Baltic
Dry Index. 1947 +28 Brent Crude 73.39
Spot
Gold 2496 US 2 Year Yield 3.88 -0.03
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is legalized lying.
H. G.
Wells.
In the stock casinos, fear’s back. What if Friday’s US jobs numbers suggest that the US economy is/has entered into a new recession.
In stock bubbles, getting out early always beats getting carried out last.
If Warren Buffett is selling and hoarding a mountain of cash ahead of buying later in a crash, why would I want to buy stocks here at the top?
Another interesting day lies ahead in the stock casinos. Look away from that falling oil price signalling recession and the flattening US yield curve now.
Nikkei and Taiex plunge 3%, leading losses in Asia
after Wall Street plummets on weak U.S. data
Published Tue, Sep 3 2024 7:49 PM EDT
Asia-Pacific markets plunged on Wednesday,
led by Japan’s Nikkei 225 after
U.S. tech
stocks sold off and weak U.S. economic data sparked recession fears.
Japan’s Nikkei 225 was down 3.19%,
leading losses in Asia, while the broad based Topix was down 2.79%.
Semiconductor related stocks such as Renesas Electronics plunged
8%, making it the largest loser on the index. Tokyo Electron lost
7.04%, while Advantest tumbled
over 7.7%.
Softbank Group, which owns
chip designer Arm, fell over 5.9%. Arm designs chips for Nvidia.
South Korea’s Kospi lost 2.17%, as well as
the small cap Kosdaq, which saw a nearly 3% loss.
Chip giants Samsung Electronics and SK
Hynix — both Nvidia suppliers — lost 2.62% and 6.36% respectively.
The Taiwan Weighted Index dropped
3.49%, with heavyweights Taiwan
Semiconductor Manufacturing Company down 3.56% and Hon Hai Precision Industry —
known internationally as Foxconn — falling over 3.51%. The index lost as much
as 5.29% in early trade, before recovering to current levels.
Australia’s S&P/ASX 200 lost almost
1.70%, mainly dragged by a weakness in oil prices. The country’s second quarter GDP grew by 1% year-on-year,
on par with expectations, and 0.2% quarter-on-quarter, slightly lower that the
expected 0.3% expected among economists polled by Reuters.
Hong Kong’s Hang Seng index saw the
smallest loss in the region, slipping 1.5%, while the mainland Chinese CSI 300
was down 0.47%.
Chinese chip stocks also suffered some
weakness despite these being unrelated to Nvidia’s supply chain, with
state-linked Semiconductor
Manufacturing International Corporation down 1.95% and Hua Hong Semiconductor falling
1.06%.
Seperately, the Caixin services purchasing managers index for August
showed that China’s service sector expanded at a slower rate compared to July,
with the PMI falling to 51.6 from 52.1.
In the U.S., chipmaker Nvidia lost over 9% in
regular trading, dragging other counterparts along with it, such as Intel, AMD and Marvell.
The VanEck Semiconductor ETF (SMH), an
index that tracks semiconductor stocks, was down 7.5%, its worst day since
March 2020.
Separately, the ISM manufacturing index
for August came in at 47.2% for the month, up 0.4 percentage points from July,
but below the 47.9% expected from Dow Jones. The gauge measures the percentage
of companies reporting expansion, so anything below 50% represents contraction.
All three major indexes recorded their
worst days since the Aug. 5 global sell-off. The Dow Jones Industrial Average fell
1.51% and the S&P 500 down
2.12%. The Nasdaq Composite saw
the largest loss, tumbling 3.26%.
Asia stock markets: Nvidia sell-off, weak U.S. data, Australia GDP (cnbc.com)
Stock futures fall after worst S&P 500 day
since early August rout: Live updates
Updated Wed, Sep 4 2024 9:31 PM EDT
U.S. stock futures fell Tuesday night
after the major averages kick-started
September lower, with the S&P 500 clocking its worst day since
early August.
