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“Why, sometimes I've believed as many as six impossible things before breakfast.”
Wall Street, with apologies to Alice in Wonderland
In something of a car v oncoming train wreck, US and global stock casinos got a nasty bout of reality yesterday from the US consumer inflation figure. Any US Fed interest rate cut moves further out to June.
Yet more reality will come next month if the
Fed doesn’t extend its US bank bailout rescue scheme, the Bank Term Funding
Program, supposedly going to end on March 11th.
Most Asian
markets fall after hotter-than-expected U.S. inflation data sends Wall Street
lower; Hong Kong up
UPDATED WED, FEB 14 2024 12:31 AM EST
Most
Asia-Pacific markets fell on Wednesday, with the exception of Hong Kong, after hotter-than-expected U.S.
inflation data sent Wall Street tumbling overnight.
U.S. consumer price index climbed
3.1% on a 12-month basis and 0.3% for the month. Economists polled by Dow Jones
expected the CPI to have increased by 0.2% month over month in January and 2.9%
on an annual basis.
Core prices, which exclude
volatile food and energy components, rose 0.4% month over month and 3.9% from a
year ago. Core CPI was expected to have increased 0.3% in January and 3.7% from
a year earlier, respectively.
Hong Kong’s Hang Seng index reversed
losses to gain 0.36%, bucking the wider downturn as the city returned to trade
after the Lunar New Year holiday. Mainland Chinese markets will remain closed
for the week.
Japan’s Nikkei 225 retreated
from 34-year highs, falling 0.67%, while the Topix saw a larger loss of 1.04%.
The Nikkei had rallied about 3%
to breach the 38,000 mark briefly on Tuesday. It last touched that level in
1990.
Japan’s top currency diplomat
Masato Kanda said that “recent movements in the foreign exchange market have
been rapid” with regard to the yen, and authorities are watching these “with a
high sense of urgency,” according to Reuters.
South Korea’s Kospi dropped
1.11%, with heavyweight Samsung Electronics losing nearly 2%, while the
small-cap Kosdaqreturned to positive territory and gained 0.76%.
In Australia, the S&P/ASX 200 slid
0.87% to close at 7,537.7, extending its losing streak to a third day.
Asia markets live
updates: U.S. inflation, BOJ yen (cnbc.com)
Dow tumbles 500
points, posts worst day since March 2023 after hot inflation report: Live
updates
UPDATED TUE, FEB 13 2024 4:19 PM EST
Stocks dropped on Tuesday after
hotter-than-expected inflation data for January spiked Treasury yields and
raised doubts that the Federal Reserve would be able to cut rates several times
this year, a key part of the bull case for the equity market.
The Dow Jones Industrial Average lost
524.63 points, or 1.35%, to close at 38,272.75 in its worst session since March
2023 on a percentage basis. At its lows, the 30-stock index sunk 757.52 points,
or 1.95%. The S&P 500 slid
1.37% to close at 4,953.17, while the Nasdaq Composite fell
1.8% to settle at 15,655.60.
The Russell 2000 also
suffered, tumbling nearly 4% for its worst session since June 2022.
The
consumer price index rose 0.3% in January from December. CPI
was up 3.1% on an annual basis. Economists polled by Dow Jones expected CPI to
have increased by 0.2% month over month in January and 2.9% from a year
earlier.
Core prices, which exclude
volatile food and energy components, rose 0.4% month over month and 3.9% from a
year ago. Core CPI was expected to have increased 0.3% in January and 3.7% from
a year earlier, respectively.
“This may well come as an easy
excuse to take some of the froth out of the top of this market that’s been
universally higher thus far this year,” said Art Hogan, chief market strategist
at B. Riley Financial. “The CPI was, as reported today, just a touch hotter
than expectations and proof positive that we’re not on a linear path, but we’re
on a path headed lower.”
The 2-year Treasury
yield jumped
above 4.66%, and the 10-year yield topped
4.32% following the CPI data. Tech shares including Microsoft and Amazon,
which have steered the market run to record highs as rates declined, led the
losses in trading Tuesday. Microsoft and Amazon each lost more than 2%.
In corporate news, JetBlue Airways spiked
almost 22% after activist investor Carl Icahn reported a
nearly 10% stake in the airline. Toymaker Hasbro lost
1.4% after missing analyst expectations for the fourth quarter. Shares of Avis Budget Group slipped
about 23% on the back of disappointing fourth-quarter revenue.
Stock
market today: Live updates (cnbc.com)
European markets close down 1% after
hotter-than-expected U.S. inflation
UPDATED TUE, FEB 13 2024 11:49 AM EST
LONDON —
European markets closed lower on Tuesday as investors assessed incoming
corporate earnings reports and a key U.S. inflation print.
EUROPEAN
MARKETS
|
TICKER |
COMPANY |
PRICE |
CHANGE |
%CHANGE |
|
FTSE 100 |
7512.28 |
-61.41 |
-0.81 |
|
|
DAX |
16880.83 |
0 |
0 |
|
|
CAC 40 Index |
7625.31 |
0 |
0 |
|
|
FTSE MIB |
31134.17 |
-322.56 |
-1.03 |
|
|
IBEX 35 Idx |
9925.4 |
0 |
0 |
The Stoxx 600 index ended
the session down 1%, compounding earlier weakness. A 2.7% decline for the tech
sector led losses, while financial services stocks lost 1.7%.
