when
inflation hit, inflation was only “transitory” and could be ignored.
The
Christopher Columbus route to the East Indies.
When, if
ever, did the stock hustlers ever say it was time to sell, not buy?
When, if ever, did the reckless central banksters say it was time to hedge against their feckless fiat money creation by buying some fully paid up physical gold and silver?
If economists could manage to get themselves thought of as humble, competent people on a level with dentists, that would be splendid.
John Maynard Keynes.
Wall St Week Ahead Inflation report, bond yields in focus as
U.S. stocks rally pauses
By Carolina
Mandl August 5,
202312:17 AM GMT+1
NEW YORK, Aug
4 (Reuters) - A highly awaited inflation report and elevated bond yields offer
the latest test to a U.S. stock rally that has delivered hefty gains this year.
The benchmark
S&P 500 index is up 16.6% year to date, fueled by an improving economic
outlook, excitement over developments in artificial intelligence and signs that
the Federal Reserve is close to ending its market-bruising U.S. interest rate
hikes.
Stocks'
near-term trajectory, however, may depend on whether next week's inflation
report shows consumer prices remaining subdued. Investors are also closely
watching the path of Treasury yields, which rattled equity markets in recent
days by rising to fresh year highs. The S&P 500 fell 2.27% this week, its
biggest weekly decline since March 10.
"After a
massive run-up in equities ... any sort of blip in terms of any of the macro
data (is) probably going to be a reason for people to take profits," said
Jack Janasiewicz, lead portfolio strategist and portfolio manager at Natixis
Investment Managers.
While
consumer prices have not been rising as fast lately, some investors worry
stubborn inflation may force the Fed to leave rates at current levels longer
than expected. The U.S. reports consumer price data on Aug. 10.
On
Friday, U.S. employment
data showed the economy maintained a moderate pace of job growth. Yet
wages grew at a faster-than-expected annual clip of 4.4%. Many fear that is too
high to be consistent with the Fed's 2% inflation target.
Janasiewicz of
Natixis said a stronger-than-expected consumer price reading next week could
spark a decline of up to 5% in the S&P 500. He said such a drop would be
“healthy” given the index's big runup this year.
Other investors have been taking profits. Concerns over
rising stock valuations pushed Aaron Chan, a managing partner at equity hedge
fund Recurve Capital, to trim stakes in shares of companies including
Amazon.com (AMZN.O), which is up 68% this year, and Norwegian
Cruise Line (NCLH.N), up 47%.
The S&P 500
is trading at about 19.5 times forward 12-month earnings estimates, much
pricier than its long-term average of about 15.6 times, according to Refinitiv
Datastream.
Rising global
prices for oil and food, which the Fed's rate increases do little to control,
may have more sway on inflation in coming months, said Tim Murray, a capital
markets strategist at T. Rowe Price.
Prices
for Brent crude were on
track for their sixth straight week of gains, up roughly 17% in that
period on signs of tightening global supply and rising demand.
More
Wall
St Week Ahead Inflation report, bond yields in focus as U.S. stocks rally pauses
| Reuters
July jobs report: U.S. payroll growth totaled 187,000,
lower than expected
Job growth in July was less than expected, pointing to a slower pace in the
U.S. economy though perhaps not a long-anticipated recession, the Labor
Department reported Friday.
Nonfarm
payrolls expanded by 187,000 for the month, slightly below the
Dow Jones estimate for 200,000. Though the headline number was a miss, it
actually represented a modest gain from the downwardly revised 185,000 for
June.
The unemployment rate was 3.5%, against a consensus estimate that the
jobless level would hold steady at 3.6%.The rate is just above the lowest level
since late 1969.
Average hourly earnings, a key figure as the Federal Reserve fights
inflation, rose 0.4% for the month, good for a 4.4% annual pace. Both numbers
were higher than the respective estimates for 0.3% and 4.2%. Hours worked
nudged down to 34.3.
Another important figure, the labor force participation rate held at
62.6%, the fifth straight month at that level. The rate for those in the
25-to-64 “prime” age group edged lower to 83.4%.
