Baltic
Dry Index. 1927 -36 Brent Crude 72.34
Spot Gold 2570 US 2 Year Yield 3.64 +0.02
The latest JOLTS data shows that job openings, quits and hires are all declining at a rate that historically has only been observed during recessions. Of particular concern is job openings in the construction industry, since it is such a highly cyclical industry. Remarkably, construction job openings have collapsed by a whopping 46% over the past six months.
Key Signs A Recession Is Starting Soon... If It Hasn't Already Started | Seeking Alpha
Led by the Great AI Bubble, the Great Disconnect between the global stock casinos and the reality of a new recession getting underway, just continues to widen. Look away from gold, oil and that flattening US yield curve now.
But now comes the prospect of NATO declaring implicit war on Russia by allowing the Ukraine to use long range US, UK and French missiles to attack targets deep inside of Russia.
A world on the brink of nuclear War, 1962 Cuban Missile crisis style. But no one remembers that, right.
Asia-Pacific markets mixed as China rebounds from
six-year low, Australia nears all time high
Published Thu, Sep 12 2024 7:50 PM EDT
Asia-Pacific markets were mixed Friday, as
mainland Chinese markets rebounded from a six year low and Australian markets
near an all time high.
In Asia, investors will react to August inflation figures out from India late Thursday,
which showed that the consumer price index rose 3.65% year on year, rising from
a five-year low. This was above July’s revised figure of 3.6% and also beat
expectations of 3.5% from economists polled by Reuters.
Mainland China’s CSI 300 was marginally
up, rebounding from a near six-year low. The index closed at 3,127.47 on
Thursday, the lowest point since January 2019.
In contrast, Australia’s S&P/ASX 200 gained
0.21%, nearing its all-time high of 8,148.7.
South Korea’s Kospi 0.26% down, while the
small cap Kosdaq was 0.42% lower. Shares of chip heavyweight Samsung
Electronics slipped almost 3% as workers in its India plant reportedly went on strike for a
fifth consecutive day.
Japan’s Nikkei 225 fell 0.89%, while
the broad based Topix was also down 0.84%.
The yen strengthened 0.49% against the
U.S. dollar to 141.1 on Friday. The currency briefly touched a low of 140.78,
approaching the nine-month low of 140.7 reached on Wednesday.
Hong Kong Hang Seng index gained 1.11%.
Overnight in the U.S., the S&P 500 gained 0.75%,
marking a four-day winning streak. The Dow Jones Industrial Average rose
0.58%, while the Nasdaq
Composite saw the largest gain, rising 1%.
Thursday saw the last major data point for
the U.S. economy before the Federal Reserve meeting next week, as the country’s
producer price index rose 0.2% month on month, in line with expectations from
Dow Jones. On a year-on-year basis, headline PPI rose 1.7%.
Asia stock markets: Australia markets, India inflation (cnbc.com)
Putin says West will be fighting directly with
Russia if it lets Kyiv use long-range missiles
By Andrew Osborn and Guy Faulconbridge
September 12, 2024 6:52 PM GMT+1
Sept 12 (Reuters) - President Vladimir
Putin said on Thursday that the West would be directly fighting with Russia if
it allowed Ukraine to strike Russian territory with Western-made long-range
missiles, a move he said would alter the nature and scope of the conflict.
Ukrainian President Volodymyr Zelenskiy
has been pleading with Kyiv's allies for months to let Ukraine fire Western
missiles including long-range U.S. ATACMS and British Storm Shadows deep into
Russian territory to limit Moscow's ability to launch attacks.
In some of his most hawkish comments on
the subject yet, Putin said such a move would drag the countries supplying Kyiv
with long-range missiles directly into the war since satellite targeting data
and the actual programming of the missiles' flight paths would have to be done
by NATO military personnel because Kyiv did not have the capabilities itself.
"So this is not a question of
allowing the Ukrainian regime to strike Russia with these weapons or not. It is
a question of deciding whether or not NATO countries are directly involved in a
military conflict," Putin told Russian state TV.
