Baltic
Dry Index. 1997 +50 Brent
Crude 85.03
Spot
Gold 2411 U S 2 Year Yield 4.45 -0.05
The day will come when the man at the telephone will be able to see the distant person to whom he is speaking.
Alexander Graham Bell.
In
the stock casinos, the greatest disconnect from economic reality ever!
As
America and Europe and probably much of
Asia are either in or just entering in to the next recession, more on that below,
most stock casinos are trading at euphoric, unsustainable highs.
If,
as I expect, a crash comes next, a Mount Everest of debt will come crashing
into default. See World Debt Clocks
(usdebtclock.org)
While
most governments, operating on fiat money, can just print their way out of
debt, the value of such fiat money falls towards zero.
Unfortunately,
people, corporations, most banks, farmers, towns and cities, don’t have a
printing way out.
Adding
to the danger of a new recession, political turmoil, from America to Europe to
much of Asia.
Not
to mention two seemingly unstoppable, brutal wars that could all to easily
escalate.
Dow
rises more than 200 points, touches new record above 40,000: Live updates
UPDATED FRI, JUL 12 2024 4:45 PM EDT
The Dow Jones Industrial Average soared
Friday on the back of gains in Home Depot and Caterpillar as investors started
to embrace some stocks outside of the technology bull market leaders this week.
The Dow added
247.15 points, or 0.62%, to end at 40,000.90. During the session, the 30-stock
blue-chip index rose to a fresh all-time high of 40,257.24. This was its first
time above 40,000 since topping that round number milestone in late May. Home Depot added
1.7% to bring its gain for the week to 7.5%. Caterpillar added
nearly 1.4% during the day.
The S&P 500 was
higher by 0.55%, closing at 5,615.35. The Nasdaq Composite was
up 0.63%, ending at 18,398.45.
During Thursday’s session, the
S&P 500 posted its worst day since late April as investors sold their Big
Tech winners in a major market rotation, pushing Nvidia lower
by 5.6%. However, the 30-stock Dow was
the outperformer that day, inching higher by 0.08% during the sell-off in the
other major averages. On Friday, investors piled into the Dow’s industrial
names on hopes slowing inflation would be followed by a Federal Reserve rate
cut in September. The Dow advanced 1.6% for the week. The catalyst was a
Thursday report showing the consumer price index declined 0.1%
in June.
“The powerful growth story in AI
has been all-consuming, but it’s not the only story in the market,” said David
Russell, global head of market strategy at TradeStation. “Powell’s testimony
this week and the CPI report remind investors that other catalysts can boost
other kinds of companies. That’s especially true for a sector like utilities,
which emerged as an AI play earlier this year and now can potentially benefit
from rate cuts.”
The Russell 2000 Index jumped 6% for the week
after a 1.1% gain on Friday as investors see a so-called soft landing for the
broader economy giving a boost to smaller companies.
The market rallied even after
meager reactions to banks’ second-quarter earnings. JPMorgan shares
were 1.2% lower even as the bank
posted second-quarter revenue higher than Wall Street expectations on
a jump in investment banking fees. Citi dipped
1.8% despite
beating on the top and bottom lines in the second quarter.
Wells
Fargo shares
tumbled 6% after the bank said net interest income, a key measure of lending
profitability for banks, fell short of expectations in the second quarter.
A reading of wholesale inflation
came in slightly
hotter than expected on Friday, but Wall Street largely ignored
those figures after Thursday’s more important consumer prices report showed
slowing inflation.
Nvidia bounced
1.4% on Friday as investors couldn’t resist some of their favorite tech names
that had sold off the day before.
The S&P 500′s nearly 18% gain
for the year has largely been led by technology stocks. The tech sector has
jumped 33% in 2024, and communication services is up 26%. No other major sector
is outperforming the benchmark.
Stock
market today: Live updates (cnbc.com)
Finally,
a commodities update. Food price inflation isn’t going away any time soon.
Extreme
Weather Is Shaking Up Global Food Markets Again
July 12, 2024 at 12:00
PM GMT+1
This week has offered yet another reminder of how food
supplies are at the mercy of weather.
Coffee prices jumped as poor growing conditions in South
America and Asia hurt output, while beneficial rains from Hurricane Beryl made
US corn and soybeans cheaper. And in China, crops are at risk from extreme
events that are happening more often because of climate change.