A more encompassing unemployment rate that includes discouraged workers
and those holding part-time jobs for economic reasons fell to 6.7%, down 0.2
percentage point from June. The survey of households, which is used to
calculate the unemployment rate, showed a more robust gain of 268,000.
----The
unemployment rate for Blacks moved lower to 5.8% while the rate for adult women
nudged higher to 2.7%. The rate for Asians tumbled to 2.3%, a 0.9 percentage
point drop and just off its lowest ever in data going back to January 2000.
“The labor market seems to be humming along rather well at this point in
the business cycle,. A 3.5% unemployment rate, you can’t complain about that,”
said Satyam Panday, U.S. chief economist at S&P Global Ratings. “It’s a
nice glide path down. We would have liked to see wage growth come down a little,
but the purchasing power of the consumer seems to be holding up well.”
More
Jobs
report July 2023: 187,000 jobs added, fewer than expected (cnbc.com)
Maersk warns of slower demand for container shipping
August 4, 2023
COPENHAGEN (Reuters) -Shipping group A.P.
Moller-Maersk warned on Friday of a steeper decline in global demand for
shipping containers by sea this year prompted by muted economic growth and
customers reducing inventories.
The company, one of the world's biggest container
shippers with a market share of around 17%, said it expects container volumes
to fall by as much as 4%. It had previously forecast a decline of no more than
2.5%.
Maersk, one of the world's biggest container
shippers with a market share of around 17%, transports goods for retailers and
consumer companies such as Walmart, Nike and Unilever.
"Maersk continue to expect muted global
macro-economic growth given continued pressure from higher interest rates and
potential recessionary risk in Europe and the United States," the company
said in a statement.
The company on Friday posted second-quarter
earnings above expectations and narrowed its profit forecast for the year.
Earnings before interest, tax, depreciation and
amortisation (EBITDA) fell to $2.91 billion in the quarter from $10.3 billion a
year earlier, beating analysts' expectations of $2.41 billion in a Refinitiv
poll. Revenues fell 40% to $13.0 billion.
It now expects underlying EBITDA between $9.5
billion and $11 billion. It had previously predicted an underlying EBITDA of
between $8 billion and $11 billion.
The company said the number of containers it loaded
onto ships between April and June fell by 6% from a year earlier, while average
freight rates halved.
"The
second-quarter result contributed to a strong first half of the year, where we
responded to sharp changes in market conditions prompted by destocking and
subdued growth environment following the pandemic fuelled years," Chief
Executive Vincent Clerc said in a statement.
Maersk warns of slower demand for container shipping
(msn.com)
JPMorgan backs off recession call even with ‘very
elevated’ risks
JPMorgan Chase economists on Friday bailed on their recession call, joining
a growing Wall Street chorus that now thinks a contraction is no longer
inevitable.
While noting that risks are still high and growth ahead is
likely to be slow, the bank’s forecasters think the data flow indicates a soft
landing is possible. That comes despite a series
of interest rate hikes enacted with the express intent of
slowing the economy, and several other substantial headwinds.
Michael Feroli, chief economist at the nation’s largest bank, told clients
that recent metrics are indicating growth of about 2.5% in the third quarter,
compared with JPMorgan’s previous forecast for just a 0.5% expansion.
“Given this growth, we doubt the economy will quickly lose
enough momentum to slip into a mild contraction as early as next quarter, as we
had previously projected,” Feroli wrote.
Along with positive data, he pointed to the resolution of the
debt ceiling impasse in Congress as well as the containment of a banking crisis
in March as potential headwinds that have since been removed.
Also, he noted productivity gains, due in part to the broader
implementation of artificial intelligence, and improved labor supply even
as hiring has softened in recent months.
However, Feroli said risk is not completely off the table. Specifically, he
cited the danger of Fed policy that has seen 11 interest rate hikes implemented
since March 2022. Those increases have totaled 5.25 percentage points, yet
inflation is still holding well above the central bank’s 2% target.
