2024, The Great Disruption? War? Trump 2.0?

Baltic Dry Index. 2087 -63           Brent Crude  79.90

Spot Gold 2049                  US 2 Year Yield 4.33 -0.01

Christmas is the season when you buy this year’s gifts with next year’s money.

Anon.

In the stock casinos, it’s time to dress up the year-end closing prices ahead of next week’s holiday shortened trading week.

Never mind that next year is almost certainly a great global recession year. The all important year end bonuses for the money managing class are all that counts.

But falling US M2 money supply, rising US bankruptcies, a growing US commercial real estate disaster and a buy now pay later day of reckoning looms across America and much of Europe.  To this old dinosaur commodities and other markets follower since 1968, 2024 looks as ugly as I’ve ever seen.

And that assumes sleepy Joe and Israel don’t drag the world into a much wider Middle East war.

 

Asia markets mixed ahead of Christmas weekend as Japan inflation slows; Hong Kong tech stocks plunge

UPDATED FRI, DEC 22 2023 12:32 AM EST

Asia-Pacific markets were mixed Friday, with the Bank of Japan’s October meeting minutes showing board members debated on how to communicate the shift in their yield control stance.

Japan’s headline inflation rate slowed to 2.8%, down from 3.3% in October, the slowest pace of inflation since July 2022.

Core inflation — which strips out prices of fresh food — came in at 2.5%, in line with expectations of a Reuters poll of economists and lower than October’s figure of 2.9%.

In Australia, the S&P/ASX 200 fell marginally, staying largely near the flatline in the trading session and closing at 7,501.6.

Japan’s Nikkei 225 rebounded after leading losses in Asia on Thursday, with the index up 0.3% and the Topix 0.54% higher.

South Korea’s Kospi also gained 0.24%, while the small-cap Kosdaq slid 0.1%

Hong Kong’s Hang Seng index advanced 0.57%, but the mainland Chinese CSI 300 was the outlier among major Asian benchmarks, falling marginally.

Separately, Hong Kong tech stocks plunged after heavyweights Tencent and NetEase reacted to China releasing draft rules on curbing excessive gaming and spending.

Overnight in the U.S., all three major indexes rebounded, with the S&P 500 gaining 1.03% to recover from its worst day since September as the year-end rally resumed.

That places the broad market index about 1% from its closing high and 1.5% from its intraday record.

The Dow Jones Industrial Average gained 0.87%, while the Nasdaq Composite advanced 1.26% to 14,963.87.

Asia stock markets today: Live updates, BOJ minutes, Japan CPI (cnbc.com)

Dow futures dip as Wall Street aims for eighth-straight winning week: Live updates

UPDATED FRI, DEC 22 2023 12:35 AM EST

Stock futures were modestly lower on Friday morning as Wall Street looks to extend its year-end rally.

Futures for the Dow Jones Industrial Average slid 135 points, or about 0.36%. S&P 500 futures and Nasdaq 100 futures were down about 0.16% and 0.28% respectively.

The move in futures comes on the heels of a bounce-back day on Wall Street. The Dow rose 322 points, or about 0.9%, erasing most of its losses from Wednesday. The S&P 500 and Nasdaq Composite rose 1.0% and 1.3%, respectively.

The small-cap Russell 2000 led the way with a gain of 1.7% on Thursday, continuing a recent trend of the market rally broadening out as bond yields fall and traders bet on rate cuts from the Federal Reserve. The small-cap index is on pace for its sixth straight positive week.

“Basically, the trend is your friend. Right now the trend is up in stocks. ... Small-caps and mid-caps really like easing conditions by the Fed,” John Spallanzani of Miller Value Partners said on “Closing Bell.”

The three major averages are on pace for their eighth positive week in a row — a first for the S&P 500 since 2017 and for the Dow dating back to 2019. The S&P 500 is up 0.58% for the week, while the Dow has a gain of 0.27%. The Nasdaq is up 1% in the period.

Nike could be a key stock to watch on Friday, as the Dow component was down 11% in extended trading after warning of soft revenue in its fiscal second-quarter earnings report. On the data front, consumer spending and a key inflation reading are due out before the bell on Friday morning.

