Dragons. An AFC Win. CPI And PPI. The Fed Speaks.

Baltic Dry Index. 1545 +72            Brent Crude  81.94

Spot Gold 2026                  US 2 Year Yield 4.48 +0.02

The idea behind the indicator is that a Super Bowl win for an NFL team from the American Football Conference (AFC) predicts a stock market decline (a bear market) in the coming year. On the other hand, a win for a team from the National Football Conference (NFC) foretells a rise in the market or a bull run in the upcoming year.

With many Asian stock casinos closed today celebrating the Lunar New Year, there’s little guidance from Asia this morning.

Markets will largely focus this week on the US consumer price index and producer price index inflation numbers, plus the remarks of Fed Chairman Powell and the remarks of a gaggle of other Fed speakers.

But what does the Super Bowl win for the AFC Kansas City Chiefs hold for stocks? Through 2023, the Super Bowl stocks  “indicator” had a 41 out of 57 winning record, or about a 72 percent accuracy.

Below, the news this morning, such as it is.

Asia markets open mixed to start holiday-shortened week

UPDATED MON, FEB 12 2024 12:11 AM EST

Asia markets were mixed Monday to start a holiday-shortened week for most markets, while China remains shut for the week.

Many major stock markets in Asia-Pacific were closed Monday including Hong Kong, Taiwan and South Korea.

Japan’s Nikkei 225 opened 0.1% higher, while the broader Topix dipped 0.2% at open.

Japan’s Nikkei 225 breached the 37,000 point mark on an intra-day basis, touching 34-year highs on Friday.

In Australia, the S&P/ASX 200 fell 0.4%.

Wall Street ended higher on Friday after December’s revised inflation reading came in lower than first reported. The benchmark S&P 500 closed above the key 5,000 level for the first time ever.

The S&P 500 rose 0.57% to end at 5,026.61, while the Nasdaq Composite rallied 1.25% to close at 15,990.66. The Dow Jones Industrial Average slipped 54.64 points, or 0.14%, to settle at 38,671.69.

Asia markets: Australia, Japan markets open for trading; China closed (cnbc.com)

Stock futures are little changed on Sunday night after a record week for the S&P 500: Live updates

UPDATED SUN, FEB 11 20246:54 PM EST

U.S. stock futures hovered near the flatline on Sunday night following a record-setting week for the S&P 500.

Futures tied to the 500-stock benchmark were flat. Dow Jones Industrial Average futures and Nasdaq 100 futures also traded within 0.1% of their previous close.

On Friday, the S&P 500 rose 0.57% to close above the 5,000 level for the first time, while the tech-heavy Nasdaq Composite added 1.25%. On the other hand, the Dow Jones Industrial Average slid 54.46 points, or 0.14%.

All three major indexes are coming off their fifth straight week of gains. The S&P 500 and Nasdaq Composite added 1.4% and 2.3%, respectively. The Dow edged fractionally higher.

Some 61 names in the S&P 500 are set to report earnings in the week ahead, including gig economy stocks Lyft, Instacart and DoorDash. Companies such as AutoNation, Kraft Heinz, Hasbro and Coca-Cola will also shed light on the state of the U.S. consumer.

“Most earnings are going to be strong because the economy was strong,” said Infrastructure Capital Advisors’ Jay Hatfield, who noted that he’s bullish on the slate of earnings reports.

Traders will also watch out for the latest level on the consumer price index — or CPI, a key inflationary gauge — set to be released on Tuesday morning. More key economic data is expected on Thursday and Friday, including January’s reading on retail sales, production, imports and exports, housing starts and the producer price index, or PPI.

“CPI and PPI should print in line, but still be bullish,” Hatfield said to CNBC. “We think that the market will continue to rally for the next week or two, and then maybe stall out as we wait for this inflation data to continue to come out.”

Stock market today: Live updates (cnbc.com)

Wall St Week Ahead: Market breadth suggests narrowing rally as S&P 500 hits records

By David Randall  February 9, 2024 11:50 PM GMT

NEW YORK, Feb 9 (Reuters) - As the S&P 500 has soared to fresh highs, fewer stocks have been participating in the rally, stirring worries that recent gains could reverse if the market’s leaders stumble.

Strong market breadth, or the number of stocks taking part in a broader index’s rise - is often viewed as a healthy sign by investors as it shows gains are less dependent on a small cluster of names.

Market breadth was narrow for most of 2023, with the 24% gain in the S&P 500 (.SPX), opens new tab driven primarily by the so-called Magnificent Seven, a group of heavyweights that includes Meta Platforms (META.O), opens new tab, Apple Inc. (AAPL.O), opens new tab and Amazon (AMZN.O)

Breadth improved toward year end, yet some measures show it narrowing once again in 2024. For example, while the S&P 500 is up 5.4% and closed on Friday at a record high, the 10-day average of stocks on the New York Stock Exchange and Nasdaq hitting new highs has fallen to its lowest level since July, data from Hi Mount Research showed.

