Baltic
Dry Index. 1405 +31 Brent Crude 74.33
Spot Gold 2739 US 2 Year Yield 4.19 -0.02
Five percent of the people think; ten percent of the people think they think; and the other eighty-five percent would rather die than think.
Thomas A. Edison.
As I write this morning, it’s still too early to know the final results of the US elections, but the early signs point to a win for Donald Trump and a likely Republican win in the Senate and House.
That was certainly the way that Wall Street had bet.
By this time tomorrow, we will likely know the final tally.
Dow futures jump 500 points, Russell 2000 futures
rise 2% as traders bet Trump winning: Live updates
Updated Wed, Nov 6 2024 12:46 AM EST
Stock futures rose sharply in overnight
trading as investors started to speculate that former President Donald Trump
may have an edge in the presidential race.
Futures on the Dow Jones Industrial Average added
548 points, or about 1.3%. S&P
500 futures gained 1.1% and Nasdaq 100 futures rose 1%.
Bitcoin jumped to a record high, and the
U.S. dollar — which was expected by Wall Street to rise in the event of a Trump
win — was also rallying on Tuesday night. Futures for the small cap
benchmark Russell 2000,
also a projected Trump beneficiary, jumped 2.5%.
Shares of Trump Media & Technology Group,
a social media company closely tied to the candidate, surged 40% in overnight
trading on the Robinhood brokerage platform.
The 10-year Treasury yield surged to
around 4.45% on speculation Trump’s proposed tax cuts and other spending plans
would increase the fiscal deficit, while possible tariffs could reignite
inflation.
Americans cast their votes across the
country in the tight race between Trump and Vice
President Kamala Harris.
By shortly after 12:30 a.m. ET, NBC News had projected that Trump had won 246
electoral college votes, including the battleground states of North Carolina
and Georgia. Pennsylvania and Wisconsin are still too close to call. He needs
270 electoral college votes to win. Follow
CNBC’s 2024 election live blog here.
NBC News also projected that Republicans
would retake the Senate, but control of the House of Representatives remains
undecided.
Goldman Sachs predicts that
a Trump win and Republican sweep of Congress would spark a 3% pop in the
S&P 500. Even a Trump win and a divided Congress would cause about a 1.5%
gain, the bank predicts. On the other hand, a Harris win with a divided
Congress would cause a 1.5% drop in the S&P 500, the bank told its clients.
“I very much ascribe to that view that a
Trump victory would be very good for stocks,” Jason Trennert, chairman at
Strategas, said Tuesday on CNBC’s “Power
Lunch.” “And I think a Harris victory would not be particularly good for
risk assets.”
More
Stock market today: Live updates
Asia-Pacific markets mixed after Wall Street
rallies ahead of U.S. election results
Updated Wed, Nov 6 2024 12:13 AM EST
SINGAPORE — Asia-Pacific markets were
mixed Wednesday after Wall Street surged overnight ahead of the U.S.
presidential election results.
Japan’s Nikkei 225 was leading
gains, up 2%, while the Topix rose 1.5%.
The Bank of Japan September monetary policy meeting minutes showed members were in
agreement over the central bank raising rates if economic and price growth
meets expectations.
South Korea’s Kospi was trading down 1%,
while the Kosdaq fell 1.3%.
Hong Kong’s Hang Seng index fell 2.7%,
while mainland China’s CSI 300 was flat in choppy trading.
A five-day meeting of China’s National
People’s Congress will continue on Wednesday, with investors watching for
information on additional stimulus and polices aimed at stabilizing the
economy.
In a meeting
on Tuesday, the head of the People’s Bank of China said that the central
bank planned to maintain supportive monetary policy, according to state media.
Australia’s S&P/ASX 200 rose 0.83%
to end at 8,199.5.
Overnight in the U.S., the S&P 500 index gained
1.23% to close at 5,782.76, while the Nasdaq Composite advanced 1.43% to
18,439.17. The Dow Jones Industrial Average climbed 427.28 points, or 1.02%, to
settle at 42,221.88.
