Baltic
Dry Index. 1844 +65 Brent Crude 87.52
Spot
Gold 2376 US 2 Year Yield 4.93 +-.04
Murray Rothbard.
In the over-priced stock casinos, a pause, a rotation or the AI bubble top?
With March-April 2024 increasingly resembling June-July 1914 and a world stumbling into a disastrous World War, does it matter?
The answer, of course is it does matter and in spades. If the current insanity of American politics and lack of leadership in the Middle East plunges Asia Minor into a much wider war, possibly leading into World War Three, the outcome will be a very different global order and global economy.
With Citi group forecasting $3,000 gold by the end of the year, even those with modest savings need now to hold a little fully paid up physical gold and silver as a precaution.
Asia markets
climb across the board after S&P and Nasdaq fall for fourth straight day
UPDATED THU, APR 18 2024 10:39 PM EDT
Asia-Pacific
markets climbed across the board Thursday, in contrast with Wall Street’s
overnight losses which saw the S&P 500 and
the Nasdaq Composite fall
for a fourth straight day.
Tech stocks led markets lower as
artificial intelligence darling Nvidia fell
nearly 4%, joined by Netflix, Meta, Apple and Microsoft.
Tech was the worst-performing S&P 500 sector, falling 1.7%.
Investors are “trimming some of
the high fliers,” said Kevin Gordon, senior investment strategist at Charles
Schwab. “I think investors are really starting to catch on to the fact that
there are other parts of the market that are doing well.”
Investors in Asia will assess
Australia’s unemployment rate, which is one of the metrics the country’s
central bank weighs when considering monetary policy.
Australia’s S&P/ASX 200 climbed
0.54%, as the country’s unemployment rate inched up to 3.8% in March, less than
the 3.9% expected by Reuters.
South Korea’s Kospi rebounded
from Wednesday’s losses and led Asian markets, advancing 1.74%. The small-cap
Kosdaq gained 2.29%.
Japan’s Nikkei 225 reversed
earlier losses and rose 0.25%, on pace to snap three straight days of losses,
while the broad based Topix advanced 0.66%.
Hong Kong’s Hang Seng index climbed
0.75%, while the mainland Chinese CSI 300 traded up 0.2%.
On Wednesday in the U.S., all three major
indexes lost
ground, with the Dow Jones
Industrial Average recording
its seventh negative session in the last eight, along with the losses in the
other two major indexes.
The 30-stock Dow lost 0.12%,
while the S&P 500 shed 0.58% and the Nasdaq Composite tumbled 1.15%.
Asia
markets live updates: Tech losses, Australia unemployment (cnbc.com)
Stock
futures are little changed after S&P 500 posts a fourth losing day: Live
updates
UPDATED THU, APR 18 2024 7:27 PM EDT
Stock
futures traded near the flatline on Wednesday evening after the S&P 500 and
the Nasdaq Composite logged a fourth straight day of losses.
Futures tied
to the S&P 500 added 0.04%, while Nasdaq 100 futures gained
0.1%. Dow Jones
Industrial Average futures were
little changed.
In extended trading, credit
bureau Equifax declined
more than 9% on disappointing second-quarter guidance that missed Wall Street
estimates. Shares of Las Vegas Sands slipped
nearly 3% after first-quarter revenue narrowly beat analysts’ forecasts.
Tech stocks struggled on
Wednesday, with the S&P 500 and
the Nasdaq Composite registering
their fourth consecutive losing session. Nvidia pulled
both indexes lower, as the artificial intelligence play dropped nearly 4%. The
30-stock Dow fell
for its seventh session in eight.
Wednesday’s
market pullback adds to a more difficult second quarter on Wall
Street. All three major indexes are lower so far in April, in stark contrast to
the stronger-than-expected market performance seen in the first quarter. The
Dow, S&P 500 and the Nasdaq have also closed below their respective 50-day
moving averages.
“The initial support for the
S&P on that breakdown was 5000 or just below,” JPMorgan head of technical
strategy Jason Hunter said on “Closing
Bell” Wednesday. “Now the question is: Does a bounce develop from
there … and if it does, is it able to get back above the breakdown levels — the
50-day moving average, the area where it gapped down from?” He said he’s
watching the 5,150 to 5,200 level of the S&P 500 as key resistance.