“While a recession is no longer our modal scenario, risk of a
downturn is still very elevated. One way this risk could materialize is if the
Fed is not done hiking rates,” Feroli said. “Another way in which recession
risks could materialize is if the normal lagged effects of the tightening
already delivered kick in.”
Feroli said he doesn’t expect the Fed to start cutting rates
until the third quarter of 2024. Current market pricing is indicating the first
cut could come as soon as March 2024, according to CME Group data.
Market pricing also points strongly toward a recession.
More
JPMorgan
backs off recession call even with 'very elevated' risks (cnbc.com)
Finally, the
west, including NATO, needs to wake up fast to a coming food tragedy. Did no
one in Washington, London or NATO Brussels know or care what a global disaster
lay ahead in fighting a proxy war on Russia in Ukraine?
The World Is Scrambling to Keep Ukraine’s Grain
Flowing
By Agnieszka de Sousa August 4, 2023 at 7:00 AM EDT
Russia’s exit from the Black Sea grain export deal last
month raised the stakes in the effort to keep Ukrainian supplies flowing.
At issue is global access to food and affordability at a
time when inflation shows few signs of letting up. Food supply risks are multiplying again, with extreme weather and India’s
rice export restrictions adding to the concerns.
As a result, global food prices are on the rise. According
to data released Friday, the United Nations’ global food index rose for the first time in three
months in July. The rice index reached its highest nominal level since 2011.
Ukraine has redirected some crop exports by rail, road and
river through its European neighbors, but those volumes are causing tensions.
Poland, Slovakia and Hungary, along with Bulgaria and Romania, have banned purchases of Ukrainian grain after
declining prices spurred protests from local farmers.
A key route to ship Ukrainian grain is the
Danube, though that’s expensive and lacks capacity. The Kremlin has also escalated assaults on grain infrastructure in Ukraine, including
attacking Danube ports. It also fired missiles that damaged equipment at a
cargo terminal in the Odesa region.
The options for farmers who made Ukraine a global
breadbasket are narrowing as the economics of their business deteriorates. They
have limited storage space as this year’s harvest piles up. Major farm companies are curbing winter crop plantings.
Decisions taken over the next few weeks in Ukraine — for
wheat, barley and rapeseed — will have repercussions for the 2024 harvest. That
will hit both Kyiv’s precious wartime revenues, and global supplies of key food
staples.
More
Supply Chain Latest: Ukraine Grain Routes - Bloomberg
Russian Oil and Grain Export Hub Disrupted by
Ukraine’s Attack on Warship
Novorossiysk
halted briefly by drone assault on naval vessel
Port
and nearby oil terminal are key sources of crude, grains
August 4, 2023 at 11:12 AM
GMT+1 August 4, 2023 at 2:50 PM GMT+1
Russia’s commodity export hub of Novorossiysk in the Black
Sea was closed for several hours on Friday after a Ukrainian drone attack on a
naval vessel, the first time that operations at the key shipment point for oil
and grains have been disrupted by
the war.
More
Ukraine
Attack on Russian Warship Disrupts Black Sea Commodity-Export Hub - Bloomberg
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.
British Airways to award bumper pay rise to 24,000 staff
August
4, 2023
Staff at British Airways have secured a pay rise
worth more than 13pc, reversing cuts rolled out at the height of the pandemic.
Around 24,000 employees at the airline will receive
a 13.1pc increase in pay over an 18-month period, as well as a one-off payment
of £1,000, the Unite union said.
The union said the deal, which excludes pilots and
management, restores and increases pay after British Airways used so-called
“fire and rehire” tactics during the pandemic, leading to many workers
suffering pay cuts.
It said there was potential for pay to increase
further, while no member of staff will have the pay increase applied at a lower
rate of pay than they were receiving in 2020.
Sharon Graham, Unite general secretary, said: “This
is a sizeable pay increase which has been achieved by the hard work and
dedication of the union’s reps and officers, hammered out in detailed
negotiations.
