Stocks Desperation In Seoul. Recession Looms. Oil.

Baltic Dry Index. 1462 +77              Brent Crude  85.23

Spot Gold 1984                   US 2 Year Yield 4.83 -0.15

November 6, 1153. Treaty of Wallingford (Oxfordshire) signed between King Stephen and the Empress Maude (aka Matilda). Ending the civil war between Stephen and Matilda. “When God and His Angels slept.”

Desperation time in the South Korean stock casino. If you rig the casino so that stocks can only go up, stocks only go up, who knew?

But if a global recession hits, the over-priced stocks may find a giant lack of buyers at anything like current prices when the longs try to cash in profits.

Oh, what a tangled web we weave, and all that.

South Korea stocks lead Asia markets higher after short selling ban

UPDATED MON, NOV 6 2023 12:14 AM EST

South Korea stocks surged on Monday after the country re-imposed a ban on short-selling, while most Asia-Pacific markets took heart from a soft U.S. jobs report that helped reduce interest rate expectations.

Financial authorities in South Korea said short-selling will be banned until the end of June 2024. Short-selling is when a trader sells borrowed shares to buy back at a lower price and pocket the difference.

U.S. nonfarm payrolls increased by 150,000 in October, lower than the Dow Jones consensus forecast for a 170,000 rise. This eased worries that the Federal Reserve will continues to hike interest rates.

Japan’s business activity expanded in October but at its softest pace this year, according to a private survey.

South Korea’s Kospi jumped 3.99%, and the Kosdaq gained 6.56%.

Returning from a long weekend, Japan’s Nikkei 225 gained 2.32%, while the Topix added 1.70% to hit its highest level in over one month.

Hong Kong’s Hang Seng index rose 1.79%. Mainland China’s CSI 300 index gained 1.33%.

In Australia, the S&P/ASX 200 closed 0.28% higher at 6,997.40

U.S. stocks closed higher on Friday after a soft jobs report drove bond yields lower, and the major indexes registered their best week so far in 2023.

The S&P 500 climbed 0.94% and notched its first five-day advance since June.

The Dow Jones Industrial Average gained over 200 points to rise 0.66%, while the Nasdaq Composite jumped 1.38%.

Asia stock markets live updates: South Korea short selling ban, U.S. jobs data lift sentiment (cnbc.com)

Stock futures are little changed after the S&P 500′s best week of 2023: Live updates

UPDATED MON, NOV 6 2023 12:06 AM EST

U.S. equity futures were flat on Monday after the major averages capped their best week so far this year.

Futures tied to the Dow Jones Industrial Average rose 24 points, or 0.07%. S&P 500 futures ticked higher by 0.03% and Nasdaq 100 futures hovered below the flat line at 0.01%.

All of the major averages were coming off their best weeks of the year so far, also striking a positive chord to begin November trading. The Dow ended the week at 34,061.32, up by 5.07% in its most winning week since October 2022. The S&P advanced 5.85% to 4,358.34 and the Nasdaq Composite finished the week higher by 6.61% at 13,478.28. It was the best week since November 2022 for both indexes.

“Oversold conditions, solid earnings, hope for an end to the Federal Reserve’s rate-hiking campaign, and a sizable pullback in interest rates have brought buyers back into the market,” said LPL Financial’s Adam Turnquist.

A soft monthly jobs report also drove bond yields lower, giving a boost to equities.

Although the week ahead will be light on economic data and company earnings, seasonal tailwinds could help further the recovery in stocks. November is the best-performing month for the S&P 500, according to the Stock Traders’ Almanac. Turnquist noted it also kicks off the best six-month return period for the market since 1950. The S&P 500 has generated an average return of 7% from November through April since then, he said.

Earnings season is winding down, with 400 S&P 500 companies having already reported their quarterly financial results. Investors this week are still looking forward to updates this week from Walt Disney, Wynn and MGM Resorts, Occidental Petroleum and D.R. Horton.

