Baltic
Dry Index. 3346 +154 Brent Crude 78.10
Spot
Gold 2034 US
2 Year Yield 4.64 +0.08
You can't cheat an honest man.
W. C. Fields. (Unless of course, you’re a central bank.)
In the stock casinos, did the latest bubble just run out of greater fool buyers?
In currencies, it’s time to start dressing up
the year-end.
Asia markets
slide as investors assess key economic data from across the region
UPDATED TUE, DEC 5 2023 12:19 AM EST
Asia-Pacific
markets fell across the board as investors assessed a slew of economic data
from across the region.
South Korea’s
overall inflation rate in November fell to 3.3%, compared with 3.7% expected by
a Reuters poll.
The inflation rate
for Japan’s capital, Tokyo, came in at 2.6%, down from the 3.3% in October.
Tokyo’s inflation figures are widely considered to be a leading indicator of
national trends.
Caixin and S&P
Global also released China’s service purchasing managers’ index today, which
hit a three-month high, while private PMI readings will also be out from Hong
Kong and India.
Hong Kong’s Hang Seng index tumbled
1.67%, leading losses in
Asia, while the mainland Chinese CSI 300 index fell 0.80%, hitting fresh
four-year lows.
Japan’s Nikkei 225 was
down 1.18%, while the Topix was also 0.66% lower.
In Australia, the S&P/ASX 200 shed
0.89% to close at 7,061.60 as the Reserve Bank of Australia held its benchmark
policy rate at 4.35%, in line with expectations.
South Korea’s Kospi dropped
0.44%, and the small-cap Kosdaq lost 1.29%.
Overnight in the U.S., all three major indexes lost
ground as investors took a breather following five straight
winning weeks.
The Dow Jones Industrial Average shed
0.11%, while the S&P 500 dropped
0.54%. The Nasdaq Composite declined
0.84% as investors sold Big Tech shares, which have led the market’s gains this
year.
As stocks stagnated, bitcoin and
gold rallied to start the week. Bitcoin passed
the $41,000 mark to notch a 19-month high, while gold reached
its highest nominal intraday level ever.
European markets
head for mixed open as rally stalls
UPDATED TUE, DEC 5 2023 12:38 AM
EST
European markets are heading for a mixed open
Tuesday as investors continue to assess the outlook for central bank interest
rate cuts.
The prospect of rate cuts, and
more imminently another hold from the U.S. Federal Reserve at
its next policy meeting in mid-December, sent the S&P 500 to a
2023 high last Friday after a five-week winning streak. Meanwhile, the Dow Jones Industrial Average in
November enjoyed its best month since October 2022.
The upward momentum continued
despite Fed
Chair Jerome Powell’s efforts to temper market expectations for
incoming rate cuts, as he argued it was “premature to conclude with confidence”
that monetary policy was “sufficiently restrictive.”
Gold
prices notched a record high on Monday for a second consecutive
day, with spot prices touching $2,100, with analysts citing geopolitical
uncertainty, a likely weaker U.S. dollar and possible interest rate cuts as
further catalysts for bullion heading into next year.
Overnight, Asia-Pacific markets fell
across the board as investors assessed a slew of economic data from across the
region. U.S.
stock futures ticked down Monday night after the major averages
took a break from their latest hot streak.
European
markets live updates: stocks, news, data and earnings (cnbc.com)
China's state banks seen
swapping and selling dollars for yuan - sources
December 5, 2023 3:49
AM GMT
SHANGHAI, Dec 5
(Reuters) - China's major state-owned banks were seen swapping yuan for U.S.
dollars in the onshore swap market and selling those dollars in the spot market
to support the yuan on Tuesday, two sources with knowledge of the matter said.
The state bank
actions come at a time the Chinese yuan strengthened 2.55% to the dollar in
November for the best month this year. However, it is still down 3%
year-to-date.
The sources said
they believed the state bank moves were aimed at accelerating the yuan's
recovery and encouraging domestic exporters to settle their foreign exchange
receipts into the local currency towards the year-end.
