Wednesday, 11 September 2024

Waiting On The CPI. PPI Tomorrow. That Great Debate Joke!

Baltic Dry Index. 1941  -17        Brent Crude  69.56

Spot Gold 2521               US 2 Year Yield 3.59  -0.09

I don't make jokes. I just watch the government and report the facts.

Will Rogers.

With the USA Great Debate joke over, the stock casinos are back to fretting over today’s Consumer Price Index inflation number and tomorrow’s Producer Price Index number.

I think the stock casinos should be more focusing on China’s growing deflation problem and how soon China will be exporting deflation out into the rest of the world.

Crude oil, and the much watched US treasury 2 year-10 year yield spread continue to signal recession. The 3 year to 30 year yield curve has now un-inverted and normalised.

As for that Great US Presidential debate, according to the BBC spin for Harris, as comedy and spin went, they huffed and they puffed, but didn’t blow any houses down.

But with a new category one hurricane headed for Louisiana landfall later today, nature might do what Harris and Trump failed to achieve.

Asia-Pacific markets slip as investors assess South Korea unemployment data, U.S. presidential debate

Published Tue, Sep 10 2024 8:06 PM EDT

Asia-Pacific markets were lower on Wednesday, even as key Wall Street benchmarks rose ahead of the U.S. August consumer inflation report due Wednesday.

Traders in Asia parsed economic data from Japan and South Korea. South Korea reported that unemployment fell to 2.4% in August, the lowest level since 1999, when the data series commenced, according to Statistics Korea.

The Reuters Tankan survey, a monthly poll that tracks business sentiment in Japan, showed that business confidence in big manufacturers dipped to plus 4 in September, a seven-month low, from plus 10 in August. The sentiment for non-manufacturers declined for a third consecutive month to plus 23, from plus 24.

Bank of Japan board member Junko Nakagawa said Wednesday the central bank would continue to raise interest rates if the economy and inflation move in line with the bank’s forecasts.

“When considering adjusting the degree of monetary easing further, we must look back upon market developments after our policy shift in July, and carefully assess how the market’s changes affect our economy and price outlook,” she said.

The Japanese yen strengthened to its highest level since January against the U.S. dollar to trade at 141.68.

Investors also assessed the U.S. presidential debate between Republican presidential nominee Donald Trump and Democratic Vice President Kamala Harris. The two presidential candidates have yet to agree on a second debate, meaning the event might have been their only face-off before Election Day.

The Asian markets are “reflecting reduced concerns over potential tariffs or sanctions on China,” Billy Leung, an investment strategist at Global X ETFs told CNBC, “the debate seems to be easing worries about significant policy changes in these areas.”

Separately, the Federal Trade Commission has warned Japanese retail company Seven & i that it may probe its potential deal with Canada’s Alimentation Couche-TardReuters reported, citing two sources.

Seven & i recently rejected Couch-Tard’s proposal, partially over U.S. antitrust concerns. The company’s shares fell nearly 2% Wednesday morning.

Chipmaking powerhouse Taiwan Semiconductor Manufacturing Corp announced its August revenue of 250.87 billion New Taiwan Dollars ($7.8 billion), increasing 33% year-on-year while dropping 2.4% from July.

The company’s shares declined marginally after the monthly revenue release.

Japan’s Nikkei 225 was 0.72% down and the broad-based Topix was 0.84% lower, extending a six-day losing streak.

South Korea’s Kospi slipped 0.2%, while the small-cap Kosdaq rose 1.61%.

Australia’s S&P/ASX 200 dipped 0.24%.

Hong Kong Hang Seng index declined 1.2% and the mainland China’s CSI 300 was down marginally.

Traders in Asia could be “positioning ahead of potential U.S. dollar’s volatility,” Leung said, “markets are still processing the broader uncertainty, especially with funding stress already impacting Japan and South Korea.”

Overnight in the U.S., stocks wavered through Tuesday’s trading session, with two of the three major U.S. indexes ending in the green, as traders are betting that a widely anticipated interest rate cut at the Federal Reserve September meeting would assuage concerns over a weakening economy.

The broad-based S&P 500 advanced 0.45% and the Nasdaq Composite climbed 0.84%, while the Dow Jones Industrial Average dipped 0.23%.

Asia markets: U.S. presidential debate, South Korea unemployment (cnbc.com)

European stocks set for mixed open as markets await U.S. inflation data

Published Wed, Sep 11 20241 2:18 AM EDT

LONDON — European stocks are expected to open in mixed territory on Wednesday as global markets focus on the latest U.S. inflation data set to be released later in the day.

The U.K.’s FTSE index is seen opening 4 points higher at 8,208, Germany’s DAX up 25 points at 18,304, France’s CAC 40 flat at 7,404 and Italy’s FTSE MIB up 66 points at 33,259, according to data from IG.

