Baltic
Dry Index. 1677 +02
Brent Crude 77.36
Spot Gold 2409 US 2 Year Yield 3.89 +0.01
Markets can remain irrational longer than you can remain solvent.
John Maynard Keynes.
After Monday’s global stock casinos rout, the rebound Tuesday rally?
Well maybe, but remember very few make money in whipsaw markets and now comes the guessing game of who just went bust and is hiding it? Who and where is the next Lehman hiding?
Several trillion dollars of phony stock casino “wealth” just evaporated in just three trading days at the start of August and the USA is just waking up to a recession I think started in April or May.
Rebound Tuesday, if it holds, is an exit rally to slim down large and very large long stock positions, before Monday’s rout turns into the start of a months long bear market.
Below, Wall Street’s pro’s know nothing. Compare and contrast last night’s pro’s with this mornings.
Japan stocks rebound more than 10% after
historic losses; other Asia markets also recover
Published Mon, Aug 5 2024 8:00 PM EDT
Japan stocks rebounded sharply on Tuesday
after the Nikkei 225 and the Topix dropped over 12% in the previous session.
Other Asia-Pacific markets were also higher.
Japan’s Nikkei 225 — which saw its
largest loss in the previous session since the 1987 Black Monday crash — and
the broad-based Topix gained over 10%.
The
Bank of Japan raising rates to their highest level since 2008 on July
30 caused the yen to strengthen to a seven-month high, pressurizing stocks.
Markets globally were also spooked
by fears
of a U.S. recession stoked by a weaker-than-expected jobs report.
Japan’s heavyweight trading houses all saw
rebounds of over 8%, with Marubeni up
over 12%. Softbank Group Corp jumped
almost 10%.
Other sectors that saw gains also included
Japanese automakers and semiconductor suppliers, such as Honda and Renesas Electronics, which
rose over 16% and 18% respectively.
The yen weakened 0.83% to trade at 145.37
against the U.S. dollar.
South Korea’s Kospi jumped above 4%, while
the small-cap Kosdaq was up more than 5%. The South Korean markets were halted
temporarily on Monday after they fell 8%, triggering circuit breakers.
South Korean heavyweight Samsung
Electronics rose 2.1%, while chipmaker SK Hynix climbed 4.5%.
Mainland China’s CSI 300 traded flat,
while Hong Kong’s Hang Seng
index was up 0.9%.
Australia’s S&P/ASX 200 was up 0.4%.
Oil prices also rose with Brent crude climbing 1.65%
to trade at $77.56 per barrel. U.S. West Texas Intermediate crude
rose 1.86% to trade at $74.30.
Japan June household
spending numbers showed a larger-than-expected fall year over year,
dropping 1.4% in real terms. The average monthly income per household was up
3.1% in real terms from the previous year.
Real wages in Japan also grew 1.1% in June compared to
a year ago, the first time that wages have risen in 26 months. A strong wage
growth offers more room to the Bank of Japan to tighten its monetary policy.
The Reserve Bank of Australia will release
its cash rate later today, with economists expecting it to remain steady at
4.35%.
Overnight in the U.S., the 30-stock Dow and the S&P 500 notched their
worst sessions since September 2022.
The Dow dropped 1,033.99 points
to end 2.6% lower, while the S&P
500 slid 3%. The Nasdaq
Composite shed 3.43% ending 15% off its closing high.
Asia stock markets: Japan household spending, RBA rate decision (cnbc.com)
10-year Treasury yield drops to lowest level in
more than a year
Published Mon, Aug 5 2024 2:49 AM EDT
The 10-year Treasury yield fell on
Monday as investors’ concerns on the economic outlook rise amid a global stock
market-selloff.
At 3:52 p.m. ET, the yield on the 10-year Treasury slipped 3
basis points at 3.765%, its lowest level since June 2023. Meanwhile, the 2-year Treasury yield was
marginally higher at 3.875%.
Yields and prices move in opposite
directions. One basis point equals 0.01%.
