Tuesday, 26 September 2023

Moody’s Warns. “Jinx Month” Looms. Merk’s Molnupiravir Questions.

Baltic Dry Index. 1614 +21             Brent Crude 92.89

Spot Gold 1915                   US 2 Year Yield 5.09 -0.01

“What me worry?”

Mad Magazine

 

Despite a Moody’s warning on the USA credit rating, US stock casinos got to work trying desperately to dress up stocks and stock indexes ahead of the all important, month-end and end of quarter valuations.

In the Asian and European stock casinos, however, no one seems to have got the dress up stocks memo. Will China’s upcoming Golden Week save Asian markets?

Still, with “crash month” October fast coming up, the perma-bulls say buy more in the coming crash.  This time it’s different, apparently.

Though October is known as the “jinx month” because of the 1929 and 1987 crashes, it also has a reputation as a “bear killer,” according to the “Stock Trader’s Almanac.”

“While October tends to be among the more volatile months of the year, it’s also the month where we usually see great buying opportunities, because it’s just before November and December, which are seasonally strong periods of the year for the markets,” said Mary Ann Bartels, chief investment strategist at Sanctuary Wealth.”

Asia markets largely fall despite Wall Street rally

UPDATED MON, SEP 25 2023 9:53 PM EDT

Asia-Pacific markets fell across the board despite a broad rebound on Wall Street and Moody’s warning that a U.S. government shutdown would be “credit negative” for the world’s largest economy.

Japan’s Nikkei 225 slipped 0.69%, reversing Monday’s gains, while the Topix was also down 0.23%. The country’s wholesale inflation for its services sector climbed 2.1% year on year, its fastest rate of increase since September 2022.

South Korea’ Kospi led losses in Asia and was trading 1.13% lower, and the Kosdaq fell 0.52%

In Australia, the S&P/ASX 200 also shed 0.42% as traders look toward its key consumer price index reading on Wednesday.

Hong Kong’s Hang Seng index slid 0.88%, while mainland Chinese markets were marginally higher, with the CSI 300 inching up 0.17%

Overnight in the U.S., all three major indexes rebounded, and snapped four-day losing streaks.

The S&P500 rose 0.4%, while the Nasdaq Composite closed higher by 0.45%. The Dow Jones Industrial Average added 0.13%

Asia stock markets today: live updates (cnbc.com)

European markets head for lower open as negative momentum continues

UPDATED TUE, SEP 26 2023 12:32 AM EDT

European markets are heading for a lower open as negative momentum continues in the region.

Investors are grappling with the prospect of a prolonged period of higher interest rates, elevated inflation and economic uncertainty.

Regional markets closed lower Monday with major bourses and almost all sectors in negative territory. Germany’s 10-year bond yield will be closely watched Tuesday after it hit its highest point since 2011 Monday, according to Reuters, as euro zone yields more widely also increased.

Investors are looking ahead to inflation data set for release this week, which will influence the European Central Bank’s next move.

European markets live updates: stocks, data and earnings (cnbc.com)

Stock futures are little changed after S&P 500, Nasdaq end four-day string of losses: Live updates

UPDATED MON, SEP 25 2023 8:02 PM EDT

Stock futures hovered near the flat line Monday evening.

Futures tied to the Dow Jones Industrial Average slipped by 25 points, or 0.07%. S&P 500 futures dropped 0.05%, while Nasdaq 100 futures lost 0.06%.

Stocks largely whipsawed during regular trading hours, with all three major indexes ending the day with modest gains. The S&P 500 added 0.4%, while the Nasdaq Composite advanced 0.45%. The 30-stock Dow inched higher by 0.13%. All three of the indexes snapped four-day losing streaks.

Nevertheless, stocks are on pace to end September lower, a month that is already known as being historically weak for equities. Last week’s Federal Reserve policy meeting also provided investors with guidance that forecast higher-for-longer interest rates and fewer cuts in 2024 than previously expected.

