Baltic
Dry Index. 2392 -27
Brent Crude 87.23
Spot
Gold 2157 US 2 Year Yield 4.68 -0.05
Paul Samuelson.
In the stock casinos, stock mania is back. After all, it’s easy money front running the Fed, right? Sooner or later the Fed’s got to start cutting interest rates and everyone can sell out to the incoming rush of greater fool buyers.
Later today, the Gospel according to Fed Chairman Powell. Almost as important, the Fedster’s latest dot plots.
Look away from that inflationary crude oil
price now.
Asia markets
rise ahead of Federal Reserve’s rate decision; China holds loan prime rates
steady
UPDATED WED, MAR 20 2024 1:27 AM EDT
Asia-Pacific
markets rose as investors digested the Bank of Japan’s landmark shift in
monetary policy while awaiting the U.S. Federal Reserve’s interest rate
decision.
The BOJ on Tuesday raised
interest rates for the first time in 17 years and scrapped its
yield curve control policy, sending the Nikkei beyond the 40,000 mark for the
first time in almost two weeks.
The People’s Bank of China kept
its one- and five-year loan prime rates unchanged at 3.45% and 3.95%,
respectively. The one-year LPR acts as the peg for most household and corporate
loans, while the five-year LPR is the benchmark for most property mortgages.
Hong Kong’s Hang Seng index reversed
earlier declines to rise 0.60%, while the mainland Chinese CSI 300 also rose
about 0.20% after opening lower.
In Australia, the S&P/ASX 200 fell
0.1% to close at 7,695.8, a day after the country’s central bank held rates at
4.35% for the third meeting in a row.
South Korea’s Kospi climbed
1.25%, powered by a 4.8% gain in heavyweight Samsung Electronics, while the
small-cap Kosdaq inched 0.08% higher.
Japan’s Nikkei 225 is
closed for a public holiday.
Overnight in the U.S., all three major indexes
rose as as the Federal Reserve kicked off its two-day policy meeting.
The central bank is expected to
keep rates unchanged Wednesday. However, a recent slate of worrying inflation
reports has investors concerned that the central bank could signal interest
rates will remain higher for longer than expected.
The Dow Jones Industrial Average gained
0.83%, marking its best day since Feb. 22, while the S&P 500 climbed
0.56% to close at 5,178.51 for a fresh record. The Nasdaq Composite advanced
0.39%.
Asia
markets live updates: Fed decision, China LPR (cnbc.com)
Stock futures are
little changed as investors await Fed rate decision: Live updates
UPDATED WED, MAR 20 2024 1:08 AM EDT
U.S. stock
futures slipped Tuesday night following a winning day for the major averages,
as investors awaited the latest Federal Reserve policy decision.
Dow
Jones Industrial Average futures were
marginally lower, while S&P 500
futures dipped
0.12%, while Nasdaq 100 futures inched
higher by 0.17%.
Wall Street is coming off a positive
session for the major benchmarks. The 30-stock Dow advanced
320 points, or 0.8%, notching its best day since Feb. 22. The S&P 500 rose
roughly 0.6%, while the Nasdaq Composite added
about 0.4%.
Recent weakness in tech stocks
has had some investors deliberating whether the artificial intelligence rally
is slowing, as other parts of the market gain traction. On Tuesday,
communication services — which includes the likes of Alphabet and Meta Platforms
— was the only losing sector in the S&P 500, as energy and utilities stocks
led the broader index.
Semiconductor stocks also
underperformed, with the VanEck
Semiconductor ETF (SMH) slipping
0.2%. Shares of bitcoin proxy MicroStrategy and Super Micro Computer were
notable decliners.
“All else equal, it’s not a bad
thing to see this rotation and churn happening under the surface,” Liz Ann
Sonders, chief investment strategist at Charles Schwab, said on CNBC’s “Closing
Bell.” “I think it is sending a message about economic resilience, and that’s
why there’s more of a cyclical bias to what has been working.”
