Baltic Dry Index. 1662 +07 Brent Crude 82.83
Spot Gold 1967 US 2 Year Yield 4.80 -0.22
A large Bank is exactly the place where a vain and shallow
person in authority, if he be a man of gravity and method, as such men often
are, may do infinite evil in no long time, and before he is detected. If he is
lucky enough to begin at a time of expansion in trade, he is nearly sure not to
be found out till the time of contraction has arrived, and then very large
figures will be required to reckon the evil he has done.
Walter Bagehot. Lombard Street, 1873.
In the stock casinos, the party’s back on. The US central bank may not yet have brought out the punch bowl again, but they soon will, right? Falling interest rates dead ahead!
What’s not to like? Look away from Japan and the EU, now.
Besides Presidents Xi and Biden are to hold a love fest later today, to be followed by “peace in our time” forever, right.
Below, how a slightly better than forecast US
inflation figure sent the US casinos “magnificent seven” soaring. Bond yields
and the dollar downwards.
Stocks surge, dollar
slumps as traders cheer inflation surprise
By Tom Westbrook
November 15, 2023 2:40 AM GMT
SINGAPORE, Nov 15
(Reuters) - Asian stocks leapt while the dollar was nursing its heaviest losses
in a year on Wednesday, as steady U.S. inflation figures boosted investor
confidence that the Federal Reserve was done hiking interest rates and may
start cutting early next year.
U.S.
headline consumer prices were flat in
October, against expectations for a 0.1% rise. Core CPI, at 0.2%, also came in
below a forecast of 0.3%.
MSCI's
broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was up 1.9% in
early trade. Japan's Nikkei (.N225) was up 1.8%. Overnight
the Nasdaq (.IXIC) jumped
2.4%, bonds surged and the dollar slumped more than 1.6% on the euro.
Ten-year yields
fell 19 bps overnight and touched an almost two-month low of 4.43% in Asia,
having tumbled below support at 4.5%. Yields fall when bond prices climb.
In foreign
exchange trade, the dollar suffered its heaviest selling in 12 months, with the
sharpest losses against risk-sensitive currencies such as the Australian
dollar.
The Aussie leapt
2% overnight and was steady at $0.6496 in Asia. The New Zealand dollar held on
to a 2.2% gain, at $0.60. The euro broke above $1.08 and even the battered yen
rallied to 150.5 per dollar.
The detail of the
data offered extra cheer to investors, with evidence of rent rises moderating.
Car prices fell and a downtrend in six-month annualised core inflation remained
intact.
"This
reading will likely confirm, in our view, that the Fed is now on hold on
rates," said Chetan Seth, strategist at Nomura.
"Recent
U.S. labour market and inflation reports suggest an economy that is softening,
but not collapsing, and bond yields and oil prices have moderated, thus
reducing hard-landing risks (for the economy next year)."
On
the other side of the world, China's central bank boosted liquidity injections
on Wednesday, although it kept the interest rate unchanged when rolling over
maturing medium-term policy loans. The yuan held near a two-month high.
In Japan, the
Bank of Japan stepped back and pared its regular bond buying as markets
rallied. Ten-year Japanese government bond yields hit a one-month low of
0.775%.
The detail of the
data offered extra cheer to investors, with evidence of rent rises moderating.
Car prices fell and a downtrend in six-month annualised core inflation remained
intact.
"This
reading will likely confirm, in our view, that the Fed is now on hold on
rates," said Chetan Seth, strategist at Nomura.
"Recent
U.S. labour market and inflation reports suggest an economy that is softening,
but not collapsing, and bond yields and oil prices have moderated, thus
reducing hard-landing risks (for the economy next year)."
On
the other side of the world, China's central bank boosted liquidity injections
on Wednesday, although it kept the interest rate unchanged when rolling over
maturing medium-term policy loans. The yuan held near a two-month high.
In Japan, the
Bank of Japan stepped back and pared its regular bond buying as markets
rallied. Ten-year Japanese government bond yields hit a one-month low of
0.775%.
