Baltic Dry Index. 1935 -13 Brent Crude 86.68
Spot Gold 1877 US 2 Year Yield 5.06 +0.07
“Never think
that war, no matter how necessary, nor how justified, is not a crime.”
Ernest Hemingway.
With the continuing tragedy of the Gaza terrorist war showing no end, it seems a little callous to be covering the stock casinos and commodity markets, but the global economy rolls on, wars, natural destruction, pandemics, droughts, floods, notwithstanding.
In the stock casinos more wobble from higher interest rates and persistent US and global inflation.
But if the new Gaza terrorist war widens out in its second week to become a regional war, the price of crude oil will soar to over $100 a barrel and with it global inflation, and I suspect, global social disorder.
Israel has just ordered 1.1 million Palestinians living in north Gaza to evacuate to south Gaza within 24 hours, implying that Israel’s land attack is coming, probably at the weekend.
Whether 1.1 million Gaza inhabitants can feasibly evacuate in a war zone without, fuel, food, water, electricity, and over a greatly damaged infrastructure is unlikely, but a desperate Israeli Prime Minister blindsided by last Saturday’s Hamas terrorist attack is fighting for his political life, the realities of the damage he’s doing to Israel’s international standing are secondary.
But
equally getting tarnished and damaged is the US standing and influence in the world.
From Ukraine to China, to Israel, to India, to Africa, to Latin America, no one
seems to be listening to President “Joe Biden” anymore.
Dow closes
more than 150 points lower as inflation data reignites interest rate fears:
Live updates
UPDATED THU, OCT 12 2023 4:34 PM EDT
Stocks fell Thursday, pressured by rising
Treasury yields, as traders fretted over new data showing persistent U.S.
inflation.
The Dow Jones Industrial Average was
lower by 0.51%, or 173.73 points, to close at 33,631.14. The S&P 500 declined
by 0.62%, ending at 4,349.61. The tech-heavy Nasdaq Composite lost
0.63%, landing at 13,574.22. The major indexes ended a four-day winning streak.
Treasury yields jumped on the
back of fresh inflation data Thursday. The benchmark 10-year rate moved nearly
11 basis points higher to 4.70%. The 2-year Treasury yield
was trading at 5.06% after rising by more than 6 basis points.
Yields recently hit a 16-year high, rattling
stocks. Earlier this month, the 10-year Treasury yield traded above 4.8%.
Some investors believe higher
yields are here to stay, influencing Thursday’s downturn in the equity market.
“Every [CPI] print that comes in
where it shows more stickiness chips away at the inherent belief we will
eventually get to 2% inflation. We’re not going to 2% inflation, but the bond
market still wants to believe we will or come close to it,” said Phillip
Colmar, managing partner and global strategist at MRB Partners. Equities
continue to head south “as the market realizes that yields will move higher,”
he said.
Sonu Varghese, Carson Group vice president and
macro strategist, similarly noted an “immediate negative correlation to equity
prices” when yields rise, particularly over a short period of time as they have
been in recent weeks.
“There is an equity risk premium,
but it’s lower than it probably was before we got the recent surge in yields,”
Varghese said. To be sure, he added that his firm remains overweight on
equities, noting confidence that the strong economic environment will feed into
third-quarter earnings.
The consumer
price index released Thursday increased 0.4% on the month and
3.7% from a year ago, according to a Bureau of Labor Statistics report. Dow
Jones estimates were 0.3% and 3.6%, respectively. The core inflation number,
excluding food and energy prices, came out in line with economists’
expectations at an increase of 0.3% on the month and 4.1% on a 12-month basis.
The data follows a stronger-than-expected producer
price index reading for September.
More
Stock
market today: Live updates (cnbc.com)
Stock
futures are little changed ahead of Friday’s big bank earnings: Live updates
UPDATED THU, OCT 12 2023 7:44 PM
EDT
Stock futures were little changed on Thursday evening as traders braced for
major bank earnings.
S&P 500 futures
and Dow Jones Industrial Average
futures oscillated
near the flat line. Nasdaq 100 futures
inched higher by 0.07%.
All three major indexes ended the day’s trading session in
the red, with the Dow dropping
more than 173 points. The S&P 500 slid
0.62%, while the tech-heavy Nasdaq Composite lost
0.63%.
