Baltic
Dry Index. 2240 -44
Brent Crude 85.19
Spot Gold 2175 US 2 Year Yield 4.62 +0.03
Nobody spends somebody else's money as carefully as he spends his own.
Milton Friedman.
In the global stock casinos, Hong Kong excepted, where EV stocks are crashing, everyone and their dog are frontrunning the Fed and other central banksters, who the casinos think are trapped over a barrel of sharply lower interest rates to come.
What could possibly go wrong?
Nikkei 225
crosses 41,000 as Japan inflation accelerates in February; Hong Kong stocks
plunge 3%
UPDATED FRI, MAR 22 2024 12:02 AM EDT
Japan’s Nikkei 225 briefly
crossed 41,000 to hit a
fresh all-time high on Friday as the country’s inflation accelerated in
February, while other Asia-Pacific markets declined.
Japan’s headline inflation rate
for February came in at 2.8%, climbing from the 2.2% seen in February. Core
inflation — which strips out prices of fresh food — was at 2.8% compared with
2% in the previous month.
The BOJ, in its monetary policy statement on Tuesday said
that “the price stability target of 2 percent would be achieved in a
sustainable and stable manner.”
However, the Nikkei retreated at
the lunch break to trade just below the 41,000 mark, last up 0.1% in volatile
trading. The Topix, which also hit a fresh record, was last up 0.41%.
Hong Kong’s Hang Seng index plunged
3%, dragged by electric vehicle stocks after the index gained almost 2% on
Thursday. Mainland China’s CSI 300 was also down 1.49%.
The Hang Seng Tech index shed
4.3%, with shares of Li Auto plunging
10% on Friday after the EV maker cut its first-quarter deliveries forecast.
South Korea’s Kospi fell 0.48%,
after leading gains in Asia on Thursday, and the small-cap Kosdaq was down
marginally.
In Australia, the S&P/ASX 200 slipped
0.38%, while the Taiwan Weighted
Index traded
close to the flatline after its central bank raised rates in a surprise move on
Thursday
Overnight in the U.S., all three major indexes
hit fresh records, continuing the rally from Thursday after the U.S. Federal
Reserve held rates steady and maintained its rate cut forecast for 2024.
The Dow Jones Industrial Average jumped
269.24 points, or 0.68%, to close at 39,781.37. The S&P 500 advanced
0.32% to end at 5,241.53, while the Nasdaq Composite edged
up 0.20% to finish at 16,401.84.
“People have faith in the Fed
right now, and that cuts are coming,” said Jay Woods, chief global strategist
at Freedom Capital Markets. “We are in a good place, and the market believes in
the smooth landing narrative. Whatever the Fed is saying continues to be the
music to the ears of the market.”
Asia markets live
updates: Japan CPI, Apple lawsuit (cnbc.com)
Stock
futures tick higher following another record-setting day for the major
averages: Live updates
UPDATED FRI, MAR 22 2024 1:04 AM EDT
U.S. stock
futures inched higher Friday after all three major averages registered new
record closes.
Dow
Jones Industrial Average futures rose
25 points, or 0.06%. S&P 500
futures and Nasdaq 100 futures both
climbed 0.1%.
In extended trading, FedEx shares
rose 13%. The shipping company posted adjusted earnings that beat analysts’
estimates in its latest quarter, but it missed on revenue. Lululemon slid
11% after the athleisure retailer posted
weak guidance on the back of slowing growth in North America.
For the second day in a row, all
three major stock indexes closed at record levels. The major averages also hit
all-time intraday highs. The Dow gained
about 0.7%, while the S&P 500 and Nasdaq Composite added
roughly 0.3% and 0.2%, respectively. Thursday was the fourth straight winning
session for the three indexes.
One reason for this market
optimism might stem from the policymaking Federal Open Market Committee’s
expectation for three rate cuts this year even after a couple of hot inflation
reports, according to Art Hogan, chief market strategist at B. Riley Wealth.
Investors have “always been more
aggressive on rate hikes and more aggressive on rate cuts than the fed funds
futures markets, but the Fed has delivered through the dot plot and we finally
lined up,” he said.