Investors will also look for progress in Washington as lawmakers hope to avert a government shutdown that could take place as early as Oct. 1 if Congress doesn’t agree on a spending bill.

Upcoming seasonal market tumult could present a window for investors. Though October is known as the “jinx month” because of the 1929 and 1987 crashes, it also has a reputation as a “bear killer,” according to the “Stock Trader’s Almanac.”

“While October tends to be among the more volatile months of the year, it’s also the month where we usually see great buying opportunities, because it’s just before November and December, which are seasonally strong periods of the year for the markets,” said Mary Ann Bartels, chief investment strategist at Sanctuary Wealth.

On the economic data front, investors will keep an eye out Tuesday for August’s final building permits report before the bell, as well as new home sales data for last month later that morning. The Conference Board’s consumer confidence report for September is also due.

Stock market today: Live updates (cnbc.com)

In other news, China. The good and the bad.

China’s outbound travel surges ahead of ‘Golden Week’ holidays

Outbound travel from China is surging ahead of the first “Golden Week” holiday period since the country has allowed international travel to resume and even as China’s economic growth has slowed.

Bookings for popular foreign destinations such as Singapore, Australia and Thailand have increased 20 times compared to the same holiday period last year, travel provider Trip.com said in a press release Monday. Golden Week, which begins Oct. 1 this year, marks the annual weeklong period that includes the Mid-Autumn Festival and National Day in China.

More than in previous years, travelers are seeking out “unique and immersive experiences,” Trip.com CEO Jane Sun said in the press release. Data shows an increase in purchases of private group tours as well as bookings for less-popular destination such as Sri Lanka and Uzbekistan, the travel provider said.

“We’ve observed a significant shift towards high-quality services and in-depth travel encounters,” Sun said in the release. “Travelers are not just exploring popular destinations but also seeking authentic and off-the-beaten-path experiences.”

The surge in bookings comes after China lifted Covid-19 travel restrictions in December and ended a ban on group tours to a list of more than 70 countries in August. The U.K. and South Korea, two countries that Trip.com said are seeing more travel from China, were included on the list.

Although more than six months have passed since China fully reopened its borders, experts have not observed a widely expected boom in travel out of the country. Instead, many residents chose to stay home because they preferred to or because they were confronted with difficult or costly options for traveling internationally.

At the same time, domestic travel has recovered. Trip.com said bookings for travel within China are up four times compared with last year’s Golden Week, with residents opting to travel between different provinces for longer periods of time. Northwest China’s autumnal tours and South China’s comfortable climate have made those destinations particularly popular, Trip.com said.

Golden Week typically spurs hundreds of millions of people in China to travel.

More

China outbound travel surges ahead of 'Golden Week' holidays (cnbc.com)

China Evergrande shares tumble for second day after unit misses bond payment

September 26, 20235:59 AM GMT+1

HONG KONG, Sept 26 (Reuters) - China Evergrande Group (3333.HK) shares slid for a second consecutive session on Tuesday, dropping as much as 8% after a unit of the embattled property developer missed an onshore bond repayment.

Evergrande's main domestic unit, Hengda Real Estate Group, said in a Shenzhen stock exchange filing late on Monday it had failed to pay the principal and interest for a 4 billion yuan ($547 million) bond that was due by Sept. 25.

The news comes after Evergrande said on the weekend that it was unable to issue new debt due to an ongoing investigation into Hengda, sending Evergrande's share price plunging 22% on Monday.

Hengda said it will actively negotiate with bondholders in a bid to reach a solution as soon as possible while working to resolve the debt risks and to safeguard creditors' rights and interests.

The missed payment is the latest setback to hit Evergrande, which has lurched from one crisis to another since its financial woes became public in 2021 and it defaulted on its offshore debt obligations later that year.

Evergrande has been seeking creditors' approval for its proposals to restructure offshore debt worth $31.7 billion that includes bonds, collateral, and repurchase obligations.

Under the plan unveiled in March this year, Evergrande proposed various options to offshore creditors, including swapping some of their debt holdings into new notes with maturities of 10 to 12 years.

