Baltic
Dry Index. 1815 +14 Brent
Crude 81.62
Spot
Gold 2327 U S 2 Year Yield 4.89 +0.03
In
the run up to the UK General Election on July 4, the LIR will play its part.
I have come to the conclusion that politics are too serious a matter to be left to the politicians.
Charles de Gaulle.
To no
one’s great surprised, month-end dress up Friday lived up to expectations. Now
comes the harder part of keeping the stock casino bubble intact over a summer
of increasing US consumer distress and inflation, especially food price
inflation that isn’t going away.
Adding
to a difficult summer, some fast indicators suggest the real US economy is/has
entered into consumer and employment recession. How long before the rest of the
US economy drops into recession too?
Dow closes more than 570 points higher to post best day
in 2024, stocks wrap a winning May: Live updates
UPDATED FRI, MAY 31 2024 4:50 PM EDT
The Dow Jones Industrial Average jumped
Friday for its best session of the year, as investors wrapped up a strong month
after the Federal Reserve’s preferred inflation measure came in largely around
expectations.
The blue-chip Dow climbed 574.84
points, or 1.51%, to 38,686.32, lifted by Salesforce and UnitedHealth’s
respective advances of 7.5% and 2.8%. The S&P 500 added
0.80% to 5,277.51. The Nasdaq Composite ticked
lower by 0.01% to 16,735.02, as Nvidia and
a few other megacap technology stocks took a hit.
The S&P 500 and Nasdaq
snapped five-week win streaks with slides of 0.51% and 1.1%, respectively. The
blue-chip Dow slipped 0.98%, marking a second straight week of losses.
Despite the tough week, it was a
winning May, with each of the major benchmarks registering a sixth positive
month in seven. The Dow added 2.3% this month, while the S&P 500 rose 4.8%.
The Nasdaq gained 6.88%, notching its best month going back to November.
“The market is going to remain
choppy,” said Quincy Krosby, chief global strategist at LPL Financial, citing
variables such as the upcoming election, Treasury yields and consumer spending.
“There are questions as to: Where are we headed? Where’s the economy headed?”
A chunk of May’s strength can be
attributed to a surge in Nvidia, which released blockbuster
earnings last week. Though the artificial intelligence
darling’s stock fell about 0.8% on Friday, shares ended the month nearly 27%
higher. Tesla and Netflix also
pulled back on Friday, hurting the tech-heavy Nasdaq in the session.
Closely followed economic data
released Friday morning came mostly in line with forecasts. The core personal
consumption expenditures price index increased
0.2% in April, the same figure that was anticipated by economists
polled by Dow Jones. Core PCE rose 2.8% on an annualized basis, slightly above
the 2.7% prediction from economists.
“This week’s most important
economic data came and went without deviating much from expectations,” said
Chris Zaccarelli, chief investment officer for Independent Advisor Alliance,
adding that the market breathed a “sigh of relief” after the report.
Traders also reacted to the
latest corporate earnings results. Dell Technologies tumbled
more than 17% despite strong earnings after saying its AI server backlog was
smaller than anticipated. Cloud security stock Zscaler popped
8.5%, while developer data platform MongoDB plunged
almost 24%. Apparel retailer Gap jumped
more than 28%.
Stock
market today: Live updates (cnbc.com)
European stocks close higher as investors digest
euro zone inflation; up 2.3% for the month
UPDATED FRI, MAY 31 2024 11:44 AM EDT
European stocks closed
higher Friday as investors digested fresh euro zone inflation data and its
implications for next week’s European Central Bank rate decision.
The regional Stoxx 600 index
was provisionally 0.28% higher as markets closed. Sectors were mostly in
positive territory, with utilities adding 1.04% while tech lost 1.48%. The
Stoxx 600 benchmark finished the month of May 2.3% higher, its biggest gain
since March, Refinitiv data showed.
British retailer JD Sports trailed
near the bottom of the pan-European benchmark, dropping as much as 12% before
paring losses slightly, after it reported a fall in first-quarter U.K. sales.
