Thursday, 28 September 2023

Oil Soars. Is Inflation Back? Costco Selling Gold Bars.

Baltic Dry Index. 1752 +58              Brent Crude 97.38

Spot Gold 1875                 US 2 Year Yield 5.10 +0.06

William the Bastard, aka William the Conqueror,  landed [at Pevensey in Sussex] on September 28, 1066, and defeated Harold's forces at the Battle of Hastings on October 14 and was crowned on Christmas Day. He spent the latter part of his reign quashing dissent from the English nobility. William's conquest resulted in the introduction of Norman landowners, reformations to the court and government, shifting the course of English history.

William the Conqueror (King of England) - On This Day

As we approach month-end, quarter-end, week three of the US auto strike and a possible US government shutdown starting Sunday, the crude oil price is heading again for 100 dollars a barrel, bringing with it rising fears of a new bout of global inflation ahead.

In the stock casinos, this is very bad news ahead of “crash month” October arriving.

But, in America physical gold bullion is making something of a comeback. Forget dodgy cryptocurrencies with no intrinsic value and a band of crooks, Costco members can now buy 1 oz. physical gold bullion bars online.

 

Asia markets mixed as oil and Treasury yields climb, Evergrande shares suspended

UPDATED THU, SEP 28 2023 12:45 AM EDT

Asia-Pacific markets fell after notching some gains on Wednesday as an uptick in Treasury yields and oil prices dented investor sentiment on Wall Street.

The benchmark 10-year U.S. Treasury yield hit its highest levels since 2007 and U.S. crude futures popped more than 3% to settle at $93.68 per barrel.

Hong Kong’s Hang Seng index slipped 0.57%, after the exchange announced that shares of embattled Chinese real estate firm Evergrande have been suspended.

Mainland Chinese stocks were slightly up on Thursday, with the CSI 300 rising 0.21%.

Japan’s Nikkei 225 slipped 0.82%, while the Topix saw a smaller loss of 0.75% on Thursday morning.

Australia’s S&P/ASX 200 rebounded from Wednesday’s losses and gained 0.26%.

South Korea’s markets are closed for a public holiday.

Overnight in the U.S., all three major indexes finished the day mixed, with the Dow Jones Industrial Average reversing gains and ending down 0.2%. The S&P 500 edged up 0.02%, while the Nasdaq Composite added 0.22%.

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

Evergrande shares halted as concerns mount about developer's prospect

September 28, 20234:59 AM GMT+1

HONG KONG, Sept 28 (Reuters) - Trading in shares of China Evergrande Group (3333.HK) was suspended on Thursday after a report that its chairman had been placed under police watch, as concerns mounted about the cash-strapped developer's future amid growing liquidation risk.

 

With more than $300 billion in liabilities - roughly the size of Finland's gross domestic product - Evergrande has become the poster child of a debt crisis in China's property sector, which contributes to roughly a quarter of the economy.

Trading in the shares of Evergrande and two of its units were suspended on Thursday, a day after Bloomberg reported that its Chairman Hui Ka Yan was taken away by police this month and was being monitored at a designated location.

The report said it was not clear why Hui was under surveillance and Reuters could not immediately verify the news. Evergrande and the police authorities have not responded to Reuters requests for comment.

Evergrande has been working to get creditors' approval for restructuring its offshore debt. The process got complicated this week after Evergrande said it was unable to issue new debt due to an investigation into its main China unit.

The offshore debt restructuring plan now looks set to falter and the risks of the company being liquidated are rising, some analysts said.

Reuters reported on Tuesday that a major Evergrande offshore creditor group was planning to join a liquidation court petition filed against the developer if it does not submit a new debt revamp plan by the end of October.

"It is unclear why Hui is under police surveillance, but it may signal certain negotiations demanded from the government. The latest development has disrupted the hope of restructuring," said Gary Ng, Asia Pacific senior economist at Natixis.

"No developer is too big to fail in China, and therefore it is hard to imagine a full bail-out. Still, when it comes to stability, it is possible to see more government influence in different ways," Ng said.

The company shares ended down 19% on Wednesday in the Hong Kong market, taking their losses to 81% since the resumption of trading in late August after a 17-month suspension.

More

Evergrande shares halted as concerns mount about developer's prospect | Reuters

Oil prices surge to highest level in more than a year

Oil prices surged to their highest level in over a year during Asian trading hours, after crude stocks at a key storage hub fell to their lowest since July last year.

Crude inventories in Cushing, Oklahoma fell to 22 million barrels in the fourth week of September — hovering close to the operational minimum, according to data from the U.S. Energy Information Administration (EIA). That’s a drop of 943,000 barrels compared to the prior week.

