Baltic Dry Index. 1407 +19 Brent Crude 77.79
Spot Gold 2030 US 2 Year Yield 4.36 +0.16
There is nothing like losing all you have in the world for teaching you what not to do.
Jesse Livermore.
Fed Chairman Powell took to US TV on Sunday to douse US stock casino punters with cold water on their expectations of future Fed interest rate cuts.
But the US stock casinos think, in an US presidential election year that they have Chairman Powell and his gang trapped over a lower interest rate barrel.
Elsewhere, Switzerland’s giant bank UBS called a big boost for gold and silver. They think Chairman Powell and his DC gang are trapped over that same barrel, too.
Finally, the US Pentagon frets over a rogue billionaire building their own stock of private nukes. But if one built them would anyone deliver and use them?
Back in the real world, Israel’s Gaza Ghetto war is in the cusp of expanding. An interesting week lies ahead.
China stocks fall
for a sixth day as Asia markets drop after Powell says Fed will be ‘cautious’
on rate cuts
UPDATED MON, FEB 5 2024 12:40 AM EST
China stocks fell for a sixth straight day, with
Asia markets kickstarting the holiday-shortened week largely lower after U.S.
Federal Reserve Chair Jerome Powell dashed investor hopes for interest rate
cuts in the near term.
Powell said the central
bank would likely move at a considerably slower pace on rate
cuts compared with market expectations.
The People’s Bank of China’s
decision, announced two weeks ago, to cut
the reserve ratio requirements for banks by 50 basis points
came into effect on Monday, but it failed to lift the market.
Hong Kong’s Hang Seng index fell
0.61%, while mainland China’s CSI 300 declined 0.43%.
A private survey on
services sector activity in China showed a softer expansion. Singapore will
also release its retail sales figures for December, while Thailand will see its
inflation numbers out for January.
South Korea’s Kospi dropped 1.47%, dragged by
losses in heavyweight Samsung Electronics and the small-cap Kosdaq fell 0.62%.
In Australia, the S&P/ASX 200 traded
0.95% lower, retreating from its all-time high set on Friday. Markets also
awaited an interest rate decision from the Reserve Bank of Australia on
Tuesday.
In contrast, Japan’s Nikkei 225 climbed
0.45%, while the broader Topix rose 0.66%.
China, Taiwan, South Korea,
Singapore, and Hong Kong will all see shortened trading weeks as the Lunar New
Year approaches.
In the U.S., the S&P 500 notched
a fresh record high on Friday as quarterly results from technology companies
including Facebook-parent Meta topped expectations and the January jobs report
came in much better than expected.
The broad market index added 1.1%
to close at 4,958.61, above its previous record close of 4,927.93 reached on
Monday.
The Dow Jones Industrial Average added
0.4% to also set a new record close of 38,654.42, while the Nasdaq Composite climbed
1.7%.
Asia markets live:
China Caixin PMI, Hong Kong PMI, Singapore retail sales (cnbc.com)
European
stocks head for flat to lower open as markets ponder Fed Powell’s comments
UPDATED MON, FEB 5 2024 12:35 AM EST
European markets are heading for a flat to lower
open Monday as investors digested the latest comments from U.S. Federal Reserve
Chairman Jerome Powell.
In an interview with CBS’ “60
Minutes” on Sunday, Powell said the central
bank would likely move at a considerably slower pace on rate
cuts than the market expects.
Asia markets kickstarted
their week largely lower after Powell’s comments. U.S. stock futures were flat
on Sunday evening as Wall Street looks to build on another positive trading
week.
European
markets live updates: stocks, news, data and earnings (cnbc.com)
Stock futures are little changed ahead of busy
week of corporate earnings: Live updates
UPDATED SUN, FEB 4 2024 7:09 PM EST
Stock futures were flat on Sunday evening as
Wall Street looks to build on another positive week.
Futures tied to the S&P 500
dipped less than 0.1%. Futures for the Dow Jones Industrial average ticked up
eight points, or less than 0.1%, while Nasdaq 100 futures slipped less than
0.1%.
The moves come after the three
major averages rose for the 13th week out of 14, powered by a
stronger-than-expected January jobs report and solid earnings reports from
Microsoft and Meta Platforms. The gains came even though Federal Reserve Chair
Jerome Powell said Wednesday that the central bank would likely not
cut rates in March, as some traders had been expecting.
---- This week has another full slate of earnings, including
McDonald’s on Monday and Ford on Tuesday.
Traders will also be keeping an
eye on the Middle East, where the U.S. began airstrikes in Iraq and Syria on Friday.
