Friday, 14 June 2024

PPI Relief. Oil Bounces. G-7 v Everyone Else? EV Bubble Bursts.

Baltic Dry Index. 1942 +106     Brent Crude  82.37

Spot Gold 2306             US 2 Year Yield 4.68 -0.07

In the run up to the UK General Election on July 4, the LIR will play its part.

The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.

Winston Churchill.

In the stock casinos, more hopium that the great disconnect from economic reality will continue.

But the Dow indexes are now increasingly lagging as fewer and fewer stocks now drive  the S&P and NASDAQ in the US casinos.

In the USA, better inflation news from the Producer Price Index.

At the G-7 meeting in Italy, a smoke and mirrors cover up attempt as the western block attempt to steal frozen Russian assets held in the west. That’s well covered in main stream media.

On Ukraine, President Biden Joe Biden, fearing a loss to Donald Trump in November, attempts to tie the next President(s) to Ukraine for the next 10 years. Again well covered in MSM today.

Ignored at the G-7 and by western media, the two day meetings of the ever expanding BRICS grouping now comprising 21 nations with some 59 nations seriously taking an interest.

With the dollar now weaponised against much of the world and Uncle Scam running up new fiat debt by about one trillion dollars every hundred days, planet Earth is now rapidly splitting into a G-7 versus everyone else.

 

Japan markets reverse losses after BOJ decision; other markets mixed

Asia-Pacific markets were mixed after the Bank of Japan kept its benchmark interest rate unchanged on Friday, but indicated it’s considering the reduction of its purchase of Japanese government bonds.

The central bank left short-term rates unchanged at between 0% to 0.1% as widely expected, but said it could reduce its purchases of Japanese government bonds after the next monetary policy meeting, scheduled for July 30 and 31.

The BOJ currently aims to purchase about 6 trillion yen ($38.5 billion) in bonds per month, and has informed the market of plans to purchase between 4.8 trillion yen and 7 trillion yen of bonds per month.

Japan’s Nikkei 225 reversed losses to gain 0.73% after the BOJ decision, while the Topix was 0.78% higher.

South Korea’s Kospi was 0.32% higher, and the small cap Kosdaq was 1.14% lower.

Australia’s S&P/ASX 200 fell 0.29%.

Hong Kong Hang Seng index was down 0.67%, while the CSI 300 on mainland China slipped 0.4%.

Overnight in the U.S., the S&P 500 rose to post a fourth consecutive record close as traders weighed more data showing inflation pressures may be easing.

The broad market index climbed 0.23% to end at 5,433.74, while the Nasdaq Composite advanced 0.34% and closed at 17,667.56. Thursday marked the fourth straight closing record for both S&P 500 and the Nasdaq.

The Dow Jones Industrial Average was the underperformer, slipping 0.17%.

The S&P 500 and Nasdaq hit record levels this week, boosted by fresh data showing signs of inflation pressures cooling.

Asia stock markets: BOJ rate decision, JGB purchases (cnbc.com)


Stock futures are little changed after S&P 500 posts fourth consecutive closing record: Live updates

UPDATED FRI, JUN 14 2024 7:09 PM EDT

Stock futures were little changed Thursday, following a fresh record close for the S&P 500 and strong quarterly results from Adobe.

Futures tied to the broad market index slipped 0.05%, while Nasdaq 100 futures ticked up by 0.03%. Dow Jones Industrial Average futures inched down by 0.07%, or 29 points.

In extended trading, software giant Adobe leapt 15% after fiscal second-quarter results surpassed Wall Street estimates. Adobe also raised its full-year guidance, making the company a standout compared to peers in the software space that are citing headwinds tied to macroeconomic trends.

Stocks are coming off a winning session that saw the S&P 500 notch its fourth-straight record close. The technology-heavy Nasdaq Composite also ended the session at a record.

Wholesale inflation unexpectedly ticked down by 0.2% last month, while economists polled by Dow Jones expected the gauge to increase by 0.1%. That follows a consumer price index reading that was flat on a monthly basis in May.

“I think the soft landing is still intact, but I think there’s starting to be and could be jitters about [if] the Fed is staying restrictive for too long,” BD8 Capital Partners CEO Barbara Doran told CNBC’s “Closing Bell: Overtime” on Thursday.

“The market on the surface is expensive at 21 times earnings, but as we know, that’s a handful of stocks [and] if you take that out of the S&P 500, it’s a lot cheaper,” she added. “The question now is breadth.” Market breadth measures the number of stocks that are rising versus those that are falling.

Hopes for a continued cooling of inflation have boosted equities this week. The S&P 500 and Nasdaq Composite are on pace to end the week higher. The S&P 500 has climbed 1.6%, while the Nasdaq has added 3.1%. The 30-stock Dow is the lone laggard with a 0.4% decline.

