Thursday, 5 October 2023

Stocks, Bonds, A Pause Or The Eye Of The Storm?

 Baltic Dry Index. 1778 -02            Brent Crude  89.39

Spot Gold 1828                   US 2 Year Yield 5.05 -0.10

In central banking as in diplomacy, style, conservative tailoring, and an easy association with the affluent count greatly and results far much less.

John Kenneth Galbraith

In the stock casinos, a brief pause as bond yields eased slightly.

Now comes the guessing game of just how big were the losses. Which US  banks are now being propped up by the Fed. Officially via their Bank Term Funding Program,  unofficially ???

Who went bust, if anyone, but is hiding it?


Asia-Pacific stocks rise after U.S. Treasury yields pull back from 16-year highs

UPDATED WED, OCT 4 2023 9:34 PM EDT

Asia-Pacific markets rise after U.S. Treasury yields eased from 16-year highs following much weaker-than-expected jobs data.

In Japan, the Nikkei 225 traded 0.53% higher, and the Topix is up 0.67%.

South Korea’s Kospi rose 0.78%, while the Kosdaq added 1.41%, after the country’s consumer price index for September came in 3.7% higher compared to a year ago, and higher than Reuters’ forecast of a 3.4% rise.

In Australia, the S&P/ASX 200 traded 0.19% higher.

Hong Kong’s Hang Seng index is trading above the flatline in its first hour of trade, while the Hang Seng Tech Index is up.

China’s markets remain closed for the weeklong holiday.

Overnight in the U.S., all three major indexes closed in the green. The Dow Jones Industrial Average broke a three-day losing streak to close 0.39% higher at 33,129.55. The S&P 500 added 0.81% and closed at 4,263.75. Similarly, the Nasdaq Composite gained 1.35% to close at 13,236.01.

Asia-Pacific shares, U.S. Treasury yields, Korea CPI (cnbc.com)

European markets head for higher open after U.S. Treasury yields retreat

UPDATED THU, OCT 5 2023 12:21 AM EDT

European stocks are heading for a higher open Thursday after U.S. Treasury yields pulled back yesterday following weaker-than-expected jobs data.

The rate on the 10-year Treasury note slipped from highs last seen in 2007 after payroll processing firm ADP said that private job growth totaled 89,000 for September, well below the 160,000 estimate from Dow Jones, and it seemed to assure investors that the labor market is easing.

Asia-Pacific markets rose overnight after the pullback in Treasury yields.

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

Stock futures tick lower on Wednesday night after Dow snaps 3-day string of losses: Live updates

UPDATED WED, OCT 4 2023 7:33 PM EDT

U.S. stock futures slipped on Wednesday evening as investors looked ahead to key jobs data.

Futures tied to the Dow Jones Industrial Average slid 57 points, or 0.2%. S&P 500 futures dropped 0.1%, while Nasdaq 100 futures also lost 0.1%.

Shares of Clorox slid nearly 3% after the bell, following guidance from the company for its fiscal first quarter that was much lower than consensus. The consumer goods company is calling for an adjusted loss ranging from 40 cents to zero cents per share. Analysts polled by FactSet called for $1.29 per share in earnings.

In Wednesday’s regular trading, stocks ended the session higher. The S&P 500 added 0.81%, while the Dow rose 0.39% and snapped a three-day losing streak. The tech-heavy Nasdaq Composite was the outperformer of the three major averages, jumping 1.35%.

“I’ve been cautious all year. Obviously, we’re getting a little reprieve today, but I think it’s just that: It’s a brief reprieve,” said Liz Young, SoFi’s head of investment strategy, on CNBC’s “Closing Bell.”

Stocks were aided by a retreat in Treasury yields. The rate on the 10-year Treasury note slipped from highs last seen in 2007 after payroll processing firm ADP said that private job growth totaled 89,000 for September. That number came in well below the 160,000 estimate from Dow Jones, and it seemed to assure investors that the labor market is loosening.

Yields remain a focus for investors this week, especially as the bond market is sending warning signals.

The spread between the 2-year and 10-year Treasury yields ended Wednesday at about 31 basis points. The 2- and 10-year yield curve has been inverted since March 2022 – meaning short-term Treasury rates are higher than long-term rates. However, the spread between the two has begun to tighten or steepen, which some say is a sign of an oncoming recession.

“One of the things that we’ll be thinking about for the rest of the week is the re-steepening of the yield curve,” Young added.

Key jobs data that could move the market is on deck. Weekly jobless claims are due Thursday morning, while the main event for the market — September’s nonfarm payrolls — will be out Friday.