Euro zone inflation rose
to 2.6% in May, slightly higher than the 2.5% analysts had
predicted, fresh data from statistics agency Eurostat said Friday. The uptick
comes as the European Central Bank is widely expected to cut interest rates at
its June 6 meeting, the first reduction since 2019.
Fresh data out of Italy also showed the economy
grew 0.3% in the first quarter, with a similar growth rate expected for the
rest of the year.
Elsewhere, U.S.
stocks ticked lower Friday as investors assessed the latest set
of corporate earnings and looked ahead to a key inflation report. In Asia
Pacific, markets rose on the back of fresh data from major economies
across the region.
Europe
stocks open to close: bond yields, stocks, data (cnbc.com)
Japan confirms first currency intervention since
2022 with $62 billion in spending
Data from Japan’s Ministry of Finance on Friday
confirmed the country’s first currency intervention since 2022, after the yen plunged
to a 34-year-low in
April.
The ministry on Friday stated Japan
spent 9.7885 trillion yen ($62.25 billion) on currency intervention between
April 26 and May 29, according to a Google-translated statement.
This is the first time that the Japanese government has undertaken such a
market measure since October 2022, according to ministry records.
The timeline of the government step
coincides with a sharp rebound in the Japanese currency in
recent weeks, after the yen plunged to a 34-year-low of 160.03
against the U.S. dollar on April 29.
It later bounced to 156 levels
later in that session, heating
speculation of a potential intervention by Japanese
authorities. The currency further strengthened by more than 2% within days.
At the time, analysts at Bank of
America Global Research estimated that the size of the first suspected
intervention could have been between 5 trillion yen and 6 trillion yen, based
on Bank of Japan data.
The yen has been combating
sustained pressure since the Bank of Japan ended its monetary policy of
negative interest rates in March. It traded at 157.25 against the U.S. dollar
at 11:55 a.m. London time on Friday.
Earlier this month, Japanese Finance Minister Shunichi Suzuki backed
the need for interventions, if sharp currency moves started to
impact households and companies. He declined to comment at the time when asked
whether the ministry had stepped in to prop up the yen.
---- Japan
last intervened to stabilize the currency in October 2022, when the yen fell to
lows of around 152 per dollar. Authorities intervened three times that year to
stabilize the currency, reportedly spending as much as a combined 9.2
trillion yen over the period.
Japan
confirms first currency intervention since 2022 (cnbc.com)
Traders Are Bracing for a Record-Smashing Summer That
Will Shake Up Commodities
High prices for food and energy frustrate
the Federal Reserve’s inflation fight.
May 30, 2024 at 9:00 AM GMT+1
Around the world, people are already living through the havoc brought on by global temperatures that are breaking records. It’s about to get a lot worse.
Odds are growing that
2024 will become the hottest year in history as the Northern Hemisphere barrels
into summer. Prices for some of the world’s most vital commodities —
natural gas, power and staple crops like wheat and soy — are climbing. The
world of shipping, already thrown into chaos from the Red Sea to the Panama
Canal, is likely to be rocked again by parched waterways. And the potential for
destructive wildfires is increasing.
The outlook is a bleak
reminder of how wild weather driven by climate change is worsening
inflation, elevating the cost of energy, food and fuel. Frequent natural
disasters are also heightening the risk of devastating damages and insurance
costs while making it harder to predict market moves. Last year, extreme
weather and earthquakes inflicted global losses of $250 billion, according to
Munich Re.
Some experts are
predicting US natural gas prices could jump more than 50%, while wheat and
coffee markets are also expected to rally.
Globally, 2024’s first four months were the
warmest in 175 years, according to the National Centers for
Environmental Information. The year will definitely rank among the top five
hottest on record and has a 61% chance of knocking 2023 out of the top spot,
based on the US agency’s analysis.
---- Here’s a look at the markets that have the
potential for the most volatility.