The U.S. West Texas Intermediate futures touched $95.03 per barrel during Asia trading hours, marking the highest since August 2022. It was last trading at $94.61 per barrel. Global benchmark Brent rose 1.05% to $97.56 a barrel.

“Today’s price action seems to be Cushing driven, as it reaches a 22 million bbl low, the lowest level since July 2022,” Bart Melek, managing director of TD Securities, told CNBC.

If the inventories continue to dip below those levels, it’s going to be “rough” getting crude out into the market, Melek said on CNBC’s “Street Signs Asia.”

He forecasts that oil prices will continue to remain at “high level” for the rest of the year, with an upside risk if global oil cartel OPEC+ continues to keep supplies tight.

The global oil markets are looking at a “pretty robust deficit” on top of an already significant shortfall this quarter, Malek said, citing the oil production cuts implemented by OPEC and its allies.

In September, OPEC+ kingpin Saudi Arabia extended its 1 million barrel per day voluntary crude oil production cut until the end of the year. It brings Saudi’s crude output to near 9 million barrels per day.

Russia has also pledged to extend its 300,000 barrels per day export reduction until the end of December.

Malek also highlighted how refinery throughputs will see a decline in the coming months as refinery maintenance season approaches. The refinery crude throughput refers to the volume of crude oil a refinery can produce during a given period of time.

More

Crude oil: WTI, Brent prices surge to highest level in more than a year (cnbc.com)

Harsh reality of 'higher-for-longer' rates looms over US stocks

By Lewis KrauskopfDavid Randall and Carolina Mandl

NEW YORK, Sept 27 (Reuters) - As the Federal Reserve’s hawkish stance boosts Treasury yields and slams stocks, some investors are preparing for more pain ahead.

For most of the year, equity investors brushed off a rise in Treasury yields as a by-product of better-than-expected economic growth, despite worries that yields could eventually weigh on stocks if they rose too high.

Those concerns may be taking on fresh urgency after the Fed last week forecast it would leave rates elevated for longer than many investors were expecting.

 

Following a 1.5% tumble on Tuesday, the S&P 500 (.SPX) is now down more than 7% from its July highs, stung by sharp declines in shares of some of this year's biggest winners -- including Apple (AAPL.O), Amazon.com (AMZN.O) and Nvidia (NVDA.O). At the same time, yields on the U.S. benchmark 10-year Treasury stand near a 16-year peak at 4.55%.

 

With policymakers projecting rates will remain around current levels until the end of 2024, some investors say more volatility could be in store. Higher yields on Treasuries - which are sensitive to interest rate expectations and seen as risk free because they are backed by the U.S. government - offer investment competition to stocks while raising the cost of borrowing for corporations and households.

The market “is recalibrating what is the right valuation for equities in a 5% interest rate world,” said Jake Schurmeier, a portfolio manager at Harbor Capital Advisors. "Investors are asking, ‘Why do I need to (take) equity risk when I get more returns than that just by holding a Treasury bill?’"

If history is any indication, higher rates are a less favorable environment for equity investors. An analysis by AQR Capital Management going back to 1990 showed U.S. equities returned an average of 5.4% over cash when rates were above their median level - as they are now - compared with a return of 11.5% when interest rates were below their median.

"Stock markets are just plain expensive,” said Dan Villalon, principal and global co-head of portfolio solutions at AQR Capital Management, who believes rates will be higher over the next five to 10 years than in the previous decade, impacting returns.

AQR's analysis showed that trend-following hedge funds tend to outperform when rates are elevated, as they hold large cash positions that benefit from higher rates.

The equity risk premium, which compares the attractiveness of stocks over risk-free government bonds, has been shrinking for most of 2023 and was last around its lowest levels in about 14 years, according to Keith Lerner, co-chief investment officer at Truist Advisory Services.

The current ERP level has historically translated to just a 1.3% average 12-month excess return of the S&P 500 over the 10-year Treasury, according to Lerner.

The 10-year Treasury yield up to 4.5% "changes the narrative for stocks," said Robert Pavlik, senior portfolio manager at Dakota Wealth Management, who is holding a higher-than-normal cash position.

"Investors are going to be even more worried that we could enter into a recession as the cost of borrowing is increasing and corporate margins will be squeezed," he said.

More

Harsh reality of 'higher-for-longer' rates looms over US stocks | Reuters

Costco is selling gold bars and they are selling out within a few hours

Costco is well-known as a place to get bargain prices on any variety of items, from food to luggage to appliances to gold bars.

Wait, gold bars?

