Baltic
Dry Index. 1939 +45 Brent Crude 85.77
Spot
Gold 2381 US
2 Year Yield 4.62 unch.
George Orwell.
In the stock casinos, it’s back to all news is good news again. What could possibly go wrong?
But how well did that turn out in 1929, 1987,
1999-2000, 2007-2008?
Joseph J. Cassano, a former A.I.G. executive, August 2007, on Credit
Default Swaps that wiped out A.I.G in 2008.
Japan’s Nikkei
smashes past 42,000 mark to all-time highs as Asia markets rally on rate cut
optimism
Japan’s Nikkei 225 crossed
the 42,000 mark for the first time amid a broader rise in Asia-Pacific markets
on Thursday, after U.S. Big Tech rallied overnight on optimism over Federal
Reserve rate cuts.
The Nikkei gained 0.97%, powered by
technology stocks, while the broad-based Topix rose 0.7%, also scaling a new
peak.
On a year-on-year basis, core machinery orders in Japan climbed 10.8%,
higher than Reuters forecast of a 7.2% rise.
Core machinery orders, however,
unexpectedly fell for a second straight month on a month-on-month basis,
slipping 3.2% compared to the 0.8% rise expected by economists polled by
Reuters.
Machinery orders are a volatile, yet leading
indicator of capital spending in Japan, and a fall could indicate a fragile
economy, complicating the Bank of Japan’s plans to normalize monetary policy.
Japanese automaker Toyota received
a boost in India after the state of Uttar Pradesh waived
some levies on hybrid cars, making them 10% cheaper, Reuters
reported.
South Korea’s Kospi was
0.75% higher as the Bank of Korea held rates at 3.5% for the 12th time in a
row, while the Kosdaq was 0.11% up.
Australia’s S&P/ASX 200 rose
0.93%.
Hong Kong Hang Seng index popped
1.41%, while the mainland Chinese CSI 300 index climbed 0.35%.
Overnight in the U.S., all three major indexes
rose, with both the S&P
500 and Nasdaq
Composite gaining 1.02% and 1.18% respectively.
The gains also meant that the
S&P broke above the 5,600 mark for the first time, marking its 37th record
close in 2024. The Nasdaq saw its 27th record close this year.
The Dow Jones Industrial Average added
1.09%.
Chip stocks were among the biggest
winners of the U.S. trading session. U.S.-listed shares of Taiwan Semiconductor Manufacturing
Company added 3.5% after revenue from April to June came in
ahead of Wall Street estimates.
Peer chip firm Qualcomm ticked
higher by 0.8%, and Broadcom rose
about 0.7%. Artificial intelligence darling Nvidia climbed
2.7%.
Gains were also fueled by rate cut
hopes, with expectations from Dow Jones indicating that the June inflation rate
would come in 3.1% year over year, lower than the 3.3% rise seen in May.
The core inflation rate, which
strips out more volatile food and energy prices, is expected to rise 3.4% since
June last year. In May, CPI was up
3.3% on an annual basis.
Asia markets:
Tech rally, BOK rate decision, Nikkei record (cnbc.com)
Key inflation
report looms on Thursday as traders grow more confident in Fed rate cut
A widely anticipated inflation report on Thursday
may solidify expectations for the Federal Reserve to
cut interest rates in coming months.
The consumer price
index, or CPI, report for June is due out at 8:30 a.m. ET. Recent economic
releases have suggested that inflation and economic growth are both cooling,
including last week’s report that unemployment in June ticked up to 4.1%.
Thursday’s report comes after Federal Reserve
Chair Jerome Powell delivered two
days of testimony on Capitol Hill this week. The central bank
chief did not indicate when exactly rate cuts will begin. However, Powell did
say the Fed sees the risks to the economy as more in balance between inflation
and recession and that the central did not need to wait until inflation hit the
2% level to cut rates.
Economists surveyed by Dow Jones are looking for
CPI to rise 0.1% month over month, and 3.1% year over year. The core CPI, which
strips out more volatile food and energy prices, is expected to rise 0.2% from
May and 3.4% since June last year.
In May, CPI was unchanged
month over month and up 3.3% on an annual basis.
Focusing on the
trends of unemployment and inflation could bolster the case for rate cuts, said
Matt Brenner, managing vice president, investments and product management at
MissionSquare Retirement.
“The level on
inflation is still elevated relative to the Fed’s [2%] target. The level on
unemployment is still very low historically at 4.1%. But the trend in both is
that unemployment is gradually starting to pick up and that inflation continues
its downward trajectory,” said Brenner.
“For some time the Fed has been more focused on
levels, and now it seems that they may be starting to tilt more towards a focus
on trend. And if that’s the case, then the chances of a rate cut go up,”
Brenner added.
The price changes
in the components that make up the CPI index will also be a
focus on Thursday, especially if the number comes in different from
expectations. Shelter and medical care services could be key areas to watch,
said Wilmington Trust Chief Investment Officer Tony Roth.
Both shelter and
medical services are also key parts of the personal consumption expenditures
index, the Fed’s preferred inflation measure, rather than CPI.
