Baltic
Dry Index. 1889 -104 Brent Crude 83.16
Spot
Gold 2392 US
2 Year Yield 4.73 -0.08
Neither a state nor a bank ever have had unrestricted power of issuing paper money without abusing that power.
David Ricardo.
In the stock
casinos, it’s bubble on. The US inflation picture looks tame, though looks can
often be deceiving.
“The market is
recognizing that the inflation dynamics look favorable,” Yung-Yu Ma, chief
investment officer at BMO Wealth Management, told CNBC. “Combine that with some
of the takeaways from the earnings season, which were pretty healthy earnings
and favorable outlooks overall, the market was just coiled to look to interpret
news as good news.”
″[That] is the
hallmark of a bull market,” he added, “to take take something that could be
two-sided and call it good.”
Dinosaur Graeme, following
stock and commodity markets since 1968, thinks we are at or approaching the
top.
From two
unstoppable wars, an assassination attempt in Slovakia, looming food price
inflation and rising commodity prices, an ineffective free world leadership
team in Washington, with no obvious leader anywhere in the G-7 nations, plus the
USA and US consumers drowning in unserviceable debt, leads this old dinosaur to
think stocks have now entered La-La Land.
What comes next in
much of the real world global economy across the northern hemisphere summer, is
likely to be a brutal return to reality.
See London Irvine
Report: CBDCs
Asia markets rise
after Wall Street soars on soft inflation data; Japan GDP shrinks
UPDATED THU, MAY 16 2024 11:57 PM EDT
Asia-Pacific
markets rose Thursday after Wall Street benchmarks closed at record highs
overnight on soft inflation data, while investors assessed Japan GDP data.
U.S. consumer
price index rose 0.3% in April, below the 0.4% rise predicted
by the Dow Jones. U.S. CPI climbed 3.4% year over year, in line with market
estimates.
Japan’s first-quarter GDP contracted at an annualized rate of
2%, more than the 1.5% expected in a Reuters poll. The latest data could likely
jeopardize the Bank
of Japan’s plans to raise interest rates.
Japan’s Nikkei 225 added
0.77%, while the broader Topix reversed earlier gains to trade 0.18% lower.
Hong Kong’s Hang Seng index reopened
after a holiday to rise 0.27%. Mainland China’s CSI 300 index gained 0.1%.
South Korea’s markets also
resumed trading after a holiday, with the Kospi jumping
1% and the smaller-cap Kosdaq adding 1.04%.
In Australia, the S&P/ASX 200 index
gained 1.7%.
Overnight, Wall Street’s main indexes closed at
record highs on Wednesday after data showed CPI rose at a slower-than-expected
pace in April.
The Dow Jones Industrial Average rose
349.89 points, or 0.88%, while the S&P 500 gained
1.17%. The Nasdaq Composite climbed
1.40%.
Asia
markets live updates: Japan GDP data shrinks (cnbc.com)
Stock
futures are little changed after S&P 500 closes above 5,300 for the first
time: Live updates
UPDATED THU, MAY 16 2024 7:17 PM EDT
Stock
futures were near flat Wednesday evening after a lighter-than-expected
inflation reading propelled the major averages to record highs.
Futures tied to the Dow Jones
Industrial Average added
32 points, or 0.08%. S&P 500
futures ticked
higher by 0.06%, while Nasdaq 100 futures advanced
0.1%.
In regular trading, all three
major averages closed at records. The Dow climbed
0.88%, while the broad-market S&P 500 gained
1.17%, ending the session above 5,300 for the first time. The tech-heavy Nasdaq Composite closed
higher by 1.40%.
That performance was helped by
the April reading of the consumer
price index, a broad measure of how much goods and services cost at
the cash register, which increased
0.3% from the prior month. That was slightly below the Dow
Jones estimate of 0.4%. Consumer prices still grew 3.4% from a year ago.
“The market is recognizing that
the inflation dynamics look favorable,” Yung-Yu Ma, chief investment officer at
BMO Wealth Management, told CNBC. “Combine that with some of the takeaways from
the earnings season, which were pretty healthy earnings and favorable outlooks
overall, the market was just coiled to look to interpret news as good news.”
