Baltic Dry Index. 1398 +01 Brent Crude 81.71
Spot Gold 2044 US 2 Year Yield 4.27 -0.09
I learned early that there is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again. I’ve never forgotten that.
Jesse Livermore.
As expected, the US central bank left its key interest rate unchanged, and hinted at no interest rate cuts for some time.
On to today’s EU preliminary inflation numbers and today’s non event at the Bank of England.
Today’s important LIR news item lies in Professor Christensen’s YouTube update in the Technology section, on the very real dangers of EV batteries.
European markets head for lower open with euro zone inflation data, Bank of England decision in focus
UPDATED THU, FEB 1 2024 12:20 AM EST
European stocks are heading for a lower open ahead of euro zone inflation data for January and the Bank of England’s latest monetary policy decision on Thursday.
Investors will be keeping an eye on the latest monetary policy decision from the Bank of England on Thursday. The central bank is widely expected to hold interest rates steady at 5.25%, but market observers will be closely watching voting patterns, projections and language for hints about future rate cuts.
Preliminary inflation data for the euro zone in January is also due Thursday, with markets keen to get the latest gauge on the direction of travel for consumer prices and how that could affect the trajectory for interest rate cuts.
Late Wednesday, the U.S. Federal Reserve signaled it was unlikely to cut rates in March. Fed Chair Jerome Powell said the central bank would likely not be comfortable enough with the path of inflation by its next meeting in March to cut interest rates.
European markets live updates: stocks, data, earnings and BoE decision (cnbc.com)
U.S. stocks log worst day since September as Powell pushes back on March rate cut
By Joseph Adinolfi January 31, 2024
U.S. stocks logged their biggest daily drop of 2024 on Wednesday after Federal Reserve Chairman Jerome Powell pushed back on the likelihood of the central bank starting its rate cuts in March.
The S&P 500 fell around 79 points, or 1.6%, to endnear 4,846, according to preliminary closing data from FactSet. That marked the worst session for the large-cap index on a percentage-point basis since September, according to Dow Jones Market Data.
It also marked the worst Fed day performance for the index since March 2023.
The Dow Jones Industrial Average shed around 317 points, or 0.8%, its biggest one-day point decline since December.
The Nasdaq Composite dropped around 346 points, or 2.2%, its worst day since October. The tech-heavy index also recorded its worst Fed day performance since November 2022, Dow Jones data show.
Other factors weighed on stocks on Wednesday, including a lackluster response to relatively strong earnings from Microsoft Corp. and Alphabet Inc., as well as resurgent concerns about regional banks following New York Community Bancorp's decision to cut its dividend after it reported a fourth-quarter loss.
U.S. stocks log worst day since September as Powell pushes back on March rate cut (marketwatch.com)
New York Community Bancorp Stock Plunges 38%, Reigniting Fears for Regional Banks
NYCB built up capital after acquiring most of the failed Signature Bank in last year’s crisis
Shares of New York Community Bancorp NYCB -37.67% plummeted 38% Wednesday after the company swung to a fourth-quarter loss and slashed its dividend to shore up capital following its purchase of the assets of the collapsed
The company swung to a loss of $252 million, or 36 cents a share, at the end of December. That was compared with a profit of $172 million, or 30 cents a share, in the same period a year earlier. Analysts expected earnings of 27 cents a share for the fourth quarter.
Loan losses surged, and the bank set aside millions of dollars more to prepare for future potential losses.
The stock fell 38% Wednesday, closing at $6.47, its worst day on record.
Chief Executive Thomas Cangemi said the company is adjusting to the regulatory demands of being a large bank after its purchase of assets and liabilities from Signature Bank, one of three banks that failed in rapid succession in early 2023 after spooked customers pulled cash en masse.
With the Signature deal, which closed last March, NYCB’s total assets surpassed $100 billion, a key regulatory threshold that comes with stricter capital and liquidity standards. The bank also acquired Flagstar Bancorp in late 2022.
As part of its steps to bolster those capital and liquidity levels, the company cut its quarterly dividend to 5 cents a share, from 17 cents a share.
