Baltic
Dry Index. 1360 -100 Brent Crude 78.10
Spot Gold 2048 US 2 Year Yield 4.14 -0.12
People who enjoy meetings should not be in charge of anything.
Thomas Sowell.
In the stock casinos, more worry that perhaps the central banksters won’t cut interest rates as fast and as far as the punters have already bet in the casinos.
In the real word, more worry that the USA and UK just widened the Gaza war making the Red Sea/Gulf of Aden unsafe for most shipping.
In Davos, worry over the global economy in 2024.
In the EUSSR Germany leads the rest
into recession.
In the USA, President Don Trump gets
off to a triumphant start to his 2024 election campaign.
Stocks slide, dollar
gains on rates outlook jitters
By Tom Westbrook
January
16, 2024 2:17 AM GMT
SINGAPORE, Jan 16
(Reuters) - Asian shares dropped to a one-month low, U.S. stock futures fell
and the dollar rose on Tuesday as hawkish remarks from central bankers tempered
expectations for interest rate cuts and traders waited to hear from the Fed's influential
Christopher Waller.
MSCI's
broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 1% to its
lowest since mid-December. Japan's Nikkei (.N225) looked set to snap a
sharp six-session winning streak with a 0.7% dip away from Monday's 34-year
high.
Bundesbank
President Joachim Nagel said it was too early to
discuss cuts and Austrian central bank governor Robert Holzmann warned not to
bank on a cut at all this year.
"The upshot
... was to see money markets scaling back the implied probability of a 25 bp
ECB cut in March to 26% from 40%," said NAB currency strategist Ray
Attrill.
Two-year German
bunds rose more than 7 bps to 2.6% and 10-year bunds rose 5.4 bps to 2.2%,
lending support to the euro, which climbed to a three-week high against the
Swiss franc .
U.S. markets were
closed for a holiday on Monday, but S&P 500 futures were 0.4% lower in Asia
trade, Fed fund futures fell - reflecting a slight cooling in interest rate cut
expectations - and short-term Treasury yields rose.
Two-year yields
were up 6.5 basis points in early Tokyo trade and tugged the dollar to
one-month highs on the risk-sensitive Australian and New Zealand dollars.
On Monday
European bonds were sold after European Central Bank officials pushed back on
market bets on rate cuts. EUR/GVD
More
Stocks
slide, dollar gains on rates outlook jitters | Reuters
European
markets head for lower open while Davos steps up a gear
UPDATED TUE, JAN 16 2024 12:27 AM EST
European stocks are
heading for a lower open Tuesday as markets continue to focus on news and
comments from the World Economic Forum in Davos, Switzerland.
The annual forum
steps up a gear Tuesday with special addresses by Chinese Premier Li Qiang,
European Commission President Ursula von der Leyen, U.S. National Security
Advisor Jake Sullivan and Ukrainian President Volodymyr Zelenskyy.
At this year’s forum, titled “Rebuilding Trust,”
global business and political leaders will meet in the Swiss ski resort to
discuss pressing economic and geopolitical matters, ranging from inflation and
supply chains to artificial intelligence, war and security challenges.
Asia-Pacific markets fell
overnight, with Japanese stocks also halting their record-breaking rally since
the start of the year.
U.S.
stock futures were also lower Monday night as Wall Street
awaits December retail sales data due Wednesday and bank earnings that will
provide a better picture of the state of the American consumer.
European
markets live updates: stocks, news and Davos latest (cnbc.com)
Stock futures are
lower to start shortened trading week: Live updates
UPDATED MON, JAN 15 2024 7:00 PM EST
Stock futures are lower Monday night as Wall
Street awaits further data and bank earnings that will provide a better glimpse
into the state of the American consumer.
Futures tied to the Dow Jones
Industrial Average lost
50 points, or 0.1%. S&P 500 futures
dipped more than 0.1%, while Nasdaq 100 futures
shed 0.2%.
Investors are looking ahead to
December retail sales data out Wednesday, which could fuel recessionary fears
and concerns about economic growth if U.S. consumer spending sees a cooldown.
Economists polled by FactSet anticipate an increase of 0.2% for the month,
slightly under the 0.3% increase in November.
Another batch
of bank earnings will be out during this holiday-shortened
week, providing further clues about consumer health and data on credit
card payments and delinquencies. Goldman Sachs, Morgan Stanley and PNC Financial Services are
set to report on Tuesday. Charles Schwab and M&T Bank,
as well as several regional banks, are also slated to release their earnings
this week.