The yield curves on the 2-year Treasury
and 10-year Treasury briefly normalized Monday morning, with the spreads
turning positive, before re-inverting.
Yields briefly rebounded on Monday before
inching lower again, after fresh economic data showed the U.S. services sector
grew at a faster-than-expected pace in July. The ISM services index recorded a 51.4% reading for the
month, representing the share of purchase managers reporting expansion. That is
up from 48.8% in June and better than the Dow Jones estimate for 50.9%.
The services index offered some positive
economic news to counter fears of a looming recession on the back of weak
economic numbers last week.
More
U.S. Treasurys: Recession concerns take hold (cnbc.com)
Last night’s Wall Street pro’s.
$6.4 Trillion Stock Wipeout Has Traders Fearing
‘Great Unwind’ Is Just Starting
- Worries
of US slowdown, AI bubble drive global market rout
- ‘There
are falling knives everywhere,’ one analyst says
August 5, 2024
at 10:20 PM GMT+1
Updated on August 6, 2024 at 3:40 AM GMT+1
----Whether Monday’s
wild gyrations mark the final bang of a global selloff that started to build
last week or signal the beginning of a protracted slump is impossible to know.
On Tuesday, some of the worst-hit markets rebounded with key gauges in Japan
soaring more than 10%, though few were saying a bottom had been reached.
One thing is clear:
the pillars that had underpinned financial-market gains for years — a series of
key assumptions that investors across the world were banking on — have been
shaken. They look, in hindsight, a bit naïve: the US economy is unstoppable;
artificial intelligence will quickly revolutionize business everywhere; Japan
will never hike interest rates — or not enough to really matter.
Rapid-fire, evidence poured in over the past couple weeks that
undermined each of them. The July jobs report was
feeble in the US. So too were Big Tech’s AI-driven quarterly earnings. And the
Bank of Japan hiked rates for the second time this year.
The one-two-three punch jolted investors into suddenly seeing the peril
inherent in, say, bidding Nvidia Corp. shares up 1,100% in less than two years
or loading up on junk-rated loans bundled into bonds or borrowing money in
Japan and plowing it into assets paying 11% in Mexico. In the span of three
weeks, some $6.4 trillion has now been erased from global stock markets.
“It’s the great unwind,” said Vishnu Varathan, head of economics
and strategy at Mizuho Bank in Singapore. In the vernacular of
traders, trying to pick the right moment to buy an asset that’s tumbling is
like trying to catch a falling knife. Today, Varathan said, “there are falling
knives everywhere.”
More
Global Stock Market Crash Is Just the Start of Rising Recession Fears - Bloomberg
Cascading Losses: The Bloomberg Close, Europe
Edition
August 5, 2024 at 5:05 PM GMT+1
Good afternoon. Here's what
you need to know to end your day.
- Megacap
tech stocks lead deepening equities plunge.
- Elon
Musk’s UK “civil war is inevitable” claim rebuffed.
- Sick of high taxes? We asked the experts where to go.
The global stock rout deepened with the Nasdaq
100 Index posting its biggest intraday drop in nearly two years and investors
rushing for Treasuries.
- The
slump in
US stocks is vindicating some of Wall Street’s most prominent bears, who
are doubling down with warnings about risks from an
economic slowdown.
- Fed
policymaker Austan
Goolsbee did little to reassure markets, saying the central bank’s job
is not to react to one month of weaker labor data.
- Just
after he spoke,
the US two-year yield fell below the 10-year yield for the first time
since July 2022 as traders bet on sharp rate cuts by the central bank.
- Cryptocurrencies
reeled,
at one point sending Bitcoin down more than 16% and saddling second-ranked
Ether with the steepest fall since 2021.
- On the brighter side, JPMorgan said “we’re getting close” to a tactical opportunity to buy technology stocks on the dip.
