Monday, 30 September 2024

Stocks, Dress Up Monday? A US Port Strike At Midnight? A Wider War.

Baltic Dry Index. 2110 +19         Brent Crude  72.35

Spot Gold 2656                US 2 Year Yield 3.55 -0.05

Democracy means government by the uneducated, while aristocracy means government by the badly educated.

Gilbert K. Chesterton.

It’s the last trading day of the month. Normally a day to dress up the stock casinos for the all important month-end money manager bonuses.

But today it’s a little more complicated. A tax raiser has become Prime Minister in Japan scaring stocks.

An US east coast and Gulf coast port strike is about to start at midnight. The Boeing strike continues on. Much of the US southeast is still drying out from the remnants of hurricane Helene. If your EV got flooded, don’t try to start it without professional help, say the “experts”.

In Europe, the right wing populist party just topped the election in Austria. The UK’s new far left socialist government is poised to start raising taxes and cutting benefits on October 30th. Le Monde says France is about to raise corporate taxes. 

A new wider Middle East war is just getting underway.

In Washington D.C., a team of non-entities lingers in office until January, irrelevant outside of Washington D.C.

All in all, a tricky week in the stock casinos.

China stocks rally 6% as manufacturing contracts less than feared; Japan’s Nikkei falls more than 4%

Published Sun, Sep 29 2024 7:50 PM EDT

Stocks in mainland China spiked over 6% while Japan’s Nikkei 225 tumbled 4.64% on Monday as investors assessed key economic data from the two countries.

China’s official purchasing managers’ index reading for September came in at 49.8, better than the 49.5 expected by economists polled by Reuters. However, this marked a fifth straight month of contraction for the manufacturing sector in China.

The Caixin PMI survey, which is a private survey compiled by S&P Global, reported that the manufacturing PMI fell to 49.3 from 50.4 in September, lower than the 50.5 expected from the Reuters poll.

The Caixin survey also marked the fastest decline in the manufacturing in 14 months.

Mainland China’s CSI 300 was up 6.22%, with the property sector gaining 7.4%. Hong Kong’s Hang Seng index rose 3.34% following the release, powered by consumer stocks. The Hang Seng Mainland Properties Index soared 8%.

Separately in Japan, the Nikkei’s decline was led by losses in real estate stocks, while the largest loser on the index was department store holding company Isetan Mitsukoshi Holdings, down 11%. The broad-based Topix fell 3.3%.

Industrial production in the country dropped 4.9% year on year in August, more than the 0.4% fall in the month before.

On a month-on-month basis, industrial production dropped 3.3%, a sharper decline than the 0.9% expected in a Reuters poll and compared with the 3.1% rise in July

The Japanese yen weakened 0.13% against the dollar, trading at 142.38.

Japan’s August retail sales climbed 2.8% year on year, beating Reuters poll estimates of a 2.3% rise, and up from a revised 2.7% rise in July.

The moves in Japanese markets come as investors digest Shigeru Ishiba’s victory in the Liberal Democratic Party elections last Friday. He will succeed Fumio Kishida as Japan’s prime minister.

Australia’s S&P/ASX 200 climbed 0.72%, breaching its all-time high of 8,246.2.

South Korea’s Kospi fell 1.13%, and the small cap Kosdaq slipped 1.21%.

Overnight in the U.S., the Dow Jones Industrial Average rose to a new high on Friday as traders assessed fresh data that showed to more progress on reining in inflation.

The 30-stock Dow added 0.33%, ending at 42,313.00. The S&P 500 ticked down 0.13%, while the Nasdaq Composite lost 0.39%.

This comes as traders assess encouraging August inflation data, which saw the personal consumption expenditures price index — the Federal Reserve’s favored measure of inflation — increasing 0.1%, matching expectations from economists polled by Dow Jones. 

PCE climbed at an annualized pace of 2.2%, below the 2.3% forecast.

Asia markets live: Nikkei 225 drop, China PMI on tap, Ishiba election (cnbc.com)

Wall St Week Ahead Jobs data to test US stock market's soft-landing hopes

By Lewis Krauskopf  September 27, 20249:34 PM GMT+1

NEW YORK, Sept 27 (Reuters) - Investor hopes for a soft landing for the U.S. economy will be put to the test next week, as the government releases closely watched labor market data following a series of disappointing jobs reports.

Wall Street's benchmark S&P 500 (.SPX), opens new tab index is up 20% year-to-date near a record high. With the third quarter ending on Monday, the index is on track for its strongest January-September performance since 1997.

