Monday 28 October 2024

Trouble In Asia. Potential Trouble From The EU. Oil Drops.

Baltic Dry Index. 1410 -07           Brent Crude  72.62

Spot Gold 2736               US 2 Year Yield 4.11  +0.04

Economists have much to be humble about.

Paul Samuelson

In the stock casinos, a rising expectation that Donald J. Trump is headed back to the White House.

Political trouble in Japan.  Industrial profits trouble in China.  A trade war warning from the EU.

A relief selloff in crude oil pricing, but will Iran now retaliate to Israel’s retaliation, to Iran’s retaliation to Israel’s assassination of the Hamas political leader in Tehran back in September?

Later in the week, the UK tax and spend budget making war on pensioners, the latest EU inflation figures.

In the USA:

Traders are also watching for a slew of key economic data this week, including the September jobs report due Friday; the September personal consumption expenditures, or PCE, price index, expected Thursday; and a preliminary reading on third-quarter gross domestic product out on Wednesday.

One week tomorrow, hopefully, US voters finally decide which economic crank gets to run the USA from next January. A USA drowning in 35. 830 trillion of Federal debt.

Japan’s Nikkei 225 climbs, yen drops amid political uncertainty as ruling coalition loses majority

Updated Mon, Oct 28 2024 12:53 AM EDT

Japan’s benchmark Nikkei 225 and its Topix index climbed on Monday, supported by a weak yen amid political uncertainty as the ruling LDP lost its parliamentary majority.

The Nikkei rose 1.54%, leading gains in Asia while the Topix was up 1.23%.The yen weakened 0.84% to 153.59 on Monday.

The LDP and its coalition partner Komeito have secured 215 out of 465 seats, public broadcaster NHK reported early Monday morning local time. The opposition Constitutional Democratic Party and the Democratic Party for the People have made significant gains in this election.

This political uncertainty prompted could deter the Bank of Japan from hiking rates, some analysts said.

Izumi Devalier, chief Japan economist at Bank of America said that while political uncertainty and instability could delay rate hikes, Devalier explained the BOJ cannot ignore sustained weakness in the yen.

“I don’t think that necessarily means that the BOJ will be on hold for the foreseeable future. Obviously, you’ve got to watch the market developments, but we could still be on track for hikes in January or even December, depending on where the yen goes,” she said.

South Korea’s Kospi gained 0.61%, while the small cap Kosdaq was 1.02% higher.

Australia’s S&P/ASX 200 rose 0.17%.

Hong Kong’s Hang Seng index fell 0.24%, while mainland China’s CSI 300 saw a larger loss of 0.73%, after China reported its worst industrial profit numbers since the pandemic. Industrial profits in China plunged 27.1% year on year in September.

On Friday in the U.S., the Nasdaq Composite rose 0.56% to a new all-time high of 18,518.61 on Friday, boosted by megacap tech stocks.

Nvidia added 0.8%, and shares of Meta PlatformsAmazon and Microsoft were also higher.

However, other major benchmarks fell, with the S&P 500 0.03% lower and the Dow Jones Industrial Average down 0.61%.

Asia markets live: Japan election, LDP loses majority, yen weakens

Stock futures rise with Nasdaq set to add to records as oil prices decline

Updated Mon, Oct 28 2024 1:08 AM EDT

U.S. equity futures jumped on Monday morning as investors looked for a batch of megacap technology earnings to keep driving the Nasdaq Composite to new heights this week. A cooling geopolitical situation also aided risk sentiment.

Weekend airstrikes by Israel against Iran did not target oil or nuclear facilities as was feared and oil futures were lower in early trading.

Futures tied to the Dow Jones Industrial Average added 179 points, or 0.42%. S&P 500 futures gained 0.53% and Nasdaq 100 futures increased by 0.73%.

The market was split at the end of last week. On Friday the tech-heavy Nasdaq Composite jumped to a new intraday all-time high, rising 0.56% to close at 18,518.61. On the flip side, the Dow shed 259.96 points, or 0.61%, to close at 42,114.40. The broad-market S&P 500 inched lower by 0.03% to 5,808.12.

Both the Dow and S&P snapped a six-week winning streak, but the Nasdaq eked out its seventh positive week in a row.