Even though the three major averages ended Thursday with
losses, they are each on pace for weekly gains. The S&P 500 is up 0.9%,
while the Dow is up nearly 0.7% on the week. The Nasdaq Composite is the
outperformer of the three, up 1% through Thursday’s close.
This is the third positive week in a row for the Nasdaq, and
the second straight positive week for the S&P 500. The Dow is also set to
snap a string of three straight weekly declines.
Thursday’s losses came after the latest consumer
price index report revealed that inflation still stubbornly
persists, pushing bond yields higher. CPI rose 0.4% in September, and gained
3.7% from 12 months earlier.
JPMorgan, Wells Fargo, Citigroup and BlackRock are
set to kick off third-quarter
earnings for major financial firms on Friday. Investors haven’t
been able to hide their feelings
of trepidation as higher capital requirements and a looming
recession threaten to squeeze earnings for the financials sector.
Besides fears over disappointing earnings and another
potential rate hike, investors have also turned their concerns to the ongoing
Israel-Hamas war, which could potentially threaten global oil supply and
prices. But Nancy Tengler, chief investment officer at Laffer Tengler
Investments, believes that investors might be losing sleep for little reason.
“We’ll have some companies that will disappoint but I think
for the most part, earnings are probably going to surprise investors to the
upside,” she said in an interview with CNBC. “Investors are too pessimistic. We
expect that companies are going to be able to manage this pretty well.”
Tengler added that she believes stocks will end the year with
a rally, led by the technology and industrials sectors.
On Friday, traders will also be watching for preliminary
consumer sentiment data for October.
Stock
market today: Live updates (cnbc.com)
Consumer
prices rose 0.4% in September, more than expected
PUBLISHED THU, OCT 12 2023 8:31
AM EDT
Prices that consumers pay for a wide variety of
goods and services increased at a slightly faster-than-expected pace in
September, keeping inflation in the spotlight for policymakers.
The consumer price index, a closely followed
inflation gauge, increased 0.4% on the month and 3.7% from a year ago,
according to a Labor Department report Thursday. That compared with respective Dow Jones
estimates of 0.3% and 3.6%.
Excluding volatile food and energy prices, the
so-called core CPI increased 0.3% on the month and 4.1% on a 12-month basis,
both exactly in line with expectations. Policymakers place more weight on the
core numbers as they tend to be better predictors of long-term trends.
In keeping with recent trends, shelter costs were
the main factor in the inflation increase. The index for shelter, which makes
up about one-third of the CPI weighting, accelerated 0.6% for the month and
7.2% from a year ago. On a monthly basis, shelter accounted for more than half
the rise in the CPI, the Labor Department said.
Energy costs rose 1.5%, including a 2.1% pickup in
gasoline prices and 8.5% in fuel oil, and food was up 0.2% for the third month
in a row. On a 12-month basis, food costs climbed 3.7%, including a 6% increase
for food away from home, while energy costs were off 0.5%.
Services prices, considered a key for the
longer-run direction for inflation, also posted a 0.6% gain excluding energy
services, and were up 5.7% on a 12-month basis. Vehicle prices were mixed, with
new vehicles up 0.3% and used down 2.5%. Used vehicle prices, a big driver of
inflation in the early days of the Covid
pandemic, were down 8% from a year ago.
More
CPI September 2023: Consumer prices rose 0.4%, more
than expected (cnbc.com)
Shelter Drives Over Half of Headline CPI Increase
Consumer prices in
September remained stable, with housing and gasoline cost continuing to be key
drivers. Despite the slight annual slowdown, shelter costs remain elevated,
accounting for over 70% of the total increase in all items excluding food and
energy.
The Fed’s ability to
address rising housing costs is limited as shelter cost increases are driven by
a lack of affordable supply and increasing development costs. Additional
housing supply is the primary solution to tame housing inflation. The Fed’s
tools for promoting housing supply are at best limited. In fact, further
tightening of monetary policy will hurt housing supply by increasing the cost
of AD&C financing. This can be seen on the graph below, as shelter costs
continue to rise despite Fed policy tightening. Nonetheless, the NAHB forecast
expects to see shelter costs decline further later in 2023, supported by
real-time data from private data providers that indicate a cooling in rent
growth.
