Baltic
Dry Index. 1844 +27 Brent
Crude 83.98
Spot
Gold 2415 U S 2 Year Yield 4.83 +0.05
“Why, sometimes
I’ve believed as many as six impossible things before breakfast.”
The stock
casinos, with apologies to Lewis Carroll and Alice.
While many stock casinos are at or close to all time highs, everything I see in the alternate universe, aka the real economy, suggests to me a large part of consumers are spent out.
In brief, starting with China. "Real estate investment steepened its pace of decline, and was down 9.8% year-on-year for the first four months of 2024." But property in China is in year four of decline.
Today's LIR covers China's latest "historic" turn around plan announced yesterday. Great sounding words and intentions but no details on where the trillion dollars worth of Yuan is to come from. They are, according to the scant details out so far, putting up an additional 42 billion dollars worth of Yuan, but it’s just a drop in the bucket needed.
In the USA, UK, Germany and much of Europe, though not Norway, EVs are piling up unsold. No surprise there given their incendiary bomb risk of EVs, but now ICE new and used cars are starting to pile up too. Vehicle production is starting to be cutback. Workers are starting to be laid off, though not in Germany where no one can ever be laid off, simply pensioned off.
In my local area, two used car dealers have closed this year and while that's not necessarily relevant, I suspect that it is. Western man is motor man in good times and all but the worst of times. Most like me, a product of the 50s, 60s and 70s onwards, live "never run if you can walk, never walk if you can ride."
Then there are the UK and EU supermarket price wars, something that only happens when consumers are largely spent out of cash and credit, including buy now pay later debt traps.
I'll end with rising credit card, auto loan, and real estate delinquencies, never a sign of a thriving economy though often a sign of good times rolling over into hard times.
While a G-7 recession is unlikely in a US presidential election year, though not impossible, the next US President, whoever it is, has to start bringing down the rate that the USA is running up new debt. Roughly an unsustainable trillion dollars every hundred days. That’s about ten billion dollars a day. Trouble ahead in 2025.
Dow
closes at record high above 40,000 to cinch a five-week winning streak
UPDATED FRI, MAY 17 2024 4:21 PM EDT
The Dow Jones Industrial Average closed
Friday above the key 40,000 level for the first time in history, a day after
hitting that benchmark in the previous trading session.
The 30-stock
average rose 134.21 points, or 0.34%, to 40,003.59. The S&P 500 inched
up 6.17 points, or 0.12%, to 5,303.27, while Nasdaq Composite ended
down 12.35 points, or 0.07%, at 16,685.97.
Shares of Walmart and Caterpillar,
both trading 1% higher, led the Dow. Chubb and Valero Energy,
respectively up more than 3% and 4%, were the biggest gainers in the S&P
500.
Stocks finished
the week strong, with the Dow up 1.2% to notch its fifth straight weekly gain.
The S&P 500 and Nasdaq climbed 1.5% and 2.1% week to date, cinching their
longest winning streak since February.
On Thursday, the
Dow reached an intraday high of 40,051.05, above the psychologically important
40,000 level, before pulling back to end the day down 0.1%.
his
week’s ascent has helped propel the three indexes into positive territory for
the second quarter despite a tough start. The S&P 500 and Nasdaq are now
each up more than 11% in 2024, while the Dow has climbed more than 6% this
year.
While concerns over the durability of the current
rally have been voiced by some investors, Tom Hainlin believes that the
combination of economic growth and decelerating inflation is the perfect
catalyst.
“That’s a fairly optimistic setup for at least the
near future here in 2024,” the senior investment strategist at U.S. Bank Asset
Management told CNBC. “We appreciate that valuation is a little high relative
to history, but so is earnings growth and so is earnings stability.”
Stock
market news for May 17, 2024: Dow sets record close above 40,000 (cnbc.com)
European
markets close slightly lower after snapping nine-day winning streak
UPDATED FRI, MAY 17 2024 11:55 AM EDT
European markets slipped
again on Friday after snapping a nine-day winning streak in the previous
session, as earnings weighed on positive sentiment.
The pan-European Stoxx 600 closed
0.13% lower, with most sectors trading in negative territory. Utilities stocks
fell 0.9%, while basic resources added 1.4%.
