Baltic
Dry Index. 1901 +05 Brent Crude 73.33
Spot Gold 2568 US 2 Year Yield 3.59 +0.03
I must confess that if I had been consulted whether to establish a Nobel Prize in economics, I should have decidedly advised against it.
Friedrich August von Hayek.
In the stock casinos, a guessing game. By how much will the US central bank cut their key interest rate?
But away from the stock casinos, the real question of the day is, will Israel now launch a ground attack into Lebanon now that Israel has wounded so many Hezbollah fighters and commanders, and taken out their communications network.
Logically, there’ll never be a more advantageous time for Israel to follow up.
What happens next, if anything, is as important as today’s Fed decision.
Will airlines now have to ban pagers, cell phones and laptops?
Asia-Pacific markets trade mixed as investors
await Federal Reserve’s rate decision
Published Tue, Sep 17 2024 7:51 PM EDT
Asia-Pacific markets opened mixed on
Wednesday, following gains on Wall Street that saw both the S&P 500 and the Dow Jones Industrial Average reach
new highs.
Investors await the Federal Reserve’s rate
decision due Wednesday stateside, and assessed economic data from Japan.
Indonesian central bank’s rate decision is also due later in the day.
Japan’s imports and exports in August rose
2.3% and 5.6%, respectively, from a year ago, according
to Japan’s Ministry of Finance, both missing the Reuters poll estimates of
13.4% and 10% growth.
Japan’s private sector machinery orders in
July declined 0.1% from the previous month, according to data from the Cabinet Office, missing Reuters estimates of a 0.5%
increase.
Bank Indonesia is set to meet Wednesday
for a key BI-rate decision. The policy rate stands at its highest level since
2016, even as inflation has cooled to well within the central bank’s 1.5%-3.5%
target.
Australia’s S&P/ASX 200 dipped
slightly, snapping a four-day winning streak that sent the index to a record
high on Tuesday.
Japan’s Nikkei 225 rose 0.74% while
the broad-based Topix was 0.48% higher.
Mainland China’s CSI 300 was nearly flat,
after closing at its lowest level since January 2019 on Friday.
The Taiwan Weighted Index fell 0.35%.
South Korea and Hong Kong markets are
closed today while markets in mainland China will resume trade after a
nationwide three-day holiday.
Overnight in the U.S., the S&P 500
notched an intraday record before closing below session highs but still
slightly higher on the day at 5,634.58. The Dow Jones Industrial Average fell
0.04% to close at 41,606.18 after touching a fresh record during the session.
The Nasdaq Composite added 0.2%
to 17,628.06.
Wall Street assessed the latest retail
sales which rose 0.1% in August from the previous month, compared to the
Reuters poll forecast of a 0.2% decline.
Asia-Pacific markets: Fed rate cut, Indonesian Bank, Japan trade (cnbc.com)
Stock futures are little changed as Wall Street
anticipates a long-awaited Fed rate cut: Live updates
Updated Wed, Sep 18 2024 8:06 PM EDT
Stock futures were flat in overnight
trading Tuesday as Wall Street anticipated a long-awaited rate cut from the Federal Reserve
following an aggressive multiyear hiking campaign aimed at tamping down hot
inflation.
Futures tied to the Dow Jones Industrial Average added
37 points, while S&P 500
futures hovered near the flatline. Futures tied to the Nasdaq-100 edged up about
0.1%.
Wall Street is coming off a mixed session
that saw the S&P 500 edge
up 0.03% after notching
another all-time high during intraday trading. The Dow Jones Industrial Average lost
nearly 16 points, while the Nasdaq
Composite added 0.2%.
Investors remain on high alert ahead of
the first expected rate cut from the Fed at the conclusion of its two-day
policy meeting Wednesday. This month’s gathering registers as one of the most
critical meetings in years as the Fed readies to unwind its cycle of
aggressive hikes, which started in March 2022.
