Baltic Dry Index. 1966 -55 Brent Crude 86.42
Spot Gold 2385 US 2 Year Yield 4.60 -0.11
It is the first responsibility of every citizen to question authority.
Benjamin Franklin.
In the stock casinos, more pause and wobble. But is this a pause or a top?
Asia markets slip
as Japan real wages fall for 26th straight month; China stocks drop for fifth
day
Asia-Pacific markets opened mixed on Monday as
investors awaited key economic data from the U.S. and China later this week,
while election results in France overnight signaled a hung parliament.
France’s left-wing New Popular
Front coalition on Sunday unexpectedly
thwarted a far-right advance, clinching the largest number of seats
but falling short of an absolute majority in a parliamentary run-off vote.
Investors await the U.S. consumer
price index reading, due Thursday stateside, to assess the Federal Reserve’s
interest rate path, while China’s inflation figures on Wednesday will signal
the state of the country’s economic recovery.
Central bank decisions from South
Korea, New Zealand and Malaysia will also be announced this week, although no
changes are expected, according to a Reuters poll of economists.
Japan’s Nikkei 225 was
down marginally, while the broad-based Topix was 0.36% lower. The losses come
as Japan’s real wages fell for a 26th straight month.
Data from the country’s ministry of
health, labor and welfare indicated that real wages fell 1.4% year on year in May, although
nominal wages rose 1.9% to 297,151 yen ($1,850). May’s number was also the
fastest wage increase in 11 months.
South Korea’s Kospi was
trading close to the flatline, and the small-cap Kosdaq climbed 0.86%. Shares
of heavyweight Samsung Electronics gained 0.46%, despite the company’s largest
union slated to begin a three day strike on Monday.
Reuters reported the National Samsung
Electronics Union (NSEU), which has about 28,000 members, has demanded that the
company improve its performance-based bonus system and give workers an extra
day of annual leave.
It is not immediately clear how
many workers will join the strike, but the union’s poll found about 8,100
members saying they would do so as of Monday morning.
Hong Kong Hang Seng index dropped
0.46%, while the mainland Chinese CSI300 slid 0.3%, on pace for a fifth day of
losses and marking its lowest level since February.
Australia’s S&P/ASX 200 slipped
0.36%, on pace for a second straight day of losses.
On Friday in the U.S., the S&P 500 and
the Nasdaq Composite rose
to new highs, with both indexes posting a record close as the latest jobs
report reignited hopes for rate cuts from the Federal Reserve.
The broad market index advanced
0.54%, closing at 5,567.19, while the tech-heavy Nasdaq gained 0.90% to end at
18,352.76.
The Dow Jones Industrial Average added
0.17%.
Asia markets: U.S.,
China CPI, South Korea rate decision (cnbc.com)
Stock futures
open lower as investors await inflation data, earnings this week: Live updates
UPDATED SUN, JUL 7 2024 6:58 PM EDT
Stock
futures edged lower Sunday night as investors await key inflation data for
further clues on the longevity of this year’s market rally. Earnings from some
major financial giants and consumer companies are also on the docket.
S&P
futures were
down more than 0.1%, while futures tied to the Dow Jones
Industrial Average lost
51 points, or 0.1%. Nasdaq 100 futures dipped
about 0.1%.
The S&P 500 has
rallied about 16.7% this year, and the benchmark index just had its fourth
positive week in the last five amid ongoing optimism that an improving
inflation backdrop — and any pockets of weakness in the economy later this year
— could lead to a Federal Reserve interest rate cut.
The June consumer price index,
which will be released Thursday, could bolster those hopes if the headline
number shows a slight improvement, as currently expected. Producer price index
data will be released Friday.
Last week, labor data reflected a
slightly cooling labor market, spurring expectations of a rate cut. But
although the U.S.
economy added more jobs in June than anticipated, there was
also an unexpected rise in the unemployment rate, to 4.1% from 4%. Traders are currently
expecting two interest rate cuts in 2024, with the first in
September, according to the CME FedWatch Tool.
“This [June jobs report] keeps
the upcoming inflation data in the driver’s seat for determining the timing of
the first cut...signs of continued moderation of economic growth and the labor
market will likely be a positive for equities and high yield bonds
in, at least, the short run,” Greg Wilensky, head of U.S. fixed income at
Janus Henderson Investors, said.
