Baltic
Dry Index. 1546 -30 Brent Crude 73.96
Spot Gold 2734 US 2 Year Yield 4.02 +0.07
Pundits forecast not because they know, but because they are asked.
John Kenneth Galbraith.
In the US stock casinos, is the US presidential election, now just two weeks off, starting to drag on stocks?
Which outcome, if any, is better for the global economy?
Is gold now signaling either candidate is bad for the US economy and the 35.7 trillion deficit?
Dow
falls nearly 350 points, snapping a three-day win streak: Live updates
Updated
Mon, Oct 21 2024 5:41 PM EDT
The
Dow Jones Industrial Average fell Monday, giving back some of the strong gains
from last week, as Treasury yields rose and investors awaited new earnings
reports.
The S&P 500 slipped 0.18% to
5,853.98. The 30-stock Dow lost
344.31 points, or 0.8%, to close at 42,931.60 and snap a three-day run of
winning sessions. The Nasdaq
Composite was the outlier, rising 0.27% and ending at 18,540.01.
Consumer
and homebuilder stocks were among the biggest losers as fears about
higher-for-longer interest rates crept up, with Target down 3.8% and Builders FirstSource off
5.2%. Lennar also shed
4.4%.
The
yield on the 10-year Treasury jumped,
rising nearly 12 basis points to 4.19%.
“Bond
yields continue to back up, which implies to me that investors are now thinking
that the Fed will be slower to lower interest rates because the economy remains
resilient,” CFRA chief investment strategist Sam Stovall said. “As a result,
the Fed will likely have a harder time pushing the inflation rate down to its
target 2% level in the next year or so.”
Earnings
will be key this week with roughly one-fifth of the S&P 500 set to report.
Among the companies on deck are Tesla, Coca-Cola and GE Aerospace.
Thus
far, the results have been mixed. Of the roughly 14% of S&P 500 companies
that have already posted third-quarter results, better than 7 in 10 have beaten
expectations, according to FactSet. Analysts have significantly downgraded
their earnings expectations for the quarter in recent months.
“I
don’t think that we are in the beginnings of an earnings recession or anything
like that, but the bar has been set very, very low … rarely does anybody injure
themselves falling out of a basement window,” Stovall said. “So with earnings
this low, chances are that this will be the 60th quarter out of the past 62 in
which actual results exceed end-of-quarter estimates.”
Still,
investors are largely optimistic equities have more room to run, but they are
mindful that stretched valuations, particularly ahead of the U.S. presidential
election and amid rising geopolitical risks, could also mean further
choppiness.
Monday’s
moves come after both the S&P 500 and 30-stock Dow registered all-time
highs on Friday, cementing a sixth straight weekly advance for both benchmarks.
Stock market news for October 21, 2024
Asia
markets lower after major U.S. indexes slip; Hyundai India set for market debut
Updated
Tue, Oct 22 2024 11:30 PM EDT
Asia-Pacific
markets slipped on Tuesday, trailing a mixed session on Wall Street.
Investors
will see a light day in terms of economic data out of Asian countries. All eyes
are on India’s markets, where Hyundai India is set to debut after a 278.56
billion rupee ($3.3 billion) IPO, the nation’s largest ever.
Australia’s S&P/ASX 200 was down
1.36%, while South Korea’s Kospi slipped
1.21% and its small cap Kosdaq lost 2.11%.
Japan’s
benchmark Nikkei 225 fell
1.34%, while the broad based Topix was trading down 1.04%.
Hong
Kong’s Hang Seng index was
close to the flatline, while the mainland Chinese CSI 300 inched down 0.13%.
During
the U.S. trading session, two Federal Reserve officials had spoken about
the trajectory
of interest rates.
Minneapolis
Fed President Neel Kashkari, noting the U.S.′ resilient economy and strong
labor market, said the longer term trajectory for interest rates could be
higher than it has in the past.
Dallas
Federal Reserve President Lorie Logan said she supports the current move to
lowering interest rates, but that a patient approach will be needed.
Overnight
in the U.S., stocks ended mixed as Treasury yields rose and investors awaited
new earnings reports.
The S&P 500 slipped 0.18% and
the 30-stock Dow lost
0.8%, and snapped a three-day run of winning sessions. The Nasdaq Composite was the
outlier, rising 0.27%.