Four big banks—including JPMorgan, Citigroup and Wells Fargo—reported
mixed results on Friday, but posted strong profits for the year amid a strong
labor market, resilient consumer and high interest rates.
Stocks are coming from a series
of weekly gains, notching their 10th winning week in 11 weeks despite a
hotter-than-expected December consumer inflation report. The negative producer
price index print had further
convinced investors that the Federal Reserve’s rate-cutting
campaign could begin soon.
Last week, tech stocks led
the market higher as the Nasdaq outperformed, adding about 3.1%
through Friday’s close. The Dow gained roughly 0.3%, while the S&P 500
advanced 1.8%.
Stock
futures are lower to start shortened trading week: Live updates (cnbc.com)
'Precarious' year
ahead for world economy, Davos survey predicts
January 15, 2024 5:05 AM GMT
Jan 15 (Reuters) - The global economy
faces a year of subdued growth prospects and uncertainty stemming from
geopolitical strife, tight financing conditions and the disruptive impact of
artificial intelligence, a survey of top economists released on Monday found.
Conducted each year ahead of the World
Economic Forum's (WEF) annual meeting in the Swiss resort of Davos, the survey
of 60-plus chief economists drawn globally from the private and public sectors
attempts to sketch priorities for policymakers and business leaders.
Some 56% of those surveyed expect
overall global economic conditions to weaken this year, with a high degree of
regional divergence. While majorities saw moderate or stronger growth in China
and the United States, there was broad consensus that Europe would muster only
weak or very weak growth.
The outlook for South Asia and East
Asia and Pacific was more positive, with very high majorities expecting at
least moderate growth in 2024.
Reflecting commentary from the world's
top central banks suggesting that interest rates have peaked, a full 70% of
those surveyed nonetheless expected financial conditions to loosen as inflation
ebbs and current tightness in labour markets eases.
Artificial intelligence was seen making
an unequal mark on the world economy: while 94% expected AI to significantly
boost productivity in high-income economies over the next five years, just 53%
predicted the same for low-income economies.
Separately, the WEF released a study on
the "quality" of economic growth across 107 economies that concluded
that most countries are growing in ways that are neither environmentally
sustainable nor socially inclusive.
"Reigniting global growth will be
essential to addressing key challenges, yet growth alone is not enough,"
said Saadia Zahidi, Managing Director, World Economic Forum.
The WEF said it was launching a
campaign to define a new approach to growth and help policy-makers balance it
with social, environmental and other priorities.
'Precarious' year ahead for world economy, Davos
survey predicts | Reuters
Finally, failing Germany. Leading the EUSSR
into recession or worse.
Tractors converge on
Berlin for farmers' protest
January 14, 202410:05 PM GMT
BERLIN, Jan 14
(Reuters) - Farmers and their tractors rumbled towards Berlin from every corner
of Germany on Sunday ahead of a giant protest demanding a rethink of plans to
tax farmers more.
Some 3,000
tractors, 2,000 trucks and 10,000 people were expected to fill the streets
around Berlin's Brandenburg Gate on Monday for a rally that will cap a week of
protests against the government.
The
protests have heaped pressure on Chancellor Olaf Scholz's coalition as it
struggles to fix a budget
mess and contain right-wing forces.
Caught
on the back foot, it has already agreed not to scrap a tax rebate on new agricultural
vehicles and to spread over years the scrapping of an agricultural diesel
subsidy.
But farmers, with
the vocal backing of the opposition conservatives and the far-right, say this
does not go far enough.
"Farmers
will die out," said farmer Karl-Wilhelm Kempner on Sunday as he boarded a
bus in Cologne heading for the demonstration. "The population must
understand that far more food will be imported" if subsidies are not
restored.
The
government is showing a conciliatory face amid concerns that political
debate in the country is becoming
radicalised and that demonstrations could turn violent.
Finance Minister
Christian Lindner will address the protest and coalition party leaders have
invited leaders of the demonstrations for talks.
Disruption
caused by protests and train strikes last week
hurt coalition parties in the polls and propelled the far-right Alternative for
Germany party to new heights.
In a video
podcast on Saturday, Scholz said the government had listened to farmers'
demands and compromised.
"We've taken
the farmers' arguments to heart and revised our proposals. A good
compromise," he said.