More
Will
Summer Heat and Hurricanes Send Gas, Power and Crop Prices Soaring? - Bloomberg
Next “as goes America,
so goes the world” might not be quite so accurate with the economic rise of
China, but this still might be an early
warning of a troubled summer ahead. Also see the last YouTube video.
Major Layoffs In May 2024: Tesla,
Google, Indeed, Microsoft, TikTok, Walmart And More
May 29, 2024
Major Layoffs: Layoffs in several sectors are
intensifying daily, fueled by economic downturns, company restructuring,
mergers, acquisitions, or shifts in business strategies. These layoffs impacted
employees across different roles and levels. Tech layoffs garner significant
attention due to the industry's rapid growth, innovation, and prominence in the
global economy. During this year, there has been a notable increase in layoffs
among leading companies across multiple sectors, resulting in a considerable number
of employees being let go from their positions.
In May 2024, several significant layoffs
affected thousands of employees across the globe. From Google to Tesla, almost
every technology company and companies from other sectors announced layoffs
this month.
In a surprising turn of events, Tesla, led by
Elon Musk, laid off its entire charging team as part of a recent round of
layoffs this month. Despite securing partnerships with major automakers like
Ford and General Motors to utilise its connectors, Tesla's Supercharger network
has been affected by these layoffs, which are in addition to the previous
layoffs the EV company has made.
Google has recently fired nearly 200 employees
from its "core team" and relocated certain roles overseas as part of
efforts to reduce costs. About 50 positions were cut from the engineering team
based at its California headquarters. A report indicates that the company
intends to hire replacement workers for these positions in India and Mexico.
Major Layoffs In May 2024: Tesla, Google, Indeed,
Microsoft, TikTok, Walmart And More (msn.com)
Finally, a credit
warning held over for the weekend edition. Is it the scary calm before the
storm? Weatherman Graeme, like all weathermen everywhere, helpfully says maybe.
Wall Street
Breakfast: Private Credit
May 30, 2024 7:30 AM ET
There's an emerging asset class that has grown
from around $250B in 2010 to about $2T today, and is set to expand by
double-digit percentages in the coming years. The private credit market
consists of private loans made by funds to privately owned companies, with
money originating from sources like pension funds, insurance companies,
endowments and foundations. Private credit also leans heavily on direct lending
and one-to-one relationships compared to traditional loans, where money that is
lent out is funded through bank deposits or is syndicated among a group of
investors.
Why so popular? In the aftermath of the banking crisis in 2008,
the Fed drove interest rates to zero, driving all the players in the market to
compete for the same small number of assets that had any yield. This created an
environment where alternative investments could gain an edge, while at the same
time, the big banks pulled back on the riskier areas of lending due to
increased regulation, and higher capital and liquidity rules. It was part of a
plan to move risks out of the banks where taxpayers have protection, and
eventually saw private credit morph into one of the hottest investments on Wall
Street.
As investors want more of it, the warnings have
grown louder. Back in November, UBS (UBS) Chairman Colm Kelleher
said there was "clearly an asset bubble going on in private credit... what
it needs is just one thing to trigger a fiduciary crisis." The IMF
also warned that the market needs more scrutiny due to liquidity
demands, as well as the quality of borrowers. The latest to weigh in on the
industry is JPMorgan's (JPM) Jamie
Dimon, who noted that "there may
be problems here," but "I don't think it's
systemic" and the bank would even contemplate investing up to $200B in
private-credit deals off its balance sheet.
What to watch: Private credit wasn't disturbed when rates took
a turn higher in the fight against inflation, as the loans carry floating
interest rates. However, there are fears that this can eventually hurt
borrowers overwhelmed by higher payments, especially if there is a severe
recession, or if it is compounded with other governance risks like weak
underwriting standards in a less liquid or not-so-transparent environment.
Those in the private credit industry say their matched funding model is more
secure compared to traditional banks that lend long/fund short with deposits -
and can experience a run in moments of crisis - while it is also a source of
credit creation that can support the U.S. economy. See private
credit stocks here.
Wall Street Breakfast: Private Credit | Seeking Alpha
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.
