Baltic Dry Index. 1876+102 Brent Crude 83.29
Spot
Gold 2311 US 2 Year Yield 4.81 -0.06
The first rule of democracy is to distrust all leaders who begin to believe their own publicity.
Arthur M. Schlesinger, Jr.
In he stock casinos, it’s back to frontrunning the central bankster interest rate cuts again.
But in the real world, the food supply chain is increasingly under pressure around much of the globe.
From massive flooding in Brazil’s granary state of Rio Grande do Sul, to flooding in Texas. Water logged fields in much of northern, western Europe. To early troubles in Russia and India’s wheat crops.
Though it’s still too early to call, the big
story of 2024 might turn into a food price inflation story of food production
disruption, probably mostly down to the lingering global effects of the now
diminishing Pacific Ocean El Nino.
Asia stocks track
Wall Street gains as softer-than-expected U.S. jobs data fuels rate cut hopes
UPDATED MON, MAY 6 2024 11:48 PM EDT
Asia-Pacific
markets tracked Wall Street gains on Monday as a softer-than-expected U.S. jobs
report fueled hopes that the Federal Reserve could start cutting rates soon.
Investors,
meanwhile, awaited the Reserve Bank of Australia’s rate decision on Tuesday and
China’s April trade data on Thursday.
ING said in a
note last week that the RBA meeting was “worth watching closely,” adding that
recent inflation data from Australia showed growth in prices was starting to
accelerate.
However, the
analysts said Australia’s inflation data was better than they had expected, and
compared to the US, the country’s economy had slowed more with the labor market
softening substantially. As such, they forecast no change to the RBA’s rate of
4.35%.
On Monday,
composite purchasing managers’ index readings will be released by S&P
Global for Hong Kong, while service PMI readings will be out for mainland China
and India.
Japan and South
Korea’s markets are closed for a public holiday.
Australia’s S&P/ASX 200 rose
0.58%, on pace for a third straight day of gains.
Hong Kong’s Hang Seng index was
flat, while mainland China’s CSI 300 rose 1.30% as traders returned from Labor
Day holiday.
On Friday in the U.S., stocks jumped sharply
after a softer-than-expected
April jobs report.
Friday’s nonfarm payrolls report
showed 175,000
jobs were added in April, below the 240,000 jobs expected by
economists surveyed by Dow Jones.
The unemployment rate edged up to
3.9%, versus 3.8% in the prior month, according to the Bureau of Labor
Statistics. Wage figures also came in less than expected, an encouraging sign
for inflation.
The S&P 500 surged
1.26% to notch its best day since February, while the Nasdaq Composite rallied
1.99%. The Dow Jones
Industrial Average gained
1.18%.
Asia
markets live updates: RBA meeting, China trade (cnbc.com)
Stock futures
inch higher after weaker-than-expected jobs report left investors looking up:
Live updates
UPDATED MON, MAY 6 2024 12:44 AM EDT
U.S. stock
futures ticked up Monday after the major averages ended the previous week in
the green on a weaker-than-expected
jobs report, which revived hopes of the Federal Reserve cutting
interest rates soon.
Dow
Jones Industrial Average futures rose
30 points, or around 0.1%. S&P 500
futures were
0.1% higher and Nasdaq-100 futures were
flat.
Last week, the Dow and Nasdaq
gained 1.1% and 1.4% each, while the S&P 500 gained 0.5%. The broad market
index and the Dow rose to their best days since late February and March,
respectively. Fresh nonfarm payrolls data on Friday showed the U.S. economy
added fewer-than-expected jobs in April and an increase in unemployment, easing
fears of an overheating economy. Traders became enthusiastic that the Fed could
start lowering rates sooner this year.
“It feels a little early to
declare that the U.S. economy has made a soft landing since the Fed still is
holding interest rates at restrictive levels. But the April jobs report helps
clear a path to that destination,” said Comerica Bank chief economist Bill
Adams.
Warren Buffett’s Berkshire Hathaway held
its annual
shareholder meeting Saturday, during which it announced it reduced its
stake in Apple by
13%.
While the peak of the
first-quarter earnings season has passed, investors are still watching key
companies set to report this week, including Dow member Disney on
Tuesday and Uber on
Wednesday.
“Earnings beats have rebounded in
Q1, helped by margins,” Barclays’ Emmanuel Cau wrote in a Friday note. “While
misses got punished, overall earnings resilience has likely
limited the downside for equities.”
On the economic front, Richmond
Fed president Tom Barkin and New York Fed president John Williams are both
scheduled to speak on Monday.
