Baltic
Dry Index. 1669 -42
Brent Crude 90.94
Spot Gold 2277 US 2 Year Yield 4.65 -0.03
Nobody spends somebody else's money as carefully as he spends his own.
Milton Friedman.
Stocks take the escalator up and the elevator down, goes the old Wall Street saying.
Less applicable today in our fiat money
printing world since 2008, with the USA increasing Federal debt by one trillion
dollars every hundred days, but if the US jobs report released later today come
in strong, many, if not most US stocks will be stepping into that elevator.
Asia
stocks stumble on risk-off mood; oil prices climb
By Rae Wee
April
5, 2024 3:37 AM GMT+1
SINGAPORE, April 5 (Reuters)
- Asian shares retreated on Friday as hawkish comments from some Federal
Reserve officials and escalating geopolitical tensions put a dent in risk
sentiment, while traders were also cautious ahead of U.S. jobs data due later in
the day.
The threat of supply disruptions owing to a prolonged conflict
in the Middle East kept Brent futures above $90 a barrel - a level not seen
since last October.
Israel had on Thursday braced for a possible retaliatory attack after its
suspected killing of Iranian generals in Damascus this week, and Prime Minister
Benjamin Netanyahu said the country would harm "whoever harms us or plans
to harm us".
In a later call with Netanyahu,
U.S. President Joe Biden threatened to
condition support for Israel's offensive in Gaza on it taking steps to protect
aid workers and civilians.
"There is a little bit of edginess in the air not helped by
a spike in oil prices amid an increase in Israel-Iran tensions," said
Rodrigo Catril, senior FX strategist at National Australia Bank.
"The risk of escalation in the Middle East conflict is
rising."
More
Asia
stocks stumble on risk-off mood; oil prices climb | Reuters
Japan’s
Nikkei leads losses in Asia as markets fear the Fed could hold off rate cuts;
oil soars
UPDATED FRI, APR 5 2024 11:30 PM EDT
Asia-Pacific
markets fell on Friday, led by Japan’s Nikkei 225,
mirroring moves on Wall Street after comments from U.S. Federal Reserve
officials fueled worries that the central bank could hold off on rate cuts.
Japan’s Nikkei 225 was
down 2.3% after briefly crossing the 40,000 mark on Thursday, while the broad
based Topix was 1.7% lower.
On Thursday, Minneapolis Fed
President Neel Kashkari cast doubts on Thursday over the central bank cutting
rates at all if inflation remained sticky.
Oil prices continued to rise,
with WTI crude surpassing
$86 a barrel to test six-month highs. Brent crude prices also set a new
six-month high of $90.65.
Japan’s household spending in
February fell much less-than-expected, down 0.5% year on year in real terms,
compared with Reuters’ expectations of a 3% fall.
Japan’s unions secured generous
pay hikes for workers in the “shunto” wage negotiations in March, which is
expected to fuel consumer spending.
S&P also released its
business activity numbers for Hong Kong, while the Reserve Bank of India will
announce its rate decision later in the day. A Reuters poll of economists
expects the RBI to hold its benchmark lending rate at 6.5%.
In Australia, the S&P/ASX 200 slipped
0.72% at the open after a 2.2% drop in exports for February.
South Korea’s Kospi fell
0.92%, reversing gains after leading major Asian benchmarks on Thursday, while
the small cap Kosdaq dropped 1.56%.
Hong Kong’s Hang Seng index,
returned from a public holiday up 0.4%, while mainland Chinese markets are
still shut.
Overnight in the U.S., all three major indexes lost
ground, with the Dow Jones
Industrial Average falling
1.35% to record its worst session since March 2023, and logging its fourth
consecutive losing day.
The S&P 500 dropped
1.23%, while the tech-heavy Nasdaq
Composite saw
the largest loss of 1.40%.
Asia
markets live updates: Fed interest rates cut, oil prices (cnbc.com)
Dow futures are
little changed after index notches worst day in more than a year, jobs report
looms: Live updates
UPDATED FRI, APR 5 2024 8:40 PM EDT
Futures tied to the Dow Jones Industrial Average sat
near flat Thursday night following the index’s worst session in over a year.
Investors also awaited key labor data due Friday morning.
Dow futures slipped 21 points, or
0.05%. S&P 500
futures and Nasdaq 100 futures flickered
near the flatline.
Those moves follow a selloff on
Wall Street during Thursday’s session. The Dow tumbled
about 530 points, or 1.35%, marking its biggest daily drop since March 2023 and
its fourth consecutive losing session.