S&P 500 futures and Nasdaq 100 futures dipped
0.54% and 0.8%, respectively. Dow
Jones Industrial Average futures slid 19 points, or 0.34%.
Nvidia shares
fell 2% in extended trading after a Bloomberg report, citing sources familiar, said the
U.S. Justice Department sent subpoenas to the chipmaker. The move comes after
Nvidia tumbled more than 9% in the regular session amid a broader pullback in
semiconductor stocks.
Wall Street is coming off a losing
session, with the major benchmarks posting their worst day going back to the
Aug. 5th sell-off as chip names came under pressure and the latest economic
data implied slowing growth for the U.S. economy. The 30-stock Dow fell more than 600 points,
or 1.5%, while the S&P 500 slid
2.1%. The Nasdaq Composite dropped
3.3%.
Traders are bracing for further volatility
in September, historically a weak month for equities, with many investors
anticipating a pullback of 5% or more in the coming weeks. Still, some bullish
investors expect any decline in stocks could be a buying opportunity.
“The next eight weeks should be a prime, a
very prime opportunity, to rebalance your portfolio, get more diversified, and
actually let the market activity go in your favor,” Chris Hyzy, investment
chief at Merrill and Bank of America Private Bank, said on CNBC’s “Closing Bell” on Tuesday.
Corporate earnings season is largely
behind investors, but reports from retailers Dick’s Sporting Goods and Dollar Tree are set to
release before the open on Wednesday. Hewlett Packard Enterprise is
set to post earnings after the close.
Traders will also look to the latest
releases on the U.S. trade deficit, job openings and labor turnover (JOLTS)
survey, and factory orders data.
Stock market today: Live updates (cnbc.com)
$279bn wiped off Nvidia stock in Wall Street
sell-off
September 3, 2024
Worries about a slowing US economy helped
send stocks on a scary summertime swoon early last month, but financial markets
later rebounded on hopes that the Federal Reserve could pull off a soft landing
for the economy.
Sam Stovall, chief investment strategist
at CFRA Research, said that the today’s market reaction is “just speculation
about the Fed. If there is any kind of economic weakness, investors believe the
Fed will respond by lowering interest rates more aggressively.”
After jacking its main interest rate to a
two-decade high to beat high inflation, the Fed looks set to ease interest
rates later this month in hopes of easing conditions for the economy and
avoiding a recession.
Many traders are anticipating the Fed will
deliver a full percentage point of cuts to interest rates this year, which is a
“recession-sized” amount, according to a Bank of America Global Research
report.
The fall in share prices came as traders
await a number of labour market reports due during the week, ahead of Friday’s
non-farm payrolls data for August.
The jobs market has come under greater
scrutiny, after July’s report hinted at a greater-than-expected slowdown, that
consequently sparked a global selloff in riskier assets.
On Friday, closely watched US jobs data is
expected to influence the Federal Reserve’s take on the American economy and
when it will start lowering interest rates. The move will have repercussions
through global markets.
Stephen Innes, analyst at SPI Asset
Management, warned that Friday’s data “is shaping up to be a significant litmus
test”.
He said: “A stronger-than-expected payroll
number, paired with a lower unemployment rate, could inject some much-needed
confidence into the market, signaling that growth risks might be easing, at
least for now.
“If the report disappoints, especially if
it pushes the unemployment rate higher, we could quickly see growth concerns
flare up again.”
Analysts cautioned investors that
September is typically a poor month for US stocks. Sam North, of investment
platform eToro, said: “September has historically been a challenging month for
US stocks. Between 1928 and 2023, the S&P 500’s return in September is
-1.17pc on average.”
$279bn wiped off Nvidia stock in Wall Street sell-off (msn.com)
Weak manufacturing measures raise specter of U.S.
economic slowdown
Published Tue, Sep 3 2024 10:54 AM EDT
U.S. factories remained in slowdown mode
in August, fueling fears about where the economy is headed, according to
separate manufacturing gauges.
