Thursday 24 October 2024

Boeing Strike Continues. EU, More Red Flags. BRICS Last Day.

Baltic Dry Index. 1445 -35           Brent Crude  75.81

Spot Gold 2727               US 2 Year Yield 4.07  +0.04

Gold still represents the ultimate form of payment in the world. Fiat money in extremis is accepted by nobody. Gold is always accepted.

Alan Greenspan.

In the stock casinos, more pause and wobble. Suppose that was as good as stocks get. What if bonds are the new stocks?

In the USA, two spendthrifts vie for the presidency, oblivious to Uncle Scam’s 35.7 trillion of existing debt and a Biden weaponised dollar reserve standard now driving much of the world towards joining the BRICS grouping.

Much of the world now seems to be hedging against dollar risk by acquiring gold.

Dow tumbles 400 points, suffering worst day since early September: Live updates

Updated Wed, Oct 23 2024 4:25 PM EDT

Stocks fell sharply on Wednesday, with the Dow Jones Industrial Average posting its worst day in more than a month, as higher Treasury yields weighed on market sentiment.

The S&P 500 lost 0.92%, closing at 5,797.42. The 30-stock Dow plunged 409.94 points, or 0.96%, ending the day’s session at 42,514.95. It was the worst day since early September for the blue-chip index. The Nasdaq Composite lost 1.6%, ending at 18,276.65.

Both the Dow and S&P 500 notched their third straight losing session.

At its session high, the benchmark 10-year Treasury yield topped 4.25%, reaching its highest level since July 26.

Treasury yields have been soaring over the past month, even after the Federal Reserve began cutting interest rates in September. Some have pointed to recent economic data as a source for the move higher, while others have noted the potential of growing fiscal deficits in the U.S. under a second Donald Trump presidency.

“To me, it’s all about the impact of higher rates. The market is repricing the probability that the Fed can aggressively cut rates,” said Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management. “There have been parts of the economy that haven’t felt the impact of rising interest rates yet, but the longer rates remain higher, the more different parts of the economy have to reprice to that reality … the economy is out of equilibrium.”

The most overvalued part of the U.S. equity market is large caps, Schutte said, adding that he believes the market is due for a pullback in the near term as recession risks linger.

Megacap stocks were under pressure Wednesday, with Apple and Nvidia shares losing more than 2%. Meta Platforms slid 3%, while Netflix and Amazon were lower by roughly 2%.

Dow member McDonald’s closed more than 5% lower. The Centers for Disease Control and Prevention said late Tuesday that an E. coli outbreak tied to the fast-food giant’s Quarter Pounder burgers has resulted in 10 hospitalizations and one death.

Stock market news for October 23, 2024

Asia markets mostly fall after Wall Street extends declines; South Korea avoids technical recession

Updated Thu, Oct 24 2024 11:24 PM EDT

Asia-Pacific markets mostly fell Thursday after U.S. stocks dropped overnight, with the Dow Jones Industrial Average posting its worst day in more than a month.

In Asia, South Korea narrowly avoided a technical recession with its third-quarter GDP growing 0.1% quarter on quarter, following a 0.2% contraction in the second quarter. It, however, missed Reuters estimates of 0.5% growth.

On a year-on-year basis, South Korea’s economy grew 1.5%, also slower than the 2% increase expected by economists.

South Korea’s benchmark Kospi was down 0.15% after the GDP announcement, while the small-cap Kosdaq fell 0.65%.

Japan’s Nikkei 225 reversed losses to gain 0.13%, but the Topix lost 0.21%.

Australia’s S&P/ASX 200 climbed 0.31%, also reversing losses.

Hong Kong’s Hang Seng index was 0.63% down, while mainland China’s CSI 300 saw a larger loss of 0.93%.

Overnight in the U.S., all three major indexes fell, with both the Dow and S&P 500 notching their third straight losing session, weighed down by higher Treasury yields.

The S&P 500 lost 0.92%, and the 30-stock Dow plunged 0.96%. The Nasdaq Composite lost 1.6%.

