Baltic
Dry Index. 1670 -13
Brent Crude 79.88
Spot Gold 2433 US 2 Year Yield 4.05 +0.01
When investing, pessimism is your friend, euphoria the enemy.
Warren Buffett.
The good news this morning, the wider war in the Middle East didn’t break out over the weekend.
The bad news this new summer trading week in the summer doldrums, volatility seems to be the new summer norm and add a retail recession to the US restaurant, logistics and goods recession, as many US consumers seem out of cash, savings, credit and buy now pay later debt traps.
Later on Tuesday and Wednesday, the latest producer price inflation and consumer price inflation data releases.
Asia-Pacific markets mostly higher after volatile
week; India inflation and industrial data in focus
Published Sun, Aug 11 2024 8:00 PM EDT
Asia-Pacific markets were mostly higher on
Monday after a rollercoaster week that saw steep sell-offs followed by a sharp
recovery, especially in Japan stocks.
Futures for benchmark U.S. indexes were
lower as investors awaited key inflation data due later this week. Major Wall
Street averages rose Friday, with the indexes making a sharp recovery
from last
week’s market rout.
The Dow ended Friday down 0.6%,
while the S&P 500 fell
a slight 0.04%, and the tech-heavy Nasdaq Composite finished
with a 0.18% loss.
In Asia, traders on Monday will assess
inflation and industrial output data from India.
Economists polled by Reuters expect
India’s year-on-year CPI inflation to fall sharply to 3.65% in July, from 5.08%
in the previous month.
Meanwhile, India’s industrial output for
June is expected to come in at 5.5%, slightly down from 5.9% in May.
Australia’s S&P/ASX 200 rose 0.45%.
Australian consumer electronics retail company JB Hi-Fi was up over 8% after
the company released its full-year results.
Despite a fall in net profit after tax,
the company announced a special dividend of 80 Australian cents per share (53
U.S. cents per share), made possible by “an elevated net cash position and a
significant franking credit balance.”
South Korea’s Kospi was up 0.9% while the
small-cap Kosdaq was up 0.8%.
Mainland China’s CSI 300 was flat, while
Hong Kong’s Hang Seng index was
down 0.1%.
Japan markets were closed for a holiday.
Asia markets live updates: India inflation and industrial data in focus (cnbc.com)
Stock futures are little changed ahead of key
inflation and retail data: Live updates
Updated Mon, Aug 12 2024 7:00 PM EDT
U.S. equity futures fell on Sunday evening
as investors braced for key inflation data, after almost
completely reversing its violent market rout last week.
Futures tied to the Dow Jones
Industrial Average fell 48 points, or 0.1%. S&P 500 futures dipped
0.08% and Nasdaq 100 futures
inched lower by 0.05%.
On Friday, all of the major averages rose
to end the week but stopped just shy of a full recovery. The Dow finished the week lower
by 0.6%, while the S&P 500 ended
down just 0.04% and the tech-heavy Nasdaq Composite finished
with a 0.18% loss.
“Emotions are high and market swings tend
to cluster together, so I wouldn’t be shocked if we get another week of
turbulence,” Callie Cox, chief market strategist at Ritholtz Wealth Management,
told CNBC. “People are beginning to brace for a recession even though a crisis
hasn’t materialized. Fear often works in our favor as stock market investors.
More relief rallies look possible if economic data holds up, and rate-sensitive
sectors could continue to lead the market higher.”
Investors this
week are hoping to get a better sense of the state of the economy
after recent fears of a job market slowdown spooked traders and rocked the
market. On Tuesday, they’ll be watching the July producer price index report,
followed by the consumer price index Wednesday, for more confirmation that
price growth has continued to stabilize. July retail sales are also due out
Thursday.
“Another round of good [inflation] data
could help calm fears that the Fed is potentially losing the plot,” Cox said.
“Investors have jumped to conclusions about the economy, and now they’re going
to analyze a fresh batch of data to judge how warranted this sell-off actually
is.”
“Retail sales and retailer earnings may
show that fears of a job market slowdown are overblown,” she added. “We haven’t
seen too many alarming details about the U.S. consumer up until now, so it’s
important to consider the totality of spending data instead of panicking over a
lukewarm jobs report.”
Home Depot will report earnings before the
bell Tuesday, and Walmart will report on Thursday.
Stock futures are little changed ahead of key inflation data: Live updates (cnbc.com)
Volatility is the stock market's new normal
No matter where the economy goes, Wall
Street is entering a prolonged period of chaos.
Aug 11, 2024, 10:47 AM BST
Global markets had an acute panic attack
this week — a sudden bout of chaos in what has been otherwise a rather placid
and predictable year.
The dizziness started in Asia: Markets crashed in Japan early Monday, with the headline
Nikkei index falling by as much as 12.4%. The trembling then spread across the
globe as cryptocurrencies — supposedly an uncorrelated store of value —
experienced a temporary loss of control, plummeting along with everything else.