The Institute for Supply Management monthly survey of
purchasing managers showed that just 47.2% reported expansion during the month,
below the 50% breakeven point for activity.
Though that was slightly above the 46.8%
recorded for July, it was below the Dow Jones consensus call for 47.9%.
“While still in contraction territory,
U.S. manufacturing activity contracted slower compared to last month. Demand
continues to be weak, output declined, and inputs stayed accommodative,” said
Timothy Fiore, chair of the ISM Manufacturing Business Survey Committee.
“Demand remains subdued, as companies show
an unwillingness to invest in capital and inventory due to current federal
monetary policy and election uncertainty,” he added.
While the index level suggests contraction
in the manufacturing sector, Fiore pointed out that any reading above 42.5%
generally points to expansion across the broader economy.
It was a weaker-than-expected reading last
month that sent
markets further into a tailspin, ultimately costing the S&P 500 about
8.5% before recovering most of the losses. Stocks
added to declines following the latest ISM release on Tuesday, with
the Dow Jones Industrial
Average off nearly 500 points.
Another weak economic reading raises the
probability the Federal Reserve will be cutting interest rates by at least a
quarter percentage point later this month. Following the ISM report, traders
raised the odds of a more aggressive half-point reduction to 39%, according to
the CME Group’s FedWatch measure.
With the survey, the employment index
edged higher to 46% while inventories jumped to 50.3%. Regarding inflation, the
prices index nudged higher to 54%, possibly giving the Fed some pause when
deciding on the extent of the fully priced-in rate cut.
The ISM results were backed up by
another PMI reading from S&P, which showed a decrease to 47.9
in August from 49.6 in July.
The S&P employment index showed a
decline for the first time this year, while the input cost measure climbed to a
16-month high, another sign that inflation remains present if well off its
mid-2022 highs.
“A further downward lurch in the PMI
points to the manufacturing sector acting as an increased drag on the economy
midway through the third quarter. Forward-looking indicators suggest this drag
could intensify in the coming months,” said Chris Williamson, chief business
economist at S&P Global Market Intelligence.
Weak manufacturing measures raise specter of U.S. economic slowdown (cnbc.com)
In other US news, that CRE problem has been fixed, writes Bloomberg. Well maybe, but extending and pretending CRE loans into an arriving new recession, probably isn’t wise and likely ends in an even bigger crash and default next year.
Landlords Face a $1.5 Trillion Commercial Real Estate Maturity Wall
August 31, 2024
(Bloomberg) -- Landlords for offices,
apartment complexes and other commercial real estate have $1.5 trillion of debt
due by the end of next year, and about a quarter of that borrowing could be
hard to refinance, according to Jones Lang LaSalle Inc.
The value of buildings has broadly dropped
after higher interest rates boosted funding costs for property owners. Those
lower valuations make it harder for landlords to borrow as much, forcing many
property owners to raise equity capital to secure new debt or extend their
existing facilities.
Apartment buildings, which make up about
40% of the looming maturities, are at the center of the refinancing wave, the
broker says. Many US owners of the assets known as multifamily bought their
properties using three-year floating rate loans during the easy money era.
Interest rate increases since then have eaten up much of their rental income,
making it a challenge to secure additional equity.
Rising insurance costs and falling values
have added to the pain, leaving about $95 billion of the US properties in
distress or at risk of becoming so, according to data compiled by MSCI Real
Assets.
“A large portion of the multifamily world
is underwater at the moment,” said Catie McKee, director and head of
commercial-mortgage backed securities trading at Taconic Capital Advisors. “A
lot of the equity is gone, but it’s an asset class that is pretty resilient
over time. It’s underwritable, it just needs a capital infusion.”
The looming debt maturities are also a
potential headache for Wall Street after many of the floating-rate loans were
bundled into the $80 billion commercial real estate collateralized loan
obligation market and sold off as bonds to investors. Even so, trouble in the
commercial real estate market isn’t seen by investors as a systemic issue for
banks.