"If this decision is taken, it will
mean nothing less than the direct involvement of NATO countries, the United
States and European countries in the war in Ukraine. This will be their direct
participation, and this, of course, will significantly change the very essence,
the very nature of the conflict."
Russia would be forced to take what Putin
called "appropriate decisions" based on the new threats.
More
In other news.
Federal Reserve will opt for slow policy easing as
there’s ‘still work to do’ on inflation, Fitch says
Published Thu, Sep 12 2024 8:39 PM EDT
The U.S. Federal Reserve’s easing cycle
will be “mild” by historical standards when it starts cutting rates at its
September policy meeting, ratings agency Fitch said in a note.
In its global economic outlook report for
September, Fitch forecast 25-basis-point cut each at the central bank’s
September and December meeting, before it slashes rates by 125 basis points in
2025 and 75 basis points in 2026.
This will add up to a total 250 basis
points of cuts in 10 moves across 25 months, Fitch noted, adding that the
median cut from peak rates to bottom in previous Fed easing cycles going up to
the mid-1950s was 470 basis points, with a median duration of 8 months.
“One reason we expect Fed easing to
proceed at a relatively gentle pace is that there is still work to do on
inflation,” the report said.
This is because CPI inflation is still
above the Fed’s stated inflation target of 2%.
Fitch also pointed out that the recent
decline in the core inflation — which excludes prices of food and energy — rate
mostly reflected the drop in automobile prices, which may not last.
U.S. inflation in August declined to its
lowest level since February 2021, according to a Labor Department report
Wednesday.
The consumer
price index rose 2.5% year on year in August, coming in lower than the
2.6% expected by Dow Jones and hitting its lowest rate of increase in 3½ years.
On a month-on-month basis, inflation rose 0.2% from July.
Core CPI, which excludes volatile food and
energy prices, rose 0.3% for the month, slightly higher than the 0.2% estimate.
The 12-month core inflation rate held at 3.2%, in line with the forecast.
Fitch also noted that “The inflation
challenges faced by the Fed over the past three and a half years are also
likely to engender caution among FOMC members. It took far longer than
anticipated to tame inflation and gaps have been revealed in central banks’
understanding of what drives inflation.”
More
Fed will ease slowly as there is 'still work to do' on inflation: Fitch (cnbc.com)
European Central Bank cuts interest rates again
and lowers growth forecasts
Updated Thu, Sep 12 2024 10:43 AM EDT
The European Central Bank on Thursday
delivered a quarter-point interest rate cut, marking its second reduction to
the deposit rate this year.
The widely anticipated move comes after a
period of sluggish economic
growth across
the euro zone and cooling inflation, which fell back
toward the central bank’s 2% target in August.
The ECB lowered its 2024 growth forecast
to 0.8%, down slightly from an earlier projection of 0.9%, citing “weaker
contribution from domestic demand over the next few quarters.”
For many market participants, the big
question was not whether the ECB would cut rates in September — but whether the
central bank will provide any clues as to what will follow.
The ECB’s Governing Council said in a
statement that it “is not pre-committing to a particular rate path,” while
reaffirming the need to take a data-dependent and meeting-by-meeting approach.
Economists are split over whether
policymakers at the ECB will look to pause when they meet again on Oct. 17, as
they had done in July, before
potentially reducing rates by another quarter-point on Dec. 12.
The ECB’s meeting comes just days before
the Federal Reserve appears poised to start its own rate-cutting cycle.
European Central Bank rate decision in focus ahead of Fed meeting (cnbc.com)
Oil prices to keep falling as demand weakens, says
IEA head
Brent has fallen below $70 for first time
in 3 years, delaying Opec plans for production increases
12 September 2024
Oil prices are likely to keep falling, the
head of the International Energy Agency has said, as producers continue to pump
volumes that exceed global demand.