National security adviser Jake Sullivan told NBC News’ “Meet the Press” on
Sunday that the U.S. plans to make “additional
strikes” against Iran-backed groups.
Stock
market live updates (cnbc.com)
Gold prices
to hit $2,200 and a ‘dramatic’ outperformance awaits silver in 2024, says UBS
Gold and silver are expected to climb further in
2024 on expectations that the U.S. Federal Reserve will start cutting interest
rates, UBS forecasts.
“We are expecting gold to be pushed
higher by a Fed easing. Also this comes with a weaker dollar” said the
investment bank’s precious metals strategist Joni Teves, who expects the metal
to hit $2,200 per ounce by the end of the year.
Gold prices tend to have an inverse relationship with interest rates. As
interest rates dip, gold becomes more appealing compared to alternative
investments like bonds, which would yield weaker returns in a low interest rate
environment.
In turn, lower rates weaken the
dollar, making gold cheaper for international buyers, driving up demand.
While there is still much
uncertainty on the timing and extent of rate cuts, UBS maintained its
expectations for the Federal Reserve to ease policy. Last week, the Fed
announced its decision to leave
rates unchanged in January, on top of shooting down hopes of a rate
cut in March.
The bullion’s appeal as a safe haven asset has
risen since Israel’s war with Hamas began on Oct. 7, which contributed to gold
prices notching an all-time high of $2,100 an ounce last month.
“We do think investors will start
to build allocations to gold in an environment where there is a lot of macro
uncertainty [and] geopolitical risks,” said Teves.
Prospects for gold’s “poorer cousin” are also optimistic,
with silver on course to “really, really shine.”
Silver is not as common of a
geopolitical and safety haven compared to gold, which partly explains why it
has underperformed gold in the last few years, the strategist said. But the
tables could turn in its favor when the Fed eases.
More.
Gold
prices to hit $2,200 and outperformance awaits silver, says UBS (cnbc.com)
Next, Russia, down but nowhere near out.
The surprising resilience of the Russian economy
February 2, 2024
Addressing a crowd of activists on
Friday in Tula, the capital of Russia’s arms industry, Vladimir Putin crowed
that the country’s economy had defeated western sanctions imposed after his
invasion of Ukraine.
“They predicted decline, failure,
collapse — that we would stand back, give up, or fall apart. It makes you want
to show [them] a well-known gesture, but I won’t do that, there are a lot of
ladies here,” Putin said to a round of applause. “They won’t succeed! Our
economy is growing, unlike theirs.”
Russia’s president gloated that
Russia’s economy had not only withstood an onslaught of sanctions from western
countries — but was now bigger than all but two of them. He was referring to
the World Bank’s ranking of GDP by purchasing power parity, by which Russia
slightly edges ahead of Germany. “All of our industry did their part,” he said.
On Tuesday, the IMF appeared to
concur with Russia’s president. The IMF revised its own GDP growth forecast for
Russia to 2.6 per cent this year, a 1.5 percentage point rise over what it had
predicted last October.
The Russian economy’s resilience has
stunned many economists who had believed the initial round of sanctions over
the invasion of Ukraine nearly two years ago could cause a catastrophic
contraction.
Instead, they say, the Kremlin has
spent its way out of a recession by evading western attempts to limit its
revenues from energy sales and by ramping up defence spending.
More
The surprising resilience of the Russian economy
(msn.com)
Finally, could a billionaire build private nukes?
Could a Rogue Billionaire Make a Nuclear Weapon?
A
decade ago, the Pentagon paid a team of experts to study the possibility of an
entrepreneur or private company building and selling bombs. Their worrisome
conclusions are even more relevant today.
Feb. 2, 2024 9:00 pm ET
I first learned of a secretive Pentagon-funded study about
rogue nuclear entrepreneurs more than five years ago from Stephen
Lukasik, a former head of the Defense Advanced Research Projects Agency.
We
were talking about the Office of Net Assessment, the long-term analysis
division of the Pentagon, famous in Washington policy circles for its
predictions about the Soviet Union’s military capabilities and then later
China’s rise. Lukasik mentioned that he had led several studies for the office,
including one that looked at whether a private company or wealthy entrepreneur
could produce nuclear weapons.
“We worked out what a private
organization would do if it wanted to build and
sell nuclear weapons,” Lukasik told me. “It turned out to be a fairly
profitable business.”