Stocks
surge, dollar slumps as traders cheer inflation surprise | Reuters
Hong Kong
stocks lead Asia higher after soft U.S. inflation, better-than-expected China
data
UPDATED TUE, NOV 14 2023 11:02 PM
EST
Hong Kong
stocks led Asia-Pacific markets higher Wednesday after upbeat economic data
from China. A soft U.S. inflation reading also boosted hopes of the Federal
Reserve nearing the end of its interest rate-hiking cycle.
Beijing
reported better-than-expected retail sales and industrial data for
October. Retail sales grew by 7.6% last month from a year ago, above the 7%
growth forecast by a Reuters poll. Industrial production rose 4.6% year-on-year
in October, faster than the 4.4% pace predicted by the Reuters poll.
U.S. CPI
was flat in October, against economists expectations of 0.1%
rise month over month.
Data showed Japan’s
economy shrank during the third quarter for the first time in
four quarters, amid slowing global demand and rising domestic inflation. Japan’s provisional gross domestic product fell
2.1% in the third quarter compared to a year ago, against a Reuters poll
estimate of a 0.6% decline.
On the geopolitical front, U.S.
President Joe Biden and China’s President Xi Jinping are
expected to meet in person in San Francisco for the first time in about a year.
Hong Kong’s Hang Seng index jumped
2.82% to its highest level in over one week, while mainland China’s CSI 300
index advanced 0.67%.
Japan’s Nikkei 225 rose
2.23%, while the Topix added 1.01% to touch its highest level in nearly two
months.
South Korea’s Kospi added
1.94%, and the Kosdaq gained 2.04%.
In Australia, the S&P/ASX 200 rose
1.26% to an eight-week high.
U.S. stocks rallied
Tuesday, building on their strong November gains, as Wall Street cheered the
soft U.S. inflation report.
The Dow Jones
Industrial Average jumped 1.43%. The S&P 500 rallied 1.91%,
briefly trading above the key 4,500 level, to settle at 4,495.70. It was the
best day since April for the broad-market index. The Nasdaq Composite jumped
2.37%.
European stocks
head for mixed open as markets digest U.S., China data
UPDATED WED, NOV 15 2023 12:34 AM
EST
European
markets are heading for a mixed open Wednesday as global markets digested data
out of the U.S. and China.
A soft U.S. inflation reading on
Tuesday boosted hopes of the U.S. Federal Reserve nearing the end of its
interest rate-hiking cycle. The October
consumer price index was flat month over month, while the core
CPI — which excludes volatile food and energy prices — rose 0.2%. Economists
surveyed by Dow Jones were expecting a 0.1% monthly rise in CPI, and 0.3% in
core CPI.
Overnight, Hong Kong stocks led Asia-Pacific
markets higher after upbeat economic data from China, which
reported better-than-expected retail sales and industrial data for
October.
In other news,
U.S. President Joe Biden and China’s President Xi Jinping are
expected to meet in person in San Francisco on Wednesday, marking the first
meeting of the leaders in about a year.
European
markets live updates: stocks, news, data and earnings (cnbc.com)
Inflation was flat in October from the prior
month, core CPI hits two-year low
PUBLISHED TUE, NOV 14 2023 8:31 AM EST
Inflation was flat in
October from the previous month, providing a hopeful sign that stubbornly high
prices are easing their grip on the U.S. economy.
The consumer price
index, which measures a broad basket of commonly used goods and services,
increased 3.2% from a year ago despite being unchanged for the month, according
to seasonally adjusted numbers from the Labor Department on Tuesday. Economists
surveyed by Dow Jones had been looking for respective readings of 0.1% and
3.3%.
Headline CPI had
increased 0.4% in September.
Excluding volatile
food and energy prices, core CPI increased 0.2% and 4%, against the forecast of
0.3% and 4.1%. The annual level was the lowest in two years, though still well
above the Federal Reserve’s 2% target.
Markets spiked on the
news. Futures tied to the Dow Jones Industrial average were up 300 points as
Treasury yields fell sharply. Traders also took any potential Fed interest rate
hikes almost completely off the table, according to CME Group data.
The flat reading on
headline CPI came as energy prices declined 2.5% for the month, offsetting a
0.3% increase in the food index. Shelter costs, a key component in the index,
rose 0.3% in October, half the gain in September as the year-over-year increase
eased to 6.7%.