In response to higher borrowing costs, CRE
CLO lenders are modifying loans to try to help keep borrowers afloat until
interest rates drop, additional equity can be injected or junior debt such as
mezzanine loans can be secured.
With the outlook for interest rates cuts
becoming clearer, there’s optimism that large scale distress can be avoided in
the wider CRE market.
The number of lenders submitting quotes
for debt refinancings has doubled on average this year, said Matthew McAuley, a
research director at JLL, who said the funding gap is $200 billion to $400
billion at present.
‘Constrained Cycle’
While some traditional lenders are focused
on working out their problem loans, other banks, life insurers and direct
lenders are willing to extend more credit, he said.
“It’s been a more constrained cycle this
time around,” McAuley added. “Banks don’t want to take over assets if they can
put a new business plan in place and get an exit.”
As a result, debt funds may find fewer
opportunities to deploy capital than expected, said Willy Walker, Chief
Executive Officer at Walker & Dunlop Inc.
“The cycle has healed to the point of CMBS
coming back, the agencies are coming back, and banks have started to lend back
into commercial real estate,” he said on a video call with reporters earlier
this month.
More
Landlords Face a $1.5 Trillion Commercial Real Estate Maturity Wall (yahoo.com)
The T. Rowe manager who predicted the yen shock this summer sees another one coming. Arif Husain said investors have “just seen the first shift” and they’re ignoring a mountain of Japanese money that may flow back home as rates rise.
T. Rowe Manager Who Predicted Yen Shock Sees
Another One Coming
- ‘Scapegoating’
of yen carry trade ignores bigger, deeper trend
- BOJ
hikes and impact on global capital far from simple: Husain
By Ruth Carson September 3, 2024 at 2:51 AM GMT+1
More, subscription required.
T. Rowe Manager Who Predicted Yen Shock Sees Another One Coming - Bloomberg
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.
VW Turns on Germany as China Targets Europe’s EV
Blunders
Losing ground in the race to produce
electric vehicles, German and French carmakers are heading toward a disruptive
wave of factory closures
By Elisabeth Behrmann, John Ainger, and Monica Raymunt
September 2, 2024 at 10:00 PM GMT+1
Volkswagen AG is considering factory
closures in Germany for the first time in its 87-year history, parting with
tradition and risking a feud with unions in a step that reflects the deep woes
roiling Europe’s auto industry.
After years of ignoring overcapacity and
slumping competitiveness, the German auto giant’s moves are likely to kick off
a broader reckoning in the industry. The reasons are clear: Europe’s efforts to
compete with Chinese rivals and Tesla Inc. in electric cars are
faltering.
“VW is recognizing just how serious the
situation is,” said Harald Hendrikse, an autos analyst with Citigroup.
“We’re living in a difficult geopolitical world, and Europe has not won that
battle.”
With car sales still nearly a fifth lower
than pre-pandemic levels in Europe, manufacturers including VW, Stellantis
NV and Renault SA were operating more than 30 factories at
levels analysts consider unprofitable, according to data from Just Auto. That
includes Volkswagen’s sprawling home factory in Wolfsburg — Europe’s largest.
The continent is uniquely exposed to the
twilight of the combustion era. Unlike in the US, the region’s auto industry
continued to prop up high-cost plants after the global financial crisis. The
massive investments required to compete in electric cars, the loss of cheap
Russian energy and dwindling prospects in China mean those days are coming to
an end.
Troubling signs have been on the rise.
Stellantis — the Chrysler parent created from the 2021 merger of Italy’s Fiat
and France’s PSA Peugeot Citroen — reported net profit plunged by nearly half
in the first half of 2024. Chief Executive Officer Carlos Tavares, an avid
cost-cutter, is under pressure amid declining market share and low demand for
vehicles like the electric Fiat 500. Its production in Italy fell more than a
third in the first half, with the impact sharpest at the Melfi and Mirafiori
plants.