Asia markets live: South Korea PPI, Hyundai India IPO
Hyundai
Motor India’s shares drop nearly 5% on trading debut after record IPO
Published
Mon, Oct 21 20241 0:15 PM EDT
Hyundai
Motor India shares fell nearly 5% on their trading debut Tuesday after a $3.3
billion initial public offering, the country’s largest-ever by amount raised.
Shares
were trading down at 1,874 rupees from their initial public offering price of
1,960 rupees, according to BSE data.
The automaker had offered 142.19 million shares at a
price band of 1,865 Indian rupees ($22.18) to 1,960 rupees. The IPO
fetched 278.56 billion rupees, or $3.3 billion.
The
company’s IPO, which opened on Oct. 15 and closed on Oct. 17, was
oversubscribed by more than two times, according to Reuters.
This
is the first IPO for a unit of the South Korean automaker outside South Korea.
Unlike
a traditional IPO, in which a firm sells fresh shares, Hyundai Motor India’s
listing is an offer for sale, where its parent Hyundai Motor Company sold its
shares.
The
company’s shares will start trading on the New Delhi-based NSE as well as the
Mumbai-based BSE.
More
Hyundai Motor India live: Shares drop 5% on trading debut
Morning
Bid: Bonds and gold begin countdown to US Election Day
October
22, 2024 5:35 AM GMT+1
A
look at the day ahead in European and global markets from Tom Westbrook
Markets
are facing a bumpy ride in the final stretch to the U.S. elections, with bonds
turning volatile and gold signalling at least some investors hunkering down.
While
gold hits record highs, a confluence of strong U.S. economic data, the
so-called "Trump
trade" and a renewed focus on the fiscal outlook has pushed 10-year
yields to three-month highs.
Notwithstanding
a broad selloff in gilts and European sovereigns on Monday, U.S. yields are
moving faster than global peers and driving markets as strong U.S. labour
indicators have traders losing confidence in Federal Reserve rate cuts.
Since
data earlier this month showed a surprising
surge in U.S. hiring, gilts and bunds have outperformed along
the curve with far less selling than Treasuries.
The
10-year spread between Treasuries and bunds is now the widest since July and
the UST-gilts spread turned positive last week. The volatility is already
showing signs of cooling primary debt markets, which have slowed down
considerably in places such as Australia.
Goldman
Sachs thinks a strong U.S. economy and a dovish central bank in Europe will
open spreads wider, with a target of 205 basis points for the gap between bunds
and Treasuries and said the election - along with fundamentals - is in focus.
A
light calendar of economic releases - save for a U.S. jobs report on Nov. 1 -
leaves investors starting to hunker down ahead of the Nov. 5 polling day.
Republican candidate Donald Trump is seen as negative for bonds since his tax,
tariff and immigration policies are likely to be inflationary - though Democrat
Kamala Harris is also likely to spend heavily.
More
Morning Bid: Bonds and gold begin countdown to US Election Day | Reuters
In other news.
Oklahoma Bank Shut Down by Regulator in 2nd Bank Failure of the Year
All
FDIC-insured customer deposits remain safe and have been made available to
their owners.
10/21/2024
Updated: 10/21/2024
The
First National Bank of Lindsay was forced to cease operations after the Office
of the Comptroller of the Currency (OCC) found the institution to be in a
perilous financial position.
The
Oklahoma-based First National Bank of Lindsay was shut down on Oct. 18 after
the OCC identified “false and deceptive bank records and other information
suggesting fraud that revealed depletion of the bank’s capital,” the agency
said in an Oct. 18 statement. The OCC is a bureau under the Treasury tasked
with regulating and supervising all national banks to ensure that they operate
securely.
The
OCC found the financial institution to be in an “unsafe or unsound condition to
transact business and that the bank’s assets were less than its obligations to
its creditors and others,” according to the statement.
The
agency appointed the Federal Deposit Insurance Corp. (FDIC) as the receiver for
the bank, which then entered into a purchase agreement with the First Bank
& Trust Co. to take over the troubled institution, the FDIC said in an Oct.
18 statement.
“No
advance notice is given to the public when a financial institution is closed,”
the FDIC said in a separate statement.
As
a result, the only office of First National Bank of Lindsay will reopen as a
branch of First Bank & Trust Co. on Oct. 21. Depositors of First National
will automatically become depositors of First Bank.
----“All
customers of The First National Bank of Lindsay will have access to their
insured deposits,” the FDIC stated.