The Bureau of Labor Statistics (BLS) reported that the
Consumer Price Index (CPI) rose by 0.4% in September on a seasonally adjusted
basis, following an increase of 0.6% in August. The price index for a broad set
of energy sources rose by 1.5% in August as the increase in gasoline index
(+2.1%), electricity (+1.3%) and fuel oil index (+8.5%) more than offset the
declines in natural gas index (-1.9%). Excluding the volatile food and
energy components, the “core” CPI rose by 0.3% in September, as it did in
August. Meanwhile, the food index increased by 0.2% in September with the food
at home index rising 0.1%.
In
September, the indexes for shelter (+0.6%) and gasoline (+2.1%) were the
largest contributors to the increase in the headline CPI. Meanwhile, the
indexes for used car and trucks (-2.5%) and apparel (-0.8%) declined in
September.
The
index for shelter, which makes up more than 40% of the “core” CPI, rose by 0.6%
in September, following an increase of 0.3% in August. The indexes for owners’
equivalent rent (OER) increased by 0.6% and rent of primary residence (RPR)
increased by 0.5% over the month. Monthly increases in OER have averaged 0.5%
over the last nine months. These gains have been the largest contributors to
headline inflation in recent months.
More
Shelter Drives Over Half of Headline CPI Increase |
Eye On Housing
Israel calls for all civilians to leave Gaza City
By Henriette Chacar, Michelle Nichols and Humeyra Pamuk
October
13, 20236:17 AM GMT+1
JERUSALEM/NEW
YORK/TEL AVIV, Oct 13 (Reuters) - Israel's military on Friday called for all
civilians of Gaza City, more than 1 million people, to relocate south within 24
hours, as it amassed
tanks near the Gaza Strip ahead of an expected ground invasion.
"Now is a time for war,"
Defence Minister Yoav Gallant said on Thursday as Israeli warplanes continued
pounding Gaza in retaliation for the weekend attacks by Hamas militants that
killed more than 1,300 Israelis, mostly civilians.
The Israeli military said it would
operate "significantly" in Gaza City in the coming days and civilians
would only be able to return when another announcement was made.
"Civilians of Gaza City, evacuate
south for your own safety and the safety of your families and distance yourself
from Hamas terrorists who are using you as human shields," the military
said in a statement.
"Hamas terrorists are hiding in
Gaza City inside tunnels underneath houses and inside buildings populated with
innocent Gazan civilians."
A Hamas official said the Gaza
relocation warning was "fake propaganda" and urged citizens not to
fall for it.
The United Nations said it considered
it impossible for such a movement of people to take place "without
devastating humanitarian consequences."
Israel's ambassador to the U.N., Gilad
Erdan described the U.N.'s response to Israel's early warning to the residents
of Gaza as "shameful".
More
Israel
calls for all civilians to leave Gaza City | Reuters
In
other news, China’s economy continues to slow. How long before the world
economy enters recession? Not long, I suspect.
China’s exports
and imports drop again in September
BEIJING — China reported a
smaller-than-expected decline in exports in September from a year ago, while
imports missed, according to customs data released Friday.
In U.S.-dollar terms, exports
fell by 6.2% last month from a year ago. That’s less than the 7.6% drop
forecast by analysts in a Reuters poll.
Imports also fell by 6.2% in
U.S.-dollar terms in September compared to a year ago — slightly more than the
6% decline expected by the Reuters poll.
China’s exports have fallen on a year-on-year basis every month this year
starting in May. The last positive print for imports on a year-on-year basis
was in September last year.
China’s trade slumped this year amid lackluster global demand
for Chinese good and muted
domestic demand.
Bucking the decline in trade with
major trading partners were Chinese imports from the European Union, up
modestly in September from a year ago, according to CNBC calculations of the
official data.
The U.S. is China’s largest
trading partner on a single-country basis, while the Association of Southeast
Asian Nations has recently surpassed the EU as China’s largest trading partner
on a regional basis.
For the first three quarters of
the year, China’s exports to the U.S. fell by 16.4%, while imports dropped by
6% during that time.
Russia was the only major country
or region in the Chinese customs agency’s report that showed growth in both
exports and imports for the first three quarters of the year from a year ago.
More
China
trade: Exports and imports fall in September (cnbc.com)
China consumer
prices were unexpectedly flat, as economic recovery remains fragile
China’s consumer prices were flat in September,
while factory gate prices saw annual declines slow for a third month — pointing
to the uneven post-Covid recovery in the world’s second-largest economy that
may require further policy support.
