Stocks In Wonderland! Red Sea Roulette. A US Banking Scam.

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This is the way things are, and the Game has been so successful that, like everything, it will get more and more successful until it stops being successful.

George Goodman, aka Adam Smith, The Money Game. 1968.

With only three trading days left in the 2023 stock casinos, what’s not to like. With an aggressive dress up the casinos for year-end money manager bonuses, do new highs lie directly ahead.

Forget for three days that two wars are underway, with one turning much, if not most of the world anti-west.  Many in the west are turning anti-west too, especially among the young.

Forget for three days that China’s Great Covid Recovery Boom of 2023, ended in a deflationary property bust.

Forget too, that Germany’s Pied Piper economy is leading most of Europe into recession, or that the USA is heading into a growing commercial real estate bust.

For the next three days, it’s likely to be Buy, Buy, Bye, in the stock casinos,

(Just why are US banks borrowing up billions from the Fed’s bank bailout scheme the Bank Term Funding Program at 4.88 percent. Not to park those same borrowings back at the Fed’s excess funds window at 5.4 percent, surely? They wouldn’t fleece US taxpayers like that would they?)

China, Hong Kong markets rise as video-game stocks bounce; Aussie shares close near 2-year highs

UPDATED WED, DEC 27 2023 12:40 AM EST

China and Hong Kong stocks gained ground Wednesday as video-game shares surged, while Australia stocks hit a near two-year high, as more markets resumed trading after a Christmas break.

China’s CSI 300 index added 0.40% by afternoon trading as shares of video-game companies rebounded after declining in the previous session.

Chinese online gaming stocks rose in Hong Kong trading after Beijing’s top gaming regulator said it would “carefully study” the concerns of all stakeholders on draft rules aimed at curbing excessive gaming and spending.

Hong Kong’s Hang Seng index rose 1.7%. This is the first trading day of the week for Hong Kong markets.

Australia’s S&P/ASX 200 index ended 0.79% higher at 7,561.20. The index hit its highest level since late April 2022, as trading resumed for the week. It is eying yearly gains of over 7%.

Aussie stocks have been buoyed by hopes that the Reserve Bank of Australia will no longer be hiking interest rates after the central bank held rates steady at its last meeting of the year, partly driven by the Federal Reserve’s more dovish tilt.

With fewer data points on the economic calendar and all major central bank meetings out of the way, trading volumes are expected to be thin.

Japan’s Nikkei 225 rose 1.25%, while the broader Topix index added 1.19%. The Topix is headed for its fourth straight day of gains.

The Nikkei 225 has gained more than 27% so far this year, making it Asia’s top performing index for 2023.

South Korea’s Kospi reversed early gains to trade flat, while the small-cap Kosdaq index rose 1.17%.

vernight, stocks on Wall Street kicked off the last week of the year on a positive note, pushing the S&P 500 closer to record levels.

The S&P 500 ended 0.42% higher, while the Nasdaq Composite advanced 0.54%. The Dow Jones industrial Average gained 159.36 points, or about 0.43%, to close at 37,545.33.

The Nasdaq 100 gained 0.6% and notched an all-time high and record close, ending the session at 16,878.46.

Live updates: China, Hong Kong stocks gain; Aussie shares hit near 2-year highs (cnbc.com)

S&P 500 futures are little changed as index nears all-time high: Live updates

UPDATED TUE, DEC 26 2023 8:30 PM EST

S&P 500 futures are near flat Tuesday night as investors eyed the benchmark index’s approach to a record high.

Futures tied to the broad market index and Nasdaq 100 were both little changed. Dow Jones Industrial Average futures lost 18 points, also trading near the flatline.

The moves follow a winning day on Wall Street to kick off the final trading week of 2023. The stock market was closed on Monday in observance of Christmas Day.

Both the Dow and S&P 500 added 0.4% each. That put the latter within 0.5% of its closing high, which was seen in January 2022.

The technology-heavy Nasdaq Composite advanced 0.5%. Meanwhile, the more concentrated Nasdaq 100 rose 0.6%, clinching an all-time high and record closing level at 16,878.46.

These gains add to what’s already been a strong year for the stock market. With just three sessions left in 2023′s trading year, the Dow and S&P 500 are poised to end 2023 higher by 13% and 24%, respectively. The Nasdaq Composite has jumped 44%, outperforming amid mega-cap technology’s rebound and the artificial intelligence craze.