“In
addition, based on the estimated recoveries of the failed bank assets, the FDIC
will make 50 percent of uninsured funds available to those depositors on
Monday, October 21, 2024. This amount could increase as the FDIC sells the
assets of the failed bank.”
More
Oklahoma Bank Shut Down by Regulator in 2nd Bank Failure of the Year | The Epoch Times
‘New
bullish phase’? As gold hits another high, analysts say more records are in
sight
Published
Mon, Oct 21 2024 11:22 PM EDT
Gold
is in a “new bullish phase” after prices notched another record high, said
asset management firm Sprott Asset Management, echoing other analysts who have
predicted that the bullion will continue to scale new heights.
“Gold
has entered a new bullish phase, driven by factors like central bank buying,
rising U.S. debt and a potential peak in the U.S. dollar,” Paul Wong, market
strategist at Sprott Asset Management, wrote in a note, after the price of the
yellow metal advanced to a fresh record of $2,700 per ounce on Monday.
Spot gold is currently
trading at $2,729.14 per ounce, while gold futures are at
$2,741.20.
“Rising
U.S. debt-to-GDP ratios have historically led to higher gold prices due to
concerns over the sustainability of debt, currency devaluation and debt
monetization,” Wong continued.
The U.S. Congressional Budget Office expects public debt to
rise from 98% of GDP in 2023 to 181% of GDP in 2053, the highest level in the
country’s history.
As
debt increases, governments might resort to printing money to address deficits,
which can devalue the currency, Wong explained. This erosion of trust in fiat
currency enhances gold’s appeal as a reliable store of value.
Persistent
inflationary pressures and difficult macroeconomic conditions plaguing global
economies suggest that central banks and investors are more likely to allocate
to precious metals, he added.
According to World Gold Council data, the net purchases of
gold by central banks in the first half of 2024 rose to 483 tonnes, 5% above
the previous record set in the first half of 2023.
A
growing chorus of analysts have predicted that the price of gold will continue
to rise to $3,000, with some expecting the commodity to cross $2,800 in the
next three months.
More
'New bullish phase'? As gold hits another high, analysts say more records are in sight
The end
of convenience: What the downfall of Walgreens means for America
October
21, 2024
The
state of America's pharmacies is, in a word, bleak.
Pharmacies
should, in theory, be a reliable business. Seven in 10 Americans take some sort
of prescription medication, creating a huge stream of potential revenue:
Pharmaceutical expenditures in the US hit $722.5 billion in 2023. What's more, many pharmacies
serve as a convenient destination for all sorts of essentials, from aspirin to
mascara. They are, in a sense, one of the last places where Americans go to
shop in person on a regular basis.
Despite
these advantages, even pharmacy megachains are struggling to survive in the
current environment. Last week, Walgreens announced it would be closing 1,200 stores over the
next three years, saying that some 25% of its outlets weren't profitable. Its
rival CVS, which has shuttered hundreds of stores over the past few years,
announced this month that it planned to shed nearly 3,000 jobs to cut costs.
Rite Aid, meanwhile, closed a slew of stores after filing for Chapter 11 bankruptcy protection in late
2023.
Even
in pharmacies that remain open, there's often next to nothing inside the store.
Many items on the shelves are locked up, and good luck finding an employee to help you
free the jailed deodorant or shampoo, given how woefully understaffed many pharmacies are.
The
demise of pharmacies is also part of the "retail apocalypse," which has intensified since the onset of the pandemic. The
convenience chain 7-Eleven just announced it's closing hundreds of stores
nationwide. What started as a consequence of COVID-19 lockdowns feels like it's
becoming a permanent feature of America's retail landscape. If you want a
nearby place to pop into and grab a bag of chips or a bottle of NyQuil, you may
be out of luck.
For
pharmacies, the reckoning has been triggered by a confluence of trends, from
the shift to online shopping to the convoluted way Americans pay for
healthcare. For a while, the pandemic actually helped pharmacies paper over
some of their deeper problems — all those vaccines and home-test kits brought
in a lot of business. But now, the underlying issues are proving impossible to
avoid. "None of these things is a new factor," Elizabeth Anderson, a
senior managing director and healthcare-equity research analyst at Evercore
ISI, told me. "But you compound that for years and years and years, and
eventually you get to kind of a breaking point."
More
The end of convenience: What the downfall of Walgreens means for America
Finally, more on our slow-motion, developing food crisis in Europe.
