Baltic Dry Index. 2350 -20 Brent Crude 85.28
Spot
Gold 2169 US
2 Year Yield 4.68 +0.07
There is no harm in being sometimes wrong - especially if one is promptly found out.
John Maynard Keynes.
The
US Producer Price Index came in at twice the estimated rate for February,
suggesting that perhaps the Fed’s soft landing victory declaration might have
been premature.
Well,
central banksters talking up their books and economists guessing wrong is
nothing new.
But
for most stocks flying in Never-Never Land territory it was a frightening shock
to the punters.
Look
away from the rising crude oil price and rising US Treasury yields now.
Dow closes more than 100 points lower, snaps
3-day win streak after hot inflation report: Live updates
UPDATED THU, MAR 14 2024 4:16 PM EDT
The Dow
Jones Industrial Average fell Thursday and snapped a 3-day win streak after the
release of hotter-than-expected U.S. inflation data sent Treasury yields
higher, while Nvidia shares
were under pressure.
The 30-stock
Dow pulled back 137.66 points, or 0.35%, to close at 38,905.66. The Nasdaq Composite fell
0.3% to 16,128.53, while the S&P 500 slipped
0.29% to finish the session at 5,150.48.
February’s producer price index,
a measure of wholesale inflation, advanced 0.6%
last month. Excluding food and energy prices, core PPI climbed 0.3% in
February. Economists polled by Dow Jones expected a 0.3% gain for headline PPI
and a 0.2% increase for the core reading. Stocks were initially resilient
following the report, but lost steam shortly after the open.
“The questions now are, will
traders rethink how soon the Fed will cuts rates, and will that slow down the
stock market rally in any meaningful way?” said Chris Larkin, managing director
of trading and investing at E-Trade from Morgan Stanley.
The hot inflation report sent
bond yields higher, with the benchmark 10-year Treasury adding about 10 basis
points to 4.29%. Shares of Nvidia were lower for the fourth session in five,
pulling back more than 3%.
“I think one question is, are
yields going to go higher still, and if they do, do we have more downside in
the market? I think the answer is yes to both,” said Thierry
Wizman, global FX and rates strategist at Macquarie.
The PPI report is the last major
piece of economic data to be released prior to the Federal Reserve’s upcoming
policy meeting, set for March 19-20.
More
Stock
market today: Live updates (cnbc.com)
Hong Kong leads losses in Asia after hot U.S.
inflation report; first estimates from Japan’s wage negotiations expected
UPDATED FRI, MAR 15 2024 1:15 AM EDT
Asia-Pacific
markets fell Friday after producer prices in the U.S. grew at a
faster than expected 0.6% in February.
Excluding food and energy prices,
core PPI climbed 0.3% in February. Economists polled by Dow Jones had expected
a 0.3% gain for headline PPI and a 0.2% increase for the core reading.
Hong Kong’s Hang Seng index plunged
2.12%, dragged by consumer cyclicals and tech stocks, while mainland China’s
CSI 300 fell 0.53%.
Meanwhile, the People’s Bank of
China kept its one-year medium term lending facility rate unchanged at 2.5%.
Investors in Asia will be
watching out for any news from Japan’s spring wage negotiations, with first
estimates expected to come out later in the day.
Japan’s Nikkei 225 fell
0.49%, while the Topix bucked the wider sell off and edged 0.2% higher.
This comes as the country’s
finance minister said that the country was “no longer in deflation,” a distinct
break from previous positions.
South Korea’s Kospi shed 1.65%,
while the small-cap Kosdaq dropped 1.29%.
In Australia, the S&P/ASX 200 fell
0.56%, closing at 7,670.3 to hit its lowest level in about two weeks.
Overnight in the U.S., all three major indexes
lost ground as the hot inflation report sent bond yields higher, with the
benchmark 10-year Treasury adding about 10 basis points to 4.29%.
This put pressure on equities,
with the 30-stock
Dow down 0.35%. The Nasdaq Composite fell
0.3%, while the S&P 500 slipped
0.29%.