“Given the current weak demand and lots of
oil coming from the non-Opec countries, mainly from America and others, we may
well see downward pressure on the price,” said Fatih Birol.
The bearish comments come after a
turbulent fortnight in oil markets, with the price of benchmark Brent crude
falling by more than $10 a barrel to tumble below $70 on Tuesday for the first
time in nearly three years.
The mood among traders and speculators has
turned sharply in recent weeks on fears of weaker growth in China and the US,
prompting Opec to delay a plan to start reversing more than 2mn barrels a day
of cuts. Birol spoke as the IEA released its latest monthly report on the oil
market, which noted that oil demand in the first six months of the year grew at
the slowest pace since the Covid-19 pandemic.
The main reason for the slower growth of
the oil market is China, he said. “In the last 10 years, around 60 per cent of
global oil demand growth has come from China. Now the Chinese economy is
slowing down,” Birol said.
China’s rapid embrace of clean energy was
also weighing on fossil fuel demand. “There is a very strong deployment of
electric vehicles and improvement in fuel efficiency. As a result, the oil
price fell substantially,” he added.
Birol noted that the oil markets had
turned despite geopolitical tensions and production shutdowns that would
normally prop up prices. “We should also consider this is happening in the
context of Libya’s oil production of 1.2mn b/d being shut down and a war in the
Middle East,” he said.
One year ago, Birol wrote in the Financial
Times that the demand for fossil fuels would peak this decade. The IEA believes
that oil demand is growing at a slower average rate this year of 900,000 b/d,
compared with an increase of more than 2mn b/d in 2023. Total oil consumption
will reach 103mn b/d this year, it said.
More
Oil prices to keep falling as demand weakens, says IEA head (ft.com)
Boeing workers overwhelmingly reject contract,
prepare to strike
Published Fri, Sep 13 2024 12:31 AM EDT
More than 30,000 Boeing workers were set to
strike Friday, halting production of most of the company’s aircraft after staff
rejected a new labor contract.
It’s a potentially costly development for
the manufacturer that has struggled to ramp up production and restore its
reputation following safety crises.
Workers in the Seattle area and in Oregon
voted against a tentative
agreement that Boeing and the International Association of Machinists
and Aerospace Workers unveiled Sunday. That proposal included 25% wage
increases and other improvements to health-care and retirement benefits, though
the union had sought raises of about 40%. Workers had complained about the
agreement, saying that it didn’t cover the increased cost of living.
The vote is a blow to CEO
Kelly Ortberg, who has been in the top job for five weeks. A day before the
vote, he had urged workers to accept the contract and not to strike, saying
that it would jeopardize the company’s recovery.
The ultimate financial impact of the
strike will depend on how long it lasts.
Jefferies aerospace analyst Sheila
Kahyaoglu estimated a 30-day cash impact from a strike could be a $1.5 billion
hit for Boeing and said it “could destabilize suppliers and supply chains.” She
forecast the tentative agreement would have had an annual impact of $900
million if passed.
Boeing has burned through about $8 billion
so far this year. Production has fallen short of expectations as the company
works to stamp out manufacturing flaws and faces other industry-wide problems
such as supply and labor shortages.
A blowout of a nearly new Boeing 737 Max 9
at the start of the year has brought additional federal scrutiny of Boeing’s
production lines.
Boeing workers overwhelmingly reject contract, prepare to strike (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.
Key Signs A Recession Is Starting Soon... If It
Hasn't Already Started
Sep. 11, 2024 11:10 AM ET Jon Wolfenbarger
Summary
- Historical
data suggests that significant Fed rate hikes and an inverted yield curve
often precede major recessions and stock bear markets.
- Recent
employment data, including declining job openings and full-time jobs,
signals an imminent or ongoing recession.
- Key
cyclical sectors like Industrials and Consumer Discretionary are
underperforming, indicating economic weakness despite high stock
valuations.
- Proven
recession indicators, such as rising unemployment and underperforming
speculative assets, suggest a bear market is likely imminent.
