Baltic
Dry Index. 2066 -63
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Spot
Gold 2343 US 2 Year Yield 4.85 -0.02
The number one problem in today's generation and economy is the lack of financial literacy.
Alan Greenspan.
In the stock casinos, worry and cold feet. Suppose today’s US PPI numbers and tomorrow’s CPI US inflation figures aren’t good enough to roll the Fed into interest rate cutting early?
If the Fed doesn’t start cutting interest rates in June, many over-priced stocks, priced to perfection, face a long, hot risky summer doldrums ahead. All the more so if recent global weather events unleash a new, nasty bout of global food price inflation. Not good for anyone seeking re-election in November.
Later today, President Biden’s Joe
Biden’s speech attacking China and imposing yet more tariffs and sanctions on
Chinese made EVs and solar panels, among other things.
Asia-Pacific markets pare gains as investors
assess inflation data from India and Japan
UPDATED TUE, MAY 14 2024 12:55 AM EDT
Asia-Pacific
markets pared gains hours after opening higher on Tuesday as stocks on Wall
Street stumbled overnight, with the Dow Jones Industrial Average snapping
an eight-day winning streak.
Investors in Asia assessed
India’s inflation numbers. Data released Monday showed consumer price index
climbed 4.83% year on year, nearly in line with the 4.8% expected by economists
polled by Reuters.
India’s wholesale inflation
reading is due to be released later in the day.
Data from the Bank of Japan showed that
corporate inflation was steady in April compared with a year earlier, but
import prices jumped 6.4% year over year last month, most likely due to the
yen’s sharp declines.
Hong Kong’s Hang Seng index was
flat, paring from earlier gains of 0.6%, while mainland China’s CSI 300 index
reversed gains to trade 0.14% lower.
Japan’s Nikkei 225 and
the broader Topix both traded around the flatline.
South Korea’s Kospi dipped
0.1%, while the smaller-cap Kosdaq gained 0.9%.
The S&P/ASX 200 in
Australia fell 0.4%.
Overnight in the U.S., traders grappled with
rising inflation expectations ahead of key reports due later in the week.
A New
York Federal Reserve survey showed consumers last month raised
their expectations for price increases. On a one-year basis, inflation
expectations rose to 3.3%. Their five-year inflation outlook ticked up to 2.8%.
The 30-stock Dow fell 0.21%,
while the S&P 500 inched
lower by 0.02%. The Nasdaq Composite added
0.29%.
Shares of meme stock GameStop soared
74% after “Roaring Kitty,” the moniker of the Reddit trader
behind 2021′s short squeeze, posted online for the first time in three years.
Asia markets live
updates: Japan CGPI, India WPI, India CPI (cnbc.com)
European stocks head for lower open as global
markets await U.S. inflation data
UPDATED TUE, MAY 14 2024 12:32 AM EDT
European
stocks are heading for a lower open Tuesday as global investors await the
latest U.S. inflation reports.
April’s consumer price index
report is due out on Wednesday and economists expect that it rose 0.4% in April
on a month-over-month basis, or 3.4% from 12 months earlier. Traders are hoping
that a return to Federal Reserve rate hikes is largely off the table despite a
recent slew of hotter-than-expected inflation prints.
Overnight, Asia-Pacific markets pared
gains hours after opening higher on Tuesday as stocks on Wall Street stumbled
Monday, with the Dow
Jones Industrial Average snapping an eight-day winning streak.
U.S.
stock futures flickered near the flatline Monday evening as
Wall Street braced itself for the release of the producer price index reading
for April on Tuesday. Economists polled by Dow Jones anticipate that the PPI
gained 0.3% from the previous month.
European markets live updates: stocks, markets, news and earnings (cnbc.com)
Stock futures are little changed as investors
brace for key inflation reports: Live updates
UPDATED TUE, MAY 14 2024 7:15 PM EDT
Stock
futures flickered near the flatline Monday evening as Wall Street braced for
the release of key inflation reports.
S&P
500 futures inched
down 0.04%, while Nasdaq 100 futures slipped
0.08%. Dow Jones
Industrial Average futures lost
5 points, or 0.01%.
In regular trading, the 30-stock Dow slid
about 0.2%. The blue-chip index posted its first losing session in nine,
snapping what had been its longest daily win streak since December. The S&P 500 inched
lower by 0.02%. The Nasdaq Composite was
the outperformer, rising roughly 0.3%.
A report from the New York
Federal Reserve showed that consumers’ expectations for inflation over the
short and long term grew in April. The results put pressure on the major
averages and weighed on stocks.