The Fed is broadly anticipated to
keep interest rates unchanged at the conclusion of its two-day policy meeting
on Wednesday. However, investors will scan the dot plot for insight into the
number and timing of rate cuts, with many anticipating the central bank will
start lowering rates in June.
Some are concerned a recent spate
of hot inflation reports could result in even fewer cuts than markets are
anticipating. “The dot plot could show that we’ve taken yet another cut out of
what have been three,” Sonders said. “The question, though, is at what point
does it hit the market, given we’ve had this market resilience. I think
ultimately, it’s not just about the Fed reaction function, but the
sustainability of the economic growth profile.”
On the corporate earnings front, Micron Technology and General Mills will
report results Wednesday.
Stock
market today: Live updates (cnbc.com)
Here’s
everything to expect from the Federal Reserve’s policy meeting Wednesday
The Federal Reserve has
a lot to do at its meeting this week, but ultimately may not end up doing a
whole lot in terms of changing the outlook for monetary policy.
In addition to releasing its rate
decision after the meeting wraps up Wednesday, the central bank will update its
economic projections as well as its unofficial forecast for the direction of
interest rates over the next several years.
As expectations have swung sharply this year for where the Fed is headed,
this week’s two-day session of the Federal Open Market Committee will draw
careful scrutiny for any clues about the direction of interest rates.
Yet the general feeling is that
policymakers will stick to their
recent messaging, which has emphasized a patient, data-driven
approach with no hurry to cut rates until there’s greater visibility on inflation.
“They’ll make it clear that they’re
obviously not ready to cut rates. They need a few more data points to feel
confident that inflation is heading back to target,” said Mark Zandi, chief
economist at Moody’s Analytics. “I expect them to reaffirm three rate cuts this
year, so that would suggest the first rate cut would be in June.”
Markets have had to adjust to the
Fed’s approach on the fly, scaling back both the timing and frequency of
expected cuts this year. Earlier this year, traders in the fed funds futures
market were anticipating the rate-cutting campaign to kick off in March and
continue until the FOMC had cut the equivalent of six or seven times in
increments of quarter percentage points.
Now, the market has pushed out the timing until at
least June, with only three cuts anticipated from the current target range of
5.25%-5.5% for the Fed’s benchmark overnight borrowing rate.
The swing in expectations will make how the
central bank delivers its message this week all the more important. Here’s a
quick look at what to expect:
The ‘dot plot’
Though the
quarterly plot of individual members’ expectations is pretty arcane, this
meeting likely will be all about the dots. Specifically, investors will look at
how the 19 FOMC members, both voters and nonvoters, will indicate their
expectations for rates through the end of the year and out to 2026 and beyond.
When the matrix was last
updated in December, the dots pointed to three cuts in 2024, four in
2025, three more in 2026, and then two more at some point to take the
long-range federal funds rate down to around 2.5%, which the Fed considers
“neutral” — neither promoting nor restricting growth.
Doing the math, it would only
take two FOMC members to get more hawkish to reduce the rate cuts this year to
two. That, however, is not the general expectation.
More
What
to expect from the Federal Reserve's policy meeting Wednesday (cnbc.com)
Morning Bid: More
pounding of yen as UK inflation data looms
Reuters March 20, 2024 5:33 AM GMT
A look at the day ahead in
European and global markets from Vidya Ranganathan
A holiday in Japan is giving markets time to digest the BOJ's
momentous monetary policy decision and to focus on the equally consequential
Fed policy decision due Wednesday.
Before that, there's German inflation data and the more
intensely debated UK inflation numbers that markets reckon the Bank of England
has been misreading.
The BoE meets on Thursday
and is expected to hold rates. A first easing in June
is put at 50-50, with 25 bps fully priced in for August and 60 bps for all of
2024. .
Already a top performer among major currencies this year,
sterling made more headway against the yen overnight, as did the euro rising to
16-year highs against the yen.
