Baltic Dry Index. 1762 -06 Brent Crude 79.51
Spot Gold 2510 US 2 Year Yield 3.90 -0.09
A government which does not trust its citizens to be armed is not itself to be trusted.
Niccolo Machiavelli.
This morning, yet again the Middle East is on the brink of a wider war, that if it happens will inevitably end up involving oil.
Though no one would appear to gain from a wider war, the region is just one miscalculation or mistake away from triggering that wider war.
What stands out since at least the October 7th terrorist attack on Israel, is just how ineffective and irrelevant US team Biden/Blinken have become. Something not lost in Moscow and Beijing and in many other parts of the rest of the world.
A wider Middle East war that triggers yet another oil shock, with the US Strategic Petroleum Reserve largely sold off to buy a Democrat victory in the mid-term elections, will likely bring on the next US and global recession.
Will saner heads prevail this coming week?
Asia-Pacific markets mixed as Middle East tensions
rise; investors assess Powell rate cut comments
Published Sun, Aug 25 2024 7:52 PM EDT
Asia-Pacific markets were mixed on Monday
amid escalating tensions in the Middle East with Israel and Hezbollah trading
strikes, while investors assessed dovish comments from U.S. Federal Reserve
Chairman Jerome Powell.
Over the weekend, Reuters reported
Israel’s Air Force struck Hezbollah targets in Lebanon, shortly before the
Iran-backed armed group launched over 320 rockets toward Israel.
Hezbollah said this was in retaliation for
Israel’s assassination of Fuad Shukr, a senior commander, last month.
However, the group signaled it was
not preparing for more strikes, while Israel’s Foreign Minister said the
country did not want a full-scale war, Reuters added.
Oil prices climbed following the strikes,
with Brent crude up 0.62% at $79.52 and U.S. West Texas Intermediate rising
0.63% to $75.34.
In Asia, investors will assess medium-term
lending rates from China’s central bank on Monday, and Singapore’s
manufacturing numbers for July.
Japan’s Nikkei 225 fell 1.09%, while
the Topix lost 1.13%. The Japanese yen strengthened 0.33% to trade at 143.9,
its strongest level since the Aug. 5 stock sell-off.
South Korea’s Kospi dropped 0.24%, and the
small cap Kosdaq inched down 0.96%.
Australia’s S&P/ASX 200 gained
0.68%.
Hong Kong Hang Seng index rose 0.99%,
but the mainland Chinese CSI 300 index inched 0.15% lower.
On Friday in the U.S., all three major
indexes rose after Powell’s comments, with the Dow Jones Industrial Average up
1.14%, while the Nasdaq
Composite advanced 1.47%. The S&P 500 gained 1.15%.
Powell on Friday signaled
cuts to the Federal Funds rate, though he did not reveal the quantum or the
exact timing of the reductions.
“The time has come for policy to adjust,”
the central bank leader said at Jackson Hole, Wyoming. “The direction of travel
is clear, and the timing and pace of rate cuts will depend on incoming data,
the evolving outlook, and the balance of risks.”
Asia stock markets: Israel-Hezbollah strikes, Powell Jackson Hole (cnbc.com)
Stock futures are little changed after Fed signals
rate cuts are imminent: Live updates
Updated Sun, Aug 25 2024 6:54 PM EDT
Stock futures were little changed on
Sunday as investors look to push equities back to record-high levels now that
the Federal Reserve indicated that rate cuts are forthcoming.
Futures tied to the S&P 500 slipped
0.1%, while Nasdaq 100 futures lost 0.1%. Dow Jones Industrial Average futures
ticked down 16 points, or 0.04%.
Stocks are coming off of a strong week
that was highlighted by comments from Fed Chair Jerome Powell that interest
rates cuts are imminent. Wall Street has been anxiously awaiting a rate cut,
especially in light of some worrying economic data that sparked a sell-off at
the beginning of August and worried investors that elevated borrowing costs
could damage the U.S. economy.
But equities have since rebounded and are
now hovering near all-time highs. The benchmark S&P 500′s close on Friday
put the broad market index less than 1% away from its record high set in mid
July. The rebound has broadened out to the wider market, with the small cap
Russell 2000 adding 3% following Powell’s comments.