At the same time, only 62% of large-cap stocks stood above their 50-day moving average as of Thursday’s close, down from 87% in December, data from Thrasher Analytics showed. Meanwhile, the Magnificent Seven have accounted for nearly 60% of the S&P 500’s gain this year, according to Dow Jones Indices.

"We are at a historic extreme in the amount of money in this very small number of stocks," said Michael Smith, a senior portfolio manager at AllSpring Global Investments.

The narrow group of stocks powering the market could make it more vulnerable to swift declines if an earnings disappointment or other issue hits its biggest stocks, said Smith, who owns shares of Microsoft, Amazon and Google-parent Alphabet (GOOGL.O

While most of the megacaps have powered higher this year, shares of Tesla have fallen 22%, the third-worst performer in the S&P 500, demonstrating how quickly the market’s superstars can fall out of favor.

Some investors believe breadth has narrowed partly because markets now anticipate the Federal Reserve will cut rates later in the year than many on Wall Street had expected, forcing an unwind of bets in rates-sensitive sectors that could benefit from lower borrowing costs.

The S&P 500 real estate sector, for instance, is down 4.4% year-to-date due to worries about commercial real estate. The Russell 2000 index of small cap companies is off 0.8%.

More

Wall St Week Ahead: Market breadth suggests narrowing rally as S&P 500 hits records | Reuters

Gold prices tepid as focus turns to US Fed in data-packed week

By Harshit Verma  February 12, 2024 5:42 AM GMT

Feb 12 (Reuters) - Gold prices were flat on Monday in holiday-thinned trading, as investors awaited remarks from a slew of U.S. Federal Reserve officials in a data-packed week.

Spot gold held its ground at $2,023.03 per ounce, oscillating in a $5 range, as of 0523 GMT.

U.S. gold futures were also steady at $2,037.10 per ounce.

"Gold is remarkably resilient, given we've seen almost 60 basis points of cuts (for 2024) come out of the market since the January high," said Kyle Rodda, a financial market analyst at Capital.com.

"Positioning is neutral, and if the data deteriorates softening the dollar and deepening U.S. rate cut bets, then gold will shine again. The big risk this week is consumer price index (CPI)-if that comes in hot, another test of $2,000/Oz level could be on the cards"

Trading is expected to be thin during Asian trading hours due to market holidays in China, Hong Kong, Japan, South Korea, Singapore, Taiwan, Vietnam and Malaysia.

COMEX gold speculators raised their net long position by 10,616 contracts to 82,591 in the week ended Feb. 6, data showed on Friday.

Market participants will focus on U.S. CPI data on Tuesday, retail sales data on Thursday and produce price index (PPI) data on Friday, while also awaiting remarks from atlas 7 Fed officials this week.

Several Fed officials, including Chairman Jerome Powell, have said last week they want to see more evidence inflation will continue to decline before cutting rates.

Gold prices tepid as focus turns to US Fed in data-packed week | Reuters

El-Erian, Krugman and other economists have very different opinions on China’s struggling economy

PUBLISHED FRI, FEB 9 2024 1:28 AM EST

China’s economy is sputtering.

Its property market is crumbling, deflationary pressures are spreading across the nation, and its stock market has weathered a turbulent ride so far this year, with the country’s CSI 300 index erasing some 40% of its value from its 2021 peaks.

Adding salt to the wound, January PMI numbers released by China’s National Bureau of Statistics showed manufacturing activity contracted for the fourth month in a row, driven by slumping demand. 

The slew of downbeat data has consequently triggered a wave of skepticism toward the world’s second-largest economy. Allianz for one, reversed its buoyant view of China, now forecasting Beijing’s economy to grow by an average 3.9% between 2025 to 2029. That’s down from a 5% forecast before the Covid-19 pandemic broke out.

Ex-International Monetary Fund official Eswar Prasad also told Nikkei Asia that “the likelihood of the prediction that China’s GDP will one day overtake that of the U.S. is declining.” 

Meanwhile, top economist and Allianz advisor Mohamed El-Erian highlighted China’s dismal stock market performance against those in the U.S. and Europe in a chart on X, saying it shows the stark divergence between all three equity markets.

----Nobel laureate Paul Krugman has been among some of the most bearish voices toward China, saying the country is entering an era of stagnation and disappointment. 

China was supposed to boom after it lifted its stringent “zero-Covid” measures, Krugman wrote in a recent New York Times op-ed. But it did the exact opposite. 