Stocks are in the thick of what’s referred to as the “Santa Claus rally,” a period comprised of the last five trading days of an ending year and first two of a new one. The S&P 500 has risen about 1.3% over this timeframe on average, according to data going back to 1950 from the Stock Trader’s Almanac.

There’s been “enthusiasm” in the market recently, said Scott Wren, senior global market strategist at the Wells Fargo Investment Institute. And “it doesn’t surprise me that it would continue this week.”

Still, he said the market may be overly optimistic, especially if the Federal Reserve begins cutting interest rates later than traders anticipate. The market is pricing in a more than 70% probability of a decrease to interest rates at the central bank’s March meeting, according to CMEGroup’s FedWatch tool.

Investors will watch on Wednesday for economic data on the manufacturing industry.

Stock market today: Live updates (cnbc.com)

The great speculative era on markets is hard to kill

December 26, 2023

In most Hollywood horror movies, the monster is incredibly hard to kill. Not until the final moments of the film will it be dispatched and, even then, enough doubt will be created to leave room for a sequel.

So it has been with the great speculative era on the financial markets. A pandemic, a Russo-Ukraine war and even substantially higher interest rates have not finished off the risk-taking bonanza.

Take the technology sector as a starter. Much of its value lies in the future profits companies are expected to earn because of their superior growth potential. When bond yields rise as they have this year, investors should in theory use a higher rate to discount those future profits taking into account the time stocks have to be held to receive them. That means valuations should fall, not rise.

But the price/earnings ratio of the US technology sector is well above its three-year average and the sector’s shares have jumped more than 50 per cent so far this year.

Second, take the overall market valuation, as measured by the cyclically adjusted price/earnings ratio, or Cape. This averages profits over 10 years to allow for the economic cycle. In March 2022, as the US Federal Reserve started to push up interest rates, the Cape was 34; on the latest figures, the ratio has dropped only to 31, still well above the historical average. And markets have continued to rally in December.

Then there is bitcoin. The late, lamented Charlie Munger, the long-term colleague of Warren Buffett, said that investing in cryptocurrencies was “absolutely crazy, stupid gambling”. As if to prove his point, the past 18 months have seen the collapse of the crypto exchange FTX, and Binance — one of its biggest competitors — suffering a $4.3bn fine for money laundering and the forced departure of its founder. There could not be more alarm bells sounding if the entire New York City fire department was racing, with sirens blazing, past investors’ doors. But the bitcoin price has more than doubled this year.

One explanation for the continuation of investors’ risk appetite is that, while nominal interest rates have risen over the past couple of years, they have been outpaced by inflation; the real returns on cash and bonds have not been attractive. That has maintained the allure of risky assets.

Now inflation has fallen, real interest rates are mildly positive in the US, making cash and bonds theoretically more appealing. But investors do not expect this to last. The stock market rally in November was driven by the widespread expectation that the Federal Reserve would be able to start cutting rates in 2024.

But there is more to the frenzy than the prospect of a change in monetary policy. Surveys show that American voters are not happy with their economy, even though it has actually been doing remarkably well. In the third quarter, gross domestic product grew at an annualised rate of 5.2 per cent.

The economy has been supported by fiscal policy, with the budget deficit running at about 5.7 per cent of GDP in the current year. In other words, American pocketbooks are sufficiently flush that they can afford a little gamble.

So what could finally bring the speculative era to an end? In any individual asset class, a collapse usually arrives when investors lose confidence in the fundamentals that have been driving prices higher.

More

The great speculative era on markets is hard to kill (msn.com)

Finally, is the Red Sea war on shipping over? Maybe.

Shipping firms take first steps towards Red Sea return

By Tom Sims and Gus Trompiz  December 26, 2023 7:26 PM GMT

FRANKFURT/PARIS, Dec 26 (Reuters) - France's CMA CGM is increasing the number of vessels travelling through the Suez Canal, it said on Tuesday, joining Maersk (MAERSKb.CO) in returning to the area after U.S.-led efforts to prevent attacks.

 

The world's top shipping companies, including Maersk and Hapag-Lloyd, stopped using Red Sea routes after Yemen's Houthi militant group began targeting vessels this month, disrupting global trade through the Suez Canal.

