Baltic Dry Index. 1902 -45 Brent Crude 72.91
Spot Gold 2495 US 2 Year Yield 3.76 -0.12
I remember when I first came to Washington. For the first six months you wonder how the hell you ever got here. For the next six months you wonder how the hell the rest of them ever got here.
Harry S. Truman.
In the stock casinos, more distress as the tech AI bubble bursts and more sign of a global recession appears.
Not to worry though, the Wall Street shills who make their living fleecing sheep, say move along, there’s nothing to see here. Buy more.
But if Warren Buffett is selling, building a Mount Everest of cash to deploy in the coming crash, why should I buy stocks here?
Besides, Germany, sunk by the US Navy blowing up the Nord Stream pipelines bringing cheap natural gas from Russia, destroying the German business model, is dragging the rest of the EUSSR into a deep recession.
It’s not quite “as goes Europe so goes the world,” but add in as goes China and Europe so goes the world, and it’s uncomfortably close.
In the US stock casinos, Caveat Emptor. Buyer beware. Why follow Sid and bet against Warren Buffett’s Berkshire Hathaway?
Pullbacks such as those experienced in
recent weeks, however, should not dissuade investors, according to TD Wealth’s
chief investment strategist Sid Vaidya.
“From our standpoint, this is normal course, short-term volatility,” he said. “We wouldn’t change any positioning based on the last day and a half.”
Asia-Pacific markets mixed after Wednesday’s
sell-off; Nikkei drops after Japan pay data
Published Wed, Sep 4 2024 7:57 PM EDT
Asia-Pacific markets were mixed on
Thursday after a sell-off in the previous session, with Japan’s Nikkei 225 and South Korea’s
Kospi among the major losers.
The Nikkei fell 0.73%, while the
broad-based Topix was up marginally, after the release of Japan’s July wage
data.
Average monthly cash earnings in the country rose 3.6%
year-on-year, a softer rise compared to the 4.5% climb seen in June.
Real wages climbed 0.4% year on year,
rising for a second straight month after a 1.1% rise in June.
The strong pay report offers the Bank of
Japan more room for a rate hike, which could put pressure on equities. Bank of
Japan board member Hajime Takata said the central bank “must keep raising rates
if it can confirm that companies will continue to increase spending and wages,”
Reuters reported.
Other economic data coming from the region
include retail sales numbers from Singapore.
Separately, Australian telecom operator
Optus has received the green light from the country’s Competition and Consumer
Commission for its proposed regional network and spectrum sharing
agreement with rival TPG Telecom.
Optus, which is owned by Singapore’s Singtel, announced the
agreement in April, after having lobbied against a similar merger between TPG
and Telstra, Australia’s largest telco.
The Hang Seng index slipped
0.33%, while the mainland Chinese CSI 300 was marginally up.
Shares of some Chinese developers inched
higher on optimism that the country was reportedly considering a two-phase
reduction in interest rates to shore up its embattled property sector. Hong
Kong-listed China Vanke rose 1.5%, while Logan Group added 1.32%.
On Wednesday, China’s financial regulators
proposed a reduction in interest rates of up to $5.3 trillion worth on
outstanding mortgages to decrease borrowing costs for millions, while easing
pressure on its banking sector, Bloomberg reported, citing sources familiar with the
matter.
South Korea’s Kospi fell
marginally, while the small cap Kosdaq was 1% lower. Shares of SK Hynix rose
3.36%. The South Korean chipmaker is set to start mass producing HBM3E 12-layer
chips by the end of September, the company’s president and head of AI Infra division reportedly
said on Wednesday.
Australia’s S&P/ASX 200 climbed 0.18%. Exports from the country in July rose 0.7% month-on-month while imports slipped 0.8% compared to last month.
In the U.S., the S&P 500 and the Nasdaq Composite was down
for a second straight session.
The broad based index lost 0.16%,
while the tech heavy index slipped 0.3%. The Dow Jones Industrial Average was
the outlier, edging up 0.09%.