″[That] is the hallmark of a bull
market,” he added, “to take take something that could be two-sided and call it
good.”
On Thursday, investors have a
batch of economic data to look forward to, including the widely watched weekly
jobless claims at 8:30 a.m. Eastern and the Philadelphia Federal Reserve
manufacturing index.
Investors are also looking forward to Walmart earnings, due before the bell, along with Under Armour and Baidu
Stock
market today: Live updates (cnbc.com)
CNBC Daily Open: Wall Street hits record highs as rate cut bets
Wall Street hits record high
The S&P 500 and the Nasdaq rose
to record highs after inflation data came in lower than expected. The Dow Jones Industrial Average jumped 350
points as investors bet the Federal Reserve may cut rates in September. All three major indexes closed at
record highs. Tech heavyweights, Nvidia, Apple and Microsoft, all rose. Yields on the benchmark
U.S. 10-year Treasury and 2-year Treasury dipped. Oil prices also fell.
Inflation eases
April’s consumer price index rose 0.3%, slightly
less than expected, while on a 12-month basis, inflation increased 3.4% in line
with economists’ forecasts. It’s the first time this year that the data did not
come in hotter than expected, increasing the prospect of a Fed rate cut sometime
later this year, although inflation remains above its 2% target.
Unsustainable debt
CEO of JPMorgan Chase Jamie Dimon warned growing U.S. fiscal
deficit is unsustainable and could lead to problems in the future if it is not
addressed. “America has spent a lot of money. During Covid and after Covid, our
deficit is at 6% now. That’s a lot, but obviously that drives growth,” Dimon
told Sky News. The federal government has spent $855 billion more than it has
collected so far this year, according to the U.S. Treasury Department.
Meme stock rally fizzles
Shares of GameStop and AMC slumped more
than 18% each amid signs of the meme frenzy petering out. The craze was
reignited Monday by the reappearance of “Roaring Kitty” on social media. Before
Wednesday, GameStop and AMC were up 179% and 135% this week, respectively.
Chart analysts are predicting the “short squeeze” could end badly.
12-second crypto heist
The Department of Justice indicted two brothers for allegedly stealing $25
million in cryptocurrency within roughly 12 seconds, raising concerns about the
“integrity of the blockchain.” Anton
Peraire-Bueno, 24, and James Peraire-Bueno, 28, brothers who attended MIT, were arrested on Tuesday for
charges of wire fraud and money laundering.
More
CNBC Daily Open: Wall Street hits record highs as rate cut bets rise
In other real world news.
Biden’s EV
tariffs may not be enough to stave off the threat of Chinese vehicles in the
U.S.
DETROIT —
President Joe Biden’s plan to quadruple tariffs on China-made electric vehicles
is unlikely to stave off the threat of more Chinese cars on the auto sales
market in the U.S.
The 100% tariff announced Tuesday, up from a current import tax of
about 25%, covers EVs imported from China but could still leave room for the
often-cheap Chinese models to undercut domestic prices and leaves loopholes for
imports made by Chinese automakers in other countries, like neighboring Mexico.
It also does nothing to address current or future gas-powered vehicles imported
from the Communist country to the U.S.
Automotive and trade
experts say the increased tariffs are a near-term protectionism act that may
delay but won’t stop Chinese automakers from coming to the U.S. with EVs.
“They’re going to be here. It’s inevitable. It’s just a matter of
time,” said Dan Hearsch, Americas co-leader of automotive and industrial
practice at consulting firm AlixPartners. “Western automakers, Western
suppliers really ought to be upping their game and preparing to take this on or
play with them. It’s one or the other.”
The EV tariffs, including other increases regarding battery
materials, were among new tariff rates on $18
billion worth of Chinese imports.
Chinese competition
For decades, Chinese auto companies have said they will begin
selling vehicles in the U.S. under their own brands, but none have succeeded.
The quality of Chinese automakers’ vehicles has gotten significantly better in recent years, as Beijing has helped by subsidizing their operations to grow domestic production. The increase in domestic automakers has led to a rapid deterioration of market share in the country for global automakers such as General Motors.