The S&P 500 and Nasdaq Composite tumbled
1.23% and 1.4%, respectively. The three major averages swung into the red in
the afternoon as crude oil jumped and Minneapolis Federal Reserve President
Neel Kashkari questioned if interest rates should come down amid sticky
inflation.
The Dow has led the three major
indexes down this week, pacing for a loss of 3% and its worst weekly
performance since March 2023. The S&P 500 and Nasdaq have each slid around
2% through Thursday’s close. Those moves mark a retreat after the strong first
quarter concluded last week, leading some market participants to wonder if a
correction is warranted following big gains.
“Near term, equities are likely
subject to some consolidation following robust first-quarter returns,” said
Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. “A
modest pullback would be within the normal ebb and flow of an upward-trending
market.”
Investors will watch for the all-important
jobs data coming Friday morning. Economists polled by Dow Jones
anticipate nonfarm payrolls growing by 200,000 jobs and the unemployment rate
ticking down to 3.8% in March.
Average hourly wages, another
closely followed metric, are expected to rise by 0.3% on the month and 4.1%
from a year prior.
“The market remains highly
sensitive to any indication that the data-dependent Fed may need to curtail a
rate-easing cycle this year,” said Quincy Krosby, LPL Financial’s global chief
strategist, citing Kashkari’s Thursday comments. “Accordingly, the payroll
report will provide important inflation-related data particularly with regard
to the pace of wages.”
Stock
market today: Live updates (cnbc.com)
Maybe No Cuts are Coming This
Year After All
April 4, 2024 at 11:25 PM GMT+1
Perhaps the last thing impatient investors want to hear but music to the ears of savers, US Federal Reserve Bank of Minneapolis President Neel Kashkari said interest-rate cuts may not be needed this year if progress on lowering inflation stalls—especially if the economy remains robust.
He called the
January and February inflation readings “a little bit concerning,” and said he
needs to see more progress on prices to gain confidence that they’re moving
toward the Fed’s 2% target. “In March I had jotted down two rate cuts this year
if inflation continues to fall back towards our 2% target,” Kashkari said
Thursday. “If we continue to see inflation moving sideways, then that would
make me question whether we needed to do those rate cuts at all.”
More
Bloomberg Evening Briefing: Maybe No Cuts are Coming This Year After All - Bloomberg
In China news, KKR thinks the property correction
is only halfway through.
KKR says China’s
real estate correction may only be halfway done
PUBLISHED WED, APR 3 2024 8:00 PM
EDT
BEIJING — China’s
real estate troubles are likely far from over and industry problems need to be
addressed quickly if overall GDP growth is to pick up significantly, according
to a report released Thursday by global investment firm KKR.
That’s one of the two
key takeaways from a recent trip to China by the firm’s head of global and
macro asset allocation, Henry H. McVey. It was his fourth visit in just over a
year.
“A fundamentally
overbuilt real estate industry needs to be addressed — and quickly,” he said in
the report, which counts Changchun Hua, KKR’s chief economist for Greater
China, among the co-authors.
“Second, confidence
must be restored to drive savings back down,” McVey said, noting that would
spur consumers and businesses to spend on upgrading to higher quality products,
as Chinese authorities have promoted.
Real estate and
related sectors once accounted for about one fifth or more of China’s economy,
depending on the breadth of analysts’ calculations. The property industry has
slumped in the last few years after Beijing’s crackdown on developers’ high
reliance on debt for growth.
Based on comparisons
to housing corrections in the U.S., Japan and Spain, China’s “housing market
correction may be just halfway complete” in terms of its depth, the KKR report
said.
“Both price and
volume must come under pressure to finish the cleansing cycle,” the report
said. “To date, though, it has largely been a contraction in volume.”
While KKR’s report didn’t provide much detail on
expectations for specific real estate policy, the authors said more action by
Beijing to improve China’s real estate sector “could materially shift investor
perception.”
Amid geopolitical tensions, the country’s property
market slump and drop in stocks have
given many foreign institutional investors pause about China investing.
More
KKR says China's real estate correction may only be halfway done (cnbc.com)
Finally, some better news from the rump-EU.
Euro zone business
activity returned to growth in March, PMI shows
By Reuters April 4, 2024 9:15 AM
GMT+1
LONDON, April 4 (Reuters) - Euro zone business activity expanded last
month for the first time since May 2023 but the recovery was uneven with a
stronger than expected upturn in the bloc's dominant services industry
offsetting a deeper downturn in manufacturing, a survey showed.
