Baltic Dry Index. 1584 +58 Brent Crude 92.88
Spot
Gold 1928 US
2 Year Yield 5.12 +0.04
The State is, and always has been, the great single enemy of the human race, its liberty, happiness, and progress.
Murray Rothbard.
The Fed came, they saw and they did nothing but dither, now on to today’s Bank of England, and their action or inaction (unlikely,) on their key interest rate.
With the UK’s latest CPI at 6.7 percent and the BOE key interest rate at only 5.25 percent, the inept BOE is still far behind the UK inflation curve.
The “good” news this morning, crude oil prices fell slightly. The “bad” news this morning, the US yield curve is still inverting.
Wall Street closes
lower after Fed holds rates steady, warns of higher for longer
By Stephen Culp September 21, 20231:30 AM GMT+1
Sept 20 (Reuters)
- U.S. stocks slumped on Wednesday after the U.S. Federal Reserve held key
interest rates unchanged as widely expected, and revised economic projections
higher with warnings that the battle against inflation was far from over.
All
three major U.S. stock indexes retreated in the wake of announcement, with interest rate sensitive megacap stocks Microsoft
Corp (MSFT.O), Apple Inc (AAPL.O) and Nvidia Corp (NVDA.O) pulling the Nasdaq down most.
The Fed's
announcement was accompanied by its Summary Economic Projections (SEP) and dot
plot, which sees an additional 25 basis point rate hike this year, peaking in
the 5.50%-5.75% range.
The SEP
projections also called for 50 basis points of rate cuts next year.
"It’s your
standard Fed day volatility," said Ryan Detrick, chief market strategist
at Carson Group in Omaha, Nebraska. "Yet it wasn’t really a curve-ball
event, because markets took things in stride."
"This day
has had a bull's eye on it all month and now we can move past it," Detrick
added.
The updated
projections see the Fed funds target rate edging down to 5.1% by the end of
next year, and to 3.9% by the end of 2025.
Since the Fed
began tightening in March, core inflation has cooled. But its slow descent
toward the central bank's 2% target has been slow and uneven.
The SEP forecasts
inflation to drop to 3.3% by year-end, and to approach the central bank's
average annual 2% target.
----The
Dow Jones Industrial Average (.DJI) fell 76.85 points, or 0.22%, to 34,440.88, the
S&P 500 (.SPX) lost 41.75 points,
or 0.94%, to 4,402.2 and the Nasdaq Composite (.IXIC) dropped 209.06 points, or 1.53%, to 13,469.13.
Among
the 11 major sectors of the S&P 500, interest rate sensitive communication
services (.SPLRCL) and technology (.SPLRCT) suffered the largest percentage losses.
More
Wall Street closes lower after Fed holds rates steady,
warns of higher for longer | Reuters
Fed
signals it will raise rates one more time this year before it ends hiking
campaign
PUBLISHED WED, SEP 20 2023 2:14
PM EDT
The Federal Reserve stayed put on
Wednesday but forecast it will raise interest rates one more time this year,
according to the central bank’s projections released Wednesday.
Projections released by the Fed showed the central
bank would hike rates to a median 5.6% by the end of 2023, up from the current
range between 5.25% and 5.5%. Twelve Fed officials at the meeting penciled in
the additional hike, while seven opposed it. There are two more policy meetings
left in the year.
The rate-setting Federal Open Market Committee
projected two rate cuts in 2024, which is two fewer than its forecast in June.
That would put the funds rate around 5.1%.
The change to fewer projected rate cuts next year
has more to do with Fed officials’ optimism about economic growth than concerns
about stubborn inflation, Fed Chair Jerome Powell said in a press conference.
“Broadly, stronger activity means we have to do
more with rates, and that’s what that meeting is telling you,” Powell said.
The dot plot also moved higher for 2025, with the
median outlook at 3.9%, compared to 3.4% previously.
Fed members also
updated their Summary of Economic Projections, revising their 2023 economic
growth expectations up sharply. The Committee now expects gross domestic
product to increase 2.1% this year, more than double the 1% estimate from June.
As for inflation, the
Fed expects that the core personal consumption expenditures price index would
slow to 3.7%, down 0.2 percentage points from June’s forecast.
Powell said the Fed
is not yet fully convinced that inflation is on the right path.
“We want to see
convincing evidence really that we have reached the appropriate level, and
we’re seeing progress and we welcome that,” Powell said. “We need to see more
progress before we’ll be willing to reach that conclusion.”
The projection for
the unemployment rate now stands at 3.8% for 2023, compared to 4.1% previously.
