Baltic Dry Index. 1869 -27 Brent Crude 81.17
Spot Gold 2416 US 2 Year Yield 4.40 -0.10
Our enemies are innovative and resourceful, and so are we. They never stop thinking about new ways to harm our country and our people, and neither do we.
George W. Bush.
What goes up must come down, goes the old saying, although in the stock casinos it’s called round tripping.
Increasingly, the stock casinos seem to be in trouble. Stocks have stopped moving up. The everything bubble long over, the “magnificent 7” no longer magnificent, the EV boom now clearly a big bust.
What else could possibly go wrong for stocks?
Well in the USA at least, the election of either Donald Trump or Kamala Harris?
Look away from that recession signalling, slumping oil price now.
Asia markets are mixed as traders assess Japan,
Aussie business activity data and U.S. tech earnings
PUBLISHED TUE, JUL 23 20247:48 PM EDT
Asia-Pacific markets are mixed on Wednesday as traders assessed July business activity data from Australia and Japan, and tech earnings from the U.S.
The region will also look for any spillover effect on tech and EV stocks after U.S. tech giants Alphabet and Tesla reported their second-quarter earnings, with Tesla falling short of estimates.
Hong Kong Hang Seng index climbed 0.15%, but the mainland Chinese CSI 300 was down 0.22%. Most tech stocks on the Hang Seng Tech index were up, but EV stocks Nio, Xpeng and Li Auto suffered losses.
Taiwan’s Hon Hai Precision Industry — known internationally as Foxconn — will invest 1 billion yuan ($138 million) for a new business headquarters in China, Reuters reported. Trading in Taiwan was suspended due to a typhoon.
Japan’s Nikkei 225 dropped 0.19%, while the broad-based Topix was down 0.35%. Flash data from the au Jibun Bank showed that the country’s business activity returned to growth.
Japan’s composite purchasing managers’ index for July was at 52.6, up from 49.7 in June. This was “indicative of solid growth” among Japanese private sector firms, the report said.
Late Tuesday, automaker Toyota said it will buyback 806.85 billion yen ($5.17 billion) of its shares from major Japanese banks and insurers, including Tokio Marine, Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group.
The company said this was part of “ongoing efforts to reduce cross-shareholdings in order to build a lean balance sheet. Shares of Toyota rose 0.74%.
In contrast, South Korea’s Kospi was up 0.1%, while the small-cap Kosdaq rose 0.84%.
Heavyweight Samsung Electronics plunged 1.43%, even as Reuters reported that chip giant Nvidia had cleared its chips for use in a processor for the China market.
The South Korean electronics company is still grappling with a strike from its largest workers union, with talks on Tuesday yielding no results, according to the National Samsung Electronics Union, which has about 30,000 members.
Australia’s S&P/ASX 200 slipped 0.18%, after the country saw its private sector activity expand at a slower pace in July, with the composite purchasing managers’ index dropping to a six-month low of at 50.2 compared to 50.7 in June, according to Juno Bank.
Overnight in the U.S., the S&P 500 dipped 0.16% to
close at 5,555.74, a day after it notched its best performance in more than a
month.
The Nasdaq Composite inched down
0.06%, while the Dow Jones
Industrial Average lost 0.14%.
Asia stock markets: Australia PMI, Japan PMI, Tesla, Alphabet earnings (cnbc.com)
Nasdaq futures fall after Alphabet, Tesla report
earnings: Live updates
UPDATED WED, JUL 24 2024 7:00 PM EDT
Nasdaq stock futures traded lower Tuesday night after megacap tech companies Alphabet and Tesla reported their second-quarter results.
Futures tied to the tech-heavy Nasdaq 100 moved down 0.5%, while S&P 500 futures fell 0.4%. Dow Jones Industrial Average futures slipped 0.2%.
Shares of Google parent company Alphabet fell 1.7% in extending trading. Although Alphabet reported a top and bottom line beat, Youtube advertising revenue fell below the consensus estimate. Meanwhile, Tesla shares declined more than 6% on weaker-than-expected results and a 7% year-over-year drop in auto revenue.
At the start of the week, around 20% of the S&P 500 companies that had reported their second-quarter earnings, with 80% of them topping expectations, according to FactSet data.
During Tuesday’s main trading session, the broad market index pulled back around 0.2%, while the Nasdaq Composite and the Dow inched down around 0.1% each.
Investors have largely priced in the chances of the Federal Reserve cutting interest rates at its September meeting. Combined with rising confidence in a soft landing, the market has continued its rally, with rate-sensitive sectors such as small caps and industrials rising in recent weeks.
“You’re left with an economy that continues to grow, corporations that continue to manage the environment very, very well and a market that’s reflecting that in its elevated valuations,” said Solus Alternative Asset Management chief strategist and economist Dan Greenhaus.