The race between former President Donald
Trump and Vice President Kamala Harris is expected to be tight. Focus will also
be on Congressional polling, given that a sweep by either party could impact
spending and tax policy.
Asia markets live updates: U.S. election, China NPC, BOJ meeting minutes
Republicans will win Senate majority, NBC News
projects
Published Wed, Nov 6 2024 12:40 AM EST
Republicans are expected to regain
majority control of the U.S. Senate in 2025, according to NBC News.
Democrats entered Tuesday’s elections with
47 seats out of 100 in the Senate. But the four independents in the chamber
caucus with Democrats, giving the party a one-seat majority.
Republicans arguably faced an easier path
to regaining a Senate majority this election cycle.
The GOP was defending just 11 seats where
candidates were seeking reelection, compared with 23 seats that Democrats were
trying to retain.
In Ohio, Republican nominee Bernie Moreno
was projected by NBC News to unseat incumbent Democratic Sen. Sherrod Brown,
boosting the GOP effort.
Another pickup for Republicans came in
West Virginia, where Gov. Jim Justice cruised to victory in the race to replace
Sen. Joe Manchin, who did not seek reelection to his seat, to which he had been
elected a Democrat. Manchin quit the party in May.
In Nebraska, incumbent Republican Sen. Deb
Fischer won re-election.
A total of more than $1 billion was
expected to be spent by Election Day on winning just three of the seats at
stake, in Montana, Ohio and Pennsylvania.
Republicans will win Senate majority, NBC News projects
In other news, would the last one out of the German auto factories remember to turn out the lights.
German Auto Parts Manufacturer Lays Off 4,700
Employees
5 November 2024
German automotive parts maker Schaeffler
AG announced plans to eliminate 4,700 jobs across Europe, following a 45% drop
in third-quarter profit this year.
Bulk Layoffs In Germany
Schaeffler, which supplies components to
major automakers worldwide, is the latest in a series of companies within the
automotive industry hit hard by the shifting market dynamics and mounting
global competition.
Schaeffler cited several factors driving
the decision, including intensifying competition, rising costs, and an ongoing
shift within the automotive sector, especially in the supply chain segment.
“This is the company’s response to the
challenging market environment, growing global competition, and the
transformation of the automotive industry, particularly in the supply chain,”
Schaeffler said in a statement according to Ziare
The bulk of layoffs — approximately 2,800
positions — will occur in Germany across ten sites. Additionally, Schaeffler
announced plans to close two facilities elsewhere in Europe but did not specify
which locations would be affected.
These measures are expected to save
Schaeffler about €290 million ($310 million) annually through 2029, with an
upfront cost of approximately €580 million ($620 million).
$640 Million in Cost Savings
Schaeffler has also been investing in
electric vehicle (EV) components to adapt to the market’s shift away from traditional
combustion engines.
In October, the company announced plans to
acquire Vitesco, a manufacturer specializing in EV parts, with the goal of
expanding Schaeffler’s EV product line and reducing costs.
Schaeffler projects that the acquisition
will lead to €600 million ($640 million) in cost savings by 2029.
The decision to downsize comes as the
global automotive sector faces significant challenges, including high
inflation, supply chain disruptions, and declining demand for internal
combustion vehicles.
Rising costs for raw materials and energy
have put pressure on profit margins, leading many automakers and suppliers to
restructure and streamline operations. Moreover, consumer demand for new cars
has dropped in some regions, partly due to economic uncertainties and rising
interest rates, which have made financing new vehicles more expensive.
In the third quarter of 2024, Schaeffler
reported an EBIT (earnings before interest and taxes) of €187 million ($200
million), falling short of analyst expectations of €209 million ($224 million).
Globally, Schaeffler employs over 120,000
people, and this recent round of job cuts reflects the intense restructuring
sweeping through the automotive industry.
German Auto Parts Manufacturer Lays Off 4,700 Employees
Michelin to close two French plants in latest blow
to Europe's auto sector
5 November 2024
PARIS (Reuters) -Tyre maker Michelin plans
to close two of its French factories, affecting about 1,250 workers, it said on
Tuesday as Europe's embattled automotive sector comes under increasing
pressure.