Asia markets live
updates: U.S. PPI, Japan shunto , China MLF (cnbc.com)
Stock futures edge lower after strong inflation
data spooks investors: Live updates
UPDATED FRI, MAR 15 2024 1:42 AM EDT
Stock
futures edged lower Friday as investors analyzed the fresh batch of corporate
earnings and attempted to look beyond the latest inflation reading.
Futures tied to the Dow Jones
Industrial Average lost
40 points, trading 0.1% lower. S&P 500
futures fell
0.1% and Nasdaq 100 futures shed
0.4%.
In after-hours action on
Thursday, software provider Adobe dropped
nearly 11% on weak sales
guidance. Beauty stock Ulta slid
more than 6% after its full-year earnings forecast largely underwhelmed
analysts.
Those moves follow a losing
day on Wall Street. The Dow slipped
more than 100 points, or about 0.4%, to snap a three-day winning streak. The S&P 500 and Nasdaq each
fell around 0.3%.
Thursday’s retreat came after
February’s producer price index, a gauge of wholesaler inflation, advanced more
than economists anticipated. Bond yields climbed in
the session — with the benchmark 10-year Treasury’s
reaching 4.29% — as investors wondered if the recent economic data was too
strong for the Federal Reserve to loosen monetary policy.
To be sure, fed funds futures are
pricing in a 99% likelihood of the central bank keeping interest rates
unchanged at its policy meeting next week, according to the CME FedWatch Tool. But recent economic
releases could throw into question whether the Fed feels inflation has cooled
enough to begin lowering levels later this year, said Mark Luschini, chief
investment strategist at Janney Montgomery Scott.
“The path toward a 2% target rate
has, at least of recent, been anything but linear,” Luschini said. “I think
that’s enough just to … curb the enthusiasm, if you will, of market
participants.”
Luschini cautioned that a slide
like Thursday’s can also be considered normal after recent gains. Despite the
leg down, the Dow and S&P 500 are still tracking to end the week up around
0.5%, while the Nasdaq is on pace to add 0.3%. All three are also higher on the
year.
Investors will watch Friday
morning for economic data on topics such as consumer sentiment, import prices
and industrial production.
Stock
market today: Live updates (cnbc.com)
Markets May Be
Showing Signs of a Big Bubble
Markets
are showing the characteristics of a bubble, given the record-setting surge by
the technology sector’s so-called Magnificent Seven stocks and the all-time
highs in cryptocurrencies. This from Bank of America Chief Investment
Strategist Michael Hartnett, who laid out his case on Bloomberg TV. The
S&P 500 has reached record highs 17 times this year, with artificial
intelligence darling Nvidia soaring more than 80%. And Bitcoin hit an all-time high for the fourth time in six days this
week, bolstered by massive inflows into US exchange-traded funds tied to the
cryptocurrency. That’s a lot of froth. Still, markets were down on Thursday. Here’s the wrap.
Here
are today’s top stories
The
almost-daily trickle of
information that could influence the US Federal Reserve one way or the other as
to when it will start cutting rates continued today. Prices paid to US
producers rose in February by the most in six months, driven by higher fuel and food
costs, new data show. The producer price index for final demand increased 0.6%
from January, according to the Labor Department. The gauge rose 1.6% from a
year earlier, the largest annual advance since September. Consumer-price data
earlier this week showed underlying inflation exceeded forecasts for a second
month, also reaffirming expectations that the Fed will be in no rush to reduce
interest rates.
More
Bloomberg Evening Briefing: Markets May Be Showing Signs of a Big Bubble - Bloomberg
In
other news, what happens to the dollar reserve standard and all those trillions
of US debt, if global trade switches to other countries Central Bank Digital
Currency, or a BIS issued CBDC?
With US debt increasing by 1 trillion dollars every 100 days, today’s US debt of
34.5 trillion will exceed 52 trillion in less than 5 years. Little wonder practically
every nation, friend or foe, is looking for an escape route out of the Biden
weaponised US dollar. Well all except Argentina, which is looking to replace
the Peso with the US dollar, except Argentina doesn’t have any. Perhaps they can
borrow them from President Biden Joe Biden, or even ask China to print
up a few billion for them.