Losses deepened
after new
figures showed U.S. inflation rose by more than expected in
January, as stubbornly high shelter prices squeezed consumers.
The headline
consumer price index increased by 0.3% month-on-month and 3.1% annually, the
Bureau of Labor Statistics reported, exceeding a Dow Jones consensus forecast
of 0.2% for the month and 2.9% year-on-year.
The
hotter-than-expected print will mean the U.S. Federal Reserve may
be more cautious around the prospect of cutting interest rates as quickly and
steeply as the market expects.
The regional
Stoxx index has recorded a muted February so far, following a strong end to
January. That’s despite big movements in individual stocks, as company results roll in.
This week will see reporting from several major European businesses, including Heineken, Airbus, Renault, NatWest and Commerzbank.
Investors may pay
particular attention to consumer stocks and what they suggest about the
strength of certain economies, as central banks monitor the state of growth and
inflation.
Europe
markets open to close: Earnings, U.S. inflation in focus (cnbc.com)
Morning Bid: Bracing for US inflation aftershock
By Jamie McGeever February 13, 2024 9:48 PM GMT
Feb 14 (Reuters) - A look at
the day ahead in Asian markets.
If anyone was wondering what it would take to puncture the U.S.
economic 'soft landing' hopes that have fueled investors' risk appetite and
gains across most markets this year, especially in tech and on Wall Street,
they got their answer on Tuesday.
An unwelcome upside surprise in U.S. inflation triggered a
surge in bond
yields, pushed expectations of the
first Fed rate cut out to June, juiced the dollar - most
notably for a break above 150.00 yen - and tanked global stock prices.
The MSCI Asia ex-Japan index
is now down four days in a row, and it could be five on Wednesday - the MSCI
World index slumped 1.4% for its steepest decline since September, and the big
three U.S. indices lost between 1.3% and 1.8%.
The regional calendar on Wednesday is light - wholesale price
inflation in India and presidential elections in Indonesia are the
main events - and Chinese markets are still closed for Lunar New Year, although
the offshore yuan could sell off.
That's a potentially choppy mix of political risk,
below-average liquidity and widespread 'risk off' sentiment across Asia on
Wednesday following the tightening of financial conditions and big moves across
many markets on Tuesday.
U.S. Treasury yields jumped as much as 20 basis
points after figures showed that annual U.S. CPI inflation slowed to 3.1% in
January and not the 2.9% economists had expected.
More
Morning
Bid: Bracing for US inflation aftershock | Reuters
Prices rose
more than expected in January as inflation won’t go away
PUBLISHED TUE, FEB 13 2024 8:31
AM EST
Inflation rose more than expected
in January as stubbornly high shelter prices weighed on consumers, the Labor
Department reported Tuesday.
The consumer price index, a
broad-based measure of the prices shoppers face for goods and services across
the economy, increased 0.3% for the month, the Bureau of Labor Statistics
reported. On a 12-month basis, that came out to 3.1%, down from 3.4% in December.
Economists surveyed by Dow Jones
had been looking for a monthly increase of 0.2% and an annual gain of 2.9%.
Excluding volatile food and
energy prices, the so-called core CPI accelerated 0.4% in January and was up
3.9% from a year ago, unchanged from December. The forecast had been for 0.3%
and 3.7%, respectively.
Shelter prices, which comprise
about one-third of the CPI weighting, accounted for much of the rise. The index
for that category climbed 0.6% on the month, contributing more than two-thirds
of the headline increase, the BLS said. On a 12-month basis, shelter rose 6%.
Food prices moved higher as well,
up 0.4% on the month. Energy helped offset some of the increase, down 0.9% due
largely to a 3.3% slide in gasoline prices.
Stock market futures fell sharply
following the release. Futures tied to the Dow Jones Industrial Average were
off more than 250 points and Treasury yields surged higher.
Even with the rise in prices,
inflation-adjusted hourly earnings increased 0.3% for the month. However,
adjusted for the decline in the average workweek, real weekly earnings fell
0.3%. Real average hourly earnings rose 1.4% from a year ago.
“Inflation is
generally moving in the right direction,” said Lisa Sturtevant, chief economist
at Bright MLS. “But it’s important to remember that a lower inflation rate does
not mean that prices of most things are falling — rather, it simply means that
prices are rising more slowly. Consumers are still feeling the pinch of higher
prices for the things they buy most often.”
More
Finally, more EV bad news from France. Of
course, they could try just giving the EVs away. That would really boost French
EV production and save the planet.
France suspends subsidised electric car scheme after surge
February 11, 2024
The French
government said Monday it was suspending a scheme to lease electric cars
from just 100 euros ($109) a month after subsidising more than double the
number of vehicles planned for 2024.