Intrigued, I asked if he would
share a copy. A few days later Lukasik, whom I had known for two decades, sent
me all four volumes of the study, which was completed in 2013. The report laid
out in exquisite detail, including staffing levels and cash flow projections,
how such an enterprise could operate.
It would take as little as a
billion dollars’ investment and five years to produce the first bomb, the
study concluded.
More
Could
a Rogue Billionaire Make a Nuclear Weapon? - WSJ
US intends further
strikes on Iran-backed groups, national security adviser says
By Phil Stewart, Idrees Ali, Mohammed Ghobari and Timour Azhari
WASHINGTON/ADEN/BAGHDAD, Feb
4 (Reuters) - The United States intends to launch further strikes at Iran-backed
groups in the Middle East, the White House national security adviser said on
Sunday, after hitting Tehran-aligned factions in Iraq, Syria and Yemen over the
last two days.
The United States and Britain unleashed attacks against 36
Houthi targets in Yemen, a day after the U.S. military hit Tehran-backed groups
in Iraq and Syria in retaliation
for a deadly attack on U.S. troops in Jordan.
"We intend to take
additional strikes, and additional action, to continue to send a clear message
that the United States will respond when our forces are attacked, when our
people are killed," White House National Security Adviser Jake Sullivan
told NBC’s "Meet the Press" program on Sunday.
The strikes are the latest blows in a conflict that has spread
into the Middle East since Oct. 7, when the Iran-backed Palestinian militant
group Hamas stormed Israel from the Gaza Strip, igniting war.
More
US
intends further strikes on Iran-backed groups, national security adviser says |
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.
Bank of England moving closer to
interest rate cut
February 2, 2024
The Bank of England has held interest rates at 5.25% but indicated it is edging towards cutting borrowing costs.
At its latest meeting, the Bank said it had discussed cutting rates, with inflation - the pace of price rises - set to fall quickly this year.
But the Bank's governor said it would wait for firm evidence that inflation was under control before doing so.
For the first time since the 2020 Covid pandemic, one Bank policymaker voted for an immediate cut.
However, while Swati Dhingra voted to cut rates to 5%, two members of the Monetary Policy Committee (MPC) backed an increase to 5.5%. The remaining six members voted to keep rates unchanged.
It is the first time there has been a three-way split on whether rates should rise, fall or be held since the 2008 financial crisis.
The Bank has been raising rates steadily over the past couple of years to try to reduce inflation, with the last rate rise in August last year.
Higher interest rates cool inflation by making borrowing more expensive, discouraging people and businesses from taking on debt to fund spending.
Inflation has fallen sharply from a 40-year peak in October 2022 and currently stands at 4%.
The Bank is charged with keeping price growth at, or close to, a target of 2%.
It said in its latest inflation report that the figure would fall back to that target between April and June this year - quicker than it had previously expected.
"We have had good news on inflation over the past few months," Bank governor Andrew Bailey said, telling the BBC that he is "optimistic" that it is heading in the right direction.
The Bank's latest release also dropped the phrase it has used previously about a "further tightening in monetary policy", which is being seen as a sign that no more rate rises are expected.
But while the Bank is now suggesting that rates have peaked, Mr Bailey signalled that any cut in interest rates may still be some months away.
"We need to
see more evidence that inflation is set to fall all the way to the 2% target,
and stay there, before we can lower interest rates," he said.
The Bank is expecting a slight rebound in inflation over the summer, and at the Bank's news conference Mr Bailey said this was "not an acceptable state of affairs".
This suggests that
any rate cut may not come as quickly as many expect.
More
Bank of England moving closer to interest rate cut - BBC News
Covid-19 Corner
This section will continue until it becomes unneeded.
More vaccine coverup.
White
House refuses to allow former COVID-19 adviser to testify before Congress in
censorship investigation
Ashley
Oliver February 3, 2024 7:00 am
EXCLUSIVE — A former COVID-19 senior adviser in the Biden administration was
forced to defy a congressional subpoena this week after the White
House instructed him not to comply
with it because of concerns with the rules surrounding his appearance.
Andrew Slavitt, a longtime
health official who worked on President Joe Biden’s coronavirus response team,
was scheduled to appear before the House Judiciary Committee on Jan. 31.
Letters obtained by the Washington Examiner reveal the White
House instructed Slavitt not to appear.
“To protect the
constitutional separation of powers and the institutional interests of the
White House, I write to inform you that the White House does not authorize Mr.
Slavitt to appear at the Committee’s scheduled deposition,” White House counsel
Richard Sauber wrote to Slavitt’s
attorney one day before the scheduled deposition.