Here’s a roundup of the latest impacts on agricultural
markets:
Pricey Coffee
Prospects for Brazil’s harvest have deteriorated as some
farmers pick smaller-than-usual beans following drought,
while production has also suffered in Vietnam and Indonesia. That spooked traders this
week, sending futures for arabica coffee that’s used in specialty brews to a
two-year high. The cheaper robusta variety favored for instant drinks is at the
highest since the 1970s.
Italian roaster Lavazza warned that coffee prices will keep rising until the middle of
next year because of bean shortages in key growers. The company’s costs have
also increased in recent years due to shipping disruptions in the Suez Canal.
Chocolate Inflation
Chocolate lovers may soon start to feel the real impact of
unfavorable weather that decimated West African cocoa harvests. Chocolate
makers have so far been relatively shielded from cocoa’s historic rally because
they’ve tapped stockpiles secured when beans were cheaper — as highlighted in surprisingly strong European
processing figures published this week.
But they’ll need to replenish supplies at higher costs that
will be passed on to shoppers. Doubts that chocolate demand will withstand high
cocoa prices sent top processor Barry Callebaut’s shares tumbling on Thursday.
Grain Prospects
One extreme event has actually been good for some crops.
Corn and soybean futures hit the lowest since 2020 in Chicago this week, partly
as Hurricane Beryl brought beneficial rains to parts of the US.
But heavy downpours have caused a headache for French wheat farmers. The country expects its soft-wheat
harvest to drop 15% to a four-year low, threatening to restrict exports which
often go to North Africa and the Middle East.
More
Global Food Roundup: Extreme Weather Hits Food
Supplies - Bloomberg
World would need 55 per cent more copper
mines to meet EV transition goals: study
'I
think there's a disconnect between, what the intentions are to meet the global
warming challenges and the reality of the materials that are going to be
required'
Author of the article: Theresa BalocatingPublished Jul 11, 2024 •
The transition to greener, more sustainable
transportation is impracticable as copper mine production cannot keep up with
the rising global demand for electric vehicles, according to a new study.
“I think there’s a disconnect between, what the
intentions are to meet the global warming challenges and the reality of the
materials that are going to be required,” said Dr. Lawrence Cathles, an earth and atmospheric sciences
professor at Cornell University.
The recent study published
by the International
Energy Forum, which was led by
Cathles and Dr. Adam Simon, a professor of earth &
environmental sciences at the University of Michigan, found that hybrid
vehicles could present a more effective alternative than transitioning the
global vehicle fleet to EVs. The study underscores that copper production cannot
keep pace with the increasing global demand for EVs, which require about 83 kg
of the metal per car, according to the International Copper Association. Copper, which is an effective electrical conductor, is
needed for EV batteries, copper rotors used in electric motors, wiring and even
charging infrastructure.
Cathles said that there
has not been sufficient investment in discovering and developing new copper
mines to meet governments’ goals for transitioning from internal combustion
engine (ICE) vehicles to EVs.
----The study shows
that in order to meet current business-as-usual trends, 115 per cent more
copper will need to be mined in the next 30 years than has been mined
historically so far. Electrifying the global vehicle fleet would require 55 per
cent more new mines.
“There are a lot of fundamental needs for copper
and it’s not a replaceable commodity,” said Cathles. “You can’t just go banning
capabilities unless you have a replacement for them,” he said, emphasizing that
the political push for electrification will require significant financial
investment.
A switch to hybrid vehicles would be more
achievable, the study found, as they require “negligible extra copper mining.”
More
World needs 55% more copper mines to meet EV
transition goals: study | National Post
My
take.
While mainstream media, to the extent they are paying attention at all to the CPI, v the Biden meltdown in the USA and the European football final in Europe, all took the falling CPI as excellent good news for the US economy.
I took it as another sign of the US economy heading into recession.
The June decline, the second month to May's tiny decline, is more a sign of a spent out US consumer, now having dissipated virtually all of the stimulus money, and fast cutting back on spending as reflected by guidance from Walmart, McDonalds and Walgreens. In the USA a great restaurant recession is already underway.
