Baltic Dry Index. 1780 +43 Brent Crude 90.79
Spot Gold 1823 US 2 Year Yield 5.15 +0.08
Stocks take the escalator up, the elevator down.
Wall Street adage.
It was a bad day in the stock casinos, with more bad days still to come, it’s October.
Forty plus years of declining to zero percent US interest rates has come to a long overdue end. Now comes the reckoning and it will trigger a tsunami of corporate bankruptcies and US bank failures. But enough of looking forward to joys of next year.
It wasn’t a very good day in the District of
Crooks either, where crook politician number three lost his job.
Boom turns to bust?
10-year Treasury
yield hits 4.80%, a 16-year high
The 10-year Treasury yield, which serves as a
benchmark for mortgage rates and as an investor confidence barometer, on
Tuesday surged to its highest level since 2007.
The 10-year Treasury yield was last
up 11 basis points to 4.793, after climbing to 4.8% earlier on Tuesday. The
30-year Treasury yield rose as high 4.924%, also the highest since 2007.
The 2-year Treasury yield,
which is sensitive to expectations around where the Federal Reserve will set
its own key borrowing rate, increased slightly to 5.144%.
Yields and prices move in opposite directions and
one basis point equals 0.01%.
August’s Job Openings and Labor
Turnover survey released
Tuesday showed a still tight labor market, giving the Federal
Reserve the green light to keep lifting rates.
In recent public remarks, Fed policymakers have
indicated disagreement about whether another rate hike is needed before the end
of the year, but concur that rates will have to stay elevated for what could be
a prolonged period of time.
The central bank’s Federal Open
Market Committee has been using rate increases to bring down inflation that
officials consider to be too high even though the rate has come down considerably
from its peak in mid-2022.
“Inflation continues to be too
high, and I expect it will likely be appropriate for the Committee to raise
rates further and hold them at a restrictive level for some time to return
inflation to our 2% goal in a timely way,” Fed Governor Michelle Bowman said in
prepared remarks Monday.
Also speaking Monday, Fed Vice
Chair for Supervision Michael Barr said it’s less important to focus on another
hike and more critical to understand that rates likely will remain elevated “for
some time.” And Cleveland Fed President Loretta Mester, a nonvoter this year on
the FOMC, said “we may well need to raise the fed funds rate once more this
year and then hold it there for some time.”
Market uncertainty remains about
when and whether a rate increase may be implemented. Two central bank policy
meetings remain this year, Oct. 31-Nov. 1 and Dec. 12-13. Market pricing
Tuesday morning was pointing to just a 25.7% chance of a hike on Nov. 1, but a
nearly 45% probability in December, according to futures pricing measured in
the CME Group’s FedWatch Tool.
---- The jump in rates has rekindled talk about
market “bond vigilantes,” a term coined by economist Ed Yardeni to describe the
impact when fixed income investors leave the market because of worries over
U.S. debt.
Persistently high
fiscal deficits are one factor in the rising costs of borrowing. Public debt
has risen past $32.3 trillion this year. Debt has risen to nearly 120% of total
gross domestic product.
“The worry is that
the escalating federal budget deficit will create more supply of bonds than
demand can meet, requiring higher yields to clear the market; that worry has
been the Bond Vigilantes’ entrance cue,” Yardeni wrote Tuesday morning in a
note titled “The Bond Vigilantes Are On The March.”
“Now the Wild Bunch
seems to have taken full control of the Treasury market; we’re watching to see
if the high-yield market is next,” he added. “We are still counting on
moderating inflation to stop the beatings in the bond market.”
U.S.
Treasury yields: investors weigh economic outlook (cnbc.com)
Dow loses
more than 400 points and goes negative for 2023 as interest rates spike: Live
updates
UPDATED TUE, OCT 3 2023 5:19 PM EDT
Stocks tumbled on Tuesday as Treasury yields hit
their highest levels since 2007, raising concern higher interest rates would
freeze the housing market and tip the economy into a recession.
The Dow Jones Industrial Average lost
430.97 points, or 1.29%, for its worst day since March. The 30-stock index
ended the day at 33,002.38. The S&P 500 slid
1.37%, touching its lowest level since June during the session and closing at
4,229.45. The tech-heavy Nasdaq Composite dropped
1.87% to end at 13,059.47 as growth stocks saw some of the biggest losses
because of the rise in rates.
With Tuesday’s losses, the Dow
went into the red for the year, off by 0.4%. The broader S&P 500 is still
up 10% for 2023.