Elsewhere, shares of electric vehicle maker Tesla traded marginally higher after the company’s shareholders approved a contentious $56 billion pay package for CEO Elon Musk.

Stock market today: Live updates (cnbc.com)

In other news.

 

Oil prices set for best week in over 2 months on solid demand outlook

By Ashitha Shivaprasad 

SINGAPORE, June 14 (Reuters) - Oil prices eased on Friday as markets evaluated the impact of U.S. interest rates staying higher for longer than anticipated, but crude benchmarks headed for their best week in more than two months after solid projections for crude and fuel demand.

Brent crude futures were down 34 cents, or 0.4%, at $82.41 a barrel by 0344 GMT. West Texas Intermediate (WTI) U.S. crude futures lost 41 cents, or 0.5%, to trade at $78.21 a barrel.

However, Brent and the U.S. benchmark gained over 3% for the week - the best week since April 5.

The Organization of Petroleum Exporting Countries (OPEC) stuck to a forecast for relatively strong growth in global oil demand for 2024 and Goldman Sachs projected solid U.S. fuel demand this summer.

This helped reverse losses in the previous week which were driven by an agreement by OPEC and its allies, together called OPEC+, to start unwinding output cuts after September.

"Overall, this week can be characterised as a recovery effort for oil," said Tim Waterer, chief market analyst at KCM Trade based in Australia.

"I wouldn't be surprised to see oil prices head higher from here whilst the demand outlook continues to look rosier. Much may depend on how the northern hemisphere summer demand picture plays out."

Providing further support to the market, Russia pledged to meet its output obligations under the OPEC+ pact, after saying it exceeded its quota in May.

However, the price rally this week cooled after the U.S. Federal Reserve held interest rates steady and pushed out the start of rate cuts to as late as December.

Meanwhile, the International Energy Agency said in a report on Wednesday it sees oil demand peaking by 2029, levelling off at around 106 million barrels per day (bpd) towards the end of the decade.

On the downside, concerns over economic outlook grew after the Fed's view on rate cut, but that said, to the extent that this buoys the U.S. dollar, it could offer a measure of support to Brent, BMI analysts wrote in a note.

More

Oil prices set for best week in over 2 months on solid demand outlook | Reuters

 

BRICS meeting calls for improving global governance

June 12, 2024

NIZHNY: A two-day meeting of foreign ministers belonging to the BRICS of emerging economies has concluded in the Russian city of Nizhny Novgorod, with all parties calling for adherence to multilateralism, improving global governance and increasing the voice and representation of developing countries.

The meeting from Monday to Tuesday marks the first gathering since the group expanded from five members (Brazil, Russia, India, China and South Africa) to nine in January with the addition of Egypt, Ethiopia, Iran, and the United Arab Emirates as official members.

On Monday, BRICS countries engaged in in-depth discussions on cooperation as well as international and regional hot topics. A joint statement of BRICS foreign ministers was issued following the meeting.

All parties spoke highly of the important role of the BRICS mechanism and the achievements of its membership expansion. They agreed that the accession of more countries to BRICS has accelerated the process of world multi-polarization and promoted a more just and equitable international order. They also voiced support for the establishment of partner countries.

All parties called for adhering to multilateralism, opposing unilateralism and protectionism, promoting reform of the international financial architecture, enhancing and improving global governance, and increasing the voice and representation of developing countries.

All parties emphasized resolving disputes peacefully through dialogue and consultations, and supporting all efforts conducive to the peaceful resolution of crises.

On the second day, a dialogue was held between the BRICS countries and 12 other major developing countries, namely Thailand, Laos, Vietnam, Bangladesh, Sri Lanka, Kazakhstan, Belarus, Türkiye, Mauritania, Cuba, Venezuela and Bahrain.

The participants praised the strategic significance of the dialogue, noting that the BRICS+ model facilitates unity and cooperation among developing countries, enhancing the Global South’s influence and building a more just and reasonable international order.

They called for reforms to the international financial system, enhanced cooperation in the digital economy, infrastructure and other areas, safeguarding the stability of the global industrial supply chain, narrowing the development gap, and achieving shared progress.

Chinese Foreign Minister Wang Yi, also a member of the Political Bureau of the Communist Party of China Central Committee, stressed universal security, common development and global governance at the meetings.

He said BRICS should take the lead in safeguarding the international system with the United Nations at its core, and push for an equal and orderly multipolar world and inclusive economic globalization.

More

BRICS meeting calls for improving global governance | Pakistan Today

Finally, more on the Great EV Turnoff.

 

Eye-watering car insurance quote leaves Tesla drivers fuming

June 13, 2024

It might be getting cheaper to purchase an electric vehicle (EV) but an insurance quote for his Tesla has been branded an 'absolute joke' by one driver. 

The motorist recently shared a photo on social media which revealed it costs a hefty $4,000 more to insure his EV than his internal combustion engine cars. 