Interestingly, though bond vigilantes, if they still exist, follow the 2 year - 10 year spread that's still inverted, the 5 year - 10 year spread has now gone positive by 8 points. (4.10% v 4.18%) In fact, the 5 out to the 30 year is now un-inverted, i.e. normalised.
Before a recession, the inversion usually un-inverts and my guess is that this is what's just starting in the US Treasury market.
I also think the Fed is already late in cutting their key interest rate and should do so on July 31 rather than waiting until September. That seems unlikely.
Another probable sign of an arriving recession, to me at least, is the rotation underway out of the "magnificent seven" stocks. Why hold the highest AI bubble stocks any longer if a new recession is likely and if a recession starts, any AI economy benefits (if any,) are likely to be delayed, resulting in M-7 sell-offs.
Of course falling inflation is
better news, but it seems to that it's falling because a large part of US
consumers are out of cash, credit and buy now pay later debt traps.
Rising US unemployment will only add to consumer stress.
I think I know how Noah felt.
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.
English pubs and shops gear up for Euro 2024 final bonanza
By James Davey and Radhika
Anilkumar July 12, 2024 7:10 AM
GMT+1
LONDON, July 12 (Reuters) -
English pubs, supermarkets and restaurants are set for a weekend bonanza as
fans prepare to tune in to watch England play Spain in the final of the Euro
2024 soccer championship in Germany and before that the Wimbledon tennis men's
singles final in London.
The events will provide a much-needed fillip to the hospitality
and retail sector after wet weather meant a subdued start to summer trading.
Items from beer, wine and snacks, barbecue food and pizzas to
large screen TVs and England shirts, are being snapped up ahead of the major
sporting weekend, supermarkets Tesco (TSCO.L), opens new tab, Sainsbury's (SBRY.L), opens new tab and Asda said and data
from Adobe showed.
Sainsbury's, Britain's No. 2 grocer, forecast weekend beer sales would
increase 200% year-on-year, with sales of sparkling wine and ready-to-drink
cocktail cans both up 30%.
Britain's third-biggest supermarket Asda has sold over 20,000 large
screen ultra-high-definition TVs during Euro 2024, with more sales expected
ahead of Sunday, it said after England beat the Netherlands 2-1 in the
semi-final on Wednesday thanks to a dramatic last minute winner.
More
English pubs and shops gear up for Euro 2024 final
bonanza | Reuters
This rule suggests the US is on the brink of recession
The “Sahm rule” suggests the US may be near a recession,
and any sharp increase in unemployment will likely be met by aggressive Fed
rate cuts.
Jul 12, 2024 – 10.13am
The US Federal Reserve is
paving the way to cut rates in September,
just two months ahead of a US presidential election that many think Donald
Trump will win.
A politically sensitive Fed
has been desperate to cut its policy rate all year from its lofty 5.25 to 5.50
per cent range (notably 100 basis points above the Reserve Bank of Australia’s
globally low cash rate).
These plans were kiboshed by
a reacceleration in core inflation in the first quarter of this year as a
result of sticky demand-side services costs, which were being powered by
elevated wage growth that was itself an artefact of a tight labour market. But
the data has started to demonstrably shift as the Fed’s tight monetary policy
settings inevitably have an impact.
The jobless rate in the US has climbed appreciably
from its 3.4 per cent trough in April last year to 4.1 per cent in June,
seemingly following the trajectory of New Zealand’s unemployment rate, which
has risen from a nadir of 3.2 per cent to 4.3 per cent.
The Reserve Bank of New Zealand lifted rates well
before most peer central banks to a globally lofty 5.5 per cent. On Coolabah’s
estimates, this has likely pushed the economy into recession in the name of
taming the worst inflation crisis in decades.
Our
research suggests that the gradual increase in US unemployment has almost
satisfied the “Sahm rule” test that has historically been the best guide to the
onset of a recession.
----Since 1950, the Sahm rule has correctly identified the
inception of all US recessions with arguably few false signals. “The Sahm rule
of thumb is not precise, mainly because of how it is calculated, and there is
no guarantee that it will continue to hold in the future,” said Kieran Davies,
Coolabah’s chief macro strategist.
“Nonetheless, it does better than any other
economic indicator in providing a timely signal of recession. This reliability
reflects the fact that every sharp rise in the US unemployment rate in the
post-WW2 period has been driven by the job losses that are the hallmark of a
recession.”