More
Cascading Losses: The Bloomberg Close, Europe Edition - Bloomberg
$1 trillion wipeout: Market rout punishes
megacap tech
Published Mon, Aug 5 2024 10:27 AM EDT
As U.S. markets opened for trading on
Monday, tech’s megacap companies lost about $1 trillion in market cap,
deepening a downturn that sent the Nasdaq into correction territory last week.
Nvidia shed
more than $300 billion in market cap at the opening bell, though it quickly
recovered about half of its loss. Shares of the chipmaker closed down 6.4% for
a loss of $168 billion. Apple and Amazon’s valuation plummeted
$224 billion and $109 billion, respectively, at the market open. Apple ended
down 4.8%, or $162 billion in market cap. Amazon dropped 4.1% at the close, or
$72 billion.
Add all that to steep declines in Meta, Microsoft, Alphabet and Tesla, and the seven most-valuable
tech companies lost $995 billion in the early moments of trading. They bounced
back some as trading progressed.
Markets fell broadly on Monday as concerns
about a recession stemming from disappointing economic data last week pushed
Japan’s Nikkei 225 down
12% on Monday, its worst day since the 1987 “Black Monday” crash on Wall
Street. Bitcoin plummeted 11%, leading a sell-off in cryptocurrency and related
stocks.
Within technology, investors have been
getting nervous for weeks. The Nasdaq slumped 3.4% last week, wrapping up
its worst
three-week stretch in two years, before losing another 3.4% on Monday.
Amazon, Alphabet and Microsoft all gave Wall Street reasons for concern in
their reports, contributing to a slide among their peers.
It is a sharp change from a few months
ago, when investors cheered as Meta CEO Mark Zuckerberg and
Google CEO Sundar Pichai both
said their companies were spending heavily to build out their artificial
intelligence infrastructure.
Nvidia, a company unknown to most
Americans, was the biggest beneficiary due to its graphics processing units, or
GPUs, powering the AI boom. The company surpassed $3 trillion in market cap and
briefly passed Microsoft and Apple to become the world’s most valuable company.
Its market cap now sits below $2.5 trillion.
Some analysts have been sounding the alarm
of late regarding a potential overinvestment in AI.
A widely read Goldman Sachs note from June
warned that the biggest-spending companies had little to show for their AI
expenditures. Elliott Management, one of the largest hedge funds in the world,
reportedly told clients that Nvidia was in a “bubble” and the AI frenzy was “overhyped.”
Nvidia reports earnings later this month.
The company has generated revenue growth in excess of 200% for the past three
quarters.
$1 trillion wipeout: Market rout punishes megacap tech (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.
Leading
economist issues dire warning about the US economy
August
5, 2024
A leading economist has issued a dire warning about the US economy - tearing into the Federal Reserve for a 'policy blunder' that could send the country into recession. Mohamed El-Erian (Pictured), the chief economic advisor at Allianz, said on Sunday he fears the economy may be spiraling following a dismal unemployment report last week.
He places the blame on the Fed for keeping its main interest rate at a two-decade high since 2022 in its zeal to stifle inflation . Those hikes are now hitting the economy hard, he said, suggesting the Fed should have lowered rates earlier. 'I really do worry that we may lose US economic exceptionalism because of a policy mistake,' he told Bloomberg TV, as worldwide markets continued to plummet.
Following the jobs report, which showed unemployment in July rose to the highest level since October 2021, markets worldwide went into a tailspin amid fears that the US economy is sputtering. A nearly 19 percent decline in Intel's shares in aftermarket trading deepened the gloom.
Economists at Goldman Sachs have since raised the likelihood of the US slipping into a recession within the next year from 15 percent to 25 percent, while analysts at JP Morgan put the chances of a recession at 50 percent. To help save the economy, experts say the Federal Reserve must cut interest rates much more quickly than planned to avoid a huge recession.
A rate cut would make it easier for U.S. households and companies to borrow money and boost the economy, but it could take months to a year for the full effects to filter through. The Goldman Sachs analysts said they expect the Fed will cut rates by 25 basis points, but noted that if the August employment report is as weak as July's was, they could opt for a larger cut.
