Baltic
Dry Index. 2219 -69 Brent Crude 79.26
Spot Gold 2042 US 2 Year Yield 4.41 -0.02
"I see no way of buying significant quantities of Ethiopian coffee going forward," said Johannes Dengler, an executive at German roaster Dallmayr, which buys about 1% of the world's exported coffee.
----The EUDR requires companies to digitally map their supply chains down to the plot where the raw materials were grown, which could potentially involve tracing millions of small farms in remote regions.
While the stock casinos are busy counting next year’s chickens courtesy of next year’s central bankster interest rate cuts, at least three but possibly five in America they think, the really big news this week comes from the Gaza Ghetto war now extending to the Red Sea off Yemen.
Already many shipping companies are diverting shipping around the Cape of Good Hope, rather than risk transiting the Red Sea.
While many oil cargoes will soon become affected, the real disruption will come in Asia-Europe container traffic. If the Red Sea disruption lasts for any length, the global economy faces supply chain disruption as early as next month.
Just don’t let on to anyone busy counting
next year’s chickens in our stock casinos. Look away from that rising oil price
now.
European markets head for higher open; UK
inflation data ahead
UPDATED WED, DEC 20 2023 12:31 AM EST
European markets are set to open higher
Wednesday, building on positive momentum seen in the previous session.
U.K. inflation figures for
November are due today and investors will be looking for signs that the rate of
price rises is slowing and how this could influence central bank policy. Last
week, the Bank of England kept its main interest rate unchanged at 5.25% and
said monetary policy is “likely to need to be restrictive for an extended
period of time.”
Asia
markets rose Wednesday, with Japan stocks extending gains to
another session after the country’s central bank left its ultra-loose monetary
policy unchanged at its final meeting this year.
U.S.
stock futures hovered near the flatline in overnight trading
after the major averages built on their strong rally to end 2023.
European
markets live updates: Stocks, news and UK inflation data (cnbc.com)
Stock
futures are flat after Dow notches a ninth winning session: Live updates
UPDATED WED, DEC 20 2023 12:28 AM
EST
Stock futures hovered near the flatline on
Wednesday after the major averages built on their strong rally to end 2023.
S&P
500 futures
inched 0.05% higher, while Nasdaq 100 futures
inched higher by 0.13%. Futures tied to the Dow Jones
Industrial Average slipped
12 points, or 0.03%.
On Tuesday, FedEx slumped
9% in extended trading on a
disappointing revenue outlook for the fiscal year. Results for
the fiscal second quarter also fell short of Wall Street’s expectations on the
top and bottom lines.
Stocks rose broadly
during regular trading Tuesday, with the S&P 500 gaining
0.59% and edging closer to its record close and intraday high hit in January
2022.
The Nasdaq Composite jumped
0.66% to close above the 15,000 level for the first time since January 2022,
while the 30-stock Dow advanced
251.90 points, or 0.68%. Both indexes notched a ninth consecutive winning day,
and the Dow closed at a fresh record high.
All three major averages are
headed for a winning December and 2023 as stocks build on the recent rally and
investors look forward to rate cuts from the Federal Reserve in the new year.
The S&P 500 has risen 4.4%
this month and 24.2% year to date, while the Dow has added 4.5% and 13.3%,
respectively. The Nasdaq is up 5.5% for December and 43.4% for 2023, putting it
on pace for its best year since 2020.
While the recent market may
appear “strong under the hood” and helpful in fueling broader confidence on
Wall Street, Charles Schwab’s Kevin Gordon cautions investors against getting
overexuberant.
“This stealthy rotation under the
surface can likely continue as we head into 2024, but given the almost (and
oddly) euphoric reaction to the Fed’s December decision, it wouldn’t be
surprising to see a short-term pullback given sentiment has gotten quite
frothy,” the senior investment strategist said.
The tail end of earnings season
presses on Wednesday with results from General Mills and Micron Technology.
Consumer confidence data for December and existing home sales for November are
also due.
Stock market today: Live updates (cnbc.com)
Up next, coffee and the EUSSR crashes
into the law of unintended consequences. The road to Hell and all that. Poor
Africa about to get poorer by some edict of some fat cat European do-gooders.
Coffee firms turning
away from Africa as EU deforestation law looms
By Maytaal Angel and Dewi Kurniawati December 19, 20236:10 AM GMT
LONDON/JAKARTA,
Dec 19 (Reuters) - Importers of coffee to the European Union are starting to
scale back purchases from small farmers in Africa and beyond as they prepare
for a landmark EU law that will ban the sale of goods linked to the destruction
of forests, a cause of climate change.
