Baltic Dry Index. 1459 -43 Brent Crude 87.41
Spot Gold 1980 US 2 Year Yield 5.07 +0.04
21st
century adage: Is that true, or did you hear it on the BBC?
The stock casinos did their best to dress up the
month-end close yesterday, but with the safety of US bonds now pulling cash
away from risky stocks, today’s US Treasury funding announcement is likely to
trump the Fed’s interest rate decision later in the day, plus Chairman Powell’s
forward guidance afterwards.
Why take on late year trading risk in stocks when you can
safely ride out the year in 5 percent yielding T. Bills and Notes.
For more on rising risk from stocks scroll down to the
next section down.
Japan stocks
lead Asia market gains ahead of Fed decision
UPDATED WED, NOV 1 2023 1:23 AM
EDT
Japan stocks led gains in the Asia-Pacific
region a day after it’s central bank increased the flexibility around its yield
curve control policy, while investors watched for a policy decision
from the U.S. Federal Reserve.
The Fed will conclude its two-day
monetary policy meeting later in the day, with markets expecting the central
bank to stand
pat on interest rates.
Data showed South Korea’s October exports climbed
5.1% year-on-year, the first time in 13 months, while its factory activity saw a slightly deeper
contraction.
Separately, China’s Caixin/S&P Global manufacturing PMI fell
to 49.5 in October from 50.6 in September, marking the first contraction since
July and missing analysts’ forecasts of 50.8 by a large margin. The reading
mirrors the official figure released by the country’s national bureau of
statistics on Tuesday.
Japan’s Nikkei 225 index
rose 2.08%, while the Topix added 2.33% to hit its highest level in over two
weeks.
South Korea’s Kospi was
up 0.67% and the Kosdaq rose 0.40%.
Hong Kong’s Hang Seng index reversed
earlier gains to fall 0.23%, while China’s CSI 300 index stayed near the flat
line.
In Australia, the S&P/ASX 200 closed
0.85% higher at 6,838.30.
U.S. stocks closed higher on Tuesday, regaining
some ground at the end of a dismal month that was defined by surging interest
rates.
The S&P 500 climbed
0.65%, while the Nasdaq
Composite added 0.48%. The Dow Jones Industrial Average advanced
0.38%.
Stocks posted their
third-straight losing month. The Dow and the S&P 500 fell 1.4% and 2.2%,
respectively.
Live
updates: Asia markets, Federal Reserve, China PMI, India PMI (cnbc.com)
European markets
set to open higher ahead of Fed rate decision
UPDATED WED, NOV 1 2023 1:18 AM
EDT
European markets are heading for a higher open,
with investors awaiting the next interest rate decision from the U.S. Federal
Reserve on Wednesday.
Central bankers are largely
expected to hold rates steady, with fed funds futures pricing suggesting a more
than 97% probability that rates will remain at current levels, according to the CME FedWatch Tool.
European markets traded higher
Tuesday after data showed euro zone inflation fell
to a two-year low of 2.9% in October, preliminary data showed
Tuesday. Economists polled by Reuters expected 3.1%.
Meanwhile, statistics agency
Eurostat said the euro zone economy contracted by 0.1% in the third quarter,
below a forecast of stagnation.
The readings come after the
European Central Bank paused its
record run of 10 consecutive interest rate hikes when it met last week.
European
markets live updates: Fed rate decision, news and earnings (cnbc.com)
Before the
Fed decision, all eyes will be on this big Treasury debt announcement Wednesday
Auctions of government debt, normally routine
events for the Treasury Department, have suddenly become very important to
financial markets.
With debt,
deficits and bond yields all surging, investors are watching closely
how the government will go to market with its borrowing needs.
Both bond and stock markets have
been volatile amid fears of oversupply at a time when the
Federal Reserve is keeping
monetary policy tight, and as investors are demanding a premium for
interest rate risk and geopolitics is posing various wild cards.
That’s why an
announcement Wednesday on refunding, entailing the size of auctions as well as
the duration mix of the debt that will be issued, is expected to draw even more
market interest.