Traders have their eyes on two key economic reports out of the U.S. this week, with the consumer price index report for August due Wednesday, followed by the producer price index on Thursday.

The data comes before a widely anticipated interest rate cut at the Federal Reserve’s Sept. 17-18 meeting that could help assuage concerns over a weakening U.S. economy

Asia-Pacific markets traded lower overnight even as key Wall Street benchmarks rose ahead of the U.S. consumer inflation report.

U.S. stock futures slipped Tuesday evening as investors awaited the inflation report and assessed the presidential debate between Republican presidential nominee Donald Trump and Vice President Kamala Harris.

In Europe Wednesday, earnings come from fashion group Inditex and monthly U.K. gross domestic product data will be published.

Europe markets: stocks, news, U.S. inflation data and earnings (cnbc.com)

Stock futures fall as traders assess presidential debate and brace for August consumer inflation report: Live updates

Updated Wed, Sep 11 2024 12:44 AM EDT

U.S. stock futures slipped Tuesday night as investors assessed the presidential debate between Republican presidential nominee Donald Trump and Vice President Kamala Harris and looked toward the August consumer inflation report due Wednesday morning.

Dow Jones Industrial Average futures fell 172 points, or 0.42%. S&P 500 futures and Nasdaq 100 futures both dipped 0.52% and 0.68% respectively.

In after-hours action, shares of GameStop dropped 10%. The video game retailer amended an open market sale agreement filed with the U.S. Securities and Exchange Commission, allowing it to sell up to 20 million additional shares of its Class A common stock.

During Tuesday’s regular trading, the S&P 500 advanced nearly 0.5% and the Nasdaq Composite climbed 0.8%, aided by a jump in Nvidia shares. It marked a back-to-back gain for the broad market benchmark and the tech-heavy index. The 30-stock Dow was the outlier, falling 0.2% as a decline in JPMorgan shares weighed on the blue-chip index.

Traders are anticipating a key economic report Wednesday morning: August’s consumer price index. Economists polled by Dow Jones expect the headline CPI to have risen 0.2% from the previous month and 2.6% from a year earlier.

The CPI report and Thursday’s producer price index could help determine the size of a widely expected rate cut at the end of the Federal Reserve’s two-day meeting on Sept. 18. Fed funds futures trading suggests a 69% chance of a 25-basis-point rate cut and a 31% likelihood of a 50-basis-point reduction, according to CME’s FedWatch Tool.

“I think what we’re going to see next week is a Fed that gives us a 25-basis-point rate cut because to give us a 50-basis-point cut will set off alarm bells and would also be an admission of guilt,” said Kristina Hooper, chief global market strategist at Invesco, on CNBC’s “Closing Bell.”

“I don’t think that the Fed keeping us at very restrictive monetary policy levels for a long time creates damage that is irreparable, but I do believe every day that we have rates at these levels the odds of a recession increase,” Hooper added.

She noted that central bankers may have to indicate next week through their dot plot — a chart of Fed policymakers’ projections for rates — that future reductions are on deck sooner rather than later.

Stock market today: Live updates (cnbc.com)

Two key inflation reports this week will help decide the size of the Fed’s interest rate cut

Published Tue, Sep 10 2024 1:19 PM EDT

The Federal Reserve gets its last look this week at inflation readings before it will determine the size of a widely expected interest rate cut soon.

On Wednesday, the Labor Department’s Bureau of Labor Statistics will release its consumer price index report for August. A day later, the BLS issues its producer price index report, also for August, a measure used as a proxy for costs at the wholesale level.

With the issue virtually settled over whether the Fed is going to cut rates when it wraps up the next policy meeting Sept. 18, the only question is by how much. Friday’s jobs report provided little clarity on the issue, so it will be left to the CPI and PPI readings hopefully to clear things up.

“Inflation data has taken a backseat to labor market data in terms of influence on Fed policy,” Citigroup economist Veronica Clark said in a note. “But with markets — and likely Fed officials themselves – split on the appropriate size of the first rate cut on September 18, August CPI data could remain an important factor in the upcoming decision.”

The Dow Jones consensus forecast is for a 0.2% increase in the CPI, both for the all-items measure and the core that excludes volatile food and energy items. On an annual basis, that is expected to translate into respective inflation rates of 2.6% and 3.2%. PPI also is projected to increase 0.2% on both headline and core. Fed officials generally put more emphasis on core as a better indicator of longer-run trends.

At least for CPI, the readings are not particularly close to the Fed 2% long-run target. But there are a few important caveats to remember.

First, while the Fed pays attention to the CPI, it is not its principal yardstick for inflation. That would be the Commerce Department’s personal consumption expenditures price index, which most recently pegged headline inflation at 2.5% in July.