“We’ve seen medical
services [be] pretty tame, and that’s important because medical services makes
up a much bigger portion of the PCE, which is the more important of the two
inflation prints,” Roth said.
The CPI report comes as markets are on the
upswing.
Stocks and bonds
have both rallied in July as traders grow more confident in a rate cut sometime
this year. The S&P 500 crossed
5,600 for the first time on Wednesday.
More
June CPI inflation report preview (cnbc.com)
Finally, is fragile President Biden’s Joe
Biden’s Gaza PR stunt about to be shut down?
US-built pier will be put back in Gaza for several days to move aid, then permanently removed
Updated 9:19
PM GMT+1, July 9, 2024
WASHINGTON (AP) — The pier
built by the U.S. military to bring humanitarian aid to Gaza will be
reinstalled Wednesday to be used for several days, but then the plan is to pull
it out permanently, several U.S. officials said. It would deal the final blow
to a project long plagued
by bad weather, security uncertainties and difficulties getting food into
the hands of starving Palestinians.
The officials said the goal is
to clear whatever aid has piled up in Cyprus and on the floating dock offshore
and get it to the secure area on the beach in Gaza. Once that has been done,
the Army will dismantle the pier and depart. The officials spoke on condition
of anonymity because final details are still being worked out.
Officials had hoped the pier
would provide a critical flow of aid to starving residents in Gaza as the nine-month-long war drags
on. But while more than 19.4 million pounds (8.6 million kilograms) of food has
gotten into Gaza via the pier, the project has been hampered by persistent
heavy seas and stalled deliveries due to ongoing security threats as Israeli
troops continue their offensive against Hamas in Gaza.
U.S. troops removed the pier on
June 28 because of bad weather and moved it to the port of Ashdod in Israel.
But distribution of the aid had already stopped due to the security concerns.
The United Nations suspended
deliveries from the pier on June 9, a day after the Israeli military used the
area around it for airlifts after a hostage rescue that killed
more than 270 Palestinians. U.S. and Israeli officials said no part of the
pier itself was used in the raid, but U.N. officials said any perception in
Gaza that the project was used may endanger their aid work.
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.
Recession
2024: What to Watch and How to Prepare
July
9, 2024
The U.S. economy is on relatively solid footing
heading into the second half of 2024. But while inflation has cooled, progress
has been choppy and inconsistent. Labor markets have remained stable, but the
Federal Reserve has been forced to delay its pivot to interest rate cuts.
Many economists, including Federal
Open Market Committee (FOMC) members, anticipate a soft landing for the U.S.
economy in 2024 that includes slowing GDP growth but no recession. However, a
single misstep in Fed policy could easily slow the economy so much that it
contracts into a recession, making the next several months a critical period
for the central bank.
Economic recessions are no reason for
panic and have been a regular occurrence over the past century. However,
investors can make the most of a difficult situation by knowing which risk
factors to watch and how to position their portfolios to optimize their
performance if a recession is looming in 2024 or 2025.
There are many factors that can trigger or
contribute to a recession, but two specific factors are likely the biggest
risks to economic stability in 2024:
Any investor who hasn't been living under a
rock for the past two years is already aware that the primary economic risk
factor in 2024 is inflation. After reaching a 40-year high of 9.1% in June 2022, year-over-year
consumer price index inflation has fallen to just
3.3% as of May 2024.
The Federal Reserve can
celebrate the progress it has made in 2024, but the latest core personal
consumption expenditures (PCE) price index reading in late June suggests it's
too early to declare victory over inflation just yet. Core PCE, which excludes
volatile food and energy prices and is the Fed's preferred inflation measure,
was up 2.6% year-over-year
in May, above the FOMC's 2% target.
The second economic risk
factor in 2024 is elevated interest rates. The Federal Reserve has taken an
aggressive approach to combating inflation by raising interest rates to 23-year
highs, and it has made significant progress in bringing inflation down. The
FOMC has raised interest rates 11 times since March 2022, bringing its fed
funds target rate range to between 5.25% and 5.5%. The Fed issued its most
recent rate hike in July 2023. Unfortunately, until the central bank gets
inflation fully under control, FOMC officials are unlikely to begin cutting
interest rates.
Higher interest rates
increase the cost of borrowing money, discouraging companies from taking on
debt to invest in expansion. Higher rates also reduce consumer spending, easing
demand pressures that contribute to rising prices.
The bond market is pricing in
a 75% chance the Fed
will implement at least two rate cuts by the end of the year, potentially
stimulating the economy. However, given the latest inflation trends, the
FOMC recently guided for
only a single rate cut in 2024.
To make matters worse, the
last leg of the inflation battle may be the most difficult period for the Fed
thanks to so-called "sticky" inflation. Sticky inflation is inflation
in goods and services that have prices that are not very responsive to monetary
policy adjustments, such as children's clothing, auto insurance and medical
products. Even as inflation in other areas of the economy continues to fall,
sticky inflation may keep the Fed from reaching its inflation target for far
longer than investors had hoped and force the central bank to further delay its
pivot to rate cuts.