A slew of major banks, including Citigroup and JPMorgan Chase,
will kick off second-quarter earnings season this week. PepsiCo and Delta Air Lines are
also set to post results.
Stocks are coming off of a strong week, as the
S&P 500 and Nasdaq Composite reached all-time highs on Friday and ended at
record closing levels, with the broad-market index notching its 34th record
close in 2024. The S&P 500 jumped about 0.5% during the day’s session,
while the Nasdaq advanced 0.9% as Tesla and Nvidia shares jumped. The 30-stock Dow added 0.17%, or 67.87
points, to end the week in the green as well.
Stock
futures open lower as investors await inflation data this week: Live updates
(cnbc.com)
In other news, Was the Sahm Rule forecasting a US recession triggered? Yes says the American Institute for Economic Research (AIER.) No says the St Louis Fed’s FRED.
Gold surges.
France gets what John Bull only dreams of, a
hung Parliament.
June U-3 Jobless Rate Triggers Sahm Rule:
Recession Ahead?
In this
morning’s US Bureau of Labor Statistics data release, the U-3 unemployment rate
increased 4.1 percent in June 2024, rising by one-tenth of a percentage point
above the forecast rate. The U-3 rate measures the percentage of the civilian
labor force that is jobless, actively seeking work, and available to work,
excluding discouraged workers and the
underemployed.
This
uptick triggers the Sahm Rule, a real-time recession indicator, suggesting that
the US economy is in, or is nearing, a recession. The Sahm
Rule, developed by former Fed economist Claudia Sahm, is designed to
identify the start of a recession using changes in the total unemployment rate.
According to the rule, a recession is underway if the three-month moving
average of the national unemployment rate rises by 0.50 percentage points or
more, relative to its low during the previous 12 months. With the June 2024 U-3
rate of 4.1 percent, the average of the last three months being 4.0 and the
lowest 12-month rate of 3.5 percent in July 2023, this criterion has been met.
Surveys had forecast the U-3 rate to hold steady at 4.0 percent in June,
unchanged from May 2024. The seemingly small 0.1 percent uptick, however,
carries substantial implications for the broader economy.
More
June U-3 Jobless Rate Triggers Sahm Rule: Recession
Ahead? | AIER
Real-time Sahm
Rule Recession Indicator (SAHMREALTIME)
Observation:
Jun 2024: 0.43(+ more) Updated: Jul 5, 2024 8:05
AM CDT
Real-time Sahm Rule
Recession Indicator (SAHMREALTIME) | FRED | St. Louis Fed (stlouisfed.org)
Gold Hits Highest Since May
After Cooling US Employment Data
Fri, Jul 5, 2024, 6:41 PM GMT+1
(Bloomberg)
-- Gold jumped to a six-week high after US hiring data pointed to a gradual
cooling in the labor market that bolstered expectations for lower interest
rates in the coming months.
Bullion was up 1.4%
to $2,389.35 an ounce as of 1:30 p.m. in New York on Friday, climbing on data
from the US Bureau of Labor Statistics that showed US hiring and wage growth
stepped down in June while the jobless rate edged up.
The new figures
“keep the prospect for a September rate cut alive,” said Ole Hansen, head of
commodities strategy at Saxo Bank A/S. Swaps traders are now pricing in a 75%
chance of a rate cut in two months.
“Having rallied
strongly this past week, further upside could be limited with the absence of
many traders” in the US following Thursday’s public holiday, Hansen said.
Gold drifted in a
relatively narrow trading range for most of the past month, but has jumped 2.7%
this week as expectations build for a September rate cut.
Silver advanced
3.3%, while platinum and palladium also gained. The Bloomberg Dollar Spot Index
and 10-year US Treasury yields were both on course for weekly declines.
Gold Hits Highest Since May After Cooling US
Employment Data (yahoo.com)
France’s
left-wing coalition thwarts far right in parliamentary run-off vote
France’s left-wing New Popular Front coalition on
Sunday unexpectedly thwarted a far-right advance, clinching the largest number
of seats but falling short of an absolute majority in a parliamentary run-off
vote, early data showed.
The New Popular Front — an alliance
of five parties ranging from the far-left France Unbowed to the Socialists and
the Ecologists — could secure 182 seats in the latest electoral round,
according to results published
by the Interior Ministry.
French President Emmanuel Macron’s
Ensemble party and its allies were set to gain between 168 seats, while
far-right Rassemblement National — which won the first round of elections and
was widely seen as likely to retain a strong momentum in the runoff vote — seen
in third place with 143 seats.