Meanwhile, traders will also be watching Federal Reserve Chair Jerome Powell, who is scheduled to speak twice in the coming days. Last week the central bank kept rates unchanged for a second straight meeting as bond yields tumbled, and investors are hoping its rate-hiking campaign may be over.

More

Stock futures are little changed after the S&P 500's best week of 2023: Live updates (cnbc.com)

Bad news for the economy is good news for the stock market ... as long as it doesn’t get too bad

PUBLISHED FRI, NOV 3 2023 10:53 AM EDT UPDATED FRI, NOV 3 2023 12:12 PM EDT

Friday’s market reaction to the jobs report comes down to a simple premise: bad news is good news, as long as it isn’t too bad.

Stocks rallied sharply after the Labor Department said nonfarm payrolls rose by 150,000 in October — 20,000 fewer than expected but a difference attributable pretty much completely to the auto strikes, which appear to be over.

For the Federal Reserve, the relatively muted job creation coupled with wage gains nearly in line with expectations adds up to a scenario in which the central bank doesn’t really have to do anything. It can just continue to let the data flow in, without having to move on interest rates as it evaluates the impact of its previous 11 hikes.

“The Fed finally got what it’s been looking for — a meaningful slowdown in the labor market,” said Mike Loewengart, head of model portfolio construction for Morgan Stanley’s Global Investment Office.

“We’ve seen one or two head fakes in this direction before, but the fact that this report followed other weaker-than-expected economic data points this week may encourage investors who have been waiting for a less-hawkish Fed,” he added.

Markets reacted in more ways than one to the report. Traders in fed funds futures reduced the probability for a December rate hike to less than 10% and now see the first cut coming as soon as May, according to CME Group tracking.

However, that cut could be the really bad news, as it likely would signal the Fed’s concern that the economy is slowing so much that it needs a boost from monetary policy. Slow, controlled growth is something the markets and the Fed are seeking in the current climate, negative growth is not.

“Investors who are eager for the Fed to be cutting rates should be careful what they wish for,” Michael Arone, chief investment strategist at State Street Global Advisors, said in an interview earlier this week.

Despite market pricing, it seems like cuts aren’t around the corner if recent statements from Fed officials are any indication. Fed Chairman Jerome Powell said Wednesday that cuts have not been a part of the conversation among policymakers.

“It seems like that’s still a ways off in my mind,” Richmond Fed President Thomas Barkin said during an interview Friday on CNBC’s “Squawk on the Street.” “You could imagine scenarios where demand comes off and you have to do something. You could imagine a scenario where inflation is starting to settle and you want to lower real rates. Both of those imaginary things still feel pretty far out the distance.”

Bad news for the economy is good news for the stock market ... as long as it doesn't get too bad (cnbc.com)

In other news, Saudi Arabia and Russia turn down the oil spigots.

 

Saudi Arabia, Russia to continue additional voluntary oil cuts

By Maha El Dahan and Olesya Astakhova November 5, 2023 11:08 PM GM

DUBAI, Nov 5 (Reuters) - Top oil exporters Saudi Arabia and Russia confirmed on Sunday they would continue with their additional voluntary oil output cuts until the end of the year as concerns over demand and economic growth continue to weigh on crude markets.

Both countries said their cuts would be reviewed next month to consider extending, deepening or increasing it.

Saudi Arabia confirmed it would continue with its additional voluntary cut of 1 million barrels per day (bpd) translating into a production of around 9 million bpd for December, a source at the ministry of energy said in a statement.

"This additional voluntary cut comes to reinforce the precautionary efforts made by OPEC+ countries with the aim of supporting the stability and balance of oil markets," the source was quoted as saying in the statement.

Following the Saudi statement, Moscow also announced it would continue its additional voluntary supply cut of 300,000 bpd from its crude oil and petroleum product exports until the end of December.

OPEC+, which comprises the countries of the Organization of the Petroleum Exporting Countries (OPEC) and leading allies including Russia, has been cutting output since last year in what it says is preemptive action to maintain market stability.

Oil hit a 2023 high in September at near $98 a barrel for Brent crude, although it has since weakened to trade around $85 a barrel on Friday, despite support from the conflict in the Middle East.