China Evergrande shares tumble for second day after unit misses bond payment | 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.  

The Dangerous Myth of Soft Landing

9/25/2023  Updated:  9/25/2023

If we search the news from 2007, we can find plenty of headlines with the International Monetary Fund and the Federal Reserve predicting a soft landing. No one seemed to worry about rising imbalances. The main reason is that market participants and economists like to believe that the central bank will manage the economy as if it were a car. The current optimism about the U.S. economy reminds us of the same sentiment in 2007.

Many readers will argue that this time is different, and we will not see a 2008-style crisis, and they are right. No crisis is the same as the previous one. However, the main pushback I get when discussing the risks of a recession is that the Fed will inject all the liquidity that may be needed. Quantitative easing is seen as the antidote that will prevent a crisis. However, if the only antidote to prevent a 2008-style contraction is monetary easing, then the risk of stagflation is even higher. So, the good news for those fearing a recession is stagflation.

I already mentioned a few times that we are in the middle of a private sector recession disguised by insane government spending. The latest Purchasing Managers Index (PMI) readings confirm it. S&P Global mentions that “further loss of service sector momentum weighs on overall U.S. economic performance” and “manufacturing firms continued to register a decline in production,” with service sector firms recording the slowest rise in business activity in the current eight-month sequence of growth. U.S. consumer confidence declined in August. The Conference Board consumer confidence index slumped to 106.1 in August from a revised 114 in July. Consensus expected 116.

Even more concerning is to admit that the services sector and consumption are held by debt increases. In July 2023, the personal savings rate was 3.5 percent, well below the pre-pandemic average of 6.9 percent. In the second quarter of 2023, total credit card debt rose above $1 trillion for the first time ever, reaching a record total household debt of $17 trillion, according to the Federal Reserve Bank of New York.

Despite elevated inflation, the U.S. government is spending more than ever, which means consuming more units of issued currency. Tim Congdon at the Institute of International Monetary Research shows how the inflationary burst was directly linked to broad money growth due to rising government deficit spending. Other studies by Claudio Borio at the Bank of International Settlements confirm it. Mr. Congdon highlights an exceedingly worrying figure that endangers trust in the U.S. currency and the sustainability of public finances. In the year to July 2023, the U.S. deficit total ed $2.474 trillion. With nominal GDP in the same period of about $27 trillion, the deficit was over 9 percent of GDP.

More

The Dangerous Myth of Soft Landing | The Epoch Times

Retail sales dip again in September but signs of optimism as inflation eases

MONDAY 25 SEPTEMBER 2023 11:52 AM

Retail sales fell for the fifth consecutive month in September but at a much slower pace than the month before, new data shows.

The Confederation of British Industry’s (CBI) Distributive Trades Survey showed 20 per cent of retailers said sales volumes in September were up on the same period last year, against 34 per cent who said they were down – giving a balance of minus 14 per cent. 

This was better than last month’s predictions for September, which showed a balance of -21 per cent expecting a fall, and the recorded fall in August of -44 per cent.

Despite the drop, sales volumes were still seen as slightly above average for the time of year. Retailers also expect the downturn to moderate further next month, with a balance of -8 per cent expecting a decline in sales.

Martin Sartorius, CBI principal economist, said: “There are some elements of optimism in our survey with retailers expecting the recent fall in sales to continue to ease.

“Last week’s lower than expected inflation figures, which in turn will ease pressure on household budgets, will also give retailers some hope going into the crucial autumn and winter trading period,” he continued.

The survey comes a week after new data showed consumer spending was remaining resilient in the face of rising interest rates. Retail sales volumes rose by 0.4 per cent in August 2023, partially recovering from a fall of 1.1 per cent  in July 2023.

The increase was driven by non-food sales, which grew by 0.6 per cent in August 2023, following a fall of 1.2 per cent in July 2023 thanks to unseasonably wet weather.

Inflation has also come down faster than expected, with it falling to 6.7 per cent in August. With wage growth remaining strong, this will improve consumer spending power.