More
VW Weighs Factory Closures as China Targets Europe's EV Blunders - Bloomberg
Citypoint tower up for sale as owner seeks cut-price deal
Monday 02 September 2024 3:02 pm | Updated: Monday 02 September 2024 3:12 pm
Canadian
asset manager Brookfield has put Citypoint tower up for sale in what could be
the biggest commercial office sale in the capital all year.
Brookfield
has reportedly started the sale in the hope of avoiding a default on a £460m
loan secured on the building, according to the FT, which it previously extended
in January 2023 for a period of 12 months.
The
company, which is one of the world’s largest owners of commercial office space,
is seeking £500m for the 36-story building according to the FT, although it was
valued at £670m in March last year.
It
first bought a stake in the tower for £106m in 2014, and later acquired the
full property in 2016. It has since invested £40m in upgrades and boosted
occupancy to 82 per cent.
Tenants
include Simpson Thatcher and Bartlett as well as Simmons & Simmons.
The
property is one of the final investments in Brookfield’s early opportunistic
funds, and the company is now looking to exit the final small investments, a
source familiar with the matter said.
The
commercial property market in London has been hit hard in the past few years
after high interest rates caused a hike in borrowing costs and a trend towards
working from home reduced the need for large prime spaces.
This
makes the sale of Citypoint tower a big test for the market, which has only
seen a few transactions over £100m so far this year.
Property
giants Great Portland Estates (GPE) and Derwent have both put expensive
buildings on the market only to find deals fall through or that they have to
pull them from the market after offers fell short of expectations.
Brookfield
also co-owns Canary Wharf Group (CWG), which manages office space in Canary
Wharf with the Qatar Investment Authority.
CWG
is similarly reportedly in talks with third parties to sell a stake in its four
underground shopping centres as the banking district’s office portfolio
struggles with working from home trends.
Numbers
from the second quarter of last year showed that Canary Wharf’s office
occupation was just under 85 per cent, down from pre-pandemic levels that were
consistently above 90 per cent.
Citypoint tower up for sale as owner seeks cut-price deal (cityam.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
COVID-19 treatment reporting in U.S. media lacked scientific rigor, study says
3
September 2024
Despite
frequent mentions of scientific evidence, U.S. media largely ignored
uncertainties and relied on non-experts, fueling public confusion during the
early COVID-19 crisis.
In
a recent study published in the journal JMIR Infodemiology, scientists
examined the portrayal of scientific evidence on early therapies against
coronavirus disease 2019 (COVID-19) and the reporting of uncertainties about
the efficacy of these therapies in online and traditional modes of news media
in the United States to understand the misinformation and challenges associated
with communicating science to the public.
The
COVID-19 pandemic highlighted the importance of accurate and lucid science
reporting to ensure public trust and the comprehension of and adherence to
public health precautions. However, the uncertainty and lack of clarity about
the nature of severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2)
infections led to a high degree of misinformation in the early phases of the
COVID-19 pandemic.
Misinformation
from unverified sources, such as experts or preprints that had not been
peer-reviewed, and various unapproved and scientifically unproven therapies,
along with the hyper-politicization of the developments surrounding the
pandemic, presented numerous challenges for accurate scientific reporting.
Furthermore,
surveys have reported that traditional forms of media, such as news broadcasts,
newspapers, and radio, are still the preferred news source for most Americans,
compared to social media, sharing news among friends, or word of mouth. The
rapid dissemination of inaccurate and unverified COVID-19 research through
traditional media sources could have contributed to the people's mistrust and
frustration during the first year of the pandemic.
---- For this
study, the researchers examined 479 media reports of the three treatment
methods across 449 U.S. news media reports selected based on coverage and
popularity. The final set of reports did not include duplicates or reports that
did not substantially discuss the treatment methods.
The
analysis was consistent and based on a codebook developed by the researchers to
ensure uniform assessment. The study focused on the themes followed in the
media reports, the portrayal of scientific evidence, the sources of authority
cited, and the claims about the efficacy and safety of the treatments.