Wall Street is bracing for a big week in markets that will mark busiest week of third-quarter earnings reporting season and the final week before the Nov. 5 U.S. Presidential election. Five of the Magnificent Seven companies – Alphabet, Microsoft, Meta Platforms, Amazon and Apple – are scheduled to report third-quarter earnings.

“One thing we expect to see play out is these megacap tech names continuing to reinforce commitment to AI in tech spending broadly,” Yung-Yu Ma chief investment officer at BMO Wealth Management, told CNBC. “I don’t think there’s going to be any backing away from that.”

“If for some reason we don’t get that – if a few of those tech companies reporting talk about say tapping on the brakes a little bit in some of these investments – the market would not take that well,” he added. “So that’s going to be somewhat impactful, for the market to actually hear that these companies are continuing their commitment to spending in this area, if not accelerating.”

Traders are also watching for a slew of key economic data this week, including the September jobs report due Friday; the September personal consumption expenditures, or PCE, price index, expected Thursday; and a preliminary reading on third-quarter gross domestic product out on Wednesday.

Stock futures rise with Nasdaq set to add to records as oil prices decline

In other news.

German finance minister warns of retaliation if U.S. kicks off trade war

Published Fri, Oct 25 2024 11:55 AM EDT Updated Fri, Oct 25 2024 1:24 PM EDT

German Finance Minister Christian Lindner on Friday warned that if the U.S. kicked off a trade war with the European Union, there could be retaliation.

“Trade controversy sees never winners, only losers,” Lindner told CNBC’s Karen Tso on the sidelines of the International Monetary Fund’s annual meeting in Washington, D.C.

What U.S. trade policy could look like if Donald Trump were elected as president is a key issue, Lindner suggested. “In that case we need diplomatic efforts to convince whoever enters the White House that it’s not in the best interest of the U.S. to have a trade conflict with [the] European Union. We would have to consider retaliation,” he said. Lindner belongs to the pro-business Free Democratic Party which is currently in coalition with Chancellor Olaf Scholz’s Social Democratic Party.

The U.S.′ problem with trading lies with China rather than the EU, Lindner said, adding that the EU “should not become a negative side effect” of controversy between the U.S. and China.

Trump has floated the idea that, if he were elected, blanket tariffs of 10% to 20% could be imposed on almost all imports, no matter where they came from.

If such a 20% tariff were implemented by the U.S., the EU’s and Germany’s gross domestic product would fall in the coming years, Reuters reported Thursday citing a study by German economic institute IW. Trade is one of the main pillars of the German economy, suggesting heightened tensions, uncertainty and tariffs would hit the country harder than others.

Earlier this month, the German statistics office, Destatis, said that the U.S.′ importance as a trading partner for Germany has been growing. The agency said that since 2021, the U.S. had been the second-most important trade partner for Germany behind China, but in the first half of 2024, foreign trade turnover with the U.S. was higher than that with China. In 2023, around 9.9% of German exports went to the U.S., according to Destatis.

Trade tensions between the U.S. and China, and the EU and China, have been rising throughout the year. Both the U.S. and EU have implemented higher tariffs and on some goods imported from China, citing unfair trade practices.

China in turn has also announced higher temporary tariffs on some imports from the EU. Several probes and investigations into one another’s competition, subsidy, and other practices are also ongoing as the tit-for-tat measures continue.

More

German finance minister warns of retaliation if U.S. kicks off trade war

China’s industrial profits plunge at fastest pace since the pandemic

Published Sun, Oct 27 2024 11:01 PM EDT

China’s industrial profits in September dropped at its fastest pace since the pandemic, data from the National Bureau of Statistics showed, as the country tussles with an economy plagued by slow growth, lack of demand and a property crisis.

After a 17.8% fall in August, industrial profits declined 27.1% in September from a year ago, marking the steepest plunge since March 2020, when it dropped by 34.9%, according to data kept by Wind Information.

The database excluded figures for most of 2022, the year when Shanghai and other parts of China were under stringent Covid-19 measures that limited business activity.

Chinese authorities have ramped up measures in recent weeks to bolster growth. The nation’s parliament scheduled a meeting for early next month, after which the National People’s Congress is expected to announce details on highly anticipated fiscal stimulus.