Chinese state
banks often act on behalf of the country's central bank in the foreign exchange
market, but they would also trade on their own behalf.
Big
banks were spotted doing a similar trade late last month, helping the yuan's
recovery against a broadly weaker U.S. dollar, Reuters reported.
China's state banks seen swapping and selling dollars for yuan - sources | Reuters
In other news, hmm. Is that why it took 10
hours for the IDF to respond on October 7th? With 1,200 people massacred
on October 7th, I can only hope that this isn’t true.
Israel investigates
possible trading knowledge ahead of Oct 7 Hamas attack
By Steven Scheer
December 4, 2023 10:36 PM GMT
JERUSALEM, Dec 4
(Reuters) - Israeli authorities are investigating claims by U.S. researchers
that some investors may have known in advance of a Hamas plan to attack Israel
on Oct. 7 and used that information to profit from Israeli securities.
Research by law
professors Robert Jackson Jr from New York University and Joshua Mitts of
Columbia University found significant short-selling of shares leading up to the
attacks, which triggered a war nearly two months old.
"Days before
the attack, traders appeared to anticipate the events to come," they
wrote, citing short interest in the MSCI Israel Exchange Traded Fund (ETF) that
"suddenly, and significantly, spiked" on Oct. 2 based on data from
the Financial Industry Regulatory Authority (FINRA).
"And just
before the attack, short selling of Israeli securities on the Tel Aviv Stock
Exchange (TASE) increased dramatically," they wrote in their 66-page
report.
In response, the
TASE referred Reuters to the Israel Securities Authority, which said: "The
matter is known to the authority and is under investigation by all the relevant
parties."
A spokeswoman
for the securities regulator did not elaborate, and Israeli police did not
immediately comment.
The researchers
said short-selling, in which investors expect the share price to fall, allowing
it to be bought back at a lower price at a profit, prior to Oct. 7
"exceeded the short- selling that occurred during numerous other periods
of crisis."
That includes the
recession following the financial crisis in 2008, the 2014 Israel-Gaza war, and
the COVID-19 pandemic.
They
wrote that for Leumi (LUMI.TA), Israel's largest bank,
4.43 million new shares sold short over the Sept. 14 to Oct. 5 period yielded
profits of 3.2 billion shekels ($862 million) on that additional short-selling.
"Although
we see no aggregate increase in shorting of Israeli companies on U.S.
exchanges, we do identify a sharp and unusual increase, just before the
attacks, in trading in risky short-dated options on these companies expiring
just after the attacks," they said.
"Our
findings suggest that traders informed about the coming attacks profited from
these tragic events, and consistent with prior literature we show that trading
of this kind occurs in gaps in U.S. and international enforcement of legal
prohibitions on informed trading."
More
Israel investigates possible trading knowledge ahead of Oct 7 Hamas attack | Reuters
Finally, commodities, yawn.
Oil prices little
changed amid OPEC+ cut doubts, Mid-East tension
December 5, 2023 4:24
AM GMT
Beijing, Dec 5
(Reuters) - Oil prices were little changed on Tuesday amid uncertainty over
voluntary output cuts by OPEC+, continued tension in the Middle East and weak
economic data from the U.S.
Brent crude
futures ticked down 1 cent to $78.02 a barrel by 0402 GMT, while U.S. West
Texas Intermediate crude futures were up 5 cents at $73.09 a barrel.
Comments by
Saudi Arabia's energy minister that OPEC+ production cuts could continue past
the first quarter of 2024 if needed lent some support to the market, said
Kelvin Wong, senior market analyst for Asia pacific at OANDA.
Oil prices had
declined in the previous trading session as traders doubted that supply cuts by
OPEC+ would have a significant impact, and as a stronger U.S. dollar weighed on
commodity prices in general, said CMC Markets analyst Tina Teng.
A stronger
dollar typically makes oil more expensive for holders of other currencies,
which could dampen oil demand.