Screenshots showed that comprehensive insurance for a Tesla would be between $5,073 and $5,175 based on two quotes from different insurers - but he could insure his petrol-powered Kia for just $900.

'Take a look at the price difference between Tesla under a lease and my Kia which is owned outright,' he said.

---- Insurance is the second-biggest ongoing expense for Australian EV owners.

According to the Insurance Council of Australia (ICA), the peak insurance body, there are a few reasons why EV owners pay higher premiums. 

A spokesperson said EVs have more complex systems and components, and explained that repairing damaged EVs required importing parts to Australia.

'The cost of these parts and the limited number of qualified service centres and technicians contributes to the higher cost of insurance premiums for EVs than internal combustion (IC) vehicles,' the spokesperson told Yahoo

Expensive battery replacement costs, which can be up to 40 per cent of the car's total value, were another key factor.

They also require speciality removal equipment, along with disposal and recycling methods and, without a local network, most batteries need to be returned overseas. 

more

Eye-watering car insurance quote leaves Tesla drivers fuming (msn.com)

 

FIRE STRIKES BYD SHOWROOM FOR THE 10TH TIME IN CHINA

BYD’s latest showroom fire has left seven vehicles destroyed and raised questions about the safety of its EVs. What’s behind these frequent fires?

BYD has found itself in the spotlight again after another fire broke out at one of its showrooms in China. On May 16, a massive blaze erupted at a BYD showroom in Qingkou, Fujian Province, completely destroying seven vehicles and damaging several more. Thankfully, no one was injured, but the fire required seven fire  trucks and a team of firefighters to extinguish. This incident marks the 10th time a BYD showroom has caught fire since 2021, raising concerns among consumers and industry watchers.

Videos of the fire quickly spread online, showing large clouds of smoke billowing into the sky and creating an eerie orange glow over the area. Eyewitnesses reported hearing loud bangs and pops as the fire raged, making it difficult for firefighters to approach the scene initially. The fire started at 12:32 a.m. and was mostly under control by 1:18 a.m., according to local reports.

BYD quickly issued a statement acknowledging the incident, suggesting that old wiring in the store’s roof or a short circuit might have caused the fire. It emphasized that a thorough investigation would be conducted in cooperation with relevant authorities. Despite early speculation that an electric vehicle in the showroom might have been the source of the fire, BYD checked the data and found no issues with the vehicle batteries.

This latest fire adds to a troubling pattern for BYD. Although electric vehicles (EVs) statistically catch fire far less often than gasoline-powered cars, BYD seems to be making headlines more frequently for these incidents. Some argue that this might simply be because BYD sells a large number of vehicles, increasing the likelihood of such reports. Still, it’s worth noting this is the 10th fire at a BYD showroom in less than three years.

EV fires, while rare, can be particularly challenging to manage due to the nature of lithium-ion batteries. These batteries can produce large amounts of oxygen when they overheat, making fires difficult to extinguish. Videos have even shown EVs burning underwater, although cooling the battery pack can help end the fire more quickly. Thermal runaways, where a problem with the battery cells causes them to overheat, are a known risk, although such incidents are still relatively uncommon.

BYD is not alone in facing these challenges. Other major EV manufacturers, including Tesla, have also dealt with battery fire issues. For instance, the Chevrolet Bolt EV had several high-profile fires, leading to one of the largest recalls in EV history.

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.

US wholesale prices dropped in May, adding to evidence that inflation pressures are cooling

Updated 

WASHINGTON (AP) — Wholesale price increases fell in May, the latest sign that inflation pressures in the United States may be easing as the Federal Reserve considers a timetable for cutting interest rates.

The Labor Department reported Thursday that its producer price index — which tracks inflation before it reaches consumers — declined 0.2% from April to May after rising 0.5% the month before, pulled down by a 7.1% plunge in gasoline prices. Overall, it was the biggest drop in producer prices since October.

Measured from a year earlier, wholesale prices were up 2.2% last month, edging down from a 2.3% increase in April. Excluding volatile food and energy costs, so-called core producer prices were unchanged from April and up 2.3% from May 2023.

Wholesale food prices dropped 0.1% from April to May. Egg prices dropped 35%. Computer and computer equipment fell 1.2%, and household appliance prices slid 0.5%.

The producer price index can provide an early read on where consumer inflation is headed. Economists also watch it because some of its components, including some healthcare and financial services costs, are used to compile the Fed’s preferred inflation gauge, known as the personal consumption expenditures price (PCE) index.

The wholesale figures were released a day after the Labor Department reported that consumer inflation eased in May for a second straight month. Core consumer prices rose 0.2% from April to May, the smallest increase since October. And compared with May 2023, core prices rose 3.4%, the mildest such increase in three years.