Retail sales dip in September but at much slower pace than August (cityam.com)

UK growth set to slow as economy experiences ‘renewed signs of stress’, KPMG warns

MONDAY 25 SEPTEMBER 2023 6:00 AM

The UK economy will “struggle to keep its head above water” for the remainder of this year as it is experiencing “renewed signs of stress,” KPMG warned today. 

The Big Four accountancy firm said that while worries about a deep recession have largely gone away, the economy was not out of the woods yet. 

Over the course of this year, it said that high interest rates, uncertainty and low productivity will likely act as a drag on economic growth. 

“This will likely weigh on investment decisions, sterling, and UK-based assets,” the firm said in its latest report on the outlook for the UK economy.

It said that the effect of higher interest rates is feeding through to investment intentions, transaction volumes and corporate insolvencies, and the latest economic data signals a slowdown in economic activity. 

Last week, S&P Global’s Purchasing Managers’ Index (PMI) for the UK economy, which assesses the health of an economy’s services and manufacturing sector, came in at 46.8 for September – far below the 50 reading that indicates flat growth. Falling from a reading of 48.6 last month, the downturn was the steepest since the financial crisis when excluding the pandemic era, increasing the chances of a recession. 

KPMG added that the outlook for consumption also remains weak. 

“Discretionary spending is down and the financial cushion in the form of excess savings has been used up,” the firm said. 

KPMG said it expects growth to slow, forecasting 0.4 per cent for this year and 0.3 per cent in 2024. 

It said there were some “bright spots”, including the pickup in consumer confidence, suggesting “cautious optimism”, though it remains well below pre-pandemic levels. 

The steady rise in oil prices and a possible slowdown in China could also drag on global growth, putting further potential strain on the UK economy going forward, the firm added. 

But there is still a huge amount of uncertainty hanging over the future direction of monetary and fiscal policy. 

The Bank of England’s Monetary Policy Committee voted to hold interest rates at 5.25 per cent last week following a surprise dip in inflation for August, which fell from 6.8 to 6.7 per cent.  

While many economists think interest rates are now likely to be at their peak, Yael Selfin, chief economist at KPMG UK, said that uncertainty remains regarding their future path”. 

“This coupled with uncertainty around future plans for fiscal policy as the UK heads into an election year, may see businesses choose to further delay investment,” she said. 

More

UK growth set to slow as economy experiences 'renewed signs of stress', KPMG warns (cityam.com)


Covid-19 Corner

This section will continue until it becomes unneeded.

Hmm. I wonder what they’re hiding and why?

CDC Refuses to Release Updated Information on Post-COVID Vaccination Heart Inflammation

'When appropriate, the updated safety data will be published,' a CDC spokesman said.

9/23/2023  Updated:  9/24/2023

The U.S. Centers for Disease Control and Prevention (CDC) is refusing to release updated information on reported cases of myocarditis and pericarditis following COVID-19 vaccination.

COVID-19 vaccines can cause the inflammatory conditions, the CDC previously confirmed.

The agency has regularly conveyed the number of post-vaccination myocarditis and pericarditis cases to the Vaccine Adverse Event Reporting System (VAERS), which it helps manage, as it has consulted with its advisers on updates to the vaccines.

But during a meeting on Sept. 12, the CDC didn't mention VAERS data.

Asked for the information, a CDC spokesman pointed to a CDC study that covers data only through Oct. 23, 2022.

That study identified nine reports of myocarditis or pericarditis following vaccination with one of the bivalent COVID-19 vaccines, which were introduced in September 2022. Seven of the reports were verified by medical review.

Asked for more current data, the spokesman acknowledged that the agency has it but isn't making it public.

"When appropriate, the updated safety data will be published," the spokesman told The Epoch Times in an email.

"The CDC has acknowledged that heart inflammation is a complication of mRNA COVID-19 shots and, yet, the only published data released by CDC officials about that complication is a seven-week study that ended on Oct. 23, 2022," Barbara Loe Fisher, co-founder and president of the National Vaccine Information Center, said in an email to The Epoch Times.