“You get a couple of inflation
data points that are a touch hotter, and I think realistically the Street’s
thought process has become much more rational and lines up well with where the
Fed is right now,” Hogan added.
The three major averages are
tracking for healthy gains this week, with the S&P 500 tracking for a 2.4%
pop and the Nasdaq rising nearly 2.7%. The Dow is the outperformer of the
three, up almost 2.8% through Thursday’s close and on pace for its best
week since December.
Stock market today: Live updates (cnbc.com)
But.
Top U.S.
asset manager Vanguard doesn’t believe the Fed will cut interest rates this
year
Vanguard doesn’t expect the Federal Reserve to cut
interest rates this year, defying the view from Fed officials that the central
bank remains
on track to reduce rates three times in 2024.
The Fed on Wednesday left
interest rates unchanged for the fifth consecutive time, as
expected, keeping its benchmark overnight borrowing rate in a range between
5.25%-5.5%.
It also said it still expects three quarter-percentage point cuts by the
end of the year.
The message fueled a market rally in
both the U.S. and beyond.
The three major stock market indexes in the U.S. all closed at record highs
Wednesday, while in Europe, the pan-European Stoxx 600 rose
to a fresh record high on Thursday morning as investors cheered the prospect of
multiple rate cuts.
Traders are currently pricing in a
roughly 68% chance of a first Fed rate cut in June, according to the CME FedWatch Tool.
Top U.S. asset manager Vanguard,
however, isn’t convinced.
Its base case is no rate cuts by
the Federal Reserve in 2024, and Shaan Raithatha, senior economist at Vanguard,
said this could have ramifications for central banks — and markets — around the
world.
“As you all know, rate cuts have already been priced down from seven rate
cuts at the start of the year to three,” Raithatha told CNBC’s “Squawk Box Europe” on
Thursday.
“So, it depends on the reason why.
… If it is because of the strong economy, especially supply-side driven growth,
which is also disinflationary, then perhaps the stock market can continue that
rally. But also at Vanguard, what we also believe is that the U.S. equity
market is relatively overvalued at this stage.”
Vanguard isn’t alone in raising the possibility of
zero rate cuts from the Fed this year.
Mark Okada, co-founder and CEO of
Sycamore Tree Capital Partners, told CNBC’s “Closing Bell” last week
that there’s a “good chance” the central bank doesn’t reduce rates in 2024.
“We are in the higher-for-longer
camp,” Okada said on March 12.
Forecasters in the CNBC Fed Survey,
meanwhile, have said that
they still expect to see three interest rate cuts from the Fed in 2024, on
average.
More
Vanguard
doesn’t believe the Fed will cut interest rates this year (cnbc.com)
China gloom sucks
life out of Asia's rate cut cheer
By Rae Wee
March 22, 2024 5:11 AM GMT
SINGAPORE, March 22 (Reuters) - Chinese stocks
slumped on Friday and the yuan fell, dragging down markets broadly in Asia and
rupturing an equity market rally spurred by a surprise rate cut in Switzerland
that had investors wagering on who will ease policy next.
Traders were left on high alert in Asia with a yen
creeping back toward multi-decade lows and jawboning efforts from Japanese
government officials ramping up, alongside sliding Chinese stocks triggered by
a sudden fall in the currency.
China's yuan weakened to a four-month low on Friday and
breached the psychologically important 7.2 per dollar level. It was last nearly
0.4% lower at 7.2266 per dollar.
The fall prompted the country's major state-owned banks to sell
dollars for yuan in an attempt to slow its decline, sources told Reuters.
That did little to soothe investors' nerves, as Chinese stocks
tumbled in step with the yuan.
The mainland blue-chip CSI300 index (.CSI300) and Shanghai Composite
index (.SSEC) each fell more than 1%,
while Hong Kong's Hang Seng Index (.HSI)slid 3%.
"Sentiment (is) very
fragile today," said Wong Kok Hoong, head of equity sales trading at
Maybank, citing concerns over weak earnings across Chinese
companies and continued headwinds facing the country's property sector, among other
things.
Elsewhere, a weakening yen was also back on traders' radars, as
it again hit a four-month trough of 151.86 per dollar and remained a whisker
away from a multi-decade low.