Second, policymakers are as concerned about the direction of movement almost as much as the absolute value, and the trend for the past several months has been a decided moderation in inflation. On headline prices in particular, the August 12-month CPI forecast would represent a 0.3 percentage point decline from July.

Finally, the focus for Fed officials has shifted, from a laser view on taming inflation to mushrooming fears over the state of the labor market. Hiring has slowed considerably since April, with the average monthly gain in nonfarm payrolls down to 135,000 from 255,000 in the prior five months, and job openings have declined.

More

Week's two key inflation reports to help decide size of Fed's rate cut (cnbc.com)

If Stupidity got us into this mess, then why can't it get us out?

Will Rogers.

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.

German chemicals sector recovery loses momentum in Q2, says industry group

10 September 2024

(Reuters) - A slight recovery in the German chemicals sector lost momentum in the second quarter, a report by the VCI industry body said on Tuesday, as both domestic and foreign orders slowed in the April-June period, especially in the pharmaceutical branch.

"The global economy has not picked up speed as hoped," VCI's Managing Director Wolfgang Grosse Entrup said in a press release, adding that Germany's structural problems, such as high production costs, red tape and labour shortages, remain unresolved.

Overall production in the chemicals sector including pharmaceuticals added only 0.8% quarter-on-quarter, slowing down drastically from the January-March quarterly increase of 5%.

Germany's chemicals industry suffered heavily throughout 2023 due to high production costs and weak demand amidst high inflation. Europe's largest chemicals producer started showing the first signs of recovery in the first quarter of this year, which are now fading away.

Pharmaceutical output fell by 4% compared with the previous quarter.

On the annual comparison, overall production was up 3.7%, or 8.4% when pharmaceuticals were excluded, but revenue fell by 0.6% compared with the same period last year.

Still, the industry maintained its annual guidance for production volumes including pharmaceuticals to grow by 3.5% and industrial sales by 1.5%.

German chemicals sector recovery loses momentum in Q2, says industry group (msn.com)

Mario Draghi warns EU at risk without €800bn a year investment boost; Germany ‘facing three-quarters-long recession’– as it happened

9 September 2024

For the first time since the cold war we must genuinely fear for our self-preservation,’ warns former ECB chief as he presents new report on European competitiveness.

Closing post

16:00

Time for a recap:

The EU should fear for its self-preservation as it faces a “slow and agonising decline”, according to a hard-hitting report by the former Italian prime minister Mario Draghi that calls for an €800bn-a-year spending boost to end years of stagnation.

Warning that the Covid pandemic and Ukraine war had changed the rules of international trade to the EU’s detriment, he said the bloc needed additional investment of €750bn-€800bn a year – equivalent to 5% of the EU’s annual economic output – to build a more resilient economy and regain previously high rates of productivity growth.

“We are already in crisis mode and to ignore this is to slide into a situation you don’t want to have,” said Draghi, who is also a former head of the European Central Bank.

In a wide-ranging report, Draghi said Europe should start regularly issuing “common safe assets” to fund joint investment projects among Member States, co-ordinate better on defence spending, and improve its access to raw materials.

And in a stark warning, he said:

“We have to understand we are becoming ever smaller relative to the challenges we face. For the first time since the cold war we must genuinely fear for our self-preservation.”

Related: EU ‘needs €800bn-a-year spending boost to avert agonising decline’

In a gloomy day for European economic news:

·         Swedish manufacturer Northvolt is to cut a large number of jobs and sell or seek partners for its energy storage and materials businesses.

·         Germany has entered a three-quarter-long recession, according to investment bank Nomura

More

Mario Draghi warns EU at risk without €800bn a year investment boost; Germany ‘facing three-quarters-long recession’– as it happened (msn.com)

UK grocery inflation returns to downward trend, says Kantar

10 September 2024

ONDON (Reuters) - UK grocery inflation edged lower this month, data from market researcher Kantar showed on Tuesday, after rising for the first time in 18 months in last month's report.

It said annual grocery price inflation was 1.7% in the four weeks to Sept 1, versus 1.8% in the previous four-week period.

Despite the fall, nearly 60% of UK households remained worried about the rising cost of their shopping, Kantar said.

"This is their second biggest financial worry, only behind home energy bills," Fraser McKevitt, the researcher's head of retail and consumer insight, said.

The data showed prices were rising fastest in markets such as vitamin and mineral supplements, chilled fruit juices and chocolate confectionery and were falling fastest in toilet tissue, dog food and bottled cola drinks.

Kantar's data, the most up-to-date snapshot of UK consumer behaviour published since the July 4 national election, showed grocery sales rose 3.0% in value terms over the four week period year-on-year, a slight slowdown from growth of 3.8% in last month's report.