Asia stock markets: Japan pay data, Australia trade, Singapore retail sales (cnbc.com)
S&P 500 books back-to-back losses as Wall
Street grapples with a rocky start to September: Live updates
Updated Wed, Sep 4 2024 4:31 PM EDT
The S&P 500 and the Nasdaq Composite
fell for a second straight session in a lackluster start to September.
The S&P 500 lost 0.16% to
finish at 5,520.07, while the Nasdaq
Composite slipped 0.3% to close at 17,084.30. The Dow Jones Industrial Average was
the outlier, edging up 38.04 points, or 0.09%, to end at 40,974.97.
“At least on the margins, you’re seeing
some nibbling after that sell off yesterday,” said Truist’s co-chief investment
officer Keith Lerner. “Investors are a bit on edge; it’s a low-conviction
trade. Everyone’s waiting for this Friday employment report, and until then,
we’re in a bit of a holding pattern.”
Nvidia fell
1.7% following a Bloomberg report that the U.S. Justice Department sent
subpoenas to the chipmaker. The move comes after Nvidia tumbled more than 9%
Tuesday amid a broader pullback in semiconductors.
Some megacap technology and chip stocks
regained their footing Wednesday, with Advanced Micro Devices and Tesla rallying about 3% and
4%, respectively. Meta
Platforms, Marvell
Technology, Broadcom and Qualcomm edged higher.
Stocks bounced off their lows as the
so-called yield curve of the Treasury market momentarily returned to a normal
state. The curve had been inverted with the rate on the 10-year note lower than
the 2-year yield. This is
a common recession signal and had worried investors. On Wednesday, the 10-year
yield returned to even with the 2-year yield at one point and briefly went
slightly higher.
Wall Street is coming off a losing
session, with the major benchmarks posting their worst day going back to the
sell-off Aug. 5, as chip names struggled and the latest economic data implied
slowing growth for the U.S. economy.
Traders are bracing for more volatility in
September, with many anticipating a pullback of 5% or more in this historically
weak stretch for equities. Pullbacks such as those experienced in recent weeks,
however, should not dissuade investors, according to TD Wealth’s chief
investment strategist Sid Vaidya.
“From our standpoint, this is normal
course, short-term volatility,” he said. “We wouldn’t change any positioning
based on the last day and a half.”
Stock market news for September 4, 2024 (cnbc.com)
Stock futures are little changed after two
straight down days for S&P 500, Nasdaq: Live updates
Updated Thu, Sep 5 2024 8:32 PM EDT
Stock futures were largely flat Wednesday
evening as Wall Street looks to regain momentum after a rocky start to
September. Key labor market data is also on deck this week.
Futures for the S&P 500 were up less
than 0.1%, while Nasdaq 100
futures inched up about 0.1%. Futures tied to the Dow Jones Industrial Average ticked
higher by 17 points, or less than 0.1%.
The moves come after the S&P 500 and Nasdaq Composite each closed
lower for the second straight session, dipping 0.16% and 0.30%, respectively.
The Dow squeezed out
a gain of 38 points, or 0.09%, on Wednesday.
All three averages are down for the week,
with key employment reports looming. On Thursday morning, investors will get to
sift through weekly jobless claims data, while the August nonfarm payrolls
report is due out Friday.
The market has appeared to be sensitive to
potential growth scares in recent weeks, including Tuesday’s sell-off on the
heels of weak manufacturing data. That could put increased importance on the
jobless claims data, BMO Wealth Management Chief Investment Officer Yung-Yu Ma
said on “Closing Bell.”
“That’s more of a forward-looking
indicator. As long as those stay low — people have jobs, people remain
confident in the ability to find jobs or comfortable in the jobs that they have
— we think that they will continue to spend. So as long as those numbers stay
low, if we get some blips in the overall monthly jobs report that shows
weakness on the edges, we’re not quite as concerned,” Ma said.
The employment data could play a key role
in the Federal Reserve’s interest rate decision later this month. Ma said he
still believes the U.S. economy is on track for a “soft landing” and that the
market rally should eventually broaden out. However, he added that there is
likely to be continued market turbulence in the near term.