Hopes for a soft landing in which the Federal Reserve tames inflation without badly hurting growth, have helped drive those gains, along with a 50 basis point rate cut the central bank delivered at its monetary policy meeting this month.

Some worry that the rate cuts may not be enough to avert a downturn, and Wall Street views the monthly employment report as one of the more critical reads on the economy. The prior two monthly reports have shown weaker-than-expected job increases, raising the stakes for the Oct 4 data.

"Stocks are priced for a Goldilocks/soft landing-type scenario," said Wasif Latif, president and chief investment officer at Sarmaya Partners. "The jobs report could potentially either confirm that or derail that."

Some recent payrolls reports have roiled markets, particularly data showing an unexpected slowdown that helped spark a sharp, days-long selloff in the S&P 500 in early August. The index has since recovered those losses and gone on to make fresh highs.

For the September report due out next week, nonfarm payrolls are expected to have increased by 140,000, according to Reuters data on Friday.

The labor data could help solidify views on the Fed's next move at its Nov 6-7 meeting. Futures tied to the fed funds rate currently show bets almost evenly split between a 25 basis point cut or another 50-basis-point reduction.

"While the totality of the data will always be important, the burden will be on incoming labor market data to provide the Fed with greater confidence that the softening trend is stabilizing," economists at Deutsche Bank said in a recent note.

Investors will also watch an address from Fed Chairman Jerome Powell, set to speak on the economic outlook before the National Association for Business Economics on Monday.

More

Wall St Week Ahead Jobs data to test US stock market's soft-landing hopes | Reuters

Stock futures are little changed to kick off final session of a strong month and quarter: Live updates

Updated Mon, Sep 30 2024 7:01 PM EDT

U.S. stock futures were flat to kick off the final trading session of September after the major averages rose to their third consecutive week of gains.

Futures tied to the Dow Jones Industrial Average traded near the flatline. S&P 500 futures added just 0.04% and Nasdaq 100 futures inched up 0.08%.

The 30-stock Dow rose 0.3% on Friday to finish at a new all-time high and end the week around 0.6% higher. The S&P 500 also gained about 0.6%, while the Nasdaq Composite climbed almost 1% during the week. 

Wall Street is on track to end September on a positive note. Month to date, the Dow and the broad market index are up 1.8% and 1.6%, respectively. The tech-heavy Nasdaq has advanced 2.3% in September. Markets had a rough start to what is historically the weakest month for the stock market, but rebounded as September went on with the Federal Reserve cutting interest rates by a super-sized half point.

The S&P 500 is up 5.1% on the quarter, stretching its year-to-date gain to more than 20%. However, October has a troubling history as well for markets, known as a time of extreme volatility with some of the more notable Wall Street drawdowns occurring during the month.

To end last week, August’s personal consumption expenditures price index came in at just 2.2%, the lowest since February 2021, making investors more confident on further rate cuts from the Fed. Additionally, initial jobless claims numbers released last week fell less than expected, signaling strength in the labor market. 

The encouraging economic data “reinforces the core beliefs that prices are stabilizing, the consumer is healthy enough, companies are poised to take advantage of lower rates, and the economy keeps chugging along,” said Scott Helfstein, head of investment strategy at Global X.  “Expect risk assets to keep advancing against this backdrop despite geopolitical noise.”

Markets will get a major test later in the week with September’s jobs report out on Friday. On the earnings front, Carnival will announce its quarterly results Monday morning.

Stock market today: Live updates (cnbc.com)

In other news, better food availability news from India. GB’s industrial revolution starts to end. The de-industrialisation of the west.

India allows non-basmati white rice exports in boost for global supplies

By Mayank BhardwajSethuraman N R and Rajendra Jadhav

September 28, 2024 1:25 PM GMT+1

NEW DELHI, Sept 28 (Reuters) - India gave the go-ahead on Saturday for exports of non-basmati white rice to resume as inventories in the world's biggest exporter of the grain surge and farmers prepare to harvest a new crop in the coming weeks.

Bigger rice shipments from India would beef up overall global supplies and soften international prices by forcing other major exporters of the staple such as Pakistan, Thailand and Vietnam to reduce their rates, traders said.

New Delhi set a floor price for non-basmati white rice exports of $490 per metric ton, a government order said. That came a day after the government cut the export tax on white rice to zero.

