Baltic
Dry Index. 1685 +01 Brent Crude 87.86
Spot Gold 2285 US 2 Year Yield 5.04 +0.07
A Happy May Day holiday to
those celebrating today, (most of the world,) and a Happy almost May Day
holiday to those in the awkward squad, (UK and Ireland,) celebrating Mayday
May Day on Monday the 6th.
With most of the world on holiday today, those stock casinos open are in for a thinly traded, nervous trading day, awaiting the US central bank’s decision on interest rates and their forward guidance on the US economy, inflation, and the possibility and timing of any future interest rate cuts.
Interestingly/worryingly ahead of the Fed’s rate decision and guidance, US Treasury yields rose and the inverted yield curve flattened, gold sold off.
All in all, barring new wars, or other serious
developments, a good day to go golfing, fishing, visiting museums, national art
galleries, helping charities, or healthy walking in the spring or autumn
countryside, depending on location.
Australia and
Japan markets slip as Fed decision looms, most Asian markets closed
UPDATED WED, MAY 1 2024 12:12 AM EDT
Australian and Japanese markets fell Wednesday
as investors brace for the U.S. Federal Reserve’s rate decision, due early
Thursday in Asia.
Investors will also keep an eye on the yen, which saw a volatile start to the week amid suspected
intervention on Monday. The currency currently trades around the 157.7 level
against the greenback.
Most Asian markets are closed on Wednesday due
to the Labor Day holiday.
Japan’s Nikkei
225 inched down 0.1%, reversing
earlier losses, while the broad based Topix was down 0.29%.
The Australian S&P/ASX
200 lost 0.85%.
Overnight in the U.S., all three major indexes
fell after higher-than-expected wage data raised fresh inflation concerns ahead
of the Federal Reserve’s rate decision.
The Labor Department said Tuesday the employment
cost index, a measure of wages and benefits, rose 1.2% in
the first quarter, above the 1% consensus estimate from economists polled
by Dow Jones. Treasury yields jumped following the data, with the 2-year yield
topping 5%.
The
S&P 500 dropped 1.57%,
while The Dow Jones Industrial Average fell 1.49%. The Nasdaq
Composite shed 2.04% to 15,657.82.
Asia markets live updates: Labor Day holiday, Fed decision (cnbc.com)
Trade in Europe
expected to be thinner on public holiday but Fed rate decision looms
UPDATED WED, MAY 1 2024 12:31 AM EDT
Light
trading volumes are expected in Europe on Wednesday, with only London’s FTSE index
open, due to the May Day/Labor Day public holiday in the region.
Nonetheless,
global markets are focused on the U.S. Federal Reserve’s latest interest rate
announcement after the central bank’s monetary policy committee concludes a
two-day meeting later on Wednesday.
The latest
interest rate decision follows another hotter-than-expected
U.S. inflation reading last Friday. The central bank is widely
anticipated to keep the borrowing cost unchanged but investors
will closely monitor the post-announcement press conference with Chair Jerome
Powell for clues on when that stance might change.
S&P 500 futures slipped
Tuesday night as investors looked ahead to the Federal
Reserve’s rate policy decision. In the Asia-Pacific region overnight,
Australian and Japanese markets fell as investors braced for the Fed’s rate
decision. Most Asian
markets are also closed on Wednesday due to the Labor Day
holiday.
European markets live updates: Fed interest rate
decision and stocks (cnbc.com)
S&P 500
futures fall as Wall Street braces for Fed rate decision: Live updates
UPDATED WED, MAY 1 2024 7:31 PM EDT
S&P
500 futures slipped Tuesday night
as investors looked ahead to the Federal Reserve’s rate policy decision.
Futures linked to the broad market index slipped
0.2%, while Nasdaq 100 futures
dropped 0.4%. Dow Jones Industrial Average futures ticked lower by 8 points, or 0.02%.