The 10-year Treasury yield
touched 4.8%, reaching
its highest level in 16 years. The benchmark yield has surged in the
past month as the Federal Reserve pledged to keep interest rates at a higher
level for longer. The 30-year Treasury yield hit 4.925%, also the highest since
2007. The average rate on a 30-year fixed mortgage neared
8%.
---- The rise in yields poses “a major headwind to equities,”
according to Alex McGrath, chief investment officer at NorthEnd Private Wealth.
Stocks traded
inversely to bond yields throughout the day, moving lower each time as rates
spiked. The latest catalyst for the rate boost was the release Tuesday of the
August job openings survey, which signaled a tight labor market. The survey showed
9.6 million open roles in the month. Meanwhile, economists polled by Dow Jones
had anticipated 8.8 million jobs. A strong labor market is allowing the Fed to
tighten policy without fear it is going too far.
ear
spread on trading floors as the session continued, with the Cboe Volatility Index jumping
to its highest level since May. That barometer rises when investors see more
tumult ahead.
Stocks with the most to lose from
rising rates and a potential recession led the day’s losses. The SPDR S&P Homebuilders ETF (XHB) shed
more than 2% with Home Depot and Lowe’s falling. Goldman Sachs and American
Express were the biggest losers in the Dow.
Big Tech names like Nvidia and
Microsoft fell as higher interest rates dented enthusiasm for growth stocks
trading on the promise of higher earnings down the road.
Stock
market today: Live updates (cnbc.com)
European stocks fall over 1% as U.S. Treasury
yields hit 16-year high
UPDATED TUE, OCT 3 2023 12:02 PM EDT
European stock markets closed lower Tuesday as
investors digested gloomy economic data from the region.
The regional Stoxx 600 index
ended down 1.1%, with all sectors and major bourses in negative territory. The
debt-heavy utilities sector dropped 2.7% with higher-for-longer rates in focus,
while mining stocks were down 2.6%.
Stocks have
failed to shake off their August and September gloom at
the start of the new month, with the Stoxx declining
Monday as data revealed an outgoing downturn in manufacturing
output, as new orders fell by a near-record level.
In Asia-Pacific
markets overnight, Hong Kong stocks fell about 3%, leading
wider losses in the region. Hong Kong’s Hang Seng index traded
3.12% lower after coming back from a National Day holiday on Monday.
U.S.
stocks were lower as traders closely monitored rising Treasury
yields, which hit a 16-year high. The 10-year Treasury yield, a benchmark for
mortgage rates and guage of investors’ economic confidence, briefly touched its
highest level since 2007.
European
markets live updates: stocks, news, data and earnings (cnbc.com)
Something is breaking in financial markets —
Here’s what’s behind the sell-off
That cracking sound in financial markets isn’t the
typical kind of break, where one asset class or another fractures and gives
way. Instead, this is more a break in a narrative, one that has widespread
repercussions.
The narrative in question is the
one where the Federal Reserve holds interest rates low and everyone on Wall
Street gets to enjoy the fruits.
That’s changing.
In its place comes a story in which
rates are going to stay
higher for longer, an idea Fed officials have tried to get the
market to accept and which investors are only now beginning to absorb.
The pain of recognition was acute
for Wall Street on Tuesday, with major
averages down sharply across the board and Treasury
yields surging to their highest levels in some 16 years.
“When you have an economy
predicated on zero rates, this fast move [by the 10-year Treasury yield]
towards 5%, the calculus has to change, because the ramifications are going to
change,” said Quincy Krosby, chief global strategist at LPL Financial. “The cost
of capital is going up, companies are going to have to refinance at a higher
rate.”
The surge in rates is especially
ominous as corporate America heads to third-quarter earnings reporting season,
which is right around the corner.
“All of this has to be assimilated and digested by the market,” Krosby
added. “You can see that it’s troubling and it’s difficult.”
---- But
the carnage really got going following the 10 a.m. ET release of a Labor
Department report showing that job
openings took a sudden swing higher in August, countering the
prevailing wisdom that the employment picture was loosening and thus putting
less upward pressure on wages.
In turn, traders grew worried that the
central bank would be forced to keep monetary policy tight. That sentiment was
buttressed this week, when at least four policymakers either endorsed hikes or
indicated that higher rates would be staying in place for an extended period.
Along with the slide in stocks, the yield on
10- and 30-year government debt instruments hit highs last seen as the economy
was moving toward the financial crisis.
So
much of the economy has evolved because of low rates and negative rates,”
Krosby said. “Now it’s adjusting to what would be considered a historically
more normal rate regime.”