Industry sources
said the cost and difficulty of complying with the EU Deforestation Regulation
(EUDR), which comes into force late in 2024, meant it was already having
unintended impacts that could in time reshape global commodities markets.
Four cited a
drying-up of orders in recent months for coffee from Ethiopia, where some 5
million farming families rely on the crop. They warned that sourcing strategies
being adopted by companies in advance of the law risk increasing small scale
farmer poverty and raising prices for EU consumers, while also undermining the
EUDR's impact on forest conservation.
"I see no
way of buying significant quantities of Ethiopian coffee going forward,"
said Johannes Dengler, an executive at German roaster Dallmayr, which buys
about 1% of the world's exported coffee.
Because beans he
orders now could find their way into coffee products sold in the bloc in 2025,
they must be EUDR-compliant, he said - even though implementing acts for the
law have yet to be finalised.
Under EUDR, importers of commodities like coffee, cocoa, soy, palm,
cattle, timber and rubber - and products that use them - must be able to prove
their goods did not originate from deforested land, or face hefty fines.
----"Nowadays
from Europe no one is interested in our coffee," a representative from
Ethiopia's Oromia Coffee Farmers' Cooperatives Union, told a recent World
Coffee Alliance webinar.
He said most
Ethiopian coffee farmers have never heard of the EUDR and that even educated
villagers would struggle to collect the required data in time.
Coffee generates
30-35% of Ethiopia's total export earnings, with almost a quarter sold to the
EU.
"Roasters
are moving to big rich Brazilian farmers. It's really shocking," said a
trader at one coffee trade major.
"In risky
countries, there's smallholders and middlemen who are illiterate - and we're
coming to them with a law that even Europeans don't understand."
More
Coffee firms turning away from Africa as EU
deforestation law looms | Reuters
Finally, more on that developing Red Sea war.
Shippers have already diverted about $35
billion in cargo from the Red Sea amid fears of attacks
So far, shippers have
diverted about more than $30 billion worth of cargo away from the Red Sea as
they face the threat of attacks from Houthi militants in Yemen.
Carriers are
re-routing vessels as a direct result of 15 strikes in the Middle Eastern body
of water since the start of the Israel-Hamas war in October. U.S. Defense
Secretary Lloyd Austin announced the formation of an international task force
to address security issues.
Details of the
U.S.-led operation are yet to be confirmed. Dan Mueller lead analyst for the
Middle Eastern Region for maritime security firm Ambrey said they continue to
advise clients to continue with their Best Management Practices by thoroughly
checking their vessel fleet’s current and past affiliations, the vessel’s
Transit Risk Assessment, preparating the crew for emergencies and other safety
measures.
At the moment, there
are 57 container vessels sailing the long way around Africa instead of cutting
through the Red Sea and the Suez Canal, according to Paolo Montrone, senior
vice president and global head of trade sea logistics at Kuehne+Nagel.
“That number will
increase as more will take this routing,” Montrone told CNBC. “The total
container capacity of these vessels is 700,000 twenty-foot equivalent units
(TEUs.)” Containers come in both 20-foot and 40-foot units.
The approximate value
of those containers is $50,000, according to Antonella Teodoro, senior
consultant for MDS Transmodal. That adds up to $35 billion in total cargo being
diverted.
---- Teodoro stressed the disruptions at both the
Suez and Panama canals highlight the importance of an international authority
monitoring how capacity is offered and at what price if we want a more
resilient global supply chain. The Panama Canal, located in Central America,
has struggled with low water levels for
months.
Port authorities are expecting
congestion as a result of updated arrival times and planning needs, according
to Montrone.
“The situation is very volatile and
the reconfiguration of these networks is very complex, so we can expect a
certain level of disruption,” Montrone told CNBC. “In Asia, the lack of empty
equipment (containers) will become a potential issue as the repositioning of
empty containers into demand areas will take 10-20 days longer.”
Maersk, one of the shippers who
paused operations in the Red Sea, expects two to four weeks of delays,
according to CEO Vincent Clerc.
“Europe is more dependent on the
Suez,” Clerc told CNBC’s “Market Movers.” “The delays will be more pronounced
in Europe.”
Shippers
divert $35 billion in cargo from Red Sea (cnbc.com)More
Shippers mask
positions, weigh options amid Red Sea attacks
By Florence Tan and Lisa Barrington December 19, 2023 8:17 AM GMT
Dec
19 (Reuters) - A number of container ships are anchored in the Red Sea and
others have turned off tracking systems as traders adjust routes and prices in
response to maritime attacks by Yemen's Iran-aligned Houthis on the world's
main East-West trade route.