The French company, founded 135 years ago,
cited high costs and cheap Asian competition for the closure of its Cholet and
Vannes sites in western France.
Michelin's announcement comes just weeks
after unions at Europe's largest car manufacturer Volkswagen warned of planned
plant closures and peers including Peugeot-maker Stellantis issued hefty profit
warnings.
----Michelin's move outraged French labour
unions. The hardline CGT called on all Michelin workers to go on strike, while
its more moderate peer CFDT urged management and the government to revisit the
closures and seek alternatives.
"We assessed our options but couldn't
find any alternatives to (closing) these two sites" Michelin Chairman
Florent Menegaux told newspaper Le Monde, adding: "The only constant at
Michelin is that it's always on the move."
Speaking in the National Assembly, Prime
Minister Michel Barnier said he regretted Michelin's decision and said affected
workers must be helped with all available means.
"The automotive sector is in a
difficult spot and not only in our country,", Barnier said, adding that
Europe must protect its auto industry against "unfair" foreign
competition with stronger action and less "naiveté".
Industry Minister Marc Ferracci called for
a European "emergency plan" to save the sector, saying he would work
towards formulating policy proposals at the EU level in the coming weeks.
----The two sites to be closed have
been "severely impacted by the structural transformation of the passenger
car and light truck and truck tyre markets and worsening competitiveness of
Europe, notably due to inflation and rising energy prices", it added.
It has already halted production at both
plants through Nov. 11 to give management and the unions time for group and
individual discussions with employees, it said, recording a provision of
approximately 330 million euros ($360 million) in non-recurring expenses in its
consolidated financial statements as of Dec. 31.
Michelin announced last year the closure
of two German heavy-duty truck tyre sites and last month lowered its annual
profit forecast due to a more marked slowdown than expected in the auto market
in the third quarter.
It employs nearly 15,000 people in France
at 15 manufacturing plants.
Michelin to close two French plants in latest blow to Europe's auto sector
Toyota posts nearly 20% drop in second-quarter
operating profit, missing estimates
Published Wed, Nov 6 2024 12:27 AM EST
Japanese automaker Toyota Motor on
Wednesday reported its first quarterly operating profit drop in about two
years, as it strives to navigate the market shift toward electric vehicles.
Here are Toyota’s results compared with
estimates from analysts, compiled by LSEG.
- Revenue: 11.44
trillion yen vs. 11.41 trillion yen
- Operating
profit:
1.16 trillion yen vs. 1.24 trillion yen
Toyota has been slower in embracing fully
battery-powered electric vehicles, with chairman Akio Toyoda reportedly saying that an “electric-vehicle only
future” would lead to job losses in the automotive industry.
“There are 5.5 million people involved in
the automotive industry in Japan. Among them are those who have been doing
engine-related (work) for a long time,” Toyoda told reporters, according to
Reuters.
“If electric vehicles simply become the
only choice, including for our suppliers, those people’s jobs would be lost.”
The world’s largest automaker by sales
volume saw a 20% year-on-year drop in operating profit.
The company maintained a full-year
operating profit of 4.3 trillion yen.
Toyota also has been in the spotlight this
year due to the multiple vehicle recalls, most recently in September.
The latest recall of 42,000 vehicles was
over the loss of power brake assist that can extend the distance required to
stop, according to the National
Highway Traffic Safety Administration. It affected certain 2023-2024
Corolla Cross Hybrid vehicles, the administration said.
Early in June, Toyota
lost over $15 billion in market value after Japan’s Transport Ministry found false data was used by
Japanese automakers to certify certain models.
The wide-ranging inspection by the Ministry of Land, Infrastructure, Transport
and Tourism also found irregularities in certification applications by
other automakers Honda, Suzuki and Yamaha.
Toyota posts nearly 20% drop in second-quarter operating profit, missing estimates
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.
7
big clues that a recession is going to clobber the stock market
November
4, 2024
When
stock investors are as bullish as they are now, it’s a good time to ask what
could go wrong.