Global players have
made more inroads in the U.S. market in recent years. The so-called Big Three
U.S. automakers — GM, Ford Motor and
Chrysler, now owned by Stellantis —
have watched their market share in the country deteriorate from 75% in 1984 to
about 40% in 2023, according to industry data.
GM and others have found it hard to compete against budget and
mainstream Chinese vehicles, including EVs. For example, a small EV from Warren
Buffett-backed BYD called the Seagull starts
at around $10,000 and reportedly banks a profit for the
increasingly influential Chinese automaker.
Though the Seagull isn’t yet sold on U.S. soil, BYD is expanding
its vehicles globally, and some believe it’s only a matter of time before more
China-made vehicles arrive in the U.S.
Even with the new 100% tariff, its pricing would likely be in line
with or better than many EVs currently on sale in the U.S.
“Ultimately, we think
protectionism from the West could remain a near-term overhang for Chinese
EV/parts makers aiming for rapid global expansion, but we think it is unlikely
to halt China’s EV push in the long run,” Morgan Stanley analyst Tim Hsiao said
in an investor note this week.
More
Biden's tariffs on Chinese EVs may not deter growing threat (cnbc.com)
Brazil flooding will
take weeks to subside, experts warn
By Lisandra Paraguassu May 16, 2024 1:03 AM GMT+1
PORTO ALEGRE, Brazil, May 15 (Reuters) - Brazil's
southernmost state capital may suffer severe flooding for weeks to come,
experts warn, compounding the struggles of half a million people forced to
abandon their inundated homes.
Parts of Rio Grande do Sul state have seen more
than 630 mm (25 inches) of rain so far this month, national weather service
INMET reported – more than London's average rainfall in a year.
The waters of Lake Guaiba, which breached its banks
to flood state capital Porto Alegre, have risen again this week to 5.22 meters
(17.13 feet), well above the flood level of 3.0 meters and close to last week's
all-time record of 5.33 meters.
Meteorologists and engineers at the Federal
University of Rio Grande do Sul (UFRGS) said water levels could stabilize or
keep rising if it rains again. They said it could take a month before the water
retreats below flood levels, based on historical comparisons.
The floods have devastated dozens of towns inland
from Porto Alegre, where the downtown area remains under water. In the whole
state, the death toll was at 149, while 108 were still missing.
Some 250,000 addresses are still without power and
more than 136,000 people have lost access to water, state officials said.
On Wednesday, President Luiz Inacio Lula da Silva
announced that the federal government will distribute 5,100 reais ($992) to
some 240,000 families which have lost their houses or furniture by the historic
floods. The measure would cost some 1.2 billion reais, according to government
estimates.
---- An initial forecast
from the UFRGS Institute of Hydraulic Research (IP) suggested the water could
take 35 days to return to normal levels based on the previous worst flood in
1941, when it reached 4.76 meters. Tributaries upstream are expected to normalize
before then.
Lake Guaiba should return slowly to below flood
levels within weeks or even by mid-June, said IPH Professor Rodrigo Paiva, but
he added that it will depend on the weather ahead.
"That may be delayed if it rains more. In 1941
we didn't have the rebound we have now," said IPH hydrologist Fernando
Fan.
Renewed rainfall over the last few days led to a
new rise in the Guaiba water level, leading authorities to warn residents not
to return to areas at risk.
On the roadside where they sought high ground
outside the inundated fishing hamlet of Paquetá, 25 km north of Porto Alegre,
villagers are watching the water level closely.
On May 1, after two days of intense rain, a broken
dike flooded the area outside Porto Alegre, where on Tuesday only the rooftops
of the village can be seen.
"We are waiting for it to go down. We were
happy that it was falling, but now it has started to rise again. It will take
at least two months," said Cristiano Pastoriza.
More
Brazil flooding will take weeks to subside, experts warn | Reuters
Finally, in the commodity metals sector, just
how high can the price of copper get? Copper, to infinity and beyond due to EV
madness?