Consumer inflation peaked at 9.1% two years ago but came down as the Fed raised its benchmark interest rate 11 times in 2022 and 2023, taking it to a 23-year high. Still, it continues to run above the Fed’s 2% target.

More

US wholesale prices dropped in May, adding to evidence that inflation pressures are cooling (yahoo.com)

Covid-19 Corner

This section will continue until it becomes unneeded.

Past COVID-19 infection may protect people against some common colds

June 13, 2024

A previous COVID-19 infection may lower your risk of getting a cold caused by a milder coronavirus cousin, according to new research.

Endemic coronaviruses are thought to be responsible for 15 to 30 per cent of common colds in adults.

Researchers found that people previously infected with COVID-19 had a 50 per cent lower chance of having a common cold caused by a coronavirus compared with people who were fully vaccinated and did not get COVID-19.

“We think there’s going to be a future outbreak of a coronavirus,” said Dr Manish Sagar, senior author of the study published on Wednesday in the journal Science Translational Medicine.

“Vaccines potentially could be improved if we could replicate some of the immune responses that are provided by natural infection," he added.

Researchers said the study may help in the development of future vaccines against COVID-19 that also protect against related coronaviruses.

“Our studies would suggest that these may be novel strategies for better vaccines that not only tackle the current coronaviruses, but any potential future one that may emerge,” said Sagar of Boston Medical Center.

More

Past COVID-19 infection may protect people against some common colds (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.

AI discovers new rare-earth-free magnet at 200 times the speed of man

C.C. Weiss  June 12, 2024

As some entities identify new (or at least overlooked) sources to meet the growing demand for rare earth materials, others are looking toward new tools. UK deep-tech company Materials Nexus announced on Tuesday that it has designed a new rare-earth-free permanent magnet with the help of its AI platform. It says the AI-driven discovery and development process was 200 times faster than the resource-intensive manual route, bringing new hope to an electrifying world with a growing appetite for powerful magnets.

With the world moving away from internal combustion engines and gradually embracing electric mobility, the demand for compact, high-power motors is rapidly rising. By far the most popular option in the automotive industry right now is the permanent magnet motor, which powers upward of 80% of modern electric vehicles.

Materials Nexus estimates that demand for permanent magnets will grow tenfold by 2030, in the EV industry alone. And it's not just electric cars and trucks, either. Permanent magnet motors are in demand for many applications, including robotics, drones, wind turbines and HVAC equipment.

The problem is, the rare earth materials used to create the most powerful magnets and most efficient, power-dense motors – materials like neodymium and dysprosium – require damaging mining and expensive, energy-intensive processing. With its world-largest EV market, China has emerged as a leader in both mining and processing of rare earths, pulling as much as 70% of the world's rare earths out of the ground while processing closer to 90%. That gives the country monopoly-like control over the essential materials, leaving other markets exposed to supply disruptions and pricing fluctuations.

The search for alternatives is on, and some automakers and suppliers are starting to develop and incorporate magnet-free motors. Others, including Tesla, are pursuing permanent magnet designs free from rare-earth materials.

Rare-earth-free magnets certainly sound like an intriguing solution, but they can be difficult to formulate and less powerful than traditional rare-earth magnets. Niron Magnetics has developed what it calls the world's first high-performance rare-earth-free magnets, using a mix of abundantly available iron and nitrogen, but it's been researching and developing it for over a decade and still isn't quite ready for mass production.

Materials Nexus is letting the world know it's here to help. It believes it has just what contemporary and future magnet startups need to identify and develop rare-earth-free magnetic materials, and by substituting AI for old-fashioned trial-and-error, it believes they can do so at a pace hundreds of times faster than has been traditionally possible. It says its AI platform can identify rare-earth-free magnetic materials in a matter of days or weeks, in contrast to the years and decades it's taken in the past.

Rather than simply spout impressive numbers, Materials Nexus has already used its AI platform to identify a rare-earth-free permanent magnet it's named MagNex. The AI analyzed more than 100 million rare-earth-free material compositions before it landed on MagNex, factoring in variables such as cost, supply chain security, performance and environmental impact.

After the AI did the heavy lifting, Materials Nexus synthesized and tested MagNex with help from the Henry Royce Institute at the University of Sheffield. In three months, the company had done work that would have taken years prior to its AI system.

More

AI discovers new rare-earth-free magnet at 200 times the speed of man (newatlas.com)

Next, our latest new section, the world global debt clock. Nations debts to GDP compared.   

World Debt Clocks (usdebtclock.org)

Another weekend and another weekend closer to the French, UK and US problematic elections. Be very careful this weekend if in France or GB, there are hundreds if not thousands of dodgy politicians and wannabe politicians on the loose. Have a great politician free weekend everyone.

Different men seek after happiness in different ways and by different means, and so make for themselves different modes of life and forms of government.

Aristotle.

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