On the economic front, initial
jobless claims data will be due on Thursday morning, and the existing home
sales report for March is also out.
Earnings season also heats up
with Alaska Air Group and KeyCorp reporting
results before the bell, followed by Netflix in
the afternoon.
Stock market today: Live updates (cnbc.com)
In
other news.
ECB June rate cut
looks increasingly likely — but there are ‘still some caveats,’ German central
bank chief says
European Central Bank
policymaker Joachim Nagel said Wednesday that a rate cut for the institution
looks increasingly likely for June, but added that certain parts of the
incoming inflation data still look higher than desired.
″Talking about the
June meeting, I think the probability is increasing that we will see a rate cut
in June but there are still some caveats,” the chief of Germany’s Bundesbank
told CNBC’s Karen Tso at the IMF Spring Meetings taking place in Washington, D.C.
″Core inflation is
still high, service inflation is high. For the June meeting we will get our
projections, so we will get our new forecasts and if there is a confirmation
that inflation is really going down and we will achieve our target in 2025, as
I said, the probability is becoming higher that this rate cut is here for the
June meeting,” Nagel said.
When asked about wage
price pressures still lingering in the euro area, he said that in Germany there
is still some wage momentum but that it was broadly still on a downward
trajectory. On energy prices, he said a recent uptick in oil prices — compared
with last year — was an “uncertainty” in what he described as a volatile
environment.
“I think we learned a
lesson in 2022, we are exposed to all this,” he said regarding a crisis in
Europe that was particularly acute for the industrial sector in his homeland.
“We are more
resilient than maybe we were two years ago. But nevertheless if oil prices,
energy prices, are going up this is not only something for Germany — this is
for all of us.”
More
ECB
June rate cut looks increasingly likely but still caveats: Joachim Nagel
(cnbc.com)
US wheat farmers face bleak crop economics as grain
oversupply hits
By Heather Schlitz April 17, 2024 2:34 PM GMT+1
April 17 (Reuters) - Profit
is growing further out of reach for U.S. wheat farmers and many do not expect
to break even in 2024 as ample global supply keeps prices around their lowest
in nearly four years at the same time costs including equipment and transport
remain high.
The current state of the U.S. wheat market will hit winter wheat
farmers in the Great Plains hard. They may lose money despite having what looks
to be their best crop for some time after three years of drought sapped yields
and forced farmers to abandon wheat.
U.S. wheat prices have plummeted as cheap supplies
from the Black Sea and Europe replenished global stocks of the staple grain,
and as plentiful corn harvests worldwide pressure the entire commodity grains
complex. U.S. winter wheat will be the first crop to be harvested in a year
when U.S. farm income is expected to plummet, signaling tough times ahead for
rural America.
Chris Tanner, a farmer in the top wheat growing
state of Kansas, said he would need to harvest 10 bushels more per acre than
last year in order to break even.
---- A Kansas State University analysis showed Kansas farmers would need a yield of roughly 60 bushels per acre at a price of $6.26 per bushel to break even, well above cash prices in the state that have ranged between $5 and $5.80 as well as July futures prices . Winter wheat is harvested in June and July in the Great Plains.
The London-based International Grains Council
forecasts a record global grain crop in the 2024-2025 marketing season,
reinforcing concerns about a global glut.
While the size of the U.S. winter wheat crop will
become clearer in coming weeks, particularly during an annual wheat tour in
May, the U.S. Department of Agriculture said on Monday that 55% of the crop is
in good-to-excellent condition, the highest for this time of year since 2020.
Scott Born, a wheat farmer
near Dallas, Texas, said he needs a price of at least $6 per bushel of wheat to
break even, a price that is also above the current cash price in his region.
The costs to transport and produce American wheat remain high
compared with Black Sea and European wheat, raising existential concerns about
the long-term competitiveness of U.S. exports.
The U.S. is the world's No. 5 wheat exporter, having lost market
share to top exporter Russia an other producers in recent years.
The global market is so competitive that American companies at
times have bought European wheat to take
advantage of low prices. The USDA estimates wheat imports in the current
marketing year at 18 million bushels, the highest in a decade.
More
US
wheat farmers face bleak crop economics as grain oversupply hits | Reuters
Dollar takes a
breather as investors ponder US rates outlook
By Reuters April 18, 2024 2:39 AM GMT+1
SINGAPORE, April 18 (Reuters) - The dollar was soft
on Thursday as traders assessed the U.S. interest rates outlook in the wake of
comments from Federal Reserve officials that cemented expectation of monetary
settings remaining restrictive for a while longer.