Stock market today: Live updates (cnbc.com)

In commodities news, with a developing Pacific El Nino weather event likely to impact southern hemisphere crops especially wheat, China hedges its source of supply. Hmm, the Great Grain Robbery 2.0?

 

China's large purchase of US wheat is rare, but not unprecedented

By Karen Braun

NAPERVILLE, Illinois, Oct 3 (Reuters) - Signs of life for the sluggish U.S. wheat market arrived on Tuesday with confirmation that China had purchased an unusually large volume of U.S. wheat for the first time in over two years.

The U.S. Department of Agriculture (USDA) reported a deal for 220,000 metric tons of U.S. soft red winter wheat for shipment to China in 2023-24, the U.S. marketing year that began June 1. That was the first daily sale of U.S. wheat to any destination since November.

Daily sales are announced when a single U.S. grain or oilseed booking exceeds 100,000 tons, which happens more commonly for U.S. corn and soybeans since those exports are much larger annually than wheat and the destinations are less diverse.

Large U.S. wheat purchases by China have been rare. The last daily U.S. wheat sale to China was in July 2021, also soft red winter wheat, and twin sales of hard red spring and hard red winter wheat were confirmed in July 2020.

Only seven daily sales of U.S. wheat to any destination were confirmed between 2021 and 2022, indicative of how high global wheat prices and falling U.S. supplies have squeezed the United States’ export share. USDA sees that share falling to an all-time low of 9% in 2023-24.

Despite shrinking U.S. wheat exports, China has recently played a heavier role in that trade, accounting for 7% of U.S. wheat shipments in 2022-23 as the No. 4 destination. Three-fourths of that was white wheat, commonly used to make Asian-style noodles.

Australia’s proximity and recent bumper crops have crowned it China’s top wheat supplier, accounting for more than 40% of imports, though the unfavorable El Nino pattern this year may curb the Australian harvest.

China’s recent U.S. wheat purchase was not a one-off, as it secured up to 600,000 tons of French wheat three weeks ago. China has been a top-three global wheat importer in the last few years, but those imports account for a very small fraction of annual Chinese wheat consumption.

Beijing’s price support system generally keeps grain prices in China above global ones, sometimes favoring imports over domestic supplies. A decline in world wheat prices would amplify this effect.

Weakness in U.S. wheat prices has recently made U.S. wheat competitive on-and-off against rival exporters, though abundant supplies in top exporter Russia have kept pressure on the global market.

Ukraine has exported more wheat than originally expected following the conflict with Russia, but its September grain shipments were 51% lower than last September, reflecting logistical limitations at Ukraine’s Black Sea ports.

China's large purchase of US wheat is rare, but not unprecedented | 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.   

Treasury yields retreat from 16-year highs after weaker-than-expected ADP jobs report

Treasury yields inched down from multiyear highs on Wednesday after new jobs data showed tentative signs of a weakening labor market.

The yield on the 10-year Treasury note dropped nearly 7 basis points to 4.735% on the back of the data release. Earlier, yields rose as high as 4.884% after crossing the 4.8% mark on Tuesday — levels last seen in 2007.

Payroll processing firm ADP said job growth totaled just 89,000 in September, sharply below the 160,000 estimate from economists polled by Dow Jones.

The 30-year Treasury bond yield slid 7 basis points to 4.867%, after briefly trading above 5% earlier in the session, also at levels last seen in 2007. The 2-year Treasury note yield was last down 9 basis points at 5.054%. Yields and prices have an inverse relationship, so that when prices rise, yields fall.

The latest data provides some sign that a historically tight labor market could be loosening, raising hope that the Federal Reserve may soon stop raising interest rates. The central bank began hiking rates in March 2022 in an effort to control inflation, and it recently signaled its intention to keep borrowing costs higher for longer.

“The recent slump in bonds is incongruous with the totality of economic data, and this ADP release could mark the start of a downside labor inflection point,” Adam Crisafulli of Vital Knowledge said in a note. “Treasuries are likely to see a notable relief rally and the attendant drop in yields should help stocks.”

The ADP report came two days ahead of Friday’s official jobs report, but the two sets of data often differ. Economists estimate non-farm payrolls increased by 170,000 in September, down from a 187,000 increase in August, according to Dow Jones.

In the latest ADP report, job gains came almost exclusively from services, which contributed 81,000 to the total. The firm said annual wage growth slowed to 5.9%, the 12th consecutive monthly decline.