In other news.
Goldman
sees potential for gold prices surging above $3000 amid geopolitical risks
May 3, 2024
2024 has seen
gold prices surge to new record levels, with the yellow metal exceeding $2,400
an ounce last month due to increased global demand amid economic and
geopolitical uncertainties.
Remarkably,
strategists at Goldman Sachs (NYSE:GS) believe there’s even more upside room
for the safe-haven metal, saying it could potentially exceed $3,000 by year’s
end.
One of the
primary drivers of this price rally is the strong demand for gold from global
central banks and Asian households.
In China,
economic recovery challenges post-pandemic and a depreciating yuan, which has
lost about 5% against the US dollar over the past year, make gold even more costly
for local consumers.
Despite this,
both Chinese consumers and the People's Bank of China (PBOC) continue to pursue
gold avidly.
The PBOC has
increased its gold reserves for 17 consecutive months, with a 16% rise in its
gold holdings during this period, as reported by the World Gold Council. In
March alone, the PBOC added 160,000 ounces of gold to its reserves.
Similarly,
countries like Turkey, India, Kazakhstan, and some in Eastern Europe have been
active gold buyers this year.
This
accumulation reflects a broader trend among global central banks to diversify
their reserves and lessen their dependence on the US dollar.
Gold prices
witnessed a proper pullback at the end of April, but the bullish sentiment
returned this week after Federal Reserve policymakers hinted that rate cuts
could be on the horizon.
At its latest
policy meeting on Wednesday, the Fed maintained its interest rate stance, as
widely anticipated. The policy statement continued to echo previous economic
assessments and guidance, suggesting conditions that could lead to a reduction
in borrowing costs.
Fed Chair
Jerome Powell stated that any future rate decisions would be data-driven, but
he noted that a rate hike was unlikely at this point.
This
reassurance from Powell, effectively ruling out further rate hikes, contributed
to gold prices staying above $2,300. Lower interest rates further increase
gold's appeal as they typically reduce yields on fixed-income assets like
bonds.
Meanwhile,
geopolitical tensions, particularly in the Middle East, have also boosted
investor interest in the bullion. Gold is considered one of the oldest
safe-haven assets, witnessing strong demand during times of geopolitical unrest
and wars.
----
Using their model, which incorporates previous estimates of gold supply and
demand elasticity, Goldman strategists also see potential for even higher gold
prices under certain conditions.
Specifically,
they predict that if US financial sanctions intensify at a pace similar to that
since 2021, gold prices could climb an additional 16% to $3,130 per troy ounce
“on the back of additional central bank buying of 7Mtoz annually,” they wrote.
More
Goldman sees potential for gold prices surging above
$3000 amid geopolitical risks (msn.com)
Death toll from
southern Brazil rainfall rises to 78, many still missing
The death toll from heavy
rains that have caused flooding in Brazil’s southern state of
Rio Grande do Sul has risen to at least 78, local authorities said on
Sunday, with more than 115,000 people displaced.
President Luiz Inacio
Lula da Silva arrived in Rio Grande do Sul on Sunday morning with most members
of his cabinet to discuss rescue and reconstruction efforts with local
authorities.
“Bureaucracy will not
stand in our way, stopping us from recovering the state’s greatness,”
Lula said at a press conference.
“It is a war
scenario, and will need post-war measures,” state governor Eduardo Leite added.
----The death toll could still substantially
increase as 105 people were reported missing on Sunday,
up from about 70 the prior day, according to the state civil defense
authority. It also said it was investigating whether another four deaths
were related to the storms.
Flooding from storms
in the past few days has affected more than two thirds of the nearly 500 cities
in the state, which borders Uruguay and Argentina, leaving more than 115,000
people displaced, according to authorities.
Floods have destroyed
roads and bridges in several cities. The rains also triggered landslides and
the partial collapse of a dam at a small hydroelectric power plant.
More than 400,000
people were without power on Sunday evening, while nearly a third of the
state’s population was without water, authorities said.
More
Death
toll from southern Brazil rainfall rises to 78, many still missing (cnbc.com)
Cooler May could
rescue Russian wheat crop after record-hot April
By Karen Braun May 3, 2024 9:05 AM GMT+1
NAPERVILLE, Illinois, May 2 (Reuters) - Global
wheat prices earlier this week retreated from multi-month highs as Russia’s
parched crop was finally due for some rain, but those rains were somewhat
dismal and the forecast is dry again, threatening to curb the top exporter’s
harvest.