Copper futures
hit record high as data center build-up, EV growth fuels demand
PUBLISHED WED, MAY 15 2024 2:21
AM EDT
Copper futures hit a record high on Wednesday as
demand for the base metal stays strong amid a rush to build data centers and
the continued electrification of the global economy.
Copper
prices on the NYMEX hit $5.02 per
pound, according to data from FactSet. The metal has gained more than 25% so
far this year.
Demand for copper is widely considered a
proxy for economic health, with metal being key to the energy transition
ecosystem. It is integral to manufacturing electric vehicles, power grids and
wind turbines, especially as the global economy electrifies.
Copper demand from electric vehicles and the
transportation sector overall is set to increase by around 5% this year,
according to forecasts by the Bank of America.
Copper is also a critical material for cables used
in data centers, whose growth has fueled demand for the red metal especially as
an artificial intelligence boom generates more need for data centers.
“With demand from EVs still growing, albeit a
slower pace, the focus has shifted towards the copper needed in the data center
build-out,” the BofA note added.
Data centers rely on copper for various electrical applications — electrical
connectors, busbars, power cables. The International Energy Agency is
expecting power demand from data
centers to more than double to over 1000 terawatt-hours (TWh) in 2026 from 460
TWh in 2022.
The International Copper Study Group (ICSG) has slashed its supply surplus forecasts for the
metal this year due to lower than expected mine production.
Copper production growth forecast for 2024 has
been cut to 0.5% compared with a 3.7% growth estimated by ICSG last October
2023. This is mainly owed to a slower-than-expected ramp up of production,
delays in project commissioning, and revised output guidance from major
producers.
More
Copper futures hit record high amid data center build-up, EV growth (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.
Jamie Dimon urges
the U.S. to deal with its deficit sooner rather than later
PUBLISHED WED, MAY 15 2024 5:52
AM EDT
JPMorgan
Chase CEO Jamie Dimon on Wednesday
urged the U.S. to reduce its fiscal deficit sooner rather than later, warning
the issue will likely become “far more uncomfortable” if it continues to be
overlooked.
His comments follow a period of rapid interest
rate hikes, tax cuts and massive stimulus programs designed to support the
world’s largest economy during the coronavirus pandemic.
“America has spent a lot of money. During Covid
and after Covid, our deficit is at 6% now. That’s a lot, but obviously that
drives growth,” Dimon said in an interview with Sky News.
“Any country can borrow money and drive some
growth, but that may not always lead to good growth. So, I think America should
be quite aware that we have got to focus on our fiscal deficit issues a little
bit more, and that is important for the world,” he added.
The federal government has so far spent $855
billion more than it has collected in the 2024 fiscal year, according to the
U.S. Treasury Department, resulting in a national deficit.
For the 2023 fiscal year, the government’s deficit
spending came in at $1.7 trillion.
The deficit has piled up despite reassurances from
U.S. President Joe Biden administration that the Inflation Reduction Act would
shave “hundreds of billions” off the deficit, in addition to reducing prices.
More
JPMorgan CEO Jamie Dimon urges U.S. to deal with its
fiscal deficit (cnbc.com)
From a 65% stock market crash to an imminent recession, here's a roundup of recent high-profile bear forecasts
May 13, 2024
- Despite a stock market
that's less than 1% away from record highs, bearish forecasts are out in
full force.
- Top economists and portfolio
managers are warnings of everything from an imminent recession to the
potential for a 65% stock-market crash.
- Outlined below are assorted
high-profile bear forecasts from across Wall Street.
Even with the stock market less than
1% away from a record high, top forecasters who have consistently leaned
bearish can't shake the idea that a painful decline is imminent.
Some warn of an imminent recession
following a weaker-than-expected April jobs report that coincided with a jump
in weekly jobless claims, while others suggest a stock market crash similar to
1929 is about to happen.
While these forecasts have fallen
flat on their face so far, they're still worth monitoring as a way for
investors to poke potential holes in the consistently bullish narrative that
the economy, corporate profits, and stock market are doing just fine.
Here's a roundup of the most recent
bearish forecasts coming from Wall Street.