Another market catalyst will
emerge Tuesday morning as the first of two key inflation reports will be
released. The producer price index reading for April will be issued at 8:30
a.m. Eastern. Economists polled by Dow Jones anticipate that the PPI gained 0.3%
from the previous month. The closely watched consumer price index will be out
Wednesday, and economists expect that it rose 0.4% in April on a
month-over-month basis, or 3.4% from 12 months earlier.
Even with Monday’s muted market
action, the major averages remain within striking distance of their highs.
Investors have been hopeful since Fed Chair Jerome Powell said earlier this
month that the central bank’s next move was “unlikely”
to be a rate hike, even amid a blast of hot inflation readings in
recent months.
“It’s not unusual for Wall Street
and Main Street to see the economy differently — the different perspective
stems from different points of focus. Stock market movements are based on
expectations of future economic performance, not necessarily current conditions,”
said Brent Schutte, chief investment officer at Northwestern Mutual Wealth
Management.
“But while these differing views
aren’t unusual, they highlight a potential risk for investors who are betting
that rate cuts will come before the economy falters,” he added.
Stock market today: Live updates (cnbc.com)
In other news, finally, recent global weather
developments might just make it into main stream news. Food price inflation
next?
1 big
thing: Wild weather sounds the alarm
A
string of unprecedented weather and climate events has
struck multiple continents in recent weeks, killing hundreds and displacing
many more.
Why it matters: Unrelenting
heat in Southeast Asia and flooding in Brazil and Texas provide a foreboding
preview of the summer season and match scientific expectations of a warming
climate.
The big picture: The
extremes that have been occurring this spring are happening in a world that has
seen global average temperatures increase by about 1.2°C (2.16°F) compared with
preindustrial levels.
- With
most climate models and researchers projecting that warming will exceed
2°C above preindustrial levels, these may be relatively tame previews of
Earth's future.
Zoom in: Multiple
countries have set national monthly temperature records during May, with
all-time records set as well.
- Nearly all of Mexico has been in the grip of an area
of high pressure aloft, also known as a heat dome, that has locked hot and
dry weather in place.
- Drought and heat in Canada have started their wildfire season early.
- Thailand,
China, Myanmar, Japan, Cambodia, Vietnam, the Philippines, Pakistan and
India have been in the throes of intense heat for at least a month.
Stunning stat: The U.S.
hasn't been immune to the heat, either. La Puerta, Texas, tied the state's record for
the hottest temperature in May with a high of 116°F on May 9.
- This was one of the hottest
temperatures observed in the country so early in the season.
- Although
less attributable to climate change, a 16-day surge in severe weather
across the U.S. led to at least 267 confirmed tornadoes in 19 states, according to the Storm Prediction Center.
More
Historically wet winter
to damage UK's food self-sufficiency, says think tank
By Reuters May 13, 2024 12:10
AM GMT+1
LONDON, May 13 (Reuters) - Britain's ability to
feed itself is set to be reduced by nearly a tenth this year as farmers across
the country reel from one of the wettest winters on record, an energy and
climate think tank said on Monday.
Heavy rain in the winter months left vast swathes
of agricultural land saturated, with many arable farmers unable to plant crops
and losing those that were in the ground.
Analysis from the Energy & Climate Intelligence
Unit (ECIU), a non-profit organisation that studies energy and climate change
issues, estimated that the projected reduction in key arable crops as a result
of lower crop area and poor yields will reduce UK self-sufficiency by 8
percentage points when measured by volume, declining from an average of 86%
between 2018 and 2022 to 78% this year.
Specifically the UK could
become dependent on foreign imports for around a third of its wheat, with wheat
self-sufficiency estimated to decline from 92% in the same period to 68%, the
ECIU said.
Self-sufficiency in oilseed rape is estimated to collapse to a
historic low of 40% from 75%.
Farmers also expect poor harvests of potatoes and onions.
Less domestic production and more imports could hold back the
decline in food inflation, which hit a 45-year high of 19.2% in March 2023 but
had fallen to 4% in March this year, according to official data.
The National Farmers' Union
has warned that consumers may see the effects through the year.
However, last month Simon Roberts, CEO of Sainsbury's (SBRY.L), opens new tab, Britain's second biggest
supermarket, said he was confident the
group could "protect availability without causing any impact for
customers," noting that commodity costs "in the main" were
coming down.
The ECIU's analysis was published ahead of a meeting Prime
Minister Rishi Sunak plans to host on Tuesday - the second annual "Farm to
Fork Summit" which brings together representatives of the UK food supply
chain.