Asia markets live: South Korea GDP, yen weakens

S&P 500 futures are little changed after index posts three straight losing days: Live updates

Updated Thu, Oct 24 2024 8:33 PM EDT

Futures linked to the S&P 500 traded near the flatline Wednesday night after the index notched a three-day run of losses.

S&P 500 futures added 0.1%, while Nasdaq 100 futures rose nearly 0.4%. Dow futures slid 79 points, or roughly 0.2%

In after-hours trading, Tesla surged 12% after the electric vehicle manufacturer beat the Street’s profit expectations in the third quarter. Tech giant International Business Machines fell more than 2% as consulting revenue narrowly missed analysts’ estimates.

The Dow ended Wednesday’s session with its biggest one-day loss since early September, dropping more than 400 points, or 0.96%. The S&P 500 slipped 0.92%, and the Nasdaq Composite fell 1.6%. It was the third straight losing day for the Dow and the S&P 500.

The 10-year Treasury yield has been marching higher this week, topping the 4.25% threshold on Wednesday at the high of the session. The run-up in yields has kept stocks under pressure as of late.

Paul Hickey, the co-founder of Bespoke Investment Group, said that he wouldn’t read too much into the recent sell-off in stocks.

“It’s a rough day today, but you just have to put it in the perspective of what we’ve seen over the last six weeks. Part of this rally has been driven by the fact that earnings results — to start with, the big banks — were very strong, and their stock price reactions were also positive,” he said on CNBC’s “Closing Bell: Overtime” on Wednesday afternoon. “It’s a rough day, but these days happen.”

Hickey cautioned that the market might experience a slight pullback after November’s U.S. presidential election. Still, he reassured that the market would find its footing after the matter.

“You could be set up for the stage of disappointment once the election comes and [see a] sell the news reaction. But I don’t think it’s going to be anything too bad. The overall market backdrop is very good in terms of breadth, earnings, the economy, and the Fed is at the market’s back,” he said.

More earnings results are expected on Thursday. United Parcel ServiceHoneywellNorthrop GrummanSouthwest Airlines and American Airlines are among the companies set to report before the market opens.

On the economic front, weekly jobless claims are due on Thursday morning. New home sales and building permits data are also slated for release.

Stock market today: Live updates

Boeing machinists reject new labor contract, extending more than 5-week strike

Published Wed, Oct 23 2024 10:14 PM EDT

Boeing machinists voted against a new labor deal that included 35% wage increases over four years, their union said Wednesday, extending a more than five-week strike that has halted most of the company’s aircraft production, which is centered in the Seattle area.

The contract’s rejection by 64% of the voters is another major setback for the company, which warned earlier Wednesday that it would continue to burn cash through 2025 and reported a $6 billion quarterly loss, its largest since 2020.

The strike is costing the company about $1 billion a month, according to S&P Global Ratings.

New CEO Kelly Ortberg had said reaching a deal with machinists was a priority in order to get the company back on track after years of safety and quality problems.

“My focus is getting everybody looking forward, get them back to work, improve that relationship,” Ortberg told CNBC’s “Squawk on the Street” earlier in the day, when asked about the strike.

Ortberg’s laid out his vision for Boeing’s future, which could includes slimming down the company to focus on core businesses. Earlier this month, he announced Boeing will cut 10% of its global workforce of 170,000 people.

Boeing’s more than 32,000 machinists in the Puget Sound area, in Oregon and in other locations walked off the job on Sept. 13 after overwhelmingly voting down a previous tentative agreement that proposed raises of 25%. The International Association of Machinists and Aerospace Workers union had originally sought wage increases of 40%. It is the machinists’ first strike since 2008.

The latest proposal, announced last Saturday, included 35% raises over four years, increased 401(k) contributions, a $7,000 bonus and other improvements.

Workers had pushed for higher pay amid a surge in living costs in the Puget Sound area. Some machinists were upset about losing their pension plan in a previous contract that they signed in 2014, but the latest proposal didn’t offer a pension.

Boeing agreed in the new contract to build its next aircraft in the Pacific Northwest, which had also been a sticking point with unionized workers after Boeing moved all of its 787 Dreamliner production to a non-union factory in South Carolina.

More

Boeing machinists reject new labor contract, extending more than 5-week strike

In other news.