‘This
has been a year from hell’ – how farmers are facing up to the second worst
harvest in history
20 October 2024
Colin
Chappell’s family has been farming on the banks of the River Ancholme in
Lincolnshire for four generations. Growing up, the award-winning farmer heard
stories from his grandfather about the disastrous harvest of 1948, when no
crops could be reaped. “I thought we’d never get to that situation again,” he
says. “But this has been a year from hell.”
Record
rainfall has led to England’s second-worst harvest since modern records began, drastically reducing the
amount of food produced. Yields of crops including wheat, winter barley and
oilseed rape have plummeted by 21, 26 and 32 per cent respectively compared to
2023. Fruit and vegetable production has also dropped by five per cent across
the country.
For
farmers like Chappell, the cost has been profound, both economically and
personally. This time last year, Storm Babet washed away all the wheat he had drilled. It was just
the devastating start of the deluge to come. “Between October 2023 and April
this year, we had the equivalent of a year’s rainfall, so we couldn’t plant
more,” he says. “For all that time, 85 per cent of our 2,000 acres was bare. I
had a 350-tonne contract to supply Warburton’s with wheat and nothing in the
ground.”
He
was left with no choice but to sow more wheat in late spring, but at that time,
the yield is lower, “so you have to plant double the acreage – just keep
planting another field, and another,” he says. His other crops – rapeseed oil,
peas, oats and barley – were abandoned to focus on the wheat, leaving a third
of his farm generating no income. “On wheat alone, I lost £100,000,” he says.
“How can I earn a living like this?” Meanwhile, a promised flood recovery fund
has not yet materialised.
His
two teenage children hope to follow him into farming, and he says: “If it
wasn’t for my kids, I’d have given up. I’d have just thrown the towel in. I was
taught how to produce food, which is vital for this country; that’s what I
know. But how do I teach my kids to grow food in these circumstances?”
Chappell
is far from alone in considering quitting. Rural organisations have been
warning all year that the 110,000-strong farming sector is on the brink, with the National Farmers’ Union (NFU) annual survey
revealing that its members’ confidence had hit the lowest level in at least 14
years.
Extreme
weather driven by the climate crisis,
coupled with drastic cuts to subsidies post-Brexit, are leading rapidly growing
numbers of farmers to scale back food production in favour of alternatives –
everything from rewilding to growing crops for biofuels, tourism, plant
nurseries and holiday cottages – to keep their businesses viable.
“If
you ask any of our members, they will tell you that first and foremost, they
see themselves as food producers,” says NFU president Tom Bradshaw. “What
they’re not going to do is go out of business producing people’s food.”
The
flagship post-Brexit policy, the Environmental Land Management scheme, is intended to reward farmers for improving the natural
environment at the same time as maintaining food production – but critics fear
it will have a detrimental impact on the latter.
A
case in point is Hannah Buisman, 26, who returned to work on her family’s farm
in Welwyn, Hertfordshire after studying modern languages at Durham University.
The farm grew wheat, barley, oats and beans, but she says: “The climate has
been so volatile over the past few years that we’ve decided to step away from
food production for the moment.”
----Currently, Britain
is around 62 per cent self-sufficient in food, according to 2023 statistics
from the Department for Environment, Food and Rural Affairs (Defra) – down from 74 per cent in 1990. In some sectors,
there has been a marked decline in recent years, such as fresh vegetables,
where self-sufficiency is down to 53 per cent, its lowest since records
began.
This
year, the poor harvest has led to more food being imported, which has a
knock-on effect on prices: carrots, for instance, have risen by an average of
about 40 per cent since last year. As British farmers emphasise, price is just
one downside to importing our food: other countries do not all adhere to the
same high growing standards, and flying food in from abroad isn’t
climate-friendly.
More
‘This has been a year from hell’ – how farmers are facing up to the second worst harvest in history
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.
This
Reliable Recession Indicator Recently Did Something for the First Time in 793
Days -- It Could Trigger a Big Move in the Stock Market
19
October 2024
Economists,
analysts, and market watchers are constantly examining different types of
economic data to find patterns that could indicate a change in the stock
market. One key economic signal the market follows closely is called the yield
curve, which maps the varying yields that Treasury bills of different
maturities pay at any given point in time. Not long ago, the yield curve did
something for the first time in 793 days, or more than 26 months, that could
signal a big move for the stock market. Here's what the yield curve may be
trying to tell us.