Attacks
in recent days on ships in the major Red Sea shipping route have raised the
spectre of another bout of disruption to international commerce following the
upheaval of the COVID pandemic, and prompted a U.S.-led international force to
patrol waters near Yemen.
The Red Sea is linked to the Mediterranean by
the Suez Canal, which creates the shortest shipping
route between
Europe and Asia. About 12% of world shipping traffic transits the canal.
Major shippers including Hapag Lloyd (HLAG.DE), MSC and
Maersk (MAERSKb.CO), oil major
BP (BP.L) and oil tanker group
Frontline (FRO.OL) have said they will be
avoiding the Red Sea route and re-routing via southern Africa's Cape of Good
Hope.
But
many ships are still plying the waterway. Several ships underway have armed
guards on board, LSEG data showed.
At
least 11 container ships which had passed through Suez and were approaching
Yemen carrying consumer goods and grains bound for countries including
Singapore, Malaysia and the United Arab Emirates, are now anchored in the Red
Sea between Sudan and Saudi Arabia, LSEG shiptracking data showed.
Four
MSC container ships in the Red Sea have had their transponders turned off since
Dec. 17, the data showed, likely to avoid detection.
Some
vessels are attempting to mask their positions by pinging on other locations,
as a safety precaution when entering the Yemen coastline, said Ioannis
Papadimitriou, senior freight analyst at Vortexa.
Denmark's
Maersk on Friday paused all container shipments through the Red Sea following a
"near-miss incident" involving its vessel Maersk Gibraltar a day
earlier. A number of the ships at anchor in the Red Sea are Maersk vessels,
LSEG data showed.
On
Tuesday it said vessels previously paused and due to sail through the southern
Red Sea and the Gulf of Aden would be rerouted around Africa.
The
Iran-backed Houthis, who say they are supporting Palestinians under siege by
Israel in the Gaza Strip, have waded into the Israel-Hamas conflict by
attacking vessels in vital shipping lanes and even firing drones and missiles
at Israel, more than 1,000 miles from the Yemeni capital Sanaa.
Houthis
attacked two commercial shipping vessels in the southern Red Sea on Monday.
Industry
sources say the impact on global trade will depend on how long the crisis
persists, but insurance premiums and longer routes would be immediate burdens.
More
Shippers mask positions, weigh options amid Red Sea
attacks | Reuters
Here’s how the Houthi attacks in the Red Sea
threaten the global supply chain
PUBLISHED MON, DEC 18 2023 2:42
PM EST
Attacks by Iran-backed Houthi militants on ships in the Red Sea have already rocked global
trade. And there could be more disruptions and price increases to come for
shipments of goods and fuel.
Several major shipping lines and oil transporters
have suspended their services through the Red Sea as more than a dozen vessels
have come under attack since the start of the Israel-Hamas war in early
October.
Help appears to be on the way. U.S.
Defense Secretary Lloyd Austin, who is visiting Bahrain, said American forces
along with the United Kingdom, Bahrain, Canada, France, Italy, Netherlands,
Norway, Seychelles and Spain would create a new force to protect ships in the
region.
MSC, Maersk, Hapag Lloyd, CMA
CGM, Yang Ming Marine Transport and Evergreen have all said they will be
diverting all scheduled journeys immediately to secure the safety of their
seafarers and vessels. Collectively, these ocean carriers represent around 60%
of global trade.
Evergreen also said it would temporarily stop
accepting any Israel-bound cargo, suspending its shipping service to Israel.
Orient Overseas Container Line (OOCL), which is a part of Chinese-owned
COSCO Shipping Group, has also stopped accepting Israeli cargo, citing
operational issues.
“About 30% of Israeli imports come through the Red
Sea on container vessels that are booked two to three months in advance for
consumer or other products, meaning that if the voyage will now be extended,
products with a shelf life of two to three months will not be worthwhile
importing from the Far East,” said Yoni Essakov, who sits on the executive
committee of the Israeli Chamber of Shipping.
“Importers will need to increase stock due to the
uncertainty and pay much more and others will lose out on their markets as time
to market is not competitive,” Essakov added.
On Monday, oil giant BP said it would also pause shipping activity in the Red Sea as the Yemen-based Houthis continue their attacks.
“The safety and
security of our people and those working on our behalf is BP’s priority. In
light of the deteriorating security situation for shipping in the Red Sea, BP
has decided to temporarily pause all transits through the Red Sea,” the company
said in a statement to CNBC. “We will keep this precautionary pause under
ongoing review, subject to circumstances as they evolve in the
region.”