This data release “underscores the need for more forceful policy responses amid weak domestic demand and deflationary pressures,” Goldman Sachs chief China economist Hui Shan said in a note Sunday.

In the first nine months, industrial profits fell by 3.5% from a year ago. NBS statistician Yu Weining said “insufficient demand and a sharp decline in producer prices” weighed down the profitability of industrial firms.

Data released earlier this month showed that the producer price index fell 2.8% year-on-year in September, steeper than a 1.8% decline the previous month.

Gary Ng, senior economist at Natixis, said in an email to CNBC that “the weakness of industrial profits indicates China’s greater need for demand-side policies.”

“While there is divergence across sectors, the stress is particularly high in upstream materials and automobiles,” he said.

China’s economy grew by 4.6% in the third quarter, the slowest pace since early 2023. In the first three quarters of the year, the economy expanded by an annual 4.8%, slightly slower than the 5% pace seen in the first half of the year. Beijing has a target of around 5% economic growth for 2024.

The country is set to release its official manufacturing purchasing managers’ index for October on Thursday.

Economists polled by Reuters expect the figure to come in at 50.1, after five months of contraction. The PMI was 49.8 in September, 49.1 in August, 49.4 in July and 49.5 in June. A reading above 50 indicates expansion in activity, while one below that level suggests a contraction.

China's industrial profits plunge at fastest pace since the pandemic

Japan’s ruling coalition loses parliamentary majority in snap election

Published Sun, Oct 27 2024 8:23 AM EDT

Japan’s ruling coalition lost its parliamentary majority, with public broadcaster NHK projecting that the Liberal Democratic Party and its Komeito partner will fall short of the 233 seats needed to win power in the country’s lower house.

The ruling bloc has secured 215 out of 465 seats, public broadcaster NHK said early Monday morning local time. The largest opposition party, the Constitutional Democratic Party of Japan (CDP), has made significant gains.

Nikkei made similar projections, reporting that the election would cast uncertainty over the newly appointed administration of Prime Minister Shigeru Ishiba. It is the first time since 2009 that the LDP has lost its parliamentary majority.

The opposition has secured 235 seats against the ruling coalition’s 215, according to Nikkei’s count of confirmed seats. The CDP won 148 seats, gaining 98; the LDP won 191 seats, losing 56; and Komeito won 24.

After markets opened on Monday, Japan’s benchmark Nikkei 225 rose 1.79%, leading gains in Asia, while the Topix was up 1.38%. The moves were supported by a weaker yen, which fell 0.65% to trade at 153.28.

The LDP’s Ishiba succeeded Fumio Kishida as prime minister on Oct. 1 and called for a snap general election on Sept. 30 after winning the party’s internal vote against rival Sanae Takaichi.

The LDP’s election campaign has been dogged by concerns over inflation, as well as corruption scandals which have divided the party. When a slush fund scandal came to light in 2023, four cabinet ministers, as well as other senior party officials, were replaced by former PM Kishida.

More

Japan election: Liberal Democratic Party to fall short of majority

Oil prices slide more than 4% after Israel’s ‘limited’ attack on Iran seen as not disrupting supplies

Published Sun, Oct 27 2024 11:11 PM EDT

Oil prices slid more than 4% on Monday as Israel’s strikes on Iran over the weekend were dubbed as “limited” by local media, with Citi analysts discounting chances of an escalation that disrupts oil supplies.

Futures for global crude benchmark Brent slid 4.34% to $72.75 a barrel, while U.S. West Texas Intermediate futures dropped 4.54% to $68.52 per barrel.

Israel on Saturday attacked Iran’s military installations in three provinces in response to Tehran launching ballistic missiles at Israel on Oct. 1.

Iranian News agency Tasnim reported the attack, which killed four soldiers, had inflicted “limited damages.” The strike steered clear of oil, nuclear, and civilian infrastructure locations. Local petro news network said that Iran’s oil industry operation is “underway normally” with no disruptions.

For weeks, markets had braced themselves for an Israeli retaliation as Middle East tensions have continued to rise following the attack on Israel by Iran-backed Hamas on Oct. 7 last year.

Oil markets’ key consideration had been a direct engagement between both parties, with concerns of an attack on Iranian oil facilities rising in recent weeks. Iran accounts for up to 4% of global oil supplies, according to the U.S. Energy Information Administration.