“We believe in it, we just think it’s
going to be on pause for a few months because this high degree of uncertainty
we have right now. There’s just too much that needs to resolved over the coming
months. … It’s just very hard for the broadening-of-the-market theme to really
gather momentum,” Ma said.
Stock market today: Live updates (cnbc.com)
In other news.
Growth in German services sector loses momentum in
August, PMI shows
4 September 2024
BERLIN (Reuters) - Growth in Germany's
services sector slowed for a third consecutive month in August, a survey showed
on Wednesday, in a further sign that Europe's biggest economy is losing steam.
The HCOB final services Purchasing
Managers' Index eased to 51.2 from 52.5 in July. Although slightly below a
preliminary estimate of 51.4, it was above the 50.0 mark that separates growth
from contraction for a sixth straight month.
"But that support is starting to
weaken," he added.
Employment fell for a second month
running, the survey showed, contrasting with consistent job creation during the
first half of the year.
August's survey data showed little change
in expectations for the year ahead.
The composite PMI index, which comprises
services and manufacturing, fell to 48.4 in August from 49.1 in July, slightly
below a preliminary reading of 48.5.
Growth in German services sector loses momentum in August, PMI shows (msn.com)
Biden Seen Blocking Nippon Takeover of US Steel
September 4, 2024 at 10:58 PM GMT+1
US President Joe Biden is said to be preparing to block Nippon Steel’s $14.1 billion
takeover of United States Steel. The proposed deal has been subject to a
review by the government’s secretive Committee on Foreign Investment in the
United States, and Biden plans to kill it as soon as the committee’s referral
lands on his desk—perhaps as soon as this week, according to people familiar
with the matter. The tie-up has sparked an election-year firestorm in the crucial swing state of Pennsylvania,
where US Steel and the United Steelworkers union that opposes the deal are
based. The past two weeks have brought a fresh $1.3 billion commitment from
Nippon Steel, a commitment to use an American-majority proxy board and
a warning from US Steel that the deal’s death may spell the end of some of its
plants. Shares of US Steel plunged as much as 24% in New York after news of
Biden’s plan broke.
Here are today’s top stories
US job openings fell in July
to the lowest level since the start of 2021 as company firings rose. The
decline in available positions coincides with recent data that show the labor
market softening, which while part of the recipe for an economic soft landing
has heightened concerns the Federal Reserve has waited too long to cut interest
rates. It’s expected to do so this month.
More
Bloomberg Evening Briefing: Biden Seen Blocking Nippon Takeover of US Steel - Bloomberg
U.S. Steel shares plunge on report White House
preparing to block Nippon Steel takeover
Published Wed, Sep 4 2024 1:53 PM EDT
U.S.
Steel shares tumbled more than 17% on Wednesday as the White House is
reportedly preparing to block the company’s planned sale to Japan’s Nippon Steel.
People familiar with the matter told The Washington Post that President Joe Biden was preparing to
announce that he will block the $14.9 billion deal. U.S. Steel shares have
fallen 41% this year.
Vice President Kamala Harris, the Democratic
presidential nominee, said U.S. Steel “should remain American-owned and
American-operated” during a campaign event in Pittsburgh Monday. Former
President Donald Trump,
the Republican nominee, is also opposed to the deal.
U.S. Steel CEO David Burritt told The Wall Street Journal on Wednesday that the
company would likely be forced to close plants and move its headquarters from
Pittsburgh if the deal is blocked. Burritt told the Journal that the
transaction is crucial to keeping U.S. Steel’s older plants competitive and
maintaining jobs.
The deal has been under review by the
Committee on Foreign Investment, a body that scrutinizes the potential impact
of foreign investment in the U.S. on national security. U.S. Steel has not
received any update or executive order related to the committee’s review, a
company spokesperson said.
“We continue to stand by the fact that
there are no national security issues associated with this transaction, as
Japan is one of our most staunch allies,” the U.S. Steel spokesperson said.
“We fully expect to pursue all possible
options under the law to ensure this transaction, which is best future for
Pennsylvania, American steelmaking, and all of our stakeholders, closes,” the
spokesperson said.