Fed signals it will raise rates one more time this
year (cnbc.com)
Asia markets fall after Fed holds rates, but signals higher rates for
longer
UPDATED
WED, SEP 20 2023 10:35 PM EDT
Asia-Pacific markets fell across the region
after the U.S.
Federal Reserve held its benchmark policy rate, but said it
will raise interest rates one more time this year, according to the central bank’s projections.
Projections showed the central
bank expects to hike
rates to a median of 5.6% by the end of 2023, up from the
current range between 5.25% and 5.5%.
The rate-setting Federal Open
Market Committee projected two rate cuts in 2024, which is two fewer than its
forecast in June. That would put the funds rate around 5.1%.
In Australia, the S&P/ASX 200 fell
1.25%, on pace to hit its lowest level this month.
Japan’s Nikkei 225 is
also slipped 1.15% as the Bank of Japan starts its two-day monetary policy
meeting, with the Topix down 0.78%.
South Korea’s Kospi was 1.3%
lower, leading losses in Asia, and the Kosdaq shed 1.84%.
Hong Kong’s Hang Seng index was
down 1.3%, while mainland Chinese markets are also down, with the CSI 300
losing 0.55%.
In Australia, the S&P/ASX 200 fell
1.25%, on pace to hit its lowest level this month.
Japan’s Nikkei 225 is
also slipped 1.15% as the Bank of Japan starts its two-day monetary policy
meeting, with the Topix down 0.78%.
South Korea’s Kospi was 1.3%
lower, leading losses in Asia, and the Kosdaq shed 1.84%.
Hong Kong’s Hang Seng index was
down 1.3%, while mainland Chinese markets are also down, with the CSI 300
losing 0.55%.
Asia stock markets today: Live updates (cnbc.com)
In US auto strike news, prepare for a wider
strike starting tomorrow.
UAW,
Detroit Three automakers in standoff as wider strike looms
By David Shepardson and Joseph White September 21, 20231:17 AM GMT+1
DETROIT, Sept 20
(Reuters) - Detroit's Big Three automakers and the United Auto Workers remained
far apart in labor negotiations on Wednesday, less than 48 hours before the
union's deadline to make significant progress or escalate a strike with new
work stoppages.
Talks continued between union representatives and company management on the sixth day of a coordinated walkout, a day after Ford (F.N) averted a strike by Canadian workers.
But there were
few signs of significant progress, with Detroit automakers increasingly
outspoken in rejecting the UAW's demands that include a 40% pay hike, a 32-hour
work week and an end to a tiered wage structure that pays newer workers less.
"The
fundamental reality is that the UAW's demands can be described in one word —
untenable," General Motors President Mark Reuss said in an opinion piece
published in the Detroit Free Press on Wednesday. "As the past has clearly
shown, nobody wins in a strike. We have delivered a record offer. That is a
fact."
The
UAW launched
a strike against Ford, GM (GM.N) and
Stellantis (STLAM.MI) last week, targeting one
U.S. assembly plant at each company. Those strikes have halted
production at plants in Michigan, Ohio and Missouri that produce the Ford
Bronco, Jeep Wrangler and Chevrolet Colorado, alongside other popular models.
Detroit-based LM Manufacturing, a joint venture between LAN Manufacturing and Magna (MG.TO), said Wednesday it temporarily furloughed 650 workers that produce seats for the Ford Bronco because of the impact of the assembly plant closure.
The UAW has said it will announce strikes against more U.S. plants on Friday if no serious progress is made in talks with automakers by 12 p.m. EDT (1600 GMT) on that day.
The biggest issues up for negotiation involve the level of pay hikes and benefits for workers. The three automakers have proposed 20% raises over the 4-1/2 year term of their proposed deals, though that is only half of what the UAW is demanding through 2027.
UAW
workers also want to end a tiered wage structure that they say has created a
large gap between newer and older employees, forcing some to work
two jobs to make ends meet.
Approximately
12,700 workers are on strike as a result of the UAW's coordinated
U.S. action, out of the union's 146,000 members who work at the Big Three.
"We're not
playing. We're serious about this," said Victor Holloway, 24, of Westland,
Michigan, who has worked at the striking Ford plant in Wayne, Michigan, since
2021.
GM said it was
idling its Fairfax, Kansas, car plant on Wednesday because of a shortage of
parts as a result of the nearby Missouri strike, a move that will result in
2,000 hourly workers being temporarily furloughed.
Analysts expect
plants that build more profitable pickup trucks such as Ford's F-150, GM's
Chevy Silverado and Stellantis' Ram to be the next strike targets if the
walkout continues.