Shares of Richemont climbed
5.3%, paring gains slightly from earlier in the session, after the Swiss luxury
goods firm said full-year sales rose 3% to an all-time high even as
fourth-quarter sales were dragged lower by weaker demand in Asia-Pacific.
U.S. stocks were little changed after the
Dow Jones Industrial Average briefly touched the key 40,000 milestone for the
first time.
In Asia-Pacific, markets
largely fell Friday, as investors assessed key China data to gauge the state of
the world’s second-largest economy.
European
markets live updates: Earnings, stocks, news and data (cnbc.com)
ECB
board member reportedly cautions against back-to-back rate cuts, cites ‘risk of
easing prematurely’
European Central Bank board member Isabel Schnabel
warned against back-to-back rate cuts amid lingering inflation risks, Nikkei reported Friday, as the central
bank gears for its June meeting amid expectations of a rate cut.
While a rate cut in June could be
warranted depending on incoming data and projections, things are less certain
beyond that, Schnabel told Nikkei.
The European Central Bank held
interest rates at a record high for the fifth consecutive
meeting last month, but
is expected to cut it to 3.75% from the current 4% at its next
meeting.
“The path beyond June is much more
uncertain. Recent data have confirmed that the last mile of disinflation is the
most difficult,” Schnabel said, adding that a rate cut in July does not seem
justified.
“After so many years of very high
inflation and with inflation risks still being tilted to the upside, a
front-loading of the easing process would come with a risk of easing
prematurely,” the ECB board member added.
Eurozone
core inflation dropped in April to 2.7% from 2.9%. The ECB has
set an inflation target of 2%.
Markets are also currently facing
“very high uncertainty,” Schnabel noted, highlighting that market participants
have shifted to pricing in around three rate cuts now from six at the beginning
of the year.
Geopolitical tensions and policy uncertainty amid a slew of elections
worldwide this year also pose risks to euro area financial stability, the ECB
said in a recent financial stability review.
More
ECB
board member Schnabel cautions against back-to-back rate cuts (cnbc.com)
Finally,
in food price inflation news, it’s getting late in the year to expect much
relief in 2024. Our global weather this year hasn’t been helpful from Argentina to
Brazil, the USA to northern Europe and on to Russia, India and a large part of
China.
Catastrophic flood destruction in
Brazil could worsen with more rain on the way
Extreme
flooding in Brazil over the last several weeks may be made worse by additional
rainfall late this week.
Published May 15, 2024 7:55 PM BST | Updated May 16, 2024 3:30 PM BST
AccuWeather
meteorologists say that massive flooding that has plagued southern Brazil for
weeks could worsen as additional storms enter the flood-ravaged
area.
Heavy
rain has repeatedly doused southern Brazil and Uruguay since late April,
causing both short-term creek and long-term river flooding.
The death toll has risen to 149, with 124 still
missing, ABC News reported Tuesday.
Over 30,000 soldiers and police have been deployed to
rescue nearly 70,000 people and 10,000 animals, but the spread of
disinformation is slowing rescue and recovery, according to the Associated Press.
A flood at the beginning of May devastated the city of Rio
Grande do Sul when the Taquari River reached a new 150-year record height -- by
12 feet (4 meters). MetSul Meteorologia, a weather media organization in
Brazil, said that in 30 years of covering weather, they had never observed such
catastrophic destruction.
Unfortunately,
more rain is in the forecast next week.
"A
slow-moving cold front will drift from Uruguay to Rio Grande Do Sul, Brazil
next week, Wednesday and Thursday, but will stall on Friday with additional
rain, some heavy, and thunderstorms across the region." AccuWeather Lead
International Forecaster Jason Nicholls explained.
Nicholls
added that widespread rainfall of 2-4 inches (mm) is likely in northern Rio
Grande do Sul into Santa Catarina next Thursday afternoon and Friday. This
could quickly become a problem in the Porto Alegre area, where the airport
flooded last week. Localized amounts could reach 8 inches. Porto Alegre, Brazil
reported 13.03 inches (331 mm) of rain in four days, more than their historical
average rainfall for all of May in the city of 4.53 inches.