“The reality is,
there is a supply-demand mismatch in the market today, and that is what has led
to this move in bond yields,” said Josh Emanuel, chief investment officer at
Wilshire. “Some have said that the issuance is almost more important than what
the Fed says or what the Fed does, but I actually think both in combination are
really important here.”
Indeed, the two
entities are both pivotal in determining how the U.S. is going to manage its
mammoth debt load. That symbiotic relationship will be on full display this
week when the Treasury Department makes its refunding announcement Wednesday at
8:30 a.m. ET, and the Fed follows with its decision on interest rates that same
day at 2 p.m. ET.
Investors got a preview of the Treasury’s
direction Monday, when the department said it will
be auctioning off $776 billion of debt in the final quarter of
calendar 2023, a bit below market expectations. Treasury said it will auction
another $816 billion in the first quarter of 2024.
Further details on those auctions
will be provided on Wednesday.
---- What to watch
The key variables
markets will be watching are the actual sizes of the auction as well as the mix
between shorter-term Treasury bills against “coupon” issues, as strategists
term longer-duration notes and bonds.
“We think the US
Treasury’s upcoming quarterly refunding meeting might deliver a surprise
relative to market expectations — in which the Treasury might decide to
increase coupons at a lower pace than what its ‘regular and predictable’
strategy might have suggested in August,” Guneet Dhingra, head of U.S. interest
rate strategy at Morgan Stanley, said in a note to clients.
The Treasury’s
reluctance to refinance its shorter-term debt into longer maturities back when
rates were at rock bottom drew the ire recently of Stanley Druckenmiller, the
billionaire founder of Duquesne Capital.
Speaking at an
event for the Robin Hood Foundation, Druckenmiller said Treasury Secretary
Janet Yellen should have been issuing more debt at 10- and 30-year durations
but opted instead to focus on the shorter end of the curve.
“I literally think
if you go back to Alexander Hamilton, it is the biggest blunder in the history
of the Treasury,” he said during a chat with fellow titan Paul Tudor Jones, in a video circulated Monday on X, formerly
known as Twitter. “I have no idea why she’s not called out on this. She has no
right to still be in that job.”
More
Treasury
refunding debt announcement: All eyes on it before Fed (cnbc.com)
Here’s
everything to expect from the Fed’s policy announcement Wednesday
The Federal Reserve meeting will most likely
conclude Wednesday with the central bank not doing a whole lot of anything —
just the way the market wants things for now.
There’s virtually no chance
policymakers will make a move either way on interest rates. Recent data has
bought Fed officials time to decide their next step. Inflation, while
decelerating, is still too high, and the economy is growing at a solid pace
despite the highest benchmark interest rates since the early part of the
century.
What investors will watch, instead,
are the signals that come from Chair Jerome Powell and
the rest of the Federal Open Market Committee about where they’re leaning for
the future.
---- Despite the chair’s efforts to walk a line between holding
tough against inflation while being attuned to the impact higher interest rates
have on the economy, markets have been sensitive.
Though
looking stronger this week, stocks have been reeling through
the past two months, while Treasury yields have been hovering around 16-year
highs — dating back to the early days of the financial crisis.
With much of those fears have
centered around how
much higher rates could go, and how long the Fed will keep them
elevated, Powell’s post-meeting news conference, as well as the FOMC statement,
could move markets.
“The last thing Powell wants to do
here is make a mistake and come across as too hawkish, because the implication
of that as you could see a risk-off environment. You’ve already started to see
a little bit of a technical breakdown in equities,” Emmanuel said. “And you
have a market that is very, very short Treasurys.”
Heavy news cycle
In fact, markets
will have a
dual focus Wednesday. Earlier in the day, the Treasury
Department will provide more information on its
funding needs in the near future, in what could be a pivotal moment
for investors with a keen focus on how the government manages its $33.7
trillion debt. Also on tap Wednesday: the Labor Department’s report on job
openings in September, and ADP’s estimate on private payroll growth.