The
study found that 67% of the media reports discussed hydroxychloroquine,
followed by remdesivir, which was discussed in 27% of the media reports, and
convalescent plasma, reported in 13% of the reports.
Most
of the media reports on hydroxychloroquine focused on its efficacy and safety
and indicated significant involvement from political bodies, with 97% of the
reports on hydroxychloroquine citing former U.S. President Donald Trump as the
source of information. The media reports' discussions on remdesivir and
convalescent plasms were centered on efficacy, safety, and logistical issues.
Although
67% of the media reports referenced scientific evidence, only 24% of these
reports referenced specific scientific publications. Furthermore, the
limitations and uncertainty in the evidence were not frequently discussed.
Only
26% of the lead paragraphs and 6% of the headlines from these media reports
contained any details on the scientific evidence. Given that most readers often
do not read beyond the headlines and the lead paragraph, the lack of scientific
evidence could contribute significantly to public misunderstanding and
mistrust.
More
COVID-19 treatment reporting in U.S. media lacked scientific rigor, study says (msn.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.
Planes, trains
and monster diggers: The vehicles pushing the limits of electric power
1
September 2024
How
much energy you can pack into a battery is one limit on how big an EV can get –
but meet the EVs ditching batteries altogether to attain mammoth proportions.
This
is no golf cart. This is one of the biggest mining excavators in the world. The
clawed bucket it uses for tearing at mineral-laced rock is so big that you
could fit more than 3,000 footballs in it. The driver sits in a cab roughly as
high up as the roof on an average two-storey British house. And the excavator's
hefty caterpillar tracks alone are just shy of 3m (10ft) tall – and about as
long as a London bus.
It
weighs 778 tonnes in total and you might be forgiven for thinking that this
beast, the PC8000-11 surface mining excavator made by Komatsu, could only run
on a fossil fuel like diesel. Surely such a behemoth demands all the raw, dirty
power of combustion to function? Well, there is a diesel model – but Komatsu
have recently brought out an electric equivalent. And it works just the same.
"We
are not sacrificing performance when you go electric," says Thomas Jordan,
marketing manager at Komatsu Germany. While the diesel excavator guzzles more
than 400 litres (88 gallons) of fuel per hour, according to Komatsu, the
electric alternative relies instead on a chunky power cable – meaning the
vehicle itself produces zero emissions.
When
comparing diesel and electric versions of the excavator used by one Swedish
customer, well-to-wheel emissions are 95% lower for the electric type,
according to Komatsu. This customer has access to electricity from nuclear and
hydro sources. Mining companies are increasingly interested in options like
this, says Jordan. "We see a trend for more electrification, that's
definitely the case."
BBC
Future Planet recently went on a hunt for some of the biggest electric vehicles
in the world – by size and weight. There is no shortage of impressive examples,
from giant mining machines to trains and cargo ships.
Bigger
electric excavators than the PC8000-11 exist, but Komatsu's vehicle is worth
noting for the particularly tough job it does, stresses Jordan. The excavator's
hydraulics system allows it to tackle rock – in this class of machinery, the
PC8000-11 was the biggest we could find in terms of tonnage. "If you go to
the big copper mines and gold mines, you will find hard material where you need
that kind of hydraulic excavator," says Jordan.
For a
larger electric excavator still, consider one of the biggest vehicles ever
built, regardless of fuel type. It holds the Guinness World
Record for heaviest land vehicle and it's not even
new, having been manufactured way back in the 1990s by the German mining
equipment firm Takraf. The colossal Bagger 293 bucket-wheel excavator is used
for strip-mining operations in Germany and it weighs a barely believable 14,200
tonnes. That's about the same as 78 empty Boeing 747-400s.
More,
much more.
Planes, trains and
monster diggers: The vehicles pushing the limits of electric power - BBC Future
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
Everyone
leaves the world a little better, some by leaving.
H. G.
Wells.
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