In after-hours trading, Amazon advanced about 1% following better-than-expected earnings
and revenue in the first quarter. Chipmaker Advanced
Micro Devices tumbled more than 6%
after issuing an in-line revenue forecast for the current quarter, while Super
Micro Computer slid 9% as revenue
came in slightly below the Street’s consensus estimates.
During Tuesday’s main trading session, the Dow and S&P
500 both shed more than 1%. The
tech-heavy Nasdaq Composite declined
2%. Bond yields jumped after the first quarter’s employment cost index came
in higher than anticipated, reigniting worries that the Fed will keep interest rates high for
even longer.
The month ended on a sour note for all three
major averages, with the S&P 500 and the Nasdaq posting losses of more than
4% in April. The Dow fell 5% for its worst monthly performance since September
2022.
Traders are now looking toward the Fed’s
interest rate decision on Wednesday afternoon. The central bank is widely
expected to hold interest rates steady, according to fed funds futures pricing data. Wall Street will be looking for clues from Fed Chair
Jerome Powell on what needs to happen before rates can come down.
“The concern is that the Fed will definitely be
slower to lower interest rates,” said CFRA chief investment strategist Sam
Stovall. “They realize that inflation is remaining fairly sticky. I think they
want to just take more of a ‘wait and see’ approach, and wait for the inflation
numbers to start coming back down again.”
On the economic front, traders can expect the
job openings and labor turnover survey for March on Wednesday. ADP’s private
employment data for April — essentially a precursor to Friday’s big nonfarm
payrolls report — is also due.
Several notable earnings reports are also
scheduled for release Wednesday. Pfizer, Kraft Heinz and CVS Health are reporting their quarterly results before the
bell. Qualcomm and DoorDash will report in the
afternoon.
Stock market today: Live updates (cnbc.com)
Here’s everything
to expect when the Fed wraps up its meeting Wednesday
Faced with stubborn inflation that has raised
concerns about where policy is headed, the Federal Reserve has been ensnared in
a holding pattern that likely will be reflected when it closes its meeting
Wednesday.
Markets are
anticipating a near-zero chance that the Federal Open Market Committee, the
central bank’s policy-setting arm, will announce any change to interest rates.
That will keep the Fed’s key overnight borrowing rate in a range targeted
between 5.25%-5.5% for what could be months — or even longer.
Recent commentary from policymakers and on Wall
Street indicates there’s not much else the committee can do at this point.
“Pretty much
everybody on the FOMC is talking from the same script right now,” said Guy
LeBas, chief fixed income strategist at Janney Montgomery Scott. “With maybe
one or two exceptions, policymakers pretty universally agree that the last few
months of inflation data are too warm to justify action in the near term. But
they’re still hopeful that they will be in a position to cut rates later.”
The only piece of
news likely to come out of the meeting itself is an announcement that the Fed
soon will reduce the level at which it is running down the bond holdings on its
balance sheet before bringing an end to a process known as “quantitative tightening”
altogether.
Outside of that,
the focus will be on rates and the central bank’s unwillingness to budge for
now.
Lack of confidence
Officials from
Chair Jerome Powell on down through the regional Fed bank presidents have said
they don’t expect to start cutting rates until they are more confident that
inflation is headed in the right direction and back toward the 2% annual goal.
Powell surprised
markets two weeks ago with tough talk on how committed he and
his colleagues are to achieve that mandate.
“We’ve said at the
FOMC that we’ll need greater confidence that inflation is moving sustainably
towards 2% before [it will be] appropriate to ease policy,” he said at a
central bank conference. “The recent data have clearly not given us greater
confidence and instead indicate that it’s likely to take longer than expected
to achieve that confidence.”
Markets actually
have held up pretty well since Powell made those comments on April 16, though stocks
sold off Tuesday ahead of the meeting. The Dow Jones Industrial Average had
even gained 1% over that period with investors seemingly willing to live with
the prospect of a higher-for-longer rate climate.
More
Here's what to expect when the Fed wraps up its meeting Wednesday (cnbc.com)
In other news, better news from the
rump-EUSSR.