″[Powell’s comments] keeps a tailwind at
the market’s back into year-end, making it harder to expect a retest of this
month’s lows,” said David Russell, global head of market strategy at
TradeStation.
To be sure, Powell did not indicate when,
or by how much, interest rates would be potentially lowered. Traders remain
unanimous in their forecast for a rate cut at the Fed’s September policy
meeting, however, per the CME Group’s FedWatch Tool.
On the economic front, initial jobless
claims are due out on Thursday at 8:30 a.m., followed by the July personal
consumption expenditures reading on Friday.
Stock futures are little changed after Fed signals rate cuts are imminent (cnbc.com)
Oil prices to remain elevated as Middle East
tensions threaten a wider conflict, CBA analyst warns
Published Sun, Aug 25 2024 10:58 PM EDT
Tensions in the Middle East and the risk
of a wider conflict will keep oil prices elevated, said Vivek Dhar, mining and
energy commodities strategist at the Commonwealth Bank of Australia.
Oil prices rose on Monday after Israel’s
Air Force struck targets in Lebanon with over 100 fighter jets before
the Iran-backed group fired more than 320 rockets into Israel.
U.S. West Texas Intermediate crude
was up 0.75% at $75.39 a barrel, while Brent crude rose 0.67% to
$79.55.
Iran-backed Hezbollah said the strikes
were in retaliation to Israel’s
killing of senior commander Fuad Shukr in Beirut last month. Israel said
its pre-emptive strikes were aimed at foiling a bigger attack by the Hezbollah,
Reuters reported.
“While market expectations are centered on
Iran’s attack hurting Israel without triggering a wider regional conflict,
Israel’s response will be equally important. And Israel’s response may include
an attack on Iran’s oil supply and related infrastructure, which would put at
risk 3 - 4% of global oil supply,” Dhar said.
Cedric Chehab, managing director and head
of global risk at research firm BMI said the exchange of fire on Sunday does
not mean that an “all-out war” is imminent.
Speaking to CNBC’s “Squawk Box Asia,” Chehab said
that “what Hezbollah wanted to do, what Iran wanted to do, was to essentially
allow for deterrence. So, [to] exercise that deterrence, and they’ve done
that.”
While there is a risk that the
confrontation spirals out into a wider conflict, there is still room for
de-escalation, he added.
Both Israel and Iranian leaders “do not
want this to get out of hand and to escalate ... don’t forget, Iran has a new
president who’s untested, and the idea is to apply pressure on Israel, but not
necessarily engage in direct confrontation.”
While Dhar agreed with Chehab’s view that
the events on Sunday are unlikely to be the catalyst for an all-out war in the
region, he pointed out Iran has yet to retaliate against Israel following the
assassination of Ismail Haniyeh, the political chief of Hamas, in Tehran last
month.
Dhar also said the progress of Gaza truce
talks will be an indicator of how Iran, Hezbollah, and Hamas interpret the
events over the weekend.
Early Monday, Reuters reported that there was no agreement over ceasefire in talks on
Sunday regarding the Gaza conflict, with Egyptian security sources telling the
agency that neither Hamas nor Israel agreed to proposals presented by mediators
in Cairo.
Dhar added while the escalation hurts
truce talks at face value, the fact that Israel managed to thwart Hezbollah
“may force Iran and its proxies to concede that Israel is in a position of
power, particularly with U.S. backing, making the truce talks more palatable.”
He also forecasts that Brent futures will
trade between $75 and $85 a barrel in September, with more potential upside if
hopes for a truce in Gaza diminish, and as an Iranian reprisal against Israel
is still “on the cards.”
“More broadly, the risk of a wider
conflict in the Middle East that permanently embroils Iran is an upside risk to
our outlook.”
Oil
to remain elevated as Middle East tensions threaten a wider conflict (cnbc.com)
Israel and Hezbollah in major missile exchange as
escalation fears grow
By Maytaal Angel and Maya Gebeily August 26, 2024 4:31 AM GMT+1
JERUSALEM/BEIRUT, Aug 25 (Reuters) -
Hezbollah launched hundreds of rockets and drones at Israel early on Sunday, as
Israel's military said it struck Lebanon with around 100 jets to thwart a
larger attack, in one of the biggest clashes in more than 10 months of border
warfare.