The report comes as
markets are closely watching the Fed for its next steps in a battle against
persistent inflation that began in March 2022. The Fed ultimately increased its
key borrowing rate 11 times for a total of 5.25 percentage points.
While markets
overwhelmingly believe the central bank is done tightening monetary policy, the
data of late has sent conflicting signals.
More
CPI
report October 2023: Inflation flat from the prior month, core CPI at 2-year
low (cnbc.com)
Finally, UBS sees US trouble ahead and rains on the stock casino parade.
If UBS is even halfway right, President Biden
is likely to become just another one termer. But will it be Trump 2.0 or independent
RFK Jr.?
UBS sees a raft of Fed rate cuts next year on
the back of a U.S. recession
PUBLISHED TUE, NOV 14 2023 4:41
AM EST
UBS expects the U.S.
Federal Reserve to cut interest rates
by as much as 275 basis points in 2024, almost four times the market consensus,
as the world’s largest economy tips into recession.
In its 2024-2026 outlook for the U.S. economy,
published Monday, the Swiss bank said despite economic resilience through 2023,
many of the same headwinds and risks remain. Meanwhile, the bank’s economists
suggested that “fewer of the supports for growth that enabled 2023 to overcome
those obstacles will continue in 2024.”
UBS expects disinflation and rising unemployment
to weaken economic output in 2024, leading the Federal Open Market Committee to
cut rates “first to prevent the nominal funds rate from becoming increasingly
restrictive as inflation falls, and later in the year to stem the economic
weakening.
Between March 2022 and July 2023, the FOMC enacted
a run of 11 rate hikes to take the Fed funds rate from a target range of
0.25-0.5% to 5.25-5.5%.
The central bank has since paused at that level,
prompting markets to mostly conclude that rates have peaked, and to begin
speculating on the timing and scale of future cuts.
However, Fed Chairman Jerome Powell said last week that he was
“not confident” the FOMC had yet done
enough to return inflation sustainably to its 2% target.
UBS noted that
despite the most aggressive rate-hiking cycle since the 1980s, real GDP
expanded by 2.9% over the year to the end of the third quarter. However, yields
have risen and stock markets have come under pressure since the September FOMC
meeting. The bank believes this has renewed growth concerns and shows the
economy is “not out of the woods yet.”
“The expansion bears
the increasing weight of higher interest rates. Credit and lending standards
appear to be tightening beyond simply repricing. Labor market income keeps
being revised lower, on net, over time,” UBS highlighted.
“According to our
estimates, spending in the economy looks elevated relative to income, pushed up
by fiscal stimulus and maintained at that level by excess savings.”
The bank estimates
that the upward pressure on growth from fiscal impetus in 2023 will fade next
year, while household savings are “thinning out” and balance sheets look less
robust.
“Furthermore, if the
economy does not slow substantially, we doubt the FOMC restores price
stability. 2023 outperformed because many of these risks failed to materialize.
However, that does not mean they have been eliminated,” UBS said.
“In our view, the
private sector looks less insulated from the FOMC’s rate hikes next year.
Looking ahead, we expect substantially slower growth in 2024, a rising
unemployment rate, and meaningful reductions in the federal funds rate, with
the target range ending the year between 2.50% and 2.75%.”
UBS expects the
economy to contract by half a percentage point in the middle of next year, with
annual GDP growth dropping to just 0.3% in 2024 and unemployment rising to
nearly 5% by the end of the year.
“With that added
disinflationary impulse, we expect monetary policy easing next year to drive
recovery in 2025, pushing GDP growth back up to roughly 2-1/2%, limiting the
peak in the unemployment rate to 5.2% in early 2025. We forecast some slowing
in 2026, in part due to projected fiscal consolidation,” the bank’s economists
said.
More
UBS sees a raft of Fed rate cuts next year on the back
of a U.S. recession (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.
Japan’s
economy shrinks far more than expected in third quarter
Japan’s economy shrank at its fastest annualized
quarterly pace in two years in the July-September period, provisional government data showed
Wednesday, as rising domestic inflation weighed on consumer demand, adding to
export woes as demand waned.