Yes, the retail warehousing giant is your one-stop shop for 1 ounce gold PAMP Suisse Lady Fortuna Veriscan bars, handsomely detailed and ready for purchase.

They’re available for the bargain price of … well, you have to be a member to know that, but apparently they were selling for a little shy of $1,900 recently, according to chatter on Reddit. Spot gold most recently was going for $1,876.56 an ounce as of Wednesday afternoon.

Regardless of the price, gold is selling like hotcakes, judging by comments Tuesday from Costco Chief Financial Officer Richard Galanti. Speaking on the company’s quarterly earnings call, Galanti said the bars are in hot demand and don’t last long when in stock.

“I’ve gotten a couple of calls that people have seen online that we’ve been selling 1 ounce gold bars,” he said. “Yes, but when we load them on the site, they’re typically gone within a few hours, and we limit two per member.”

A couple of important points from that thought: The bars indeed are only available online, and only if you’re a Costco member, which costs either $120 or $60 a year, depending on which program you pick. The retailer also is limiting the purchases to two to a customer, meaning it would be pretty hard to build a position that would lead to financial security.

---- Precious metals have been on a run over the past several years. Gold has risen more than 15% over the past year and more than 55% over the past five years.

With inflation still elevated, banks under the gun from a regulatory standpoint and looming issues in the commercial real estate market, the safe-haven aspect of gold and silver should be strong, Rose said.

“We know what the road map looks like: Bank failures, commercial loans defaulting at an alarming rate … they don’t seem to have a handle on inflation, and that’s why they keep raising interest rates,” he said. “The outlook for stability in the market isn’t good and people want a [tangible] asset that’s going to be a safe haven. That’s what gold and silver provide.”

Costco is selling gold bars and they are selling out within hours (cnbc.com)

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.  

London sees 24 per cent drop in first-time buyers as high mortgage rates bite

WEDNESDAY 27 SEPTEMBER 2023 6:00 AM

London has seen a 24 per cent decline in the number of first-time buyers entering the market in the last year as record high mortgage rates crush home-ownership dreams.

According to a new study by Halifax, the South-East, which is home to a number of commuter hotspots such as Surrey, saw the largest fall in the last year, with 25 per cent fewer first-time buyers. 

Soaring mortgage rates and a rocky economic sentiment has battered the health of the housing sector in the last 12 months. 

While rates are coming down – the average five-year fixed mortgage is now at around 5.67 per cent – many first time buyers are struggling with affordability as they also navigate rising living costs and wage stagnation. 

An end to the Help to Buy and Help to Buy London schemes, which was stopped last year, also halted many would-be-buyers’ plans to enter the market. 

Across the UK, the number of first-time buyers fell 22 per cent between January and August this year, compared to the same period in 2022. 

The average price of a first home is now £288,000 – down just two per cent  in the past year. 

However, in London the figure is significantly higher where first-time buyers face an average property price of £448,000 – nearly 11 times average annual earnings in the area. 

Chris Druce, senior research analyst at Knight Frank, said: “With interest rates at a 15-year high, affordability is proving to be a significant drag on activity in the UK residential market. First-time buyers, who are typically unable to access the best mortgage rates when starting out, are particularly exposed to this.

“While we expect average prices to decline by 10 per cent  through this year and next as the market continues to cool after a pandemic inspired boom, the challenge of getting onto the property ladder will remain significant. With the political party conference season underway, fresh polices to support first time buyers are needed.”

He added: “This is because existing measures – such as the doubling of the nil-rate stamp duty threshold for first time buyers – are helpful but time-limited. A replacement for the expired Help to Buy scheme, which at its peak supported 50,000 new build sales annually in England, would prove popular, too.”

London sees 24 per cent drop in first-time buyers as high mortgage rates bite (cityam.com)

Covid-19 Corner

This section will continue until it becomes unneeded.

Scientists Move Closer to Potential Blood Test for Detecting Long COVID

With a lack of specifically identifying biomarkers, doctors have found it difficult to identify whether patients are suffering from long COVID.

9/26/2023  Updated:  9/26/2023

 

Since the outbreak of the pandemic, medical researchers have been unable to define a common set of symptoms for the complex long COVID condition.

A recent study led by the Icahn School of Medicine at Mount Sinai in New York and Yale School of Medicine discovered that people suffering from long COVID have distinct hormonal and immune differences, and that long COVID is a biological disease with specific biomarkers that can be used to differentiate the condition.

The findings, which were published in Nature, point to the development of blood tests which can be used to accurately identify those who are suffering from the condition.