None of the parties have accrued
the necessary absolute majority of 289 seats to rule alone, suggesting markets
could open on Monday to a hung parliament in Europe’s third-largest economy, if
the Sunday results are confirmed.
Prime Minister Gabriel Attal, part
of Macron’s Ensemble party, on Sunday stated his intentions to step down,
following the results. “Faithful to the Republican tradition and in accordance
with my principles, tomorrow morning I will submit my resignation to the
president of the Republic,” Attal said, according to a CNBC translation.
More
France election 2024: Left-wing coalition thwarts Le Pen's far right (cnbc.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.
The
irony is that he was just to early in calling a US recession. A recession I
think started in April this year. Fired, just as the new US recession starts?
Did no one at JP Morgan notice the downward employment revisions in Friday’s US
employment report?
Wall
Street’s biggest bear—once dubbed ‘Gandalf’ for his market foresight—is out of
a job after predicting a U.S. recession that never happened
July 5, 2024
JPMorgan’s chief market
strategist is boxing up his belongings on Wednesday after more than two years
in which his consistently wrongfooted calls cost the bank and its clients
money.
Marko Kolanovic is “exploring
other opportunities” after 19 years with the Wall Street firm, according to an
internal memo first reported by Bloomberg and
later matched by the Wall Street Journal on Thursday.
The 48-year-old physicist, who also serves as the bank’s co-head of global research, made a name for himself over the past decade, culminating in his 2020 contrarian call that the benchmark S&P 500 index would shake off a once-in-a-century pandemic and hit record highs within a matter of months.
But more recently, his bearish stance
has proven ill-advised.
His forecast the S&P 500 will
plunge to 4,200 by the end of this year is the lowest of any major bank on Wall
Street and implies a near 25% crash from current levels.
JPMorgan could not immediately be
reached by Fortune for comment.
Kolanovic’s powers of prediction appear to have run out with the end of the stimulus-induced market rally three years ago.
----Right before ChatGPT ignited interest in generative AI
later that year, he changed his bullish stance and began to fear the arrival of
a recession in 2023. But the downturn never materialized, as a labor
market shortage and rising real wages meant consumers still had plenty of
spending firepower.
Instead he urged investors to
shift their money out of equities, just as the market began to rally on the
hope GenAI would unleash material productivity gains throughout the economy and
power corporate profit growth.
Going into 2024, he stuck to
his guns and continued to warn of further weakness.
When the S&P 500 had
briefly dipped in April, Kolanovic argued the
correction still had further to go.
In reality, by the time he
made that call, it had already ended, and the broader equity market had added
11% in value since.
More
America's
freight recession is showing no signs of ending
July 3, 2024
The freight industry is still rolling through a recessionary downturn, and more time is needed for the sector to kick into higher gear.
The latest example of the
industry's struggles came on Monday, when S&P Global Ratings cut
to negative its outlook on Accuride, a commercial-truck-parts manufacturer. The
agency cited weak sales and negative free operating cash flow as reasons the
company is at risk at default next year.
The agency
specified that tractor and trailer production will see limited demand into
2025, noting that Accuride's low sales are fueled by persistent challenges in
the industry.
"The freight environment
remains depressed, which will leave credit metrics weak over the next two
years," the report said. "Freight market conditions have remained
much weaker than our previous expectations and underpin the reduction in our
earnings and cash flow estimates for the company,"
The sector has been mired in
headwinds since the pandemic, as strong COVID goods demand declined over the
years that followed. In the wake of falling consumption, the industry was left
with an oversupply of trucks and sliding sales.
JB Hunt, a leading
trucking firm, was one of the first to warn of this "freight recession" in 2023. Its problems persisted into 2024, when the firm posted both a profit and sales miss in the first quarter. Its stock is now down 21.3% year-to-date.
Looking forward, investors
should be hesitant to bet on a rebound in the second half of 2024, given that
the freight industry is closely aligned with goods buying, S&P
analysts wrote separately last
month.
More
America's freight recession is showing no signs of ending (msn.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
Florida
sees COVID-19 surge in emergency rooms, near past winter's peaks
July 5, 2024
Rates of COVID-19 have
surged in Florida emergency rooms over recent weeks, according to new figures
from the Centers for Disease Control and Prevention, and are now near peaks not
seen since the worst days of this past winter's wave of the virus.