More
New York Community Bancorp Stock Plunges 38%, Reigniting Fears for Regional Banks - WSJ
Goldman Sachs pushes back Fed rate cut expectation to May from March
February 1, 2024 5:20 AM GMT
Jan 31 (Reuters) - Goldman Sachs pushed back its expectation of the U.S. Federal Reserve starting interest rate cuts to May from March, after Chair Jerome Powell's signaled delays in cuts.
The Wall Street brokerage, in a note dated Wednesday, maintained its forecast of five 25 basis points rate cuts this year and expects four consecutive cuts starting in May through September and a final cut in December.
The Fed kept its policy rate unchanged on Wednesday at 5.25%-5.50%.
Chair Jerome Powell declined to declare victory in the U.S. central bank's two-year inflation fight, vouch that it had achieved a sought-after "soft landing," or promise that rate cuts would come as soon as the Fed's March 19-20 meeting.
Goldman Sachs pushes back Fed rate cut expectation to May from March | Reuters
In other news.
GLOBAL ECONOMY Asia's factories struggle for momentum amid soft Chinese demand
By Leika Kihara February 1, 2024 5:59 AM GMT
TOKYO, Feb 1 (Reuters) - Asia's factories delivered a largely patchy performance in January, surveys showed on Thursday, as soft Chinese demand left the region's economies on a shaky footing at the start of 2024.
China's private-sector Caixin/S&P Global manufacturing purchasing managers' index (PMI) stayed at 50.8 in January, unchanged from December and exceeding the 50-point mark that separates growth from contraction.
The reading contrasted with an official survey that showed manufacturing activity contracted for the fourth straight month. Deflationary pressures were also a lingering blight in the world's second-largest economy, suggesting underlying weakness in demand.
Taken together, they point to a still-underperforming economy and back market expectations for more policy support measures this year.
The picture was patchy for Asian economies with some bearing the brunt of soft Chinese demand better than others.
South Korea's factory activity expanded in January for the first time in 19 months on improved demand for goods in key markets such as the United States and China.
But activity shrank in Taiwan and Malaysia, and expanded at a slower pace in the Philippines, the surveys showed.
"For countries like South Korea, the hit from weak Chinese demand was offset somewhat by the resilience in exports to the United States," said Toru Nishihama, chief emerging market economist at Dai-ichi Life Research Institute.
"But both external and domestic demand appears weak in China. That means the global economy lacks a key driver of growth, which bodes ill for Asian economies," he said.
Manufacturing activity in Japan also shrank for an eighth straight month in January as output and new orders slumped, with some analysts warning of the hit from production suspension at Daihatsu, a unit of auto giant Toyota Motor Corp (7203.T).
More
GLOBAL ECONOMY Asia's factories struggle for momentum amid soft Chinese demand | Reuters
China overtakes Japan as world's biggest vehicle exporter
Wed, 31 January 2024 at 8:20 am GMT
China's global dominance in electric cars helped it overtake Japan as the world's biggest vehicle exporter last year, official data confirmed Wednesday.
Japanese giants such as Toyota and Nissan have been much more cautious than their Chinese counterparts like BYD on electric vehicles (EVs), banking instead on hybrid models.
Figures released Wednesday by the Japan Automobile Manufacturers Association showed shipments of cars, trucks and buses rising 16 percent to 4.42 million last year.
But China exported almost 500,000 more -- 4.91 million vehicles in total, as reported by the China Association of Automobile Manufacturers this month.
China's customs bureau put the number even higher at 5.22 million, a huge year-on-year rise of 57 percent, with one in three fully electric vehicles.
The country had already been shipping more vehicles than Japan on a monthly basis, but Wednesday's data confirmed that it was also number one for a whole year.
Unlike Chinese firms, Japanese automakers including Toyota -- re-confirmed on Tuesday as the world's largest company by unit sales -- also make huge volumes of vehicles in other countries.
In 2022, vehicle production in Japan excluding motorcycles totalled 7.84 million units, but overseas production was almost 17 million.
Japanese manufacturers have long bet on hybrids that combine battery power and internal combustion engines, an area they pioneered with the likes of the Toyota Prius.