The dollar has been rising in recent weeks as a
slew of strong U.S. economic data and persistent inflation dashed expectation
of rate cuts in the near term. Simmering tension in the Middle East also added
to the dollar's safe-asset appeal.
Dollar strength has cast a
shadow across currency markets, keeping the yen rooted near 34-year lows and
leading to several warnings from Japanese authorities as traders fret about
possible intervention. Emerging-market currencies have also been under pressure.
The U.S., Japan and South Korea agreed to "consult
closely" on foreign exchange markets in their first trilateral finance
dialogue on Wednesday, in a nod to concern from Tokyo and Seoul over their
currencies' recent sharp declines.
On Thursday, the euro was a tad weaker at $1.0664,
having notched a 0.5% gain on Wednesday and lifting away from a five-month low
touched on Tuesday. Sterling was last at $1.2449, up 0.02% on the day.
The dollar index , which measures the U.S. currency
against six peers, was last at 105.97, inching away from the
five-and-a-half-month high of 106.51 hit on Tuesday as traders consolidated
positions. The index is up 4.5% this year.
Markets are pricing in 44 basis points of cuts from
the Fed this year, drastically lower than the 160 bps expected at the start of
the year, with September becoming the latest starting point of the easing
cycle, showed the CME FedWatch Tool.
Traders had earlier expected the Federal Open
Market Committee (FOMC) to start cutting rates in June but a string of data
including the consumer price index (CPI) and push-back from central bankers
have altered that expectation.
---- Fed Governor
Michelle Bowman on Wednesday said progress on slowing U.S. inflation may have
stalled, and it remains an open question whether rates are high enough to
ensure inflation returns to the Fed's 2% target.
"In our view it will take a run of lower CPI
readings for the FOMC to cut interest rates in September," said senior
economist Kristina Clifton at Commonwealth Bank of Australia.
More
Dollar
takes a breather as investors ponder US rates outlook | 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.
IMF Steps
Up Its Warning to US Over Spending and Ballooning Debt
Tue, Apr 16, 2024, 2:00 PM GMT+1
(Bloomberg) -- The International Monetary Fund
leveled an unusually direct criticism at US policymakers Tuesday, saying the
country’s recent standout performance among advanced economies was in part
driven by an unsustainable fiscal policy.
“The exceptional
recent performance of the United States is certainly impressive and a major
driver of global growth,” the IMF said in its annual World Economic Outlook.
“But it reflects strong demand factors as well, including a fiscal stance that
is out of line with long-term fiscal sustainability.”
Washington’s
overspending, the report said, risks reigniting inflation and undermining
long-term fiscal and financial stability around the world by ratcheting up
global funding costs.
“Something will
have to give,” the IMF warned.
US deficit spending
has been driven in recent years by Covid-related stimulus, aggressive
investments in infrastructure and clean energy, and exploding interest costs.
Debt held by the public is expected to reach $45.7 trillion, or 114% of GDP by
2033, up from 97% at the end of 2023, according to the Congressional Budget
Office.
Treasury Secretary
Janet Yellen has so far sought to downplay the growing worries. Debt
sustainability, she has said repeatedly, is best measured by the cost to
service debt as a percentage of GDP, adjusted for inflation. Real net interest
expenses will remain below 2% of GDP for the coming decade, according to White
House projections.
Yet that forecast
is vulnerable, Yellen has conceded, should interest rates remain elevated.
IMF Steps Up Its Warning to US Over Spending and Ballooning Debt (yahoo.com)
Debt-saturated markets may soon face a ‘Minsky’
moment
April 16, 2024
Markets are once again at a
possible inflection point – and a deeply negative one at that.
Last week’s sudden escalation in hostilities in
the Middle East, and the equally abrupt recalibration of interest rate
expectations that followed the release of worse than expected US inflation figures, may be the final straw.
In combination, they amount
to a potentially deadly cocktail with wide ranging implications for financial
markets made doubly vulnerable by asset price valuations that have been
stretched to breaking point and a global economy awash with debt.
Many of
the ingredients seem to be there for another Minsky moment, named after the US
economist Hyman Minsky – the point where markets and economies, overwhelmed by debt,
suddenly collapse.