Rate cuts generally benefit companies’
earnings growth and will usher in a welcome reprieve following a prolonged
period of high borrowing costs and sticky inflation. The cutting cycle may also
yield more gains for an already-strong market, with the S&P 500 already up
18% this year. Data
from Canaccord Genuity shows that since 1974, the index has rallied a
median of 6.4%, 9.8% and 15.6% in the three, six and 12 months following an
initial cut, respectively.
Although a cut appears imminent, traders
are divided over the magnitude of the move. CME Group’s FedWatch Tool shows traders pricing in a
63% chance of a 50 basis point cut, and 37% odds of a 25 basis point move.
Despite these market expectations, some
investors remain cautious about cutting rates too much, too soon. Peter
Cecchini, Axonic Capital’s director of research, called
a 50 basis point cut “unusual” as the first move in a cutting cycle
from the Fed given the current state of the housing market.
“This is not really the environment where
I think the Fed needs to do a 50 basis point cut as a preemptive measure, when
historically it’s never done so,” he told CNBC’s “Closing Bell” on Tuesday.
Stock market today: Live updates (cnbc.com)
Israel planted explosives in Hezbollah’s
Taiwan-made pagers, Reuters reports
Published Tue, Sep 17 2024 10:34 PM EDT
Israel’s Mossad spy
agency planted a small amount of explosives inside
5,000 Taiwan-made pagers ordered by Lebanese group Hezbollah months before
Tuesday’s detonations, a senior Lebanese security source and another source
told Reuters.
The operation was an unprecedented
Hezbollah security breach that saw thousands of pagers detonate
across Lebanon, killing nine people and wounding nearly 3,000 others, including
the group’s fighters and Iran’s envoy to Beirut.
Iran-backed Hezbollah has vowed to
retaliate against Israel, whose military declined to comment on the
blasts.
The plot appears to have been many months
in the making, several sources told Reuters.
The senior Lebanese security source said
the group had ordered 5,000 beepers made by Taiwan-based Gold
Apollo, which several sources say were brought into the country
earlier this year.
The senior Lebanese security source
identified a photograph of the model of the pager, an AP924, which like
other pagers wirelessly receive and display text messages but cannot
make telephone calls.
Hezbollah fighters have been
using pagers as a low-tech means of communication in an attempt to
evade Israeli location-tracking, two sources familiar with the
group’s operations told Reuters this year.
But the senior Lebanese source said the
devices had been modified by Israel’s spy service “at the production
level.”
“The Mossad injected a board inside of the
device that has explosive material that receives a code. It’s very hard to
detect it through any means. Even with any device or scanner,” the source said.
The source said 3,000 of
the pagers exploded when a coded message was sent to them,
simultaneously activating the explosives.
Another security source told Reuters that
up to three grams of explosives were hidden in the
new pagers and had gone “undetected” by Hezbollah for months.
Neither Israel nor Gold Apollo
immediately responded to Reuters requests for comment.
Images of
destroyed pagers analyzed by Reuters showed a format and stickers on
the back that were consistent with pagers made by Gold Apollo,
based in Taipei.
Hezbollah was reeling from the attack,
which left fighters and others bloodied, hospitalized or dead. One Hezbollah
official, speaking on condition of anonymity, said the detonation was the
group’s “biggest security breach” since the Gaza
conflict between Israel and Hezbollah ally Hamas erupted on
Oct. 7.
More
Israel planted explosives in Hezbollah's Taiwan-made pagers, Reuters reports (cnbc.com)
In other news, Rep. of Ireland 1 Germany 0.
US tech giant halts €30bn factory in latest blow to German economy
17 September 2024
Intel has halted plans for a €30bn (£25bn)
microchip facility in Germany in a major blow to Europe’s technology plans.
The US chipmaking giant said it would
delay construction at a site in Magdeburg by around two years, as well as
postponing a facility in Poland, despite receiving billions of euros in state
subsidies.
