Baltic
Dry Index. 1831 +05 Brent Crude 82.37
Spot Gold 2312 US 2 Year Yield 4.75 -0.06
In
the run up to the UK General Election on July 4, the LIR will play its part.
In our age there is no such thing as 'keeping out of politics.' All issues are political issues, and politics itself is a mass of lies, evasions, folly, hatred and schizophrenia.
George Orwell.
As expected, the US central bank left its key interest rate unchanged. US consumer price inflation eased 0.1 percent year on year to 3.3 percent, but still far above the Fed’s target of 2 percent year on year. BoE up next.
US stock markets yawned, and mostly moved higher. With new money creation surging again in the US debt markets, all news is good news again (for now,) but I think the Fed just made a big mistake in not starting to cut interest rates in the face of a slowing global and US economy, plus rising US and EU tariffs.
For the record, US Federal debt stands at
34.8 trillion this morning on an official GDP of only 28.4 trillion. Not that
anyone cares (for now.) Debt never
matters, until one day suddenly it does.
Central bank digital currency anyone?
US stocks hit record highs, dollar pares losses after
CPI, Fed decision
June 12, 2024
NEW YORK (Reuters) -The S&P 500 and the Nasdaq scored record closing highs for the third consecutive session on Wednesday and U.S. Treasury yields pared earlier declines as investors weighed a market-pleasing inflation report against lowered interest rate cut expectations.
The dollar shed some weakness after
the U.S. Federal Reserve concluded its two-day policy meeting by leaving
interest rates unchanged, and released its accompanying policy statement and
Summary of Economic Projections (SEP).
The S&P 500 and the Nasdaq ended
sharply higher, while the blue-chip Dow turned slightly negative toward the end
of the session.
The more-hawkish-than-expected SEP
seemed to contradict the Labor Department's closely watched CPI report released
earlier in the day, which showed core prices growing at their slowest annual
pace in over three years.
"It's a little disappointing to
see this continued hawkishness, especially on the same day where you get one of
the softest inflation reports in probably a couple of years," said Ross
Mayfield, investment strategy analyst at Baird in Louisville, Kentucky.
"The market is going to struggle a bit with how hawkish the Fed is in
light of all of not only this morning's data, but last week’s as well."
In his press conference following the decision, Fed Chair Jerome Powell acknowledged that inflation has eased substantially but remains too high and rate-cut expectations have been pushed out due to slower-than-expected progress in bringing price growth down to the central bank's 2% goal.
"I think the main takeaway will
be that the market was probably expecting the Fed to shift the dot plot from
three cuts to two cuts," Mayfield added. "Instead it was shifted from
three cuts to one cut, which on margin is a hawkish surprise."
Still, financial markets are pricing
in a 61.5% likelihood of a 25-basis-point rate cut in September, up from 46.8%
on Tuesday, according to CME's FedWatch tool.
The Dow Jones Industrial Average fell
35.21 points, or 0.09%, to 38,712.21, the S&P 500 gained 45.71 points, or
0.85%, to 5,421.03 and the Nasdaq Composite added 264.89 points, or 1.53%, to
17,608.44.
More
US
stocks hit record highs, dollar pares losses after CPI, Fed decision (msn.com)
European stocks head for lower open as markets
react to Fed, U.S. inflation data
LONDON — European stocks are expected to open in
negative territory Thursday as regional investors react to the U.S. Federal
Reserve’s latest monetary policy decision and U.S. inflation data.
The U.K.’s FTSE index
is expected to open 29 points lower at 8,193, Germany’s DAX 41
points lower at 18,600, France’s CAC 40 down
21 points at 7,849 and Italy’s FTSE MIB 42
points lower at 34,035, according to IG.
Regional markets are digesting the
Fed’s decision Wednesday to hold the federal funds rate at 5.25% to 5.5% and to
project only one rate cut this year.
That was down from the three cuts
projected in its March meeting. However,
the “dot plot” also indicated a more aggressive cutting path for 2025 —
four rate cuts totaling a full percentage point are anticipated, up from three.
The move came after the latest U.S.
inflation reading; the consumer
price index stayed the same for the month of May, lower than
the Dow Jones estimate for a 0.1% monthly increase. Year over year, the
inflation yardstick increased 3.3%, which also came in below expectations.
The Fed’s post-meeting
statement said “inflation has eased over the past year but
remains elevated,” echoing language from the last statement.
Asia-Pacific markets rose overnight with
Chinese electric vehicle stocks seeing gains despite the European Union
slapping tariffs of up of 38% on Chinese EV makers. In
the U.S., S&P 500 futures rose slightly Wednesday night
after the broad market index closed above 5,400 for the first time after the
Fed decision.
There are no major earnings or data
releases in Europe on Thursday.
European markets react to Fed, inflation data (cnbc.com)
S&P 500 futures inch higher after index’s
first-ever close above 5,400: Live updates
UPDATED THU, JUN 13 2024 7:11 PM EDT
S&P 500
futures rose slightly Wednesday night after the broad market index closed above
5,400 for the first time, following the Federal Reserve’s latest interest rate
decision and a May consumer inflation print that came in cooler than expected.