Historically wet winter to damage UK's food self-sufficiency, says think tank | Reuters
Funds race out of CBOT
corn and soy shorts as weather worries build
By Karen Braun May 13, 2024
9:03 AM GMT+1
NAPERVILLE, Illinois, May 12 (Reuters) -
Speculators furiously pitched short positions in Chicago corn and soybeans last
week just after a big short squeeze in wheat, as pests raid Argentina’s corn
crop and rains devastate soybeans in southern Brazil.
Wet weather also slowed the pace of U.S. planting
during what is normally the most active period for field work, but top wheat
exporter Russia’s main growing region remains concerningly dry.
In the week ended May 7, money managers slashed their net short position in CBOT corn futures and options to 102,513 contracts from 218,040 a week earlier, establishing their least bearish corn view since October.
That represented funds’ largest weekly round of net
buying in corn since May 2019, and was substantially larger than any weekly
buying seen during last summer’s U.S. drought scare.
The week’s short covering was the heaviest since
June 2019, but money managers added more than 26,000 gross corn longs, the most
since June 2023 and their fourth consecutive week adding longs.
Most-active CBOT corn futures rose 4.5% during the
week ended May 7, but most-active soybeans jumped more than 7% and CBOT soybean
meal surged nearly 9%.
Funds’ net buying and short covering of soybeans
were both record large figures during the week, surpassing the old highs from
July 2017.
The managed money soybean net short plummeted to
41,453 futures and options contracts from 149,236 a week earlier, marking the
least bearish soy stance since January.
More
Funds race out of CBOT corn and soy shorts as weather worries build | 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.
The case for forever
high interest rates
By Yoruk Bahceli
May 13, 2024 6:07 AM GMT+1
May 13 (Reuters) - If financial markets are right, interest rates won't
just stay high this year, but possibly forever.
The return of inflation means ultra-low rates are history. And markets
now reflect a scenario where even the neutral interest rate that balances the
economy in the long run after factoring in inflation, dubbed 'R-star', is
rising, economists say.
Traders see U.S. rates at around 4% at the end of the decade, far higher
than policymakers' 2.6% long-run expectations. Euro area rates are seen around
2.5%, above what has prevailed for most of the bloc's history.
Yet making the right call on where rates settle is a huge challenge for
policymakers and investors -- many economists reckon R-star is lower than
before the great financial crisis, but disagree on how to calculate it, its
current level and whether it is rising.
BNY Mellon Investment Management's chief economist, Shamik Dhar, who
reckons R-star has risen is "nervous that hasn't been fully priced into
equity and property markets."
We explore five factors that will
determine interest rates in the longer term:
1/ FOOTING THE BILL
Huge
investment needs, whether climate or military, and rising interest costs will
keep government borrowing high.
Economists
debate the impact of rising debt but some expect spending needs will drive
rates up.
Advanced
economy budget deficits at 5.6% of output in 2023 were nearly double 2019's 3%
and will remain elevated at 3.6% in 2029, the IMF estimates.
Aviva Investors' head of rates Ed Hutchings said higher deficits would
raise the premium investors demand to hold government bonds.
But productivity gains have slowed and potential growth is seen subdued
on both sides of the Atlantic, factors economists reckon dampen investment.
"That would argue for less of an increase in neutral policy
rates," said First Eagle Investment Management portfolio manager Idanna
Appio, a former Fed economist.
2/ OLDER
Demographics
is one of the biggest uncertainties facing longer-term rates, said BNY Mellon's
Dhar, a former Bank of England economist.
There
is consensus that a savings glut helped by pre-retirement hoarding in rich
countries has depressed rates.
That
may continue; 16% of the world population will be over 65 in 2050, from 10% in
2022, the United Nations projects. That will likely be most strongly felt in
Europe.
But
the ratio of dependents, including retirees, to workers is rising. That will
cause rates to rise as age-related spending cuts saving, economists Charles
Goodhart and Manoj Pradhan argue.
Plugging
pension shortfalls through borrowing would also put upward pressure to rates,
Nomura said.
More
The case for forever high interest rates | Reuters
The
economy could be heading toward 1970s-style stagflation. What it means for the
stock market.
May
13, 2024
The U.S.
economy could be barreling toward 1970s-style stagflation amid a cooling
economy and sticky inflation — and it could end up sparking a double-digit
plunge in stocks, according to Sevens Report Research.
“Stagflation
doesn’t have to be as bad as it was in the 1970s, but for a stock market that’s
trading above 21 times earnings, the truth is that even a small bout of
stagflation would result in a 10%-20% decline in stocks,” said Tom Essaye,
founder of Sevens Report Research, in a Monday note.
Stagflation refers to slowing economic growth combined with high
inflation, which scarred the U.S. economy for much of the 1970s. Stock-market
investors have grown concerned that the economy could sink into a similar
dilemma since the March consumer-price index report came
in hotter than expected.