New Delhi's decision to allow traders to sell non-basmati white rice on the world market follows a series of moves to ease export restrictions on premium, aromatic basmati and parboiled varieties. On Friday, India also reduced the export duty on parboiled rice to 10% from 20% previously.

Earlier this month, the government removed a floor price for basmati rice exports to help thousands of farmers who complained about a lack of access to lucrative overseas markets such as Europe, the Middle East and the United States.

As the El Nino weather pattern raised the spectre of poor monsoon rains, India imposed various curbs on rice exports last year and extended them into 2024 to keep local prices in check ahead of the April-June national election.

Since the 2023 ban on exports, local supplies have picked up, bumping up stocks at government warehouses.

Rice stocks at the state-run Food Corporation of India on Sept. 1 stood at 32.3 million metric tons, 38.6% higher than last year, giving the government ample room to ease rice export curbs.

Buoyed by copious monsoon rains, farmers have planted rice on 41.35 million hectares (102.18 million acres), up from 40.45 million hectares (99.95 million acres) last year and an average of 40.1 million hectares (99.09 million acres) over the last five years.

The decision to allow non-basmati rice exports will raise farm incomes in the countryside and help India regain its position in the global market, said Rajesh Paharia Jain, a New Delhi-based trader.

Despite the 10% export tax on parboiled rice and the floor price of $490 a metric ton, Indian white rice will be competitive in the international market, said B.V. Krishna Rao, president of the Rice Exporters' Association.

India allows non-basmati white rice exports in boost for global supplies | Reuters

UK's biggest steelworks to cease production after more than 100 years

29 September 2024

The UK's biggest steelworks will cease production today after more than 100 years, leading to thousands of job losses across South Wales.

Blast Furnace 4 - the final furnace operating at Tata Steel's plant in Port Talbot - will be fully shut down at about 5pm, with the last steel made late on Monday evening.

In an email sent to staff and seen by Sky News, Tata UK's chief executive Rajesh Nair admitted it would be a "difficult day" of "great emotion and reflection".

Tata Steel is replacing the furnace with a greener electric arc furnace which will use UK-sourced scrap steel, but that will not be operational until 2028.

The transition will cost £1.25bn, £500m of which is being paid by the British government and will lead to nearly 3,000 job losses, almost 75% of the workforce.

Unions have battled for months to push back the furnace closure and reduce the number of redundancies.

Roy Rickhuss, general secretary of the Community Union which represents most steelworkers at Port Talbot, said it was an "incredibly sad and poignant day" for the British steel industry.

----In an email sent to staff last Friday, Tata UK's chief executive Rajesh Nair said: "Port Talbot has long been associated with the iron and steel industry and the closure of our heavy end operations will be a hugely significant and emotional day for employees - past and present - contractor partners, and the local community.

"While it will of course be a difficult day, it is a necessary step as we transition to a green steel future and secure the legacy of steelmaking at Port Talbot for future generations."

As well as around 2,800 job losses, many fear there will be a greater number of workers in the wider supply chain impacted.

----The giant Port Talbot steelworks will not close completely - it will continue to operate hot and cold strip mills to roll steel slab imported from overseas.

But it is a hugely significant day not only for the UK's industrial infrastructure, but for a town built on steel that will no longer produce it.

The government announced earlier this month it will publish a strategy for the future of UK steel next spring

UK's biggest steelworks to cease production after more than 100 years (msn.com)

Finally, yet more bad EV news.

Saltwater is making electric cars blow up

29 September 2024

Electric vehicles that have been flooded with saltwater are being treated as a potential fire hazard in the wake of Hurricane Helene.

Officials are urging those who evacuated and left electric vehicles or golf carts in garages or under buildings to report them if they cannot safely access or move the vehicles.

Saltwater exposure can damage the battery components in electric vehicles, potentially leading to dangerous chemical reactions that could cause the vehicle to catch fire.

Residents who may have left electric vehicles behind when they evacuated from affected areas are being urged to contact the local emergency services.

Recovery operations continue, and authorities say they want to mitigate any potential hazards caused by damaged electric vehicle batteries.

Emergency responders have advisedr esidents not to move a flooded electric vehicle themselves but instead contact authorities for help.

Florida, Georgia, North Carolina, South Carolina, Alabama and Virginia have all declared emergencies in the wake of the devastating hurricane that swept the southern United States.

Sixty-four people are believed to have died, and millions have been affected by power outages.

According to officials a number of people were left stranded or without shelter across the region. About 2.7 million households were without power throughout the south-east, down 40 per cent from a peak of 4.6mn on Friday, according to the energy department.