S&P
500 futures and Nasdaq 100 futures climbed
0.10% and 0.45%, respectively. Dow Jones
Industrial Average futures
fell 34 points, or 0.09%.
In extended trading, Broadcom shares surged
14% after the chipmaker topped fiscal second-quarter
expectations and announced a 10-for-1
stock split. On the other hand, Dave & Buster’s Entertainment shares
dropped 10% after the company’s first-quarter revenue missed estimates.
Wall Street is coming off a
strong session for the S&P 500 and Nasdaq Composite,
with each benchmark hitting all-time highs and closing at records. The broader
market index notched a 0.85% advance, while the tech-heavy Nasdaq rallied
1.53%. The 30-stock Dow was the outlier, closing down slightly by 0.09%.
Investors were optimistic after
the central bank acknowledged that “modest
further progress” had been made toward its 2% inflation target,
even as it kept rates unchanged.
At the conclusion of its policy
meeting Wednesday, the Fed indicated just one
rate cut is coming in 2024, down from the three it previously
forecast in March.
May’s
cooler consumer price index print added to hopes that inflation
was indeed easing. Treasury yields plunged following the report, with the
10-year note dropping to its lowest level since April 1.
“The Fed unsurprisingly left
policy unchanged but continues to just about keep the door open to rate cuts
this year,” wrote James McCann, deputy chief economist at abrdn. “Today’s
downside surprise in CPI inflation was more encouraging, and with most members
split between one or two cuts we wouldn’t be surprised to see market pricing
continue to flirt with multiple rate cuts this year.”
Investors will get another look
at inflation on Thursday. The May producer price index is expected to have
risen 0.1% last month, according to economists polled by Dow Jones. That’s down
from a 0.5% increase the prior month.
Stock
market today: Live updates (cnbc.com)
Finally, in commodities news, will Brazil’s
extra arabica production and exports help ease a shortage of robusta coffee
from Vietnam?
Brazil Coffee Report: Upward Prediction for Production,
Exports and Revenue
Better
weather and higher demand for Brazilian coffees — the latter caused by
weather-related production shortages in Vietnam and other key countries — is
projected to contribute to increased production and exports in the 2024/25
market year.
Combined
with a prolonged period of (relatively) high international prices, the
projected total production increase of 5.4% is expected to generate
higher-than-normal revenues for the Brazilian coffee industry, reaching an
estimated US$10.7 billion.
These and other issues are outlined in the new USDA Foreign Agriculture Service annual report on the Brazil coffee sector.
[Note: This is part of a series of stories that will explore USDA FAS annual coffee reports. The information agency typically delivers more than a dozen
country-level reports on the coffee sector, each coming from different authors
and field offices, with predictions for the 2024/25 market year.]
Production
·
The FAS office now estimates Brazil’s coffee production for the
2024/25 marketing year will reach 69.9 million 60-kilogram bags, a 5.4% increase from the previous year.
·
Arabica coffee production is expected to
rise by 7.3% to 48.2 million bags, while robusta production
is forecasted at 21.7 million bags, a 1.4% increase.
·
Brazilian agricultural agencies CONAB and IBGE have projected lower figures for the 2024 harvest than
the FAS report, with total harvest estimates at 58.8 million and 60.2 million
bags, respectively.
Infrastructure
Issues
·
Brazilian coffee exporters face significant logistical
challenges, with 81% of shipments delayed at
main ports in March 2024, including 80% at the key Port of
Santos, causing delays of up to 39 days, according to a report from the
Brazilian exporters association CECAFE.
·
Limited gate access at port terminals exacerbated planning issues, according to the CECAFE report,
resulting in increased fees to exporters and a higher incidence of missed
deadlines with international buyers.
·
The FAS noted that the industry struggles with labor shortages for manual harvesting, forcing
farmers to start harvesting earlier than optimal or prioritize parts of their
crop.
More
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.
[UK] Economy stagnant in April thanks to wet weather
as recovery falters
WEDNESDAY 12 JUNE 2024 7:03
AM
The UK’s economic
recovery faltered in April, revealing the
challenges facing the next
government in generating sustainable
growth.
According to figures
from the Office for National Statistics (ONS), the UK economy was stagnant in
April after the surprisingly strong expansion in the first quarter of the year.
This was in line with
economists’ expectations, but will not make good reading for Prime Minister
Rishi Sunak amid an election campaign in which the performance of the economy
is a crucial issue.
“After one of the wettest Aprils
since records began it’s no surprise that rain dampened consumer spending, with
many households also feeling the pinch from higher prices and bills,” Ben
Jones, lead economist at the Confederation of British Industry said.
Output in the production sector fell
0.9 per cent, with manufacturing recording a poor month.
Construction recorded an even weaker
performance, contracting 1.4 per cent, largely as a result of the weather. The
UK received about 155 per cent of the average rainfall for April, according to
the Met Office’s Monthly Climate Summary.
April’s stagnation followed a 0.6 per
cent expansion in the first quarter of the year, which took the economy out of
last year’s shallow recession.
Paul Dales, chief UK economist at Capital
Economics, said today’s figures are “unlikely to suggest the economy is on the
precipice again”.