More
Key Signs A Recession Is Starting Soon... If It Hasn't Already Started | Seeking Alpha
Ally
Financial plunges 19% after CFO says its borrowers are struggling
Wed,
11 Sept 2024, 4:15 am BST
Shares
of Ally
Financial plunged
as much as 19% on Tuesday after the company's CFO said it is seeing a
deterioration in the financial health of its consumers.
At
a Barclays conference on Tuesday, Ally CFO Russell Hutchinson said high
inflation and a worsening employment picture had weakened its customers'
ability to pay back its loans.
"Our
borrower is struggling with high inflation and cost of living, and now more
recently, a weakening employment picture," Hutchinson said.
Those
challenges have hindered the ability of Ally Financial's customers to pay back
their loans in a timely manner.
Ally
Financial is one of the largest auto lenders in the country, with tens of
billions of dollars in debt on its balance sheet tied to consumer auto loans.
"On
the retail auto side, our credit challenges have intensified over the course of
the quarter," Hutchinson said. "In July and August, we saw
delinquencies up about 20 basis points versus our expectations."
He
added: "We're clearly dealing with a cohort of borrowers who have been
struggling with cost of living and now are struggling with an employment
picture that's worsened."
Hutchinson
expects Ally's delinquency rates to continue rising in the coming months,
"just given the size of this population of struggling borrowers."
"And
so that's really kind of one of the things that's put us on notice around
credit development," Hutchinson added.
To
soften the blow from the rise in delinquency rates, Hutchinson said he expects
the company to move up its reserves to cover any potential credit losses.
Overall,
Ally Financial's comments are not encouraging for the consumer picture, but
Ally Financial is known for catering to borrowers with credit scores in the
lower to middle ranges.
More
Ally Financial plunges 19% after CFO says its borrowers are struggling (yahoo.com)
UPS
is laying off more employees amid effort to boost profitability
September
10, 2024 at 1:30 p.m.
Sandy
Springs-based UPS is laying off more of its employees, after earlier this year
announcing it was cutting 12,000 jobs in its management ranks.
The
company did not specify how many employees are losing their jobs in the latest
round of cuts, but said Monday night that the layoffs are part of ongoing
efforts since the January announcement of reductions. It was not clear which
departments were affected and how many of the cuts might be in the Atlanta
area.
"Earlier
this year, we announced efforts to align the size of our management staff with
the size of our company," a UPS spokesperson said in a written statement.
"We continue to look for ways to increase productivity through process
improvements, technology advancements and organization realignment."
UPS
has about 500,000 employees, but has had declines in business from peaks seen
during the COVID-19 pandemic, when stay-at-home protocols drove explosive
growth in online shopping and deliveries to doorsteps.
The
job cuts came in force after the company reported early this year that it saw
declines in volume, revenue and operating profit in all of its business
segments for 2023, which UPS CEO Carol Tomé called "a difficult and
disappointing year."
Things
have not improved, the most recent quarterly results show. In July, UPS
reported a decline in operating profit for the first half of 2024 compared with
2023. That includes a second quarter with a 32% year-over-year decline in net
income and a 1.1% decline in total revenue, while operating expenses grew 3.1%.
More
UPS is laying off more employees amid effort to boost profitability | Chattanooga Times Free Press
Covid-19 Corner
This section will continue until it becomes unneeded.
What? No free vitamin D?
As COVID-19 continues to spread, how can you protect yourself?
Wed, September 11, 2024
at 12:03 PM GMT+1
CHICOPEE, Mass. (WWLP) –
After having to quarantine, wear masks, and follow social distancing
guidelines, Americans are still dealing with COVID-19, as it continues to
spread across the U.S.
At this point, it looks
like COVID-19 will be here for a long time. We’re constantly seeing new
variants and health officials say the best thing to do is practice those safety
guidelines. Four years later, COVID-19 is still circulating across the U.S., and
many people are still getting sick.