Euro zone
inflation steady at 2.4%, keeping June rate cut in play as economy returns to
growth
PUBLISHED TUE, APR 30 2024 5:06
AM EDT
Price rises in the euro area held steady at 2.4%
in April, while the economy returned to growth in the first quarter, according
to flash figures published Tuesday.
Headline inflation of 2.4% was in line with the
forecast of economists polled by Reuters. On a monthly basis, inflation was
0.6%.
It is the seventh straight month the headline rate
has been below 3%, despite a slight rebound in the
rate in December due to energy prices.
Core inflation, excluding energy, food, alcohol
and tobacco, dipped to 2.7% from 2.9% in March. The impact of a lower
year-on-year price of energy continued to moderate, coming in at -0.6% versus
-1.8% in March.
Price increases in services, a key watcher for the
European Central Bank, cooled to 3.7% from 4%.
Gross domestic product meanwhile rose by 0.3% over
the first three months of the year, slightly better than consensus economist
expectations. GDP for the fourth quarter of 2023 was
revised from no growth to a 0.1% contraction, which means that the euro zone
was in a technical recession in the second half of last year.
Market expectation is mounting for the ECB to
start cutting interest rates at its next monetary policy meeting on June 6.
Money market pricing currently indicates a nearly 70%
probability of a June trim, according to LSEG data, with even
higher bets on a cut in July or September.
A host of voting ECB members told CNBC earlier
this month that they are anticipating an interest rate reduction in June,
citing the need to prevent an excessive slowdown in the euro zone economy. They
also flagged risks from oil prices and volatility in the Middle East.
More
Euro zone inflation April 2024 and first-quarter GDP
(cnbc.com)
IMF chief
warns of emerging market risk with high U.S. interest rates
PUBLISHED TUE, APR 30 2024 3:59
AM EDT
Kristalina Georgieva,
the managing director of the International Monetary Fund, played down the
prospect of any negative impact from a monetary policy divergence between
Europe and the U.S., but said issues could be more acute in emerging markets.
The benchmark rates
of most advanced economies soared in recent years, as central banks aimed to
tame inflation following the Covid-19 pandemic. These banks are now looking to
bring rates back down as economies cool off, although signals in the U.S. suggest
that cuts might still be some months away.
A high U.S. interest
rate environment is traditionally bad news for emerging markets, as it makes
their debts — often priced in U.S. dollars — more expensive. It can also
trigger capital outflows, as investors opt for better returns in the U.S., and
can cause much tighter financial conditions.
“It is a much more
serious issue for countries where the impact of high interest rates in the
United States are more profound — in many emerging market economies,” Georgieva
told CNBC’s Silvia Amaro in Brussels on Monday.
“We also see some of
this in Japan, and there the attention of policymakers, indeed, has to be
sharpened to carefully monitor where the volatilities are becoming more
significant. In Europe, this is not the case.”
In the euro zone, she
said that “we are not too worried about the exchange rate impact,” adding that
the IMF’s analysis showed that the 50 basis points difference between the rates
of the U.S. Federal Reserve and those of the European Central bank “is likely
to lead to miniscule or 0.1 to 0.2% shift in the exchange rate.”
“And that is to say
that here [in Europe] this is not a big issue,” she said.
IMF chief warns of
emerging market risk with high U.S. interest rates (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.
Stagflation fears come back with a vengeance
April 30, 2024
Some Wall Street strategists
are growing concerned the U.S. economy could
be headed toward a 1970s-style stagflation scenario amid recent signs of
stubbornly high inflation and a cooling economy.
A string of inflation reports
during the first three months of 2024 all came in above estimates, fueling
fears that inflation could prove more difficult to conquer than previously
believed. On top of that, economic growth during the first quarter unexpectedly
faltered, rising at an annualized pace of just 1.6% – the slowest rate since
2022.