Average-to-cool temperatures are expected for
southern Russia in the first half of May following record April warmth, and the
cooldown could be key in avoiding significant crop losses amid an unusually dry
spring.
Southern Russia, which grows more than 30% of the
country’s annual wheat crop, experienced its driest April in a decade as
precipitation amounted to just a quarter of the month’s normal. Temperatures
were likely record for April, nearly 10 degrees Fahrenheit (5.4 degrees
Celsius) above average.
---- Crop losses in Russia could be a boon for other global wheat suppliers, though alarms are not yet sounding as Russia has recently been exporting record volumes. Russia has doubled its wheat crop over the last 20 years and is now responsible for a fifth or more of all wheat exports.
Years ago, Russian wheat production had an
unpredictable reputation due to volatile yield swings, though results have been
steadier and higher in recent years. It has been a while since Russia had a
wheat disaster, but the 2021 harvest came in about 10 million tons (12%) below
initial expectations on unfavorable weather.
That eased exportable Russian supplies in the
2021-22 season, though other exporters picked up some of that slack, especially
as prices surged following the Ukraine invasion. India, an on-and-off exporter,
shipped a huge record of 8 million tons that year.
India’s wheat stocks are now at a 16-year low, and
the country may be forced to import wheat for the first time since 2017. India
imported 6 million tons of wheat in 2016-17 and about 1.2 million in 2017-18.
Australia, which exports most of its crop, had a
record wheat harvest in 2021-22 and was the No. 2 exporter behind Russia.
Australia’s wheat output heavily depends on global weather patterns, and the
recent El Nino is not ideal.
Australia’s recently harvested 2023-24 crop was
about a third smaller than in the prior year, and exports are set to fall a
similar degree, by more than 11 million tons. Major exporter France is also
facing issues with its crop, and the European Union’s upcoming wheat harvest
could be a four-year low.
More
Cooler May could rescue Russian wheat crop after record-hot April | Reuters
Finally in UK news, nothing good.
Water giants drowning in a sea of debt borrowing even
more than we thought!
May 4, 2024
Water companies are drowning in a sea
of debt far greater than official figures suggest because of the way the
regulator calculates their finances, the Mail on Sunday can reveal.
Experts say Ofwat's measure masks the
scale of the problems they face.
Thames Water, whose parent company is
on the brink of going bust, has what looks like a relatively low level of debt
– 80 per cent – compared with its overall funding.
But using traditional accounting
methods its debt level would be more than 1,000 per cent, according to academic
David Hall at the University of Greenwich.
The sheer amount of borrowing already
threatens to engulf Thames, the UK's largest supplier, which is scrambling to
agree a fresh rescue plan.
A senior executive at the company
admitted this weekend it is 'not investible'.
Cathryn Ross, who served as a
temporary chief executive and has also run Ofwat, warned that other companies
are likely to run into financial problems.
They have racked up more than £60
billion in debt in the three decades since privatisation. They have also been
attacked for paying £78 billion in dividends to shareholders in that time –
nearly half the sum they have spent on maintaining and replacing the creaking
Victorian-era system of pipes and sewers. Critics say the payouts should have
been used to upgrade the network instead, as soaring levels of raw sewage have
spilled into rivers and seas.
Thames Water's parent company
defaulted on its debts last month after shareholders refused to put more money
into the utility.
They too claimed it was
'uninvestible'. Experts say the way regulator Ofwat calculates debt levels
makes the borrowing look dramatically lower than it would under conventional
reckoning.
Hall – a visiting professor of the
Public Services International Research Unit at the University of Greenwich –
said that using standard methods of accounting, the debt levels for all ten
water and sewage monopolies would be almost 460 per cent, compared with the
Ofwat average of just 68 per cent. The regulator's methodology allows firms to
rack up debt to pay bigger dividends to shareholders, Hall added.
More
Water giants drowning in a sea of debt borrowing even more than we thought! (msn.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.
Why hundreds of
U.S. banks may be at risk of failure
PUBLISHED
WED, MAY 1 2024 10:06 AM EDT UPDATED WED, MAY 1 2024 11:53 AM EDT
Hundreds of small and regional banks across the
U.S. are feeling stressed.
“You could see some banks either fail or at least, you know, dip below their
minimum capital requirements,” Christopher Wolfe, managing director and head of
North American banks at Fitch Ratings, told CNBC.
Consulting firm Klaros Group analyzed about 4,000 U.S.
banks and found 282 banks face the
dual threat of commercial real estate loans and potential losses tied to higher
interest rates.