Bad Debt Surging at Deutsche Bank Points to Economic Weakness

October 23, 2024 at 6:00 PM GMT+1

Surging bad debt at Deutsche Bank is the latest warning that economic malaise is creeping through the European Union. The lender said it will have to set aside more money than expected for souring loans, the second time this year it had to adjust its guidance. Provisions doubled last quarter at the most valuable lender in the bloc’s biggest economy. While Deutsche Bank said the increase was only temporary, and that provisions for commercial real estate were already coming down, analysts suggested Germany’s weak economy is starting to impact revenue. The result could challenge Chief Executive Officer Christian Sewing’s goal to improve profitability and return more than €8 billion ($8.6 billion) to shareholders over the medium term. The bank’s shares fell as much as 4.9% in Frankfurt.

What You Need to Know Today

A transatlantic showdown threatens to roil the smartphone and personal computer markets and disrupt operations of two of the most influential companies in the semiconductor industry. The UK’s Arm Holdings is canceling a license that allowed longtime partner Qualcomm to use Arm intellectual property to design chips. With the cancellation notice, Arm is giving the US company an eight-week period to remedy a legal dispute that began in 2022. If the cancellation takes effect, Qualcomm may have to stop selling products that account for much of its roughly $39 billion in revenue, or face claims for massive damages.


A multipolar world is being created to challenge the US-dominated international order, according to Russian President Vladimir Putin. He delivered remarks to delegates from more than 30 countries who gathered today in the city of Kazan, located about 800 kilometers (497 miles) east of Moscow. Russia is hosting the first BRICS summit since the group expanded to nine members in January, with the United Arab Emirates, Iran, Egypt and Ethiopia joining Brazil, Russia, India, China and South Africa in the organization. Its clout is growing, with members accounting for 26% of the world economy and 45% of the its population.

More

Bloomberg Evening Briefing: Bad Debt at Deutsche Bank Points to Frail Economy - Bloomberg

Finally, potato news.  A great future ahead as much of Asia turns to potatoes, but only provided global weather returns to more normal growing and harvesting conditions.

Potato farmers have been hit by rising costs and bad weather affecting harvests.

21 October 2024

Potato farmers have been hit by rising costs and bad weather affecting harvests.

Robert Strathern, of Fairfields Farm at Wormingford, near Colchester, told BBC's Countryfile a wet spring had delayed the harvest, making it a "race against the clock and the weather".

Rising energy costs have also made life more difficult for growers.

"You can soon find yourself in a loss-making scenario. Potatoes have become a very high-risk crop," said Mr Strathern.

About 1,000 acres of land are used to grow potatoes at the farm, producing about 25,000 tonnes a year.

Wet weather earlier in the year delayed planting, which in turn had delayed harvesting, Mr Strathern said.

"We’ve been able to lift most of the time but we had a very wet spring," he said.

"March, April and May were quite wet months so that delayed planting for this year and that delayed harvest date as well.

“Now you’re on a race against the clock and the weather to get the crop in before it turns."

He said the crop this year had been a "mixed bag".

Mr Strathern said the cost of growing potatoes was about £4,000 per acre, while wheat was only about £500 an acre.

"Generally, the potato here has been dropping as growers have less appetite for that risk," he said.

Once harvested, many of the potatoes are moved to cold stores, which allow the farm to keep some of the crop for up to a year, helping ensure a steady flow of product.

However, Mr Stathern said the cold store was also being affected by rising energy costs.

“Electricity is a big part of our costs, so when inflation happened for power, that had a big impact on our business," he said.

"But for making sure we’ve got crop available it’s imperative we’ve got our own crop in our own store, so we’ve got control of it."

Essex potato harvest hit by rising costs and bad weather - BBC News

Global trends in the potato industry: New report highlights key opportunities for French producers

on October 17, 2024

A newly released report of a study commissioned by the National Union of Potato Producers (UNPT), FranceAgriMer, the Interprofessional Group for the Promotion of Potatoes (GIPT), the National Interprofessional Potato Committee (CNIPT) and carried out by the Ceresco firm, offers critical insights into the future of the French potato market.