The storm could result in up to $34bn in losses from damage to property and reduced economic output, according to Moody’s. Forecaster AccuWeather’s preliminary damage estimate was higher at between $95bn and $110bn, suggesting Helene might be one of the most destructive in America’s history.

More

Saltwater is making electric cars blow up (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.

Men are so stupid and concerned with their present needs, they will always let themselves be deceived.

Niccolo Machiavelli.

Italy sees debt rising through 2026 in new budget plan

28 September 2024

ROME (Reuters) -Italy's public debt will only start falling as a proportion of economic output from 2027 despite a more positive trend in addressing its significant budget deficit, the Treasury said in its multi-year fiscal plan published on Saturday.

The euro zone's third largest economy has a level of debt that is the second largest in the monetary zone as a share of GDP and under close scrutiny from rating agencies and markets.

The debt is targeted at 135.8% of GDP this year from 134.8 in 2023, and seen rising to 136.9% in 2025 and 137.8% in 2026, before marginally declining to 137.5% in 2027.

The Treasury said the increase was due to costly home renovation incentives adopted in the wake of the COVID pandemic -- the so-called Superbonus.

Economy Minister Giancarlo Giorgetti said in the document that a prudent and credible fiscal policy was crucial to attacking the burden of debt and interest expenditure.

The multi-year budget plan, to be presented to the European Commission next month after parliamentary approval, forecasts gross domestic product will grow by 1% in 2024, 1.2% in 2025 and 1.1% the following year, in line with previous estimates made in April

The Treasury targets this year's budget deficit at 3.8% of national output, below the 4.3% estimated in April.

After declining to a projected 3.3% of GDP next year, below a previous 3.6% goal agreed with the EU, the deficit is seen at 2.8% in 2026, below the EU's 3% ceiling, according to the latest estimates.

All figures factor in revisions to economic growth data for 1995-2023 unveiled this week, which gave a modest boost to Prime Minister Giorgia Meloni's government.

The EU put Italy under an "excessive deficit procedure" this year after the 2023 deficit reached 7.2% of GDP.

The government also needs to comply with the latest reform of the bloc's fiscal rules, which requires slow but steady cuts in the headline deficit and debt from 2025 over four to seven years, depending on reform commitments and strategic investments.

To this end, the Treasury said it planned to limit the average annual increase in Italy's net primary expenditure, an indicator that measures spending components under the government's direct control, to close to 1.5%.

"From 2027, debt will begin to fall in line with new EU rules that call for an average reduction of 1 percentage point of GDP following the exit from the excessive deficit procedure," the Treasury said.

Italy sees debt rising through 2026 in new budget plan (msn.com)

Disney cuts 300 corporate staffers in latest wave of layoffs

Thu, 26 Sept 2024, 7:40 pm BST

Walt Disney Co. has initiated a fresh round of layoffs, with corporate employees emerging as the latest victims of the Burbank media and entertainment giant's ongoing $7.5-billion cost-cutting effort.

This week, Disney is in the process of eliminating about 300 jobs, according to Deadline. In a statement provided Thursday to The Times, the House of Mouse said it is looking to manage its resources and costs "more effectively" in order to "fuel the state-of-the-art creativity and innovation that consumers value and expect from Disney."

"As part of this ongoing optimization work, we have been reviewing the cost structure for our corporate-level functions and have determined there are ways for them to operate more efficiently," the Disney spokesperson added.

Read more: Disney television unit hit with 140 layoffs, including cuts at National Geographic

The most recent wave of cuts is reportedly expected to span a number of Disney's departments, including legal, human resources, finance and communications.

Last year, Disney embarked on a mission to cut 7,000 positions to reduce costs and turn a profit for its streaming business. With Chief Executive Bob Iger back at the helm, the company worked fast, eliminating 4,000 staff members by April 2023 and increasing its target to 8,000.

In May 2024, Disney-owned animation studio Pixar reduced its staff by 14%, or 175 employees, while the famed unit was experiencing a box office slump (in part due to the company's controversial decision to send multiple pandemic-era titles directly to streaming even after movie theaters began to reopen).

The Pixar curse has since been lifted, thanks to the summer box office sensation that was "Inside Out 2."

Read more: Pixar layoffs are underway. About 175 jobs are being cut

The job cuts continued in July at Disney Entertainment Television, which lost 2% of its workforce, amounting to 140 jobs. The TV staff at National Geographic was hit particularly hard.