The U.S. stock market will be closed on Monday for Christmas.

Stock market today: Live updates (cnbc.com)

In other news.

 

China bans export of rare earths processing tech over national security

By Siyi Liu and Dominique Patton  December 21, 2023 8:07 PM GMT

BEIJING, Dec 21 (Reuters) - China, the world's top processor of rare earths, banned the export of technology to extract and separate the critical materials on Thursday, the country's latest step to protect its dominance over several strategic metals.

Rare earths are a group of 17 metals used to make magnets that turn power into motion for use in electric vehicles, wind turbines and electronics.

While Western countries are trying to launch their own rare earth processing operations, the ban is expected to have the biggest impact in so-called "heavy rare earths," used in EV motors, medical devices and weaponry, where China has a virtual monopoly on refining.

 

"This should be a clarion call that dependence on China in any part of the value chain is not sustainable," said Nathan Picarsic, co-founder of the geopolitical consulting firm Horizon Advisory.

China's commerce ministry sought public opinion last December on the potential move to add the technology to its "Catalogue of Technologies Prohibited and Restricted from Export."

It also banned the export of production technology for rare earth metals and alloy materials as well as technology to prepare some rare earth magnets.

The catalogue's stated aims include protecting national security and public interest.

China has significantly tightened rules guiding exports of several metals this year, in an escalating battle with the West over control of critical minerals.

It introduced export permits for chipmaking materials gallium and germanium in August, followed by similar requirements for several types of graphite since Dec. 1.

"China is driven to maintain its market dominance," said Don Swartz, CEO of American Rare Earths (ARR.AX), which is developing a rare earths mine and processing facility in Wyoming. "This is now a race."

WEST STRUGGLES

The move to protect its rare earth technology comes as Europe and the United States scramble to wean themselves off rare earths from China, which accounts for nearly 90% of global refined output.

China has mastered the solvent extraction process to refine the strategic minerals, which MP Materials (MP.N) and other Western rare earth companies have struggled to deploy due to technical complexities and pollution concerns.

Shares of MP, which has slowly begun increasing rare earths processing in California, jumped more than 10% on Thursday after China's move. The company did not immediately respond to requests for comment.

More

China bans export of rare earths processing tech over national security | Reuters

Global retailers, goods facing disruption risks from Red Sea attacks

By Savyata Mishra and Deborah Mary Sophia December 21, 2023 5:20 PM GMT

Dec 21 (Reuters) - Global retailers selling apparel, household staples and white goods face bigger risks from disruptions in freight movement through the key Suez Canal trade route as Iran-backed Yemeni militants attack ships sailing through the lower Red Sea.

Some shipping companies are already considering longer voyages, including around the Horn of Africa, due to the attacks by the Houthi militant group, potentially leading to longer wait times as well as higher prices for goods.

S&P Global identified sectors such as consumer goods, apparel and chemicals to bear the biggest brunt from the disruptions in shipping routes between Europe, the Middle East and Asia.

The Suez Canal is one of the most important conduits for world trade, accounting for about 12% of the world's maritime traffic. The biggest names in the retail world, including Walmart (WMT.N), H&M Hennes & Mauritz (HMb.ST) and Target (TGT.N), extensively use the canal to move goods from major manufacturing markets in Asia.

If there are extended disruptions, the consumer goods sector will face the biggest impact, S&P Global said in a report.

ImportGenius, a global trade database, said goods including clothing and accessories such as handbags, men's t-shirts and girls' dresses along with furniture, home decor and everyday items like toothbrushes, made up a majority of the goods transported via the key route so far in December.

William George, director of research at ImportGenius, said fast-fashion companies such as H&M and Zara-owner Inditex (ITX.MC) that import goods from Indian and other east Asian textile mills are also at a bigger risk.

Some companies already are trying to switch to so-called intermodal transport, said Jan Kleine-Lasthues, chief operating officer of airfreight at German freight forwarder Hellmann Worldwide Logistics.