Missiles were visible curling up through
the dawn sky, dark vapour trails behind them, as an air raid siren sounded in
Israel and a distant blast lit the horizon, while smoke rose over houses in
Khiam in southern Lebanon.
On Sunday evening, sirens sounded in
Rishon Letsiyon, central Israel, the Israeli Defense Forces (IDF) said, and
added that one projectile had been identified crossing from the southern Gaza
Strip and falling in an open area. The armed wing of Hamas said it had fired an
"M90" rocket at Tel Aviv.
Any major spillover in the fighting, which
began in parallel with the war in Gaza, risks
morphing into a regional conflagration drawing in Hezbollah's
backer Iran and Israel's main ally the United States.
---- Hezbollah leader
Sayyed Hassan Nasrallah said the Iranian-backed group's barrage, a reprisal for
the assassination of senior commander Fuad Shukr last month, had been completed
"as planned".
However, the group would assess the impact
of its strikes and "if the result is not enough, then we retain the right
to respond another time", he said.
Israel's foreign minister said the country
did not seek a full-scale war, but Prime Minister Benjamin Netanyahu warned:
"This is not the end of the story."
Earlier, Netanyahu had said: "We are
determined to do everything we can to defend our country ... whoever harms us -
we harm him".
The two sides have exchanged messages that
neither wants to escalate further, with the main gist being that the exchange
was "done", two diplomats told Reuters.
More
Israel and Hezbollah in major missile exchange as escalation fears grow | Reuters
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.
Rate
cuts won't prevent a recession and the economy is deteriorating 'quite
rapidly,' investment strategist says
Kelly Cloonan Aug 23, 2024, 5:44 PM BST
·
A recession is coming even if interest rates come
down, according to BCA Research chief strategist Garry Evans.
·
"We see signs that the economy is turning
down," Evans said, pointing to labor market indicators.
·
Fed chair Jerome Powell said Friday that "the
time has come" to cut rates.
Markets are confident that rate
cuts will benefit stocks and the economy, but one strategist says lower
borrowing costs won't stave off a recession.
Federal Reserve Chairman Jerome
Powell said in remarks at Jackson Hole on Friday that "the time has come
to adjust policy," giving his strongest indication yet that the central
bank is poised to cut rates next month.
Stocks rallied following the
comments, as markets have been clamoring for lower rates to boost stocks and
give the economy more padding against a possible recession.
Yet, BCA Research chief asset
allocation strategist Garry Evans said this week that lower rates can't avert a
looming downturn.
"Every single one of us now believes there's a recession, and
that's exactly the opposite of what the market believes," Evans said in a
Thursday interview
with CNBC.
"There's a very strong narrative out to the market that we're
facing a soft landing. We don't believe that. We see signs that the economy is
turning down," he added.
Evans pointed to the labor market in particular as a source of concern.
Revised jobs data released by the Labor Department on Wednesday showed
the US added 818,000 fewer jobs between April 2023 and March 2024 compared to
initial figures.
That data, plus a rising unemployment rate, are cause for concern, Evans
said. US unemployment is up from 3.4% in April 2023 to 4.3% last month, the
highest rate since October 2021.
"There's things that are breaking down quite rapidly now,"
Evans said, including recent manufacturing data. US manufacturing activity fell
to its lowest since November, according to data from the Institute for Supply
Management released earlier this month.
Evans said labor and manufacturing data, plus a range of global data
like weak Japanese exports, are showing signs of a tough economic outlook
worldwide.
"Across the board, it's telling you that the global economy is not
on a very solid footing," he said.
Evans said the Fed will likely cut rates in September, but that it won't
prevent a pending recession.
Investors are currently pricing in a 25 basis point cut next month as
almost certain, with smaller odds of a 50 basis point cut, according to
the CME FedWatch tool. Markets see 100 basis points of cuts through the rest of this year.
Rate Cuts Won't Prevent a Recession and the Economy Is Deteriorating: BCA - Business Insider
Covid-19 Corner
This section will continue until it becomes unneeded.
