Wednesday, 6 March 2024

Bubble On Or Bubble Off? UK Budget Day. Powell Day One.

Baltic Dry Index. 2291 -06            Brent Crude  82.31

Spot Gold 2126                   US 2 Year Yield 4.54 -0.07

If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand.

Milton Friedman.

In the stock casinos it’s still bubble on. But did Wall Street just send a different signal?

In USA politics, a Biden Joe Biden v Trump Mulligan. Powell Day One.  I’ll bet no one mentions US Federal debt rising by an unsustainable trillion dollars every hundred days!

 

Dow Jones ends down over 400 points and Nasdaq suffers worst day in 3 weeks as Apple shares slump

U.S. stocks tumbled for a second day on Tuesday as technology shares came under pressure, dragged down by Apple’s continued slump, while investors remained cautious ahead of closely watched remarks by Federal Reserve Chair Jerome Powell and labor-market data, both of which should offer more clues on the central bank’s interest-rate path and the health of the economy.

 

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Dow Jones ends down over 400 points and Nasdaq suffers worst day in 3 weeks as Apple shares slump - MarketWatch

 

Asia markets mostly rise and reverse earlier losses; Hong Kong gains 2%

UPDATED WED, MAR 6 2024 12:27 AM EST

Asia-Pacific markets reversed early declines to mostly rise Wednesday, with Hong Kong stocks leading gains in the region.

The Hang Seng index rose more than 2%, while mainland Chinese stocks slid, sending the CSI 300 down 0.6%.

This comes after a tech slide on Wall Street led by Apple, following a report that iPhone sales dropped in China.

Apple shares slipped almost 3% in U.S. trading after a report from Counterpoint Research found iPhone sales plunged in China in the first six weeks of 2024. Investors monitored shares of Apple suppliers in Taiwan and South Korea.

The Taiwan weighted index gained 0.63%, extending a record high in the previous session, with shares of Taiwan Semiconductor Manufacturing Company trading close to the flatline.

Shares of Samsung Electronics fell 1.22%, while South Korea’s broader Kospi slid 0.44%. The small-cap Kosdaq was up 0.49%.

The news arrives after China’s CSI 300 index hit over three-month highs Tuesday after the country set its economic growth target at “around 5%” for 2024 during its “Two Sessions” meeting.

Japan’s Nikkei 225 dipped marginally, while the broad-based Topix edged 0.27% higher.

In Australia, the S&P/ASX 200 gained marginally, closing at 7,730.9 even as its economy grew more than expected in the fourth quarter, with gross domestic product up 1.5% year on year, compared with the 1.4% rise estimated in a Reuters poll.

U.S. stocks slipped for a second session Tuesday, dragged by steep declines in major tech names such as Apple. The indexes slipped from record high territory.

The Nasdaq Composite fell 1.65% as technology stocks fell the most. The Dow Jones Industrial Average lost 1.04% while the S&P 500 fell 1.02%.

Live updates: Asia markets, Apple suppliers, Australia GDP (cnbc.com)

European markets set for higher open ahead of UK budget statement

UPDATED WED, MAR 6 2024 12:48 AM EST

European markets are heading for a higher open Tuesday as investors in the U.K. prepare for the 2024 budget statement.

The budget, which will be presented to the British Parliament by Chancellor Jeremy Hunt, outlines the government’s plans for taxation and spending. He’s widely expected to announce a cut to National Insurance tax.

In other news, futures linked to the Nasdaq 100 rose on Tuesday night, following a sharp selloff for all three major averages.

Investors will be watching Fed Chair Jerome Powell’s testimony before the House Financial Services Committee on Wednesday. They will be seeking more clarity on where the central bank stands on monetary policy and looking for clues on the pace and timing of anticipated interest rate cuts this year. The central bank leader will speak before the Senate Banking Committee on Thursday.

Asia-Pacific markets were mixed Wednesday, with Hong Kong stocks leading gains in the region and up over 2%. Mainland Chinese stocks slid, sending the CSI 300 down 0.6%, after a tech slide on Wall Street led by Apple, following a report that iPhone sales dropped in China.