Catastrophic flood destruction in Brazil could worsen
with more rain on the way (accuweather.com)
Corn emergence trails average pace in one
third of top producing states
Six
top corn-producing states are behind their respective five-year averages for
corn emergence.
By Mariah Squire Published on May 15, 2024
USDA reported Monday that of the 18 top
corn-producing states in the country, six have fallen behind their respective
five-year average pace for corn emergence. One farmer in Tennessee, the state
furthest behind in corn emergence as well as corn planted, offers an
interesting take on why.
Tennessee
According to USDA’s report for the week ending May
12, Tennessee is the furthest behind its five-year average for corn emergence.
At 45%, the state’s corn emergence is 7 percentage points behind the five-year
average and down 13 points from last year at this time. At first glance, an
explanation may be that just 73% of the state’s expected corn is in the ground.
That is 5 percentage points behind the five-year average and 12 points behind
last year at this time.
Rain showers affecting much of the state two weeks
ago and heavy rainfall across the state last week have clearly taken a toll.
USDA said that for the week ending May 12, the subsoil moisture condition was
27% surplus and the topsoil moisture condition was 35% surplus. Such excess
rain drastically impacted the number of days suitable for fieldwork across the
state.
More
Corn emergence trails average pace in one third of top
producing states (agriculture.com)
‘Poorly timed extremes’ to blame for
deteriorating winter wheat in one top growing state
A
dry fall, a wet winter, and late freezes have all led to the decline of winter
wheat in Kansas.
By Charmayne Hefley Updated on
May 15, 2024
For the fifth consecutive week, winter wheat in
Kansas is the worst in the nation. The state’s winter wheat crop continues to
decline in quality, with 35% of the crop in poor/very poor shape, according to
the USDA Crop Progress report for the week ending May 12.
Varying degrees of extreme weather conditions have
been a primary factor for the decline of the state’s winter wheat crop
conditions this year. Dry conditions in the fall, wet conditions in the winter,
and late freezes in the spring have all impacted the crop.
Kansas winter wheat progress and condition
USDA rated Kansas winter wheat 13% very poor, 22%
poor, 34% fair, 28% good, and 3% excellent the week ending May 12. This is a
slight decline from the previous week when 31% of the state’s crop was rated
poor/very poor.
More
Global
Inflation/Stagflation/Recession Watch.
Given our Magic Money
Tree central banksters and our spendthrift politicians, inflation/recession now needs an entire
section of its own.
China, too little,
too late?
China unveils 'historic' steps to stabilise crisis-hit
property sector
By Liangping Gao and Clare Jim May 17, 2024 8:58 AM GMT+1
BEIJING/HONG KONG, May 17 (Reuters) - China on
Friday announced "historic" steps to stabilise the crisis-hit
property sector, allowing local governments to buy "some" apartments,
relaxing mortgage rules and pledging to deliver unfinished homes.
Investors hoped the measures marked the beginning
of more decisive government intervention to compensate for waning demand for
both new and old apartments, slow down falling prices, and reduce a growing
stock of unsold homes.
Analysts have long called
for the government to step in with its own purchases to prop up a sector which
at its peak accounted for a fifth of GDP and remains a major drag on the world's
second-biggest economy.
Since the property market began its steep downturn in 2021, a
string of developers have defaulted, leaving scores of idle construction sites
behind, and sapping confidence in what had for decades been the preferred
savings instrument for the Chinese population.
China Real Estate Newspaper, a publication managed
by the housing ministry, said the "heavyweight policies" marked
"a significant historic moment" for the property sector.
"It's a positive and encouraging direction,
that the governments are stepping in to buy housing inventory," said Larry
Hu, chief China economist at Macquarie.
"But in order to evaluate how powerful the
impact will be, the key questions are who will be funding the purchase and how
much they'll fund in the end."
After waves of support measures over the past two
years failed to put a floor under the property sector, Vice Premier He Lifeng
told an online meeting with other authorities that municipal governments can
buy "some" homes at "reasonable" prices.
The homes would be used to provide affordable
housing, He said, without giving a timeline or a target for the purchases, nor
detailing how they would be funded. He also said local governments, already
some $9 trillion in debt, can repurchase land sold to developers, and promised
that authorities will "fight hard" to complete stalled projects.