Sauber communicated the same
message to Judiciary Committee Chairman Jim Jordan (R-OH) in a separate letter, and he indicated
that the administration also objected to the committee’s forthcoming deposition
with Robert Flaherty, Biden’s former director of digital strategy.
The committee is seeking to
speak with Slavitt and Flaherty about the well-documented pressure they put on
social media companies to censor content, particularly about COVID-19,
beginning in 2021.
Flaherty, who now works for
the Biden presidential campaign, was cited dozens of
times in a sweeping memorandum from a federal judge, who found the former
official had a key role in coercing Meta, X, and YouTube to censor content.
Flaherty would routinely
demand the companies report to him on their practices for removing content,
such as posts that showed “vaccine hesitancy” and “borderline content.”
In one instance, Flaherty
became angry with Meta in July 2021, indicating he was displeased with the
platform’s efforts to censor a group that became known as the “disinformation
dozen,” which included Robert F. Kennedy Jr.
“Are you guys f***ing
serious? I want an answer on what happened here and I want it today,” Flaherty
wrote to Meta.
The Judiciary Committee could sue the
pair of former officials or attempt to hold them in contempt of Congress for
failing to comply with subpoenas.
“Everything is on the table as to
what comes next,” a committee spokesperson said
More
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.
But what about the fire risk from
all those stored, or charging, ready to
be swapped batteries? Would you want an EV battery swapping fire risk near you?
Battery swapping is taking off in China — and it
could help rescue the EV revolution in the US
Sat, 3 February 2024 at
11:00 am GMT
America's EV revolution is stalling — and the time it takes to charge an electric car
is at the heart of the issue.
Right now, charging your EV can
take anywhere from 20 minutes to 50 hours depending on how you do it, and anxieties over
range and charging are putting many drivers off going electric.
Battery swapping, which sees dead
EV batteries replaced with fully charged ones in a process that can take less
than five minutes, might provide a solution — and it's an approach being used
by one of Tesla's biggest Chinese rivals.
The Tesla rival pioneering battery-swapping
Founded by entrepreneur William
Li — sometimes referred to as "China's Elon Musk" — in 2014, Nio has built a network of more
than 2,000 battery swap stations in
China.
The company allows customers to
buy their cars without paying for the full cost of the battery, and then
charges them a monthly subscription fee to simply swap out their dead batteries whenever
they run out of charge.
Aside from lowering the upfront
cost of an electric car, Nio's battery-swapping system also has other benefits,
its senior vice-president Fei Shen told Business Insider
"In areas of China where
battery swap stations are fairly widespread, users can upgrade their battery
from 75 kilowatt hours to 100 kilowatt hours for only 50 yuan ($7) per
day," he said.
"What we find, is that more
users will buy or lease cars with the 75 kilowatt hours battery instead of this
100 kilowatt hours battery because the price is lower. When they go on
long-distance journeys, like going back to their hometown, they can upgrade to
a long-distance battery in one of our swap stations," he added.
Nio's battery-swapping strategy
has picked up traction in the fiercely competitive Chinese EV market in recent
months, with the company signing deals with fellow electric vehicle
makers Geely, JAC, and Chery to jointly develop battery-swapping tech.
However, it remains far more
expensive than regular charging, with Shen telling BI that only around 20% of
Nio's "swap stations" are breaking even, and the company has yet to make a profit.
Despite this, Nio is planning to
significantly expand its operations, including outside China. The company has
set up 30 battery swap stations in Europe, and is planning to launch a new range of affordable EVs in an attempt to boost sales in the continent.
US challenges
Nio's battery swap stations —
around the size of a small car wash — are unlikely to appear on US roads
anytime soon, with Chinese automakers largely shut out from the US market thanks to high tariffs.
More
The 'Welcome Stranger' [gold nugget] was found on 5 February 1869 by
Cornish miner John Deason, who was working in Bulldog Gully, near Moliagul in
central Victoria. While searching around the roots of a tree he discovered, 3
cm below the surface, a gold nugget. He concealed his find until dark, then
with his partner, Richard Oates, dug it out. They then held a party during
which they revealed their find to the guests.
The 66kg 'Welcome Stranger', then the world's largest-known gold nugget,
was taken to Dunolly where it had to be broken on an anvil before it could fit
on the bank's scales. It was worth 10,000 pounds - around $3-4 million in
today's money. Deason returned to Moliagul and his descendants are still in the
area. Oates returned to Cornwall.
Gold Nugget 'Welcome Stranger' (1869)
(museumsvictoria.com.au)
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