Baltic Dry Index. 1581 -01 Brent Crude 82.80
Spot
Gold 2004 US
2 Year Yield 4.56 -unch.
Everyone wants to live at the expense of the state. They forget that the state wants to live at the expense of everyone.
Frederic Bastiat.
In the fantasy world of the central bankster
fiat money fuelled stock casinos, it’s still bubble on.
Japan’s Nikkei
closes in on all-time high; Hong Kong leads gains in Asia
UPDATED FRI, FEB 16 2024 12:26 AM EST
Japan’s Nikkei 225 hit
a fresh 34-year high Friday and was on course to reach all-time record levels.
At its intraday high of 38,863.69, it was less than 100 points from scaling its
record peak.
The index was last up 1.12%,
extending gains a day after the country lost its spot as the third-largest
global economy to Germany and entered into a technical recession.
The economic slowdown in the
country has raised hopes Japan may stick with its ultra-loose monetary policy
for longer, even as the country’s finance minister has reportedly raised
concerns on yen’s weakness.
Other Asia-Pacific markets rose
Friday, tracking Wall Street gains, with the S&P 500 notching
a fresh record high.
Hong Kong’s Hang Seng index climbed
2.3%, leading gains in Asia.
In Australia, the S&P/ASX 200 rose
0.69% to close at 7,658.3, while South Korea’s Kospi climbed
1.24%. Mainland Chinese markets remain closed for the Lunar New Year holidays.
Investors also await Singapore
2024 budget, slated to be released later in the day.
Overnight in the U.S., all three major indexes
ended trading session in positive territory, after clawing back the steep
losses suffered earlier in the week.
The S&P 500 climbed
0.58%, settling at 5,029.73 to close at a new record high, while the Nasdaq Composite added
0.30% to close at 15,906.17. The Dow Jones Industrial Average traded
348.85 points higher, or 0.91%, to end at 38,773.12.
Asia
markets live: Nikkei hits fresh 34-year high, Singapore budget (cnbc.com)
Stock futures are little changed as investors
digest more earnings news: Live updates
UPDATED THU, FEB 15 2024 7:07 PM EST
Stock
futures are were little changed on Thursday night as investors attempt to carry
forward the broader market’s strong momentum.
Futures tied to the Dow Jones
Industrial Average slipped 27 points, or 0.07%. S&P futures inched up
0.03%, while Nasdaq 100 futures added 37 points, or 0.2%.
Several stocks reporting
quarterly results posted major moves in after-hours trading. Shares of food
delivery service DoorDash dropped
8.5% on a wider-than-expected loss, while digital advertising company Trade Desk popped
about 18.9% after topping analysts’ fourth-quarter revenue estimates and
offering an upbeat outlook for the first quarter. Shares of semiconductor
equipment maker Applied Materials also
jumped 12% on positive earnings results.
Investors have spent the week
assessing the direction of the U.S. economy, particularly after this week’s hotter-than-expected
inflation data and a surprisingly steep
decline in January retail sales, which may indicate further weakness
in consumer spending. The three major indexes ended Thursday’s trading session
in the green, with the S&P 500 notching yet another record high,
maintaining its level above 5,000.
So far this week, the broad
market index is up by less than 0.1%. The Dow, meanwhile, is 0.3% higher for
the week after raking in its biggest one-day loss since March 2023 on Tuesday.
The Nasdaq, however, is lower by 0.53%.
Investors are also eyeing
Treasury yields, which fell on Thursday.
More
Stock market today: Live updates (cnbc.com)
In the ever harsher real world of the global
economy, an ugly reality is now unfolding. Spreading recession, rising layoffs,
consumers cutting back.
Japan slipped
into a technical recession. The Bank of Japan has to juggle supporting the yen
and fragile growth
Japan’s central bank is expected to exit its
negative interest rate regime this spring, though sluggish growth will limit
its ability to alleviate depreciation pressure on the yen, according to a
former Bank of Japan board member.
BOJ Governor Kazuo Ueda is under
pressure to stem yen depreciation
driven by the divergence between high U.S. interest rates and Japan’s ultra
easy policy. Yet, he is also constricted by high inflation that BOJ
policymakers still deem unsustainable, even as it crimped domestic demand and
tipped the economy into a technical recession.
That surprise contraction meant Japan’s economy is now the world’s fourth
largest, falling
behind Germany.
“It’s a serious challenge and dilemma,” Sayuri Shirai, an economics
professor at Keio University in Tokyo, told CNBC’s “Squawk Box Asia” on
Thursday. She previously served as a member of BOJ policy board from 2011 to
2016, helping to make monetary policy decisions.
“However, I think BOJ is likely to
take some policy change, including [the] removal of negative interest rates
this spring, because I think they worry about side effects,” she said.