For, while the BOJ has abandoned negative
rates, the yen remains undeniably the cheapest funding currency on the block,
and the Fed's certain to drive that message home further.
The U.S. central bank is
considered certain to keep rates at 5.25-5.5% on Wednesday and all eyes will be
on the FOMC dot plots for rates and inflation.
Analysts assume policy makers will look through the recent run
of unhelpfully high inflation readings as a seasonal and statistical
aberration, but there has to be a risk the median dot plot shifts to two 25 bps
rate cuts this year rather than the former three cuts.
Futures now imply markets have pushed back the timing for the first Fed cut to June, and maybe even July.
---- Key developments
that could influence markets on Wednesday:
Data: UK inflation, German inflation, Euro zone
consumer confidence, FOMC.
Speakers: ECB policymaker Pablo Hernandez de Cos;
ECB President Christine Lagarde, chief economist Philip Lane Lagarde and board
member Isabel Schnabel at a conference in Frankfurt.
Debt auctions: Germany-Reopening of 28-year debt.
Morning Bid: More pounding of yen as UK inflation data looms | Reuters
Finally better shipping canal news. No not
Suez, that other slightly newer shipping canal.
Panama
Canal Adds Transit Slots As Restrictions in Crucial Corridor Begin to Ease
March 19, 2024
The
Panama Canal is adding transit slots as restrictions in the corridor
begin to ease.
According
to the Panama Canal Authority (ACP), a pair of slots are up for auction for
transit dates starting on March 18, with an additional slot for dates beginning
on March 25.
The
ACP could add more slots if rainfall raises levels at the lakes servicing the
Panama Canal. This is after historically low water levels brought on by a lack
of rainfall reduced daily traffic by almost 40 percent in late 2023 and early 2024. Over
that period, many ships have been forced to take longer, more costly routes,
all while the ongoing crisis in the Red Sea has complicated a crucial alternative
to the Panama Canal.
Even
so, with the ACP adding transit slots on top of better-than expected
rains in late 2023, conditions appear to be improving, at least
for now, in the critical shipping lane.
Panama Canal Daily Slots | SupplyChainBrain
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.
Trouble
in US Residential Real Estate (RRE) to compete with trouble in US Commercial
Real Estate (CRE)? Banking crisis 2.0
next?
Once America’s Hottest Housing
Market, Austin Is Running in Reverse
Home prices have
fallen more than anywhere in the U.S.
March 18, 2024 5:30 am ET
The Sunbelt city that came to symbolize the pandemic
housing boom is now leading a national property cool-down.
Home prices and apartment rents in Austin, Texas, have fallen more than
anywhere else in the country, after a period of overbuilding and a slowdown in
job and population growth.
That marks a sharp reversal from previous years when
Austin’s real-estate market was sizzling. The city attracted waves of remote
workers on six-figure tech salaries. Others arrived after companies such as
Tesla and Oracle moved offices there, taking advantage of lower taxes and less
business regulation. Austin’s economy grew at nearly double the national rate,
and it became the country’s 10th-largest city.
Now,
it is contending with a glut of luxury apartment buildings. Landlords are
offering weeks of free rent and other concessions to fill empty units. More
single-family homes are selling at a loss. Empty office space is also piling up
downtown, and hundreds of Google employees who were meant to occupy an entire
35-story office tower built almost two years ago still have no move-in
date.
Austin’s recent downswing is a sign that migration
patterns that were turbocharged by the pandemic continue to fade. Housing
markets in other Sunbelt cities, including Phoenix and Nashville, Tenn., that
swelled with new residents in recent years, have also softened from
overbuilding, slowing population growth and a lack of affordability.
Austin was at the forefront of the U.S. housing boom,
when rock-bottom borrowing costs near the start of the pandemic fueled robust
sales and sent home prices to new highs. Austin prices soared more than 60%
from 2020 to the spring of 2022.