HCOB's composite Purchasing Managers' Index (PMI) for the currency
union, compiled by S&P Global and seen as a good gauge of overall economic
health, climbed to 50.3 in March from February's 49.2, improving on a
preliminary 49.9 estimate.
That bounce moved the index back above the 50 mark separating growth
from contraction.
"Finally some good news again. The service sector in the euro zone
is gradually finding its footing, with activity stabilizing in February and
showing signs of moderate growth in March," said Cyrus de la Rubia, chief
economist at Hamburg Commercial Bank.
The services PMI jumped to 51.5 from 50.2, above the flash estimate of
51.1 and its highest reading since June.
That comes after a sister survey released
on Tuesday showed the downturn in manufacturing deepened
last month although it did show some tentative signs of recovery.
Demand
for services increased with the new business index moving above breakeven to
51.4 from 49.8.
"It's
particularly encouraging to note that new business has resumed growth after an
eight-month dry spell. This favourable trend is expected to persist, fuelled by
wage growth outpacing inflation, thus bolstering the purchasing power of
households," de la Rubia added.
More
Euro zone business activity returned to growth in March, PMI shows | 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.
UK
economy ahead of rivals as prospects for 2024 look rosy
THURSDAY 04 APRIL 2024 6:00
AM
The UK economy has
made a stronger start to the year than advanced economies around the globe,
according to a
closely watched survey.
The latest round of
purchasing managers’ index (PMI) surveys, released earlier in March, showed
that the UK outperformed other developed economies, including the US.
Although the PMI
dipped slightly compared to February’s reading of 53.0, it remained comfortably
in expansionary territory at 52.9. Anything above 50 indicates growth.
In fact revised
figures from the manufacturing sector published earlier this week suggest that
the UK performed
better than first estimated, with the ‘flash’
reading of 49.9 revised up to 50.3.
This meant the manufacturing sector
recorded growth for the first time since July 2022. Revised figures on the
services sector in both the UK and eurozone are due out tomorrow.
“For all the caution surrounding the
UK economy, its PMI is currently top of the developed economy league table,”
Simon French, head of research at Panmure Gordon said.
Ashley Webb, assistant economist at
Capital Economics, said “the PMI has been a surprisingly reliable predictor of
GDP over the past six to nine months,” suggesting it is compatible with GDP
rising by 0.2 per cent in the first quarter.
The UK’s strong start to the year has
been fuelled by falling inflation and hopes of lower interest rates. A strong
labour market has also kept wage growth high, meaning households have seen a
boost to their real income.
The euro area
meanwhile continues to struggle as the manufacturing
sector remains mired in a deep downturn.
Revised figures out
earlier this week showed a slight improvement, but still put the PMI index for
the manufacturing sector at 46.1.
Cyrus de la Rubia,
chief economist at Hamburg Commercial Bank, said: “The eurozone’s manufacturing
sector usually runs on several cylinders, mainly the Euro-4 countries of
Germany, France, Italy and Spain.”
“We currently have the
unusual situation that two cylinders, Germany and France, are more or less out
of action,” he continued.
UK economy ahead of rivals as prospects for 2024 look rosy (cityam.com)
Covid-19
Corner
This section will continue until it becomes unneeded.
COVID-sniffing dogs deployed in Alameda County
April
3, 2024
(KRON) — COVID-19 virus detecting dogs are being deployed
into some Alameda County health centers.
“Scarlett, a three-year-old
yellow labrador and medical detection dog, along with her canine coworker
Rizzo, were working their tails off and making friends recently at Park Bridge
Rehabilitation & Wellness,” Alameda Health System officials wrote.
The dynamic dog duo is part
of a pilot program for identifying cases within the county’s health
centers. The adorable dogs received warm reactions from clients and staff
members who were sniffed at Park Bridge Rehabilitation & Wellness.
----The yellow labs are trained to sniff
near an person’s feet, ankles, or lower leg. If they locate the COVID scent,
Scarlett and Rizzo will alert their handler by quickly sitting down.
Health officials said the yellow
labs’ noses can detect “volatile organic compounds associated with COVID-19.
Scarlett and Rizzo have undergone rigorous training with an average accuracy
detection rate of 94 percent, health officials said. The dogs can sniff-test
approximately 300 people in 30 minutes.
Park Bridge residents and staff
members were pre-screened to ensure they were not allergic to or afraid of
dogs. Scarlett and Rizzo are accompanied by humans who administer COVID-19
antigen tests if needed.