But they have vowed to up their game, with Toyota aiming to sell 1.5 million EVs annually by 2026 and 3.5 million by 2030.
The company is also hoping to mass-produce solid-state batteries that charge faster than conventional ones and give EVs more range.
Helped by strong government support, Chinese EV firms have stolen a march on more established rivals such as General Motors, Volkswagen and Toyota.
BYD in the fourth quarter of 2023 even snatched Tesla's crown for most sales of all-electric vehicles, data this month showed.
On Tuesday BYD -- it stands for "Build Your Dreams" -- which also sells batteries to the likes of Tesla, BMW and Mercedes, said it expects net profit for last year to reach 29-31 billion yuan ($4.1-4.4 billion).
But China's success in EVs has also landed its firms in hot water with regulators in Western markets worried about unfair competition for local automakers.
The European Commission is investigating Chinese state subsidies in a probe that could lead to the European Union imposing import duties.
To soothe concerns, BYD is planning to build more factories abroad including a $600 million plant in Brazil and another in Hungary.
More
China overtakes Japan as world's biggest vehicle exporter (yahoo.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.
China unveils new property support measures amid concerns about Evergrande fallout
By Clare Jim and Liangping Gao January 31, 2024 8:03 AM GMT
HONG KONG/BEIJING, Jan 31 (Reuters) - A state-backed property project in China has received the first development loan under Beijing's so-called "whitelist" mechanism and two major cities have eased home-buying curbs, state media reported, as concerns mount about the liquidation of Evergrande.
The latest measures add to a string of supportive policies rolled out by the world's second-largest economy over the past year to help revive the economically crucial property sector hit by an unprecedented debt crisis.
Despite those measures, the property market ended last year with the worst declines in new home prices in nearly nine years, casting a shadow over the hopes of broader economic recovery and renewing investor demands for stronger policy initiatives.
Analysts say a Hong Kong court placing property giant China Evergrande Group (3333.HK), opens new tab into liquidation could worsen the demand outlook as homebuyers take a cautious approach given uncertainty about the health of other private developers.
Two of China's major cities, Suzhou and Shanghai, followed Guangzhou in easing home-buying restrictions, official media reported on Tuesday, in an effort to boost demand from homebuyers.
Investors were not excited by the new supports, however, with Hong Kong's Hang Seng Mainland Properties Index (.HSMPI), opens new tab and China's CSI 300 Real Estate Index (.CSI000952), opens new tab both falling 2.6% on Wednesday.
In another support measure, a loan worth 330 million yuan ($46 million) to a state-backed development was approved just a few working days after the government announced the "project whitelist" mechanism, the official Securities Times reported on Wednesday.
---- The rollout of funding support under this mechanism is being closely watched by a market reeling from a debt crisis since mid-2021 which resulted in unfinished homes and defaults, especially among privately owned developers.
HOMEBUYER SENTIMENT
The new measures come as analysts weigh the impact of the court's order to put Evergrande, once China's top-selling developer into liquidation with more than $300 billion in liabilities.
"We think that home-buyer concerns about purchasing pre-sold units from financially troubled developers that might not deliver the project in a timely fashion - that is a major reason that home sales are still sluggish," said Christopher Beddor, deputy China research director at Gavekal Economics.
"If nothing else, the headlines of the ordered liquidation in Hong Kong, that's not going to have a great impact on homebuyer sentiment."
The unfinished homes promised to buyers by Evergrande are, however, likely to be delivered because the government was making this a top priority for all developers, said Jonathan Krane at Krane Shares in New York.
"The long-term impact is that real estate will account for a smaller portion of China's economy, to be replaced by other industries such as technology and consumer products and services."
Besides the impact on home sales, S&P Global Ratings said in a report published on Wednesday Evergrande's offshore creditors stand to receive a potentially tiny payout in a complicated liquidation process that could take years to play out.
China unveils new property support measures amid concerns about Evergrande fallout | Reuters
Covid-19 Corner
This section will continue until it becomes unneeded.
Today, some good news common sense about vaccine damage, from Australia. Will other countries also follow rectifying, as far as is possible, the damage caused by the rushed out, long term untested Covid vaccines?