Euro zone
inflation rises just as ECB prepares to cut rates
May 31, 2024
FRANKFURT (Reuters) - Euro zone inflation rose in
May, data showed on Friday, in a sign the European Central Bank still faces a
slow and uncertain journey to rein in prices.
The bigger-than-expected increase in inflation was
unlikely to stop the ECB from lowering borrowing costs from a record high next
week, but may cement the case for a pause in July and a slower pace of interest
rate reductions in the coming months.
Consumer prices in the 20 countries that share the
euro rose by 2.6% year on year in May, inching away from the ECB's 2% goal
after increases of 2.4% in the previous two months, according to Eurostat's
flash estimate.
Economists polled by Reuters had anticipated a 2.5%
increase although an upside surprise was likely after German, French and
Spanish readings earlier.
More significantly, a closely watched measure of
underlying inflation that excludes food, energy, alcohol and tobacco came in at
2.9% from 2.7% in April.
Prices in the services sector, which some policymakers
have singled out as especially relevant because they reflect domestic demand,
rebounded to 4.1% from 3.7%.
This was likely to mirror larger-than-expected
increases in wages in the first quarter of the year, which have boosted
consumers' battered disposable income after years of below-inflation pay hikes.
The ECB's biggest ever streak of rate hikes has
helped bring down inflation from a whopping 10% in late 2022 and stabilised
consumer expectations but it has also choked off credit.
This meant that policymakers meeting next week were
likely to stick to well-telegraphed plans to cut rates despite growing market
doubts about a global narrative of falling inflation.
Euro zone inflation rises just as ECB prepares to cut
rates (msn.com)
German retail sales fall more than
expected in April
May 31, 2024
(Reuters) -German retail sales fell more than expected in April,
decreasing by 1.2% compared with the previous month, dimming hopes that
consumer spending could give a much-needed boost to Europe's largest economy.
Analysts polled by Reuters had predicted a 0.1% decrease.
Year on year, retails sales declined by 0.6% in real terms, the federal
statistics office reported on Friday.
The data, published in more detail on the office's website, offers a
mixed picture for consumption in Germany as economists hope that rising wages
and an improved outlook will boost spending.
Germany's inflation rate, harmonised to compare with other euro zone
economies, has increased over the past two months after easing from the
double-digits highs of late 2022, coming in at 2.8% in May.
On Friday, the Ifo institute said its price expectations index had risen
slightly to 16.2 points in May from 15.2 points the month before.
However, price expectations declined by contrast in consumer-related
industries.
"This means inflation is likely to fall again in the coming months.
In August, it should drop below 2% for the first time since March 2021,"
said Timo Wollmershaeuser, head of forecasts at Ifo.
The statistics office also reported on Friday a 1.7% year-on-year fall
in import prices in April, largely in line with analysts' expectations.
German retail sales fall more than expected in April
(msn.com)
Covid-19
Corner
This section will
continue until it becomes unneeded.
As goes Australia in
their winter, so goes America and Europe next winter?
South Australia:
Surgeries shut down as new Covid and flu wave sees emergency 'Code Yellow'
declared
- 'Code Yellow'
declared in South Australia
- Elective
surgeries postponed, patients transferred
May 31, 2024
An emergency 'Code Yellow' has been
declared in one state's public hospital system as a new Covid and flu wave overwhelms staffing numbers and
generates a surge in new patients.
South Australia Health Chief Executive Robyn Lawrence
triggered the emergency on Thursday and at a press conference on Friday
confirmed at least nine elective surgeries would be postponed and some patients
at Adelaide's metropolitan hospitals would be transferred to
regional centres.
'I've been able to see this growing
number of Covid presentations in particular, but I'm also seeing a growth
in pneumonia and heart failure and other conditions which
can be triggered by older Australians having a viral illness of a variety of
different types,' she said.
'That's not unusual in winter but what we are
experiencing at the minute is 200 more patients in our hospital than the same
time last year, and that's a significant uplift for our system.'