The majority of those banks are smaller lenders
with less than $10 billion in assets.
“Most of these banks aren’t insolvent or even
close to insolvent. They’re just stressed,” Brian Graham, co-founder and
partner at Klaros Group, told CNBC. “That means there’ll be fewer bank
failures. But it doesn’t mean that communities and customers don’t get hurt by
that stress.”
Graham noted that communities would likely be
affected in ways that are more subtle than closures or failures, but by the
banks choosing not to invest in such things as new branches, technological
innovations or new staff.
For individuals, the consequences of small bank
failures are more indirect.
“Directly, it’s no consequence if they’re below
the insured deposit limits, which are quite high now [at] $250,000,” Sheila
Bair, former chair of the U.S. Federal Deposit Insurance Corp., told CNBC.
If a failing bank is insured by the FDIC, all depositors will be paid “up to at least $250,000 per
depositor, per FDIC-insured bank, per ownership category.”
Watch
the video to
learn more about the risk of commercial real estate, the role of interest rates
on unrealized losses and what it may take to relieve stress on banks — from
regulation to mergers and acquisitions.
Why
hundreds of U.S. banks may be at risk of failure (cnbc.com)
Covid-19 Corner
This
section will continue until it becomes unneeded.
People With More COVID-19 Vaccine Doses More Likely to Contract
COVID-19: Study
Vaccinated
people were at higher risk of contracting COVID-19, researchers find.
5/3/2024 Updated: 5/3/2024
People who
received more than one dose of a COVID-19 vaccine were more likely to contract
COVID-19, according to a new study.
An analysis of
data from Cleveland Clinic employees found that people who received two or more
doses were at higher risk of COVID-19, Dr. Nabin Shrestha and his co-authors
reported.
The risk of
contracting COVID-19 was 1.5 times higher for those who received two doses,
1.95 times higher for those who received three doses, and 2.5 times higher for
those who received more than three doses, the researchers found. The higher
risk was compared to people who received zero or one dose of a vaccine.
Even after
adjusting for variables, the elevated risk remained.
“The exact reason for this finding is not
clear. It is possible that this may be related to the fact that vaccine-induced
immunity is weaker and less durable than natural immunity. So, although
somewhat protective in the short term, vaccination may increase risk of future
infection,” the researchers said in the paper, which was released as a preprint.
Dr. Robert
Malone, a vaccine researcher who was not involved in the paper, told The Epoch
Times that the paper served as “another acknowledgment that the products are
not effective or are at very low effectiveness and are contributing to negative
effectiveness [down the line].”
He noted that the researchers did not
study vaccine safety among the employee population. The COVID-19 vaccines can
cause a number of side effects, including fatal heart inflammation, according
to the literature and death records.
Earlier studies and data have also suggested that people with more
vaccine doses are more susceptible to COVID-19 infection, including previous papers from the Cleveland Clinic scientists and a study from Iceland.
More
People With More COVID-19 Vaccine Doses More Likely to
Contract COVID-19: Study | The Epoch Times
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.
New NI
Water Battery to Deliver for the Grid
May 2, 2024
The battery boasts a 5.6 MWh
(megawatt hour) total capacity which helps to store surplus energy generated
onsite from c.24,000 solar panels. The battery means that during periods of low
customer demand, NI Water can store this surplus renewable energy to use later
during peak times. The company can therefore power its operations at a lower
cost and keep water flowing.
The battery
also has flexibility to provide power back to the grid when required, to
help support grid stability and provide greater resilience in the network to
benefit NI society and economy. By generating its own renewable power, NI Water
will reduce its costs and generate income from this installation.
Jo Aston,
Chair at NI Water, said: “NI Water’s Power of Water Report outlined practical
examples of how NI Water planned to play a pivotal role in decarbonising our
energy system. This Dunore Point project is just one of the many initiatives we
committed to in this Report. It is great to see tangible results on the ground
through the deployment of a state-of-the-art battery energy storage system.
“The large-scale battery will
provide greater resilience for both NI Water and the wider network across
Northern Ireland. It will store renewable energy generated onsite, avoiding
peak tariffs, and enable more capacity for renewables to be connected to the
grid. We will be able to provide electricity system services to the national
grid operator which in turn has the potential to generate income for NI Water
and help offset other costs.”
More
New NI Water Battery to Deliver for the Grid (msn.com)
Finally,
our latest new section, the world global debt clock. Nations debts to GDP
compared.
World Debt
Clocks (usdebtclock.org)
The farmer and manufacturer can no more live without profit than the labourer without wages.
David Ricardo.
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