Baltic Dry Index. 1755 +34 Brent Crude 78.78
Spot Gold 2516 US 2 Year Yield 3.83 unch
No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.
Adam Smith, The Wealth of Nations, 1776.
With Nvidia priced to perfection and beyond, was it a case of buy the rumour, sell the news?
The Nvidia “whisper miss” is weighing heavily on Asian tech stocks today.
Meanwhile in UK stocks, it’s the banksters getting hammered, in anticipation that the new Labour government is about to hammer them in October with even more taxes.
With the Fed expected to start cutting interest rates next month, two US presidential candidates running on unsound economic policies, Germany dragging down the EU economy, and far too many stocks disconnected from economic reality, it might be a good time to be out of stocks and into bonds.
For a second day, the much watched US 2 year – ten year Treasury yield spread is out of inversion and closed slightly positive last night. A US recession underway?
Asia-Pacific
markets slump as investors assess Nvidia results, South Korea and Taiwan lead
losses
Published
Wed, Aug 28 2024 7:53 PM EDT
Asia-Pacific
markets fell on Thursday, with tech stocks dragging South Korean and Taiwanese
indexes after chipmaker Nvidia reported its second-quarter results.
Nvidia reported second-quarter
earnings — ended July — that beat Wall Street expectations and
provided stronger-than-expected guidance for the current quarter. The company
also authorized an additional share
buyback of $50 billion.
Revenue for the second quarter came in at $30 billion,
up 15% from the previous quarter and 122% higher from a year ago. However, the
firm’s shares fell
8% in extended trading.
Investors
in Asia will watch for any spillover to tech stocks in the region, which is
home to companies along Nvidia’s value chain like Taiwan Semiconductor Manufacturing
Company and SK Hynix.
South
Korean chip heavyweight SK Hynix plunged over 5%, while Samsung Electronics
fell more than 2.6%, dragging the Kospi down 0.71%. The
small-cap Kosdaq was down 0.74%.
The Taiwan Weighted Index lost
1.14%, leading losses in Asia. Taiwan Semiconductor Manufacturing
Company shares shed 2.07%, while Hon Hai Precision Industry —
known internationally as Foxconn dropped 2.16%.
Japan’s Nikkei 225 dropped 0.42%,
while the broad based Topix was down 0.24%.
Australia’s S&P/ASX 200 was down
0.67%.
Hong
Kong Hang Seng index slipped
0.4%, with the mainland Chinese CSI 300 losing 0.31%.
Overnight
in the U.S., all three major indexes fell in the regular trading session and
before Nvidia’s results, with the Nasdaq Composite down 1.12%,
while the S&P 500 slipped
0.6%.
The Dow Jones Industrial Average lost
159.08 points, or 0.39%.
Asia stock markets: Nvidia earnings, Asia tech, TSMC (cnbc.com)
Nvidia’s
earnings report shows the problem of being priced for perfection
Published
Wed, Aug 28 2024 7:33 PM EDT
Nvidia reported its
fourth-straight quarter of triple-digit revenue growth on Wednesday, sailing
past estimates on the top and bottom line while also issuing a
forecast that topped Wall Street expectations. The company even bolstered
its buyback
program with a plan to repurchase $50 billion in shares.
But
the stock dropped 7% in extended trading.
That’s
life for Nvidia, which has ridden the artificial intelligence boom to a $3
trillion market cap, soaring almost nine-fold since the end of 2022 and
surpassing every public company other than Apple in valuation. (It topped Apple
for a stretch in June.)
In
addition to reporting 122% annual revenue growth on Wednesday to over $30
billion, Nvidia said sales in the current period will jump about 80% to roughly
$32.5 billion. Analysts were expecting close to $32 billion.
However,
Stacy Rasgon, an analyst at Bernstein, told CNBC before the report came out
that “buyside whispers” were closer to $33 billion to $34 billion, meaning
Nvidia would have to dramatically surpass analyst estimates in its guidance in
order to see a pop.
