Monday, 23 October 2023

A Dangerous Week. Putting Out The Fire Or Spreading It?

Baltic Dry Index. 2046 -25            Brent Crude  91.33

Spot Gold 1974                   US 2 Year Yield 5.07 -0.07

"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

Ludwig von Mises.

What happens in the stock casinos this week is highly dependent on what happens next in our new Middle East war.

If the war widens out into Lebanon, Syria, Iraq and Iran, expect the price of crude oil to surge above $100 and with it global inflation to surge.

If the fire brigade turn up to start releasing hostages, putting out the inferno in Gaza and getting the adults in Israel and Gaza to stop throwing petrol on the fire, (unlikely,) then here is what might drive the stock casinos in more normal times.

 

Asia markets mostly down ahead of regional inflation readings and South Korea growth figures

UPDATED SUN, OCT 22 2023 9:58 PM EDT

Asia-Pacific markets are mostly lower ahead of a week of inflation readings from across the region and South Korea’s third-quarter gross domestic product numbers.

Singapore and Australia will release inflation figures for September on Monday and Wednesday respectively, while Japan will release Tokyo’s inflation numbers on Friday. Tokyo’s inflation is considered a leading indicator of nationwide figures.

In Australia, the S&P/ASX 200 fell 0.81% in Monday morning trading, extending losses from last week and on pace for a third straight session of losses.

Japan’s Nikkei 225 slipped 0.37%, while the Topix was down 0.13%. South Korea’s Kospi was trading just below the flatline, while the Kosdaq bucked the trend and gained 0.51%.

Hong Kong’s markets are closed for a holiday Monday, but the mainland Chinese CSI 300 index continued its slide, down 0.46% and diving past its one-year low.

On Friday in the U.S., all three major indexes retreated as a surge in the 10-year Treasury yield prompted broader concerns about the state of the economy.

Most notably, the yield on the benchmark 10-year Treasury crossed 5% for the first time in 16 years on Thursday.

The S&P 500 shed 1.26%, notching its first losing week in three, while the Nasdaq Composite dropped 1.53% The Dow Jones Industrial Average lost 0.86%.

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


European markets head for mixed open as global sentiment wavers

UPDATED MON, OCT 23 2023 12:37 AM EDT

European markets are heading for a mixed open Monday as investors continue to monitor economic and geopolitical uncertainty, and look ahead to a busy week for earnings and the European Central Bank’s latest monetary policy decision.

Overnight, Asia-Pacific markets were mostly lower ahead of a week of inflation readings from across the region and South Korea’s third-quarter gross domestic product numbers.

U.S. stock futures ticked higher on Sunday night as traders looked ahead to the release of corporate earnings from tech industry behemoths, including AlphabetAmazonMeta and Microsoft.

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

 

Stock futures edge higher on Sunday night as Wall Street awaits big tech earnings: Live updates

UPDATED SUN, OCT 22 2023 6:54 PM EDT

Stock futures ticked higher on Sunday night as traders looked ahead to the release of corporate earnings from tech industry behemoths.

Futures tied to the Dow Jones Industrial Average rose 59 points, or 0.18%. S&P 500 futures and Nasdaq 100 futures climbed 0.23% and 0.15%, respectively.

The moves follow a tough week for stocks, as concerns over higher interest rates sent all three major indexes into negative territory. The S&P 500 ended the week 2.4% lower, notching its first losing week in three. The Dow Jones Industrial Average shed 1.6%, while the Nasdaq Composite slumped 3.2% to register its second losing week in a row.

The yield on the benchmark 10-year U.S. Treasury climbed above the key 5% level on Thursday for the first time since July 2007. The move came after Federal Reserve Chairman Jerome Powell signaled hawkish messaging in a speech at the Economic Club of New York.

Earnings season ramps up this week, with a slew of big tech titans slated to report. Investors will anticipate results from AlphabetAmazonMeta and Microsoft to provide key information for the stock market.

---- Traders are also bracing for key economic data to be released this week, including Thursday’s third-quarter advance report for the U.S. gross domestic product. The personal consumption expenditure, an inflation yardstick, is due for release on Friday. Investors are worried that if these reports come out stronger than expected, yet another rate hike may not be completely off the table this year.

Investors are gearing up for the busiest week of earnings season, with 30% of companies in the S&P 500 slated to report.

Tech titans Alphabet and Microsoft are slated to release earnings after the bell on Tuesday. Meta is due to report on Wednesday, and Amazon on Thursday.

