Friday 21 June 2024

Stocks, AI Bubble Nerves? Triple Witching Day. US Recession?

 Baltic Dry Index. 1984 +41      Brent Crude  85.62

Spot Gold 2362             US 2 Year Yield 4.70 +0.01

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

To lodge all power in one party and keep it there is to insure bad government and the sure and gradual deterioration of the public morals.

Mark Twain.

In the stock casinos, a nervous pause or something more?  Is the AI bubble about to end?

What happens when the great AI hype goes the way of the great Dot.con bubble?

It might not matter much to those not caught up in this latest stock casino bubble, if I’m right about the US economy in or entering recession.

As goes America so goes the world, might not have the impact it once had, but if the US economy is entering recession, Canada, the UK, the EU and much of Asia will be right behind. More on that in tomorrows update.


Asia-Pacific markets drop as Japan posts cooler-than-expected core inflation data

Asia-Pacific markets fell Friday after Japan’s May core inflation data came in slightly cooler than expected.

The country’s core inflation rate — which strips out prices of fresh food — came in at 2.5%. A Reuters poll of economists expected the May core inflation reading to come in at 2.6%, compared with April’s 2.2%.

The so-called “core-core” inflation, which strips out prices of fresh food and energy, came in at 2.1%. This is lower than April’s reading of 2.4%. The metric is considered by the Bank of Japan when formulating the country’s monetary policy.

Japan’s headline rate rose to 2.8%, higher than April’s figure of 2.5%.

Japan’s Nikkei 225 dipped marginally, while the broad-based Topix gained 0.26%.

The yen weakened for a seventh straight day, declining to 158.95 against the U.S. dollar.

Japan’s chief currency diplomat, Masato Kanda, said the government was ready to make a move against the volatile currency market that has hurt the economy, Reuters reported.

The U.S. Treasury Department placed Japan on its currency “Monitoring List,” but did not classify it as a currency manipulator.

South Korea’s Kospi fell 0.73%, while the small-cap Kosdaq lost 0.27%.

Separately, the country announced that the finance ministers of South Korea and Japan will meet on June 25 to discuss bilateral and multilateral cooperation, as well as their views on the global economy. The meeting will be held two months after both parties agreed to manage excessive currency volatilities during their meeting in Washington.

Mainland China’s CSI 300 dipped marginally, while Hong Kong’s Hang Seng index declined 0.85%.

Australia’s S&P/ASX 200 slid 0.04%.

Overnight in the U.S., the S&P 500 closed 0.25 % lower after hitting a new high. The Nasdaq Composite dipped 0.79%, while the Dow Jones Industrial Average climbed 0.77%. Nvidia slipped 3.5% after rising earlier in the trading day.

Asia stock markets live: Japan CPI misses estimates (cnbc.com)

 

Nvidia loses top spot to Microsoft after 3% drop

By Reuters 

June 20 (Reuters) - Nvidia's (NVDA.O)  shares declined nearly 3.4% on Thursday, handing the title of the world's most valuable company back to Microsoft.

Nvidia, whose market capitalization surpassed that of Microsoft (MSFT.O) on Tuesday, was set to lose around $91 billion to its last closing market value of $3.34 trillion, at the current level of $131.88.

Microsoft's market value also slipped, to $3.30 trillion, as its shares were down 0.4% at $444.8 in afternoon trading.

Nvidia, Microsoft and Apple (AAPL.O) oare in a three-horse race to become the world's most valuable company. The Tim Cook-led iPhone maker's market capitalization was at $3.22 trillion, with its shares down 2.2% at $210.10 in the afternoon.

Elon Musk said on his X social media platform on Wednesday that Dell and Super Micro are supplying server racks for the supercomputer of his xAI startup, which will be used to expand the capabilities of its AI tool, Grok.

Dell Technologies (DELL.N)  and Super Micro Computer (SMCI.O) fell 1% and 0.7%, respectively.

The companies make servers equipped with Nvidia chips, enabling them to capitalize on the surging demand for processors that power virtually every AI application.

Musk said earlier this year that training the Grok 2 model took about 20,000 Nvidia H100 graphic processing units and that the Grok 3 model and beyond would require 100,000 Nvidia H100 chips.

-----Nvidia's stock price has nearly tripled so far this year, powering the gains in the broader market. Super Micro shares have more than tripled in value during the same period, while Dell's stock is up nearly 95%.

The Philadelphia SE Semiconductor Index (.SOX) opens new tab has risen nearly 34% since the most recent low in April and closed at a lifetime high on Tuesday.

Nvidia loses top spot to Microsoft after 3% drop | Reuters

Friday’s US options expiration may provide volatility-starved traders with some short-term market swings. The so-called triple-witching will see some $5.5 trillion worth of options tied to indexes, stocks and exchange-traded funds fall off the board. As the contracts disappear, investors will adjust their positions, adding a burst of volume capable of swinging individual holdings.

Bloomberg Evening Briefing: The SEC Is Turning Its Gaze to ‘AI Washing’ - Bloomberg

Finally, more on so you really, really, really want an EV.

Arizona Tesla driver trapped in EV following dead battery escapes using ‘hidden latch’

A Tesla driver has experienced distress after her electric vehicle's battery died, locking the doors and windows with seemingly no escape.

13:12 ET, Wed, Jun 19, 2024 | UPDATED: 13:13 ET, Wed, Jun 19, 2024

 A Tesla driver found herself trapped inside her 2021 Model Y electric vehicle after it shut down while traveling on a full charge, locking the doors and windows. 

This Arizona-based motorist, Diane, tried to look at her Tesla’s owner’s manual to find a solution but found its glove box storage area wouldn’t open without electricity. 