That all happens
two days before the Labor Department issues its nonfarm payrolls report for
October, and comes on the heels of a report showing better-than-expected
economic growth in the third quarter but a likely slowdown
ahead.
More
Here's
everything to expect from the Federal Reserve meeting Wednesday (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.
Asia's
factories squeezed as China's nascent recovery teeters
By Leika Kihara
November
1, 2023 3:54 AM GMT
TOKYO, Nov 1
(Reuters) - Asia's manufacturers faced worsening pressure in October with
factory activity in China slipping back into decline, clouding recovery
prospects for the region's major exporters already squeezed by weaker global
demand and higher prices.
Purchasing
managers' indexes (PMIs) for factory powerhouses China, Japan and South Korea
showed activity shrinking while Vietnam and Malaysia also struggled with the
broadening fallout from a Chinese slowdown.
China's Caixin/S&P Global manufacturing
PMI fell to 49.5 in October from 50.6 in September, a private sector survey
showed on Wednesday, falling back below the 50.0 point threshold that separates
growth from contraction.
The
Chinese survey echoed a downbeat official PMI reading on
Tuesday, which also showed an unexpected contraction in activity, casting doubt
over recent hopes of a recovery in the world's second-largest economy.
"Overall,
manufacturers were not in high spirits in October," said Wang Zhe, an
economist at Caixin Insight Group, on China's survey outcome.
"The
economy has showed signs of bottoming out, but the foundation of recovery is
not solid. Demand is weak, many internal and external uncertainties remain, and
expectations are still relatively weak."
The impact of
China's slowdown is being felt in countries like Japan and South Korea, whose
manufacturers are heavily reliant on demand from the Asian giant.
Japan's
factory activity shrank for a fifth straight month in October, the final au Jibun Bank PMI
showed.
That came a day
after official figures showed Japan's factory output rose much less than
expected in September as demand slowed significantly.
Japanese
machinery makers like Fanuc (6954.T) and Murata
Manufacturing (6981.T) recently
reported weak six-month earnings due to sluggish Chinese demand.
South Korea's
factory activity fell for the 16th straight month while PMIs from Taiwan,
Vietnam and Malaysia also showed continued declines in activity.
The International Monetary Fund (IMF) has
warned that China's weak recovery and the risk of a more protracted property
crisis could further dent Asia's economic prospects.
In its World
Economic Outlook released last month, the IMF cut next year's growth estimate
for Asia to 4.2% from 4.4% projected in April, and down from 4.6% forecast for
this year.
Asia's
factories squeezed as China's nascent recovery teeters | Reuters
Firms going bust on track
for worst year since 2009
October 31, 2023
The number of companies going
bust this year is on track to be the highest since the depths of the financial
crisis in 2009.
Insolvencies
rose 10% from a year ago in the three months to the end of September, the latest official figures for England and Wales show.
There has also
been a sharp rise in the number of firms at risk of going bust.
Firms in
"critical financial distress" jumped 25% in the last three months,
insolvency expert Begbies Traynor says.
They are
defined as having county court judgments exceeding £5,000 against them - often
a precursor to going under.
Dean Euden, a wine merchant from Cardiff, has already wound up his business. "I thought Covid would be the toughest time but actually the harder times came after," he said.
"The cost of living crisis meant people had less money to spend so I closed the shop and went online but there just wasn't the same spending power in the market," he added.
"I couldn't make ends meet, couldn't pay my suppliers, couldn't pay myself. That's when I realised it wasn't a viable business anymore."
There are nearly 38,000 companies in critical financial distress, according to data prepared by analysts Red Flag for Begbies Traynor.
Julie Palmer, from Begbies Traynor, said this was down to a combination of higher inflation and borrowing costs twinned with weaker consumer confidence and demand.
"Tens of thousands of British companies are in financial dire straits now that the era of cheap money is firmly behind us," she said.
"Businesses that had loaded up on debt at rock-bottom rates, and were only able to cling on during the pandemic thanks to government support, must now deal with a financial reality check as higher interest rates hit working capital for the foreseeable future.
"Taken together with stubbornly high inflation and weak consumer confidence, many of these businesses will inevitably head towards failure."