 

Instead they have rerouted via southern Africa, a longer and more expensive journey. The canal is the quickest sea route between Asia and Europe.

Shipping firms are now reviewing whether it is safe to return after the United States announced a multinational maritime security initiative in the Red Sea in response to attacks on vessels by Yemen's Houthis.

CMA CGM has undertaken "an in-depth evaluation of the security landscape", it said in a statement.

"We are currently devising plans for the gradual increase in the number of vessels transiting through the Suez Canal. We are monitoring the situation constantly and we stand ready to promptly reassess and adjust our plans as needed."

German container shipping group Hapag-Lloyd (HLAG.DE) will decide on Wednesday whether to resume journeys through the Red Sea, a spokesperson said.

 

"We will decide tomorrow how we will proceed," a Hapag-Lloyd spokesperson said on Tuesday, declining to comment further.

The company had said last week it would redirect 25 ships by the end of the year to avoid the area.

 

Danish-based Maersk had said on Sunday that it was preparing to resume shipping operations in the Red Sea and the Gulf of Aden, citing deployment of the U.S.-led military operation designed to ensure the safety of commerce in the area.

 

Maersk did not immediately respond to requests for comment on Tuesday about when it would return vessels to the Suez Canal and what assistance it had received from the U.S.-led maritime force.

In a notice posted on its website on Tuesday, CMA CGM listed 28 of its vessels as being re-routed around the Cape of Good Hope, compared with 22 in a previous list published last Thursday.

CMA CGM is among container lines to have introduced surcharges due to the re-routing of vessels, adding to rising costs for sea transport since the Houthis started targeting vessels.

Mediterranean Shipping Co. said container ship United VIII was attacked while transiting the Red Sea on Tuesday. The Houthis also on Tuesday claimed to have fired missiles at the vessel, without saying it was struck.

Two explosions in the Red Sea were reported by a vessel sailing off the coast of Yemen on Tuesday, shortly after two unmanned aircraft were sighted, a British maritime authority said.

 

The British maritime authority said the vessel was in contact with coalition forces and that reports said the crew was safe and the vessel was continuing its voyage.

Shipping firms take first steps towards Red Sea return | 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.

RBC says these 6 reasons explain why a recession will strike in the first half of 2024

Dec 26, 2023, 12:24 PM GMT

• RBC Global Asset Management put the odds of a recession in 2024 at 70%.
• In the firm's 2024 outlook, strategists shared six reasons why they hold that view.
• "A recession can be expected to inflict very real pain on businesses and households, and cascade into financial markets as well."

The Federal Reserve's interest-rate hiking cycle has yet to tip the US economy into a downturn, but RBC Global Asset Management put the odds of a recession in 2024 at 70%.

For now, inflation has cooled, unemployment has remained low, and the stock market's major indexes are touching all-time highs. 

But RBC strategists said their recession prediction is informed by the softening economic and business landscape. They shared six reasons why a recession will arrive in the first half of the new year.

1. The Fed's rate hikes have gone high enough to trigger a downturn. The current policy is "deeply in restrictive territory," and that stance may no longer be appropriate if the economy continues to slow or inflation continues to cool. 

2. Souring economic data suggests further weakness ahead.

3. The firm's recession scorecard is flashing warning signals. For example, the 2-year and 10-year curves are inverted, as well as the 3-month and 10-year curves — both pointing to a recession. The scorecard also shows financial conditions and lending standards have tightened. 

4. RBC's business-cycle model indicates the economy is vulnerable to a downturn, as it's currently late in the cycle. 

5. the economy is operating beyond a sustainable level, meaning that a period of sub-par activity is needed to cool things down.

6. central banks around the world are intent on cooling inflation to pre-pandemic levels, and they will likely have to produce a period of economic weakness to curb wage growth and pricing power.

RBC said any recession will likely be "reasonably mild and fairly short," and the labor market would see fewer job losses than typical. 

"Still, a recession can be expected to inflict very real pain on businesses and households, and cascade into financial markets as well," the strategists added.

Recession Outlook 2024: 6 Reasons Why a 2024 Downturn Looms, RBC Says (businessinsider.com)

Covid-19 Corner

This section will continue until it becomes unneeded.

4th Vaccine Dose Showed Negative Relative Vaccine Efficacy Against COVID Death: Study

An Austrian study showed more COVID-19 deaths among individuals who received four vaccine doses than among those who received fewer doses or no vaccinations.