From bad leadership to high youth unemployment, the country is facing headwinds from all corners, Krugman argued. And the country’s economic stumble isn’t isolated, Krugman warns, potentially becoming everyone’s problem.  

More

El-Erian, Krugman and other top economists voice China opinions (cnbc.com)

Finally, more on Europe’s growing property scandal. All that glitters is not gold.

 

The Spectacular Crash of a $30 Billion Property Empire

Despite a criminal conviction, René Benko tapped into family dynasties and sovereign-wealth funds to raise billions for Signa; a stake in the Chrysler Building

Feb. 8, 2024 12:26 pm ET

René Benko was a high school dropout and convicted criminal. But by 2018, he was at the pinnacle of global real estate.

His company, Signa Holding, launched a glassy, J-shaped skyscraper on the banks of the River Elbe in Hamburg, Germany. The design of the 800-foot tower resembled a chart showing exponential growth.

Hamburg’s mayor, the future German Chancellor Olaf Scholz, lauded Signa’s good reputation with banks when the city picked the developer to build the tower.

“Signa is financially strong,” he said.

It wasn’t.

Benko’s sprawling, $30 billion empire of trophy real estate and department stores has imploded into the biggest property bankruptcy in Europe since the global financial crisis. The mess threatens to unleash significant losses on scores of lenders and investors and freeze half-built developments in numerous city centers. 

Stakes in Manhattan’s Chrysler building, upscale British retailer Selfridges and sporting- goods groups in the U.S. and Europe face the block. Auctioneers are selling off Signa’s bookshelves, doormats, 700-bottle wine collection and a diamond-shaped award for Europe’s 2021 real-estate brand of the year. The Hamburg tower is halted—leaving a 330-foot tall concrete stump.

The unraveling marks a dramatic reversal for the self-made entrepreneur, who once lavished backers with hops on his yacht, a top-of-the-line Bombardier Global Express jet and trips to Signa’s multiple Austrian hunting grounds, complete with a shooting guide on the company payroll.

----In fundraising presentations, Signa told investors it was offering conservative, low-debt investments in iconic properties to be held for generations. Investors said they have since learned through Signa’s legal filings the companies had far more debt than they knew. Many were invested in discrete parts of the larger company, unaware of convoluted cross-investments and large amounts of borrowing across hundreds of vehicles.

More

The Spectacular Crash of a $30 Billion Property Empire - WSJ

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.

World’s Poor Face Even Pricier Rice If India Extends Export Curbs

February 9, 2024 at 12:00 PM GMT

India’s restrictions on rice exports have already sent ripples around the world. Those curbs may now be extended, threatening to keep food inflation in many countries higher for longer.

The world’s top shipper started restricting sales of key varieties last year to help keep local food prices in check ahead of national elections. But this week, Bloomberg News reported that the government is considering extending an export tax on the parboiled type beyond March.

The impact of existing measures is evident in the high cost of the staple that’s vital to the diets of billions of people in Asia and Africa — home to some of the world’s poorest countries.

Benchmark Asian prices are near a 15-year high. India’s exports of the grain to its major markets have slumped from usual levels, especially in sub-Saharan Africa, according to recent analysis from the International Food Policy Research Institute.

For example, in the four months through November, India’s exports to West Africa slid some 54% from a year earlier. Shipments to East Africa and Central Africa dropped 58% and 80%, respectively, the Washington-based IFPRI said in a note.

“Rice-importing countries in sub-Saharan Africa have felt the greatest impacts, scrambling to find alternative sources,” said the note’s authors Joe Glauber and Abdullah Mamun.

Seeking Alternatives

Outside of Africa, nations are finding other sources. The Philippines — one of the world’s biggest rice buyers — recently struck a five-year import agreement with Vietnam. And Indonesia’s state-owned food logistics company Bulog signed a contract with Vietnam, Myanmar and Pakistan.

About half of the global population relies on rice for daily diets. The key question now is how long India's export curbs will remain in place. If exports continue at their current sluggish pace beyond India’s elections in the coming months, it will likely result in higher prices and more pressure on rice-importing nations, the IFPRI warns.

More

Global Food Roundup: India Rice Export Restrictions Risk Higher Prices - Bloomberg

Covid-19 Corner

This section will continue until it becomes unneeded.

mRNA vaccine boosters and impaired immune system response in immune compromised individuals: a narrative review

·         Review Open access  Published: 27 January 2024

Abstract

Over the last 24 months, there has been growing evidence of a correlation between mRNA COVID-19 vaccine boosters and increased prevalence of COVID-19 infection and other pathologies. Recent works have added possible causation to correlation. mRNA vaccine boosters may impair immune system response in immune compromised individuals.