A landmark rate increase from
the Bank of Japan (BOJ) this week has failed to move the needle on the stark
interest rate differentials between the U.S. and Japan, keeping the yen under
pressure.
It has fallen about 1.5% against the dollar since the BOJ's
decision on Tuesday to exit negative interest rates.
Data on Friday showed Japan's core inflation accelerated in
February but an index gauging the broader price trend slowed sharply,
highlighting uncertainty on how soon the central bank will raise interest rates
again.
More
China gloom sucks life out of Asia's rate cut cheer | Reuters
Gold prices
have been hitting record highs — here’s why the rally is far from over
The rally in gold continues with prices hitting an
all-time high on Thursday — and there’s room for
it to rise more as central banks continue to purchase bullion
in record amounts.
Prices could rise to $2,300 per
ounce in the second half of 2024, especially against the backdrop of
expectations that the U.S. Federal Reserve could cut rates in the second half
of 2024, Aakash Doshi, Citi’s North America head of commodities research, told
CNBC. Gold is currently trading at
$2,203.
Gold prices tend to share an inverse relationship with interest rates. As
interest rates dip, gold becomes more appealing compared to fixed-income assets
such as bonds, which would yield weaker returns in a low-interest-rate
environment.
Macquarie has also forecast gold
prices to notch new highs in the second half of the year. While acknowledging
that physical purchases of gold have given prices a lift, Macquarie’s
strategists attributed the recent $100 spike in prices to “significant futures
buying” in their note dated March 7.
“Central banks, who have bought
historic levels of gold over the past two years, continue to be strong buyers
in 2024 as well,” World Gold Council Global Head of Central Banks Shaokai Fan
said.
These purchases have strengthened
gold prices despite high interest rates and a strong dollar, market watchers
told CNBC.
Higher rates tend to reduce the
appeal of gold compared with bonds as it does not pay any interest, while a
stronger dollar erodes the sheen of greenback-priced bullion for holders of
other currencies.
Strong physical demand for gold is also fueled by its appeal as a
safe-haven asset amid geopolitical uncertainties.
“In the past decade, Russia and China have been
the two largest buyers. However, central bank purchases in recent years have
diversified,” Doshi.
China central bank top buyer
China is the
leading driver for both consumer demand and central bank gold purchases, and
the country’s not likely to slow down.
Among central
banks, the People’s Bank of China was the largest buyer of gold in 2023.
China’s weak economy and embattled
real estate sector also drove more investors toward the
safe-haven asset, with individual gold investment remaining robust, WGC said.
More
Gold prices have been hitting new highs — and the rally is far from over (cnbc.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.
Bank
of England holds interest rates again but Bailey says ‘things are moving in the
right direction’
THURSDAY 21 MARCH 2024 12:14
PM
Andrew Bailey,
governor of the Bank of England, said inflation was “moving in the right direction”
as policymakers voted to leave interest rates on hold for the fifth consecutive meeting.
The decision means the
Bank Rate remains at a post-financial crisis high of 5.25 per cent, a
level reached last August.
While the decision was
widely expected, the Monetary Policy Committee’s (MPC) two hawkish outliers –
Catherine Mann and Jonathan Haskell – backed a hold rather than a hike.
Swati Dhingra was the
only member of the MPC to back a 25 basis point cut.
This meant eight members voted for a
hold and one for a cut, making it the first meeting since September 2021 in
which no members voted for a hike.
The shifting voting pattern suggests
that the Bank is edging ever nearer to cutting interest rates.
“We’re not yet at the point where we
can cut interest rates,”Andrew Bailey, governor of the Bank, said. “But things
are moving in the right direction”.
The Bank was forced into aggressively
hiking interest rates over 2022 and 2023 as it sought to quell a sudden burst
in inflation which was fuelled by the Russian invasion of Ukraine. Inflation
peaked at over 11 per cent back in October 2022.
Since then, price pressures have
abated fairly rapidly. Figures out yesterday showed that inflation fell to 3.4
per cent in February, a slightly larger fall than expected by most
economists.
Forecasts from the Bank show that
inflation will fall to two per cent in the Spring, although it may then rise
again to around three per cent by the end of the year.