12/22/2023  Updated: 12/23/2023

 

A fourth dose of the COVID-19 vaccine may not be as effective as expected, according to a recent peer-reviewed study.

The retrospective population-based observational study published in the European Journal of Clinical Investigation used national health data from the Austrian epidemiological reporting system, individual all-cause mortality data from Statistics Austria, and the national COVID-19 vaccine registry.

Researchers calculated COVID-19 deaths and SARS-CoV-2 infections from Nov. 1 to Dec. 31, 2022, in 3,986,312 individuals, comparing the outcomes of 281,291 who received four vaccine doses with 1,545,242 individuals who received three vaccine doses to determine relative efficacy.

According to the CDC, relative vaccine effectiveness is measured by comparing people who received one vaccine type or regimen to those who received a different one.

During the initial study period, researchers recorded 69 COVID-19 deaths, 89,056 SARS-CoV-2 infections, and an overall case fatality rate of 0.08 percent. Relative vaccine efficacy for four doses was negative 24 percent compared with those who received three vaccine doses. Additionally, researchers found more COVID-19 deaths among individuals who received four vaccine doses than among those who received fewer vaccine doses or no vaccinations.

"Negative efficacy basically means [there were] more deaths (or illnesses) in the vaccinated group compared to the unvaccinated group. Efficacy is a "delta" of unvaccinated deaths minus vaccinated deaths. Once vaccinated deaths exceed unvaccinated deaths, the delta becomes negative, and that yields a negative efficacy," Brian Hooker, chief scientific officer at Children's Health Defense, who holds a doctorate in biochemical engineering, told The Epoch Times in an email.

There was a 17 percent reduced risk among those who received four vaccine doses. However, the initial decreased risk of infection “rapidly diminished” and reversed itself in a six-month extended follow-up, leaving individuals who received four doses with a higher risk of infection than less vaccinated individuals.

Those with repeated previous and recent infections experienced significantly reduced reinfections, regardless of the vaccine dose.

More than 80 percent of vaccinated Austrians had received Pfizer’s COVID-19 vaccine during the initial study period, and 97.4 percent of individuals who had received four vaccine doses in the extended observation had received Pfizer’s vaccine.

More

4th Vaccine Dose Showed Negative Relative Vaccine Efficacy Against COVID Death: 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.

Scientists developed portable nuclear reactor with amazing feature: ‘Transformative for our economy, industry, and communities’

Rick Kazmer  Sun, December 24, 2023 at 11:00 PM GMT

A small nuclear reactor that can run for eight years or more without water is scheduled to go online by 2029 in Saskatchewan, Canada.

In November, Saskatchewan’s government announced an $80 million CAD (about $59 million USD) project from the Saskatchewan Research Council to demonstrate the microreactor’s capability. The unit, called an eVinci, is being built by Westinghouse.

“This project has the opportunity to be transformative for our economy, industry, and communities,” Premier Scott Moe said in a government press release. “Microreactors provide a custom solution for Saskatchewan’s unique energy needs.”

It’s also cleaner energy, as each eVinci will “reduce up to 55,000 tons” of air pollution each year, according to Westinghouse.

The unit will be capable of “producing five megawatts of electricity, over 13 megawatts of high-temperature heat, or operating in combined heat and power mode,” per the council.

For reference, the Nuclear Regulatory Commission reported in 2012 that a single megawatt of capacity for a conventional power plant produces energy similar to what is used by 400 to 900 homes in a year.

Westinghouse considers their unit “revolutionary” technology for future energy needs, per a video clip. Microreactors are notable for their portability and potential to power remote locations. The U.S. Energy Department reports that several kinds are in development in the United States.

The eVinci will be installed above ground with a small footprint. The unit’s supporting infrastructure will fit inside a hockey rink. The power can be integrated into existing grids, and it can be paired with renewable power sources, as well.

With its “heat pipe technology,” the system doesn’t need water to cool down. After an approximate eight-year service life, the unit can be hauled away for disposal, and another one can be plugged in, all per Westinghouse.

More + video

Scientists developed portable nuclear reactor with amazing feature: ‘Transformative for our economy, industry, and communities’ (yahoo.com)

Somebody has to be on the other side.

George Goodman, aka Adam Smith. The Money Game. Why Are The Little People Always Wrong?