More
UAW,
Detroit Three automakers in standoff as wider strike looms | Reuters
Finally, will tin mining restart in Cornwall, keeping alive a mining tradition going back more than 3,000+ years to the early Bronze Age?
But
with tin stocks rising in LME warehouses, does the world, although not
Cornwall, really need another tin mine?
Cornish Metals begins mining at newly discovered tin
target
September 20, 2023
A company working to revive production
at a tin mine in Cornwall has begun a new exploration drilling programme.
Canadian-headquartered mining company
Cornish Metals has started a fresh 14-hole / 9,000m dig on the southern
boundary of its South Crofty mine in Pool near Redruth.
The AIM-listed firm said it
was looking to test the geometry and the continuity of tin mineralisation on an
extension of the Great Flat Lode, a mineral-bearing body of underground rock.
At the start of this year,
Cornish Metals discovered new high-grade tin at the spot, known as the ‘Wide
Formation’, which is located under the southern slopes of Carn Brea south of
Camborne in west Cornwall.
The Great Flat Lode district
comprised a series of copper and tin mines that covered a strike length of
approximately five kilometres (3.1 miles).
The drill programme will test
an area measuring 2,500m north-east to south-west, and 500m north to south.
Richard Williams, chief
executive and director of Cornish Metals, said; "We are very excited to
start this drill programme, testing what we believe represents a new
district-scale target that is only 500m - 1,000m south of the Tuckingmill
Decline at South Crofty.
“It
reflects the opportunity to make new discoveries close to the South Crofty
underground infrastructure and, if the programme is successful, we believe
there is potential to not only grow the mineral resource base, but also to
potentially expand production rates if the project advances through to mine
development."
Cornwall was formerly one of
the world’s major tin-producing areas and Cornish Metals and is looking to
establish a primary production site for the critical metal for Europe and North
America, with around 75% of the tin mined today coming from China, Myanmar and
Indonesia.
South Crofty was closed in
1998, following more than 400 years of continuous production, and was acquired
by Cornish Metals in 2016.
Over the summer Cornish
Metals said it had successfully installed and
commissioned two submersible pumps at
the mine, marking the first time that water has been pumped out of the mine
since it was closed.
Last
year the company raised £40.5m to fund the construction of the mine water treatment
plant, dewatering and a feasibility study. The firm previously estimated
dewatering would take 18 months to complete, through to the end of 2024, with a
target of recommending tin production at the mine in 2026.
Cornish Metals begins mining at newly discovered tin
target (msn.com)
The natural tendency of government, once in charge of money, is to inflate and to destroy the value of the currency.
Murray Rothbard.
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.
It
is no crime to be ignorant of economics, which is, after all, a specialized
discipline and one that most people consider to be a ‘dismal science.’ But it
is totally irresponsible to have a loud and vociferous opinion on economic
subjects while remaining in this state of ignorance.
Murray Rothbard.
Surprise fall in inflation puts Bank of England
interest rate decision on a knife edge
September 20, 2023
Inflation fell to 6.7pc in
August, defying expectations of an increase and leaving the Bank of England’s
interest rate decision on a knife edge.
Economists had anticipated an
acceleration in the rate of price rises from July’s 6.8pc to 7.1pc as petrol and diesel prices jumped in
August. But a slowdown in food
price inflation and a fall in the price of hotel rooms meant overall consumer
prices were more restrained.
Financial markets now see a
roughly 50-50 chance the Bank of England will hold rates at 5.25pc at its next
policy meeting on Thursday.
Prior to the inflation data,
traders and economists had been almost certain that Andrew Bailey, the Bank’s
Governor, and his colleagues on the Monetary Policy Committee would raise the
base rate to 5.5pc in a renewed effort to get inflation down to their 2pc
target.
George Buckley, economist at
Nomura, said the surprise fall in inflation added to evidence the economy was
slowing and meant the MPC may be able to stop raising rates.
He said: “Might a huge
downside miss stop the Bank of England out from another hike? This is now a
very real risk indeed, especially with pretty much all the data we’ve seen
between the August and September MPC meetings being weaker.”
Investors
also now believe rates could fall sooner than previously expected. Market
prices suggest rate cuts could come potentially as early as March 2024. Cuts
were previously forecast for May 2024 at the earliest.
The pound fell sharply against the
dollar after the latest inflation figures were published by the Office for
National Statistics. Sterling fell 0.4pc against the dollar to $1.2341.