A surge in interest rates crushed the housing market
nationwide, and existing-home sales fell to a nearly 30-year low in 2023. Despite that collapse,
home prices remain near record levels thanks to tight supply. But in Austin,
according to the Freddie Mac House Price Index, prices have fallen more than
11% since peaking in 2022, the biggest drop of any metro area in the
country.
“Austin’s housing market remains extremely
overvalued,” said Matthew Walsh, an economist at Moody’s Analytics.
Housing affordability hit a four-decade low, even with recent price declines,
he added.
By Moody’s count, Austin home prices still run 35% higher than what the city’s
underlying economic trends would typically support. Austin’s per capita income
rose 23% between 2020 and 2022, but home prices increased more than twice as
much.
That disparity has veered greatly from historical
norms. “It’s unsustainable,” Walsh said.
More
Once America’s Hottest Housing Market, Austin Is Running in Reverse - WSJ
Covid-19
Corner
This section will continue until it becomes unneeded.
COVID-19 knocks down scoring skills in footballers,
study shows
March 19, 2024
A new Scientific
Reports study assesses the
impact of the coronavirus disease 2019 (COVID-19) on several indicators of
match technical performance (MTP) in attacking footballers after recovering
from the infection.
Background
Knowledge
about the impact of COVID-19 on individual players' performance can be used to
develop match preparation strategies and specific training. In addition to training,
assessing the role of injuries is also essential while investigating the impact
of the pandemic on player performance.
Mental fatigue
following recovery from COVID-19 could also impact player performance. In fact,
several players who have recovered from COVID-19 reported significant
psychological distress, which could demand more cognitive activity, thereby
leading to more mental fatigue.
Aside from
training, injuries, and mental fatigue, the most important factor for the
outcome of a match is the player's physical performance. COVID-19
lockdowns have been shown to negatively affect the physical performance of
footballers in terms of their high-intensity running distance, including
average peak velocity and sprinting distance. However, few studies have
analyzed player performance in real sporting environments.
The current
study determined whether footballers who returned to play after recovering from
COVID-19 exhibited any changes across indicators of MTP relative to their pre-infection
levels. As MTP varies by playing position, the analysis was restricted to
attacking players.
Data on 100
players from the top five leagues were obtained. A total of 28 MTP indicators
were studied, some of which included passes completed, take-ons attempted,
touches in the attacking penalty area, expected assisted goals, and goals,
including penalty kicks.
A series of independent t-tests were conducted to measure the
difference in player ability before and after COVID-19. Regression analyses
were also conducted to study the potential effects of age.
About 76% of players who contracted COVID-19 exhibited
significant alterations in at least one MTP indicator after returning to
playing. Attacking players who recovered from the disease exhibited notable
alterations in 14 MTP indicators, including non-penalty expected goals and
expected goals, including penalty kicks. These indicators were part of the
possession, passing, and scoring categories.
More
COVID-19 knocks down scoring skills in footballers,
study shows (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.
Today, EV news. Has Tesla, like Boeing, lost its way?
The Hertz car rental horror show.
Are EVs crumbling GB’s roads?
Tesla’s Troubles Raise Questions
About Its Invincibility
Elon Musk appeared to be in a defiant mood Wednesday when
he stood before employees at Tesla’s factory near Berlin a week after an
arsonist set fire to a high-voltage power pylon and brought
production to a standstill.
“They
can’t stop us,” Mr. Musk, the company’s chief executive, told workers in a
giant tent beside the plant.
But there are proliferating signs that Tesla may not be
as unstoppable as it once seemed. The company’s car sales are no longer growing
at a torrid pace. Chinese automakers and established brands like BMW and Volkswagen are flooding the market with electric cars. And
Tesla has been slow to respond with new models.
Mr.