----In
addition to the pay increase, Unite said it had secured “milestone reviews” and
additional pay rises for specific groups of workers at the company.
It comes amid chaos for European airlines as
walkouts across the industry fuel a sharp rise in delays.
Repeated strikes by air traffic controllers in France
have added to airspace congestion across the continent, forcing budget carriers
Ryanair and easyJet to cancel thousands of flights.
British Airways narrowly avoided disruption after a
wave of industrial action by ground handlers at ASC, Menzies Aviation and
GGS was cancelled.
Another round of strikes by baggage handlers
working with easyJet at London Gatwick has been suspended after Unite received
a better pay offer.
British Airways to award bumper pay rise to 24,000
staff (msn.com)
Britain’s era of cheap food is
over, economists say
|
|
|
|
The Bank
of England has warned grocery price inflation will remain in double digits
until the end of the year, with prices likely to keep rising for
the foreseeable future. Barret
Kupelian, a senior economist at PwC, said: “The bad news is that even though
food inflation is expected to moderate, food prices will remain high and not
decrease. This means that the era of cheap food has probably come to an end
in the UK.” Price increases are not, however, expected to be spread evenly
– some retailers and products are
predicted to be more affected than others. |
Bank of England's interest rate hikes 'make no
difference' to inflation, analyst warns
The
latest interest rates hike will have no effect on inflation while piling more
pressure on Britons' budgets, a group has warned.
08:22, Fri, Aug 4, 2023 |
UPDATED: 09:12, Fri, Aug 4, 2023
The Bank of
England's decision to increase the base interest rate to 5.25 percent will have no effect on inflation while making life
worse for thousands of Britons, a group has warned.
Laith Khalaf, head of
investment analysis at AJ Bell, said: “Its own numbers show that more interest
rate hikes will make almost no difference to inflation in the medium term.
“But they
will of course inflict more pain on consumers and businesses, and in particular
mortgage holders.
“Sometimes
doing nothing is the hardest approach, but there is increasing evidence that’s
the path the Bank should now be following."
He pointed to the central bank’s projections
that inflation will fall to 1.4 percent if interest rates stay as they are,
while hiking rates to six percent and then trimming them to 4.5 percent would
get inflation down to just 1.5 percent.
Mr Khalaf
explained: “This supports a pause in rate hikes, especially because the
cost-of-living crisis engulfing consumers is currently being exacerbated by
high interest rates.
“The full
effect of monetary policy takes around 18 to 24 months to ripple out into the
economy, so a hiatus in rate activity would also give the bank more time to
assess the impact of its past actions.”
Another
strong critic of the central bank's decision was Samuel Mather-Holgate, from
Mather & Murray Financial. He commented: "Increasing rates, knowing
the last rises haven't been felt yet, and whilst inflation is falling, is
absolute lunacy
More
Below,
why a “green energy” economy may not be possible, and if it is, it won’t be
quick and it will be very inflationary, setting off a new long-term commodity
Supercycle. Probably the largest seen so far.
The
“New Energy Economy”: An Exercise in Magical Thinking
https://media4.manhattan-institute.org/sites/default/files/R-0319-MM.pdf
Mines,
Minerals, and "Green" Energy: A Reality Check
https://www.manhattan-institute.org/mines-minerals-and-green-energy-reality-check
"An
Environmental Disaster": An EV Battery Metals Crunch Is On The Horizon As
The Industry Races To Recycle
by Tyler Durden Monday, Aug 02, 2021 - 08:40 PM
Covid-19
Corner
This section will continue until it becomes unneeded.
New Evidence Suggests mRNA COVID-19 Vaccine Transmission of Aerosols by
Vaccinated to Unvaccinated
Aug 2 2023
New evidence suggests vaccinated individuals can transmit
antibodies generated through mRNA COVID-19 vaccination to unvaccinated
individuals through aerosols, according to a peer-reviewed study (pdf) published in ImmunoHorizons.
