Baltic
Dry Index. 2022 -88 Brent Crude 76.07
Spot Gold 2033 US 2 Year Yield 4.36 -0.04
Money is not everything. Make sure you earn a lot before speaking such nonsense.
Warren Buffett.
In the
stock casinos Hopium’s back. After all it’s
a US Presidential election year so the US central bank will be lowering
interest rates all year, right?
In the EU, Germany is leading the support cast
into recession, so the ECB will be cutting interest rates all year, right?
In the UK, it’s probably an election year too, with
His Majesty’s Government squatting in office hoping for something to turn up to
save them, so it will be tax cuts and interest rate cuts all year, right?
Well maybe, but there’s many a slip….
Asia markets
rebound after Monday’s sell-off; Tokyo inflation slows further
UPDATED MON, JAN 8 2024 11:20 PM EST
Asia-Pacific
markets rose across the board Tuesday, rebounding from a sell-off in the
previous session.
Investors assessed December
inflation numbers for Japan’s capital city of Tokyo, which are a leading
indicator for nationwide inflation.
Tokyo’s
inflation rate slowed to 2.4% in December from 2.6% in the
previous month. Core inflation — which strips out prices of fresh food —
remained unchanged at 2.1%, and came in line with expectations.
Australia’s
retail sales for November 2023 also rose more than expected,
gaining 2% month-on-month and beating economists expectations of 1.2% in a
Reuters poll.
The country’s benchmark
S&P/ASX 200 index
climbed 1.02%.
Japan’s Nikkei 225 gave
up some gains but was still up 1.2%, as trading resumed after a public holiday;
the Topix advanced 0.81%.
South Korea’s Kospi advanced
0.29% even as heavyweight Samsung Electronics cut its earnings forecast for the
fourth quarter of 2023, while the small-cap Kosdaq gained 0.81%.
Hong Kong’s Hang Seng index inched
up 0.34%, while the mainland Chinese CSI 300 was up 0.29%.
Overnight in the U.S., all three major indexes
gained, boosted by tech shares.
Shares of Nvidia rose
6.4%, reaching an all-time high, and Amazon climbed
nearly 2.7% to help pull the Nasdaq higher. Separately, Alphabet shares
advanced 2.3%, while Apple added
2.4% after Evercore ISI advised clients to buy last week’s dip.
The S&P 500 gained
1.41%, and the Nasdaq Composite jumped
2.2% to mark the tech-heavy index’s best day since Nov. 14.
The Dow Jones Industrial Average added
216.90 points, or 0.58%, settling at 37,683.01.
Asia stock markets
today: Japan inflation, Australia retail sales (cnbc.com)
European
markets set to rebound at the open following negative start to 2024
UPDATED TUE, JAN 9 2024 12:31 AM EST
European markets look set to open higher
Tuesday, rebounding after a gloomy start to the new trading year.
Global investors are looking
ahead this week to the release of the latest U.S. inflation data and big bank
earnings for further clues on the state of the economy, and the path of rate
cuts from the Federal Reserve.
December’s consumer price index
is due to be released Thursday, while the producer price index is due out on
Friday.
U.S.
stock futures inched lower overnight after the major averages
popped to start the week. Asia-Pacific markets rose
across the board Tuesday, rebounding from a sell-off in the previous session.
European
markets live updates: stocks, news, data and earnings (cnbc.com)
But.
Samsung
warns fourth-quarter profit could plunge 35%, misses expectations
Samsung Electronics on Tuesday said it expects to
post a 35% drop in operating profit in the fourth quarter of 2023, missing
expectations by a wide margin as a rebound in semiconductor prices likely
narrowed losses in the South Korean company’s biggest profit-driving segment.
Samsung said that for the
October-December quarter, operating profit is likely to be 2.8 trillion South
Korean won ($2.13 billion), down 35% from the same period a year ago where the
firm reported an operating profit of 4.31 trillion won. Operating
profit was 2.43 trillion won in the previous quarter.