Countries closing in
on digital currencies but US lagging, study shows
By Marc Jones March 14, 2024 4:08
AM GMT
LONDON, March 14 (Reuters) -
A total of 134 countries representing 98% of the global economy are now
exploring digital versions of their currencies, with over half in advanced
development, pilot or launch stages, a closely-followed study on Thursday showed.
The research, opens new tab by the U.S.-based
Atlantic Council think tank highlighted that all G20 countries with the
exception of Argentina are now in one of those far-along phases although,
notably, the United States is falling increasingly behind.
While still inching forward on a banks only
"wholesale" digital dollar, one for the wider U.S. population now
looked "stalled" the report said, with Federal Reserve chief Jerome
Powell saying this month, "nothing like that is remotely close to
happening".
U.S. President Joe Biden ordered officials to look
into a digital dollar in 2022 but it has become a divisive political issue with
Biden's Republican rival in this year's U.S. election race, Donald Trump,
vowing not to allow it.
"The biggest headline
here is that the divergence between the world's largest central banks over
CBDCs (Central Bank Digital Currency) is growing," the Atlantic Council's
Josh Lipsky said pointing to how much further ahead China, Europe and Japan
were.
Supporters say digital currencies will allow new functionality
and provide an alternative to physical cash, which seems in terminal decline.
But they have also fuelled protests in
a number of countries over the potential for government snooping.
The risk of the U.S. lagging
behind was "a more fractured international payments system" Lipsky
added, saying Washington could also lose some of its global finance clout if
other countries press on and set the new standards around CBDCs.
Some 36 pilot projects are now underway including China's e-CNY
which is being trialled with 260 million people across 25 cities, and in Europe
where the European Central Bank (ECB) is six months into digital euro "preparation"
work.
More
Countries closing in on digital currencies but US
lagging, study shows | Reuters
Finally,
in commodities news, wheat cancellation is the only game around. Anti- West weaponisation,
a global glut, or more trouble in China’s economy? All three?
Exclusive: Chinese
buyers cancel or postpone Australian wheat buys amid global oversupply
By Naveen Thukral March 14, 2024 7:52 AM GMT
SINGAPORE, March 14 (Reuters) - Chinese wheat
importers have cancelled or postponed about one million metric tons of
Australian wheat imports, trade sources with direct knowledge of the deals
said, as growing world stockpiles drag down prices.
The moves come after the U.S. government reported
cancellation of more than 500,000 metric tons of U.S. wheat exports last week
to China, the world's No. 1 buyer, with international prices trading close to
three and a half year lows.
"Chinese buyers have cancelled some deals for
Australian wheat, and they are also moving the shipping time from the first
quarter to the second quarter, third quarter," said one Singapore-based
trader at an international trading company, which sells Australian wheat to
Asia.
Sources said the steep decline in prices is the
most likely reason for China's cancellation of Australian and U.S. cargoes,
with some citing oversupply in the country's domestic market following large
imports.
A second trader in Singapore said trading companies
have vacated shipping slots across several Australian ports, which were booked
for cargoes to be shipped to China. Both traders declined to be named because
of the sensitivity of the matter.
Benchmark Chicago wheat futures have dropped more
than 14% in 2024 to their lowest since August 2020, thanks to the ample world
supplies. The market was trading down 1.5% at 0708 GMT on Thursday.
Russia, the No. 1 exporter, is flooding the global
market with cheap wheat as it draws down inventories ahead of an expected
bumper harvest.
Refinitiv data shows benchmark Russian wheat export
prices slipped below $200 a metric ton ($5.44 per bushel) this week for the
first time since August 2020, marking the lowest early March price since 2017.
Russia is projected to export a record 51 million
metric tons of wheat in the crop year that ends on May 31, up from 47.5 million
a year ago, the U.S. Department of Agriculture (USDA) says.
More
Exclusive:
Chinese buyers cancel or postpone Australian wheat buys amid global oversupply
| Reuters
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.
Two
days after the US Fed’s bank bailout program, the BTFP, closed it looks like
the Fed just privatised US bank bailouts, according to the Financial Times.