The construction sector saw the sharpest increase in companies facing critical distress with an increase of 46% compared to just three months ago.
More
Firms going bust on track for worst year since 2009 - BBC News
Eurozone economy shrinks
in third quarter, inflation falls further
Tue,
31 October 2023 at 10:40 am GMT
Economic growth in the eurozone
contracted in the third quarter, data showed Tuesday, hit by the European
Central Bank's painful rate-hiking campaign and Germany's weakening economy,
but inflation slowed in October.
The EU's official data agency said
the 20-country single currency zone's economy shrank by 0.1 percent over the
July-September period, after recording only 0.2 percent growth in the second
quarter.
The figures reflect the difficulties
facing the eurozone including the cost-of-living crisis and concerns over the
flagging demand in the global economy.
Although the eurozone has weathered
the shocks from the coronavirus pandemic and the war in Ukraine, fears are
growing over the economic effects of the Hamas-Israel war.
The data published by Eurostat on
Tuesday showed, however, the whole 27-country European Union economy --
including members who do not use the euro -- fared better, growing by 0.1
percent in the quarter.
Germany's economy shrank by 0.1
percent in the third quarter, while Austria also recorded a contraction of
0.6 percent.
France, the EU's second biggest
economic powerhouse, only grew by 0.1 percent, and Italy's economy stagnated in
the third quarter, the data showed.
Germany has been hit hard by elevated
energy costs, a sluggish manufacturing sector and high interest rates designed
to tame inflation.
Consumer price inflation in the
eurozone has slowed to 2.9 percent, Eurostat data for October showed Tuesday,
the lowest rate since July 2021 when it reached 2.2 percent.
The figure is down from 4.3 percent
in September and lower than predicted by analysts who had expected inflation to
remain above three percent.
The inflation rate is also now closer
to the ECB's two percent target. Despite higher borrowing costs, the ECB
remains steadfast behind its mission to tame red-hot inflation.
But signs of weakness in the economy
as well as ebbing price pressures prompted the ECB to leave interest rates
unchanged earlier this month after raising them in each of their previous 10
meetings.
"Continued deflation in energy
prices and easing food price inflation were the main drivers," Tomas
Dvorak, senior economist at Oxford Economics said, adding that he expected
inflation to "dip below target" in 2024.
"We think the ECB will start
with rate cuts already" as early as in April, he added.
- Inflation slows -
Eurozone inflation is down from its
peak of 10.6 percent in October last year following Russia's invasion of
Ukraine which sent energy prices spiralling.
Core inflation, which strips out
volatile energy, food, alcohol and tobacco prices, also slowed to 4.2 percent
in October from 4.5 percent in September, Eurostat said.
More
Eurozone economy shrinks in third quarter, inflation
falls further (yahoo.com)
French GDP growth slows, inflation eases
By Marine Strauss and Tassilo Hummel October 31, 2023 8:04 AM GMT
PARIS, Oct 31
(Reuters) - The French economy grew by 0.1% in the third quarter, with growth
slowing from the previous quarter but staying just above zero thanks to
household spending, preliminary data from the INSEE statistics agency showed on
Tuesday.
Household
consumption was up by 0.7%, while INSEE data also showed that inflationary
pressures in the euro zone's second-biggest economy continued to ease.
"The upturn
in household growth is good news. It drove growth in the third quarter,"
Finance Minister Bruno Le Maire told reporters, confirming a 1% full-year
growth target for 2023.
Le Maire also
said recent trends of easing inflation would allow France to meet its 2024
growth target of 1.4%.
Third
quarter growth was in line with forecasts. A Reuters poll of 26 economists had
an average forecast of 0.1% (FRGDPP=ECI), with estimates ranging from 0.5% to -0.3%.
The economy grew
a revised 0.6% in the second quarter, INSEE said.
French inflation
slowed in October as prices in the energy and food sector continued to ease,
preliminary EU-harmonised data also showed.
Consumer prices
rose 4.5% in October from a year earlier, after a 5.7% rise in September, INSEE
said.