Global retailers, goods facing disruption risks from Red Sea attacks | Reuters

High-speed transportation firm Hyperloop One to shut down - Bloomberg News

December 21, 2023 10:38 PM GMT

Dec 21 (Reuters) - High-speed freight transportation company Hyperloop One will shut down, having failed to win any contract to build a working hyperloop, Bloomberg News reported on Thursday citing people familiar with the matter.

The Los-Angeles-based firm, which completed the world's first passenger ride on a super high-speed levitating pod system in 2020, will sell off its remaining assets, while the employment for its remaining employees will end on Dec. 31 this year, according to the report.

Hyperloop One did not immediately respond to a Reuters request for comment.

In a hyperloop system, which uses magnetic levitation to allow near-silent travel, a trip between New York and Washington would take just 30 minutes - twice as fast as a commercial jet flight and four times faster than a high-speed train.

Elon Musk had reignited interest in the technology in 2013 by setting out how a modern hyperloop system would work. His own tunneling enterprise, The Boring Company, is seeking to send passengers packed into pods through an intercity system of giant, underground vacuum tubes known as the hyperloop.

Hyperloop One was founded in 2014 and raised more than $400 million, largely from United Arab Emirates shipping company DP World and British billionaire Richard Branson.

High-speed transportation firm Hyperloop One to shut down - Bloomberg News | Reuters

Christmas is a time when kids tell Santa what they want and adults pay for it. Deficits are when adults tell the government what they want and their kids pay for it.

Richard Lamm.

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.

Is the 'Big Ease' coming in 2024 or will rate-cut hopes get dashed?

By Dan Burns  December 21, 2023 10:06 AM GMT

NEW YORK, Dec 21 (Reuters) - As 2024 comes into view, investors, economists, business leaders and everyday consumers from London to Lyons to Los Angeles share a common hope: Let the interest rate cuts begin!

Central banks from most major developed economies closed out 2023 with a blitz of policy meetings in December that effectively shut the books on the aggressive rate hikes that have dominated the economic and financial landscape since 2022. The lone outlier, the Bank of Japan (BOJ), never managed to kill off its negative rates policy and signaled this week at the year's final meeting of a Group of Seven central banks that a shift away from that stance was not imminent.

 

Allowing the rest of the big central banks to call time on rate hikes was the favorable turn inflation took over the course of 2023. After starting the year with annual inflation rates that were on average 3.7 times the 2% target shared by the U.S. Federal Reserve, European Central Bank (ECB), Bank of England, Bank of Canada and BOJ, the pace of price increases is now down to 1.5 times that target.

Of course that means more work to do to complete the "last mile" in the inflation fight. Central bankers are loathe to declare victory prematurely and are battling with over-eager financial markets to retain maximum optionality, prompting the drum beat of pledges to hold rates high for a longer period or raise them again if necessary - the latter in particular being seen increasingly as an empty threat.

Inflation, however, does not need to drop all the way to 2% in order for rate cuts to begin, and 2-handle inflation rates could soon be the norm.

Holding rates steady as inflation rates slow further is another form of policy tightening that may not be appropriate for much longer.

That is something some Fed officials have begun openly bandying about as a reason for the rate cuts they flagged last week as being in the cards next year, especially if they hope to deliver a "soft landing" for the U.S. economy.

Keeping rates restrictive for longer than necessary risks a harsher outcome, one featuring a rapid slowdown in economic activity, a painful rise in unemployment and a recession that much of the world has managed to dodge so far despite that scenario being the more traditional end to rate-hike cycles.

Rate-sensitive economic sectors everywhere - such as housing and manufacturing - have felt the pinch of higher rates for more than a year.

While services activity generally has continued to expand, S&P Global's measure of manufacturing activity in developed economies has been in contraction since October 2022, although there are indications the worst may be over with the latest reading at the highest level since the spring. Emerging market factory output, which has been at stall speed for much of 2023, also edged higher.

WHAT IT MEANS FOR 2024

A major game of chicken is underway as market actors have set expectations for far more policy easing than central bankers are likely to be willing to provide.