Treasury yields retreat from 16-year highs after weaker-than-expected ADP jobs report (cnbc.com)

 

Covid-19 Corner

This section will continue until it becomes unneeded.

Because of its importance and to expose UK politicians absolute contempt of the voters, I will leave this link up all week.

The Great British Parliament Scandal.  MPs gross contempt of the voters over excess deaths. Approx.14 minutes.

Excess deaths debate in parliament

Excess deaths debate in parliament - YouTube

Singapore COVID-19 infections surge in 17-23 Sept, more than double the previous week

October 3, 2023

SINGAPORE — Singapore witnessed a notable surge in COVID-19 infections during the week of 17 to 23 September, with a total of 14,843 confirmed cases.

This was more than double the 6,401 cases reported the previous week. Over the past 10 weeks - between 9 July and 16 September - weekly infection counts fluctuated between 3,485 and 7,045 cases.

The Ministry of Health (MOH) said in a statement on its website that it is closely monitoring the situation. However, it believes that there is no immediate cause for alarm, as the current infection numbers is "low compared to previous waves".

As Singapore no longer mandates reporting COVID-19 cases, the numbers primarily reflect individuals who sought medical care.

MOH also stated on its website that the average daily new COVID-19 hospitalisations and average daily new ICU cases have also remained low in recent weeks.

Earlier this year, a peak of 28,410 infections in a week at the end of March led to a slight increase in hospitalisations and ICU admissions.

During that period, 159 people were hospitalised, which slightly exceeded the 139 hospitalisations from the previous week, and seven required admission to intensive care, up from six the previous week.

April and May also witnessed the highest number of COVID-19 deaths this year, with 54 and 53 deaths respectively.

Based on the latest COVID-19 death figures on MOH website, 10 individuals, all aged at least 60 years old, succumbed to COVID-19 in August.

MOH attributed the recent increase in cases to various factors, including waning population immunity, rise of other emerging variants, and increased travel and community interactions, resulting in virus transmission.

More

Singapore COVID-19 infections surge in 17-23 Sept, more than double the previous week (msn.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.

 Editors' notes

A graphene addition for enhancing the critical current density of Bi-2223 superconductors

OCTOBER 3, 2023

Superconductors are materials that offer zero electric resistance to the flow of current on being cooled down below a certain critical temperature. Typically, superconductors have a very low critical temperature, close to absolute zero. However, a class of superconductors, known as high-temperature superconductors (HTS) have a critical temperature above 77 Kelvin, the boiling point of liquid nitrogen. They have been extensively used for the development of superconducting devices in many industries.

Bismuth strontium calcium copper oxide, often referred to as BSCCO, is a class of HTS which has been widely studied and used in engineering, medical equipment, mining, and transport systems.

One of its members, (Bi1.6Pb0.4)Sr2Ca2Cu3O10 or Bi-2223, possesses the highest superconducting critical temperature, and has garnered significant attention for potential applications. However, limitations such as weak critical current density and weak magnetic flux pinning and a complex synthesis route have hindered the development and progress of Bi-2223 superconductors.

To address these shortcomings, a group of researchers, led by Professor Muralidhar Miryala from Materials for Energy and Environmental Laboratory of Superconducting Materials at Shibaura Institute of Technology and Professor Awang Kechik Mohd Mustafa from the Department of Physics of the Faculty of Science at Universiti Putra Malaysia, have investigated the effects of graphene nanoparticle addition on the phase formation and superconducting properties of Bi-2223.

"In this study, we report the effects on the critical temperature, critical current density, and structural and morphological properties of Bi-2223, when graphene nanoparticles are integrated into them using a novel co-precipitation method," explains Prof. Miryala.

This study was published in Nanomaterials. It is co-authored by Abdullah Siti Nabilah, Nursyahirah Kamarudin Aliah, Soo Kien Chen, Kean Pah Lim, Abdul Karim Muhammad Khalis, and Shaari Abdul Halim from Universiti Putra Malaysia, Abidin Talib Zainal from Jeonbuk National University, Baqiah Hussein from Dezhou University, and Hashim Azhan and Ermiza Suhaimi Nurbaisyatul from Universiti Teknologi MARA Pahang.

Since graphene possesses excellent electrical, mechanical, and chemical properties, and both graphene and Bi-2223 are grown as sheet-like microstructures, graphene nanoparticles are quite appealing as additives.

More

A graphene addition for enhancing the critical current density of Bi-2223 superconductors (phys.org)

In any great organization it is far, far safer to be wrong with the majority than to be right alone.

John Kenneth Galbraith.

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