More
Covid-19 Corner
This section will continue until it becomes unneeded.
Today, welcome to Xi’s Communist China.
COVID-19 whistleblower's
status unknown after 4-year prison term
Wed,
May 15, 2024 at 12:00 AM GMT+1
Chinese citizen
journalist Zhang Zhan was
expected to be released on May 13 after spending four years behind bars for
documenting the early days of the COVID-19 outbreak, but her current status
remains unknown.
Key points:
·
Zhang's videos
documented crowded hospitals, empty streets and interviews with Wuhan residents
in lockdown.
·
Her content
countered the Chinese government's official narrative of how it was handling
the coronavirus outbreak.
·
Detained in May
2020, she was charged with the vague offense of "picking quarrels
and provoking trouble."
·
Reports of hunger strikes, force-feeding and a dramatic
weight loss during her imprisonment sparked concerns about Zhang's health over the years.
·
Zhang, a former
lawyer, traveled from Shanghai to
Wuhan to document events as COVID-19 took
over the city in early 2020. She posted unfiltered reports on Chinese
social media, as well as YouTube, which is banned in China.
·
Her reports, which
offered a rare glimpse into the early extent of the outbreak, eventually gained
traction. She also wrote essays critical of the Chinese government response.
·
Zhang's family and
rights groups were expecting her release on May 13 based on a court verdict they obtained.
But as of Monday evening, advocates lamented that there had been no
confirmation whether she was able to walk free.
·
Activist Jane Wang,
who heads the U.K.-based Free Zhang Zhan campaign, expressed concerns about Zhang's condition.
“Zhang Zhan should have
regained her freedom. We should have heard from her or her family by now.
Instead, we are left wondering where she is, how she is doing physically and
mentally, what’s happened to her family and what the future holds for her:”
·
Zhang's family
has reportedly faced pressure from authorities to remain silent, adding to the
uncertainty surrounding her situation.
COVID-19 whistleblower's status unknown after 4-year
prison term (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.
Today,
more on that rising EV bust.
Tesla's Storing Unsold
Inventory In An Abandoned Mall Parking Lot
The
electric automaker is renting parking lots to store thousands of vehicles
May
13, 2024
Parking lots full of Tesla vehicles are
becoming impossible to ignore as the electric automaker seemingly can’t sell
enough cars and trucks to match its rate of production. According to its own
figures, the electric automaker produced 46,561 more vehicles than it delivered
to customers during the
first quarter of 2024. Where are all these cars going? Parking lots at
its factories, malls and airports.
The Chesterfield Mall, about 20 miles west of St.
Louis, has become an overflow lot for Tesla. Emblematic of American
retail’s current state, the mall is slated to be demolished and replaced
with a $2 billion mixed-use project. The Staenberg Group, the mall’s owner, is
eking out the last drops of revenue before the mall’s remaining tenants have to
move out on August 31. Tim Lowe, a Staenberg Group senior vice president, told KTVI:
“We put a plan together to try and create alternate
uses that would kind be able to use some of the remaining life left in the mall
before we tear it down. One of those uses was allowing people to use the
parking lot for different things.”
“One of our users happens to be Tesla, who does have
a dealership in the [Chesterfield] Valley, but does not have enough capacity at
the dealership to park all of the cars they are bringing in. So they are
renting space within the parking lot to store their cars.”
Lowe estimates that there are at
least 300 Tesla vehicles parked at the Chesterfield Mall. However, Tesla isn’t
slowing down production, Recent drone footage from the automaker’s Fremont,
California factory shows that cars are still rolling off the assembly lines at
a high rate to fill the site’s lots. Things aren’t different on the other side
of the Atlantic. Neuhardenberg, a small town in Germany of less than 3,000
residents, is complaining about the noise Tesla transporters are making
as the company parks cars at the nearby regional airport.
Tesla's Storing Unsold Inventory In An Abandoned Mall
Parking Lot (jalopnik.com)
Next, our
latest new section, the world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
Nothing contributes so much to the prosperity and happiness of a country as high profits.
David Ricardo.
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