Regarding the market rally, Greenhaus added, “As long as something doesn’t change on that front, I don’t know why I would be any more scared tomorrow or the next day that I’ve been over the previous eight, three months.”
On the earnings front, investors will be
looking at AT&T, General Dynamics and Boston Scientific’s quarterly results
Wednesday morning.
Stock market today: Live updates (cnbc.com)
Deutsche Bank snaps 15-quarter profit streak on
Postbank lawsuit provision
PUBLISHED WED, JUL 24 2024 1:11 AM EDT
Germany’s largest lender Deutsche Bank on Wednesday snapped a 15-quarter profit streak with a narrower-than-expected loss, as it made a provision for an ongoing lawsuit over its Postbank division.
Net loss attributable to shareholders was 143 million euros ($155.1 million), against an LSEG poll of analysts which had predicted a loss of 145 million euros.
Back in April, the bank had posted a 10% hike in first-quarter profit, smashing expectations on the back of a rebound of its investment banking division. It also said it was its highest first-quarter profit since 2013 and marked the bank’s 15th straight quarterly profit.
The lender came under fire at home last week, as German regulators criticized Deutsche Bank for incorrectly disclosing deferred tax assets in its 2019 financial statement, which were not in line with international accounting standards.
German regulator BaFin estimated that
around 2.076 billion euros worth of deferred tax assets had not been disclosed
separately in the notes for Deutsche Bank’s U.S. business.
Deutsche Bank (DBK) Q2 earnings (cnbc.com)
In EV news, the sky is falling. Well make that sales. Who wants to drive around in a limited range, slow to recharge, incendiary fire hazard?
Chinese EV stocks drop after Tesla’s earnings
miss, General Motors delays EV plans
PUBLISHED WED, JUL 24 202412:14 AM EDT
Shares of major Chinese electric vehicle companies dropped Wednesday after U.S. giant Tesla’s earnings fell short of analysts’ estimates and General Motors delayed its EV plans.
Hong Kong-listed shares of Xpeng lost as much as 5.74% while Nio’s stock tumbled as much as 5.26% on Wednesday.
Li Auto’s shares dropped as
much as 3.99% while BYD, Zhejiang Leapmotor and SAIC Motor slid as much as
3.1%, 5.34% and 1.02%, respectively on Wednesday.
In the U.S., shares of Xpeng and Nio closed 6.67% and 4.48% lower respectively on Tuesday.
EV hype has been dwindling, as automakers from Tesla to General Motors scale back or delay their EV plans.
On Tuesday, Tesla reported a second straight quarterly decline in revenue, down 7% to $19.9 billion, from $21.27 billion in the same period a year ago. Tesla shares closed 2.04% lower.
CEO Elon Musk said in the firm’s earnings
call on Tuesday that Tesla will host a robotaxi unveiling event on Oct. 10,
after originally saying the event would take place on Aug. 8.
When asked about the timeline of “the first robotaxi ride,” Musk said he would be “shocked if we cannot do it next year.” He also noted that his predictions have been “overly optimistic in the past.”
Separately, General Motors on Tuesday said it was delaying further a second U.S. electric truck plant and the Buick brand’s first EV.
Investors were spooked by the pullbacks in growth businesses and General Motors’ shares closed 6.42% lower on Tuesday despite solid financial results.
GM also said it was indefinitely putting on hold the production of its Cruise Origin autonomous vehicle, and that it was making efforts to restructure a joint venture in China with SAIC amid continuing losses.
The EV industry is facing a reality check, after years of buzz which saw automakers putting out optimistic sales forecasts for EV models and announcing ambitious growth targets.
Surging raw material costs, high interest
rates and other factors have made EVs
much more expensive to produce, as compared to their traditional
counterparts.
Chinese EV stocks drop after Tesla's earnings miss, General Motors delays EV plans (cnbc.com)
Porsche scraps electric car targets as demand slumps
July 23, 2024
Porsche has abandoned its sales targets for electric vehicles (EVs) amid waning demand from customers.
The German car manufacturer previously said that EVs would account for 80pc of its new vehicle sales by 2030. But bosses have now watered down that goal, saying sales will depend on uptake and how the technology develops around the world.
It comes after a slew of rival car companies watered down plans for electric models, cast doubt on customer enthusiasm for the technology and expressed support for low-carbon alternatives to petrol known as e-fuels.
Porsche said: “The transition to electric vehicles will take longer than we assumed five years ago.
“Our product strategy is set up such that we could deliver over 80pc of our vehicles as all electric in 2030 – dependent on customer demand and the development of electromobility.”