Consumer price index for September
was flat on an annual basis, the National Bureau of Statistics reported Friday, below than the median
estimate for a 0.2% increase in a Reuters poll. CPI inched up 0.1% in August
for the first year-on-year increase in three months.
Core inflation — excluding energy
and food prices — however, climbed 0.8% in September from a year earlier, the
bureau said in a separate statement. This rate of increase
was similar to the one recorded in August.
China’s producer price index fell 2.5% from a year earlier, weaker than
expectations for a 2.4% decline, after a 3% drop in August. The drop in factory
prices, though, was the smallest in seven months.
Tepid prices underscore what
China’s top leaders labeled as a “tortuous”
economic recovery after the country emerged from its draconian zero Covid curbs
toward the end of last year. China stands as a stark outlier among the world’s
major economies that are mostly still battling stubbornly high inflation after
the Covid-19 pandemic peaked.
Friday’s inflation print may reignite fears that
China is tethering
on the verge of deflation. Despite narrowing producer prices in
September, the decline is still its 12th straight monthly drop on an annualized
basis.
“CPI inflation at zero indicates
the deflationary pressure in China is still a real risk to the economy,” said
Zhiwei Zhang, president and chief economist at Pinpoint Asset Management.
“The recovery of domestic demand is
not strong, without a significant boost from fiscal support. The damage from
the property sector slowdown on consumer confidence continue[s] to weigh on
household demand,” he added.
Beijing has been rather targeted in
its policy support even as rafts of economic data suggested growth remains
tepid. An ongoing debt crisis in two of China’s largest real estate developers
has further dented consumer confidence.
More
China
economy: September CPI flat amid muted demand, PPI falls (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.
In fact, all research indicates that consumers mostly ignore shrinkflation because they are focused on price mainly. That is especially true in high inflation times.
Well, if they say so, but I suspect
otherwise.
The Economics of Shrinkflation
10/11/2023 Updated: 10/11/2023
This time of year,
a holiday delight begins appearing on the grocery shelves. So far as I know,
it’s one of those American specialties, laughed at by Europeans (especially the
French!) but beloved in the United States. It’s the famed cheeseball, Wisconsin
cheddar the size of a softball, rolled in a variety of nuts. It is served at
room temperature and spread on crackers. It’s a favorite.
But something is
odd this time around. Instead of being large and generous, the only ones
available at the store I saw were only a bit larger than a golf ball, like a
mini-cheeseball. I’ve never in my life seen something like this, though I might
be wrong. Still it was $3.50, which (if memory serves) was what the full-sized
one cost two years ago.
We all know it is
happening: shrinkflation. The tubes of toothpaste are smaller. The candy bars
are smaller. The hamburger bun package has 4 instead of 6 buns. The coffee
container contains less. The bag of chips might be large but doesn’t contain
much at all. The food at restaurants seems dominated by the cheap stuff (rice
and potatoes) but not much is there in terms of meat.
Because our
memories of prices are not usually precise or long-lasting beyond a few
snapshots, most shrinkflation gets by us. It’s not that the sellers are trying
to trick us, contrary to popular legend. They reduce packaging in order to
survive as businesses. They know that price hikes can trigger people to buy
less or not buy at all, which is a move along the demand curve in response to
prices.
At what point this happens
is mostly a speculation on the part of businesses. They do not know with any
precision what the elasticities of demand for their product is in a changing
market (even if they can calculate that roughly from past data). So they are
better off and generally safer finding other ways to save on costs, passing
them on to the consumer in ways that are less immediately obvious than with a
blunt price hike.
In fact, all research indicates that consumers mostly ignore
shrinkflation because they are focused on price mainly. That is especially true
in high inflation times.
More
The Economics of Shrinkflation | The Epoch Times
Covid-19 Corner
This
section will continue until it becomes unneeded.
Drug Used to Treat COVID-Related Loss of Smell Found Ineffective: Study
Clinical
trial results were manipulated by the manufacturer to exaggerate the drug's
effectiveness, especially for off-label use.
10/11/2023 Updated: 10/11/2023
For many COVID-19 survivors,
the inability to smell life's aromas is an unseen affliction that lasts months
after recovering from the infection. This hidden impairment robs them of a
primal sense, leaving them disconnected.