----Nvidia
said it expects to ship “several billion dollars” worth of Blackwell revenue in
the fiscal third quarter, which ends in October. Blackwell is the company’s
latest generation of technology, following Hopper. There had been some concerns
that Blackwell would be delayed, but CFO Colette Kress said on the call with
analysts that “supply and availability have improved.”
Still,
“demand for Blackwell platforms is well above supply, and we expect this to
continue into next year,” Kress said.
Other
than missing the “whisper” numbers, some investors may be looking at Nvidia’s
gross margin, which slipped a bit in the quarter to 75.1% from 78.4% in the
prior period. That’s up from 43.5% two years ago and 70.1% in the fiscal second
quarter of last year.
----But
buying into Nvidia at these levels is a bet that the company can continue to
outperform very high expectations and requires a willingness to accept the kind
of stock volatility generally reserved for much smaller companies.
After
reaching a record in June, Nvidia proceeded to lose almost 30% of its value
over the next seven weeks, shedding roughly $800 billion in market cap. It’s
since recovered most of those losses.
More
Nvidia's earnings report shows problem of being priced for perfection (cnbc.com)
FTSE
100: Natwest, Barclays and Lloyds shares drop on fears of Labour tax raid
Wednesday
28 August 2024 4:01 pm
Shares
in the UK’s largest banks dropped on Wednesday amid concerns that the new
Labour government could raise taxes on the sector in October’s Budget.
Natwest
and Barclays were among the biggest fallers on the FTSE 100, dropping as much
as 4.1 per cent and 3.7 per cent respectively. The moves wiped more than £1bn
from each firm’s market capitalisation.
Lloyds
Banking Group, the UK’s biggest domestic lender, dropped as much as 3.3 per
cent.
Elsewhere,
shares in Asia-focused HSBC and Standard Chartered fell up to 0.8 per cent and
1.5 per cent respectively.
The
news comes after Keir Starmer, in his first major speech since becoming prime
minister, said on Tuesday that those “with the broadest shoulders should bear
the heaviest burden” for filling what Labour claims is a £22bn “black hole” in
the public finances left by the Conservative government.
A
spokesperson for now Chancellor Rachel Reeves said in May, before the general
election, that she had “no plans” to raise the surcharge on bank profits or introduce a
financial transaction tax.
However,
recent bumper profits in the sector have fuelled speculation that banks could
become an easy target for further taxes, including a windfall tax.
Lloyds,
HSBC, Barclays and Natwest together posted a record £44.2bn in pretax profit last year, up 41 per cent
from £31.4bn in 2022, on the back of interest rate hikes from the Bank of
England, which allowed them to charge more on loans.
Meanwhile,
data published by the Treasury Committee in May showed big banks earned more
than £9bn in interest on their central bank reserves last year, up 135 per cent
from 2022.
“There
are banks who’ve been making good profits out of higher interest rates –
they’ve got broad shoulders and no one likes banks,” a former senior Whitehall
adviser told the Financial Times on Tuesday.
Influential
lobby groups like the TheCityUK have staunchly opposed a windfall tax
on banks, arguing it would make Britain less competitive compared to other
financial hubs by deterring businesses and investors.
Non-profit
advocacy group Positive Money found in February that a windfall tax on Big Four
bank profits could raise between £3.5bn and £14bn.
Other
options available to Labour include increasing the capital gains tax rate to align it with
income tax. Reeves has not explicitly ruled out such a measure.
FTSE 100 bank shares drop on fears of Labour tax raid (cityam.com)
In other news, dedollarisation rises. Weaponising the dollar has consequences.
China’s
international use of renminbi surges to record highs
Closer ties with Russia bolster Beijing’s efforts to use its currency more in global trade
29
August 2024
China’s use of the renminbi in
cross-border transactions has reached record highs this year, as closer ties
with Russia bolster Beijing’s efforts to internationalise its currency and cut
dependence on the US dollar.
In
July, 53 per cent of China’s inbound and outbound transactions used the Chinese
currency, according to data from the State Administration of Foreign Exchange,
up from about 40 per cent for the same month in 2021.