European markets live updates: stocks, UK budget, data and earnings (cnbc.com)

Fed's Powell to set election year stage with testimony on rate cuts, inflation

By Howard Schneider 

WASHINGTON, March 6 (Reuters) - With asset values from stocks to crypto to homes piling higher, inflation still considered too high, and worries of "exuberance" creeping into the conversation, Federal Reserve Chair Jerome Powell on Wednesday will update U.S. lawmakers on the economy and prospects for interest rate cuts in a politically charged election year.

The landscape he'll lay out is in many ways encouraging, with the unemployment rate a low 3.7%, inflation by some measures within striking distance of the Fed's 2% target, and the economy still growing despite the tight credit conditions imposed by the central bank.

But the next steps remain uncertain, with recent inflation readings stickier than expected in key ways, and some Fed officials and outside analysts concerned the U.S. economy remains too strong for price pressures to fully recede - an argument for rate cuts to be delayed further than anticipated.

Powell kicks off two days of testimony with a 10 a.m. ET (1500 GMT) hearing before the House Financial Services Committee, explaining to lawmakers who face inflation-weary voters this November why he is confident price pressures will keep easing without upending the job market or conversely why the window for a "soft landing" may be narrowing.

The best-case outcome "is hardly assured," Atlanta Fed President Raphael Bostic said on Monday in the last policymaker comments before Powell's House testimony. Bostic fretted "pent-up exuberance" among businesses could lead to a spending surge and renewed inflation if the Fed cuts rates too soon.

The comment somewhat echoed Alan Greenspan, the former Fed chair who three decades ago called out the "irrational exuberance" driving a developing bubble in technology stocks.

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Fed's Powell to set election year stage with testimony on rate cuts, inflation | Reuters

Finally, more on so you really, really, really, want to own and drive an EV. Well maybe not a Chinese made EV. Approx. 16 minutes.

Explodes While Charging, Driving, Parking, Even in Tunnels - China's EVs Are Deadly

Explodes While Charging, Driving, Parking, Even in Tunnels - China's EVs Are Deadly (youtube.com)  

 Since the 1930s the technique of buying votes with the voters' own money has been expanded to an extent undreamed of by earlier politicians.

Milton Friedman.

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.

Corporate greed is pushing prices up even as the main drivers of inflation keep falling, Fundstrat's Tom Lee says

Mon, 4 March 2024 at 11:28 pm GMT

Corporate greed is the reason why inflation was hotter than expected to start the year, according to Fundstrat's head of research Tom Lee.

Speaking to CNBC on Friday, Lee pointed to the slight uptick in January consumer inflation, with prices rising 3.1% year-over-year. PCE inflation, the Fed's preferred inflation measure, rose 2.4%, in line with economists' estimates.

That's fueled some fear that inflation could be poised for a resurgence, which would prompt the Federal Reserve to push back its timeline for rate cuts. But the main drivers of inflation have been dropping, Lee said. Core inflation is "basically" already at the Fed's 2% price target, he noted.

That suggests the hotter-than-expected inflation reading to start 2024 was likely due to corporate "greedflation," or simply, businesses hiking prices because they're able to.

"The arching reality is that inflation is falling ... A lot of companies raise prices in the month of January and it doesn't get captured," Lee said. "January and February tend to have that high, what they call residual seasonality," he added.

The underlying message is that investors can still breathe easy, as inflation is still on the decline and the Fed is still on track to lower interest rates this year. Despite rising talk of no rate cuts in 2024, markets see a 50% chance rates are lowered by at least 100 basis points by December, according to the CME FedWatch tool.

"I think if there are no cuts this year, the stock market has to reassess what it's thinking in terms of the trajectory of inflation, the probability of a soft-landing, and of course, all these things would weigh on what would happen to multiples," Lee warned.