“The recent Israel military action is unlikely to be seen by the market as leading to an escalation that impacts oil supply,” Citi analysts wrote in a note on Monday, cutting the bank’s Brent oil forecast by $4 to $70 per barrel over the next three months.

Oil markets are also staring at an oversupply. “With Israel deliberately, and perhaps with some American encouragement, avoiding the targeting of crude oil facilities, the oil market is back to looking at an oversupplied market,” said Andy Lipow, president at Lipow Oil Associates.

Oil production has been increasing not just in key countries such as U.S., Canada and Brazil, but even among smaller players such as Argentina and Senegal, he added.

“Oil prices will remain under pressure for the rest of this year, it may be difficult to see Brent crude oil prices reaching $80 in the foreseeable future,” Lipow told CNBC via email.

---- The spotlight now will be on whether Iran will counter the attack in the coming weeks, which would see risk premium rise again, Kavonic told CNBC, noting that the overall trend still remains one of escalation, with the scope for another round of attacks remaining high.

During a cabinet meeting on Sunday, Iranian President Masoud Pezeshkian emphasized Iran’s right to react to Israel’s attack, but maintained that they do not seek war.

“We do not seek war, but we will defend our country and the rights of our people. We will give a proportionate response to the aggression,” he said.

More

Oil slides over 4% as Israel's attack on Iran unlikely to disrupt supplies

Finally, yet another EV fire. Mercedes goodwill gesture.

'Why did our parked electric car burst into flames?'

25 October 2024

A mother said her family was "lucky to have got out safely" after their parked electric car exploded and engulfed their house in flames.

Georgina Bayliss from Spratton, Northamptonshire, said their Mercedes EQA had been parked outside their house for several hours before the explosion.

She said her younger son had seen flames around the front of the house and thought the rest of the family and their five dogs were still inside.

Mercedes-Benz UK said it was carrying out an investigation.

Mrs Bayliss's husband Scott, 47, explained how his eldest son, James, 17, raised the alarm at 21:15 BST after he heard a loud bang and thought it was fireworks.

"The pace and ferocity at which the fire took hold and engulfed the entire car and pretty much the entire front of our house was scary beyond belief," he said.

Mrs Bayliss, 49, said: "We are lucky to have got out safely, for our house to still be standing, and to all be here in one piece.

"When we saw the flames, we grabbed the puppies, and we ran out the back door."

Her husband, son and neighbour all grabbed hosepipes to try to stop the fire spreading through their home.

James's brother Adam came running up the lane towards the house.

"The look on his face is something that will forever haunt me. He thought we were still inside," Ms Bayliss continued.

Mr Bayliss said: "This is a pretty calamitous car failure, in my view, of a prestigious brand and our concern is this could happen again and people could ultimately lose their lives."

Firefighters arrived and told the family they had been minutes away from losing their home.

The family said the car was only two years old and had not shown any sign of a fault.

It was parked on the drive at 11:30 BST on the day of the explosion three weeks ago and had not been on charge.

Mercedes-Benz UK told the BBC: "We were sorry to learn of the incident. After receiving contact from Mr Bayliss, we took it very seriously and immediately contacted his vehicle insurer to arrange to investigate and examine the vehicle.

"We received feedback today and will set up a joint inspection shortly. Until then, please understand that we cannot comment further.

"In the meantime, we have offered Mr Bayliss a loan car as a gesture of goodwill."

More

'Why did our electric car parked in Spratton burst into flames?' - BBC News

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.

Sinking Consumer Confidence Raises Odds Of A 2025 Recession

October 25, 2024

The Fed may have achieved a soft landing, but pessimistic shoppers—especially Gen-X and Millennials—remain a stiff headwind for consumer-facing companies.

All those 2023 predictions about a recession hitting the U.S. in 2024 have been wrong—so far, anyway. Instead, headlines have touted the apparent success of the Federal Reserve in engineering a slowdown in the rate of inflation without stifling the economy. Hooray for the Fed.

But that hopeful news—and the constant drumbeat of election developments—seems to have drowned out another important, yet more sobering, trend: Consumers as a group are worn out by inflation and all the other financial disruptions triggered by the COVID pandemic.