"Where is more specific myocarditis/pericarditis data related to bivalent COVID shots for the past 10 months?"

The mRNA shots are made by Pfizer and Moderna. Novavax's updated shot, which uses different technology, hasn't yet been authorized by the U.S. Food and Drug Administration (FDA).

"I am tired of the CDC and FDA deciding what information the public needs and doesn’t need. This is precisely the information that parents need to have especially when there are still schools and activities mandating these shots. This is evil playing out right before our eyes," Kim Witczak, a drug safety advocate who runs the nonprofit Woodymatters, told The Epoch Times in an email.

"The CDC’s response of 'when appropriate, the updated safety data will be published' is unacceptable and they wonder why there is vaccine hesitancy and lack of trust in public health officials."

Merck Covid drug linked to virus mutations that can spread between people, new study says

A new study released Monday said Merck’s widely used antiviral Covid pill can cause mutations in the virus that occasionally spread to other people, raising questions about whether the drug has the potential to accelerate Covid’s evolution. 

The findings may increase scrutiny about the usefulness of the treatment, molnupiravir, which was one of the first Covid drugs available to doctors worldwide during the pandemic.

Molnupiravir works by causing mutations in Covid’s genetic information, which weakens or destroys the virus and reduces the amount of Covid in the body. However, the study published Monday in the scientific journal Nature found that Covid can sometimes survive treatment with molnupiravir, leading to mutated versions of the virus that have been found to spread to other patients. 

Researchers in the U.S. and U.K. specifically analyzed 15 million Covid genomes to see which mutations had occurred and when. They found that mutations increased in 2022 after molnupiravir was introduced in many countries. 

There is no evidence that molnupiravir, sold under the brand name Lagevrio, has produced more transmissible or severe variants of Covid, according to the study. 

But the findings are important for regulators who continue to assess the risks and benefits of molnupiravir, wrote Theo Sanderson, the lead author of the study and a researcher at the Francis Crick Institute in London, in a post on X, formerly Twitter.

A spokesperson for Merck pushed back on the new study, claiming the researchers assumed that the mutations they analyzed were associated with molnupiravir-treated patients “without documented evidence of that transmission.”

More

Merck Covid drug linked to virus mutations, study says (cnbc.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.

Redflow lands biggest project for flow battery technology, with stack of US funding

 25 September 2023

Australian flow battery innovator Redflow has landed its biggest contract yet, with a children’s hospital in California, that is being funded as part of a $US325 million ($A505.9 million) US federal government energy storage fund initiative.

The flow battery maker will provide 34.4 megawatt hours (MWh) of zinc-bromine flow batteries, for delivery in late 2025, for a project allowing the Valley Children’s Hospital in Madera, California to switch from diesel generators. 

It is Redflow’s biggest project to date.

The hospital is the Central Valley’s only full-service paediatric facility and regularly faces extreme heat conditions, drought, coastal smog, and poor air quality.

The system will need to be able to maintain critical hospital operations during utility outages or shortages, but if an earthquake happens it will need to maintain facility operations for at least 18 hours after a seismic event.

The project is being developed by Faraday Microgrids. 

“Our batteries are ideally suited for daily use in the Central Valley’s extreme heat,” says Redflow CEO and managing director Tim Harris. 

“We are delighted to see another project from our fast-growing pipeline of opportunities progress forward and ultimately support another community with its transition to renewable energy.”

The final sum the project will receive is yet to be determined, says Nick Carrigan, a strategic advisor with Redflow.

The US Department of Energy (DOE), which will be the main funder of the project via its LDES Funding Opportunity program alongside the hospital and the California Energy Commission (CEC), wants a final figure before allocating funding.

More

Redflow lands biggest project for flow battery technology, with stack of US funding | RenewEconomy

“The world is a place that’s gone from being flat to round to crooked.”

Mad Magazine.

 

 

 

 

 

 

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