Saudi Arabia, OPEC's de-facto leader, first made the voluntary cut for July as an addition to a broad supply-limiting deal first agreed by some members of OPEC+ in April.

The kingdom said in September it would extend its additional voluntary cut until the end of the year, and review the decision monthly.

Analysts had widely expected the kingdom to confirm it would extend its cut in December.

A June decision by OPEC+ already limits supply into 2024.

The alliance is next due to meet on Nov. 26 in Vienna.

Saudi Arabia, Russia to continue additional voluntary oil cuts | 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.

The founder of the market's most famous recession indicator says the Fed overdid it with rate hikes and a downturn is still coming

Fri, 3 November 2023 at 10:52 pm GMT

This week, yields in the bond market have taken a breather after the Federal Reserve decided to skip a rate hike again. But that doesn't mean we've dodged a recession, according to a finance professor at Duke.

Campbell Harvey, known for creating the renowned yield curve recession indicator, said a downturn may very well still be on its way.

For one, it's because the Fed is overestimating inflation and raised rates too much. After excluding housing costs, which are a lagging indicator that makes up a sizable chunk of the consumer price index, inflation is already below 2%, according to Harvey.

"If you look at real-time data for shelter, that means inflation is running about 1.8%," he told CNBC on Friday. "So this idea that we still have a long way to go, that's just not the case. That is a false narrative."

Harvey also pointed out the flattening of the yield curve, and why it's flashing a warning sign.

Last year, the curve inverted from its usual upward slope as recession angst seeped through markets amid the Federal Reserve's aggressive rate hikes.

The curve has remained inverted since then. But its recent flattening is actually sending another recessionary signal, he said, noting that the yield curve uninverted just before the last four downturns.

And the way the curve has been uninverting is especially concerning because it's not that short-term rates are coming down, normalizing the slope. It's because long-term rates are going up.

"The long rate is very damaging," Harvey warned. "It increases the cost of capital, so it makes it difficult for businesses to invest. It craters the housing market with mortgages all of a sudden at 8%. This causes implications in indeed in our financial system. Our banks are taking a hit right now."

He added, "All of this points to weakness in 2024."

The founder of the market's most famous recession indicator says the Fed overdid it with rate hikes and a downturn is still coming (yahoo.com)

Jobs Market Close To A Major Recession Warning

Nov 4, 2023,12:49pm EDT

One of the best near-term recession indicators is the job market. The release of October’s jobs report showed unemployment rose to 3.9%. Small increases in the unemployment rate have historically been sufficient to trigger a recession. This is called the Sahm Rule. Now, it’s not calling for a recession yet, but it may be getting close if the unemployment rate does not improve from here.

Why It Has Worked Historically

The Sahm Rule is designed to rapidly determine if the U.S. economy is in recession, in part, so that policymakers can respond. It’s designed by economist Claudia Sahm.

Using jobs data is helpful because it’s released weeks ahead of most other economic metrics. This approach has merit because unemployment has a big impact on economic growth. Broadly two thirds of the economy is consumer spending, so when jobs are cut, it’s a fair bet that consumer spending falls, and hence economic activity typically weakens too because consumer spending is its largest component.

Constructing The Metric

The metric examines the current 3-month average of the unemployment rate compared to the low unemployment rate of the previous 12-months. The 12-month low of unemployment is currently 3.4% as occurred twice in January and April of 2023. Then the recent readings of unemployment for the past 3 months (August, September and October) are 3.8%, 3.8% and 3.9% respectively. Therefore should unemployment remains at or above the current 3.9% level for November’s and December’s jobs report or simply spike materially higher in November, then the indicator will call a recession. A recession could be called by this indicator with the next jobs report on December 8.

More

Jobs Market Close To A Major Recession Warning (forbes.com)

Covid-19 Corner

This section will continue until it becomes unneeded.

Hydroxychloroquine Associated With Lower COVID-19 Mortality: Study

The French study included 30,202 patients.

11/3/2023 Updated: 11/3/2023

People who received hydroxychloroquine were less likely to die than those who did not, according to a new study.