Fortunately, inflation and
rising rates have not yet dragged down the U.S. economy, but there are warning
signs that it could start slowing in the second half of the year. The U.S.
economy added a healthy 206,000 jobs in
June, but the U.S. unemployment rate also ticked higher to 4.1%.
Investors should continue to
monitor the labor market and other economic data in coming months as tight
monetary policy often has a lagging impact on growth. U.S. GDP growth slowed
from 3.4% in the fourth quarter of 2023 to just 1.4% in the first quarter of
2024. The latest Federal Reserve economic projections suggest that growth will
rebound to an annual rate of 2.1% in 2024, but accelerating growth may prove
difficult unless the Fed can cut interest rates.
The U.S. Treasury yield curve
has been inverted since mid-2022, a historically strong recession indicator.
U.S. credit card debt stands at more than $1.1 trillion, and delinquency rates on
that debt recently hit their highest level in more than a decade. Auto loan
delinquencies are also on the rise, another
potential red flag that U.S. consumer strength is deteriorating. A 4.1%
unemployment rate is not historically high, but it is the highest U.S.
unemployment rate since November 2021.
DataTrek Research co-founder
Nick Colas says corporate bond spreads are another warning sign that economic
growth could soon slow.
More
Recession 2024: What to Watch and How to Prepare
(msn.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
Why Are
COVID-19 Cases Spiking Again?
July 9, 2024
It's summer, and RSV and flu
have come and gone. But, as ever, COVID-19 is different. Even though the pandemic
may be behind us, the virus is once
again surging in the U.S.
Here's what to know about the
current spike in COVID-19.
COVID-19
seems to be settling into a pattern of two peaks a year: one in the winter and
one in the summer. According to the latest data from the end
of June, rates of positive COVID-19 tests from labs (which represent only a
small fraction of overall cases), increased by nearly 1% from June 23-29.
Emergency room visits for COVID-19 jumped 23% during that same time period,
and hospitalizations for
the disease increased by 13% from June 9-15. Signs of the COVID-19 virus in
wastewater—which provides among the most accurate, real-time snapshots of
cases—have been increasing since May. Just before July 4, four states—Florida,
New Mexico, Nevada, and Utah—reported very high levels of the virus in
wastewater samples collected from sewage facilities.
The good news is that while the number of cases is
climbing, deaths from
COVID-19 continue to drop. In the last week of June, deaths from COVID-19
declined by 25%.
The rise in cases is due to a
number of factors. First, people’s immunity to the virus is waning; only 22% of people in
the U.S. received the most
updated vaccine, which became available
in the fall. Second, the newest variants are mutating to spread more
easily between people. That means more people are likely to get infected.
But so far,
the virus does not seem to be causing more severe disease. “The latest data on
COVID-19 show that it is now starting to settle in and have similar kinds of
statistics to influenza, meaning hundreds of thousands of hospitalizations and
tens of thousands of deaths every year,” says Dr. Paul Offit, director of the
vaccine education center at Children’s Hospital of Philadelphia and a member of
the U.S. Food and Drug Administration’s vaccine expert committee. And similar
to flu, the people most severely affected are the elderly and those with
weakened immune systems.
More
Why Are COVID-19 Cases Spiking Again? (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.
Graphene-Indium
Selenide Device Effectively Cools Quantum Systems
July 9, 2024
Engineers from
the EPFL Laboratory of
Nanoscale Electronics and Structures have developed a gadget that effectively
converts heat into electrical voltage at extremely low temperatures and with an
efficiency that is on par with existing room temperature technologies. This discovery
could help remove a major barrier to the development of quantum computer
systems, which depend on very low temperatures for optimal operation.
Quantum computations require quantum
bits (qubits) to be cooled to millikelvin temperatures (near -273 Celsius) to
reduce atomic motion and minimize noise. However, the electronics that control
these quantum circuits produce heat, which is difficult to dissipate at such
low temperatures.
Consequently, most current
technologies must separate quantum circuits from their electronic components,
resulting in noise and inefficiencies that obstruct the development of larger
quantum systems outside the laboratory.
We are the first to
create a device that matches the conversion efficiency of current technologies,
but that operates at the low magnetic fields and ultra-low temperatures
required for quantum systems. This work is truly a step ahead.
Gabriele Pasquale, Ph.D. Student,
Swiss Federal Institute of Technology Lausanne
The novel device combines indium selenide's semiconductor
qualities with graphene's superior electrical conductivity. Its exceptional
performance comes from a unique combination of materials and structure, and
although being only a few atoms thick, it behaves like a two-dimensional
entity.
The device leverages the Nernst
effect, a complex thermoelectric phenomenon that produces an electrical voltage
when a magnetic field is applied perpendicular to an object with a temperature
gradient. The two-dimensional structure of the lab’s device enables electrical
control over the efficiency of this mechanism.
The 2D structure was fabricated at
the EPFL Center for MicroNanoTechnology and the LANES lab.
More
Graphene-Indium Selenide Device Effectively Cools
Quantum Systems (msn.com)
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
Some ideas are so stupid that only intellectuals believe them.
George Orwell.
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