Oliver Blume, Porsche’s chief executive, said as recently as March that the company would “stay true” to its target.
However, Porsche has also been keen to emphasise its ability to react to swings in demand, with its factory in Leipzig capable of making fully electric cars, plug-in hybrids and combustion engines on one production line.
Carmakers including Mercedes-Benz and Renault have scaled back their EV targets in recent months and even Tesla has softened its sales forecasts amid signs consumers are reluctant to make the switch from petrol and diesel models.
German car brands are particularly exposed to China, where EV sales have been hit by an economic slowdown and consumers are increasingly opting for cheaper, local models.
Despite the lagging demand, Jaguar this month said it will push ahead with its switch to electric-only models, with only one combustion engine vehicle to remain in production by the end of the year.
Porsche, meanwhile, is among several
companies to have started production of e-fuel, synthetic petrol made using
hydrogen generated with a renewable power source.
More
Porsche scraps electric car targets as demand slumps (msn.com)
Tesla’s profit margin is getting hammered by EV
discounts and hefty AI spending
PUBLISHED TUE, JUL 23 2024 8:58 PM EDT
As Tesla CEO Elon Musk continues to make lofty promises about his company’s future in autonomous driving and robotics, investors keep watching profit margins deteriorate.
In missing Wall Street estimates for second-quarter earnings on Tuesday, Tesla said its adjusted operating margin shrank to the lowest in three years, dropping to 14.4% from 18.7% a year earlier. It’s the fourth straight quarter of shrinkage.
The company reported just $1.48 billion in net income on revenue of $25.5 billion, which included $890 million in regulatory credits.
Tesla is getting hit from both sides. Expenses are soaring as the company spends on the artificial intelligence infrastructure Musk says is needed to turn Tesla EVs into self-driving cars, and to develop humanoid robots capable of doing factory work and more.
Meanwhile, deliveries of
Tesla’s most popular electric vehicles have been dropping this year, and the
company has responded by slashing prices and offering other incentives like
low-interest loans.
More
Tesla's margin getting hammered by discounts and hefty AI spending (cnbc.com)
The vast majority of our imports come from outside the country.
George W. Bush.
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.
Sir
Keir Starmer warned he risks inflation if gives pay rises of 5.5%
July 22, 2024
Sir Keir Starmer risks stoking inflation if he hands millions of public sector workers inflation-busting pay hikes while increasing the minimum wage, economists warned yesterday.
Bumper rises of as much as 5.5 per cent for teachers and NHS staff could be signed off as early as this week - far beyond what departments have budgeted for.
The award, recommended by pay review bodies, would be well above the current 2 per cent rate of inflation and cost about £3.5billion.
A similar hike across the whole public sector could cost £10billion.
But experts warned that bumper hikes could trigger higher pay demands in the private sector and spark a wage-price spiral, in turn driving up inflation.
They also said caving into militant trade union leaders may embolden them to ramp up their demands at the next round of pay talks.
George Buckley, an economist at Nomura, said: 'If you see, as a private individual working for a company, or as a union, that the public sector is getting wage increases of a substantial amount, you might well be tempted to try to claw some back yourself as well - so it could influence expectations and wages in the private sector as well.'
Rob Wood, at Pantheon Macroeconomics, told the Daily Telegraph that expected further hikes in the minimum wage could compound the issue.
He said: 'Further increases in the minimum wage would be even more important for the Bank of England [and whether it cuts interest rates].
'The Labour Party [has signalled it] would seek to raise the minimum wage to above two thirds of the average wage.
'The question is how fast it does that. If you try to do that all in one year, that could delay Bank of England rate cuts.'
The remarks echo advice from the International Monetary Fund (IMF), which last year warned that 'further increases in public wages and other social spending' have put Britain's debt pile on a 'steeper upward trajectory'.
More
Sir Keir Starmer warned he risks inflation if gives pay rises of 5.5% (msn.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
How Covid-19 Is Still
A Big Factor In Presidential Politics
Jul 22, 2024, 08:16am EDT
Covid-19 has now
contributed in two second-term presidential campaigns. In November 2020, when
the virus was raging throughout the world, and fears were at their peak, the
country sought a return to normalcy – And a plan to reduce health and economic
turmoil was a key factor. Voters selected the Biden presidency to do that and
with no small irony, President Biden’s run for a second term was given a blow
by his own Covid-19 infection — a cautionary reminder of the pathogen’s staying
power over two presidencies.
This is a symptom of the
challenge both providers and consumers in the U.S. healthcare system face.
Immediate concerns are generated by the growing surge of Covid-19. Test
positivity was 11% as of July 6, per the CDC, up from 9.1% the
previous week. For context, this past winter's peak was 12%. A CDC map shows that test
positivity is highest in California and the Southwest. Covid-19 related
emergency room visits were up 23% in the past week and hospitalizations are
rising steadily, per the CDC.
