Tuesday, 15 October 2024

Stocks, The AI Mania Bubble Bubbles On. Crude Drops.

 Baltic Dry Index. 1814 +05          Brent Crude  75.09

Spot Gold 2642                   US 2 Year Yield 3.95  Fri.

A Parliament is nothing less than a big meeting of more or less idle people.

Walter Bagehot.

It’s not quite the return of the everything bubble in the stock casinos, but it’s close. The everything but Tesla bubble perhaps.

With the US central bank now rooting for a Democrat win in just about three week’s time, what more can the deep state do to block Trump?

 In reality, I don’t think it matters much who wins on November 5th. Each candidate are proposing economic fantasy policies, only too likely to wreck the US economy and with it the global economy.

But with Uncle Scam already 35.7 trillion dollars in debt on a GDP of only 28.7 trillion dollars, the next four years promise four years of economic pain and a new global economy reality.

From America to Britain to the EU to China, the old economic reality was replaced by a massive debt binge 2008-2024.  That debt binge is about to come to an unpleasant end 2025-2030.

Dow adds 200 points for first close above 43,000; S&P 500 hits another all-time high: Live updates

Updated Mon, Oct 14 2024 5:01 PM EDT

The S&P 500 and the Dow Jones Industrial Average rose to fresh records Monday as investors awaited the next batch of key corporate earnings.

The broad market index climbed 0.77% to 5,859.85, while the 30-stock Dow advanced 201.36 points to 43,065.22. Both averages hit all-time highs and closed at records, with the Dow ending the session above the 43,000 mark for the first time. The Nasdaq Composite added 0.87%, closing at 18,502.69.

McDonald’sUnitedHealth Group and Apple led the Dow higher. Technology continued its upward run and was the best-performing sector in the S&P.

Bank of AmericaGoldman Sachs and Johnson & Johnson report their latest results on Tuesday, while Morgan Stanley and United Airlines are set to release results Wednesday. Walgreens Boots AllianceNetflix and Procter & Gamble are also scheduled to post earnings this week.

Those reports will come after JPMorgan Chase and Wells Fargo kicked off the third-quarter earnings season on a high note. The early signs of a recovery in banking profits helped push the broader market to all-time highs at the end of last week. The S&P 500 closed above 5,800 for the first time on Friday, while the blue-chip Dow also reached an all-time high.

So far, 30 S&P 500 companies have posted results, beating the earnings consensus by about 5% on average, according to Bank of America. That is better than the 3% beat this time last quarter. Still, Bernstein thinks this quarter’s year-over-year earnings per share growth rate will come in “much lower” than last quarter’s.

Despite the market climbing to new all-time highs, investors remain anxious against a backdrop of a closely contested presidential election in three weeks, suddenly rising Treasury yields, uncertainty about the pace of Federal Reserve policy easing and escalating geopolitical risks in the Middle East.

“All-time-highs sentiment is maybe a little stretched, so it wouldn’t be surprising — especially in the last three or four weeks before an election — to see some volatility return,” said Baird investment strategist Ross Mayfield. “Over a three- or six-month-plus time horizon we’re still pretty bullish just on the idea of lower rates for the right reason, soft landing in the economy and earnings growth.”

The S&P 500 has gained almost 23% this year, excluding reinvested dividends. The bull market recently turned two years old, and the benchmark has rallied about 63% in total since hitting a closing low in October 2022. Treasury yields have risen lately, too, with the benchmark 10-year note yield, used to calculate everything from mortgages to auto loans, topping 4.1% last week.

The bond market was closed on Monday for Columbus Day.

Stock market news for October 14, 2024 (cnbc.com)

Japan’s Nikkei hits 3-month high as Chinese markets continue to fluctuate

Updated Tue, Oct 15 2024 12:50 AM EDT

Asia-Pacific markets were mixed Tuesday, following gains on Wall Street that saw the Dow Jones Industrial Average and the S&P 500 reach new record highs.

Investors assessed trade data out of South Korea, which showed trade surplus surging to $6.7 billion in September, up from $3.7 billion in August.

South Korea’s Kospi as well as the small-cap Kosdaq were hovering near the flatline.

Mainland China’s CSI 300 was down 0.5%, clawing back after falling more than 1% earlier in the day. Meanwhile, Hong Kong’s Hang Seng index fell 1.3%.

China had gotten disappointing September trade data after markets closed Monday, with exports rising 2.4% from a year ago and imports adding 0.3%, both sharply missing expectations.

Japan’s Nikkei 225 gained 1.3%, while the broad-based Topix rose 1%.

Australia’s S&P/ASX 200 rose 0.8%.

On Wall Street, the broad market S&P climbed 0.77% to 5,859.85, while the 30-stock Dow advanced 201.36 points to 43,065.22, ending the session above the 43,000 mark for the first time.

The Nasdaq Composite added 0.87%, closing at 18,502.69.