FDA
approves new COVID-19 vaccine amid rising cases
Lindsey Burrell Fri, August 23, 2024 at 11:28 PM GMT+1
DES
MOINES, Iowa — On Thursday the Food and Drug Administration approved two
updated COVID-19 vaccines from Pfizer and Moderna. Officials said these
vaccines could soon be available to patients.
The
Center for Disease Control reports COVID-19 cases and hospitalizations are on
the rise. So, just like the yearly flu shot, COVID-19 vaccinations are being
updated to protect individuals against the current strains of the virus going
around.
These
new shots are designed to target the KP.2 strain, which is a descendant of the
highly contagious JN.1 variant that went around last winter. But only 22.5% of
adults got last years updated COVID vaccine.
Iowa’s
first West Nile virus case reported for 2024
Health
care officials say these updates are key to help people combat new strains of
the virus, and mitigate symptoms if people do get sick.
“We
have a really good, robust database with information about how safe COVID
vaccines are in general,” Dr. Nathan Boonstra, pediatrician at Blank Children’s
Hospital, said. “So, just changing that strain is not likely to cause
additional issues, just like getting your each year’s Flu vaccine that has a
different strain of Flu in it, is not likely to effect the safety profile of
the vaccine. So, I don’t think there’s a lot of reason why people need to worry
about safety issues. In fact, as we see each year, as the seasonal vaccine
comes out, these vaccines are extremely safe.”
Boonstra
said for people looking to get the updated booster, it may take some time to
for the vaccines to get to pharmacies or clinics. So, make sure to call ahead
and ensure the availability of the shot before booking an appointment.
FDA approves new COVID-19 vaccine amid rising cases (yahoo.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.
Battery energy
storage systems: a complex but promising route to clean-energy transition
24
August, 2024
For
investors, excitement in the renewable energy landscape is palpable. Renewable
energy capacity is being added to the world’s energy systems at the fastest
rate in two decades, prompting the International Energy Agency to revise its
forecasts for 2027 upwards by 33 per cent. However, further growth will depend
on investment in a key technology: battery storage.
Finding
ways to store energy is critical to stabilising the power grid as it
accommodates increasing volumes of energy from sources with unpredictable
outputs, such as wind and solar. A utility-scale battery energy storage system
(BESS) can stabilise the unstable, build grid resilience and enhance
efficiency. These capabilities have prompted predictions that the market will
be worth $150bn by 2030.
Even
so, the global BESS market is highly complex and is dependent on many players
in multiple jurisdictions. Developers and investors face regulatory challenges,
lack of standardisation and the need to adapt to unfamiliar business models.
Countries also face potential disruptions due to highly concentrated supply
chains. For example, the US imports 90 per cent of battery storage equipment
from China, while for Europe the figure is 80 per cent. Accelerating domestic
production of equipment would help increase supply chain diversification and
resilience.
And
while governments understand that rapid expansion of battery-storage
infrastructure underpins the growth of their renewables sectors, the drivers of
demand for BESSs vary by region. All this makes for a market that, while
promising, is not for the faint-hearted.
Disparities
in demand
The
first challenge for developers and investors is diversity of demand. European
renewables markets are highly fragmented, for example, with regional variations
in supplies of wind and solar power driving demand for BESSs. Yet these
regional and local complexities only serve to increase the need for BESS
projects.
In
Germany, for example, BESS projects are needed to balance a geographical split
in supply and demand since wind-generated power is abundant in the north but
not in the south. “There’s high demand for battery storage to balance the
system,” says Florian Degenhardt, who heads White & Case’s German project
finance practice. “So, in Germany, big infrastructure investors are coming into
the battery storage market.”
Meanwhile,
in the Middle East, the availability of land and sunshine have encouraged
development of fewer but extremely large-scale solar projects. “Right now, for
example, Abu Dhabi has two large plants not far from each other,” explains
UAE-based Yasser Riad, a partner in White & Case’s project development and
finance group. “So, if you have cloud cover in the area, you’ve taken off two
gigawatts of capacity in one go.”
Whether
the need is balancing a geographic demand-supply mismatch in Germany or
mitigating the risk of power outages in the Middle East, BESSs are an essential
cog in the clean energy machine.
More
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
Every
block of stone has a statue inside it and it is the task of the sculptor to
discover it.
Michelangelo.
No comments:
Post a Comment