The
Organization of the Petroleum Exporting Countries (OPEC) and allies including
Russia, together known as OPEC+, on Thursday agreed to voluntary output cuts totalling
about 2.2 million barrels per day (bpd) for the first quarter of 2024, led by
Saudi Arabia rolling over its current voluntary cut.
At least 1.3
million bpd of those cuts, however, were an extension of voluntary curbs that
Saudi Arabia and Russia already had in place.
Resumption
of fighting in the Israel-Hamas war, however, stoked supply concern, as did attacks on three commercial
vessels in international waters in the southern Red Sea.
---- Data on Tuesday
showed U.S. factory orders fell by more than analysts expected in October and the
most for over three years, dampening oil market sentiment. That bolstered the
view that high interest rates are beginning to limit spending, analysts said.
Oil prices little changed amid OPEC+ cut doubts, Mid-East tension | Reuters
No one party can fool all of the people all of the time; that's why we have two parties.
Bob Hope.
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.
A
Massive Data Dump May Lead To A Steeper Yield Curve And Then The Real Fun
Begins
Dec. 03, 2023 6:15 AM ET
A very busy week lies
ahead for the market, especially following a weak ISM manufacturing report,
which showed that stagflation may be becoming entrenched, as the continuing
claims show that the unemployment rate may be on the rise.
If this week's data
disappoints, it will likely lead to further yield curve steepening as the
2-year rate falls to the 10-year.
The JOLTS data on Tuesday is expected to show that the number
of job openings in October fell to 9.3 million from 9.5 million. Meanwhile,
analysts see the ISM services index rising to 52.3 from 51.8 in October. More
employment data from ADP on Wednesday is expected to show that hiring increased
to 120,000 in November from 113,000 in October. Finally, the BLS job report is
expected to show that new jobs increased by 160,000 from 99,000 in
October, while the unemployment rate remained unchanged at 3.9%. Average hourly
earnings rose by 0.3% in November and 4.0% y/y versus an increase of 0.2%
versus 4.1% in October.
The Indeed job posting data suggest that the JOLTS data is
likely to show that the number of job openings continues to fall, but at what
appears to be a slower pace. It will likely take a further economic slowdown to
get employers to reduce their job openings.
The reason why jobs are probably fairly slow to fill is
because the number of workers in the labor force has only modestly risen since
its peak in February 2020, climbing to just 161 million from around 159
million.
Additionally, the number of people not in the labor force has
climbed dramatically to roughly 99.9 million from 95.1 million pre-pandemic.
The combination of demand for workers, as demonstrated through high JOLTS
readings, and the rising number of workers not in the labor force suggests that
the supply of workers isn't ample enough to satisfy the demand.
More
A Massive Data Dump May Lead To A Steeper Yield Curve
And Then The Real Fun Begins | Seeking Alpha
Covid-19 Corner
This
section will continue until it becomes unneeded.
New COVID Variant
Spreading in US, but Risk Is Low: Experts
Compared
to Eris, BA.2.86 has a significantly lower growth efficiency, meaning that it
is less capable of replicating itself in the human bodies.
11/28/2023 Updated: 12/2/2023
The new
BA.2.86 variant, unofficially known as Pirola is taking hold in the United States.
Between Oct. 28 to Nov. 25, its prevalence
increased from 1 to around 9 percent in the United States, according to the
U.S. Centers for Disease Control and Prevention (CDC).
The World Health Organization designated
Pirola as a variant of interest on Nov. 21, yet it also found the public health
risk posed by BA.2.86 to be “low at the global level (pdf).”
In
an update published on
Nov. 27, the CDC agreed with the WHO’s assessment “that the public health risk
posed by this variant is low compared with other circulating variants, based on
available limited evidence.”
Current
Research Suggests Low Risk of Disease
Pirola is derived from BA.2, an earlier
Omicron variant.
Other variants
derived from BA.2 include XBB.1.5 which became the dominant strain in early
2023.
The current
dominant variant is H.V.1, and it is derived from the variant EG.5,
unofficially known as Eris, a previously dominant variant in the United States.