Multiple doses of the mRNA COVID-19 vaccines may result in much higher levels of IgG 4 antibodies, or also impaired activation of CD4 + and CD8 + T cells. The opportunity for mRNA vaccine boosters to impair the immune system response needs careful consideration, as this impacts the cost-to-benefit ratio of the boosters’ practice.

Introduction

The administration of mRNA vaccine boosters in individuals with impaired immune systems is an area of ongoing debate. The question of immunity to COVID-19 in immunocompromised individuals [1,2,3,4] is a critical and complex one, with reliable specific supporting information mostly missing, and a continuously evolving situation almost four years from the start of the outbreak.

Immunocompromised individuals generally have weakened immune systems. Immunocompromised individuals may not mount as strong an immune response to vaccines compared to healthy individuals. This can affect the effectiveness of vaccination in preventing infection or severe disease.

Booster doses have been recommended for immunocompromised individuals, to enhance and prolong immunity.

Immunocompromised individuals may be at a higher risk of breakthrough infections, where they contract COVID-19 despite being fully vaccinated. The severity of breakthrough infections can also vary. Some immunocompromised individuals may not produce as many antibodies in response to the virus or the vaccine. 

More

mRNA vaccine boosters and impaired immune system response in immune compromised individuals: a narrative review | Clinical and Experimental Medicine (springer.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.

Hydrogen vehicles could finally have their moment

February 7, 2024

The outlook for hydrogen-powered vehicles is improving after decades of unfulfilled hype, thanks to unprecedented federal support and increased private investment.

Why it matters: Hydrogen fuel cells produce electricity by mixing hydrogen and air, with water vapor as the only byproduct. That makes them a promising climate solution — especially as a replacement for noisy, soot-spewing diesel trucks and industrial equipment.

• They offer a longer driving range than electric vehicle batteries, and refueling is much faster than recharging, so they could be appealing in passenger cars too.

Catch up quick: Despite its reputation as an abundant and pollution-free energy source, hydrogen has failed to take off as a fuel for many practical reasons.

• For starters, it's currently derived mostly from natural gas, which undermines its environmental benefits.
• Cleaner hydrogen, made from renewables, is expensive to produce. Plus, there's no nationwide distribution network.

What's happening: Two recent U.S. policy moves to boost hydrogen are resurrecting optimism for fuel cell vehicles.

• In October 2023, the Biden administration awarded $7 billion from the 2021 infrastructure law to establish seven regional hubs for hydrogen production.
• In December 2023, the U.S. Treasury Department proposed rules for companies to claim lucrative tax credits for clean hydrogen production under 2022's Inflation Reduction Act. The IRA also includes tax incentives for fuel cell vehicles, hydrogen infrastructure and energy storage.
• The Biden administration expects all that government spending to spur tens of billions more in private hydrogen investment.

The latest: General Motors and Honda have started producing fuel cells at a factory near Detroit, to power a new plug-in hybrid fuel cell version of Honda's CR-V crossover utility coming this spring.

• They'll also go into a line of hydrogen-powered cement mixers, dump trucks, garbage trucks and more that GM is developing with Autocar Industries, a heavy truck manufacturer.
• And GM has a new joint venture with Komatsu to develop fuel cell-powered mining trucks.

Other truck manufacturers are also bringing fuel cell trucks to market, including Toyota, Hyundai and the startup Nikola.

• Cummins has its own twist: It's developing hydrogen combustion engines, which burn hydrogen instead of diesel fuel — unlike fuel cells, which generate electricity to power a motor.
• And rivals Daimler Truck and Volvo Group teamed up on a new fuel cell venture called Cellcentric that aims to crank up large-scale production by 2025.

Be smart: Hydrogen can make sense for long-haul trucking and round-the-clock freight logistics operations, where time is money.

• But fuel cell passenger cars remain a tiny niche. Fewer than 18,000 have been sold in the U.S. since 2012, and the country has just 55 publicly available hydrogen fueling stations —  all in California, where zero-emissions rules are strictest.
• Still, it's worth noting that none of the early players, including Toyota, Hyundai and BMW, have given up.

What to watch: There's still a lot of fighting over the hydrogen production tax incentive rollout, as Jael Holzman explains in Axios Pro: Energy Policy.

• Without enough guardrails, environmentalists worry the credit could wind up increasing U.S. carbon emissions.

The bottom line: Fuel cell vehicles have a long way to go — but they may finally have the energy to get there.

Hydrogen vehicles could finally have their moment (axios.com)

In central banking as in diplomacy, style, conservative tailoring, and an easy association with the affluent count greatly and results far much less.

John Kenneth Galbraith.