Blank-cheque company aims to buy
failed US banks
Porticoes
Capital bets on further turmoil with approval to take over collapsed lenders
from FDIC
March
13, 2024
Blank-cheque
companies have raised money to buy businesses ranging from pilotless
helicopters to Donald Trump’s social media platform. A group of Wall Street
veterans is now setting its sights on a new target: failed banks.
Porticoes
Capital will seek to take over banks closed by the Federal Deposit Insurance
Corporation, the US regulator, according to an official filing. The firm’s
sponsors aim to attract hundreds of millions of dollars from investors.
The best-known blank-cheque groups are special purpose acquisition companies,
which list on stock markets with a goal of taking another business public
through a merger. Spacs exploded in popularity during the coronavirus pandemic
but have faded as many of their targets proved to be disappointments, and in
some instances frauds.
Porticoes
is similar to a Spac in that is not an operating company and would need to
complete an acquisition before opening for business. Unlike a Spac, the amount
it actually raises from investors will depend on the size of the bank it
eventually acquires.
The
bet on failed banks suggests Porticoes’ sponsors see more trouble ahead for the
sector a year after the failure of Silicon Valley Bank shook confidence in US
regional lenders.
Leading
the venture is Leslie Lieberman, an executive who got his start at former
investment bank Drexel Burnham Lambert, worked on mergers and acquisitions at
Kidder Peabody and bought banks in the wake of the 2008 financial crisis.
Joining
Lieberman as a board member is Tom Naratil, formerly one of the highest-ranking
US executives at Swiss bank UBS before he left in 2022. Also in the group is
Manuel Sánchez Rodriguez, a former top executive at Spanish bank BBVA and a
board member, since 2018, of the US government-backed mortgage insurance
company Fannie Mae.
The
FDIC takes over US lenders when they fail and brokers deals to sell what
remains. The agency typically likes to sell to other regulated banks so the
loans and customers of collapsed lenders remain under the eye of regulators.
The result has been that private equity firms and other outside investment
groups are largely locked out of the bidding
Porticoes
won approval late last year from the Office of the Comptroller of the Currency
to buy banks closed by the FDIC. Its so-called shelf charter is a workaround to
traditional curbs on private investors. Lieberman’s group was approved to run a
bank holding company once Porticoes actually buys a bank.
Some lawyers and former regulators think
others may follow suit.
Unlike a Spac, Porticoes is not looking to go public and instead plans to raise
money in a private offering. While typical Spacs tell investors in advance what
industries they are interested in but are not bound by those statements,
Porticoes only has permission to buy a failed bank.
As a result, more banks would need to fail for
Porticoes to be able to use money it has raised — and the list of potential
targets is slim.
Despite
the turmoil of early 2023, only five banks failed last year and all were resold
within weeks.
More
Blank-cheque company aims to buy failed US banks
(ft.com)
Japanese firms offer
biggest pay rise since 2013, largest industrial union says
By Tetsushi
Kajimoto March 14,
2024 6:38 AM GMT
TOKYO, March 14 (Reuters) -
Japan's largest industrial union said on Thursday the average pay rise offered
by 231 firms for both full-time and part-time employees was the biggest since
2013, amid signs wage hikes were broadening.
The announcement comes a day after Japan's big
manufacturers, led by bellwether Toyota Motor (7203.T), opens new tab and including
Panasonic (6752.T), opens new tab, Nippon Steel (5401.T), opens new tab and Nissan (7201.T), opens new tab, agreed to fully meet union
demands for pay hikes at this year's annual wage talks.
The UA Zensen, an umbrella group established in
2012 that represents 2,237 unions and 1.8 million workers, announced a weighted
average 5.9% wage increase this year for full-time workers and a 6.5% hike for
part-timers at the labour talks that wrapped up on Wednesday.
Strong wage growth is expected to stoke sustainable
and stable inflation, a prerequisite for an end to negative interest rates.
Speculation is growing the Bank of Japan may lift
negative rates at its March 18-19 policy-setting meeting next week.