The bipartisan opposition to U.S. Steel’s
acquisition by Nippon demonstrates a rising tide of protectionism in the U.S.
even toward a company that is based in a close ally such as Japan.
U.S. Steel has 20 million metric tons of
annual production capacity. Nippon, headquartered in Tokyo, is Japan’s largest
steelmaker. The companies combined would have up to 86 million tons of
capacity.
More
U.S. Steel shares plunge as Biden prepares to block Nippon Steel takeover (cnbc.com)
Nippon Steel shares rise after news Biden close to
blocking its U.S. Steel buy
By Katya Golubkova September 5, 20245:46 AM GMT+1
TOKYO, Sept 5 (Reuters) - Nippon
Steel (5401.T), opens new tab shares climbed on Thursday
after news that the White House was close to announcing President Joe Biden
will block the company's $15 billion bid for its peer U.S. Steel (X.N),
opens new tab.
Sources told Reuters
on Wednesday the U.S. action would be based on national security risks, amid
growing bipartisan political opposition to the deal which the companies were
hoping to close by the end of the year.
Nippon Steel's shares fell more than 1% in
early trading in Tokyo, but recovered to trade 0.2% higher by 0408 GMT,
outperforming the wider Nikkei index (.N225),
opens new tab which was down 1%. U.S. Steel shares closed down 17.5%.
More
Nippon Steel shares rise after news Biden close to blocking its U.S. Steel buy | Reuters
If you want a friend in Washington, buy a dog.
Harry S. Truman.
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.
I want a one-armed economist, that way he cannot say, 'on the
other hand'.
Harry S. Truman.
Today,
Forbes, on the one hand, on the other.
What
Market Indicators Are Signaling About Recession Risks
Sep
3, 2024,08:04am EDT
Following
the soft July jobs report that showed a 4.3% unemployment rate (up from 4.1% in
June), some commentators worried that the Federal Reserve had waited too long
to ease monetary policy to stave off a recession. These fears sent equity
markets around the world on a roller-coaster ride, with the Japanese stock
market selling off by 12% in one day while the Nasdaq composite
index entered correction territory.
More
recently, however, U.S. equity markets have recouped their losses amid economic
data that point to continued economic growth and moderating inflation.
So,
what accounts for the heightened market volatility of late?
My
take is that confidence in the Fed was undermined when it acted belatedly in
addressing accelerated inflation during 2021 and 2022. It was then forced to
play catch up when it tightened policy from the spring of 2022 to mid-2023,
which increased the risk that it could tip the economy into a recession.
After
keeping monetary policy on hold for more than a year, Chair Jerome Powell signaled at
the Jackson Hole Economic Symposium that the time had come for the Fed
to begin easing monetary policy at the September Federal Open Market Committee
meeting. The reason: The Fed is more confident that inflation will approach its
2% annual target, while evidence is mounting that the job market is softening.
Powell
did not commit to what the pace of easing would be, and he reaffirmed that the
Fed would be “data dependent” in balancing the risk of inflation and recession.
However, some Fed officials have indicated that they favor easing in increments
of 0.25%.
---- Wall Street
analysts’ main concern is: If the Fed waits for data to confirm the economy is
weak, it could be too late to head off a recession.
One
way for policymakers to be more forward-looking is to assign greater weight to
financial market indicators in their analysis. During the postwar period,
however, some indicators are more reliable than others in predicting
recessions.
---- Another
set of useful indicators is credit spreads between corporate bonds and U.S.
Treasuries. When the risk of a recession increases, corporate credit spreads —
both for investment-grade bonds and high-yield bonds — typically widen
significantly. Yet, this is not happening and corporate credit
spreads are well below their long-term averages (see chart
below).
One
explanation is credit markets have become bifurcated, especially for high-yield
bonds. Thus, spreads between BB- and B-rated bonds versus Treasuries are at
their tightest deciles in four decades, whereas those for C-rated bonds are
near median. This suggests investors are differentiating between credits that
are preforming and those that are not.