Although the rate of inflation has fallen back to levels close to those pre-pandemic, the prices of goods have not decreased. Housing remains unaffordable for many, and car insurance rates are higher than ever. Whether or not this year’s retail holiday season performs well, American shoppers are fundamentally discouraged about the future.

The most recent Consumer Confidence Survey by The Conference Board, a nonprofit think tank, recorded a broad decline in its monthly index for September. “Consumer confidence dropped to near the bottom of the narrow range that has prevailed over the past two years,” according to Chief Economist Dana M. Peterson.

The decline was the largest since August 2021, with all components of the index in retreat. Peterson noted that consumers’ assessments of current business conditions have turned negative; views of the labor market have softened; and people are more pessimistic about future labor market conditions as well as future income.

Among generations, the 35–54 age group (straddling Gen-X and Millennials and representing about a third of the U.S. population) were the least confident. The Conference Board survey found confidence declined across most income groups.

Similarly, the widely-cited University of Michigan’s most recent Consumer Sentiment Survey found that although inflation expectations have fallen substantially since 2022, the percentage of consumers blaming high prices for their worse personal finances remains at or near an all-time high.

More

Sinking Consumer Confidence Raises Odds Of A 2025 Recession

German Recession Seen Weighing on Europe in Next Week’s Data

October 25, 2024

(Bloomberg) -- A shallow German recession weighing on the euro area and a mild pickup in the region’s inflation may draw attention in a bumper series of data releases next week across the region.

Gross domestic product in Europe’s biggest economy is predicted by forecasters to have shrunk by 0.1% in the third quarter, matching the result in the prior three months. While that would signify a recession, economists reckon stronger expansion elsewhere sustained a steady pace of growth in the currency zone, at 0.2%.

Inflation meanwhile is projected to have partially rebounded to 1.9% in October, in line with the bumpy path that policymakers expect before it settles around the 2% target in the first half of next year. A core measure — that strips out volatile elements such as energy — probably weakened.

The euro-zone reports for GDP on Wednesday and inflation the following day are among pivotal data for officials looking ahead to their final decision of 2024 on Dec. 12. With the most recent evidence pointing to feeble growth and tame consumer prices, traders have raised the chances of a 50 basis-point interest-rate cut.

“Incoming information on inflation shows that the disinflation process is well on track,” European Central Bank President Christine Lagarde told the International Monetary Fund’s annual meetings in Washington on Friday. “Recent indicators of economic activity have surprised somewhat to the downside.”

While Germany is seen to have experienced a manufacturing-led recession, the GDP reports on Wednesday should point to some strength elsewhere during the quarter as a whole, amid buoyancy in Spain, a slight acceleration in France — thanks to the Paris Olympics — and steady expansion in Italy, according to economists.

That may not last. Purchasing-manager numbers have shown a recent loss of momentum in the region, with a downtrend in the private sector extending into a second month.

Even so, the recession in Germany may turn out to be short-lived. The Bundesbank last week predicted that the economy will remain broadly stable toward end of the year, albeit “stuck in the phase of weakness that’s persisted since mid-2022.” 

In one sign of hope, the closely watched business outlook index compiled by the Munich-based Ifo institute rose to the highest since June, according to a release on Friday. 

While growth data will focus investors, they and policymakers will also hone in on the inflation numbers. In Germany, price growth is predicted by economists to have exceeded the ECB’s 2% target again. France, Italy and Spain and are seen to have experienced accelerations, but still below the goal.

German Recession Seen Weighing on Europe in Next Week’s Data

Covid-19 Corner

This section will continue until it becomes unneeded.

XEC Covid symptoms to look out for as admission rates rise across the UK

27 October 2024

The UK is currently experiencing a spike in Covid cases, with health experts highlighting four main symptoms to be vigilant about. The UK Health Security Agency (UKHSA) has identified the XEC strain of coronavirus, a hybrid of the KS.1.1 and KP. 3.3 variants, as it spreads across the country.

First detected in Germany, this highly transmissible variant has now been found in 27 countries across Europe, Asia, and North America. According to The Independent, the latest figures from the UKHSA indicate a climb in hospital admissions, with rates increasing to 4.5 per 100,000 people in the week up to October 6, from 3.7 the previous week.