Asia markets live updates: South Korea trade data (cnbc.com)

European markets set for positive open, tracking Wall Street higher

Updated Tue, Oct 15 2024 12:44 AM EDT

European stocks are heading for a positive open Tuesday, with global markets broadly tracking gains on Wall Street.

The U.K.’s FTSE 100 index is expected to open 40 points higher at 8,324, Germany’s DAX up 86 points at 19,586, France’s CAC up 27 points at 7,621 and Italy’s FTSE MIB up 125 points at 34,653, according to data from IG.

The positive start for Europe comes after gains on Wall Street that saw the Dow Jones Industrial Average and the S&P 500 reach new intraday highs and record closes. Dow Jones Industrial Average futures were near flat Monday night.

Asia-Pacific markets were mixed overnight, but regional chip stocks rose, boosted by Nvidia’s share price rising 2.4% Monday before closing at a record high.

In Europe Tuesday, earnings are set to come from LVMH and Ericsson and data releases include the U.K.’s latest unemployment figures, French inflation data and the Europe and German ZEW index of economic sentiment.

European markets live updates: stocks, news, data and earnings (cnbc.com)

In other news, crude oil prices signal difficult times directly ahead. Will Israel now bomb Iran’s oil terminals to get the oil price rising again?

U.S. crude oil prices fall more than 2% after OPEC cuts demand forecast again

Published Mon, Oct 14 2024 7:56 AM EDT Updated Mon, Oct 14 2024 2:52 PM EDT

U.S. crude oil futures fell more than 2% on Monday after OPEC cut its demand forecast for 2024 for the third time in a row.

OPEC now sees demand growing by 1.9 million barrels per day in 2024, down from 2 million bpd in its previous forecast, according to a report released Monday. The group expects demand to grow by 1.6 million bpd in 2025, compared with 1.7 million bpd previously.

Here are Monday’s closing energy prices:

  • West Texas Intermediate November contract: $73.83 per barrel, down $1.73, or 2.29%. Year to date, U.S. crude oil has gained about 3%.
  • Brent December contract: $77.46 per barrel, down $1.58, or 2%. Year to date, the global benchmark has risen nearly 1%.
  • RBOB Gasoline November contract: $2.1086 per gallon, down 2%. Year to date, gasoline is little changed.
  • Natural Gas November contract: $2.494 per thousand cubic feet, down 5.24%. Year to date, gas has fallen nearly 1%.

China’s finance minister also disappointed the market during a weekend press briefing. Traders have been banking on more robust stimulus in China to boost the world’s second-largest economy. Soft demand in China, the world’s largest crude importer, has weighed on the market for months.

“China’s monetary stimulus measures failed to stimulate and the weekend’s pledge from the finance ministry to borrow more was long on cliches and phrases but short on reassuring and convincing details,” Tamas Varga, analyst at oil broker PVM, told clients in a note.

The market, meanwhile, continues to monitor the Middle East in anticipation of a retaliatory strike by Israel against Iran. U.S. officials told NBC News that Israel has narrowed down the targets it plans to hit. These include military targets and energy infrastructure, the officials told NBC.

Crude oil prices today: WTI, Brent fall after China press briefing (cnbc.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.

Inflation expected to fall back below Bank of England’s 2% target

Experts think inflation will fall in figures released this week before rising later in 2024

October 14, 2024 6:00 am

Inflation is expected to have fallen back below the Bank of England’s 2 per cent target when figures covering the year to September are revealed on Wednesday.

Last month, the Office for National Statistics (ONS) unveiled that the consumer prices index (CPI) measure of inflation had held steady at 2.2 per cent in August, but economists now predict that September’s number will be lower.

Pantheon Macroeconomics has forecast that September’s CPI figure will be 1.9 per cent, while Deutsche Bank Research suggests it will likely by 1.8 per cent. Oxford Economics is forecasting 1.7 per cent.

The Bank of England’s Monetary Policy Committee (MPC) has previously said it expects a slightly higher figure of 2.1 per cent, but that forecast was made in summer.

In a note about its forecast, Pantheon Macroeconomics said: “All of the undershoot relative to the MPC’s call is accounted for by falling motor fuel prices.

“We expect the drop in motor fuel prices, following oil price falls through the summer, to cut 0.22 percentage points from headline CPI inflation in September compared to August.”

It is forecasting core inflation – which excludes volatile products like food and energy, to fall from 3.6 per cent to 3.5 per cent, and services inflation to fall from 5.6 per cent to 5.4 per cent.

Economists expect inflation to tick upwards later in the year.

Sanjay Raja of Deutsche Bank Research said: “Upward momentum will likely gather pace. The recent run of energy deflation will likely come to an end shortly. Indeed, pump prices are likely to reverse course in October, while dual fuel bills will see a hefty 10 per cent rise.

“The upcoming Autumn Budget also raises risks to short-term inflation, with alcohol and tobacco duty increases potentially in the offing.”