Long-Term term concerns
are still evidenced by Covid-19 post-acute sequelae of SARS-CoV-2 (PASC) also
known at Long Covid-19. And this is even among vaccinated persons who have had
viral infections during the Omicron era. One study of more than
400,000 infected U.S. Veterans, published on July 17 in the New England
Journal of Medicine continued to raise these concerns about Long
COVID.
Healthcare providers are
facing new challenges that could affect their ability to respond to this
pandemic. According to a May 24 report by the American Hospital Association, hospitals and health systems incurred significant
underpayments for several essential and complex health care services in 2023.
They also are facing mounting administrative burdens and costs, due to
commercial health insurer practices like prior authorization and denials. At
the same time, health insurance costs to consumers have grown twice as fast as
hospital prices in 2023 and the industry is in the throes of the biggest
M&A wave in more than a decade, with healthcare deal activity having grown
42 percent since 2010.
Pharmaceutical drug
prices are rising and shortages are increasing. The yearly median list price of
pharmaceutical drugs has risen 35% over the previous year. There was an average
of 301 drug shortages per quarter last year, the most in a decade.
Labor costs, which on
average account for 60% of a hospital’s budget, increased by more than $42.5
billion between 2021 and 2023. Even at higher wages, staffing is becoming a
problem. Hospitals can’t function without nurses. According to a report by McKinsey & Company, by 2025, the United States may face a shortage of 200,000 to 450,000
nurses available for direct patient care, equating to a 10 to a 20 percent gap.
Even the payment system
for hospitals and physicians is undergoing fundamental changes. Payers are now
encouraging providers to move toward value-based care (VBC)
arrangements, which pay hospitals and physicians based on patient health
outcome rather than fees for service. It remains to be seen if these
value-based models will really achieve better outcomes and cost savings. Still,
if they do or don’t, it’s estimated that VBC reimbursement will grow from
between 80 and 100 million patients in 2022 to between130 and 160 million in
2027.2
More
How Covid-19 Is Still A Big Factor In Presidential Politics (forbes.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.
A Living
Passivator for Perovskite Solar Cell Stability has been Developed by City
University of Hong Kong Researchers
July 23,
2024
The
progress of solar energy technology took a step forward recently with the
development of a groundbreaking living passivator at City University of Hong
Kong (CityUHK) that can substantially enhance the stability and efficiency of
perovskite solar cells.
This
newly developed passivator is a type of corrosion inhibitor that appreciably
changes the potential of a metal. The CityUHK technology leverages dynamic
covalent bonds that activate on exposure to moisture and heat, enabling it to
evolve new passivators in response to environmental factors.
This
innovative approach allows for real-time repair and maintenance of perovskite
solar cells. The coating mimics sustained-release capsules in drugs that
continuously release chemicals to heal defects caused by environmental
stressors like water and heat, making it a promising solution for
next-generation perovskite photovoltaics.
The
team’s research was recently published in the prestigious scientific
journal Nature paper under the title “Water- and
heat-activated dynamic passivation for perovskite photovoltaics”.
The
project is led by Professor Feng Shien-ping, Professor in the Department
of Systems Engineering and Associate Dean in the College of Engineering at
CityUHK, in collaboration with Professor Henry J. Snaith at
the University of Oxford and Professor Angus Yip Hin-lap, Associate
Director of the Hong Kong Institute for Clean Energy at CityUHK,
Perovskite
solar cells are known for their impressive ability to convert sunlight into
electricity, making them a strong contender for the next generation of solar
panels. However, concerns about their long-term storage and operational
stability persist. Various passivation strategies have been developed to
improve their performance and reliability, but as they are fixed in specific
locations after manufacturing, addressing new defects caused by exposure to
water and heat over time during operation presents a significant challenge.
In
response, the CityUHK-led team has found through extensive experiments that the
passivator significantly improves the performance and durability of perovskite
solar cells. A photovoltaic conversion efficiency of over 25% has been
recorded, and operational stability for more than 1,000 hours at high
temperatures and in humid conditions has been maintained.
----The CityUHK-led team is
collaborating with industry partners to apply this technology to ionic
migration and instability in perovskite solar cells during the
manufacturing and operation stages.
The
team believes that making these solar cells more stable and reliable could help
make them more commercially viable, adding that this technology could be used
in other applications, such as anti-oxidation and interfacial contact
engineering in microelectronic devices.
Professor
Feng and Professor Henry J. Snaith are the paper's corresponding authors.
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
I'm for
a stronger death penalty.
George
W. Bush. (Come back George, all is forgiven.)
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