As well as a fall in headline
inflation, indicators of underlying price pressures in the economy also
dropped.
Core inflation, which excludes
volatile food and energy prices including petrol, slowed from 6.9pc to 6.2pc.
Services inflation, which the Bank of
England watches closely for signs of wage increases driving price rises, also
decelerated from 7.4pc to 6.8pc.
More
Surprise fall in inflation puts Bank of England
interest rate decision on a knife edge (msn.com)
Auto strike may spit
fuel on US inflation flame
By Jamie McGeever September 21, 202312:30 AM GMT+1
ORLANDO,
Florida, Sept 20 (Reuters) - With oil
prices at their highest this year and
eyeing $100 a barrel again, the last thing U.S. consumers, businesses and
policymakers need is another inflationary headache.
The
fledgling auto
workers strike, if it lasts and broadens out,
could be just that.
Most economists
reasonably focus on the temporary blow to U.S. economic output or payrolls from
a lengthy strike across the sector. And the economy could contract almost one
full percentage point in the fourth quarter, according to Morgan Stanley
economists, which would cut their full-year 2023 GDP growth call to 1.4% from
1.7%.
But the potential
effect on new and used car prices, at a time when inventories remain
historically low, combined with a significant wage settlement, could also move
the inflation dial.
This is a
worst-case scenario for the Fed. Policymakers and market participants won't
need reminding of the role supply shocks and shortages of chips, parts and
other inputs had in driving inflation to the highest in over 40 years after the
pandemic.
Soaring used car
prices had an outsized impact on U.S. inflation, in particular. That dynamic
has reversed over the last year, but disinflationary base effects are fading
and could quickly flip to being inflationary in the event of a damaging strike.
Michael Feroli,
chief U.S. economist at JP Morgan, is wary. A prolonged nationwide strike could
put already-low inventory under heavy strain, posing "significant"
upside risk to auto prices.
----The
transportation group accounts for around 16% of the U.S. Consumer Price Index,
and around half of that is the new and used motor vehicles index.
The annual rate
of used cars and trucks price inflation reached a record high 45% in June 2021,
according to one measure from the Bureau of Labor Statistics, while Cox
Automotive's Manheim index of used vehicle prices rose at a peak annual rate of
54% in April that year.
----Fewer than
13,000 of the UAW's 150,000-strong workforce are involved in the strike over
pay and benefits, which is currently centered on one U.S. assembly plant at
each company.
If no agreement
is reached, that could quickly spread in numbers and locations. Detroit's Big
Three accounted for 43% of new cars sold in the U.S. last year, according to
Cox Automotive, so the disruption is potentially huge.
JP Morgan
analysts also warn that a significant wage settlement - the UAW is looking for
a 40% increase over four years - will present an upside risk for inflation
across the sector as some of that will be passed onto consumers.
More
Auto strike may spit fuel on US inflation flame |
Reuters
Recession-hit Germany is
facing a flurry of global headwinds, Goldman Sachs says
September
19, 2023
Germany finds itself at a
crossroads of global issues as it deals with an economic contraction, according
to Peter Oppenheimer, chief global equity strategist and head of macro research
EMEA at Goldman Sachs.
"The predicament that
the economy is facing at the moment is really down to a number of
factors," Oppenheimer told CNBC Tuesday, with challenges in the manufacturing
sector, a disappointing China reopening boost and higher energy costs contributing to the recession in Europe's largest
economy.
"It's … not a deep recession but
it's obviously been more hit by obvious headwinds," Oppenheimer said.
The comments reflect the latest
projection by the Bundesbank, which estimated Monday that the German economy is
likely to shrink this quarter thanks to slow private consumption and industry
stuttering.
Germany
officially fell into a technical recession in the first quarter of the year as GDP growth was
revised from zero to -0.3%.
Bleak
forecasts for the German economy have prompted discussion as to whether the
country is once again the "sick man of Europe," a
moniker that was first used to describe Germany in 1998 as the country
navigated the costly challenges of a post-reunification economy.
But there are positives to be found
in the German economy, Oppenheimer told CNBC.
"The equity market has been
holding up quite well and there are some bright spots, I think, in terms of
activity in the economy," he said, highlighting "opportunities"
in Germany's small and mid-sized companies, known as the Mittelstand.
Germany's DAX index will see
"fat and flat" returns going forward, Goldman Sachs predicted, in
line with the rest of Europe.
"Over the short term, we could
see a rebound in the DAX along with a broader range of China-related
assets," the bank said in a research note, but there is a risk that
Chinese trade doesn't provide as much of an economic boost as expected.