Daniel was forced to have a Covid jab to keep his job. Then he fell gravely ill. Now he has secured a HUGE legal victory
January 30, 2024
A public servant who was forced to get a Covid vaccination to keep his job, but then fell gravely ill, has won a major legal battle and will be paid compensation.
Daniel Shepherd, 44, received two Covid-19 vaccinations when he was a youth worker at Baptist Care South Australia in 2021 and suffered adverse reactions to the jab.
The father of one started a new job with the Department for Child Protection (DCP) on October 19 that year, but was told on January 28, 2022, that he had to get a booster shot to keep his job as a child and youth worker.
Mr Sheperd was given a Pfizer mRNA jab on February 24, 2022, but a day later he had serious chest pains.
The pain kept getting worse until March 11, when he thought he was having a heart attack and was rushed to Adelaide's Ashford Hospital. There he was diagnosed with post-vaccine pericarditis - an inflammation of the membrane around the heart.
The illness meant Mr Shepherd was only able to work for a few months in a part-time administrative capacity.
DCP acknowledged the pericarditis was caused by the Pfizer mRNA booster shot, but it denied workers compensation liability, saying it was a legal government directive and so was excluded under the SA Emergency Management Act.
But Judge Mark Calligeros, the SA Employment Tribunal's deputy president, rejected the DCP's arguments.
'It is not surprising that some people who receive a dose of Covid-19 vaccine will sustain injury as a result,' he wrote in his judgment.
'It would be astonishing if parliament intended that an employee of the state, injured adhering to an EM (Emergency Management) Act direction, was to be precluded from receiving workers compensation.
'I am not satisfied that parliament intended to deny compensation to employees of the state injured by heeding a vaccination mandate designed to protect the health and welfare of citizens.'
Judge Calligeros added that Mr Shepherd was required to be vaccinated to continue working in healthcare.
This was 'because (the state) sought to protect and reduce the risk of infection to the public and general and those members of the public receiving healthcare services in particular.
'It would be ironic and unjust if Mr Shepherd was denied financial and medical support by complying with the state's desire to preserve public health.'
In a landmark ruling, the judge ordered that Mr Shepherd should get weekly income support payments and the payment of medical expenses.
The ruling came despite SA Health still enforcing a mandatory Covid vaccination policy for some employees, even though similar policies have been dropped in other states.
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, more on EV madness.
So Many Problems Continue to Plague the EV Industry
January 28, 2024
The fourth quarter of 2023 was not good for Electric Vehicles (EV). Multiple manufacturers decided to curb or halt production. Ford in particular decided to cut their F150 Lightening Truck series in half. Roughly 4,500 auto dealers signed on to a letter petitioning the Biden administration to “tap the breaks” on its aggressive EV push, on account of EVs stacking up on dealer lots.
The new year is already off to a rough start and we’re not even through the first month.
Hertz announced it will be selling off about one third of its EVs, which will amount to roughly 20,000 vehicles. This is a major reversal from their promise just a few years ago to dramatically increase its EV fleet. The money procured from selling them off will be used for the purchase of internal combustion engines (ICE) in order to “meet customer demand.” The car rental company isn’t too keen on the expensive repairs that accompany EV ownership either, which can cost up to twice that of ICE vehicles.
Mid-January saw a severe cold snap surge across many parts of the United States, greatly affecting the Midwest. Many Chicago-area EV owners found themselves unable to charge their vehicles, leaving them stranded. This is because on average an EV’s range can drop 40% and charging takes significantly longer in freezing conditions. Some motorists waited hours in line at charging stations that struggled to even charge vehicles, and long lines meant difficulty finding open charging stations. Other vehicles had to be towed. This can’t be good PR for the EV industry.
More
So Many Problems Continue to Plague the EV Industry | RealClearWire
Finally, when EVs explode. Approx. 29 minutes.
Prof. PAUL CHRISTENSEN Electric Vehicle Battery Fires SUBSCRIBE NOW
Prof. PAUL CHRISTENSEN Electric Vehicle Battery Fires SUBSCRIBE NOW (youtube.com)
In the long run commodity prices are governed by one law – the economic law of demand and supply.
Jesse Livermore.
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