Three key industrial companies are also reporting, starting with 3M and General Electric on Tuesday. Boeing is set to follow on Wednesday before the bell.

With General Motors reporting on Tuesday and Ford on Thursday, investors will also gauge the economic impact of the United Auto Worker strikes.

Stock futures edge higher on Sunday night as Wall Street awaits big tech earnings: Live updates (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.

ECB set to hold rates as inflation drifts downwards

October 23, 2023

For the first time in over a year, European Central Bank policymakers are expected to decide against raising interest rates again when they gather in Athens on Thursday.

Once red-hot, inflation, driven by Russia's invasion of Ukraine in early 2022, has started to ease, while the outlook for the economy has worsened.

Consumer prices in the 20-nation currency bloc rose at an annual rate of 4.3 percent in September, its lowest rate in almost two years.

The figure remains clearly above the ECB's two-percent target, but the pain of rising interest rates has been increasingly felt across the bloc.

The outbreak of the Israel-Gaza war has added to the potential troubles faced by the eurozone economy, already weathering the impact of the conflict in Ukraine.

The central bank, which holds one meeting outside its Frankfurt headquarters every year, looks set to follow in the footsteps of the US Federal Reserve and pause interest rate hikes for the time being.

All indications since the last meeting in September were that the ECB's current tightening cycle was "over", said Jack Allen-Reynolds of Capital Economics.

Currently, the ECB's key deposit rate sits at four percent, its highest mark in the history of the central bank. 

But after deciding to hike at each of its last 10 meetings, raising rates at their fastest pace ever, "the ECB won't be in any rush to take further action", said ING bank analyst Carsten Brzeski.

The conflict in the Middle East would "further dampen eurozone growth prospects" and, along with rising oil prices, left the ECB in a more "complicated" position, Brzeski said.

"With all the new uncertainties, there hasn't been a better moment in the last 16 months for the ECB to take a pause than now," he added.

More

ECB set to hold rates as inflation drifts downwards (msn.com)

Hong Kong inflation higher than expected in September

Hong Kong’s inflation rate came in above expectations for September, with the city’s consumer price index increasing 2% year on year.

This is compared to the 1.8% expected by economists polled by Reuters, and also faster than the 1.8% growth seen in August.

Hong Kong’s statistics bureau said increases in prices were recorded in most sectors, except durable goods.

Alcoholic drinks and tobacco, clothing and footwear, as well as meals out and takeaway food led the increases in prices, with alcoholic drinks notably increasing 18.9% year on year.

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

A recession will hit next year, hammering stock prices and home values, Wall Street veteran predicts

 

October 22, 2023

  • The US economy will capitulate and enter a recession next year, Harley Bassman says.
  • The Wall Street veteran expects stocks and house prices to fall once unemployment and mortgage defaults rise.

Bassman once ignored a warning from "The Big Short" star Steve Eisman about the mid-2000s bubble.

A recession will strike the US economy next year, pummeling stocks and house prices, a Wall Street veteran has warned.

Harley Bassman, the managing partner of Simplify Asset Management, issued the bleak forecast during a recent Rosenberg Research webcast.

Bassman spent over 25 years at Merrill Lunch, and has worked at both Pimco and Credit Suisse. He compared inflation to carbon monoxide, and recalled that he once ignored a warning from one of the stars of "The Big Short" about the mid-2000s housing bubble.

More

A recession will hit next year, hammering stock prices and home values, Wall Street veteran predicts (msn.com)

Covid-19 Corner

This section will continue until it becomes unneeded.

COVID-19 Increases Sepsis Risk: Potential Therapeutic Benefits of Vitamin D

Recent research has found that sepsis is more common and lethal among COVID-19 patients than previously thought.

10/20/2023 Updated: 10/20/2023

Recent research has found that sepsis is more common and lethal among COVID-19 patients than previously thought.

Sepsis is a highly severe clinical syndrome, often originating from lung infections, urinary tract, skin, or gastrointestinal tract, involving pathogens such as fungi, bacteria, viruses (including COVID-19 and influenza), and more. The immune system becomes hyperactive when combating these infections, leading to systemic inflammation and tissue necrosis. In severe cases, it can result in shock, organ failure, and even death.

A study revealed that for every one-hour delay in the administration of targeted antibiotics, antifungal, or antiviral medications after the onset of organ dysfunction or shock, the odds of a poor outcome increase by 3 percent to 7 percent. Sepsis treatment in the United States is estimated to cost $23.7 billion annually, making it the most expensive condition for inpatient care.