---- Treasury yields
tend to have an inverse relationship with Treasury bills and their movements
are affected by multiple factors, including economic growth, inflation, the
Federal Reserve's monetary policy and the federal funds rate, supply and
demand, and investor sentiment. Depending on some of these factors, there are
times when short-term Treasury bills can yield more than long-term ones. This
is called an inverted yield curve, where the slope seen above is more S-shaped
and certain low-duration T-bills yield more than some of the longer-duration
bonds. If the inversion is severe, the path would start high on the yield axis
(Y-axis) and gradually get lower as it spreads across the maturity axis
(X-axis), forming a half-pipe-like swoop.
An
inverted yield curve suggests the economy is in trouble because short-term
borrowing is more expensive. Long-term yields also reflect the market's view of
economic growth and inflation, so lower long-term yields imply more pessimistic
about the future.
---- The
yield curve officially became inverted in July 2022 and stayed that way for
more than two years, marking the longest period of inversion ever and beating
the previous record of 624 days in 1978. In early September, a closely watched
part of the curve finally began to uninvert, specifically the yields on the
two- and 10-year U.S. Treasury bills.
Why
is this important
Investors
don't like to see an inverted yield
curve because
it has a nasty habit of foreshadowing a recession. However, the recession
doesn't necessarily take place while the curve is inverted. Typically, a
recession occurs not long after the yield curve uninverts, right before the Fed
begins to lower interest rates, and that just happened. The yield curve
officially uninverted in early September, and the Fed announced its cuts later
that month.
According
to Barron's, each of the last four recessions, which began in
1990, 2001, 2007, and 2020, all kicked off about three to six months after the
yield curve was uninverted. Stocks tend to get hammered
during a recession,
with the broader market S&P 500 falling by more than 30%
on average in the last 10 recessions.
More
Covid-19 Corner
This section will continue until it becomes unneeded.
Covid XEC: What are the symptoms of new virus strain?
21 October 2024
A new strain of Covid emerging in the UK is spreading as cases increase at a high rate,
the UK Health Security Agency (UKHSA) has said.
Called XEC, the strain is
a combination of the KS.1.1 and KP.3.3 variants. Figures from the UKHSA show
that the admission rate for patients testing positive for the new strain rose
to 4.5 per 100,000 people in the week to October 6. This was up from 3.7 a week earlier.
It is thought the XEC
strain is more transmissible due to its numerous mutations, and presents
symptoms similar to those of other Covid variants including tiredness,
headaches, a sore throat and high temperatures.
Although self-isolation
is no longer a legal requirement in the UK, the NHS has advised anyone who
tests positive for Covid to avoid contact with others for at least five days.
It is also recommended
that contact with more vulnerable people be avoided for 10 days, to reduce the
risk to them. As a general rule, it is advised anyone with symptoms at least
wait for them to subside before returning to normal activities.
Here’s what you need to
know about the new Covid XEC strain:
More
Covid XEC: What are the symptoms of new virus strain?
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.
Graphene maker
BeDimensional gets EIB support to boost production
19
October 2024
MILAN
(Reuters) - Italian start-up BeDimensional said on Friday it had secured
financial support from the European Investment Bank (EIB) to boost its
production capacity for graphene and other super-thin crystals.
The
European Union is looking at ways to reduce its reliance on imports of
materials that are critical for the bloc's energy transition.
Graphene,
whose powder has a high electrical and thermal conductivity, can be used to
increase the storage capacity of lithium-ion batteries, BeDimensional said.
The
material made of a single layer of carbon atoms is also key to developing
lubricants free of metal-based additives.
BeDimensional
will on Friday inaugurate a production plant in the Italian city of Genoa with
a capacity of over three tonnes a year of graphene and other super-thin
crystals.
The
firm plans to increase its capacity to over 30 tonnes annually by 2028 thanks
to the establishment of an additional production plant that will be partly
funded via a 20 million euro ($21.7 million) loan granted by the EIB.
BeDimensional's
current shareholders - which also include the venture capital arm of Italian
energy group Eni and Italian state lender CDP - will provide an additional 5
million euros to support the group's development plans.
Born
as a spin-off of the Italian Institute of Technology (IIT), BeDimensional also
produces a super-thin boron nitride powder which is anti-corrosive and is an
electrical insulator that can be added to textiles and leather.($1 = 0.9228
euros)
Graphene maker
BeDimensional gets EIB support to boost production
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
In
central banking as in diplomacy, style, conservative tailoring, and an easy
association with the affluent count greatly and results far much less.
John Kenneth Galbraith.
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