The announcement came as the Silicon
Valley icon unveiled a radical overhaul aimed at reversing a share price
collapse, fuelled by concerns that Intel has lost its ability to make
cutting-edge chips.
Intel chief executive Pat Gelsinger told
investors that it would separate its manufacturing arm from the rest of the
business, signalling a possible future break-up of the company.
German Chancellor Olaf Scholz last year
agreed to award Intel €10bn in subsidies to encourage
it to build a plant in Magdeburg, in the chipmaking hub of Saxony.
It was part of an effort to wean Europe
off semiconductors made in China and Taiwan, with Mr Scholz saying the plant
would help Germany “become one of the world’s major semiconductor production
locations”.
The plant is scheduled to be the
biggest-ever foreign investment in Germany, with Intel claiming it would create
3,000 permanent jobs and 7,000 construction jobs while it was being built.
The EU has outlined tens of billions in
funding to help it double its share of semiconductor manufacturing to 20pc. The
subsidies, which will not be paid until the plant is being built, have been
controversial in Germany at
a time of economic pressure and concerns about public spending.
Intel’s decision to delay work on the
facility, which was expected to begin next year, has already sparked a row
among members of Germany’s coalition government.
Finance minister Christian Lindner, of the
centre-right Free Democratic Party, said the proposed subsidies should be used
to plug a black hole in Germany’s budget, while economy minister Robert Habeck,
of the Green party, said they should be deployed “for the good of the country”.
Mr Gelsinger said Intel’s facility in
Ireland, on the outskirts of Dublin, would “remain our lead European hub for
the foreseeable future”. The company recently sold a 49pc stake in the plant to
private equity giant Apollo for $11bn (£8.3bn).
More
US tech giant halts €30bn factory in latest blow to German economy (msn.com)
German investor morale slides far more than
forecast
September 17, 2024
BERLIN (Reuters) -German investor morale
darkened more than expected in September, the ZEW economic research institute
said on Tuesday, as the assessment of the economic situation continued its
downward trend.
The economic sentiment index fell to 3.6
points from 19.2 points in August. Analysts polled by Reuters had pointed to a
reading of 17.0.
"The hope for a swift improvement in
the economic situation is visibly fading," said ZEW president Achim
Wambach.
Expectations are plummeting because there
is simply no light at the end of the tunnel, said Alexander Krueger, chief
economist at Hauck Aufhaeuser Lampe. "The general trend towards falling
growth forecasts is likely to continue," he said.
The assessment of the economic situation
in Germany has also continued to worsen, with the indicator falling to minus
84.5 from minus 77.3, its lowest since May 2020.
"The miserable assessment of the
situation points to another lost quarter on the growth side," Krueger
said.
The German economy shrank in the second
quarter, sparking fears of another recession, marked by two consecutive
quarters of contraction.
"With the winter months approaching,
the German economy also seems to be going into hibernation," said Thomas
Gitzel, chief economist at VP Bank.
"Over the next few quarters, the
German economy will be caught in a triangle between stagnation, slight growth
and a slight contraction in gross domestic product."
German investor morale slides far more than forecast (msn.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.
The Fed’s biggest interest rate call in years
happens Wednesday. Here’s what to expect
Published Tue, Sep 17 2024 3:50 PM EDT
For all the hype that goes into them,
Federal Reserve meetings are usually pretty predictable affairs. Policymakers
telegraph their intentions ahead of time, markets react, and everyone has at
least a general idea of what’s going to happen.
Not this time.
This week’s gathering of the central
bank’s Federal Open Market Committee carries an uncommon air of mystery. While
markets have made up their collective mind that the
Fed is going to lower interest rates, there’s a vigorous debate over
how far policymakers will go.
Will it be the traditional
quarter-percentage-point, or 25-basis-point, rate reduction, or will the Fed
take an aggressive first step and go 50, or half a point?