---- Goldman Sachs estimates
saleable housing inventory at 13.5 trillion yuan ($1.87 trillion) at the end of
2023 and because some of their construction had not been finished, it would
require 5 trillion yuan of capital investment to complete them.
There were 395 million square
metres (4.25 billion square feet) of new housing for sale in January-March, up
24% year-on-year, the latest official data show.
Analysts at Tianfeng Securities estimate it will cost
around $1 trillion to
buy the entire stock.
More
China
unveils 'historic' steps to stabilise crisis-hit property sector | Reuters
China
pledges $42 billion in a slew of measures to support the struggling property
sector
BEIJING — Chinese authorities on Friday pledged
new support for state-owned enterprises to enable them to buy unsold
apartments, in an effort that could help developers get more funding to finish
construction on pre-sold properties.
These and other measures announced
Friday marked Beijing’s latest efforts to address issues in the massive real
estate sector.
“I think it is encouraging that the policy is taking a turn of direction
trying to support the housing market,” said Zhu Ning, a professor of finance at
Tsinghua University and author of the book “China’s Guaranteed Bubble.”
People’s Bank of China Deputy
Governor Tao Ling told reporters at a briefing Friday the central
bank would provide 300 billion yuan ($42.25 billion) to
financial institutions to lend to local state-owned enterprises (SOEs) so they
can buy unsold apartments that have already been built.
More
China
pledges billions in measures to support struggling property sector (cnbc.com)
Covid-19
Corner
This section will
continue until it becomes unneeded.
More problems from the mRNA Covid vaccines. Fatal Post COVID mRNA-Vaccine Associated Cerebral Ischemia. Approx. 18 minutes.
Stroke
Technology Update.
With events happening
fast in the development of solar power and graphene, I’ve added this section.
Hmm, is/has a new
fire hazard developing/developed?
Solar panel fire at Sydney Olympic Park Aquatic Centre
By
Ellie Busby May 13,
2024
More
than 2,500 people have been safely evacuated from Sydney Olympic Park Aquatic
Centre in Homebush following a solar panel fire this afternoon.
Six appliances and 24 Fire and Rescue NSW (FRNSW) firefighters responded
to the incident in Shane Gould Avenue at 12.15pm after reports of black smoke
issuing from the building.
Upon investigation, crews found a working fire in the solar panels on
the roof of the sporting facility.
Firefighters quickly got to work and utilised a ladder platform to
attack the flames. The blaze was contained within approximately 45 minutes.
A swimming carnival was in progress at the centre at the time of the
incident however all people were evacuated safely and there were no reported
injuries.
Investigations are underway to determine the cause of the fire.
Solar panel fire at Sydney Olympic Park Aquatic Centre
- Parra News
Next, our
latest new section, the world global debt clock. Nations debts to GDP compared.
World
Debt Clocks (usdebtclock.org)
This
weekend’s music diversion. Vivaldi season in major keys. Vivaldi at his best. Approx.
9 minutes.
A.
Vivaldi: RV 555 / Concerto con molti istromenti in C major / Ensemble Matheus
A. Vivaldi: RV 555 / Concerto con molti istromenti in
C major / Ensemble Matheus (youtube.com)
This
weekend’s chess update. Approx. 11 minutes.
THE
CHOSEN ONE || Magnus Carlsen vs Alireza Firouzja || GRAND FINAL Champions Chess
Tour (2024)
This
weekend’s final YouTube diversions. And the EV winner is? Approx. 8 minutes and 6 minutes.
Toyota’s
Skepticism Towards EVs is paying off BIG TIME!
Toyota’s Skepticism Towards EVs is paying off BIG
TIME! (youtube.com)
BYD
= Burn Your DEALERSHIP! Entire BYD showroom DESTROYED by fire | MGUY Australia
BYD = Burn Your DEALERSHIP! Entire BYD showroom
DESTROYED by fire | MGUY Australia (youtube.com)
“It would be so
nice if something made sense for a change.”
Fed Chairman Powell, with apologies to to Lewis Carroll and Alice
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