"Going forward, any rise in
geopolitical tensions or curtailment in world trade would hinder the German
recovery," the note said.
Recession-hit Germany is facing a flurry of global headwinds, Goldman Sachs says (msn.com)
Covid-19 Corner
This
section will continue until it becomes unneeded.
Viral RNA Can
Persist for 2 Years After COVID-19: Preprint Study
A
recent preprint study shows why some people never return to normal after
experiencing COVID-19 but instead develop new medical conditions or long COVID.
9/19/2023
Updated: 9/19/2023
A new study may explain why
some people who get COVID-19 never return to normal and instead experience new
medical conditions like cardiovascular disease, clotting dysfunction,
activation of latent viruses, diabetes mellitus, or what’s known as “long
COVID” after SARS-CoV-2 infection.
In a recent preprint study published on medRxiv,
researchers conducted the first positron emission tomography (PET) imaging
study of T cell activation in individuals who previously recovered from
COVID-19 and found that SARS-CoV-2 infection may result in persistent T cell activation
in a variety of body tissues for years following initial symptoms.
Even in clinically mild
cases of COVID-19, this phenomenon could explain the systemic changes observed
in the immune system and in those with long COVID symptoms.
However, most of the
participants were vaccinated and the study didn't investigate the link between
the existence of viral RNA and vaccination.
SARS-CoV-2
RNA Found in Study Participants
To carry out the study, researchers conducted whole-body
PET scans of 24 participants who were previously infected with SARS-CoV-2 and
recovered from acute infection at time points ranging from 27 to 910 days
following COVID-19 symptom onset.
A PET scan is an imaging
test that uses a radioactive drug called a tracer to assess the metabolic or
biochemical function of tissues and organs and can reveal both normal and
abnormal metabolic activity. The tracer is usually injected into the hand or vein
in the arm and collects in areas of the body with higher levels of metabolic or
biochemical activity, which can reveal the location of the disease.
Using a novel
radiopharmaceutical agent that detects specific molecules associated with a
type of white blood cell called T lymphocytes, researchers found uptake of the
tracer was significantly higher in post-acute COVID-19 participants compared to
pre-pandemic controls in the brain stem, spinal cord, bone marrow,
nasopharyngeal and hilar lymphoid tissue, cardiopulmonary tissues, and gut
wall. Among males and females, male participants tended to have higher uptake
in the pharyngeal tonsils, rectal wall, and hilar lymphoid tissue compared to
female participants.
More
Viral RNA Can Persist for 2 Years After COVID-19: Preprint Study | The Epoch Times
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.
China exported no
germanium, gallium in Aug due to export curbs
September 20, 2023 5:13 AM GMT+1
BEIJING, Sept 20 (Reuters) - China's
exports of germanium and gallium products in August plunged to zero，customs data
showed on Wednesday, due to new export controls on the two chipmaking metals.
Beijing exported no wrought germanium
products last month, compared to 8.63 metric tons in July when volumes more
than doubled from June as overseas buyers rushed to lock in supply ahead of the
curbs.
There were also no exports of wrought
gallium products in August. In July, exports were 5.15 tons and 7.67 tons in
the same month in 2022, the data showed.
In July, China announced
restrictions on the export of eight gallium and six germanium products
starting Aug. 1, the latest salvo in an escalating war between Beijing and
Washington over access to materials used in making high-tech microchips.
Under the new rules, exporters of
germanium and gallium products now need to obtain an export licence for
dual-use items and technologies, meaning those with potential military and
civilian applications.
Permit applications take around 45
working days to process, said a Chinese germanium trader and a germanium
producer, who declined to be named because of the sensitivity of the matter.
"We did not ship any volumes
abroad last month as we are still waiting for a permit," the trader added.
Chinese spot gallium prices slid last
month as stocks piled up in the domestic market due to the export controls and
subdued demand.
The spot price of gallium metal fell by
9% on the month to 1,655 yuan per kg on Aug. 31, according to data from
Shanghai Metals Market (SMM).
The spot price of germanium ingot ,
however, climbed by 1% during the month to 9,700 yuan per kg at the end of
August, SMM data showed, helped by tightening supply.
China's exports of wrought germanium
totaled 36.45 metric tons in the first eight months of 2023, up 58% on the year
while shipments of wrought gallium fell 58% on the year to 22.72 tons over the
January-August period.
China exported no germanium, gallium in Aug due to
export curbs | Reuters
States
have always needed intellectuals to con the public into believing that its rule
is wise, good, and inevitable.
Murray Rothbard.
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