The study, titled Tendances de marché pour la pomme de terre française, provides a comprehensive analysis of global consumption trends, production challenges, and trade projections, with a focus on the French potato industry. The findings suggest significant shifts in consumer behavior, emphasizing a growing demand for processed potato products worldwide.

Stabilizing Consumption, Rising Demand for Processed Potatoes

According to the study, global potato consumption has plateaued in recent years, with population growth outpacing production for human consumption. Between 2019 and 2021, the global per capita consumption averaged 32.9 kg annually, with processed products accounting for 27% of that figure. However, the report highlights that the demand for processed potatoes, such as frozen fries and dehydrated products, continues to rise, particularly in regions where potato production is limited.

In OECD countries, processed potatoes already dominate, accounting for over 60% of consumption. The trend is rapidly gaining momentum in Southeast Asia, where processed products now represent 40% of total potato consumption in countries like Indonesia and the Philippines. This shift in consumer preferences is expected to continue, replacing fresh potatoes with more convenient, processed alternatives.

Global Production and Yield Challenges

The report notes a slight increase in global potato production, driven primarily by yield improvements rather than an expansion in cultivated area. From 2018-2020, global potato production averaged 368 million tonnes, with the top five producers—China, India, Russia, Ukraine, and the U.S.—contributing over half of the world’s output.

Yields have steadily risen, with global averages increasing from 19.6 t/ha a decade ago to 21.9 t/ha in recent years. However, the report warns of stagnation in cultivation areas, especially in regions like Eastern Europe, where significant losses in agricultural land have occurred. In contrast, North America and the EU have maintained stable production levels, supported by high yields ranging from 38 to 50 t/ha.

---- Projections for 2030: A Growing Appetite for Processed Products

Looking ahead to 2030, the report presents several scenarios for future market growth. In the most optimistic case, global consumption of processed potato products could rise by 70%, driven by population growth and changing dietary preferences. This scenario would require an additional 45 million tonnes of potatoes dedicated solely to processing.

Even in a more conservative projection, the demand for processed potatoes is expected to increase by 17%, highlighting the ongoing shift toward convenience foods. The study also points to the need for increased production capacities, particularly in emerging markets, to meet rising global demand.

More

Global trends in the potato industry: New report highlights key opportunities for French producers – Potato News Today

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.

South Korea’s economy barely grows in third quarter, missing expectations

Published Wed, Oct 23 2024 9:17 PM EDT

South Korea’s economy barely grew in the third quarter, missing market expectations, as consumer spending rebounded but exports fell.

In the July-September quarter, gross domestic product expanded 0.1% from a quarter earlier on a seasonally adjusted basis, according to the Bank of Korea’s advance estimates released on Thursday.

That was just enough for Asia’s fourth-largest economy to avoid a recession, commonly defined as two consecutive quarters of contraction, after the economy contracted 0.2% in the second quarter.

The growth rate was far weaker than an increase of 0.5% tipped in a Reuters poll of economists and expected by the central bank in its quarterly forecasts provided in August.

Private consumption rose 0.5%, after falling 0.2% a quarter earlier. Construction investment dropped 2.8%, while corporate investment jumped 6.9%.

Exports, down 0.4%, fell for the first time since the final quarter of 2022, while imports rose 1.5%, bringing a net negative contribution.

South Korea’s central bank this month lowered interest rates for the first time since mid-2020 and flagged there was room for more reductions though it said the timing of any further easing would be carefully examined.

On an annual basis, the economy grew 1.5%, weaker than the previous quarter’s 2.3% and economists’ expectations of 2.0%. It was the slowest pace since the third quarter of 2023.

South Korea's economy barely grows in third quarter, missing expectations

IMF predicts slightly slower global growth in 2024 and 2025

22 October 2024

Global growth is expected to ease slightly to 3.2 per cent this year and remain at that level in 2025, the IMF announced Tuesday, while warning that the stable figures masked “important” regional and sectoral shifts.

In its new World Economic Outlook (WEO) report, the International Monetary Fund also estimates that global inflation will continue to ease, hitting 5.8 per cent this year, before falling to 4.3 pe rcent in 2025.