President
Emmanuel Macron's administration launched the scheme in December 2023 to make
electric vehicles affordable to low-income households and reduce carbon
emissions in France.
The scheme
initially planned to subsidise up to 25,000 European-built electric vehicles
this year, but it doubled the number following huge demand.
"It's a
real success story, emblematic of French environmental policy: good for the
wallet and good for the planet," said an advisor to the president.
Eligible
French residents could rent a car without a deposit for three years and renew
the subscription once, supported by a subsidy of up to 13,000 euros for each
car.
In addition to
income eligibility conditions, applicants must need a car to travel to a job
more than 15 km (9 miles) away from home.
The French
government indicated it plans to relaunch the scheme at the end of 2024 for
2025.
"What's
great about this scheme (...) is that you're both giving people who aren't
necessarily well-off access to a cheap electric vehicle and producing more
French vehicles. We have to manage to do both", French Industry and Energy
Minister Roland Lescure said on France 3 television on Sunday.
France suspends subsidised electric car scheme after surge (msn.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.
The US now has an 85% chance of recession in 2024,
the highest probability since the Great Financial Crisis, economist David
Rosenberg says
February 12, 2024
A recession is likely to hit
the US economy in 2024, a new economic model highlighted by the economist David
Rosenberg suggests.
The economic indicator, which
Rosenberg calls the "full model," suggests there's an 85% chance of a
recession striking within the next 12 months.
That's the model's highest
reading since the Great Financial Crisis in 2008.
The model
is based on a working National
Bureau of Economic Research paper
and consists of financial conditions indexes, the debt-service ratio, foreign
term spreads, and the level of the yield curve.
Rosenberg said this economic
model had "superiority" over other models due to its history of
providing a timely warning of recessions without firing any false signals since
1999.
He noted that in early 2023
this model suggested only a 12% chance of a recession — while the yield-curve indicator said
the odds of a recession were 50% at the time.
"The full model
predicted the 'soft landing' we saw in 2023 — but now is saying that for 2024,
recession probabilities are highly elevated," Rosenberg said.
The model calls into question
the growing narrative that the economy is about to pull off a "soft landing" or
"no landing" scenario this year.
"Our conviction that the
recession has been delayed but not derailed is still running at a high
level," Rosenberg said.
He said if a recession did
materialize, it would probably be disastrous for the stock market.
"Few asset classes are
priced for that outcome, even though recessions are part and parcel of the
business cycle and almost always come on the heels of a Fed rate-hiking cycle
that continues past the point of yield curve inversion," Rosenberg said.
The model utilized by
Rosenberg also helps explain why the closely followed yield-curve indicator has
so far been inaccurate in predicting a recession.
"It also explains why
the yield curve didn't work as a recession predictor in 2017-19: easy financial
conditions, extremely low debt service obligations, and favorable foreign term
spreads offset the signal from the inverted U.S. yield curve," Rosenberg
said.
Covid-19 Corner
This section will continue until it becomes unneeded.
Despite the attempted Covid vaccines cover up, truth will out. UK Prime Minister Sunak stumbles into a buzzsaw. Approx. 7 minutes.
Question
to prime minister
Question
to prime minister (youtube.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.
Researchers unveil solar technology using a ‘miracle
material’ that could revolutionize the energy sector: ‘It’s very exciting’
February 12, 2024
Scientists across the globe are competing to
engineer solar cells that
most efficiently capture light to turn into clean, renewable energy. In Saudi
Arabia, a team of researchers at King Abdullah University of Science and
Technology has announced plans
to bring a new type of solar cell to market, and it could be among the most
efficient yet.
The cell combines a mineral
called perovskite with
silicon to maximize both performance and longevity. It has been aptly named
“perovskite/silicon tandem.”
Perovskite
has been dubbed a “miracle material” by
clean energy experts because of its impressive capacity for absorbing light,
combined with the fact that it can be manufactured at room temperature, making
it much more sustainable and also cheaper.
---- By combining
perovskite with silicon, the KAUST team said that they had harnessed the best
qualities of both materials. The team said that its
perovskite/silicon tandem set a record for tandem solar cell efficiency,
operating with greater than 33% efficiency.
“The
market for perovskite/silicon tandems is expected to exceed $10 billion within
a decade. KAUST is at the forefront of this revolution, laying the groundwork
for affordable, accessible clean energy for all,” professor Stefaan De Wolf,
the leader of the KAUST team, said.
He also said: “It’s very
exciting that things are moving rapidly with multiple groups.”
The most immediate challenges
for the team include figuring out how to manufacture the perovskite/silicon
tandems at commercial scale, which may involve high costs and hazardous
materials. They also must ensure that the cells will be able to withstand various
weather conditions, as perovskite is extremely fragile.
The future looks bright,
though, as solar cells should continue to become more efficient and affordable
with the continued development of technology in the field.
“If I had a world of my own, everything would
be nonsense. Nothing would be what it is, because everything would be what it
isn't. And contrary wise, what is, it wouldn't be. And what it wouldn't be, it
would. You see?”
Alice’s Adventures in Wonderland /
Through the Looking-Glass
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