Oil tanker group
Frontline also said it is avoiding the Red Sea.
More
How Houthi attacks in Red Sea threaten global supply
chain (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.
Can China get its
economic miracle back on track in 2024?
By Marius Zaharia December 19, 2023 8:12 AM GMT
HONG KONG, Dec 19
(Reuters) - China's disappointing post-COVID recovery has raised significant
doubts about the foundations of its decades of stunning growth and presented
Beijing with a tough choice for 2024 and beyond: take on more debt or grow
less.
The expectations
were that once China ditched its draconian COVID rules, consumers would burst
back into malls, foreign investment would resume, factories would rev up and
land auctions and home sales stabilise.
Instead,
Chinese shoppers are saving for rainy days, foreign firms pulled money
out, manufacturers face waning
demand from the West, local government
finances wobbled, and property developers defaulted.
The dashed expectations have partly vindicated those who always doubted China's growth model, with some economists even drawing parallels with Japan's bubble before its "lost decades" of stagnation starting in the 1990s.
China sceptics
argue Beijing failed to shift the economy from construction-led development to
consumption-driven growth a decade ago, when it should have done so. Since
then, debt has outpaced the economy, reaching levels that local governments and
real estate firms now struggle to service.
Policymakers vowed this year to boost consumption, and reduce the economy's reliance on property. Beijing is guiding banks to lend more to high-end manufacturing, away from real estate.
But a concrete
long-term roadmap for cleaning up debt and restructuring the economy remains
elusive.
Whatever
choices China makes, it will have to account for an ageing
and shrinking population, and a difficult
geopolitical environment as the West grows wary of doing business with the world's No.2 economy.
WHY IT MATTERS
China likely grew
5%-or-so in 2023, outrunning the global economy. However, beneath that headline
is the fact China invests more than 40% of its output - twice as much as the
United States - suggesting a significant portion of that is unproductive.
That
means many Chinese don't feel that growth. Youth unemployment topped 21% in
June, the last set of figures before China controversially stopped
reporting.
University
graduates who studied for advanced-economy jobs are now taking up low-skilled positions to make ends meet while others have seen
their wages
cut.
In
an economy where 70% of household wealth is parked in property, home owners
are feeling
poorer. Even in one of the few bright spots of
the economy, the electric vehicle sector, a price
war is causing pain downstream for
suppliers and workers.
The
national pessimism could present President Xi Jinping with social
stability risks, analysts say. If China does slip into a Japan-style decline,
it would do so before ever achieving
the kind of development Japan did.
That would be
felt widely as most global industries depend significantly on suppliers in
China. Africa and Latin America count on China buying their commodities and
financing their industrialisation.
WHAT IT MEANS FOR 2024
China's problems
give it little time before it has to make some tough choices.
More
Can China get its economic miracle back on track in
2024? | Reuters
Fed’s Goolsbee says he was ‘confused’ by
last week’s market reaction
PUBLISHED MON, DEC 18 2023 9:23
AM EST UPDATED MON, DEC 18 2023 10:04 AM EST
A Federal Reserve official said Monday that the
market may have misunderstood the central bank’s intended message last week
after stocks and bonds rallied sharply.
The Fed voted last week to hold rates steady once
again, and its updated projections showed an expectation of three rate cuts in
2024. That caused a rally in stocks and bonds, with the Dow Jones Industrial
Average jumping to a record high.
“It’s not what you say, or what the chair says.
It’s what did they hear, and what did they want to hear,” said Chicago Fed
President Austan Goolsbee said on CNBC’s “Squawk Box.” “I was confused a bit —
was the market just imputing, here’s what we want them to be saying?”
The Fed president also pushed back against the
idea that the Fed is actively planning on a series of rate cuts.
“We don’t debate specific policies, speculatively,
about the future. We vote on that meeting,” he said.
Trading in the options market implies that traders
see 3.75% to 4.00% as the most likely range for the Fed’s benchmark rate at the
end of 2024, according to the CME FedWatch Tool. That would be six quarter-point cuts below the current
Fed funds rate, or double what was forecast in the central bank’s summary of
economic projections.
Goolsbee did not explicitly say that the market
pricing was wrong, but did highlight this difference.
“The market expectation of the number of rate cuts
is greater than what the SEP projection is,” Goolsbee said.
Goolsbee is not the only Fed official who has
downplayed the meeting in the wake of the market rally. New York Fed President
John Williams said on CNBC’s “Squawk Box” on Friday that “we
aren’t really talking about rate cuts right now.”