“The battle against inflation is almost won,” IMF chief economist Pierre-Olivier Gourinchas told reporters Tuesday. “The decline in inflation without a global recession is a major achievement.”

The Fund’s WEO report noted that global growth is expected to trend to a lackluster 3.1 percent by 2029, and warned of growing risks to that metric.

Beneath the relatively calm outlook for growth through 2025, “the picture is far from monolithic,” the Fund said, warning of “important sectoral and regional shifts” taking place over the past six months.

There are also a number of downside risks to growth, Gourinchas said, highlighting the prospect of “an escalation in regional conflict, especially in the Middle East.”

The WEO’s publication comes a day after the IMF and World Bank Annual Meetings got underway in Washington, bringing together finance ministers and central bankers from around the world for meetings on the health of the global economy.

The report finds that the United States has remained an engine of global growth -- in sharp contrast with the euro area, where expansion remains slow.

The world’s largest economy is now expected to grow by 2.8 percent this year, down ever-so-slightly from the 2.9 percent seen in 2023, but still a shade better than the Fund’s previous estimate in July.

It is then expected to ease somewhat to 2.2 percent in 2025 -- up 0.3 percentage points from July -- as fiscal policy is “gradually tightened and a cooling labor market slows consumption,” the IMF said.

“The US economy has been doing very well,” Gourinchas told AFP in an interview ahead of the report’s publication, pointing to strong productivity growth and the positive effects of a surge in immigration on economic growth.

He added that the United States is “very close” to achieving a soft landing -- a rare feat in monetary policy, where inflation falls to within targets without spurring a severe recession.

In Europe, growth is still trending higher, but remains low by historical standards, and is on track to be at an anemic 0.8 percent this year, rising slightly to 1.2 percent in 2025.

While France and Spain saw upgrades in their outlook for 2024, the IMF cut its projections for German growth by 0.2 percentage-points this year, and by half a percentage-point next year, citing its “persistent weakness in manufacturing.”

There was some good news in the United Kingdom, where growth is projected to accelerate in both 2024 and 2025, “as falling inflation and interest rates stimulate domestic demand.”

Growth in Japan is expected to slow sharply to just 0.3 percent this year, before accelerating to 1.1 percent next year, “boosted by private consumption as real wage growth strengthens,” according to the IMF.

The Fund expects the growth in economic output in China to continue to cool, easing from 5.2 percent last year to 4.8 percent this year, and then falling further to 4.5 percent in 2025.

“Despite persisting weakness in the real estate sector and low consumer confidence, growth is projected to have slowed only marginally,” the IMF said, pointing to “better-than-expected” net exports from the world’s second-largest economy.

The slowdown in India looks set to be more pronounced, with the IMF penciling in growth of 7.0 percent this year, down from 8.2 percent in 2023.

It is then set to slow even further to 6.5 percent, as the “pent-up demand accumulated during the pandemic” runs out, the IMF said.

More

IMF predicts slightly slower global growth in 2024 and 2025 - GulfToday

Covid-19 Corner

This section will continue until it becomes unneeded.

Floor swabbing offers new insights for COVID-19 monitoring

October 23, 2024

OVID-19 is here to stay. As restrictions and human testing have waned, new research is tackling the challenge of how we can monitor, predict, and prevent cases and outbreaks of COVID-19, especially among vulnerable groups like hospitalized patients.

One approach is environmental surveillance. The most well-known incarnation is wastewater surveillance, which rose in prominence following the advent of the COVID-19 pandemic. But the Coronavirus in the Urban Built Environment research team, also known as CUBE, is exploring an alternative-;swabbing the floors.

In a recent study at two hospitals in Ontario, CUBE researchers swabbed the floors of healthcare worker areas, such as change rooms, meeting rooms and staff washrooms, and observed a strong association between the amount of SARS-CoV-2 viral matter found on the floor and the number of cases and outbreaks of COVID-19 in the hospital.

The association between floor swabs and human cases and outbreaks was something we had previously observed in long-term care homes, and we wanted to test the hypothesis in the hospital setting."