Tractors converge on Berlin for farmers' protest |
Reuters
Germany skirts
recession at the end of 2023 but faces prolonged slump
PUBLISHED MON, JAN 15 2024 4:15
AM EST
Europe’s largest
economy contracted by 0.3% year-on-year in 2023, as high inflation and
firm interest rates bit into growth, the Federal Statistical Office of
Germany said Monday.
The estimate is in line
with the expectations of analysts polled by Reuters. The decline in economic
output eases to 0.1% when adjusted for calendar purposes.
“The overall economic
development in Germany stalled in 2023 in the still crisis-ridden environment,”
said Ruth Brand, president of the federal statistics office, according to a
Google translation.
“Despite the recent declines, prices remained high
at all levels of the economy. Added to this were unfavorable financing
conditions due to rising interest rates and lower demand from home and abroad,”
Brand added.
German inflation ticked up by 3.8% year-on-year in
December on a harmonized basis, the statistics office said on Jan. 4. The European Central Bank in December opted to hold rates
unchanged for the second consecutive time, shifting its inflation outlook from
“expected to remain too high for too long” to expectations that it will
“decline gradually over the course of next year.”
Germany’s manufacturing sector, excluding
construction, fell by a sharp 2%, led by lower production in the energy supply
sector. Weak domestic demand last year and “subdued global economic dynamics”
also stifled foreign trade, despite a drop in prices. Imports fell by 1.8%,
declining more sharply than exports and leading to a positive trade balance.
More
Germany skirts recession at the end of 2023 but faces prolonged slump (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.
Global
shipping recession could end as freight rates soar on Red Sea troubles
Vessels transiting the Red Sea have faced attacks
over the past several weeks from Yemen-based Houthis, prompting shipping
companies to change routes, leading to a spike in freight rates.
Embarking on longer detours around
the Cape of Good Hope in South Africa have pushed ocean
freight rates by up to $10,000 per 40-foot container, as container
ships have diverted more than $200 billion of goods away from the Red Sea
waterway to avoid strikes by Houthi militants.
U.S.-owned commercial vessel, the
Gibraltar Eagle, was
struck by Houthi militants on Monday, the U.S. Central Command said.
Some market watchers expect the
disruptions could bring about a reversal in fortunes of an industry that was
mired in a recession last year.
“As to the higher rates in 2024,
this could add multiple billions to the bottom line of the VOCC even if this
lasts for just another two or three weeks,” Alan Baer, CEO of logistics company
OL USA, told CNBC in an email.
Vessel-Operating
Common Carriers (VOCC) are ocean carriers that own and operate vessels
responsible for managing cargo and transporting them. Maersk, Evergreen and
COSCO are some prominent VOCCs.
“If this goes on for
three to six months the [profits] will again slowly approach 2022 levels as the
operating expenses should be lower than what the carriers experienced during
the 2021 and 2022 chaos,” Baer said.
The global shipping industry has been in a slump, dragged
down by high inventories and consumer spending pullback which
led to several
bankruptcies last year. Before the Red Sea attacks, global shipping
container rates
had more than halved from 2022, a stark reversal from the boom following the pandemic.
Asia-Europe rates averaged around
$1,550/FEU in 2023, but have now more than doubled to over $3,500/FEU, a recent
Jefferies research note said. FEU is a standard unit for measuring for a
40-foot shipping container capacity, which is usually the largest standard size
for container vessels.
More
Red
Sea troubles could end shipping recession as freight rates spike (cnbc.com)
Covid-19 Corner
This
section will continue until it becomes unneeded.
New COVID-19 variant driving winter wave of
infections
The new JN.1 strain of
COVID-19, dubbed ‘Juno’, has contributed to the rapid rise of COVID-19
infections worldwide. Although winter virus figures in the UK reached highs in
December and seemingly fell over Christmas and the new year, experts suggest
a surge in COVID-19 cases may reappear as the holidays come to an end.
According to the UK Health
Security Agency and the Office for National Statistics, the prevalence of the
virus appeared to be experiencing a downward trend in
England and Scotland in the two weeks leading up to the 3rd of January. As more
people return to school and work, infection rates are expected to increase.
January’s cold temperatures will also encourage more indoor socialising,
further compounding the risk of transmission.
The Juno variant is a
derivative of Omicron, the dominant strain that circulated in early 2022.