Lee though, who nailed his stock market outlook in 2023, is forecasting another positive year for stocks. Previously, he said the S&P 500 could soar as high as 5,500 by year-end, implying a gain of about 16% for the year.

Corporate greed is pushing prices up even as the main drivers of inflation keep falling, Fundstrat's Tom Lee says (yahoo.com)

Covid-19 Corner

This section will continue until it becomes unneeded.

COVID-19 'pandemic babies' developed 'fascinating' protection against common condition

March 3, 2024

Lockdowns imposed during the COVID-19 pandemic saw changes in newborn babies that may have protected them against allergies, according to a study.

Infants raised when coronavirus social distancing restrictions were in place were found by Irish researchers to have more of the beneficial microbes acquired after birth from their mother, which could act as a defence against disease.

The scientists believe this led "pandemic babies" to have lower than expected rates of allergic conditions, such as to food, compared to pre-COVID babies.

The findings, published in the journal Allergy, highlighted the gut health benefits for the youngsters as a result of the COVID-19 lockdowns, including lower rates of infection and consequent antibiotic use, and increased duration of breastfeeding.

The ecosystem of naturally-occurring bacteria in the gut, known as the microbiome, plays an essential role in human health.

The researchers analysed faecal samples from 351 babies born in the first three months of the pandemic, comparing these with a pre-pandemic group.

Online questionnaires were used to collect information on diet, home environment and health.

Stool samples were collected at six, 12 and 24 months and allergy testing was performed at 12 and 24 months.

The study highlighted significant differences in the microbiome development of babies born during lockdown periods when compared to pre-pandemic babies.

It revealed only about 5% of the lockdown babies had developed a food allergy at age one, compared to 22.8% in the pre-COVID group.

Fewer infections through not being exposed to germs also reduced the need for antibiotics, which kill good bacteria.

Of the lockdown babies only 17% needed an antibiotic by the age of one.

In the pre-pandemic group, 80% of infants had taken antibiotics by 12 months.

COVID-19 'pandemic babies' developed 'fascinating' protection against common condition (msn.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.

Graphjet Technology Accelerates Production Timeline at State-of-the-Art Manufacturing Plant in Malaysia

Mon, 4 March 2024 at 4:11 pm GMT

Kuala Lumpur, Malaysia, March 04, 2024 (GLOBE NEWSWIRE) -- Graphjet Technology (“Graphjet” or “the Company”), a leading developer of patented technologies to produce graphite and graphene directly from agricultural waste, today announced it has accelerated the timeline for its planned manufacturing plant in Malaysia.

Graphjet is advancing construction of its first manufacturing plant in the Kuantan district of Pahang State in Malaysia, which is expected to be commissioned by the second quarter of 2024. The completion of the facility will enable the Company to begin producing graphite to supply its customer Toyoda and generate revenues in 2024.

The facility is expected to recycle up to 9,000 tonnes of palm kernels, which is agricultural waste, to produce up to 3,000 tonnes of graphite per year. Over time, the Company expects to scale the facility to 13,000 tonnes of annual graphite production by second half of 2026. Graphjet’s green technology uses an environmentally friendly methods in a completely circular solution using waste and its processes eliminate emissions and pollutions.

“We are excited to accelerate our plans for our manufacturing capabilities and production at our plant in the Kuantan district of Pahang State to address the growing demand for graphite and graphene outside of China,” said Aiden Lee, Graphjet’s CEO. “There is incredible whitespace opportunity for the use of palm oil waste in Malaysia to be leveraged to produce graphite and graphene, which Graphjet is capitalizing on. This expedited construction and commissioning timeline for our facility will enable us to support our customer Toyoda and generate revenues in the near term. We look forward to establishing ourselves as a leading supplier of graphite as our current and prospective customers seek alternatives to navigate China’s restrictions.”

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Graphjet Technology Accelerates Production Timeline at State-of-the-Art Manufacturing Plant in Malaysia (yahoo.com)

You cannot simultaneously have free immigration and a welfare state. 

Milton Friedman.


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