Getting used to a
more typical rate structure doesn’t sound like such a terrible thing. After
all, prior to the financial crisis, the 10-year Treasury yield had averaged
around 7%, though that also was skewed by the historic rate increases in the
early 1980s.
But after 15 years
of living in an unnaturally low rate regime, normal sounds, well, abnormal.
Trouble for financials
Multiple parts of
the economy face substantial interest rate risk, but none more so than banks.
The sector was jolted earlier this year by the high-profile
failure of a few banks that had built up too much long-duration
government debt, then had to sell at a loss following deposit runs.
In the second
quarter, unrealized losses on bank balance sheets totaled $558.4 billion, an
8.3% jump from the prior period, according to the Federal Deposit Insurance Corp.
Of that total, held-to-maturity Treasurys, which caused much of the turmoil
this year, totaled $309.6 billion.
More
Something
is breaking in financial markets: What's behind the sell-off (cnbc.com)
Why a rout in
government bonds is worrying
By Yoruk Bahceli, Karin Strohecker and Dhara Ranasinghe
LONDON, Oct 3 (Reuters) - The world's
biggest bond markets are in the throes of another rout as a new era of higher
for longer interest rates takes hold.
In the U.S. Treasury market, the
bedrock of the global financial system, 10-year bond yields have shot up to
16-year highs. In Germany, they touched their highest since the 2011 euro zone
debt crisis. Even in Japan, where official rates are still below 0%, bond
yields are back at levels seen in 2013.
Because government borrowing costs
influence everything from mortgage rates for homeowners to loan rates for
corporates, there's plenty of reason for angst.
Here's a look at why the bond rout
matters.
More
Why
a rout in government bonds is worrying | 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.
Food
inflation lowest level since last August, as supermarket price wars pay off
TUESDAY 03 OCTOBER 2023 6:00 AM
The
rate at which food prices increase has fallen to 9.9 per cent in
September, down from 11.5 per cent the prior month, and the lowest level since
last August, in the latest signal that cost of living pressures customers face
at the till are beginning to ease.
Shop price annual inflation is now also at its lowest level since last September, according to the latest analysis by the British Retail Consortium (BRC), and remains below the three month average rate of 6.8 per cent.
Fresh food inflation slowed further in September, to 9.6 per
cent, down from 11.6 per cent in August and ambient food inflation, which
included canned goods cooled to 10.4 per cent in the last month, down
from 11.3 per cent in the prior.
A better than expected overall inflation reading during the
month has offered a glimmer of hope for families who have been battling sky
high prices for over a year.
Supermarkets ramping
up price cuts and loyalty scheme offers – to compete with Lidl and Aldi- has
also offered some relief for shoppers.
A grocery price
war has been playing out before customers’
eyes over the last year with all major chains slashing prices to win the hearts
of shoppers.
Helen Dickinson, chief
executive of the BRC said: “Food prices dropped in the previous month for the
first time in over two years because of fierce competition between retailers.”
“This brought
year-on-year food inflation down to single digits and contributed to the fifth
consecutive monthly fall in the headline rate, helped by easing cost
pressures.”
Dicksion said she
expects shop price inflation to continue to fall over the rest of the year, but
warned that high interest rates, climbing oil prices, global shortages of
sugar, as well as the supply chain disruption from the war in Ukraine, could
pose a risk to this trend.
She added: “Retailers will continue to do all they can to
support their customers and bring prices down, especially as households face
being squeezed by higher energy and mortgage bills.”
Food
inflation lowest level since last August, as supermarket price wars pay off
(cityam.com)
This Website Exposes the Truth
About Soaring Food Prices
A
developer in Austria created a comparison website that helped open up the
opaque world of food costs as regulators investigate the food industry.
OCT 3, 2023
2:00 AM
IT DIDN'T
TAKE long
for Mario Zechner to
prove the government wrong. In May, the independent software developer was
listening to a radio interview with Austria’s labor minister, Martin Kocher,
who said the government would build a new database that
will help people find the cheapest milk, eggs, and other supermarket products
to help fight soaring food prices. However, the planned system would take months to build and
cover only a handful of food types. Zechner decided to take action.
Two
hours after hearing the interview, Zechner had built the first prototype of a
comparison system, pulling the cost of 22,000 items from the websites of
Austria’s biggest two supermarket chains. “I decided to just sit down in the
afternoon and see how hard it really can be,” Zechner says. The result was Heisse Preise (which
translates as “Hot Prices”), with Zechner open-sourcing the project on
GitHub. “From then on, it kind of escalated,” he says.