“At this time,
BA.2.86 does not appear to be driving increases in infections or
hospitalizations in the United States,” the CDC wrote.
Research
outside of the United States similarly suggests that Pirola should not be more
severe than current variants.
Researcher Yunlong Cao, who holds a
doctorate in physical biochemistry from Harvard found that Pirola
“exhibits lower cell infectivity” compared to XBB.1.5 and Eris.
A preprint study from
Japan found that while Pirola may be more transmissible than Eris a previous
dominant variant, it is less likely to cause disease.
Compared to
Eris, Pirola has a significantly lower growth efficiency, meaning that it is
less capable of replicating itself in the host, the authors wrote.
“This is not the second coming of omicron.
If it were, it is safe to say we would know by now,” Bill Hanage, associate
director and professor of epidemiology at Harvard wrote on X on Sep. 1 ,when
the variant's prevalence was significantly lower.
More
New COVID Variant Spreading in US, but Risk Is Low: Experts | 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.
More on that EV fantasy. And just wait
until every other heavy goods vehicle is EV. Massive battery weights make for
smaller loads, which makes for many more road trips. What hallucinogens are
politicians taking?
EV charging growth
plans slowed by EU's power grid problems
By Julia Payne December 4, 2023 6:05 AM GMT
BRUSSELS, Dec 4
(Reuters) - Electric vehicle drivers hoping to top up their batteries at one of
Repsol's (REP.MC) 1,600 Spanish charging stations might well be
disappointed, with nearly half lying dormant because they have no power
connection.
Such gaps are
evident across the European Union, where last week the European Commission
announced plans to
upgrade the bloc's power grids. These are due to be implemented in 18 months
and include addressing EV charging station power shortages.
But despite the declarations of its
leaders, red tape preventing progress towards greener transport in the EU is on
the rise, industry groups and energy companies told Reuters, with permitting
one of the major roadblocks.
The ease of building an EV charging hub
varies considerably country by country. One industry source said that in
Germany a hub was held up for months over rules protecting a single tree, while
another located on a busy highway had to wait 10 months for a noise evaluation
before it gained approval.
"Although the work of installing a
fast and ultra-fast charging point requires only two to three weeks of work,
due to different administrative requirements in Spain, the complete process ...
can last from one to two years," Repsol said.
Industry group ChargeUp Europe said
that while the Commission recognised permitting was a problem, it had not
proposed any concrete tools or actions. Specific guidelines for member states
to accelerate permitting are only expected at some point over the next two
years, the plan's timeline shows.
This is slowing down the rollout of
charging hubs across the 27-member bloc, putting EU targets to phase out petrol
and diesel vehicles, as well as its broader climate goals, in peril.
"The time needed for connecting
the EV recharging points to the grid can indeed be seen as a barrier to
accelerate the uptake of EVs and needs to be tackled," a Commission
spokesperson said in an emailed response.
The process for setting up a fast EV
station has risen to an average of two years from six months in the last few
years, four EV charging companies and the industry's representative said, as
firms wade through myriad rules from federal to municipal level.
"It's Kafka meets the energy
transition. We have so many things working against Europe but we could fix
this," Lucie Mattera, secretary general of ChargeUp Europe, told Reuters.
Mattera said the number of EVs will
grow faster than the total number of public charging stations which ChargeUp
Europe estimates will rise by nine times by 2030, with EVs by ten.
---- This year, the EU adopted a law to
install fast chargers by 2030 every 60 kilometres along designated road
networks for passenger cars and every 100 km for heavy-duty vehicles.
But charging developers say obtaining
basic data about potential hubs is a major challenge, making investments hard.
This involves finding out whether an
average roadside rest stop has a single lamppost or enough cabling that
connects to the broader grid. Hubs often require an extra electricity
sub-station, which converts high voltage power into smaller units.
More
EV charging growth plans slowed by EU's power grid
problems | Reuters
I like thieves. Some of my best friends are thieves.
Why, just last week we had the president of the bank over for dinner.
W. C. Fields.
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