Fed's Goolsbee says he was 'confused' by last week's market reaction (cnbc.com)
Covid-19 Corner
This
section will continue until it becomes unneeded.
What to Know About the JN.1 Variant of the COVID-19 Virus
December 18, 2023
A new variant of the
virus that causes COVID-19 is rising to prominence in the U.S. as winter
illness season approaches its peak: JN.1, yet
another descendent of Omicron.
JN.1 was first detected in
the U.S. in September but spread slowly at first. In recent weeks, however, it
has accounted for a growing percentage of test samples sequenced by labs
affiliated with the U.S. Centers for Disease Control and Prevention (CDC), surpassing 20% during the two-week period ending Dec. 9. By some projections, it
will be responsible for at least half of new infections in the U.S. before
December ends.
Is JN.1 more infectious or severe than other
SARS-CoV-2 variants?
JN.1 is
closely related to BA.2.86, a fellow
Omicron descendent that first popped up in the U.S. this past summer. The two
variants are nearly identical, according to the CDC,
except for a single difference in their spike proteins, the part of the virus
that allows it to invade human cells.
The fact that JN.1 is
responsible for a growing portion of infections suggests it is either more
contagious or better at getting past our bodies’ immune defenses than previous
iterations of the virus, the CDC says. But there is no evidence that it causes
more severe disease. The World Health Organization (WHO) has not labeled JN.1 a variant of concern—that is, a new strain of the SARS-CoV-2 virus with
potential for increased severity; decreased vaccine effectiveness; or
substantial impacts on health care delivery.
Right
now, there's nothing that suggests JN.1 is any more dangerous than other viral
strains, even though it may cause a bump in transmission, the CDC says. Primary
symptoms are likely to be the same as those from
previous variants: a sore or scratchy throat, fatigue,
headache, congestion, coughing, and fever.
More
What to Know About the JN.1 Variant of the COVID-19 Virus (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.
Ultrafast lasers map electrons 'going ballistic' in
graphene, with implications for next-gen electronic devices
Date: December 15, 2023
Source:
University of Kansas
Summary: Research reveals the ballistic movement of
electrons in graphene in real time. The observations could lead to
breakthroughs in governing electrons in semiconductors, fundamental components
in most information and energy technology.
Research
appearing in ACS Nano, a premier journal on nanoscience and
nanotechnology, reveals the ballistic movement of electrons in graphene in real
time.
The
observations, made at the University of Kansas' Ultrafast Laser Lab, could lead
to breakthroughs in governing electrons in semiconductors, fundamental
components in most information and energy technology.
"Generally, electron movement is interrupted by
collisions with other particles in solids," said lead author Ryan Scott, a
doctoral student in KU's Department of Physics & Astronomy. "This is
similar to someone running in a ballroom full of dancers. These collisions are
rather frequent -- about 10 to 100 billion times per second. They slow down the
electrons, cause energy loss and generate unwanted heat. Without collisions, an
electron would move uninterrupted within a solid, similar to cars on a freeway
or ballistic missiles through air. We refer to this as 'ballistic
transport.'"
Scott
performed the lab experiments under the mentorship of Hui Zhao, professor of
physics & astronomy at KU. They were joined in the work by former KU
doctoral student Pavel Valencia-Acuna, now a postdoctoral researcher at the
Northwest Pacific National Laboratory.
Zhao said
electronic devices utilizing ballistic transport could potentially be faster,
more powerful and more energy efficient.
"Current
electronic devices, such as computers and phones, utilize silicon-based
field-effect transistors," Zhao said. "In such devices, electrons can
only drift with a speed on the order of centimeters per second due to the
frequent collisions they encounter. The ballistic transport of electrons in
graphene can be utilized in devices with fast speed and low energy
consumption."
The KU
researchers observed the ballistic movement in graphene, a promising material
for next-generation electronic devices. First discovered in 2004 and awarded
the Nobel Prize in Physics in 2010, graphene is made of a single layer of
carbon atoms forming a hexagonal lattice structure -- somewhat like a soccer
net.
More
Richard Wittington, an honest dreamer, travels to London “where
the streets are paved with gold”. Fairy Bow Bells realises his destiny, and
supplies him with an introduction to the leading London bitcoin gambler, Bernie
Buymore, a 22 year old dropout from the London School of Economics, who’s
fighting extradition to America over an unintended flash crash in shady
Chicago.
A Panto for modern times. With apologies to Richard Gauntlett author of pantomime scripts.
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