The
Safe data shows cross-border transfers by banks on behalf on non-banking
clients and mainly represents trade settlement, although it also captures
investment flows and debt payments.
China’s use of the renminbi in cross-border transactions has reached record
highs this year, as closer ties with Russia bolster Beijing’s efforts to
internationalise its currency and cut dependence on the US dollar. In July, 53
per cent of China’s inbound and outbound transactions used the Chinese
currency, according to data from the State Administration of Foreign Exchange,
up from about 40 per cent for the same month in 2021. The Safe data shows
cross-border transfers by banks on behalf on non-banking clients and mainly
represents trade settlement, although it also captures investment flows and
debt payments.
“The sanction situation created a huge
stimulus for China to develop its [financial] system and to develop solutions
to link China’s system with the Russian one,” said Alexandra Prokopenko, a
research fellow at the Carnegie Institute in Berlin.
Growth
of trade settled in renminbi has also been helped by currency swap lines that
Beijing opened or renewed throughout 2023 with Saudi Arabia, Argentina and
Mongolia — all commodity producers with goods China wants.
Since
2022, new clearing banks for the renminbi have also been established in Laos,
Kazakhstan, Pakistan, Brazil and Serbia, according to the People’s Bank of
China.
More
China’s international use of renminbi surges to record highs (ft.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.
Why
the Fed may be too late to stop a recession with its rate cuts, according to
Northwestern Mutual investment chief
August
27, 2024
The
Federal Reserve's efforts to boost the economy may be coming too late,
according to Northwestern Mutual.
The
financial services firm flagged the risk of a potential recession, even as the
Fed looks poised to cut rates to keep the economy stimulated.
Markets
are pricing in with certainty that the Fed will begin easing monetary policy in
September, according to the CME FedWatch tool— but that may not prevent a
recession, given the weakness in the economy, according to Brent Schutte, the
firm's chief investment officer.
"I
think we all think because the Fed is cutting rates, that's the magic elixir
that's going to allow us to avoid a recession," Schutte said in an
interview with CNBC on Tuesday,
pegging the probability of a downturn at over 50%. "If you look at the
past four recessions, the Fed has actually cut before the recession and still
had one."
Other
strategists have noted that Fed rate cuts have typically preceded
a recession.
That's because central bankers tend to ease policy when they see a significant
weakening in the economy — but it's difficult to stop
economic conditions from weakening once a downward path starts, experts
have said.
In
a recent note, Schutte pointed to weakness in the US labor market, with hiring
conditions looking significantly weaker than they did several years ago.
The unemployment
rate spiked to 4.3% in
July — the highest level recorded since the pandemic. Meanwhile, the US
government significantly downgraded job gains in the year leading up to the end
of the first quarter, with the economy
having added 818,000 fewer jobs in that timeframe than previously
thought.
"Given
that labor data is a lagging indicator, it raises the question of whether the
Fed is already too late in drawing its line in the sand of maintaining the
current employment picture," Schutte wrote. "The Federal Open Markets
Committee may be hamstrung when it comes to how far it can go in supporting the
labor market," he later added, pointing to ongoing signs of weakening,
like cooling demand for labor in manufacturing.
An
economic slowdown now looks more likely than a soft landing, Schutte said,
though he noted that there were still some attractive areas in the market for
investors.
More
Covid-19 Corner
This section will continue until it becomes unneeded.
Today, a vaccine warning from Australia.
Father
has to learn to walk again after rare reaction to Covid vaccine - as he shares
grave warning
·
Chris Nemeth developed severe reaction to Covid
jab
·
He has slammed the government's compensation scheme
By Brett Lackey For
Daily Mail Australia
Published: 08:01, 28
August 2024 | Updated: 08:28, 28 August 2024
An
Australian dad whose Covid vaccine left him with a crippling injury that forced
him to quit his 'dream job' has blasted the government's treatment of those who
suffered adverse reactions to the jab.