Months later, Heisse Preise has grown enormously,
demonstrating the power of citizen-developed tools and what can be achieved
when data is opened up to everyone. The comparison site now lists prices from
10 Austrian supermarket chains, plus four in neighboring Germany and Slovenia.
Heisse Preise includes more than 177,000 items. Thanks to data provided by an
anonymous contributor and local press, item pricing history goes back to 2017.
Zechner’s creation of the tool came as Europe’s food retailers and governments
have clashed over rising prices and
the cost of living.
Perhaps
most significantly, Zechner’s tool has shone a light on the opaque world of
price changes by supermarkets, allowing price increases and decreases to be
tracked. The transparency, Zechner and others say, shows there can be little
difference in prices at some major supermarkets, and within days of an item
changing price, competitors can mirror the change.
Data gathered by Heisse Preise and other newly-emerged DIY
comparison sites has fed into the investigations of Bundeswettbewerbsbehörde,
the Austrian Federal Competition Authority, which has been probing the food
industry since October 2022. The authority, which is due to present its full
findings later this month, has already suggested the government should
introduce new laws to make shops publish their
price data. The authority also says it “can be assumed” that
supermarkets themselves crawl the websites of competitors and use that
information to set their own prices.
“This
data is enormously useful for anyone interested in serious competition
policies,” says Leonhard Dobusch,
the academic director at the Momentum Institute, an Austrian progressive think
tank. “It really allows a peek into pricing strategies [and] price coordination
tactics.”
More
This
Website Exposes the Truth About Soaring Food Prices | WIRED
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
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.
Direct
Lithium Extraction (DLE): A Revolutionary Technology for Meeting Lithium
Battery Demand
As the global push toward
sustainable energy gains momentum, the role of lithium-ion batteries as vital
components in electrification and energy storage systems has become
indisputable, accelerating demand for the silvery-white alkali metal with
atomic number 3.
The
insatiable demand for lithium ignited a remarkable tripling of global
production between 2010 and 2020, and this upward trend shows no sign of
slowing, with estimates pointing toward a staggering 40-fold expansion by 2050.1
This
surge in demand places the industry under immense pressure to advance
extraction methods. One of the most promising emerging technologies in lithium
extraction is direct lithium extraction (DLE).
This
article focuses on the importance of lithium-selective sorbents
(LSS) in DLE, such as lithium bayerite and lithium titanate. It
highlights Saint-Gobain Ceramics as a pioneer in this innovative approach.
Conventional Methods and the Promise of DLE
Traditional
methods for lithium extraction primarily involve evaporating continental brine
pools using solar energy and extracting lithium from hard-rock ores.
Continental brine deposits, particularly in Chile, Argentina, and Bolivia, are
four times more abundant than hard-rock ores.
However,
these conventional evaporative methods have faced criticism due to their
substantial water consumption in regions with limited freshwater resources.
These
methods rely on extensive land use and specific climatic conditions.
Evaporative processes suffer drawbacks, such as slow production rates, limited
scalability, and inefficiency in processing lower-concentration lithium brine
sources.1,2
DLE
has emerged as a credible alternative to traditional lithium extraction
techniques, offering advantages over conventional methods through various
technologies, including electrochemical and thermal processes.
These
advantages include increased throughput and enhanced efficiency in meeting the
growing demand for lithium.1
The Role of Lithium Selective Sorbents (LSS)
Among
the array of lithium extraction methods, sorption, and ion exchange are
considered the most promising.3 At the heart of these
approaches are lithium-selective sorbents (LSS), also referred to as
"resin" or "adsorbents."
LSS
enables the selective separation of lithium in solution, with Saint-Gobain
Ceramics, a leading manufacturer, producing two significant LSS: lithium
bayerite and lithium titanate.
Lithium Bayerite: An Absorption Elution Mechanism
Lithium
Bayerite is employed in an absorption-elution process crafted for lithium
recovery. The adsorbent particles of Lithium Bayerite, developed by
Saint-Gobain Ceramics, comprise double-layered hydroxides capable of
lithium-ion exchange.
These
adsorbent particles play a pivotal role in the absorption-elution mechanism of
DLE. Typically, the sorbent is packed within a column. When brine interacts
with the sorbent, it selectively captures and concentrates lithium ions.4,5
The
absorbed lithium ions are subsequently eluted from the sorbent, regenerating it
for reuse. This technique allows for lithium's effectual separation and
concentration, constituting a crucial step in the DLE process.
More
[Prices] are never too high to begin buying or too low to begin
selling.
Jesse Livermore.
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