Hope emerged when doctors prescribed gabapentin to treat
COVID-related smell loss. But new research has deflated expectations, finding
in a double-blinded, placebo-controlled clinical trial that the medication is ineffective.
Gabapentin Falls Short in 8-Week Trial
The trial ran from January 2022 to February 2023,
involving adults with at least three months of smell dysfunction after COVID-19
infection. Those with other causes for smell disorders or inability to take
gabapentin were excluded.
Researchers enrolled 68
participants, randomly assigning 34 to a placebo group and 34 to an oral
gabapentin treatment group. All patients were exposed to the maximum tolerable
dose for four weeks. After that, doses were adjusted to the highest tolerable
amount, maintained during an eight-week fixed-dose phase. In the gabapentin
group, 56 percent received the maximum dose of 3,600 milligrams daily.
After completing that phase, 41
participants were tapered off and monitored for four more weeks.
The researchers found no
clinically meaningful difference between the gabapentin and placebo groups over
the entire duration of the trial.
“Changes in subjective
olfactory function, objective odor identification, and olfactory-related
quality of life were neither clinically meaningful nor statistically significant,"
the trial researchers wrote.
However, the authors noted
that the findings applied only to an eight-week treatment period. Longer
treatment may yield different results.
More
Drug Used to Treat COVID-Related Loss of Smell Found
Ineffective: 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.
Today, something different. A modern
miracle?
Nanomaterial stimulates and regrows severed nerves
like sci-fi tech
Michael Franco October 11, 2023
In a move
that echoes a sci-fi series, researchers have developed a super-small material
that was able to not only stimulate nerves in rodents, but reconnect them as
well. The finding could lead to injectable particles that take the place of
larger implants.
In creating
the particles, researchers at Rice University started with two layers of a
metallic glass alloy called Metglas and wedged a piezoelectric layer of lead
zirconium titanate in between them. Piezoelectric materials generate
electricity when they have mechanical forces applied to them. Metglas is a
magnetostrictive material, which means it changes its shape when it has a
magnetic field applied to it. In this case, the change in shape of the Metglas
in the presence of magnetic pulses caused the piezoelectric material inside to
generate an electrical signal. Materials that do this are known as
magnetoelectric.
“We asked, ‘Can we create a
material that can be like dust or is so small that by placing just a sprinkle
of it inside the body you’d be able to stimulate the brain or nervous system?’”
said lead author Joshua Chen, a Rice doctoral alumnus. “With that question in
mind, we thought that magnetoelectric materials were ideal candidates for use in
neurostimulation. They respond to magnetic fields, which easily penetrate into
the body, and convert them into electric fields – a language our nervous system
already uses to relay information.”
Magnetoelectrics have been
investigated for use with nerves before. For example, one study in 2021 showed
how magnetoelectric devices could relay signals from one to the other
wirelessly, which could potentially replace the signaling ability of damaged neurons. However, a known issue with the neurological
application of magnetoelectrics is that the signals the materials produce tend
to be too fast for other human nerves to pick up.
To solve
that, the Rice researchers built up the magnetoelectric film even more, adding
platinum hafnium oxide, and zinc oxide to it. Despite this layered materials
approach, the final film still only measured about 200 nanometers thick. (For
comparison, a human hair measures about 90,000 nanometers wide.)
Next they
tested the material in rats and found that it could not only stimulate
peripheral nerves in the rodents when they were under anesthesia, but that it
could also restore function in a severed sciatic nerve. It also proved to
operate about 120 times faster than similar materials that have been previously
developed.
Not only do the researchers
believe this holds promise for super-small, potentially injectable
neuroprosthetics, but they feel it could have applications in other fields as
well.
“We can use this metamaterial
to bridge the gap in a broken nerve and restore fast electric signal speeds,”
Chen said. “Overall, we were able to rationally design a new metamaterial that
overcomes many challenges in neurotechnology. And more importantly, this
framework for advanced material design can be applied toward other applications
like sensing and memory in electronics.”
The research has been
published in the journal Nature Materials.
Nanomaterial stimulates and regrows severed nerves
like sci-fi tech (newatlas.com)
Another weekend and a widening war
weekend? Have a great weekend everyone.
“In modern war… you will die like a dog for
no good reason.”
Ernest
Hemingway.
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