By the end of the day it was clear that US stock markets could not catch their
breath. Fully untethered from reality, hearts palpitating wildly up and down
Wall Street, the Dow Jones Industrial Average closed down more than
1,000 points, a 2.6% drop, while the tech stock-heavy Nasdaq tanked by 3.4% and
the S&P 500 sank 3%. In the days that followed, the market
jumped or fell with each new piece of information, leading to a distinct
tightness in every investor's chest.
As with any panic attack, the reasons for its sudden onset are myriad — a compounding of long-known anxieties both in and out of our control. After the Bank of Japan hiked interest rates, the Japanese yen appreciated suddenly, scrambling the carry trade, a popular Wall Street strategy that had been paying off for years but requires placid markets to sustain itself. Added on top were concerns about Big Tech, the backbone of 2024's roaring market. After wrapping up earnings season with little profit to show for investments in AI, worries that companies wasted $1 trillion on this nifty but unproven tech went from whispers to open debate.
Most important, though, was the market's
painful processing of the July jobs report, which showed that the US added just
114,000 new jobs last month, well below economists' expectations. The main
reason for the market's tranquility this year was the strong conviction that
America's battle with inflation would end with a soft landing, an ideal
scenario where prices come back under control without a surge of job losses.
The recent uptick in unemployment — which rose to 4.3% in July — forced Wall
Street to accept that its perfect economic scenario is at risk and that the
Federal Reserve, which has been focused on getting inflation under control, may
be behind the curve on cutting interest rates to support the labor market. It
was enough to send the market into a full-on tantrum.
A soft landing remains Wall Street's base
case. Fed Chairman Jerome Powell is likely to step in to boost the economy in
September. And it is probable that the recent weakness in the job market is
just a level setting back to a more sustainable existence. But even a little
doubt can be pernicious for finance, a world ruled by probabilities. After a
rather long absence, fears that the US economy could tip into recession came
back into view, which caused the people of markets — from the macro traders to
the stock jockeys — to panic.
All this bedlam is a warning that a new
era is approaching. The inflationary post-pandemic economy is fading, and
something new will soon replace it. We do not know if that regime will reward
growth or value stocks, whether it will send money flows back to Japan or to Mexico. We do not know this new economy's structure —
only that it will be slower than what we're experiencing now and perhaps more
"normal" than anything we've seen since the 2008 financial crisis.
The plan is to return to a 2% inflation rate and a 2% benchmark interest rate.
Exactly how we get there — through a soft landing or after a recession — is the
question that will have markets convulsing between fresh data prints and
central-bank announcements until we reach our destination. It may be a turbulent
ending, but at least it's in sight.
More
Recession Fears Are Fueling Stock Market Crash, Wall Street Chaos - Business Insider
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.
For
Retailers and Brands, the Next Recession May Already Have Begun
Aug 9, 2024,06:22pm EDT
Most
economists rate a recession as unlikely, but consumers believe it's already
started. What does the data say?
The
optimistic narrative of the past year or two about steady consumer spending
gains, slowing inflation, and robust job growth hit a wall of reality this
week, as evidenced by Wall Street’s sudden and dramatic nosedive. The selloff
follows a spate of weak quarterly results from a wide swath of consumer-facing
companies and an uptick in unemployment. It’s a good time to ask:
Is
the post-pandemic consumer party over? Is this the start of a recession?
On
the one hand, the majority of economic forecasters are predicting a soft
landing or no recession at all. According to a survey of members of the
National Association of Business Economics, the chance of a recession in the
next 12 months has dropped significantly. The Wall Street Journal reported just
last month that a poll of business and academic economists indicated there
would be no hard landing. Instead, they suggest the economy is just
“normalizing” after a prolonged period of growth.
On
the other hand, the majority of shoppers in one survey said they believe we’re
in a recession already.
The recent flurry of sales disappointments and earnings warnings came from nearly every sector of the consumer economy, which accounts for about 70% of US gross domestic product (GDP). Brands reporting slowing sales are as diverse as Mercedes-Benz and McDonald’s. Pepsico’s Frito-Lay North America saw a 4% decline in sales volume as consumers increasingly opt for less expensive store brand equivalents. Apple iPhone sales have been disappointing. Procter & Gamble (Tide and Charmin toilet paper) posted an earnings decline of 7%. The luxury fashion market is sputtering too, according to a report from LVMH (Louis Vuitton).
Meanwhile,
as we noted here recently,
discount chains have been reaping the benefits of inflation as shoppers trade
down—a trend that’s been developing for some time. Credit card debt and
delinquencies are on the rise. Customers have become ruthlessly savvy about
online price comparisons, putting pressure on margins. It’s estimated that more
than 60% begin their product searches on Amazon.
Add
it all up, and it’s hard to escape the conclusion that a recession seems
inevitable.
None
of this ought to be a surprise to those who study consumers. According to
Affirm, a buy now-pay later e-commerce platform, a recent survey found that
most respondents believed the economy has been in a recession since March 2023
and that it will last another year.