More
Covid-19
Corner
This section will
continue until it becomes unneeded.
Bird flu could become a human pandemic. How are countries
preparing?
Wealthy
nations are purchasing vaccines against H5N1 influenza and boosting
surveillance, but there are concerns that low-income countries will be left
behind.
12 July 2024
As cases of avian
influenza continue to rise in cattle in the United States, countries are
preparing for the possibility that the virus could start spreading in people.
Many nations are ramping up surveillance, as well as purchasing vaccines or
developing new ones.
“This virus in its
current state does not look like it has the characteristics of causing a
pandemic. But with influenza viruses, that equation could entirely change with
a single mutation,” says Scott Hensley, an immunologist at the University of
Pennsylvania in Philadelphia.
The highly pathogenic
avian influenza H5N1 has so far been detected in 145 cattle herds and 4 farm
workers in a dozen states across the United States. Researchers say many more
cases in cows and people have probably gone undetected.
The chances of quashing the outbreak get “more slim by the day”, says Angela
Rasmussen, a virologist at the University of Saskatchewan in Saskatoon, Canada.
Studies suggest that
the virus is spreading between cows through contaminated milking equipment1,2, rather
than airborne particles. The biggest risk is that it could evolve to infect
mammals more effectively, including through the respiratory system, which would
make it more difficult to contain. Given the close and regular contact that
cows have with people, airborne transmission could spark a pandemic.
Efforts to prepare for
that possibility include risk assessments, modelling and outbreak predictions.
“There is loads of planning and preparedness going on internationally,” says
Michelle Wille, a virus ecologist at the University of Melbourne in Australia.
More
Bird flu could become a human pandemic. How are
countries preparing? (nature.com)
Technology Update.
With events happening
fast in the development of solar power and graphene, I’ve added this section.
Global EV sales up 13% in June, down 7% in Europe, Rho Motion
says
By Alessandro
Parodi July 12, 20241 2:09 AM
GMT+1
July 12 (Reuters) - Global
sales of fully electric and plug-in hybrid vehicles rose by 13% in June versus
the same month in 2023 driven by growth in China, while they dropped in Europe,
market research firm Rho Motion said.
China accounted for over 60% of the total, as rising
availability of electric vehicles and strong sales by BYD (002594.SZ), opens new tab contributed to an
increase in the domestic market share of PHEVs in the first half of the year,
Rho Motion data manager Charles Lester told Reuters.
PHEV sales worldwide reached 1.4 million in July,
of which 0.86 million were in China, where they were up 25% year-on-year,
Lester said.
In Europe, monthly sales were down 7% to 0.30
million, with Finland, Ireland, and the Netherlands leading losses, while Italy
recorded a 34% increase following the introduction of government incentives, he
added.
In the United States and Canada, PHEV sales were up
6% to 0.14 million in the same month.
BYD sales surged in Brazil,
contributing to more than tripled figures from June 2023, Lester added.
KEY QUOTES
"The overall picture is that 2024 is not going to see the
ambitious growth some may have hoped for the industry and we have lowered our
forecasts by 5% to 16.6 million electric cars sold this year", Lester said
in a statement.
"Regional disparities are quite remarkable", he added.
More
Global EV sales up 13% in June, down 7% in Europe, Rho
Motion says | Reuters
Next, the
world global debt clock. Nations debts to GDP compared.
World
Debt Clocks (usdebtclock.org)
This weekend’s music diversion. Beethoven again. Approx. 7 minutes.
Beethoven
- The Tempest - 3. Movement (Arr. for Strings)
Beethoven - The Tempest - 3. Movement ( Arr. for Strings) (youtube.com)
This
weekend’s chess update. Approx. 12 minutes.
BEST
GAME BY FAR || Gukesh vs Vidit || GCT SuperUnited Croatia (2024)
BEST GAME BY FAR || Gukesh vs Vidit || GCT SuperUnited Croatia (2024) - YouTube
This
weekend’s final diversion EVs Boom Over. Approx. 8 minutes.
The
Next Big Crisis: Why the EV Market Crash Is Only the Start! Electric Vehicles,
The Next Disaster
When one door closes, another opens; but we often look so long and so regretfully upon the closed door that we do not see the one which has opened for us.
Alexander Graham Bell.
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