Extended mask requirements allowed scientists at the
University of Colorado to evaluate whether vaccinated individuals could
transfer aerosolized antibodies generated from COVID-19 vaccines. Aerosols are
a manufactured or naturally occurring suspension of particles or droplets in
the air, such as airborne dust, mists, fumes, or smoke, that can be absorbed by
the skin or inhaled.
Researchers used a combination of tests to detect
SARS-CoV-2-specific antibodies from masks vaccinated lab members wore and
donated anonymously at the end of the day. Antibodies are proteins
produced by the immune system that circulate in the blood and neutralize
foreign substances such as bacteria and viruses.
Consistent with results reported by others, the
researchers identified both immunoglobulin G (IgG) and immunoglobulin A (IgA)
antibodies in the saliva of vaccinated individuals and on their masks.
Based on their observations, the researchers hypothesized
droplet or aerosolized antibody transfer might occur between individuals,
similar to how droplets and aerosolized viral particles are transferred by the
same route.
To test their hypothesis, they obtained and compared
nasal swabs from unvaccinated children living in vaccinated, unvaccinated, and
COVID-19-positive households.
Results showed high IgG in the noses of vaccinated
parents was “significantly associated” with an increase in intranasal IgG
within the unvaccinated child from the same household, especially compared to
the “complete deficit of SARS-CoV-2-specific antibody detected” in nasal
swabs obtained from children in nonvaccinated families. A similar trend was
found with IgA in the same samples.
In other words, their findings suggest aerosol
transmission of antibodies can occur between COVID-19 vaccinated parents
and their children—and the tendency for this transfer is directly related to
the amount of nasal or oral antibodies found in those who received vaccines.
This type of shedding is called “passive immunization,”
where antibodies—primarily IgA—are actually exchanged between individuals through
respiratory droplets, Brian Hooker, chief scientific officer at Children’s
Health Defense, who holds a doctorate in biochemical engineering, wrote in an
email to The Epoch Times. “But this would provide minimal immunity for the
‘bystanders’ based on the fact that the original mRNA vaccines provide so
little protection.”
Mr. Hooker said passive immunization could elicit
autoimmunity and “all sorts of reactions” in bystanders due to a similar
“molecular mimicry between the COVID-19 Ig [immunoglobulin] antibodies and
human proteins.”
Studies have shown that molecular mimicry between the foreign molecules and human molecules
can lead to an autoimmune response causing antibodies to function incorrectly
and interact against human proteins. Autoimmunity refers to an immune reaction
where the body attacks its own tissues, resulting in damage or disease.
Mr. Hooker said the study suggests that if Ig antibodies
can be transmitted person-to-person, there is a possibility the spike protein
generated by COVID-19 vaccines could be transmitted as well.
“This could cause immunization of the
bystanders as well as problems associated with spike protein toxicity to
bloodstream components and other tissues,” he added.
More
Technology Update.
With events happening fast in the
development of solar power and graphene, I’ve added this section.
This weekend, the difficulty of going
all in EVs. When mining, even heavily subsidised mining, goes wrong.
America's Only Cobalt Mine Can't Get Off the Ground
July 25, 2023
Etched into a mountain in the Idaho wilderness, at
an elevation of roughly 8,000 feet, a cobalt mine three decades in the making
demonstrates how America’s clean-energy ambitions are clashing with market realities.
Miners have spent years traveling the 42-mile dirt
road to the site, pushing the project forward in fits and starts while
confronting wildfire, permitting fights, market swings and a corporate
takeover.
Those fortunes were finally supposed to turn this
spring with the launch of what the project’s Australian owner billed as the
only cobalt mine of its kind in the U.S. China dominates the processing of
cobalt, a metal used in cellphones, jet engines, munitions, and, increasingly,
electric-vehicle batteries.
Federal and state officials hailed the mine at a
ribbon cutting in October, timed ahead of the winter, and a White House energy
adviser later pointed to it as an example of America’s renewed mining
aspirations.
But Jervois Global recently suspended operations
and cut hundreds of workers just weeks before the mine was set to produce its
first pound of cobalt. The market had shifted at a key moment, cratering prices
for the lustrous silvery metal around the world.