The UK barely
registered any growth in 2023 as it struggled with a cocktail of higher
interest rates and stubborn inflation. However, most economists think a
combination of falling inflation, strong wage growth and lower borrowing costs
should provide a
healthy tailwind for household spending
during the remainder of the year.
Yael Selfin, chief
economist at KPMG UK, said the “recovery remains on track” despite April’s
figures, pointing to the “adverse weather conditions” as a major contributor to
the poor performance.
Forward looking
business surveys suggest that the economy is still growing, albeit at a slower
pace than earlier in the year.
More
Economy stagnant in April as recovery falters (cityam.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
Why Dr Nick Coatsworth is done with any more vaccine jabs
June 12, 2024
Dr Nick Coatsworth, who helped lead Australia's response to Covid-19, has revealed he will not be getting any more vaccinations for the virus.
Speaking
with Ben Fordham on
2GB on Wednesday, the former public face of Australia's fight against Covid-19
made the stunning admission he is done with Covid vaccines.
'Are
you still being vaccinated for Covid?' Fordham asked.
'No,'
Dr Coatsworth said.
'When
did you stop doing that?'
'About two years ago, I had three
vaccines, and that's been enough for me.'
'Any reason why?' Fordham asked.
'Because I don't think I need any
more Ben, and the science tells me that I don't,' Dr Coatsworth said.
The
current advice from the Department of Health and Aged care states: 'Regular
COVID-19 vaccinations (also known as boosters) are the best way to maintain
your protection against severe illness, hospitalisation and death from
Covid-19.
'They
are especially important for anyone aged 65 years or older and people at higher
risk of severe Covid-19.
----
This is not the first controversial statement Dr Coatsworth - Australia's
former deputy chief health officer - has made about the Covid vaccine.
In
February this year Dr Coatsworth admitted that imposing vaccine mandates was
wrong in the wake of the Queensland Supreme Court finding that forcing police
and paramedics to take the jab or lose their jobs was 'unlawful'.
In
his inquiry submission Dr Coatsworth said mandates should only be a 'last
resort', 'time limited', and be imposed by governments not employers.
More
Why Dr Nick Coatsworth is done with any more vaccine jabs (msn.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.
Electric Vehicle Calculations Don’t Add Up
Jun. 1, 2024 11:20 am
According to the Federal
Highway Administration, there are over 280
million registered vehicles in
the United States, including cars, trucks, and motorcycles. President Biden’s
plan aims to replace 67%
of these vehicles with electric
ones by 2032. While China, which produces 80% of the batteries, would benefit,
American consumers and the environment would suffer as a result.
First, purchasing an electric
vehicle (EV) is expensive. On average, the purchase price of an EV is currently
$26,000 more than a gasoline-powered car. Next, using an EV as a primary
vehicle or for long family trips is extremely problematic. They have a short
range of only 291
miles on average, compared to
400 miles for gasoline-powered cars. Additionally, they have long charging
times and reduced performance at temperatures below 40°F or above 90°F. On
extremely cold days, the range of the battery can decrease by as
much as 50%. Consequently, EVs may
not be suitable for use in most northern states or out west, where temperatures
range from very high to very low.
According to the Department
of Transportation, depending on the type of EV you buy, recharging to 80%
capacity can take anywhere from 20 minutes to 10
hours. The reason why 80% capacity
is often cited in literature is that the top 20% and bottom 20% of the EV
battery are either unusable or not recommended for use. This fact significantly
affects the actual range of an EV compared to the range cited by environmentalists.
They claim
that this switch is being done to save the environment, but with charging times
of up to 10 hours, every American home would need at least one charger. Since
most homes have more than one car, multiple chargers would be necessary. If
public recharging stations on highways had fast chargers that only require 20
minutes to fill a battery to 80%, far more of these chargers would be needed
than the gas pumps that exist today.
It only takes
3-4 minutes to fill a car with
gas, so waiting in a line 5 cars deep would be a 20-minute wait. With EVs, that
would be a 100-minute wait, followed by the 20 minutes it takes to charge your
EV battery to 80%. Service stations would need to add additional charging
stations, or cities would need to install them in parking lots. Either way,
there would be a massive construction of new electric charging stations.
Nowadays, you replace a
perfectly working phone or computer every two to three years because the
technology keeps improving. This will be the case with EVs and charging
stations. As new technology emerges, old EVs and charging stations will be
disposed of, and new ones will be built in the hundreds of millions, which
could be detrimental to the environment.
If all 280 million US
vehicles were converted to EVs, the demand for electricity would increase by
25% to 50%. Generating more
electricity would necessitate expanding the electric grid and likely burning
more fossil fuels. However, the White House has set a goal of reducing
emissions by 50%
– 52% compared to 2005 levels
by 2030 and achieving net zero by 2050. To achieve this goal, power generation
would need to switch to wind and solar, both of which have significant
environmental impacts that proponents often overlook.
more
Electric Vehicle Calculations Don't Add Up | The
Gateway Pundit | by Antonio Graceffo
Next, our
latest new section, the world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
If Lincoln were alive today, he'd be turning over in his grave.
President Gerald R. Ford.
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