Both declines were Japan’s first in
four quarters and are part of an unstable trend since the start of the Covid-19
pandemic in early 2020 that has seen periods of economic expansion alternating
with contraction. The latest growth print underscores the policy challenges
that Prime Minister Fumio Kishida and Bank of Japan Governor Kazuo Ueda face in
the coming months.
Provisional gross domestic product fell 2.1% in the third quarter compared
to a year ago, after expanding 4.8% in April-June. This was its biggest
contraction since the third quarter of 2021 and a bigger contraction than the
expected 0.6% decline in a Reuters poll. The GDP deflator in the third quarter
stood at 5.1% on an annualized basis.
The world’s
third-largest economy also contracted 0.5% in the third quarter from the
previous quarter, after expanding 1.2% in the second quarter from the first.
This was also a larger contraction than expectations for 0.1% contraction.
“The biggest drag on
activity came from stock building, which subtracted 0.3%-pts from GDP growth
last quarter. Even so, it’s worth noting that there was a concurrent,
broad-based decline in private demand,” said Marcel Thieliant, Capital
Economics’ head of Asia-Pacific coverage.
The weaker GDP print
was partly driven by weaker than expected domestic capital expenditure, which
contracted 0.6% in the third quarter from the second quarter — as opposed to
expectations for a 0.3% expansion, according to the same government release.
Private consumption
in Japan was flat in the third quarter from the previous quarter, as domestic
and foreign demand weighed on the economy.
“With real household
incomes set to fall at least until the middle of next year, that bodes ill for
consumer spending, which we expect to grind to a standstill next year,”
Thieliant added.
More
Japan
economy shrinks far more than expected in Q3 (cnbc.com)
Euro zone Q3 GDP
shrinks
November
14, 2023 10:06 AM GMT
BRUSSELS, Nov 14
(Reuters) - The euro zone economy contracted marginally quarter-on-quarter in
the third quarter, a new estimate confirmed on Tuesday underlining expectations
of a technical recession if the fourth quarter turns out equally weak, but employment
still rose.
The European
Union's statistics office Eurostat confirmed its estimate from Oct 31 that
gross domestic product in the 20 countries sharing the euro fell 0.1%
quarter-on-quarter in the July-September period for a 0.1% year-on-year rise.
European
Central Bank vice president Luis de Guindos said
last week the euro zone economy was likely
to contract slightly or at best stagnate in the fourth quarter after business
activity data for October showed further
weakening of demand in the dominant services industry.
But contrary to
the usual trend when the economy weakens, employment in the euro zone rose 0.3%
quarter-on-quarter in the same period, for a 1.4% year-on-year increase.
Eurostat data
showed 0.1% quarterly economic growth in France, 0.3% in Spain and 0.5% in
Belgium, but that failed to offset a 0.1% quarterly slump in Germany, no growth
in Italy, and contractions in Austria, Portugal, Ireland, Estonia and
Lithuania.
The growth slump
is caused by strong headwinds from high inflation and record high interest
rates as well as the slowly tightening fiscal policy.
As inflation
dropped sharply in October, the ECB left interest rates unchanged at its
meeting on Oct. 26, ending an unprecedented streak of 10 consecutive rate
hikes.
De Guindos said
that given the current high uncertainty the institution would continue to
follow a data-dependent approach regarding its future monetary policy.
Euro zone Q3 GDP shrinks | Reuters
UK wage growth cools slightly but stays near record
By William
Schomberg and David Milliken November 14, 2023 9:00 AM GMT
LONDON, Nov 14 (Reuters) - Wages in
Britain grew slightly less fast in the three months to September after rising
at a record pace previously, according to official data that will leave the
Bank of England on alert for inflation pressures.
Earnings excluding bonuses were 7.7%
higher than a year earlier in the third quarter, the figures from the Office
for National Statistics (ONS) showed on Tuesday, in line with economists'
expectations in a Reuters poll.
The figure represented a slight
slowdown in regular pay growth from 7.9% in the previous two ONS reports, the
highest since this data series began in 2001.
Britain's economy is flat-lining as the
BoE's long run of interest rate hikes squeezes households and businesses. But
employers are still struggling to fill vacancies after many workers left the
job market during the coronavirus pandemic, with Brexit also reducing the
supply of candidates.
