Saturday, 18 May 2024

Special Update 18/5/2024 Stocks In Wonderland. Gold And Silver Rising.

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

‘Poorly timed extremes’ to blame for deteriorating winter wheat in one top growing state (agriculture.com)

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 

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

Stroke (youtube.com)

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   

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)

THE CHOSEN ONE || Magnus Carlsen vs Alireza Firouzja || GRAND FINAL Champions Chess Tour (2024) (youtube.com)

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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