JP
Morgan analysts, though, wrote in a memo that because 'the Fed looks to be
materially behind the curve, we expect a 50 [basis point] cut at the September
meeting, followed by another 50 [basis point] cut in November.' Yet the Fed
left benchmark borrowing costs unchanged at a 23-year high at its latest
meeting last week.
More
Leading economist issues dire warning about the US economy (msn.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
Big pharma is pushing vaccines again. What about free vitamin D?
Three
groups of people urged to come forward for Covid booster jab as cases rise
Getting vaccinated is the best form of protection against serious illness from Covid, a health body said
10:29, Sat, Aug 3, 2024 | UPDATED: 10:33, Sat, Aug 3, 2024
A health body is urging three eligible groups of people to come forward for the next available COVID-19 booster jab amid a rise in cases.
The UK Health Security Agency (UKHSA) warns that not getting the top-up vaccine would leave you more vulnerable to hospitalisation and even death due to the illness.
The free jab, provided by the NHS, will be offered this autumn as protection from earlier vaccines will be “starting to wane”.
It
will be offered to those most at risk of serious illness due to Covid and should
provide protection for “around four months”.
According to UKHSA data from last year’s booster jab programme, people who received the vaccine were 45 percent less likely to be admitted to hospital with Covid from two weeks after it was administered.
The UKHSA said: “Vaccination continues to help protect against severe illness, hospitalisations and deaths arising from COVID-19.
“Between November, December and January over 38,000 people were admitted to hospital with the virus.”
The groups of people eligible for a booster jab this autumn are:
·
Adults
aged 65 years and over
·
Residents
in a care home for older adults
· Individuals aged six months to 64 years in a clinical risk group.
The eligibility is the same across England, Scotland, Wales and Northern Ireland.
More
Three groups of people urged to get Covid jab as cases rise | Express.co.uk
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.
New analytical
model makes groundbreaking discovery about potential of solar power and thin-film
cells: 'The traditional models just weren't capturing the whole picture'
August
5, 2024
Researchers
in Wales and Finland have developed a new analytical model for understanding
how thin-film solar cells work, Phys.org reported. The
breakthrough could have major implications in developing more ultra-efficient
ways to harvest clean, renewable energy from the sun.
The
existing model for explaining how current flows through solar cells, known as
the Shockley
diode equation, is nearly eight decades old — roughly as old as the
first practical silicon solar cell itself.
The
new model, from scientists at Swansea University in Wales and Åbo Akademi
University in Finland, reveals a critical balance between collecting energy
from light and minimizing losses due to recombination. It gives a more accurate
picture of the thin-film solar cells that could be crucial to the future of the
industry.
Their
findings were published in
the scientific journal PRX Energy.
"The
traditional models just weren't capturing the whole picture, especially for
these thin-film cells with low-mobility semiconductors," Ardalan Armin,
associate professor at Swansea University, explained.
Super-thin solar
panels have been hailed as a major clean energy breakthrough.
Photovoltaic film can be strategically placed in all kinds of locations where
traditional bulky, inflexible solar panels cannot — even on peoples'
clothing.
One
study found that, while most researchers in the field are working
on ways to make solar cells more efficient, designing them to better fit their
surroundings could yield even better results in terms of overall clean energy
harvested.
"Making
solar cells super-efficient turns out to be very difficult. So, instead of just
trying to make solar cells better, we figured some other ways to capture more
solar energy," said Dr.
Tomi Baikie, one of the study's authors. "This could be really helpful for
communities, giving them different options to think about instead of just
focusing on making the cells more efficient with light."
With
this new model for understanding how thin-film photovoltaics work, scientists
can potentially do both, focusing on ultra-thin solar film that can fit
anywhere and is also the most efficient.
Breakthroughs
like this one are vital to pushing clean energy forward to where it can begin
to replace polluting
forms of dirty energy en
masse.
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
Long
run is a misleading guide to current affairs. In the long run we are all dead.
John
Maynard Keynes.
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