Pantheon Macroeconomics suggests CPI will reach 2.8 per cent by November, and could get to 3 per cent in 2025.

The Bank of England aims for inflation be around 2 per cent, and signs that inflation is falling can raise the prospect of it dropping interest rates – which are raised to counter high price rises.

Interest rates fell in August from their 16-year high of 5.25 per cent to 5 per cent, and economists think further falls are still to come.

Most economists think there will be at least one further fall this year, with another a possibility.

“We continue to expect the Bank of England to cut interest rates slowly in the coming months, from 5 per cent to 4.75 per cent in November, and thereafter perhaps by 0.25 percentage points at every other meeting,” said Ashley Webb of Capital Economics.

Inflation expected to fall back below Bank of England's 2% target (inews.co.uk)

Covid-19 Corner

This section will continue until it becomes unneeded.

Covid hospitalisations surge as new variant XEC spreads across UK

14 October 2024

Covid hospitalisations have surged across Britain at an “alarming” rate as a new variant of the virus emerged, the UK Health Security Agency (UKHSA) has warned.

UKHSA figures showed the admission rate for patients testing positive for Covid XEC stood at 4.5 per 100,000 people in the week to October 6 – up from 3.7 a week earlier.

The North East has seen the highest hospital admission rates at 8.12 per 100,000, whilst those aged 85 and older face an alarming surge, reaching 52.48 per 100,000, according to the UKHSA.

Cases of the XEC variant, first detected in Germany in June, have also been found in the United States, Denmark and other countries.

The strain, a combination of the KS.1.1 and KP.3.3 variants, presents symptoms similar to those of other Covid variants including tiredness, headaches, a sore throat and high temperatures.

Since it is still only a sub-family of the same omicron lineage, experts say keeping up to date with vaccines and booster shots would offer sufficient protection against severe illness and hospitalisation.

It is characterised by mutations in the building block molecules phenylalanine (F) altered to leucine (L), and arginine (R) to threonine (T) on the spike protein that the virus uses to attach to human cells.

The second omicron subvariant KP.3.3 belongs to the category FLuQE where the amino acid glutamine (Q) is mutated to glutamic acid (E) on the spike protein, making its binding to human cells more effective.

The US Centers for Disease Control & Prevention also advises people to practise good hygiene and to take steps for cleaner air.

Researchers have called for monitoring the XEC variant more closely to better understand its symptoms.

More

Covid hospitalisations surge as new variant XEC spreads across UK (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.

World's largest onshore wind turbine spins up 430 ft blades to deliver 15 MW

By Abhimanyu Ghoshal  October 11, 2024

China's Sany Renewable Energy claims it has just erected the world's largest onshore wind turbine. The 15MW prototype was installed earlier this week in northeast China's Jilin Province.

The lovingly named SI-270150 turbine features 430-ft-long blades (131 m), making for a maximum swept area of 616,298 sq ft (57,256 sq m). That's equivalent to nearly 11 American football fields. According to Sany, it's also set a record for the largest onshore turbine rotor diameter at 886 ft (270 m), surpassing the previous largest onshore wind turbine on the planet, Goldwind's 12-MW design launched in 2023 with a 787-ft (240-m) rotor diameter.

The 430 ft blades were first manufactured at the company's facility in Inner Mongolia back in January. Those were built to not only be durable and stable, but also to incorporate recyclable parts. They also bested Sany's 2023 record for the longest onshore turbine blades, which measured 341 ft (104 m).

A single 15-MW turbine is said to be able to generate enough electricity to power 160,000 households for a year. This one is designed to run for 25-30 years, and features several design optimizations to see it through that life span. Its drivetrain features a dual tapered roller bearing integrated main shaft support system, "ensuring high load-bearing capacity and stability."

Wind energy nerds will have noticed that this 15-MW turbine isn't nearly as big as the world's largest offshore turbine, which we wrote about last month – the 20MW behemoth from China's Mingyang Smart Energy.

That's because offshore turbines can be built with higher towers and longer blades to take advantage of more consistent winds found over the ocean.

There's also less concern about visual and noise impact since they're far from populated areas, and they're not constrained by land usage regulations.

It'll be a little while before this 15-MW turbine is installed widely. Sany said this prototype wind turbine will go through a year of operational testing for reliability in an experimental wind farm.

That's another feather in China's wind energy cap. As of 2023, the country accounted for 65% of global wind capacity, with four of the top five wind turbine manufacturers being based there. That includes world #1 OEM Goldwind, as well as Mingyang, which built the world's largest offshore turbine last month. Sany, meanwhile, is at #7.

Source: Sany Renewable Energy

World's largest onshore wind turbine spins up 430 ft blades to deliver 15 MW (newatlas.com)

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

World Debt Clocks (usdebtclock.org)

The best argument against democracy is a five-minute conversation with the average voter.

Winston Churchill.

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