The inflation
figure was in line with a consensus of 15 economists polled by Reuters.
French GDP growth slows, inflation eases | Reuters
Italian Economy Avoids Recession by Narrowest of
Margins
October 31, 2023
(Bloomberg) -- Italy’s economy stagnated in the third quarter — just dodging a recession as Prime Minister Giorgia Meloni battles to keep output expanding while also limiting debt.
Gross domestic product was unchanged from the previous three months, data Tuesday showed. That follows a 0.4% contraction in the second quarter and is less than the 0.1% growth estimated by analysts in a Bloomberg poll.
The economy was helped by net exports, though domestic demand acted as a drag, national statistics institute Istat said in a statement.
The outcome puts Meloni in a difficult spot as she struggles to invest in the economy while also keeping Italy’s mammoth debt in check. It underscores how rising interest rates and weaker global exports are weighing on the euro zone’s No. 3 economy. The Bank of Italy sees 2023 GDP up by just 0.7%.
The news is part of a mixed picture across the continent. France saw slight growth in the third quarter, while Germany contracted by 0.1%. Figures for the 20-nation euro area, expected to show stagnation, are due later Tuesday.
Italy’s recent budget law, which envisages a wider deficit due to tax cuts and spending to help low-income families, has unnerved investors, pushing the spread between Italian and German 10-year bonds to 193 basis points.
Italian Economy Avoids Recession by Narrowest of Margins - BNN Bloomberg
Germany on brink of recession after narrowly avoiding
one last winter
October
30, 2023
Germany is on
the brink of recession having narrowly avoided one last winter.
Gross domestic
product in Europe’s largest economy fell 0.1 per cent in the third quarter.
Another quarter of decline would leave it in recession.
Germany
avoided recession last winter but has been dubbed ‘the sick man of Europe’.
The German
economy has become one of the growth laggards of the eurozone,’ said Carsten
Brzeski, economist at ING.
Commerzbank
expects the German economy to contract over the winter.
And Pantheon
Macroeconomics chief eurozone economist Claus Vistesen added: ‘Germany’s
economy is now firmly stuck in the mud.’
Germany on brink of recession after narrowly avoiding one last winter (msn.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
More
contempt for the public, by all parties in the Commons, on display yet again,
on the issue of Covid-19 vaccine safety.
I will leave this callous display of contempt for the UK public up for
the rest of the week. Approx. 14
minutes.
Safe
and effective
The Veil Of Silence Over
Excess Deaths
MONDAY,
OCT 30, 2023 - 06:00 AM
Around the world, there has been a deafening
silence over excess deaths from governments and the mainstream media, who
not so long ago were quite fixated on the daily death toll for Covid.
On October 20th, a 30-minute adjourned debate
(20 rejections later) on excess deaths in the UK House of Commons was finally secured
by Andrew
Bridgen, MP for North West
Leicestershire and member of the Reclaim Party.
Bridgen began his speech to the sound of
erupting cheers from the full, upper public gallery, in stark contrast to the
almost empty chamber below.
Where were the hundreds of MPs who would
normally sit shoulder to shoulder in the chamber? It appears, an increase in
deaths of their constituents was not a pressing issue for them on that Friday
afternoon.
We’ve experienced more excess deaths
since July 2021 than in the whole of 2020, unlike the pandemic, however, these deaths are not
disproportionately of the old, in other words, the excess deaths
are striking down people in the prime of life but no-one seems to care.
I fear history will not judge this house kindly.
Strikingly, excess deaths have been seen
across all age groups, which Bridgen pointed out during
his speech.
More
The Veil Of Silence Over Excess Deaths | ZeroHedge
Nearly 1 in 3 COVID-19 Vaccine Recipients Suffered Neurological Side Effects: Study
The
people included in the study suffered from headaches, tremors, muscle spasms,
insomnia, sleepiness, vertigo, and difficulty in concentration.
10/30/2023 Updated: 10/31/2023
Almost a
third of individuals who received a COVID-19 vaccine suffered from neurological
complications including tremors, insomnia, and muscle spasms, according to a
recent study published in the journal Vaccines.