With inflation falling fast, traders
have turned their attention to when the Bank will start lowering interest
rates. So far, policymakers at the Bank have taken a cautious approach,
pointing to signs that cost pressures remain high.
Services inflation, which is arguably
a more important figure than the headline rate of inflation, remains above six
per cent. Annual pay growth meanwhile stands at 5.6 per cent.
Although both are firmly on a
downward trajectory, the MPC continued to express concerns that “key indicators
of inflation persistence remain elevated”.
More
Switzerland
becomes first major economy to cut interest rates in surprise move
PUBLISHED THU, MAR 21 2024 4:50
AM EDT
The Swiss National
Bank on Thursday surprised the market with a decision to lower its main policy
rate by 0.25 percentage points to 1.5%, saying national inflation is likely to
stay below 2% for the foreseeable future.
Economists polled by
Reuters had expected the Swiss central bank to hold rates at 1.75%.
“For some months now,
inflation has been back below 2% and thus in the range the SNB equates with
price stability. According to the new forecast, inflation is also likely to
remain in this range over the next few years,” the bank said. Swiss inflation
continued to fall in February, hitting 1.2%.
The SNB also reduced
its annual inflation forecasts. The bank now sees average inflation reaching
1.4% in 2024, down from its 1.9% estimate in December, and 1.2% for 2025,
trimmed from the previous 1.6% estimate. Its first forecast for 2026 puts
average inflation at 1.1% over the period.
Following the
announcement, analysts at Capital Economics said they expect two more SNB rate
cuts over the course of this year, “with the Bank sounding more dovish and
inflation likely to undershoot its forecasts.”
“As it happens, we
think inflation will come in even lower than the new SNB forecasts imply and
remain around the current level of 1.2% before falling to below 1.0% next year.
Accordingly, we forecast the SNB to cut rates at the September and December
meetings taking the policy rate to 1%, where we think it will remain throughout
2025 and 2026,” Capital Economics analysts said in a note.
The September meeting
is likely to be the last under the stewardship of SNB Chairman Thomas Jordan,
who will step down at the end of that month after 12 years at the helm.
The SNB said Swiss
economic growth is “likely to remain modest in the coming quarters,” with the
GDP poised to expand by roughly 1% this year.
More
Switzerland becomes first major economy to cut
interest rates in surprise move (cnbc.com)
Wary of
inflation, Taiwan central bank raises key rate in surprise move
PUBLISHED THU, MAR 21 2024 5:55
AM EDT
Taiwan’s central bank
surprised markets by raising its policy rate on Thursday, wary of continued
inflationary pressures and ahead of an expected rise in electricity prices next
month.
The central bank
hiked the benchmark discount rate to 2% from 1.875%, where it has stood since
last March, citing concern about the effect of April’s power price hike and as
inflation persists.
In a Reuters poll, 25
out of 26 economists had predicted the central bank would keep the rate
unchanged. The new rate remains at a much lower level relative to major
economies.
Taiwan’s central bank
increased its forecast for the consumer price index (CPI) this year to 2.16%
from a previous prediction of 1.89%.
The island’s CPI rose
3.08% in February, a 19-month high, as food prices climbed during the Lunar New
Year holiday.
Taiwan’s government
will announce on Friday by how much electricity prices will go up.
Taiwan’s unexpected
rate rise follows the U.S. Federal Reserve’s decision on Wednesday to leave
rates on hold though it indicated it would stick with plans to cut borrowing
costs this year.
Taiwan’s central bank
also raised its 2024 estimate for economic growth to 3.22% from a forecast of
3.12% in December, as global demand for made-in-Taiwan tech products as well as
domestic spending rebound.
The economy grew at
its slowest pace in 14 years in 2023.
Wary of inflation, Taiwan central bank raises key rate in surprise move (cnbc.com)
Covid-19
Corner
This section will continue until it becomes unneeded.
Mounting research shows COVID-19 leaves its mark on
the brain, including significant drops in IQ
Thu, March 21, 2024 at
3:05 AM GMT
Research shows that even mild
COVID-19 can lead to the equivalent of seven years of brain aging.