Respiratory illnesses are the prime driver for the
surge in sickness, she said, and about 270 hospital staff are off sick with Covid
or the flu, and about 140 patients are in hospital with either ailment.
---- Health authorities are warning
Australia is going to experience a brutal flu season this winter. Covid, RSV,
whooping cough and influenza are all in circulation, with Queensland and New
South Wales expected to see a rapid increase in those illnesses over the next
six to eight weeks.
Experts are advising people to help reduce the
spread of disease through simple measures such as staying home if unwell and
wearing a mask if they need to go out.
The declaration triggers an emergency response,
reallocating resources and adjusting patient care.
As the hospital system works to regain control over
the surge, priority two and three surgeries will be pushed back, Ms Lawrence
said.
More
Technology Update.
With events happening
fast in the development of solar power and graphene, I’ve added this section.
1,300 miles to a tank – BYD's
new hybrids don't care about your bladder
Joe Salas May 29, 2024
Yes,
you read that correctly, 1,300 miles (nearly 2,100 km) before you have to
refuel or charge it. BYD – the world's leader in EV car sales having recently
surpassed Tesla – released its 5th-generation "DM" Plug-in Hybrid
Electric Vehicles.
BYD
Auto Co. has just released two models, the Qin L DM-i and the Seal 06 DM-i,
both with a ridiculously impressive 81.1 miles per gallon (2.9L/100km) on their
internal combustion side, with an additional 49 miles (79 km) with their
smaller battery and 74 miles (119 km) on their larger battery in
"all-electric" mode. What's equally impressive is their price tag:
US$13,762 (¥99,800). The DM stands for Dual Mode – but could equally stand for
Deranged Mileage.
----Both the Qin L and the Seal 06 are based on the same
1.5L inline-4 turbo platform with either a 10-kWh or a 15.8-kWh battery pack.
With the little liter-an-a-half punching out a mere 99 hp (74 kW) and 93 lb-ft
(126 nm) of torque paired with the 161-hp (125-kW) electric motor, you're not
going to set any P100D Plaid times at the drag strip, but you should be able to
get where you're going in style and with a thicker wallet when you arrive.
The Warren Buffet backed company said its recent gains in
ultra high efficiency are courtesy of its "AI-enabled energy consumption
management system" that decides when it's best to switch back and forth
between its ICE and its EV capabilities. Its higher trim models are capable of
Level 2 automation driving, which basically means you'll still have to hold the
wheel and pay attention, but it sounds like it'll have cruise control at the
very least.
Granted, these impressive figures are based on the relatively
new CLTL testing procedure (China Light Duty Vehicle Test Cycle) which is
apparently a bit more generous and optimistic with its figures than that of the
EPA (Environmental Protection Agency), which tends to better reflect
"real-world" driving conditions. CLTL is the Chinese standard for
testing whereas the EPA is the standard in the US. CLTL testing figures can be
as much as 30% higher than that of the EPA. Even so, 70% of 1,300 miles (2,092
km) is still a pretty impressive 910 miles (1,465 km) of "real-world"
range, if the trend holds true.
1,300 miles to a tank – BYD's new hybrids don't care
about your bladder (newatlas.com)
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.
Antonio
Vivaldi: Concerto for 2 clarinets, 2 oboes, strings & b.c. in C major (RV
560)
Antonio Vivaldi: Concerto
for 2 clarinets, 2 oboes, strings & b.c. in C major (RV 560) - YouTube
This weekend’s chess update. Approx. 13 minutes.
Praggnanandhaa Beats Magnus in Classical for The First Time!
Praggnanandhaa Beats Magnus in Classical for The First Time! - YouTube
This
weekend’s final, worrying YouTube diversion.
Approx. 14 minutes.
EVERYONE
IS BROKE - EVEN TOYOTA IS NOT SELLING!
EVERYONE IS BROKE - EVEN TOYOTA IS NOT SELLING! -
YouTube
Under democracy one party always devotes its chief energies to trying to prove that the other party is unfit to rule—and both commonly succeed, and are right.
H. L. Mencken.
No comments:
Post a Comment