Sudden,
dramatic global recessions like the one that followed the pandemic shutdown in
2020 are rare. Instead, economic downturns develop slowly at first and
gradually pick up steam and scope. Claudia Sahm, the chief economist at New
Century Advisors, is credited with creating the most accurate recession
predictor. Sahm says recessions start like a snowball rolling downhill, getting
bigger and bigger until they become avalanches. In a recent interview with
Bloomberg, Sahm stated that while the economy is not in a recession yet, the
outlook “does not look promising.”
If
she’s right, the next year may see another shake-out of brands and retailers
who haven’t been paying attention to the state of the consumer, whose balance
sheets are debt-heavy, and who haven’t figured out how to connect with their
core audience. Particularly vulnerable is Target, which we reported on here recently
and is in the midst of trying to turn around a sales decline, as well as fading
department store brands like Macy’s.
More
For Retailers and Brands, the Next Recession May Already Have Begun (forbes.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
Noah
Lyles decided to race with COVID-19. The USOPC's CEO is '100% comfortable' with
that decision
9 August, 2024
The
head of the U.S. Olympic and Paralympic Committee said she was “100% comfortable”
with Noah
Lyles'
decision to compete in the 200 meters after testing positive for COVID-19 two
days before the event.
Lyles
didn't publicly reveal he'd tested positive for the virus until after he won
bronze Thursday night at the Paris Olympics. It
was the first loss in three years for the American favorite in that event, who
was trying to become the first sprinter since Usain Bolt to sweep the 100 and
200 meters.
The
head of the U.S. Olympic and Paralympic Committee said she was “100%
comfortable” with Noah Lyles' decision to
compete in the 200 meters after testing positive for COVID-19 two days before
the event.
Lyles
didn't publicly reveal he'd tested positive for the virus until after he won
bronze Thursday night at the Paris Olympics. It
was the first loss in three years for the American favorite in that event, who
was trying to become the first sprinter since Usain Bolt to sweep the 100 and
200 meters.
She
said the medical staff followed guidance from the Centers for Disease Control
and Prevention and relied on previous experience in treating athletes with the
virus.
“We
gave Noah as much flexibility in his own choices as we could,” she said. “He
had every opportunity to say, ‘I don’t want to compete. I don't feel good
enough to compete, or, I don't want to compete.'”
Once
he decided to move ahead with competing, USOPC and USATF set procedures to
ensure the safety of both Lyles and those around him.
Lyles
said after the race that he had quarantined, drank fluids and rested as much as
possible in preparation for the event. USATF said in a statement that Lyles was
given “a thorough medical evaluation” and chose to compete.
And
although he finished a respectable third racing while ill, the three-time world
champion collapsed, rolled onto his side and gasped for breath. He turned over
on his hands and knees, then went to one knee, and balanced himself with his
fist.
He
finally stood up and wobbled toward the medics, signaling for a cup of water.
Then, he left in a wheelchair. He wore a mask in the tunnel before the race,
and again when he spoke to reporters.
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.
Solar energy breakthrough
could mean solar panels will be a thing of the past
10
August, 2024
Scientists
at Oxford University have developed a revolutionary approach which could
generate solar generated electricity without the need for solar panels.
The
new approach involves coating a new power-generating material onto the surfaces
of everyday objects such as rucksacks, cars, and mobile phones, the university
said.
“If
more solar energy can be generated in this way, we can foresee less need in the
longer term to use silicon panels or build more and more solar farms,” Dr Junke
Wang, at Oxford’s physics department, said.
They
say they have developed an ultra-thin material capable of being stuck to any
everyday object to harness the power of the sun. The material can be applied as
a coating and is far smaller than current solar panels as well as being more
energy efficient, meaning it can convert more of the sun’s energy.
The
versatility of the new ultra-thin and flexible material is also key. “At just
over one micron thick, it is almost 150 times thinner than a silicon wafer,”
the university said.
Oxford
University’s Dr Shuaifeng Hu said that after just five years experimenting the
team have raised power conversion efficiency from about 6 per cent to over 27
per cent, close to “the limits of what single-layer voltaics can achieve
today.” He said the research team believe this could be extended to up to 45
per cent efficiency.
The
Oxford team believe their approach will continue to reduce the cost of solar
and also make it the most sustainable form of renewable energy. In the
past 14 years the average cost of solar electricity has dropped by 90 per cent,
making it nearly a third cheaper than fossil fuels.
If
correct, it could help ease the
growing tension between renewable energy projects
and farmers and rural communities who complain that impact the environment
Some
bodies, such as the countryside charity CPRE, are
concerned that “valuable farmland” is too often the location of choice for
solar farms. The CPRE says it is “essential”
to preserve agricultural land for food production.
More
Solar energy
breakthrough could mean solar panels will be a thing of the past (msn.com)
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
The difference between
successful people and really successful people is that really successful people
say no to almost everything.
Warren Buffett.
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