Over the 12 weeks to Sept. 1 online supermarket Ocado was again the fastest growing grocer with sales up 12.9% year-on-year, its best rate of growth since May 2021, Kantar said.

Market leader Tesco saw growth of 5.3%, while sales at No. 2 Sainsbury's rose 5.7%.

No. 3 Asda was again the laggard, with sales down 5.6% and it lost 1.2 percentage points of market share year-on-year.

Discounters Aldi and Lidl saw sales growth of 1.3% and 9.1% respectively.

Aldi said on Monday its limited sales growth reflected its move to reduce prices ahead of the market.

UK grocery inflation returns to downward trend, says Kantar (msn.com)

Covid-19 Corner

This section will continue until it becomes unneeded.

COVID-19 is here to stay: what you need to know

10 September 2024

COVID-19 is here to stay: what you need to know

It's been over a year since the World Health Organization downgraded COVID-19's pandemic status, but the summer of 2024 has seen a sharp increase in the number of cases. We all know someone who came back from their vacation and tested positive, or have come down with the virus ourselves. The World Health Organization said in the first week of August, that the virus is increasing in at least 84 countries. In the US, the number of coronavirus-related emergency room visits increased dramatically at the beginning of July. According to the CDC, the week ending July 6 saw 23.5% more hospital visits than the previous week. 

COVID-19 seemed to be in the rearview mirror, so why this sudden summer outbreak? According to CNN medical expert Dr. Leana Wen, there has been a wave of summer infections every year since the pandemic began, potentially due to an increase in travel and gatherings held indoors to escape the heat during peak temperatures. She recommends taking extra precautions when traveling or visiting those who are immunocompromised, and staying up to date on vaccines. 

Check out this gallery for some important tips to stay safe and slow the spread. 

----Wash your hands

According to doctors, the best way to prevent the coronavirus is to wash your hands thoroughly and frequently. The main mode of transmission is hand to mouth, eye, or nose contact.

More

COVID-19 is here to stay: what you need to know (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.

Bilayer Graphene Reveals New Secrets of Lithium-Ion Storage

9 September 2024

A research team at the University of Manchester has made a significant breakthrough in understanding lithium-ion storage within the thinnest possible battery anode, composed of just two layers of carbon atoms. Their findings, published in Nature Communications, reveal an unexpected "in-plane staging" mechanism that occurs when lithium intercalates into bilayer graphene. This discovery could lead to advancements in energy storage technology.

Ion intercalation is the process by which lithium-ion batteries, which power devices from electric vehicles to computers and smartphones, store energy. During charging, lithium ions move between layers of graphite, a common material in battery anodes. The more lithium ions that can be added and then removed, the greater the battery's capacity to store and release energy.

Despite being widely recognized, the details of this process remain unclear. The Manchester research team focused on bilayer graphene, the thinnest material that could serve as a battery anode, consisting of just two atomic layers of carbon. Their research sheds new light on the intricacies of ion intercalation.

In their experiments, the researchers replaced the conventional graphite anode with bilayer graphene and observed how lithium ions behaved during the intercalation process. Surprisingly, they found that lithium ions do not randomly intercalate between the two layers or all at once. Instead, the process occurs in four distinct stages, with lithium ions arranging themselves systematically at each stage, forming increasingly dense hexagonal lithium ion lattices.

The discovery of 'in-plane staging' was completely unexpected. It revealed a much greater level of cooperation between the lattice of lithium ions and the crystal lattice of graphene than previously thought. This understanding of the intercalation process at the atomic level opens up new avenues for optimizing lithium-ion batteries and possibly exploring new materials for enhanced energy storage.

Irina Grigorieva, Professor, University of Manchester

The study also revealed that, compared to conventional graphite, bilayer graphene has a lower capacity for storing lithium, though it offers valuable new insights. This reduced capacity is due to weaker screening of the interactions between positively charged lithium ions, leading to greater repulsion and preventing the ions from getting as close.

While this suggests that bulk graphite may outperform bilayer graphene in terms of storage capacity, the discovery of bilayer graphene's unique intercalation mechanism is a significant advancement. Additionally, this discovery raises the possibility of using atomically thin metals to enhance the screening effect, which could potentially increase the storage capacity of future battery materials.

Journal Reference:

Astles, T., et al. (2024) In-plane staging in lithium-ion intercalation of bilayer graphene. Nature Communicationsdoi.org/10.1038/s41467-024-51196-x,

The University of Manchester

Bilayer Graphene Reveals New Secrets of Lithium-Ion Storage (msn.com)

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

World Debt Clocks (usdebtclock.org)

It's easy being a humorist when you've got the whole government working for you.

Will Rogers.


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