Dr Jamie Lopez Bernal, a consultant epidemiologist for UKHSA, noted that the XEC variant accounts for approximately 13 percent of Covid cases in the UK. Nonetheless, he assured the public that "current information doesn't suggest we should be more concerned about this variant," and continued to stress that vaccination remains the most effective defence.

He also advised that anyone who tests positive for Covid should isolate from others for at least five days and keep away from those at higher risk for 10 days, reports Gloucestershire Live.

"We are monitoring this closely and vaccination still offers the best protection," Dr Lopez Bernal said. Symptoms of the XEC strain are said to mirror those of cold and flu seen in previous variants, including:

·         A high temperature

·         Aches

·         Tiredness

·         A cough or sore throat.

The NHS has also outlined additional symptoms such as headaches, a blocked or runny nose, loss of appetite, alterations in smell or taste, diarrhoea, and nausea.

More

XEC Covid symptoms to look out for as admission rates rise across the UK

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.

Next-generation solar cells become more powerful with silver-doping technology

25 October 2024

A team of researchers has significantly improved the performance of kesterite (CZTSSe) thin-film solar cells. They developed a new method for doping silver (Ag) in solar cells to suppress defects that hinder cell performance and promote crystal growth, thereby dramatically increasing efficiency and paving the way for commercialization. The work is published in the journal Energy & Environmental Science.

CZTSSe solar cells are composed of copper (Cu), zinc (Zn), tin (Sn), sulfur (S), and selenium (Se), and are gaining attention as a resource-abundant, low-cost, and eco-friendly solar cell technology. In particular, they have the advantage of being suitable for large-scale production and highly competitive in price because they use materials that are abundant in resources instead of the scarce metals used in conventional solar cells.

However, conventional CZTSSe solar cells have low efficiency and high current losses due to electron-hole recombination, thus making them difficult to commercialize.

To address these issues, the research team employed a method of doping the solar cell precursor with Ag. Ag inhibits the loss of Sn and helps the materials mix better at low temperatures. This allows the crystals to grow larger and faster, reducing defects and improving the performance of the solar cell.

In this study, they systematically analyzed how the placement of Ag at different locations in the precursor changes the defects and electron-hole recombination properties in the solar cell. The results indicate that Ag can significantly improve the performance of the solar cell by preventing Sn loss and maximizing the defect suppression effect.

Importantly, they also found that doping Ag in the wrong place actually interferes with the formation of Zn and Cu alloy, causing Zn to remain in the bulk and form defect clusters. This can lead to increased electron-hole recombination losses and degraded performance. From this, the research team offered an important insight: solar cell performance varies significantly depending on where Ag doping occurs.

Furthermore, the research team found that the liquid material formed by Ag doping promotes crystal growth, significantly improving the density and crystallinity of the absorber layer. This resulted in an improved energy band structure and fewer defects, ultimately allowing for smoother charge transport in the cell. These findings are expected to contribute significantly to the production of high-performance solar cells at low cost.

The researchers included Kee-jeong Yang, Dae-hwan Kim, and Jin-gyu Kang from the Division of Energy & Environmental Technology, DGIST, who collaborated with Prof. Kim Jun-ho's team from the Department of Physics, Incheon National University and Prof. Koo Sang-mo's team from the Department of Electronic Materials Engineering.

"In this study, we analyzed the effect of Ag doping, which had not been clearly identified before, process by process, and found that silver plays a role in suppressing tin loss and improving defects," said Yang.

"The results provide important insights into the design of silver-doped precursor structures to improve solar cell efficiency and are expected to contribute to the development of various solar cell technologies."

More information: SeongYeon Kim et al, Reducing carrier recombination loss by suppressing Sn loss and defect formation via Ag doping in Cu2ZnSn(S,Se)4 solar cells, Energy & Environmental Science (2024). DOI: 10.1039/D4EE02485K

Provided by DGIST (Daegu Gyeongbuk Institute of Science and Technology)

Next-generation solar cells become more powerful with silver-doping technology

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

World Debt Clocks (usdebtclock.org)

'Emergencies' have always been the pretext on which the safeguards of individual liberty have been eroded.

Friedrich August von Hayek.

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