Diane said: “It was fully charged. I unplugged the car, went to get in my car, shut the door, and everything just shut down. I couldn’t open the windows. I couldn’t unlock the doors. I was trapped,” CBS affiliate AZFamily reports. 

Teslas use a battery as their primary energy source and a smaller battery for onboard electronics, according to CBS affiliate KOLD-TV.

Diane noted there’s no warning when this onboard electronics battery is low.

Next, Diane dialed a friend for help, who arrived but couldn’t figure out how to open the SUV from its outside. 

Diane responded by opening Tesla’s app and requesting roadside assistance, resulting in a customer service representative informing her there was an unmarked latch to open the door. 

These manual levers exist on the Model Y’s front two door handles and the floor area of the rear seats’ outboard storage compartment underneath a removable rubber lining.

She added: “To me, it seems that the default for when you lose power should be windows and doors open. Not lock. It should be the reverse logic. That I don’t understand.”

The Daily Express US contacted Tesla for comment but did not receive a response

Tesla drivers risk getting locked in their EV without a ‘hidden latch’ - Daily Express US (the-express.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.

Bank of England holds rates but August cut still on the table

THURSDAY 20 JUNE 2024 12:01 PM

The Bank of England voted to leave interest rates on hold for the seventh consecutive meeting in June, but an August rate cut is still on the cards. 

Seven members of the Monetary Policy Committee (MPC) voted to leave the Bank Rate at 5.25 per cent, while the remaining two backed a 25 basis point cut. This was unchanged on May. 

The decision came just a day after new figures showed that inflation fell to two per cent in May, its lowest level since July 2021 and down from peaks of over 11 per cent in October 2022. 

“Its good news that inflation has returned to our two per cent target,” Andrew Bailey, governor of the Bank said. 

However, he cautioned that “we need to be sure that inflation will stay low and that’s why we’ve decided to hold rates at 5.25 per cent for now”. 

Policymakers are still concerned by the persistence of domestic inflationary pressures which could make it more difficult for inflation to remain at two per cent sustainably. 

The Bank has singled out services inflation as a good gauge of domestic price pressures and yesterday’s figures showed that services inflation only fell to 5.7 per cent in May. 

In its latest round of economic forecasts, produced in May, the Bank projected that services inflation would have fallen to 5.3 per cent by now. 

 

Wage growth, which is a major contributor to services inflation, has also remained above expectations. 

More

Bank of England holds rates but August cut still on the table (cityam.com)

Swiss National Bank continues rate cuts

By John Revill 

ZURICH, June 20(Reuters) - The Swiss National Bank cut interest rates on Thursday for the second time running, pointing to easing price pressures that allowed it to maintain its position as a front-runner in the global policy easing cycle now underway.

The Swiss franc weakened against other currencies and stocks gained after the central bank cut its policy rate by 25 basis points to 1.25%, as expected by two-thirds of analysts polled by Reuters, following a quarter-point reduction in March.

The SNB's decision had been finely balanced, given a recent rebound in economic growth and a break in the trend of gently falling inflation in Switzerland.

"The underlying inflationary pressure has decreased again compared to the previous quarter," SNB Chairman Thomas Jordan said. "With today's lowering of the SNB policy rate, we are able to maintain appropriate monetary conditions."

More

Swiss National Bank continues rate cuts | Reuters

Covid-19 Corner

This section will continue until it becomes unneeded.

Study sheds light on why some people do not get Covid-19

June 19, 2024

Researchers have shed new light on why some people do not get Covid-19.

In a world-first, 36 healthy people who had never had coronavirus were deliberately given the virus that causes the disease.

The study found their immune systems responded in a novel way, helping to explain how some people avoid getting Covid.

The findings may pave the way for treatments and vaccines mimicking these natural defences, not just for Covid, but potentially other diseases too.

These findings shed new light on the crucial early events that either allow the virus to take hold or rapidly clear it before symptoms develop

It is the first time scientists have been able to see how the body responds to a new disease from the very point of exposure.

According to the experts, their data can serve as a Rosetta stone for cells that cover various surfaces of the body, and immune cells, and reveals early responses associated with protection against infection.

Dr Marko Nikolic, senior author of the study at UCL and honorary consultant in respiratory medicine, said: “These findings shed new light on the crucial early events that either allow the virus to take hold or rapidly clear it before symptoms develop.

“We now have a much greater understanding of the full range of immune responses, which could provide a basis for developing potential treatments and vaccines that mimic these natural protective responses.”

The findings, published in Nature, provide the most comprehensive timeline to date of how the body responds to Covid exposure, or any infectious disease.

The scientists suggest it might be possible to extrapolate these findings to other infections, such as flu, and although the study only looked at Covid it is very likely that some of the findings might be similar across different infections.

More

Study sheds light on why some people do not get Covid-19 (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 hits banks

Artificial intelligence is likely to displace more jobs across the banking industry than in any other sector, according to Citigroup. About 54% of jobs across banking have a high potential to be automated.

The world’s biggest banks have slowly begun experimenting more with AI over the past year. Citigroup has said it would equip its 40,000 coders with the ability to experiment with different AI technologies, while JPMorgan is scooping up talent and Deutsche Bank is using AI to scan wealthy-client portfolios.

Speaking of AI, OpenAI’s co-founder discloses his plans to continue his work at a new research lab focused on artificial general intelligence.

Stock Markets Today: BOE meeting, AI jobs, French bonds, hedge funds, trade war - Bloomberg

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

World Debt Clocks (usdebtclock.org)

Another weekend and another week closer to voter turmoil in France and the UK. Another week deeper into a new US recession, I think, but more on that in tomorrow’s weekend edition. Have a great weekend everyone.

When plunder becomes a way of life, men create for themselves a legal system that authorizes it and a moral code that glorifies it.

Frederic Bastiat.

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