The study
analyzed 19,096 people who received COVID-19 vaccines in Italy in July 2021,
out of which 15,368 had taken the Pfizer vaccine, 2,077 had taken the Moderna
version, and 1,651 took the AstraZeneca version.
While both
Pfizer and Moderna are mRNA vaccines, AstraZeneca, being an adenovirus vaccine,
uses a different mechanism to trigger the immune response.
The study
found that about 31.2 percent of vaccinated individuals developed
post-vaccination neurological complications, particularly among those injected
with the AstraZeneca jab. Different vaccines had a different “neurological risk
profile.”
The
neurological risk profile of the AstraZeneca vaccine included headaches,
tremors, muscle spasms, insomnia, and tinnitus, while the risk profile of the
Moderna vaccine included sleepiness, vertigo, diplopia (double vision),
paresthesia (a feeling of numbness or itching on the skin), taste and smell
alterations, and dysphonia (hoarseness or loss of normal voice).
As to Pfizer vaccines, researchers found “an
increased risk” of cognitive fog or difficulty in concentration.
AstraZeneca
Risks
More than 53 percent of individuals who took
an AstraZeneca shot suffered from headaches, which usually lasted for one day.
Over 13 percent developed tremors, which typically reverted after a day as
well.
Insomnia was
reported among 5.8 percent of AstraZeneca recipients. However, the study notes
that researchers were unsure whether the individuals actually developed
insomnia or had a “misperception of their sleep quality due to vaccination
stress.”
Tinnitus was
reported by 2.7 percent of the people who took AstraZeneca shots. Tinnitus is a
condition in which an individual hears ringing or other noises which are not
caused by an external sound.
All these health
complications had a higher risk of occurring after taking the first dose of the
vaccine.
The study
speculated that complications related to the AstraZeneca vaccine are
attributable to two factors. “Firstly, the nature of the vaccine, which is a
modified adenovirus vector that results in significant and persistent systemic
immune activation; secondly, individual vulnerability related to a predisposing
biology.”
More
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.
How
Solar Power Is Set to Become the New King of Electricity
October 30, 2023
Solar power is not only
a key solution for climate change, but also an unstoppable force in the global
energy market. According to a recent study, solar energy will become the
dominant source of electricity generation by 2050, even without more ambitious
climate policies. The study, conducted by the International Energy Agency (IEA)
and the International Renewable Energy Agency (IRENA), attributes this
remarkable trend to the rapid decline in the cost of solar plants and
batteries, and the fast construction of solar farms.
The study projects that
solar photovoltaic (PV) plants will account for 43% of global electricity
generation by 2050, followed by wind (32%) and fossil fuels (11%). This means
that solar power will surpass coal, gas and nuclear as the main source of electricity
in the world. The study also estimates that solar energy can reduce greenhouse
gas emissions by 60% by 2050, compared to the current levels.
Solar power is
not just good for the environment, but also for people. Solar panels can
sequester more carbon dioxide per acre than trees, and much more than corn
ethanol, according to a study by Columbia University. Solar power also creates
jobs, stimulates growth, and improves energy security. “Solar power is not just
a key solution for climate change. It is also an important driver of economic
development,” said Francesco La Camera, Director-General of IRENA.
Solar power
also has a minimal impact on water resources, land use, wildlife and human
health, compared to fossil fuels. A study by Yale University found that wind
and solar power have low life-cycle emissions, meaning that the emissions from
their construction, operation and decommissioning are much lower than those
from coal, gas and oil. “Wind and solar power are now mainstream options in the
power sector. They not only offer substantial benefits for our climate, but
also have a minimal impact on water resources, land use, wildlife and human
health,” said Professor Ken Caldeira, Senior Scientist at the Carnegie
Institution for Science.
More
How
Solar Power Is Set to Become the New King of Electricity (msn.com)
GB and the world can probably never get to carbon neutral no
matter how many trillions are spent. Google "The New Energy Economy: An
Exercise in Magical Thinking," for the science of why not.
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