Dr. Caroline Nott, Infectious Disease Physician at The Ottawa Hospital, Assistant Professor at the University of Ottawa Department of Medicine, and one of the principal investigators of CUBE

For every 10-fold increase in the amount of virus detected on the floor, the researchers observed a corresponding 15-fold increase in patient cases and a 22-fold higher odds of a COVID-19 outbreak. These results add to the mounting evidence that floor swabbing may provide an additional layer of monitoring to help inform infection prevention and control measures in hospitals and other settings.

"To be clear, COVID-19 is not spreading via the floor," reassures Nott. "It is extremely rare to catch COVID-19 from any surface. Rather, what we are seeing in our floor swabs is a reflection of the burden of infection in the humans occupying the environment where we are swabbing. So if we start seeing an increase in the amount of virus we are finding on the floor, it could be a signal that additional cases and potentially outbreaks are on the way. This kind of early warning may help the hospital prepare and take preventative measures."

More

Floor swabbing offers new insights for COVID-19 monitoring

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.

Manchester celebrates 20 years since graphene breakthrough

Written by: Romy Nicholson  22 October 2024

The University of Manchester is marking two decades since the discovery of graphene: the Nobel Prize-winning ‘wonder material’, which was first isolated by Professor Sir Andre Geim and Professor Sir Kostya Novoselov on this day in 2004.

Although scientists knew one atom thick, two-dimensional crystal graphene existed, no-one had figured out how to extract it from graphite, until Professor Geim and Professor Novoselov’s groundbreaking work in Manchester in 2004.

Geim and Novoselov frequently held ‘Friday night experiments’, where they would play around with ideas and experiments that weren’t necessarily linked to their usual research. It was through these experiments that the two first isolated graphene, by using sticky tape to peel off thin flakes of graphite, ushering in a new era of material science.

Their seminal paper ‘Electric Field Effect in Anatomically Thin Carbon Films’, has since been cited over 40,000 times, making it one of the most highly referenced scientific papers of all time.

What Andre and Kostya had achieved was a profound breakthrough, which would not only earn the pair a Nobel Prize in 2010 but would revolutionise the scientific world.

The vast number of products, processes and industries for which graphene could significantly impact all stem from its extraordinary properties. No other material has the breadth of superlatives that graphene boasts:

  • It is many times stronger than steel, yet incredibly lightweight and flexible
  • It is electrically and thermally conductive but also transparent
  • It is the world’s first two-dimensional material and is one million times thinner than the diameter of a single human hair.

It’s areas for application are endless: transport, medicine, electronics, energy, defence, desalination, are all being transformed by graphene research.

In biomedical technology, graphene’s unique properties allow for groundbreaking biomedical applications, such as targeted drug delivery and DIY health-testing kits. In sport, graphene-enhanced running shoes deliver more grip, durability and 25% greater energy return than standard running trainers – as well as the world’s first graphene car.

Speaking at the Times Higher Education World Academic Summit 2024, hosted by The University of Manchester, Professor Sir Andre Geim said: “If you have an electric car, graphene is there. If you are talking about flexible, transparent and wearable electronics, graphene-like materials have a good chance of being there. Graphene is also in lithium ion batteries as it improves these batteries by 1 or 2 per cent.”

The excitement, interest and ambition surrounding the material has created a ‘graphene economy’, which is increasingly driven by the challenge to tackle climate change, and for global economies to achieve zero carbon.

At the heart of this economy is The University of Manchester, which has built a model research and innovation community, with graphene at its core. The National Graphene Institute enables academics and their industrial partners to work together on new applications of graphene and other 2D materials, while the Graphene Engineering Innovation Centre accelerates lab-market development, supporting more than 50 spin-outs and numerous new technologies.

Professor James Baker,  CEO of Graphene@Manchester said: “As we enter the 20th anniversary since the first discovery of graphene, we are now seeing a real ‘tipping point’ in the commercialisation of products and applications, with many products now in the market or close to entering. We are also witnessing a whole new eco-system of businesses starting to scale up their products and applications, many of which are based in Manchester."

More

Manchester celebrates 20 years since graphene breakthrough

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

World Debt Clocks (usdebtclock.org)

In the long run, the gold price has to go up in relation to paper money. There is no other way. To what price, that depends on the scale of the inflation - and we know that inflation will continue.

Nicholas Deak.


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