Musk’s many outside ventures, and his penchant for making polarizing political
statements and attacking people he disagrees with, have raised questions about
how focused he remains on managing Tesla. Wall Street is increasingly concerned
about the company: Tesla’s share price has lost one-third of its value this
year even as major stock indexes have hit record highs.
“A
bet on Tesla has always been a bet on Mr. Musk,” said Eric Talley, a professor
at Columbia Law School who focuses on corporate law, governance and finance.
In an interview with the former television anchor Don
Lemon that streamed online on
Monday, Mr. Musk brushed off the drop in the company’s share price as part of
the cycle.
“The
stocks go up and down, but what really matters is are we making and delivering
great products,” Mr. Musk said.
The weeklong production stop at Tesla’s factory in
Grünheide, its second this year, was only a temporary setback. But the
decline in the share price indicates that investors are reassessing Tesla’s
long-term prospects and are no longer certain that the company — still worth
more than any other carmaker — will one day dominate the industry.
More
Tesla’s Troubles Raise Questions About Its
Invincibility – DNyuz
Hertz
CEO out following electric car ‘horror show’
Updated 2:48 PM EDT, Mon
March 18, 2024
Trouble
and turmoil continue at rental car company Hertz.
The
company, which announced in January it was selling 20,000 of the electric
vehicles in its fleet, or about a third of the EVs it owned, is now replacing
the CEO who helped build up that fleet, giving it the company’s fifth boss in
just four years.
The
company announced that Stephen Scherr, who came to the company two years ago
after nearly 30 years at Goldman Sachs, is stepping down at the end of this
month. He’ll be replaced by Gil West, former chief operating officer
of Delta Air Lines and General Motors’ Cruise unit.
In
the most recent quarter, Hertz took a $245 million hit to its earnings due to a
drop in value of the EVs it was selling.
While
the number of EVs bought by American customers surged 40% last year to top 1 million for the first time, there was less demand
than some of the traditional automakers had expected as they moved to offer
EVs. Tesla, the leader in US EV sales, started a price war for EVs just over a
year ago, driving down the value of both new and used EVs, such as those in
Hertz’ fleet. And the drop in prices hit Hertz bottom line since it reduced the
money it could expect to get from reselling the vehicles.
But
the problem for Hertz wasn’t necessarily that the cars were electric, and
customers simply do not want to drive electric cars. The problem was how Hertz
handled the fleet in general, according to industry analysts.
“The
execution and marketing of EV’s [by Hertz] was a horror show across the board,”
said Daniel Ives, an analyst with Wedbush Securities who follows the EV market.
“It’s a black eye they couldn’t recover from.”
Part
of the problem for Hertz was that even people who might want to buy an EV
wouldn’t necessarily want to rent one while on the road, when they don’t
necessarily have the ability to plug them in to charge them as they would at a
private home. There might not be a charging station, or enough time, for a
rental car customer to charge an EV, Ives said.
More
Hertz CEO out following electric car ‘horror show’ |
CNN Business
Heavier electric cars are blamed for the £16 billion cost of Britain's
pothole plague as crumbling roads reach 'breaking point'
Over 107,000 miles of local roads risk crumbling if not
re-built within 15 years
Heavier electric
vehicles and larger cars are helping push Britain's crumbling roads to
'breaking point'.
The pothole
backlog repair bill now stands at a record £16 billion, as compensation claims
soar.
The warning comes
in a report which highlights how changing driving habits are putting increased
pressure on local roads across England and Wales.
It found the
pothole repair bill has surged by £2 billion (16 per cent) on last year, with
one in every ten miles of local roads now having surfaces in a 'poor'
condition. This equates to around 22,300 miles.
But even more
worrying, over 107,000 miles of local roads – 53 per cent – have deeper
structural problems and risk crumbling completely if not re-built within 15
years.
More
Finally,
our latest new section, the world global debt clock. Nations debts to GDP
compared.
World Debt Clocks
(usdebtclock.org)
Economists have much to be humble about.
Paul Samuelson.
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