"The labour market remains very
tight and businesses are still struggling to hire the people they need,"
Alexandra Hall-Chen, a policy adviser at the Institute of Directors, said.
The BoE is watching pay growth as it
assesses how much inflation pressure remains in Britain's economy after raising
interest rates 14 times in a row between December 2021 and August this year.
Since then, it has kept rates on hold.
Including bonuses, which are typically
volatile, pay growth slowed to 7.9% from 8.2% in the three months to August.
The BoE has said pay growth is dropping
too slowly for it to consider cutting interest rates, although it has also said
unofficial estimates of wage increases suggest a less steep climb than the ONS
numbers.
More
UK wage growth cools slightly but stays near record |
Reuters
Covid-19 Corner
This
section will continue until it becomes unneeded.
Catching a Cold
Might Prevent a Severe Case of COVID-19
Researchers
analyzed blood samples from 94 unvaccinated hospitalized patients with varying
severity of respiratory failure; 74 had tested positive for COVID-19.
11/12/2023 Updated: 11/12/2023
Scientists have
puzzled over why some people seem immune to COVID-19, even after exposure. Now,
emerging evidence points to an intriguing explanation: prior run-ins with the
common cold.
Common Cold Antibodies Protect Against COVID
A new study investigated whether
preexisting antibodies from common cold viruses offer protection against
COVID-19. Researchers analyzed blood samples from 94 unvaccinated hospitalized
patients with varying severity of respiratory failure; 74 had tested positive
for COVID-19, while 20 did not have the infection.
They measured levels of
antibodies from prior common cold coronavirus infections. The same analysis was
done for non-COVID patients as controls.
There was a positive correlation between common cold
antibody levels and COVID-specific antibodies. Higher common cold antibody
levels in the control patients suggested a potentially protective effect
against COVID severity.
‘Original Antigenic Sin’
The concept of “original antigenic sin” (OAS) was first
coined in the 1960s. It refers to how initial flu exposures shape immunity
against later, related strains.
Since then, research has shown
these original imprints can influence susceptibility to other infections.
This phenomenon may also apply
to COVID-19 and common colds, Dr. Thomas Gut, an internal medicine doctor with
the Post-COVID Recovery Center at Staten Island University Hospital, told The
Epoch Times.
“It’s been up for debate for
quite some time whether preexisting colds ... offer a protective effect for
being exposed to COVID or whether it somehow makes it higher-risk when they’re
exposed to COVID,” he said.
These latest findings
suggest that any prior corona-type virus—the common cold or COVID—is unlikely
to heighten susceptibility, Dr. Gut added.
Did Childhood
Colds Help Africa Evade COVID’s Worst?
More
Catching a Cold Might Prevent a Severe Case of COVID-19 | 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.
Template for success: Shaping hard carbon electrodes
for next-generation batteries
Scientists
use inorganic zinc-based compounds to vastly improve the capacity of sodium-
and potassium-ion batteries
Date:
November 13, 2023
Source: Tokyo University of Science
Summary: Sodium- and potassium-ion batteries are
promising next-generation alternatives to the ubiquitous lithium-ion batteries
(LIBs). However, their energy density still lags behind that of LIBs. To tackle
this issue, researchers explored an innovative strategy to turn hard carbon
into an excellent negative electrode material. Using inorganic zinc-based
compounds as a template during synthesis, they prepared nanostructured hard
carbon, which exhibits excellent performance in both alternative batteries.
Lithium-ion
batteries (LIBs) are, by far, the most widely used type of rechargeable
batteries, spanning numerous applications. These include consumer electronics,
electric vehicles (e.g., Tesla cars), renewable energy systems, and
spacecrafts. Although LIBs deliver the best performance in many aspects when
compared to other rechargeable batteries, they have their fair share of
disadvantages. Lithium is a rather scarce resource, and its price will rise
quickly with its availability going down in the future. Moreover, lithium
extraction and improperly discarded LIBs pose huge environmental challenges as
the liquid electrolytes commonly used in them are toxic and flammable.