The yen retreated to around 150 to the dollar this
week after U.S.
inflation data came in higher than expected, dousing hopes of a
quicker Federal Reserve rate cut. The yen’s chronic weakness has diminished not
only the purchasing power of consumers in Japan, but also the value of the
country’s exports.
“I think they want
to take this opportunity to do some adjustments, and also more market
participants anticipate that BOJ will do some normalization this spring. So
regardless of whether BOJ is able to achieve 2% in stable manner, I think BOJ
will take some policy change this spring,” Shirai added.
Between a rock and a hard place
Even if BOJ
policymakers deem inflation is still not sustainably driven by domestic demand,
the prolonged high inflation rates have hit domestic consumption — a key reason
driving the second consecutive contraction in Japan’s GDP in the fourth
quarter.
While inflation has been gradually slowing,
“core core inflation” — which excludes food and energy prices — has exceeded
the BOJ’s 2% target for more than a year.
At its January meeting, the BOJ decided unanimously
to keep short-term interest rates at -0.1%. It also stuck to its yield curve
control policy, which keeps the upper limit for 10-year Japanese
government bond yield
at 1% as a reference.
BOJ policymakers
have been cautious and fastidious with their primary task: reflating an economy
that’s been mired in decades of deflationary pressures.
Many in the market
expect the BOJ to move away from its negative rates regime at its April policy
meeting, once the annual spring wage negotiations confirm a trend of meaningful
wage increases. The central bank believes wage increments would translate into
a more meaningful spiral, encouraging consumers to spend.
But former BOJ policy
board member Shirai said currently Japanese yen-denominated wages and household
consumption are both dropping.
more
BOJ
juggles yen weakness and fragile growth after GDP surprise (cnbc.com)
Nike plans to cut
about 2% jobs
February 16, 2024 5:21 AM GMT
Feb 15 (Reuters) - Nike (NKE.N) on Thursday said it will
cut about 2% of its total workforce, or more than 1,600 jobs, as the sportswear
giant looks to cut costs after flagging weaker profits this year.
Nike's global peers Adidas, Puma (PUMG.DE) and JD Sports (JD.L), too, have warned of weaker
earnings this year, as consumers cut back on non-essential spending.
In December, Nike had outlined a $2 billion savings
plan over the next three years through steps including tightening the supply of
some products, improving its supply chain, reducing management layers and
increasing the use of automation.
The company had also
announced that it would incur about $400 million to $450 million in employee
severance costs in the third quarter.
Nike had approximately 83,700 employees as of May 31, 2023,
according to a company filing.
The Wall Street Journal, which first reported the news, said the cuts
were expected to start on Friday, and a second phase would be completed by the
end of the current quarter.
Nike
plans to cut about 2% jobs | Reuters
US real estate is a
micro-drama set to turn macro
By John Foley
February 15, 2024 1:47 PM GMT
NEW YORK, Feb 15 (Reuters Breakingviews) - The Great Fire of
London started in a bakery. Thomas Farriner, the establishment’s hapless owner,
said later that he thought he had extinguished the flames. Hours later, the
inferno was snaking through the city at a terrifying pace.
More than three centuries on, something similar is happening in
U.S. commercial property as discrete plumes of smoke threaten to turn into a
conflagration. Investors will get burned, but the damage can still be contained.
A few lenders are already getting singed. Last week, a listed real estate fund managed by KKR (KKR.N) cut its dividend after recording a loss on a Philadelphia office loan. Mid-sized lender New York Community Bancorp (NYCB.N) earlier took a large charge against loans secured by properties, and its shares collapsed. The flames have also licked their way across the ocean: Shares in Japan’s Aozora Bank (8304.T) and Germany’s Deutsche Pfandbriefbank (PBBG.DE) plunged after forecasting losses on U.S. real estate lending.
The underlying cause of these problems is the rapid rise in interest rates over the past two years, which pushes down the value of property by making future rental income relatively less appealing. The trouble started with office property, which underpins around a quarter of all U.S. commercial real estate mortgages according to Morgan Stanley. It has the extra problem of workforces only partly returning to their desks, leading tenants to downsize and constraining landlords’ ability to crank up rents.
But what started in offices is now spreading to so-called multi-family properties such as apartment buildings. There’s no shortage of demand overall: families still need somewhere to live. Even so, the combination of higher rates and the difficulty in getting tenants to pay more can create problems. NYCB’s setback stemmed partly from New York apartments affected by government curbs on raising rents. Some cities in the southern “sunbelt” have aggressively built new supply.
The bigger challenge is that
the wave of mortgages coming due could turn a micro problem into a macro one.