Just 0.8 percent of patients at a facility in France who received hydroxychloroquine (HCQ) and an antibiotic died, compared to 4.8 percent of patients who did not receive the drug combination, French researchers reported on Nov. 1.

"This study represents the largest single-center study evaluating HCQ-AZ in the treatment of COVID-19. Similarly, to other large observational studies, it concludes that HCQ would have saved lives," Dr. Didier Raoult, with Aix-Marseille Universite in Marseille, and his co-authors wrote.

The paper was published in the journal New Microbes and New Infections. It was released as a preprint earlier this year, but withdrawn because authors said they have changed their "analytic strategies."

Researchers examined records from 30,423 patients with COVID-19 who were treated at another institution in Marseille, IHU Méditerranée Infection. They included all adults who tested positive for COVID-19 and who were treated in the hospital as an inpatient or an outpatient between March 2, 2020, and Dec. 31, 2021.

The study set ended up with 30,202 patients because treatment information was not available for the 221 others.

Most of the patients received off-label prescriptions of hydroxychloroquine and azithromycin (AZ), a common antibiotic.

Of the set, 23,172 patients received the drug combination. The other 7,030 did not.

Among those who received the drugs, 191, or 0.8 percent, died. Among those who did not, 344, or 4.8 percent, passed away.

Those who received HCQ and AZ were more likely to survive regardless of whether they were inpatients or outpatients.

The biggest effect was recorded in outpatients aged 50 to 89.

Limitations of the study included drawing from records from a single center. Funding came in part from the French government.

HCQ has been cleared in both France and the United States for decades but not for treating COVID-19.

---- Dr. Raoult and his co-authors acknowledged that several large randomized trials have found no benefits for HCQ against COVID-19, including a World Health Organization trial. But they said that the largest, funded by the World Health Organization and and United Kingdom government, suffered from "significant methodological problems," including high dosing during the first 24 hours.

The group also criticized smaller trials with similar findings as underpowered, including a trial in France that was stopped due to enrollment issues.

"In contrast, several large observational retrospective studies published in the literature, including a total of 47,516 patients report a benefit of using HCQ on the mortality of COVID-19 patients," the authors said, pointing to studies from France, Iran, and Spain.

More

Hydroxychloroquine Associated With Lower COVID-19 Mortality: 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.

Battery storage could ease growing strain on power grid

Mella McEwen, Oil Editor  Nov. 4, 2023

As the Permian Basin’s oilfields become more electrified, demand is expected to soar in an area lacking in sufficient transmission capacity. That could set up a conflict between homeowners and commercial users for power. Battery storage is one way to help reduce spikes and offer resiliency.

“Battery storage has been around for a long time,” said Sequoya Cross, vice president, energy storage with Briggs & Stratton Energy Solutions.

Speaking with the Reporter-Telegram by phone, she said battery storage was initially used for homes “off the grid,” but their use has expanded with technical advancements that have made them not only more advanced but affordable. The chemistry has also become safer for home use, she added.

Battery storage can help distribute energy where needed rather than relying on transmission lines that could fail, Cross noted. It also allows for the dispatch of energy from one area to another experiencing peak load.

Homeowners are also turning to solar panels, and she said batteries would allow that solar energy to be stored rather than pushing it onto the grid, helping reduce spikes and offering energy resiliency to owners and utilities more time to make repairs.

“Often, batteries can be used where generators can’t be used or in lieu of generators,” she said.

Her company recycles all of the material that can be recycled. “We as a company thought through the entire life cycle of the battery,” she said.

Briggs & Stratton offers 10- and 15-year manufacturer warranties on its batteries, which she estimated are good about 10,000 cycles. “(But) even after 10 or 15 years, you still have 80% capacity left. These batteries have incredible life spans.”

Battery storage could ease growing strain on power grid (mrt.com)

November 6, 1812, the first blizzard hits Napoleon’s calamitous retreat from Moscow.  In a little over the next month the vast majority of the remnants of the Grand Army of Napoleon’s Russian invasion will have frozen to death, starved to death or been captured.