The weekly average of
emergency room patients with COVID-19 has reached 2.64% in Florida, according
to CDC data updated
Friday, and now rank among the highest of any state during this summer's
COVID-19 wave.
Trends from Florida have also
climbed steeply in other key metrics that authorities now use to track
COVID-19, including in wastewater and nursing homes.
Florida's
steep increase in COVID-19 emergency room patients echoes that in some western states, which
saw trends of the virus pick up in recent weeks.
Trends remain high across the
West, though COVID-19 emergency room visits now appear to have peaked in Hawaii
after recording some of the highest rates of patients in over a year.
"Over the past few weeks, some surveillance systems have
shown small national increases in COVID-19; widespread as well as local surges
are possible over the summer months," the CDC said in a bulletin issued
Wednesday.
Nationwide, the majority of
states are also now estimated to be
seeing COVID-19 cases grow, the CDC's forecasters said this week.
A growing number of states
have also begun to see COVID-19 increase in data from hospitals, the Centers
for Disease Control and Prevention said Friday in its
weekly report on the virus.
"Some areas of the
country are experiencing consistent increases in COVID-19 activity, including
increases in COVID-19 test positivity and emergency department visits and
increases in rates of COVID-19–associated hospitalizations among adults 65+ at
several sites," the agency said.
The agency has been cautious
in recent weeks saying that this year's summer COVID-19 surge had arrived,
saying that recent increases were coming off of record low levels of the
virus.
"This
past winter, COVID-19 peaked in early January, declined rapidly in February and
March, and by May 2024 was lower than at any point since March 2020," the
CDC said.
More
Florida sees COVID-19 surge in emergency rooms, near
past winter's peaks (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.
Innovative battery design: More
energy and less environmental impact
Date: July 5, 2024
Source: ETH Zurich
Summary: A new electrolyte design for lithium metal batteries could significantly
boost the range of electric vehicles. Researchers have radically reduced the
amount of environmentally harmful fluorine required to stabilize these
batteries.
Lithium metal batteries are among the most promising
candidates of the next generation of high-energy batteries. They can store at
least twice as much energy per unit of volume as the lithium-ion batteries that
are in widespread use today. This will mean, for example, that an electric car
can travel twice as far on a single charge, or that a smartphone will not have
to be recharged so often.
At present, there is still one crucial drawback with lithium
metal batteries: the liquid electrolyte requires the addition of significant
amounts of fluorinated solvents and fluorinated salts, which increases its
environmental footprint. Without the addition of fluorine, however, lithium
metal batteries would be unstable, they would stop working after very few
charging cycles and be prone to short circuits as well as overheating and
igniting. A research group led by Maria Lukatskaya, Professor of Electrochemical
Energy Systems at ETH Zurich, has now developed a new method that dramatically
reduces the amount of fluorine required in lithium metal batteries, thereby
rendering them more environmentally friendly and more stable as well as
cost-effective.
A stable protective
layer increases battery safety and efficiency
The fluorinated compounds from
electrolyte help the formation of a protective layer around the metallic
lithium at the negative electrode of the battery. "This protective layer
can be compared to the enamel of a tooth," Lukatskaya explains. "It
protects the metallic lithium from continuous reaction with electrolyte
components." Without it, the electrolyte would quickly get depleted during
cycling, the cell would fail, and the lack of a stable layer would result in
the formation of lithium metal whiskers -- 'dendrites' -- during the recharging
process instead of a conformal flat layer.
Should these dendrites touch the
positive electrode, this would cause a short circuit with the risk that the
battery heats up so much that it ignites. The ability to control the properties
of this protective layer is therefore crucial for battery performance. A stable
protective layer increases battery efficiency, safety and service life.
Minimising fluorine
content
"The question was how to reduce
the amount of added fluorine without compromising the protective layer's
stability," says doctoral student Nathan Hong. The group's new method uses
electrostatic attraction to achieve the desired reaction. Here, electrically
charged fluorinated molecules serve as a vehicle to transport the fluorine to
the protective layer. This means that only 0.1 percent by weight of fluorine is
required in the liquid electrolyte, which is at least 20 times lower than in
prior studies.
More
Innovative battery design: More energy and less
environmental impact | ScienceDaily
Next, our
latest new section, the world global debt clock. Nations debts to GDP
compared.
World Debt
Clocks (usdebtclock.org)
Everyone who does not agree with me is a traitor and a scoundrel.
King George III
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