“These findings are important—they can inform more sensitive testing for long COVID patients and personalized treatments for long COVID that have, until now, not had a proven scientific rationale,” said principal investigator David Putrino in a Mount Sinai news release about the discovery.

“This work is so exciting because it is one of the first to show us clear, measurable differences in blood biomarkers of people with long COVID compared with people who recovered fully from an acute infection and a group of people who have never been infected with SARS-CoV-2 (the virus that causes COVID-19). This is a decisive step forward in the development of valid and reliable blood testing protocols for long COVID.”

Researchers have attributed brain fog, fatigue, abnormal taste and smell, cough, chest and muscle pain, and shortness of breath to long COVID symptoms. There is no definite list with a complete set of symptoms. Conditions can last from weeks to months following a COVID-19 infection.

A recent study published in The Lancet found there were higher rates of lung, brain, and kidney injuries in people suffering from long COVID, with lung injuries about 14 times higher than those in the control group.

Over 770 million people have been diagnosed with COVID-19 worldwide since the virus first began spreading, according to the World Health Organization, with 10 to 20 percent suffering from a post COVID-19 condition or long COVID.

More

Scientists Move Closer to Potential Blood Test for Detecting Long COVID | 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.

OCSiAl is constructing a graphene nanotube facility in Europe

September 27, 2023

OCSiAl, a leader in graphene nanotube technologies, has been granted a construction permit for a nanotube production facility near Belgrade, Serbia. The new nanotube synthesis plant will be launched in 2024 and will have an initial annual capacity of 60 tonnes of graphene nanotubes.

Over the next two years, the capacity of this plant will be increased to 120 tonnes per year. “The project will facilitate logistics and lower supply chain costs. European-produced nanotubes and nanotube derivatives will be primarily supplied to our customers in central and western Europe, North America, and Asia,” said OCSiAl Group Senior Vice President Gregory Gurevich.

In addition to synthesizing nanotubes, the facility will manufacture nanotube suspensions for lithium-ion battery manufacturers in Europe, the US, and Asia – enough to enhance the performance of more than 1 mln electric cars with an average battery capacity of 75 kWh per car. OCSiAl nanotubes create long and robust electrical networks between active material particles, improving key battery characteristics, including cycle life, lower DCR, C-rate performance, and cohesion between active battery material particles, making the battery electrodes more durable. Graphene nanotubes unlock new battery technologies, including high-silicon content anodes, thick LFP cathodes, fast-charging graphite anodes, and more. They can be applied in both conventional and emerging battery tech, such as a dry battery electrode coating process, and solid-state batteries.

As well as synthesizing nanotubes and producing suspensions, OCSiAl project includes manufacturing of nanotube concentrates for high-performance polymers. The project has passed environmental impact assessment and it is 100% powered by green energy. It enjoys support from Serbian municipal and national governments. The plant is planned to be certified in accordance with ISO 9001, ISO 14001, and ISO 45001, and to be compliant with the IATF 16949 automotive industry standard. The project will create more than 200 job opportunities for engineers, scientists, managers, operators, and administrative staff.

Currently, OCSiAl has an extensive manufacturing system of nanotube-based products in the regions of highest market demand, such as China, Japan, Sri Lanka, Brazil, Malaysia, and other countries. The Serbia nanotube hub will operate in conjunction with the company’s operational R&D center and planned graphene nanotube synthesis facility in Luxembourg – together, the projects will significantly strengthen the stability of OCSiAl’s supply chain and increase the cost-efficiency of nanotube technologies for its customers.

OCSiAl is constructing a graphene nanotube facility in Europe - JEC (jeccomposites.com)

The Norman Conquest

The Norman Conquest (or the Conquest) was the 11th-century invasion and occupation of England by an army made up of thousands of NormanBretonFlemish, and French troops, all led by the Duke of Normandy, later styled William the Conqueror.

William's claim to the English throne derived from his familial relationship with the childless Anglo-Saxon king Edward the Confessor, who may have encouraged William's hopes for the throne. Edward died in January 1066 and was succeeded by his brother-in-law Harold Godwinson. The Norwegian king Harald Hardrada invaded northern England in September 1066 and was victorious at the Battle of Fulford on 20 September, but Godwinson's army defeated and killed Hardrada at the Battle of Stamford Bridge on 25 September. Three days later on 28 September, William's invasion force of thousands of men and hundreds of ships landed at Pevensey in Sussex in southern England. Harold marched south to oppose him, leaving a significant portion of his army in the north. Harold's army confronted William's invaders on 14 October at the Battle of Hastings. William's force defeated Harold, who was killed in the engagement, and William became king.

More

Norman Conquest - Wikipedia

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