Across the industry, major Hollywood studios have been tightening their belts and decreasing their output after overspending during the so-called streaming wars in an effort to compete with Netflix. Entertainment and media companies, including Paramount, Amazon and Warner Bros. Discovery, have also been rocked by layoffs.

Disney cuts 300 corporate staffers in latest wave of layoffs (yahoo.com)

Covid-19 Corner

This section will continue until it becomes unneeded.

Severe COVID-19 Ages Your Brain 20 Years, New Study Reveals

By University of Liverpool September 28, 2024

A groundbreaking study has revealed long-term cognitive effects in COVID-19 patients, likening their post-recovery state to accelerated aging.

Findings include diminished brain volume and increased brain injury proteins, emphasizing the severe and lasting impact of the virus on brain health.

UK’s Largest COVID-19 Brain Study

New steps have been taken towards a better understanding of the immediate and long-term impact of COVID-19 on the brain in the UK’s largest study to date.

Published on September 23 in the journal Nature Medicine, the study from researchers led by the University of Liverpool alongside King’s College London and the University of Cambridge as part of the COVID-CNS Consortium shows that 12-18 months after hospitalization due to COVID-19, patients have worse cognitive function than matched control participants. Importantly, these findings correlate with reduced brain volume in key areas on MRI scans as well as evidence of abnormally high levels of brain injury proteins in the blood.

Cognitive Impacts and Brain Changes Post-COVID

Strikingly, the post-COVID cognitive deficits seen in this study were equivalent to twenty years of normal aging. It is important to emphasize that these were patients who had experienced COVID, requiring hospitalization, and these results shouldn’t be too widely generalized to all people with lived experience of COVID. However, the scale of deficit in all the cognitive skills tested, and the links to brain injury in the brain scans and blood tests, provide the clearest evidence to date that COVID can have significant impacts on brain and mind health long after recovery from respiratory problems.

The work forms part of the University of Liverpool’s COVID-19 Clinical Neuroscience Study (COVID-CNS), which addresses the critical need to understand the biological causes and long-term outcomes of neurological and neuropsychiatric complications in hospitalized COVID-19 patients.

More

Severe COVID-19 Ages Your Brain 20 Years, New Study Reveals (scitechdaily.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.

Thermoelectric generator pulls energy from room temperature heat

By Michael Irving  September 26, 2024

Scientists in Japan have developed a new organic device that can harvest energy from heat. Unlike other thermoelectric generators, this one works at room temperature without a heat gradient.

Thermoelectric devices are designed to tap into a simple law of physics: heat energy moves from hotter regions to colder ones. In these devices, electrons move from the warmer surface to the cooler one, which produces an electric current. In theory, thermoelectric generators, materials and paints could produce electricity from small temperature differences in engines, power plants, even body heat.

Usually, the bigger the temperature gradient, the better the thermoelectric generator, but now scientists from Kyushu University in Japan have found a way to harness the relatively low energy available from room temperature, without a gradient at all.

Instead, the new device works on a principle called charge separation. Heat from the ambient air causes negative electrons and positive electron “holes” in the material to separate and move in different directions, generating a current.

The materials in question are organic compounds, which can easily transfer electrons between each other. Different types of these compounds are stacked in thin layers like stairs, and the heat gives the electrons or holes enough energy to jump up to the next “step.”

After much trial and error of different compound combinations, the team settled on a device with a 180-nanometer layer of copper phthhalocyanine, 320 nm of copper hexadecafluoro phthalocyanine, 20 nm of fullerene, and 20 nm of bathocuproine.

The end result boasted an open-circuit voltage of 384 millivolts, a short-circuit current density of 1.1 μA/cm2, and a maximum output of 94 nW/cm2. That’s a tiny amount of electricity, of course, but considering it’s coming from room temperature, it could make for simpler generators.

“We would like to continue working on this new device and see if we can optimize it further with different materials,” said Professor Chihaya Adachi, lead author of the study. “We can even likely achieve a higher current density if we increase the device’s area, which is unusual even for organic materials. It just goes to show you that organic materials hold amazing potential.”

The research was published in the journal Nature Communications.

Source: Kyushu University

Thermoelectric generator pulls energy from room temperature heat (newatlas.com)

Next, the world global debt clock. Nations debts to GDP compared.

World Debt Clocks (usdebtclock.org)

When I am abroad, I always make it a rule never to criticize or attack the government of my own country. I make up for lost time when I come home.

Winston Churchill.

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