In 2021 EAC partnered with the
California Department of Public Health in a program to train and deploy COVID
detection dogs in Bay Area schools. The next phase will focus on vulnerable
populations in skilled nursing facilities.
The cost to train each dog is about
$50,000 and can take up to a year.
COVID-sniffing
dogs deployed in Alameda County (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.
What happens to old electric car batteries?
Inside the UK's EV battery recycling industry
We
pay a visit to Ecobat’s battery recycling facility in the West Midlands
30
Mar 2024
One of the most common issues brought up by those sceptical of electric
cars is what will happen to the battery packs once a car is destined
for the scrapheap. With EV
sales having shot up dramatically in recent years, and the Zero
Emission Vehicle (ZEV) mandate looming, it seems logical to assume
that in time we’ll have scores of old packs to deal with.
The thing is, car makers are responsible for the battery packs that go in
their vehicles right up until the end of their life, so it should come as no
surprise when a company like Renault announces its
intentions to recycle them as part of a “360-degree circular economy”.
Meanwhile others, like Honda,
have announced partnerships with specialist firms.
What you might not know is that most OEMs are already working with one
firm for end-of-life and second-life hybrid and EV battery work. That company
is Ecobat, which has a large recycling centre located right here in the UK, in
Darlaston, West Midlands. We were invited to take a look around to see what
happens at the facility.
A large part of Ecobat’s business concerns the
recycling of conventional batteries, such as lead-acid car batteries and
alkaline/zinc batteries from consumer electronics (if you’ve ever stopped to
wonder where your old AAs end up after you’ve posted them into supermarket
collection bins and the like, wonder no more). However, recycling old batteries
from hybrid and electric vehicles has become an increasingly large part of the
operation.
Ecobat buys the regular batteries en masse so it can recover and sell on
materials, but its relationship with EVs’ and hybrids’ batteries is very
different. A car manufacturer’s whole-life responsibility for its battery packs
means that, if a battery needs to be assessed and possibly recycled, Ecobat’s
services are engaged to find a solution.
“A lot of people think that recycling is something that happens at the end
of the battery’s
life,” explains Ecobat’s EU marketing director, Peter Coleman, adding, “But
we’ll get involved at any stage of that battery’s life, with the goal being to
achieve maximum life for a battery.”
Given that we’re still very much in the early stages of the electric
revolution, there isn’t a huge number of automotive lithium-ion batteries
reaching the end of their life. As a result, much of Ecobat’s work today
involves intervention somewhere in the middle of a battery’s life.
“What we are collecting is often accident-damaged, in
which case the manufacturers don’t want those going back into circulation, or
they are recalls,” explains Ecobat’s EU key accounts director, Tom Seward.
“Thirdly, it’s waste from R&D, preproduction and production, so again, they
don’t want those going back into reuse,” he adds.
“That’s where the bulk of our materials are coming from today, but we’re
all looking at the ‘hockey stick’ growth, and that’s where that transition will
come,” Seward says, alluding to the growth in end-of-life recycling of
electrified vehicle batteries.
Once Ecobat is involved in the process – for instance, through its
partnership with national vehicle-recycling company CarTakeBack – a battery
needs to get to the Darlaston facility in approved packaging. Some of the
batteries received here are potentially dangerous, which is why Ecobat has
special “critical boxes” to house and transport units designated as hazardous.
These steel boxes have thick, insulated walls, and
can fit batteries up to 144kWh in size. They’re designed to keep everything
contained should a battery experience thermal runaway – a dangerous feedback
loop that causes temperatures to shoot right up. Potentially problematic packs
are labelled as ‘hostile’ and go to an immediate ‘quarantine’ zone for up to
two weeks.
The quarantine enclosure is closely monitored by
thermal cameras (these are dotted around the whole facility), and a tent-like
roof is used to cover it – this will burn through quickly in the event of a
fire, allowing fire-fighting crews easy access to quell any flames.
More
Finally,
our latest new section, the world global debt clock. Nations debts to GDP
compared.
World Debt
Clocks (usdebtclock.org)
Another weekend and yet another
endless war weekend in Ukraine and the Gaza Ghetto. Did this week’s IDF “mistake”
in Gaza, killing seven international aid workers, finally open up the eyes of American
politicians to the reality of two useless and futile wars? Have a great weekend everyone.
Unlike the days of the gold standard, it is impossible for the Federal Reserve to go bankrupt; it holds the legal monopoly of counterfeiting (of creating money out of thin air) in the entire country.
Murray Rothbard.
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