The profit guidance fell far short of LSEG’s SmartEstimate of 3.7 trillion
won, which is weighted more heavily toward expectations of analysts who have
been consistently more accurate.
Fourth-quarter revenue likely fell 4.9% from the
same period a year ago to 67 trillion won, the firm said in a preliminary
earnings statement.
Samsung is the world’s largest
maker for dynamic random-access memory chips which are found in consumer
devices such as smartphones and computers.
″[Samsung is] very good at making
some of the best semiconductors in the world, at least in making them and
getting them done. But their yields are so much worse than competitors like
TSMC,” said Cory Johnson, chief market strategist at The Futurum Group, on
Tuesday.
″... so bad yields can turn into really bad
earnings results,” he told CNBC’s “Squawk Box Asia” after Samsung’s earnings
preview.
The company is set to announce detailed earnings on Jan. 31, according to a filing.
More
Samsung
issues guidance for Q4 2023, expects 35% profit drop (cnbc.com)
Next, more on that Zhongzhi
Enterprise bankruptcy. If Zhongzhi contagion spreads (Evergrande) and takes
down the shadow banking sector, that’s a 3 Trillion US dollar equivalent crash.
Don’t look up Creditanstalt 1931.
Why
China’s markets are being rocked by fears of contagion
Published Sun, Jan 07, 2024 · 9:00 am
CHINESE regulators
have sought for years to get to grips with the US$2.9 trillion trust industry,
a corner of the country’s shadow-banking sector that offers bigger returns than
regular bank deposits but can be fraught with risk.
A reckoning arrived
on Jan 5, when one of the sector’s biggest players, Zhongzhi Enterprise Group
Co, filed for bankruptcy, victim of a property crisis that’s bedevilled the
world’s second-largest economy.
China’s banking
regulator had vowed in November to use “strong medicine” to tackle major risks
in the country’s financial sector. But the collapse of Zhongzhi in one of
China’s biggest-ever bankruptcies still came as a shock to investors, given the
government’s past willingness to throw an occasional lifeline to struggling
firms.
1. What are these
trust companies?
They are loosely
regulated firms that pool household savings to offer loans and invest in real
estate, stocks, bonds and commodities. No other Chinese financial companies
operate across all of these asset classes.
The sector was once
seen as a safe place for wealthy Chinese to park their money for heftier
returns. But trust firms have defaulted on billions of dollars of investment
products in recent years and the industry has shrunk by about 16 per cent from
its peak in 2017, when regulators began clamping down on the nation’s
shadow-banking excesses.
2. What is
Zhongzhi?
It’s a shadow
banking giant, with interests in trust companies, wealth management and private
equity. The Beijing-based firm was founded in 1995 by Xie Zhikun, who built it
into a sprawling empire. Xie died of a heart attack in 2021, just as the
Covid-19 pandemic slowed China’s economy and increased volatility in its
capital markets.
It oversaw more
than US$140 billion at its peak before succumbing to the property crisis. One
of its most important investments was a 33 per cent stake in Zhongrong Trust, a
major backer of troubled real estate developers.
The firm has 230
products totalling 25.3 billion yuan coming due this year, according to Use
Trust data. The average yield on those products amounted to 6.73 per cent,
compared with the benchmark 1.5% one-year deposit rate paid by banks.
3. How did the
crisis unfold?
As recently as
early August, investors began spreading the word on social media that they’d
failed to receive payments from companies linked to Zhongzhi, including
Zhongrong. The group then suspended payments on nearly all its products and
hired KPMG to conduct an audit of its balance sheet, people familiar with the
matter said at the time.
This led to
volatility in financial markets and sparked rare street protests in Beijing. An
audit in November found Zhongzhi Enterprise had debts of between 420 billion
and 460 billion yuan (S$78.6 billion) and assets of 200 billion yuan. Zhongzhi
Enterprise told investors it was “severely insolvent” and, on Jan 5, Beijing’s
First Intermediate People’s Court said the company had filed for
bankruptcy.