Fed watchers are unsure, setting up the
potential for an FOMC meeting that could be even more impactful than usual. The
meeting wraps up Wednesday afternoon, with the release of the Fed’s rate
decision coming at 2 p.m. ET.
“I hope they cut 50 basis points, but I
suspect they’ll cut 25. My hope is 50, because I think rates are just too
high,” said Mark Zandi, chief economist at Moody’s Analytics. “They have
achieved their mandate for full employment and inflation back at target, and
that’s not consistent with a five and a half percent-ish funds rate target. So
I think they need to normalize rates quickly and have a lot of room to do so.”
Pricing in the derivatives market around
what the Fed will do has been volatile.
Until late last week, traders had locked
in on a 25-basis-point cut. Then on Friday, sentiment suddenly shifted, putting
a half point on the table. As of Wednesday afternoon, fed funds futures traders
were pricing in about a 63% chance of the bigger move, a comparatively low
level of conviction against previous meetings. One basis point equals 0.01%.
Many on Wall Street continued to predict
the Fed’s first step would be a more cautious one.
“The experience of tightening, although it
seemed to work, didn’t work exactly how they thought it was going to, so easing
should be viewed with just as much uncertainty,” said Tom Simons, U.S.
economist at Jefferies. “Thus, if you’re uncertain, you shouldn’t rush.”
“They should move quickly here,” Zandi
said, expressing the more dovish view. “Otherwise they run the risk of
something breaking.”
The debate inside the FOMC meeting room
should be interesting, and with an unusual division among officials who
generally have voted in unison.
“My guess is they’re split,” former Dallas
Fed President Robert Kaplan told CNBC on Tuesday. “There’ll be some around the
table who feel as I do, that they’re a little bit late, and they’d like to get
on their front foot and would prefer not to spend the fall chasing the economy.
There’ll be others that, from a risk management point of view, just want to be
more careful.”
Beyond the 25 vs. 50 debate, this will be
an action-packed Fed meeting. Here’s a breakdown of what’s on tap:
More
The Fed's biggest interest rate call in years happens Wednesday. Here's what to expect (cnbc.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
Covid variant XEC 'taking charge', experts warn with fears it will sweep across Europe and the US
17
September 2024
A
new Covid variant has
emerged which is set to sweep across Europe and the US
and potentially become the dominant type, according to scientists.
The
XEC variant was first identified by German scientists but cases have been
confirmed in the UK, US, Denmark and several other countries.
It
has some new mutations that could make it the dominant strain by the autumn
after first being spotted in June.
However, current vaccines should ward
off serious illness, experts have
said.
The
NHS offers a free booster
shot for
vulnerable groups.
Prof
Francois Balloux, Director of the Genetics Institute at University College
London, said that although XEC has a "slight transmission advantage"
over other recent Covid variants, vaccines should still
offer good protection.
He
told the BBC it is possible XEC will become the dominant subvariant over the
winter though.
Director
of the Scripps Research Translational Institute, in California, Eric Topol sid
XEC is "just getting started".
He
told the LA Times: "And that's going to take many weeks, a couple months,
before it really takes hold and starts to cause a wave.
"XEC is
definitely taking charge.
"That
does appear to be the next variant.
"But
it's months off from getting into high levels."
The
UK Health Security Agency (UKHSA) has said it is normal for viruses to mutate
and change.
UKHSA
Deputy Director Dr Gayatri Amirthalingam said: “It is normal and expected for
viruses to genetically change over time.
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.
Today
something different. What’s gone wrong at Volkswagen. Approx. 16 minutes. Germany itself. Approx. 11 minutes.
Volkswagen
To Close German Factories For First Time Ever
Volkswagen To Close German Factories For
First Time Ever (youtube.com)
Is
German Economic Crisis Getting Worse?
Is German Economic Crisis Getting Worse?
(youtube.com)
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
'Emergencies'
have always been the pretext on which the safeguards of individual liberty have
been eroded.
Friedrich August von Hayek.
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