Economists and executives warn similar challenges
lie ahead in the race to build renewable-energy infrastructure. Many of the
richest deposits of commodities required lie elsewhere, while firms extracting
them in the U.S. or its allies face higher environmental standards, greater
labor costs and limited interest from Wall Street.
At the same time, China has developed much of the
refining capacity for metals such as copper, lithium and nickel, backing mines
in low-income countries where cheap costs drive down prices. U.S. officials
warn China’s clout poses risks ranging from export controls to fallout from
armed conflicts abroad.
It has created a puzzle as the Biden administration
tries to accelerate electric-vehicle adoption that is key to curbing America’s
appetite for fossil fuels. The president’s climate law will offer tax credits
to buy models with fewer components and minerals from China, but some
automakers warn that many cars won’t qualify. Officials are also trying to
expand trade deals to diversify supplies and tapping new or rarely used
programs to shower Jervois and other firms with cash.
In relatively small markets for critical minerals,
it remains unclear if Washington will be able to jump-start investment or have
to settle for subsidizing projects that can’t stand up on their own, said Rod
Eggert, an economics professor at the Colorado School of Mines. The danger is
that giving priority to self-sufficiency could raise costs and slow the energy
transition.
“Let’s think really carefully,” Eggert said. “How
high of a priority is this?”
Washington has nevertheless started opening the
spigot on what a senior White House official said is the greatest investment in
upstream mining production since the Korean War—a push that could hinge on
small firms such as Jervois.
The Pentagon awarded the company $15 million last
month to keep drilling in Idaho and study a potential domestic refinery. Also
in June, Finland’s government awarded Jervois a grant equal to roughly $13
million to expand a processing facility there.
“We believe in what we’re doing ideologically in
terms of protecting Western supply chains,” Jervois Chief Executive Bryce
Crocker said.
That ideology has its limits. Cobalt, which traded
for almost $40 a pound as recently as May 2022, has fallen to roughly $15 as
China’s reopening faltered, global output increased and automakers pushed to
cut batteries’ reliance on the metal.
Now, Crocker said Jervois plans to sit tight until
it can get prices that yield a sufficient payoff—$25 or above—even if it takes
years.
“We’re a company that has shareholders that expect an
economic return,” Crocker said, adding that the Idaho mine’s break-even price
is about $17.50 a pound. “We’re not a public policy instrument.”
Many investors have grown skeptical in recent
months. The firm’s shares have dropped 94% from their April 2022 high, to the
equivalent of 4 cents apiece, and are among the most heavily shorted in
Australia.
A $100 million bond issued in 2021 at a 12.5%
coupon is now trading on secondary markets for about 90 cents on the dollar. In
June, Jervois said it was raising $50 million to shore up its balance sheet as
it waits out the downturn.
Still, Jervois’s biggest shareholder, pension fund
AustralianSuper, backed the freeze of the Idaho site. Analysts agreed it makes
sense to keep cobalt in the ground until EVs eventually push up prices, even if
each battery uses less cobalt.
“You only get to mine it once,” said Luke Smith,
senior portfolio manager at the pension fund. The project is currently
estimated to produce cobalt for only seven years once operational.
More
America's Only Cobalt Mine Can't Get Off the Ground
(msn.com)
This weekend’s music
diversion. Another long forgotten Italian Maestro. Approx. 9 minutes.
Francesco
Maria Cattaneo: Concerto in D major for Violin, Bassoon, Strings & B.c
Francesco Maria Cattaneo: Concerto in D major for
Violin, Bassoon, Strings & B.c - YouTube
This weekend’s chess update. Approx. 9
minutes.
Meet
14 Year Old Ediz Gürel
Meet 14 Year Old Ediz Gürel - YouTube
This weekend’s interesting maths
update. Approx. 11 minutes.
The Map of Mathematics
The Map of Mathematics - YouTube
Last year we said, 'Things can't go on like this', and they didn't, they got worse.
Will Rogers.
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