More
Why China’s markets are being rocked by fears of
contagion, International - THE BUSINESS TIMES
Finally, CES 2024.
CES
2024 Live Blog: News, Gadgets, and Photos From Tech's Big Show
Get live, up-to-the-minute
reports of all the products, trends, and weird stuff we're seeing at CES in Las
Vegas.
January
8, 2024
EVERY JANUARY, THE giant
trade show known as CES takes over Las Vegas. It's a global bazaar featuring
the best and worst tech ideas the industry has to offer. The products on
display are by different turns wearable, pocketable, audible, rideable,
mountable, and—in some cases—digestible. There are also a few dozen new cars to
ogle, with most major automakers present. Here on this page, we'll be keeping a
running report of everything we find interesting, from fascinating new EV
concepts to bio-scanners to the latest smart home tech.
Live
coverage kicks off around 8 am Las Vegas time—that's 11 am on the East Coast, 4
pm in the UK—and will pause at the end of each day. We'll be here all week, so
check back often.
More
CES
2024 Live Blog: News, Gadgets, and Photos From Tech's Big Show | WIRED
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.
Buckle Up for a Bumpy 2024, Economists Say
Inflation,
interest rates, tight housing supply, and an election year: Analysts are
divided on which direction the economy will shake out this year.
By Emel Akan January 07, 2024 Updated: January
07, 2024
---- Currently, there’s growing talk about the prospect of a “soft landing”
in 2024. Nevertheless, economists remain cautious, with many expecting a bumpy
ride ahead due to the lingering effects of tight monetary policy over the past
two years.
Recession Fears Not Over
Although the
economy has shown resilience in the face of numerous challenges, many analysts
predict a significant slowdown in the coming months, with some even
anticipating a recession.
“While so
far economic growth has held up well and inflation has been coming down, there
is a high risk that we will experience an economic recession before the 2024
election,” Desmond Lachman, senior fellow at the American Enterprise Institute,
told The Epoch Times.
The U.S.
economy is yet to see “the full effects of the Federal Reserve’s monetary
policy tightening, and there are major problems in the commercial real estate
space that could trigger another regional banking sector crisis.”
The Conference Board, a nonprofit business
think tank, predicts that the recession will arrive in the
first half of the year.
“We forecast
two quarters of negative growth that will be broadly felt across the economy,”
Erik Lundh, principal economist at the Conference Board, said in a recent
report.
Although
this contraction will be limited in depth and duration, Mr. Lundh said he still
expects it to be officially designated as a recession.
Jamie Dimon, CEO of JPMorgan Chase, is
more pessimistic. During a speech
at the New York Times DealBook summit in November 2023, he cautioned Wall
Street not to fall for robust economic growth. Inflationary pressures, he said,
could persist, and a recession should not be ruled out.
Mr. Dimon
described the U.S. economy as being on a “sugar high” from stimulus money
handed out during the pandemic and the Fed’s quantitative easing.
“They are drugs
running through the system,” he said. “So I’m quite cautious about the
economy.”
Many analysts
expect the upcoming election to be a significant source of uncertainty and
anxiety around the economy.
More
Buckle Up for a Bumpy 2024, Economists Say | The Epoch Times
Covid-19 Corner
This
section will continue until it becomes unneeded.
Health experts issue fresh Covid warning to everyone in the UK
January 8, 2024
Britain is facing a surge in Covid-19 cases
as children return to the classroom today and more
people go back to working from the office, an immunologist has warned.
Professor
Sir Andrew Pollard, director of the Oxford Vaccine Group, is expecting ‘a rise
in infections in the population over the course of the this week.’
A rise in both Covid-19 and flu cases was already observed
during Christmas and
New Years, and further increases are likely as the weather drops colder, the
latest data from the UK Health Security Agency showed.
With NHS strikes still
in full swing, Prof Pollard said this will prove ‘quite an extra burden’ on the
health system.