"This
was a worst of both worlds report: slower than expected growth, higher than
expected inflation," said David Donabedian, chief investment officer of
CIBC Private Wealth US, of the latest GDP data. "The biggest setback is
the acceleration in core inflation, and in particular, the services sector
rising above a 5% annual rate."
That combination of economic
stagnation and high inflation is what's known as "stagflation," which
is regarded as a worst-case outcome for the Federal Reserve.
The
phenomenon ravaged the U.S. economy in the 1970s and early 1980s as spiking oil
prices, rising unemployment and easy monetary policy pushed the consumer price
index as high as 14.8% in 1980, forcing Federal Reserve policymakers to raise interest
rates to nearly 20% that year.
More
Stagflation fears come back with a vengeance (msn.com)
FOMC
May Meeting: Stagflation, Presidential Election Could Put The Fed In A Bind
April 29, 2024
Stagflation
and the presidential election could put the Federal Reserve in a difficult
position at this week's Federal Open Market Operations Committee (FOMC)
meeting.
According
to various recent economic reports, the U.S. economy is presenting a mixed
picture, with both increased inflation and weaker economic growth. One example
is the CPI, which has accelerated for the second month in a row, with an annual
rate of 3.5% in March 2021, up from 3.2% in February. This reading is the
highest rate since September, indicating a rise in inflation.
Then there is the March Producer Price Index (PPI), which rose at an
annual rate of 2.1% in March 2024, up from 1.6% in February and 1% in January,
the most gain since April 2023.
And there's the PCE inflation, which rose 2.7% in March 2024 from 2.5%
in February. It's the highest reading in four months.
At the same time, economic growth has slowed significantly in the
last couple of quarters, with the first-quarter growth coming down. The Gross
Domestic Product (GDP) -- a measure of the nation's output during a calendar
year--expanded by an annualized 1.6% in the first quarter of 2024. It's down from 3.4% in the previous quarter, the second
consecutive slowdown since the contractions in the first half of 2022.
More
FOMC May Meeting: Stagflation, Presidential Election Could Put The Fed In A Bind | IBTimes
Covid-19 Corner
This section will continue until it becomes unneeded.
What to Know About
the 'FLiRT' Variants of COVID-19
Mon, 29 April 2024 at 7:46 pm BST
The COVID-19 lull in the U.S. may
soon come to an end, as a new family of SARS-CoV-2 variants—nicknamed “FLiRT”
variants—begins to spread nationwide.
These variants are distant Omicron relatives that spun out from JN.1, the variant behind the surge in cases this past winter. They’ve been dubbed “FLiRT” variants based on the
technical names for their mutations, one of which includes the letters “F” and
“L,” and another of which includes the letters “R” and “T.”
Within the FLiRT family, one
variant in particular has risen to prominence: KP.2, which accounted for about
25% of new sequenced cases during the two weeks ending Apr. 27, according to data from the U.S. Centers for Disease Control and
Prevention (CDC). Other FLiRT variants, including KP.1.1, have not become as
widespread in the U.S. yet.
Researchers are still learning
about the FLiRT variants, and many questions remain about how quickly they’ll
spread, whether they’ll cause disease that’s more or less severe than what
we’ve seen previously, and how well vaccines will stand up to them. Here’s what
we know so far.
Despite KP.2's rise in the U.S.,
it’s too soon to tell whether the FLiRT family will be responsible for a major
surge in cases, says Dr. Eric Topol, executive vice president at Scripps
Research, who wrote about the FLiRT variants in a recent edition of his newsletter. For now, the amount of SARS-CoV-2 virus in U.S.
wastewater remains “minimal,” according to the CDC, and hospitalizations and deaths have also continued to
decline steadily since their recent peaks in January. At the global level, case counts rose from early to mid-April, but remain
far lower than they were a few months ago.
KP.2 and its relatives will
likely cause an uptick in cases, but “my hunch is it won’t be a big wave,”
Topol says. “It might be a ‘wavelet.’” That’s because people who were recently
infected by the JN.1 variant seem to have some protection against reinfection,
Topol says, and the virus hasn’t mutated enough to become wildly different from
previous strains. A recent study from researchers in Japan, which was posted online
before being peer-reviewed, also found that KP.2 is less infectious than JN.1.