Borrowers are due to repay $929 billion of U.S. commercial real estate loans
this year, and $573 billion the year after, according to the Mortgage Bankers
Association. Of this year’s haul, almost one-third appears to be loans due last
year where borrowers have renegotiated or delayed repayment. And one-third of
the total amount coming due is backed by multi-family properties.
More
US
real estate is a micro-drama set to turn macro | Reuters
Niccolo Machiavelli.
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.
Recession
confirmed for UK after GDP dropped 0.3 per cent in final quarter
THURSDAY 15 FEBRUARY 2024 7:30 AM
The UK slipped into a recession at
the end of last year after a poor performance from the dominant service sector
pushed the economy into contraction, new figures show.
According to the Office for National
Statistics (ONS), the UK economy shrunk 0.1 per cent in December meaning it
contracted 0.3 per cent over the fourth quarter of last year, a worse
performance than economists had expected.
The figures showed that the economy
performed less well than initially thought in October and November, with the
ONS revising down its estimates for output in both months.
This means the UK fell into a very
shallow recession in the second half of last year, after the 0.1 per cent
contraction recorded in the third quarter. A technical recession is two
consecutive quarters of negative growth.
Looking across the quarter as a
whole, all three sectors recorded a fall in output with the all-important
services sector contracting 0.2 per cent. This was largely driven by a 0.6 per
cent fall in wholesale and retail trade.
Output in production dropped one per
cent in the quarter, although it returned to expansion in the month of
December, while construction also recorded a relatively sharp drop.
“While
it has now shrunk for two consecutive quarters, across 2023 as a whole the
economy has been broadly flat,” ONS director of economic statistics Liz McKeown
said. Across the year, output grew only 0.4 per cent.
----
The UK has struggled to generate any momentum over the course of 2023 due to
the twin impact of rising inflation and high interest rates.
The benchmark Bank
Rate stands at a post-financial crisis
high of 5.25 per cent, having been hiked from just 0.1 per cent at the end of
2021. This has sent a chill through the economy as households and businesses
struggle under the burden of higher borrowing costs.
However, inflation
fell fairly rapidly in the second half of last year, fuelling bets that
interest rates would start being lowered. Huw Pill, the Bank’s chief economist,
has confirmed that rate cuts are a “when
rather than an if“.
Lower inflation has
also given households a real income boost. Analysts at Deutsche
Bank predict that real wages will grow at
1.75 per cent in 2024, making it one of the highest growth rates in the last
decade.
All this means that a
number of economists think better
times are ahead for the UK in 2024.
Recession confirmed for UK after GDP dropped 0.3 per cent in final quarter (cityam.com)
Spanish disposable income falls the most among OECD
countries
February 15, 2024
The
real per capita income of Spanish households recorded a decline of
2.09% in the third quarter of 2023 compared with the previous three months,
a reading well below the 0.2% decrease for the Organisation for Economic
Co-operation and Development (OECD) as a whole, positioning Spain at the head
of the reductions, as reported by the think tank of advanced economies.
Spain's drop in real disposable
income per capita represents an interruption in three consecutive periods of
increases after growth of 5.11% in the fourth quarter of 2022 and 1.95% and
0.59% in the first and second quarters of 2023, respectively.
In the OECD, real
household disposable income fell by 0.2% in the third quarter, ending
four consecutive quarters in positive territory.
Despite the overall figure, the
picture was mixed among OECD countries, as 11 of the 21 countries
for which data are available recorded an increase in the third
quarter, while 10 saw declines, with Spain leading the way.
The highest increase in real
disposable income per capita was observed in Hungary (5.47%) as
inflationary pressures eased, ahead of Poland (2.91%) and Italy (1.45%), while
Spain (-2.09%), Austria (-1.31%) and Ireland (-0.95%) registered the greatest
declines.
The unemployment rate in OECD
countries stood at 4.8% in November 2023, remaining for the ninth consecutive
month at its lowest level in the historical series, which began in 2001,
according to the organisation. Spain is the member country with the highest unemployment rate.
The highest
unemployment rates in the OECD were observed in Spain at 11.9%, Colombia at
10.3% and Greece at 9.4%. In
contrast, the Czech Republic had the lowest unemployment levels at 2.4%,
followed by Japan (2.5%), and South Korea, Poland, Mexico and Israel, all at
2.8%.
Spanish disposable income falls the most among OECD
countries (msn.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
Nigel Farage calls for public inquiry into Covid
vaccine harms, demanding: 'I want know why we were lied to'
February 14, 2024
Nigel
Farage today called for
a full public inquiry into the harms caused by Covid vaccines.
The
former UKIP leader argued there is 'a lot we need to
know' about the jabs and called for a 'massive investigation' into any damage
they caused.