For instance, while last week's projections from Fed officials themselves indicated they expect 75 basis points of rate reductions over the course of 2024, bond and rate futures markets are now positioned for twice that amount. That led at least one U.S. central bank official, Chicago Fed President Austan Goolsbee, to confess that he was "confused" by the market's behavior.

Across the Atlantic, meanwhile, sources familiar with the matter told Reuters it is unlikely that the ECB will be in position to cut rates before June, three months later than market pricing there now reflects.

More

Is the 'Big Ease' coming in 2024 or will rate-cut hopes get dashed? | Reuters

Covid-19 Corner

This section will continue until it becomes unneeded.

 

Covid cases double in December as 2.5 million people infected

December 21, 20023

 

Covid cases are shooting up with more than one in 24 people in England and Scotland now infected with the virus, new figures show.

An estimated 2.5 million people had the virus on 13 December – more than double the level seen at the start of the month, according to the latest official winter infection survey by the ONS and UK Health Security Agency.

That number is expected to have risen further since then, experts say.

Professor Steven Riley, Director General for Data and Surveillance, UKHSA said: “At this time of year, the cold weather, shorter days and increased socialising mean that the potential for transmission of respiratory viruses like COVID-19 is particularly high. This, as well as the possible impact of new variants, means it’s not unexpected to see cases increasing.

“If you are showing symptoms of COVID-19 or other respiratory illnesses, you should try to limit your contact with other people as much as possible, especially those who are older or more vulnerable,” he said.

Covid cases double in December as 2.5 million people infected (msn.com)

Technology Update.

With events happening fast in the development of solar power and graphene, among other things, I’ve added this section. Updates as they get reported.

Adding Small Amounts of Solid Carbon to Copper Wire Boosts Its Conductivity

Adding a small amount of solid carbon to copper boosts its ability to conduct electricity—industry applications abound.

Published: December 21, 2023

A common carbon compound is enabling remarkable performance enhancements when mixed in just the right proportion with copper to make electrical wires. It’s a phenomenon that defies conventional wisdom about how metals conduct electricity. The findings, reported December 2023 in the journal Materials & Design, could lead to more efficient electricity distribution to homes and businesses, as well as more efficient motors to power electric vehicles and industrial equipment. The team has applied for a patent for the work, which was supported by the Department of Energy (DOE) Advanced Materials and Manufacturing Technologies Office.

Materials scientist Keerti Kappagantula and her colleagues at DOE’s Pacific Northwest National Laboratory discovered that graphene, single layers of the same graphite found in pencils, can enhance an important property of metals called the temperature coefficient of resistance. This property explains why metal wires get hot when electric current runs through them. Researchers want to reduce this resistance while enhancing a metal’s ability to conduct electricity. For several years they have been asking whether metal conductivity be increased, especially at high temperatures, by adding other materials to it. And if yes, can these composites be viable at commercial scale? 

Now, they’ve demonstrated they can do just that, using a PNNL-patented advanced manufacturing platform called ShAPE™. When the research team added 18 parts per million of graphene to electrical-grade copper, the temperature coefficient of resistance decreased by 11 percent without decreasing electrical conductivity at room temperature. This is relevant for the manufacturing of electric vehicle motors, where an 11 percent increase in electrical conductivity of copper wire winding translates into 1 percent gain in motor efficiency.

 

“This discovery runs counter to what’s generally known about the behavior of metals as conductors,” said Kappagantula. “Typically, introducing additives into a metal increases its temperature coefficient of resistance, meaning they heat up faster at the same current levels compared to pure metals. We are describing a new and exciting property of this metal composite where we observe enhanced conductivity in a manufactured copper wire.”

More

Adding Small Amounts of Solid Carbon to Copper Wire Boosts Its Conductivity | Technology Networks

Another weekend and a Christmas weekend too. Sadly another war weekend in Ukraine, Gaza and Sudan.  May God bring a just, lasing peace to all three in 2024.  Have a great Christmas weekend everyone.

“You are fettered," said Scrooge, trembling. "Tell me why?"
"I wear the chain I forged in life," replied the Ghost. "I made it link by link, and yard by yard; I girded it on of my own free will, and of my own free will I wore it.”

Charles Dickens, A Christmas Carol.