Some economists have downplayed
the idea of stagflation. Chief among them is Federal Reserve Chair Jerome
Powell, who said during a press conference following the central bank’s April
policy meeting that there was no sign of stagflation in the economy,
even as inflation remained stubbornly high and some signs of slowing growth
started to emerge.
“Of course, comparing
this period to the 1970s, where GDP growth was flat or negative and CPI was
running more than 10%, [Powell’s] absolutely right [that] there is no
stagflation,” said Essaye. But he added that it’s somewhat “dismissive” to say
that just because things aren’t as bad as they were in the 1970s, any talk of
stagflation is unwarranted.
“In an absolute sense,”
economic growth is not at levels that would imply stagflation — but data
releases are becoming “more conclusive that economic momentum is slowing,”
Essaye said. “While stagnation isn’t here yet, the data is showing a greater
chance of it occurring than any time in the last year and a half.”
More
Covid-19 Corner
This section will continue until it becomes unneeded.
Today, real, or big Pharma lining up their next cash cows?
Rise of drug-resistant superbugs could make Covid
pandemic look ‘minor’, expert warns
Common
infections will kill millions if drug resistance through misuse of antibiotics
is not curbed, says England’s ex-chief medical officer
Mon 13 May 2024 08.00
BST
The Covid-19 pandemic will “look minor” compared with
what humanity faces from the growing number of superbugs resistant to current
drugs, Prof Dame Sally Davies, England’s former chief medical officer, has
warned.
Davies, who is now the UK’s special envoy on
antimicrobial resistance (AMR), lost her goddaughter two years ago to an
infection that could not be treated.
She paints a bleak picture of what could happen if the
world fails to tackle the problem within the next decade, warning that the
issue is “more acute” than climate change. Drug-resistant infections already
kill at least 1.2 million people a year.
“It looks like a lot of people with untreatable
infections, and we would have to move to isolating people who were untreatable
in order not to infect their families and communities. So it’s a really
disastrous picture. It would make some of Covid look minor,” said Davies, who
is also the first female master of Trinity College, Cambridge.
AMR means that some infections caused by bacteria,
viruses, fungi and parasites can no longer be treated with available medicines.
Exposure to drugs allows the bugs to evolve the ability to resist them, and
overuse of drugs such as antibiotics accelerates that process.
Widespread resistance would make much of modern medicine too
risky, affecting treatments including caesarean sections, cancer interventions
and organ transplantation.
“If we haven’t made good strides in the next 10 years,
then I’m really scared,” Davies said.
More
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.
Fastest charging EVs
revealed as drivers making the switch to electric warned to expect up to 12
hours refuel time
Surprisingly
for some, Tesla is not the number one fastest charging car
12
May 2024
DRIVING an electric
vehicle requires a change of mindset.
With petrol and diesel engines, users are not giving much thought to the
speed of refuelling.
But recharging an EV isn't as
simple as parking up at the station and waiting a few seconds, pump in hand.
It can take as little as 30
minutes or as much as 12 hours.
Electric models are ranked - along with other criteria
- on how quickly they can refuel and be back on the road.
The highest selling EV,
however - the Tesla Model 3 - is the best seller but only comes in
third on the list of top 5 for charging.
Manufacturers will quote a
maximum charging speed - the theoretical highest amount of power it can draw from a rapid charger.
But it's only theoretical
because the charger itself will also have a maximum possible power output,
which can further vary depending on local electricity supply available.
A car charging at its maximum
charging speed of 100kW for one hour could theoretically fill a 100kWh battery.
But in reality, the rate of
charge slows dramatically after the battery is 80% full.
Instead, it is more likely a
driver would add 25kWh in 15 minutes, which on average could allow for 87 miles
of travel, according to Auto Express.
NET-ZERO EMISSIONS
The UK Government has set a
net-zero emissions target for 2050.
To meet this goal, all cars
in the UK will need to be 100% battery- or hydrogen-powered by this date.
The first steps towards this target have been announced.
As of 2035, it will be
illegal to sell brand-new petrol and diesel cars (ICEs).
However, with the most
popular model - the Tesla 3 - costing at least £40,000, general drivers on
average salaries will be hoping prices take a drastic nose dive in the next decade.
More
Approx.
5 minutes.
Totally
INSANE "Electric Jerry Can" is PURE FANTASY | MGUY Australia
Totally INSANE "Electric Jerry Can" is PURE
FANTASY | MGUY Australia (youtube.com)
Finally,
our latest new section, the world global debt clock. Nations debts to GDP
compared.
World Debt
Clocks (usdebtclock.org)
The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. Deficit spending is simply a scheme for the hidden confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.
Alan Greenspan.
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