Pressures
are also building in the leveraged loan space, which now rivals the size of the
high-yield market at $1.5 trillion in debt outstanding. Fitch Ratings
recently revised its leveraged loan default rate estimate for 2024.
The range is 5.0% to 5.5%, up from 3.5% to 4.0% previously. This mainly
reflects cash flow pressures from slowing gross domestic product growth and
high interest rates that are “posing challenges to highly levered issuers’
liquidity positions and ability to service debt,” Fitch wrote.
Weighing
these considerations, my conclusion is the most reliable indicators do not
signal a recession is imminent. Accordingly, the Fed should not take emergency
action to bolster the economy.
However,
there is evidence that economic activity and employment are softening, and the
lowest quality and most highly-leveraged segments of credit markets are showing
signs of strain. In this context, the Fed is correct that the time has come to
ease monetary policy.
More
What Market Indicators Are Signaling About Recession Risks (forbes.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
UT
researchers say they found an antibody that protects against all COVID-19
variants
Grace Reader Wed, September 4, 2024 at 12:54 AM GMT+1
AUSTIN
(KXAN) — A team of researchers, led by folks at the University of Texas at
Austin, believe they’ve found an antibody that protects against all COVID-19
variants. Antibodies attach themselves to the spike protein of a virus,
preventing infection, the university explained.
The
team of researchers were able to ” isolated a broadly neutralizing plasma
antibody, called SC27, from a single patient,” the university said. Researchers
were then able to use existing technology to find the molecular sequence of the
antibody.
“One
goal of this research, and vaccinology in general, is to work toward a
universal vaccine that can generate antibodies and create an immune response
with broad protection to a rapidly mutating virus,” said Will Voss, a recent
Ph.D. graduate in cell and molecular biology in UT’s College of Natural
Sciences, who co-led the study.
It
comes as the nation sees a summer uptick in COVID-19 cases, according to the
Centers for Disease Control and Prevention.
The
Texas Medical Association says Texas is among states seeing the highest number
of cases nationwide, as is determined by wastewater testing and COVID-19 test
reporting.
“In
the summer, people get hot. They go indoors where we know the virus transmits
more efficiently. The vaccines that are currently available right now are not
well-matched to the variants that are circulating,” said Dr. Amesh Adalja last
month. He’s an infectious disease physician for Johns Hopkins University.
UT researchers say they found an antibody that protects against all COVID-19 variants (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.
Nasa unfurls
giant solar sail – and you can see it from Earth
Centuries
after it was first theorised, the sunlight propulsion method could herald a new
era of space exploration
2
September 2024
Nasa has
unfurled a solar sail in space for the first time, aiming to harness the
propulsive power of sunlight for interstellar travel.
The US
space agency revealed that it had deployed the solar sail 1,000 kilometres (600
miles) above Earth on Thursday, four months after launching it into space. The
first images from the craft are expected to be available on Wednesday.
Measuring
80 square metres – roughly the same size as six parking spaces – Nasa said
the craft will be visible from Earth and as bright as the brightest star in the
night sky under ideal viewing conditions.
“The
advanced composite solar sail system introduces a new way to explore the
cosmos,” Nasa said. “Much like a sail boat is propelled by wind, a solar sail
spacecraft is pushed by light from the Sun.”
The
system works by utilising the pressure exerted by photons as they bounce off
the reflective sail, thus eliminating the need for heavy propulsion equipment
like rockets.
The
method allows a spacecraft to travel indefinitely, without the need to refuel
or reposition itself – however its size and structure makes it vulnerable to
damage from dust, debris and other particles.
The
next-generation propulsion method, which was first theorised in the 17th
century, has been limited by the materials and structure that the sail requires
to be effective.
Recent
advances have finally made it possible to harness the force of sunlight on the
sail, which is roughly equivalent to the weight of a paperclip on Earth.
More
Nasa unfurls giant
solar sail – and you can see it from Earth | The Independent
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
Everybody
has the right to express what he thinks. That, of course, lets the crackpots
in. But if you cannot tell a crackpot when you see one, then you ought to be
taken in.
Harry
S. Truman. (On HM’s latest G?)
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