Vaccines played a vital role in
building the wall of immunity that allowed the UK to turn a corner in the
pandemic, leaving lockdowns and restrictions behind.
But, like with all medications, they
can have side effects. Rare cases of blood clots and heart inflammation have
been recorded.
For this reason, the Government has a
compensation scheme which dishes out six-figure sums to those who have been
harmed by jabs, including those offered during the Covid crisis.
However,
lawyers representing dozens of Brits who have been injured or bereaved by the
jabs have previously warned that the scheme is 'no longer fit for purpose'.
Severe
reactions to the jabs this week gained fresh attention after a man who claims
his health 'crumbled' after his booster dose confronted Rishi
Sunak and demanded that
he 'do the right thing' and speed up payments for those injured by the jab.
Richard Tice, leader of Reform UK,
told GB News that his party would commit to a public inquiry into vaccine
injuries if it was to come into power.
Asked about the pledge,
Mr Farage said Mr Tice was 'dead right'.
He told the programme: 'There's a lot
we need to know. We were told to take the so-called vaccine and you won't catch
Covid. Take the vaccine and you won't pass Covid on. Both of those things were
totally, completely untrue.
We
were told the vaccine was safe in every way.
'Frankly,
it had not been through anything like the normal testing that any kind of
vaccine in terms of trials.
'Now
we learn there's elderly people on their seventh jab.
'That
is not the kind of vaccines that you and I grew up with, where you have a
vaccine once and you are inoculated for life.
'I
do think there needs to be a massive investigation, not just into the harms
that were caused by the vaccine - and all vaccines cause side effects, we know
that, but there do seem to be an alarming number of people, young men in
particular, who've developed myocarditis and other heart conditions.
'I'm
not getting conspiratorial about this but let's have it out in the
open.
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.
Low
power, please charge: Battery storage troubles leave investors on the hook
February 15, 2024.
Developing the UK’s battery storage
capacity is crucial to the green transition.
One of the downfalls of renewable
energy, such as wind and solar, is that it is beholden to the elements and
can’t always provide a continuous output of power.
But if that renewable energy can be
stored in batteries when it isn’t being used, suddenly it becomes a lot easier
to call upon in times of high demand.
So beginning in 2018, a
number of specialist battery storage investment trusts, along with many of the
big energy players, jumped on the opportunity to invest in and develop swathes
of battery storage facilities.
However,
the three main listed battery storage investment trusts in the UK have had a
terrible start to the year.
The Gresham House Energy Storage Fund has seen its stock price fall 49.7 per cent since
the beginning of January, while Harmony Energy Income Trust is
down 56.2 per cent, after they both decided to cancel their fourth-quarter
dividends.
The third main competitor in
the space, Gore Street Energy Storage Fund, has been somewhat spared due to its more
international focus, but even its share price has dropped 27.7 per cent since
the beginning of the year.
However,
their share prices have been struggling for some time.
Rupert Robinson, managing director of Gresham
House, said in an investor call last week that the last month has been a
“pretty chastening experience”.
---- Running
out of power?
Battery storage firms make
their money by selling energy to the grid, which is purchased by the National Grid’s
Electricity System Operator (ESO).
The ESO’s tool for buying the
right amount of electricity the system needs is known as the balancing
mechanism.
In effect, it is a
continuously open auction where power suppliers, such as battery firms like
Gresham, Harmony, and Gore Street or major gas companies submit bids to supply
power to the ESO.
But Ben Guest, managing director of
Gresham’s trust, explained to City A.M. that the software
behind ESO’s balancing mechanism has a legacy preference to default to fossil
fuel-linked bids.
“The balancing market is operated in
order of merit, so if you’re competitive, you should be used,” Guest said, but
“gas-fired stations with storage have been there for decades, and the grid is
used to dealing with them.”
“We didn’t have an appreciation of
the high skip rate because there was no transparency on that information at the
time,” Guest said. “We assumed the system would work around us… [we were] naive
perhaps.”
In Harmony’s recent announcement that
it would be postponing its dividend, the trust said the fall in natural gas
prices and more players in the battery storage market was also making the
bidding process more competitive.
National Grid declined to comment,
but it is understood that it is upgrading its software to make greater use of
battery assets. However, there isn’t a concrete timeline for when this upgrade
will be completed.
More
Low power, please charge: Battery storage troubles
leave investors on the hook (msn.com)
Another weekend and never ending wars
continue, although there are sings that Washington and London’s proxy war on
Russia in Ukraine maybe nearing its end.
No sign of an end to the latest stock bubbles though, though stock
bubbles usually end suddenly and without warning. Have a great weekend
everyone.
When plunder becomes a way of
life, men create for themselves a legal system that authorizes it and a moral
code that glorifies it.
Frederic Bastiat.
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