After a summer surge of COVID-19 cases, it looks like its here to stay.
“COVID-19 we knew was
always going to become an ongoing problem and what we are seeing is exactly
what we expected to see which is that we are having outbreaks of an infectious
illness. It goes along with other infections school just started, people are going
to be inside more and we have some transmission happening,” said Sarah
Kleinschmidt, the Regional Chief of Emergency at Baystate Nobile Hospital.
According to the CDC,
older adults are at the highest risk of getting severely sick from COVID-19,
and more than 81% of COVID-19 deaths occur in people over age 65. The best ways
to protect yourself from this infectious disease are to wear a mask, avoid large
crowds, or get vaccinated.
For those who want that
extra protection from the virus, pharmacy chains like CVS and Walgreens already
have the COVID-19 vaccines available. The Food and Drug Administration approved
the new COVID-19 vaccines from Pfizer and Moderna on August 22nd. With new
variants and strains of COVID-19 on the rise, the latest vaccines were updated
to match the circulating strains.
Remember that as we
transition from the summer to the fall, viruses like COVID-19 can spread more
easily. If you’re feeling sick, you may want to get tested. Also, consider
staying home so that you don’t get others sick.
As COVID-19 continues to spread, how can you protect yourself?
(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.
Exclusive-Vitol-backed
VPI to invest up to 450 million euros in German battery projects
12
September 2024
LONDON
(Reuters) - Power firm VPI, backed by the world's largest energy trader Vitol,
will invest up to invest up to 450 million euros ($496 million) over the next
three to five years in battery projects in Germany, VPI’s chief executive told
Reuters.
Germany
plans to rapidly expand its renewable power capacity to account for 80% of the
country's electricity by 2030 from around 40% now, which will also require an
increase in energy storage to help balance supply and demand on the system.
VPI
already owns power assets in Britain and Ireland and said the battery joint
venture with German energy storage firm Quantitas Energy would be its first
investment in the country.
Due to
high levels of solar power, which produce more electricity during sunny mid-day
peaks, the Germany power market can see extreme intra-day price volatility.
Companies with batteries can then benefit from selling power during highs and
charging when prices are low or even negative.
"In
Germany a lot of the opportunity (for batteries) is on the wholesale market...
and that is because a lot of the renewable base is solar which creates price
differentials within the day," Jorge Pikunic, VPI Chief Executive said in
an interview.
The
investment is aimed at developing up to 500 MW of battery storage capacity over
the next three to five years and the joint venture expects to build 10
projects, mostly based in northeast Germany, a region rich with wind power
generation.
Pikunic
said individual projects would be different in scale but the majority of the
projects would have a 60 MW capacity.
He did
not disclose the ownership split of the venture but said VPI would be the
majority shareholder.
Exclusive-Vitol-backed
VPI to invest up to 450 million euros in German battery projects (msn.com)
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
Another weekend and a weekend closer to the next recession, or if as I think, that the US economy entered recession in April or May, another weekend deeper into recession. Another weekend closer to nuclear war. Will a senile 81 year old start the war the Kennedy and Khrushchev managed to avoid?
Have a great weekend everyone.
Another
concern shown in the jobs reports was a decline in full-time jobs, offset by an
increase in part-time jobs. Full-time jobs fell by 438,000, while part-time
jobs rose by 527,000. In fact, all the net jobs added over the past year have
been part-time jobs, with full-time jobs declining by 1.02 million and
part-time jobs increasing by 1.05 million. As the following chart shows,
full-time jobs (blue line) are declining by 0.8% year-over-year, while
part-time jobs (red line) are rising by 14.4%. Such a wide disparity between
full-time and part-time jobs is typical in the early stages of a recession.
Note that full-time jobs have declined for the past seven months. Historically,
a recession has occurred when there has been three straight months of full-time
job declines.
Key Signs A Recession Is Starting Soon... If It Hasn't Already Started | Seeking Alpha
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