Minsky’s abiding economic
insight is the idea that stability in financial markets breeds instability. The
longer things remain settled and predictable, the more oblivious to risk
financial markets become, until eventually the whole edifice comes tumbling
down.
You’d have thought that more
expensive money alone would be enough to force open the cracks and fragilities
in the system, but so far markets have taken it in their stride, riding the
tightening cycle relatively unscathed.
But for how much longer? For now,
complacency remains the order of the day.
Bizarrely, markets chose not
to react to the weekend’s events, but instead focused on the positive – efforts to prevent them from escalating into outright war. Any negative consequences ought
to be digestible, is the view, with policymakers standing in the wings to
address mishaps.
It’s part of a pattern where
every adversity is met with a shrug of the shoulders, and “oh well, it could
have been worse” insouciance. Even the oil price failed to react.
Even so, things look
poisonous enough; what hitherto had seemed a relatively contained, if horrific,
conflict now shows every sign of turning into a wider regional conflagration,
perilously drawing in Israel’s Western allies.
It’s possible – now that
“honour” has been satisfied – that things will settle back into the uneasy
standoff that presided before last weekend’s drone and missile attacks.
Neither Israel nor Iran have
any real interest in widening the conflict;
they don’t want outright war, and nor do Israel’s allies. Everyone is
scrambling to prevent it.
Yet the risk of matters spiralling out of
control is high.
More
Debt-saturated markets may soon face a ‘Minsky’ moment (msn.com)
Covid-19
Corner
This section will continue until it becomes unneeded.
No update today, normal service resumes tomorrow.
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.
World first energy storage unit demonstrates zero
degradation over 5 years
Paul Ridden April 15, 2024
China's
CATL – the world's largest EV battery producer – has launched TENER, which is
described as the "world's first mass-producible energy storage system with
zero degradation in the first five years of use."
As anyone
who uses a smartphone or drives an electric vehicle will know, the
lithium-based batteries at the heart of such technologies won't always operate
like new, they will lose some energy capacity over time – meaning more time
plugged in.
Though improvements in energy
density and charging
technologies should help eke more
time away from the charger, zero degradation is the ultimate goal. And that's
what China's CATL – the world's largest EV battery maker, ahead of LG, BYD,
Samsung and Panasonic – is promising its TENER (or Tianheng, depending where
you are in the world) development can achieve, for the first five years of use
anyway.
TENER is a bit like
Tesla's Megapack, in that it's a big battery pack housed within a metal
box that's designed to store energy from intermittent renewables such as solar
and wind. CATL has managed to house 6.25 MWh of L-series long-life Lithium Iron
Phosphate batteries within a 20-ft-equivalent container, for an energy density
of 430 Wh/L (for context, a Megapack's unit capacity is 3.9 MWh). This is
reported to translate into a 30% energy density increase per unit compared to
previous iterations, which should mean a smaller footprint for new multi-unit
installs or more juice for existing power stations.
The company says that the new
setup employs a "biomimetic" solid electrolyte interphase layer at
the electrode and "self-assembled electrolyte technologies" to enable
the movement of lithium ions without suffering degradation in power or
capacity, while effectively preventing thermal runaway. A TENER unit is reported to have a
charge/discharge cycle life exceeding 15,000, and is expected to have a 20-year
operational lifespan.
A platform to test the safety
of its energy storage systems across different power grid setups has been
developed, and will continuously monitor projects post-installation with the
help of AI. CATL also states that it's managed to significantly reduce failure
rates in cells deployed in the TENER system, and is wooing potential customers
with the promise of extended operation, lower operational costs and improved
returns on investment.
CATL is no
stranger to energy storage, having been involved with the Zhangbei wind/solar
energy storage facility from 2011, moving indoors in 2020 for Phase I of the
Jinjiang station and even landing in Texas for a huge liquid-cooled battery
storage project. Pricing has not been revealed for the TENER technology, but
the company clearly has its eyes on the world energy storage market.
World first energy storage unit demonstrates zero
degradation over 5 years (newatlas.com)
Finally,
our latest new section, the world global debt clock. Nations debts to GDP
compared.
World Debt
Clocks (usdebtclock.org)
The natural tendency of government, once in charge of money, is to inflate and to destroy the value of the currency.
Murray Rothbard.
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