(Illustration by Victor Habbick via Getty Images)
From the very early days of the
pandemic, brain fog emerged as a significant health
condition that many
experience after COVID-19.
Brain fog is a colloquial term
that describes a state of mental sluggishness or lack of clarity and haziness
that makes it difficult to concentrate, remember things and think clearly.
Fast-forward four years and there
is now abundant evidence that being infected with SARS-CoV-2 – the virus that
causes COVID-19 – can affect brain health in many ways.
In addition to brain fog, COVID-19 can
lead to an array of problems, including headaches, seizure disorders, strokes, sleep
problems, and tingling and paralysis of the nerves, as well as several mental health disorders.
A large and growing body of
evidence amassed throughout the pandemic details the many ways that COVID-19 leaves an indelible mark on the brain. But the specific pathways by which
the virus does so are still being elucidated, and curative treatments are
nonexistent.
Now, two new studies published in
the New England Journal of Medicine shed further light on the profound toll of COVID-19 on cognitive health.
I am a physician scientist, and I have been devoted to studying long COVID since early patient reports about this condition –
even before the term “long COVID” was coined. I have testified before the U.S.
Senate as an expert witness on long COVID and have published extensively on this topic.
More
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.
New Polymer Improves Perovskite Solar Cell
Performance
March 20, 2024
Lithuanian chemists at Kaunas University of
Technology (KTU) created a novel substance for perovskite solar
cells. It may be employed as a hole-carrying layer in standard and inverted
architectural solar cells after polymerization; in both scenarios, the solar
elements produced have higher power conversion efficiency and stable operation.
The photovoltaic community has shown
great interest in perovskite solar cells (PSCs) because of their rapidly
increasing power conversion. PSCs can be produced at a low cost using a large
supply of readily available raw ingredients, allowing for further scaling up.
These features point to PSCs being a
viable mainstream solar technology in the future. To meet market demands,
perovskite solar devices' long-term stability under realistic operating
settings must be improved.
The chemists at KTU in Lithuania have
synthesized a novel 9,9′-spirobifluorene derivative with thermally
cross-linkable vinyl groups, which may aid in resolving some of the
aforementioned issues.
A smooth, solvent-resistant
three-dimensional (3D) polymeric network is created after thermal
cross-linking, and this network is utilized as a hole-transporting component in
perovskite solar cells.
The
copolymerization takes place at a relatively low temperature (103 °C), which
makes the technology safe for use in the casting of a layer on perovskite,
which is not resistant to temperatures above 140 °C. Another very important
aspect is that the polymerization process is incredibly fast, apparently due to
the specific spatial configuration of the monomer.
Šarunė
Daškevičiūtė-Gegužienė, Study Co-Author, Faculty of Chemical Technology, Kaunas
University of Technology
Comparing the resultant devices to
traditional hole transportation materials (PTAA or Spiro-OMeTAD), the former
showed superior energy conversion efficiency and the latter, vitally,
stability.
High Commercialization Possibilities, Patent
Pending
PSCs are stacked,
next-generation solar cells that come in two different architectonic
configurations: regular (n-i-p) and inverted (p-i-n). In the latter case, the
materials for conveying holes are deposited behind the layer of perovskite
absorber.
The KTU laboratories
synthesized the monomer, which readily yields 3D polymers resistant to
solvent and can be employed in both types of perovskite solar cells.
Polymer synthesis is
carried out by heating the monomer layers for as little as 15 min, yielding
spatially structured insoluble polymer matrices.
Vytautas
Getautis, Professor and Lead Researcher, Synthesis of Organic Semiconductors
Research Group, Kaunas University of Technology
New Polymer Improves Perovskite Solar Cell Performance
(msn.com)
Finally,
our latest new section, the world global debt clock. Nations debts to GDP
compared.
World Debt
Clocks (usdebtclock.org)
Another weekend, and more death and destruction
with no end in sight. Destruction too, without limit, among the Great Nixonian
Error of fiat currencies. With Uncle Scam wracking up new federal debt at a
rate on one trillion dollars every hundred days, it’s little wonder some from
Asia to America have started swapping fiat paper or computer electrons, for
physical gold and silver.
Have a great weekend everyone.
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.
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