More
What
to Know About the 'FLiRT' Variants of COVID-19 (yahoo.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.
Traveller community objects to major battery energy
storage system next their homes
April
29, 2024
A traveller community has urged Wakefield Council to reject plans to
build one of the UK’s largest battery energy storage plants next to their
homes.
Wakefield and
District Travellers Association say it would be like living next to a “ticking
time bomb” if the scheme at Heath Common is approved. Harmony Energy want to
build the battery energy storage system (BESS) on farmland next to the
traveller site.
If approved,
72 containers storing lithium ion batteries could be installed on greenbelt
farmland. Fire chiefs have raised concerns for public safety if there was an
explosion at the site. Concerns around fire safety stems from the lithium
within the batteries, which can cause an explosion when it overheats.
In
September 2020, a fire at a BESS site in Liverpool took 59 hours to extinguish.
Harmony Energy said it has an “impeccable” safety record and has operated 14
sites across the UK with[out?] an incident. Letters from 35 families based at
the Heath Common site have been handed to the council.
The site was
established in 1961 and is one of the oldest traveller sites in West Yorkshire.
Annemarie
Nicholson, who represents Wakefield and District Travellers Association, said:
“If this plan goes ahead, this will be a ticking time bomb for all the
residents living here. The thought of this proposed plan is having a huge
impact on people’s mental health.
“Everyone we
spoke to was worried about their health and safety if the batteries catch fire,
which happened in Liverpool and at a number of locations around the world, and
worried about living with the constant noise from the site and the impact it
will have on their day-to-day lives.”
Last year,
West Yorkshire Fire and Rescue Authority said up to 5.5m litres of water could
be needed if there was an explosion at the site. The authority also warned of
other potential public dangers including contamination of the local water
supply.
More
Traveller community objects to major battery energy
storage system next their homes (msn.com)
Kilwinning: Drone footage reveals extent of battery
plant fire
10th
April 2024
New drone footage has revealed the
extent of devastation of the fire at a battery recycling centre in Kilwinning.
Local, Tommy Morrison, filmed
the site from above, blackened and still smoking on Tuesday. The aerial
photographer lives 1.5 miles away from the site and recalled being woken by the
noise of explosions on Monday night.
“I could see,” he recalled, “the
flames and smoke-plume from my daughter's room. The noise woke me up, about
midnight and I moved my daughter into our bedroom away from the window just as
a precaution. I kept thinking about that awful Beirut ammonium nitrate
explosion.”
The Scottish Fire and Rescue Service
were, this morning, still urging residents to remain at home, two days
after a fire engulfed a battery recycling centre at Kilwinning.
At 6.45am on Wednesday, the Scottish
Fire and Rescue Service urged residents in the surrounding area to remain at
home with windows and doors shut following the fire at the Fenix battery
recycling centre.
More
Kilwinning: Drone footage reveals extent of battery
plant fire | The Herald (heraldscotland.com)
Next,
our latest new section, the world global debt clock. Nations debts to GDP
compared.
World Debt
Clocks (usdebtclock.org)
Finally, in
honour of Mayday May Day and
while we await the latest Gospel from Fed Chairman Powell and his Fedster gang,
a little light relief to help soothe the nerves and pass away the time.
The Drunkard and the Pig
By Anon.
It was early last December,
As near as I remember,
I was walking down the street in tipsy pride;
No one was I disturbing
As I lay down by the curbing,
And a pig came up and lay down by my side.
As I lay there in the gutter
Thinking thoughts I shall not utter,
A lady passing by was heard to say:
"You can tell a man who boozes
By the company he chooses " ;
And the pig got up and slowly walked away.
Keyboard
Concerto in F Major, Hob. XVIII:3: II. Largo
Keyboard Concerto in F Major, Hob. XVIII:3: II. Largo (youtube.com)
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