According to the Centers for Disease Control and Prevention,
symptoms of COVID-19 have generally remained the same across different
variants. Persons infected with JN.1 can expect to have symptoms such as fever,
congestion, cough, body aches, and sore throat. Currently, no evidence suggests
that JN.1 leads to a more severe infection.
Individuals are encouraged to
receive the most up-to-date COVID-19 vaccine available to better defend against
JN.1 and other recent variants. The Juno variant has an additional spike
protein mutation that makes it easier for the virus to bypass pre-existing
immunity. Older vaccines, while still providing immunity, are less equipped to
deal with newer variants. Outdated vaccines, in addition to the variant’s
mutation, make the strain highly transmissible.
The winter uptick in flu and
COVID-19 cases placed a massive strain on the NHS. Hospitalisation rates are
once again on the rise. Staffing and supply shortages have adversely impacted
health care provision and indicate a need for government support. The six-day strike by
junior doctors from 3 to 9 January further disrupted health care services. It
will take months for hospital operations to recover from the longest strike in
NHS history. With COVID-19 cases expected to rise, the ability to support
infected individuals will be challenging.
Another wave of COVID-19
infections in the UK would coincide with a broader international trend. The
United States and Europe have been experiencing sharp increases in positive
cases, and Australia has
reached record-level cases not seen in more than a year. The JN.1 variant has
spread globally, demonstrating a need to remain cautious and follow public
health guidelines.
While most people experience
mild to moderate symptoms of the virus, vulnerable populations may experience a
more severe infection. Similarly, anyone is at risk of developing Long COVID.
The new variant is a reminder
that although COVID-19 is no longer a global public health emergency,
individuals should continue to take precautionary measures to avoid health
risks to both themselves and others. Practising good hygiene and keeping informed
on developments from health officials are important.
New COVID-19 variant driving winter wave of infections – The Oxford Student
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.
AI
to hit 40% of jobs and worsen inequality, IMF says
January 15, 2024
Artificial intelligence is set
to affect nearly 40% of all jobs, according to a new analysis by the International Monetary Fund
(IMF).
IMF's managing
director Kristalina Georgieva says "in most scenarios, AI will likely
worsen overall inequality".
Ms Georgieva
adds that policymakers should address the "troubling trend" to
"prevent the technology from further stoking social tensions".
The
proliferation of AI has put its benefits and risks under the spotlight.
The IMF said AI
is likely to affect a greater proportion of jobs - put at around 60% - in
advanced economies. In half of these instances, workers can expect to benefit
from the integration of AI, which will enhance their productivity.
In other
instances, AI will have the ability to perform key tasks that are currently
executed by humans. This could lower demand for labour, affecting wages and
even eradicating jobs.
Meanwhile, the
IMF projects that the technology will affect just 26% of jobs in low-income
countries.
It echoes a
report from Goldman Sachs in 2023, which estimated AI could replace the
equivalent of 300 million full-time jobs - but said there may also be new jobs
alongside a boom in productivity.
Meanwhile, UK
Prime Minister Rishi Sunak said in November people should not be worried about
the impact of AI on jobs at all, because reforms to education reforms would
boost skills.
Ms Georgieva
said "many of these countries don't have the infrastructure or skilled
workforces to harness the benefits of AI, raising the risk that over time the
technology could worsen inequality among nations".
More generally,
higher-income and younger workers may see a disproportionate increase in their
wages after adopting AI.
Lower-income
and older workers could fall behind, the IMF believes.
"It is
crucial for countries to establish comprehensive social safety nets and offer
retraining programmes for vulnerable workers," Ms Georgieva said. "In
doing so, we can make the AI transition more inclusive, protecting livelihoods
and curbing inequality."
The IMF
analysis comes as global business and political leaders gather at the World
Economic Forum in Davos, Switzerland.
AI is a topic
of discussion, following the surge in popularity of applications like ChatGPT.
The technology
is facing increased regulation around the world. Last month, European Union
officials reached a provisional deal on the world's first comprehensive laws to regulate the use of AI.
The European
Parliament will vote on the AI Act proposals early this year, but any
legislation will not take effect until at least 2025.
The US, UK and
China have yet to publish their own AI guidelines.
AI to hit 40% of jobs and worsen inequality, IMF says
- BBC News
Meetings are indispensable when you don't want to do anything.
John Kenneth Galbraith.
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