One retrospective cohort study published in JAMA Network Open in September conducted on 431,017 patients (with an average age of 57.9) hospitalized in five hospitals in Massachusetts between March 2020 and November 2022 found that COVID-19-associated sepsis was present in 1.5 percent of all admissions and 28.2 percent of COVID-19-positive hospitalizations. Additionally, presumed bacterial sepsis was present in 7.1 percent of hospitalizations.

The researchers also found that in the first 33 months of the COVID-19 pandemic, approximately one-sixth of sepsis cases were attributed to COVID-19.

Between the first and last quarters of the study, the mortality rate of COVID-19-related sepsis decreased from 33.4 to 14.9 percent, while presumed bacterial sepsis mortality was stable at 14.5 percent.

----Vitamin D: An Essential Adjunctive Treatment

Vitamins are essential micronutrients in the human body, playing a crucial role in numerous biological pathways associated with sepsis, including antioxidant and anti-inflammatory functions, protein and hormone synthesis, energy production, and gene regulation.

Dr. Ryoichi Nakahara, who holds a doctorate in surgery from the University of Tokyo, stated during an interview with The Epoch Times that the high metabolic state triggered by the immune response in sepsis patients rapidly depletes micronutrients in the body. Numerous vitamin trials have suggested that vitamin D, vitamin C, and other micronutrient supplements offer a fresh perspective on sepsis treatment.

More

COVID-19 Increases Sepsis Risk: Potential Therapeutic Benefits of Vitamin D | 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 imposes export curbs on graphite

Restrictions on critical electric vehicle battery material set to escalate trade tensions with US

October 20, 2023

China has imposed export controls on graphite, a material used in electric vehicle batteries, as Beijing hits back at US-led restrictions on technology sales to Chinese companies.

China, which dominates global supply chains for the mineral, will require special export permits for three grades of graphite, the commerce ministry and the General Administration of Customs said on Friday.

The new export controls, which China said were introduced on “national security” grounds, are set to escalate geopolitical tensions between Beijing and Washington and its allies over tech supply chains. They also underline China’s dominance of global supplies of dozens of critical resources.

Graphite for batteries can be produced either from mined material, which is called “natural” material, or in a “synthetic” process using petroleum feedstocks, which helps the cell charge quicker and last longer but is more expensive to produce.

 China is by far the biggest processor of natural graphite and generated almost 70 per cent of the world’s synthetic graphite last year, according to Benchmark Mineral Intelligence, making it one of the critical materials where Beijing has the tightest stranglehold.

The move comes days after US president Joe Biden’s administration tightened controls on exports of cutting-edge artificial intelligence chips to China.

Beijing criticised Washington for the controls. The Chinese commerce ministry on Wednesday said the “US constantly overstretches the concept of national security, abuses export control measures and turns to unilateral bullying acts, which China is strongly dissatisfied with and firmly objects to”.

Japan said it would look into whether China’s latest measures were in accordance with World Trade Organization and other international rules.

Japan said it would look into whether China’s latest measures were in accordance with World Trade Organization and other international rules.

“We will take appropriate steps . . . if the measures are deemed unjust,” said chief cabinet secretary Hirokazu Matsuno on Friday, adding that the government will assess the impact of the export curbs. “We will check with the Chinese side on their intentions and operational policies of the measures.” 

The White House did not respond to a request for comment.

Executives at companies in the graphite supply chain said they are scrambling to understand how the new export controls differ to existing ones on graphite introduced in 2006.

Graphite prices have fallen 30 per cent since the start of the year but Thomas Kavanagh, head of battery materials at commodity data provider Argus, said the restrictions could set them on an “upward trajectory internationally”.

While Chinese officials are wary of retaliation that could damage China’s own companies, Beijing in recent months has started to leverage its dominance over a vast array of materials and resources in response.

More

China imposes export curbs on graphite (ft.com)

“Fiat-money! Let the State 'create' money, and make the poor rich, and free them from the bonds of the capitalists! How foolish to forego the opportunity of making everybody rich, and consequently happy, that the State's right to create money gives it! How wrong to forego it simply because this would run counter to the interests of the rich! How wicked of the economists to assert that it is not within the power of the State to create wealth by means of the printing press!- You statesmen want to build railways, and complain of the low state of the exchequer? Well, then, do not beg loans from the capitalists and anxiously calculate whether your railways will bring in enough to enable you to pay interest and amortization on your debt. Create money, and help yourselves.”

 Ludwig von Mises, The Theory of Money and Credit.

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