More
Japanese firms offer biggest pay rise since 2013, largest industrial union says | Reuters
Covid-19 Corner
This section will continue until it becomes unneeded.
More
vitamin D good news.
Preventive Vitamin D
Supplementation and Risk for COVID-19 Infection: A Systematic Review and
Meta-Analysis
February 28, 2024
PMID: 38474807 PMCID: PMC10935157 DOI: 10.3390/nu16050679
Abstract
Over the past few
decades, vitamin D has been found to play a crucial role in bone homeostasis,
muscle function, oncogenesis, immune response and metabolism. In the context of
the COVID-19 pandemic, numerous researchers have tried to determine the role vitamin
D might play in the immune response to the virus.
The aim of this
systematic review and meta-analysis is to demonstrate that preventive vitamin D
supplementation can play a protective role in the incidence of COVID-19,
mortality and admission to intensive care units (ICUs).
A comprehensive search
on the PubMed/MEDLINE, Scopus, Cochrane and Google Scholar databases was
performed on 15 May 2023, and two of the authors independently screened the
literature. As effect measures, we calculated the Odds Ratios with their
corresponding 95% confidence intervals (ICs). The assessment of potential bias
and the evaluation of study quality will be conducted independently by two
researchers.
Sixteen publications
were selected for inclusion in the meta-analysis. Our findings indicate that
vitamin D supplementation has a protective effect against the incidence of
COVID-19 in RCT studies (OR 0.403, 95% IC 0.218, 0.747), in the incidence of
COVID-19 in analytical studies (OR = 0.592, 95% IC 0.476-0.736) and in ICU
admission (OR 0.317, 95% IC 0.147-0.680). Subsequent analyses were conducted by
type of subject treated (patient/healthcare workers) and type of
supplementation (vitamin D vs. placebo/no treatment or high dose vs. low dose).
Our meta-analysis
suggests a definitive and significant association between the protective role
of vitamin D and COVID-19 incidence and ICU admission.
Keywords: COVID-19; prevention; vitamin D.
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.
Flat 12-volt battery on electric cars
‘less likely than ICE’
By Gareth Roberts 14 March 2024
Electric
cars are less likely to suffer from a flat battery call-out than petrol or
diesel cars, according to new data from Start Rescue.
Plug-in
cars accounted for 23.7% of call-outs compared to 29.7% for petrol and diesel.
The
findings come in the wake of a warning to fleets over 12-volt batteries on electric vans suddenly draining.
The
Association of Fleet Professionals (AFP) says that fleets are reporting they
have experienced battery drain across a number of key electric vans. In some
cases, the battery died even when tethered to a charge point.
The
12-volt battery powers the same functions as petrol and diesel cars, such as
the dashboard which enables the vehicle to start, as well as lights and wipers.
Regular
use keeps the 12-volt battery in good condition and avoids breakdown call-outs
as electric vehicles (EVs) still need this system to open the doors and start.
Start
Rescue also found that EVs are 59% less likely to require a breakdown call-out
than ICE (internal combustion engine) vehicles.
“Our
figures show electric cars ranging from new to 10-years old are 59% less prone
to breakdowns than ICE cars,” said Lee Puffett, managing director of Start
Rescue.
“This
might surprise some motorists, but with more than a million EVs now on the UK’s
roads it shows drivers can choose an EV confident that they are less likely to
be stranded at the roadside.”
However,
he added: “You still need to look after the 12-volt battery to avoid one of the
most common causes of call-outs.”
Separate data from The AA shows that over the past year there
have been more 12v battery faults on
electric vans compared to diesel vans.
Flat
12-volt battery on electric cars ‘less likely than ICE’ (fleetnews.co.uk)
Finally, our
latest new section, the world global debt clock. Nations debts to GDP compared.
World Debt Clocks
(usdebtclock.org)
Another weekend and for most of the
northern hemisphere, a Spring weekend to enjoy.
The Antarctic Sea ice is expanding again. The Arctic Sea ice will soon
begin contracting. Have a great weekend everyone.
I know of only three people who really understand money. A professor at another university. One of my students. And a rather junior clerk at the Bank of England.
John Maynard Keynes.
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