The
shortcomings of LIBs have motivated researchers worldwide to look for
alternative energy storage technologies. Sodium (Na)-ion batteries (NIBs) and
potassium-ion batteries (KIBs) are two rapidly emerging options that are
cost-efficient as well as sustainable. Both NIBs and KIBs are projected to be
billion-dollar industries by the end of the decade. Governments across the
world, including that of the US, Austria, Hong Kong, Germany, and Australia,
are promoting research and innovation in this field. Moreover, companies such
as Faradion Limited, TIAMAT SAS, and HiNa Battery Technology Co. Ltd., are
investing heavily in this technology. Both Contemporary Amperex Technology Co.
Limited and Build Your Dreams are expected to introduce electric vehicle battery
packs with NIBs soon.
Unfortunately,
however, the capacity of the electrode materials used in NIBs and KIBs still
lags behind that of LIBs. Against this backdrop, a research team led by
Professor Shinichi Komaba from Tokyo University Science (TUS), Japan, has been
working to develop groundbreaking high-capacity electrode materials for NIBs
and KIBs. In their latest study, published in Advanced Energy Materialson
November 9, 2023, they report a new synthesis strategy for nanostructured
"hard carbon" (HC) electrodes that deliver unprecedented performance.
The study was co-authored by Mr. Daisuke Igarashi, Ms. Yoko Tanaka, and Junior
Associate Professor Ryoichi Tatara from TUS, and Dr. Kei Kubota from the
National Institute for Materials Science (NIMS), Japan.
But what is HC
and why is it useful for NIBs and KIBs? Unlike other forms of carbon, such as
graphene or diamond, HC is amorphous; it lacks a well-defined crystalline
structure. Additionally, it is strong and resistant. In an earlier 2021 study,
Prof. Komaba and his colleagues had found a way to use magnesium oxide (MgO) as
a template during the synthesis of HC electrodes for NIBs, altering their final
nanostructure. The process had led to the formation of nanopores within the
electrodes upon MgO removal, which, in turn, had vastly increased their
capacity to store Na+ ions.
Motivated by
their previous findings, the researchers explored whether compounds made from
zinc (Zn) and calcium (Ca) could also be useful as nano-templates for HC
electrodes. To this end, they systematically investigated different HC samples
made using zinc oxide (ZnO) and calcium carbonate (CaCO3) and
compared their performance with the ones synthesized using magnesium oxide
(MgO).
Preliminary
experiments showed that ZnO was particularly promising for the negative
electrode of NIBs. Accordingly, the researchers optimized the concentration of
ZnO embedded in the HC matrix during synthesis, demonstrating a reversible
capacity of 464 mAh g-1 (corresponding to NaC4.8)
with a high initial Coulombic efficiency of 91.7% and a low average potential
of 0.18 V vs. Na+/Na.
The team
achieved remarkable results by incorporating this powerful electrode material
into an actual battery. "The NIB fabricated using the optimized
ZnO-templated HC as the negative electrode exhibited an energy density of 312
Wh kg-1," highlights Prof. Komaba. "This value is
equivalent to the energy density of certain types of currently commercialized
LIBs with LiFePO4 and graphite and is more than 1.6 times the
energy density of the first NIBs (192 Wh kg-1), which our laboratory
reported back in 2011." Notably, the ZnO-templated HC also exhibited a
significant capacity of 381 mAh g-1 when incorporated into a
KIB, further showcasing its potential.
Taken
together, the results of this study show that using inorganic nanoparticles as
a template to control the pore structure may provide an effective guideline for
the development of HC electrodes. "Our findings prove that HCs are
promising candidates for negative electrodes as an alternative to
graphite," concludes Prof. Komaba.
In turn, this
could make NIBs viable for practical applications, such as the development of
sustainable consumer electronics and electric vehicles as well as low carbon
footprint energy storage systems for storing energy from solar and wind farms.
Template for success: Shaping hard carbon electrodes
for next-generation batteries | ScienceDaily
I am therefore afraid that we must abandon the plan of improving
the government of the Bank of England by the appointment of a permanent
Governor, because we should not be sure of choosing a good governor, and should
indeed run a great risk, for the most part, of choosing a bad one.
Walter Bagehot. Lombard Street, 1873.
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