Chris
Nemeth, 51, worked in airline logistics until he got the AstraZeneca vaccine in
July 2021 and developed chronic inflammatory demyelinating polyneuropathy
(CIPD) which can cause numbness, pain and even paralysis in the limbs.
His
thorough 1,000-page submission to the Covid-19 Vaccine
Claims Scheme, including documentation from a GP and a specialist
attributing the permanent condition to his Covid shot, took more than 455 days
to be assessed.
Mr
Nemeth said the scheme, which was established to provide support for those who
did their bit and got vaccinated but were injured, was a bureaucratic
nightmare.
The
Melburnian, who takes medication for his pain as well as IV immunoglobulin
infusion therapy in hospital every three weeks, warned there could be
'suicides' because the process under the claims scheme was so arduous.
'I
had to learn to walk again, I still have constant neuropathy in both hands and
feet - tingling, burning, pins and needles - fatigue, my brain doesn't work the
way it did... the neurologist said this is as well as I'm likely to get,' he
told Daily Mail Australia.
Despite
not being able to work since 2021 and with a family to support he said he was
made to jump through hoops by the claims scheme with his application repeatedly
bounced back for more information or external legal reviews.
Mr
Nemeth said he was only this month offered a settlement for his claim but has
not revealed the exact figure.
More
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.
Kagome
superlattice method offers new way to tune graphene's electronic properties
August
27, 2024
A research
team has introduced a novel method for selectively tuning electronic bands in
graphene. Their findings, published in Physical
Review Letters, showcase the potential of artificial superlattice fields
for manipulating different types of band dispersions in graphene.
Traditional
band engineering methods, such as heterostructures, interfacial strain, and
alloying, have limitations, particularly in providing in situ and continuous
control over the engineered band structures. The advent of van der Waals (vdW)
materials, especially graphene, has opened new avenues for band structure
engineering through gating and moiré heterostructures, which can modify energy
bands and lead to various emergent physical phenomena.
The
primary challenge lies in the precise control and manipulation of band
structures to achieve specific electronic properties. Previous methods have
been less flexible and lacked the ability to actively and selectively modify
dispersion characteristics of bands.
To
address the challenges, this research introduces a paradigm-shifting method of
band engineering by creating an artificial kagome superlattice to manipulate
the Dirac bands in graphene. The kagome superlattice is designed with a large
period of 80 nm, which is pivotal for folding and compressing various
high-energy bands into a low-energy regime that can be experimentally observed
and manipulated.
The
study's key innovation lies in the use of a high-order potential within the
kagome superlattice. This potential allows for the reconstruction of band
structures through different contributions, leading to dispersion-selective
band modulation. The researchers fabricated the artificial lattice device using
standard van der Waals assembly techniques and electron beam lithography,
creating a kagome-lattice pattern that functions as a local gate for the
graphene.
By
independently adjusting the voltage applied to the local gate and the doped
silicon substrate, the researchers were able to finely control both the
strength of the artificial potential and the carrier density in the graphene.
The high-order kagome potential enabled the researchers to observe and
manipulate the redistribution of spectral weight among multiple Dirac peaks.
Furthermore,
the application of a magnetic field was shown to effectively weaken the
superlattice's impact on the band structure, reactivating the intrinsic Dirac
band. This finding provides an additional knob for controlling the electronic
properties of the material.
In
conclusion, the innovative approach presented in the study, leveraging an
artificial kagome superlattice, offers unprecedented control over band
structure engineering. This method not only advances the field's capacity for
precise manipulation of electronic properties but also opens new avenues for
the discovery of novel physical phenomena and materials with designed
functionalities.
The
team was led by Prof. Zeng Changgan from the University of Science and
Technology of China (USTC) of the Chinese Academy of Sciences (CAS), who
collaborated with Prof. Sheng Junyuan from Wuhan University and Prof. Francisco
Guinea from IMDEA Nanociencia in Spain.
Kagome
superlattice method offers new way to tune graphene's electronic properties
(msn.com)
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
There is no
art which government sooner learns of another than that of draining money from
the pockets of the people.
Adam Smith,
1776. HMG’s new UK government now!
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