He told
the Mirror: ‘It is not that
we are at a point where there is a terribly serious risk of the pandemic coming
back, we just have another virus that is adding to the usual winter pressures.
‘Of
course we still have quite a lot of people in hospital from the previous wave.
It is not pandemic numbers, but it is quite an extra burden on the NHS.’
Currently, JN.1 – a particularly
infectious sub-variant of the Omicron strain – is the dominant one in the UK,
accounting for 51.4% of cases.
Referring to he sub-variant
specifically, Prof Pollard stressed that there is no firm evidence to suggest
that it is more lethal than previous strains.
Latest Covid-19 symptoms you should be aware of
More
Health experts issue fresh Covid warning to everyone in the UK (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.
Today, Bird can’t fly and crashes.
E-scooters:
Why Bird’s bankruptcy is a turning point for the sector’s profit scrap
MONDAY
08 JANUARY 2024 9:43 AM
E-scooter startups
were once some of the most hotly-anticipated businesses in Western markets.
From obscurity just
years ago, names including Tier, Lime and Bird are now well known across Europe
and America. E-bikes have also exploded in popularity, with the electric bike
users now a common sight on the way into work in London.
But has it all been a
bit of a sham?
Bird, the e-scooter
rental pioneer which is well known for becoming the fastest startup to secure a
fabled “unicorn” valuation,
filed for bankruptcy last month.
While questions have
been raised about the company’s business model following such a turbulent year,
financial struggle has become a growing theme in the sector and most of the key
players can’t seem to turn a profit.
Berlin-based Tier announced plans to cut nearly a quarter of its
workforce in November and has undergone several
rounds of layoffs over the last few years. It was reported in February the
startup had been working with bankers at Rothschild to secure a mammoth
fundraising.
Granted, operators can
use the pandemic as somewhat of an excuse, with lockdowns prompting a massive
reducting in urban footfall.
But the e-mobility
market is highly competitive and a challenging macroeconomic backdrop, namely
due to high interest rates and borrowing costs, is tightening the noose on an
industry whose model was already questionable.
Costs are soaring, yet
operators are obliged to keep the price of renting out their fleets low amid
such a fierce battle for customers.
And problems surrounding
legislation and safety are cropping up all over the shop. Paris, which is home to Tier, Dott and Lime, banned e-scooters from the capital last year and
there is an ongoing and unresolved problem with the batteries used to power
micromobility vehicles – which are prone to causing dangerous fires.
In London, anyone who
spent a significant chunk of time on the roads over the summer will be all too
aware of the distinctive ‘clacking’ noise made by Lime bikes which have been illicitly hijacked. The problem has
now been resolved but posed a real headache for the firm and saw many of the
electric bikes left broken and discarded near the city centre – not fantastic
PR.
Dott has
seperately withdrawn
it’s e bikes from the capital entirely. Its chief executive told City A.M.
in an interview the market had become “out of control,” due largely to the capital’s confusing
borough-by-borough contracting system, which has led to issues with parking and
how to work out where each operator’s bikes can actually run.
Oliver Montague,
co-founder and chief executive of competitor Swytch, which develops electric
conversion kits to power normal bicycles, told City A.M. many
operators had failed to adjust their business models when expanding into new
cities.
“Where many have
stumbled is by attempting to reach everywhere simultaneously, overlooking vital
local nuances.” These include adjusting language and metrics when advertising e
bikes and scooters in new regions, or looking at behavioural disparities to avoid
demand becoming outpaced by the rate of damage to the devices.
“If you look at the
numerous micro mobility companies that went bankrupt or have been
struggling in the UK, a common thread was their outsider status, marked by
a failure to fully grasp and cater to local intricacies,” he added.
More
E-scooters: Why Bird's bankruptcy is a turning point
for the sector's profit scrap (cityam.com)
No matter how great the talent or efforts, some things just take time.
Warren Buffett.
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