We
got a hint last week in the October U.S. jobs report, which came in below
expectations that were already ratcheted down because of bad weather. This
could signal the beginning of labor-market trouble, which could tip the economy
into a recession by the middle of next year, according to Doug Ramsey, chief
investment officer at The Leuthold Group and co-portfolio manager of Leuthold
Core Investment Fund LCORX and Leuthold Global Fund GLBLX.
If
Ramsey is right, your stocks will suffer. Few things kill off a bull market
like a recession. “A recession is likely,” but not until mid-2025, Ramsey said
in a recent interview. He described the current market environment as
“perilous.”
Even
before the October employment surprise, Ramsey was skeptical of the U.S. job
market. He described the super-strong September jobs report — which had zeroed
out recession risk for many people — as a temporary growth scare. “It was not a
great report. There are issues with the employment numbers,” he said.
Four
big-picture concerns
1.
Recessions most often begin in the year after a presidential election: In the past
century, eight U.S. recessions have started in the year after the presidential
election. Six began in the election year. Two started in the midterm year, and
none of the recessions began in the pre-election year. The idea here is that the
party in power pulls levers to stoke the economy ahead of elections to garner
votes. Then after the election year, the hangover sets in.
2.
Valuation risk is extremely high: Valuations are not a good market timing
tool, but they suggest where the market may be heading — sooner or later. The
current extreme valuations are troubling. The S&P 500 trades at around 22
times forward earnings. “The only time it has persistently traded above 21 was
during 1999-2000 and during the COVID-19 stimulus mania of 2021,” Ramsey said.
“Valuations are high enough that I would be well below my maximum equity
allocation.” Midcap and small-cap stocks are more reasonably priced, he adds.
From
here, if the U.S. markets fell back to their long-term median valuations, the
S&P 500 would decline 26%, midcaps would fall 14% and small caps would slip
3%. Ramsey said he doubts earnings and profit margins growth will be high
enough for stocks to “grow into” current valuations, as some strategists
suggest.
3.
It will take a while to reverse the impact of aggressive monetary tightening: The U.S.
Federal Reserve cut rates half a percentage point in September. But the
preceding rate-hiking campaign was so aggressive, it’s going to take more cuts
to dull the impact of the rate hikes, Ramsey said. The Fed raised the federal
funds rate more than five percentage points to 5.5% from early 2022 to last
August. It typically takes at least a couple of quarters for shifts in monetary
policy (the recent September rate cuts) to have any impact.
4.
Inflation may not continue in a downtrend: The S&P 500 is
up 35% in the past year. Normally these big bull-market runs happen when
unemployment is much higher. So, the weak labor market dulls the impact of
portfolio gains on consumer spending. But that isn’t the case now, because
unemployment is so low.
Without
the buffer of joblessness, asset price inflation spills over into consumer
prices. The upshot: “Inflation may not be as dead as everyone thinks,” Ramsey
said. If that’s the case, the Fed may have to pause rate cuts, increasing the
odds of recession.
Three
hidden warning signs
Here’s
a look at the troubling signs Ramsey sees in the employment data:
1.
The number of unemployed workers is rising at a rate that normally signals a
recession: Over
the past year, the number of people out of a job is up by 13.7%. “In the past
when the rate of change exceeds 10% you are on the doorstep of a recession or
in a recession,” Ramsey said. “This has been the point of no return.” To smooth
out the high volatility in employment numbers, Ramsey looks at the rate of
change over the past year in the three-month moving average.
2.
The number of full-time jobs is contracting: As of the end of September,
full-time jobs were down 0.5% compared to a year earlier. “This has never
happened outside of a recession,” Ramsey said.
Companies
seem reluctant to take on full-time workers and are hiring part-time workers
instead. “That normally forecasts recession,” Ramsey said. “It is a sign of a
lack of business confidence, but it also means less income for workers.”
Part-time jobs normally pay less, and usually do not offer benefits.
3.
Employment growth has almost fallen to a level that signals recession: Typically
when nonfarm payroll growth falls below 1.4%, a recession follows. We are
there, with October growth at just 1.35%. “Historically, that is the stall
speed,” Ramsey said. “That has been the point of no return.”
The
reason: Lower job and income growth leads to weaker demand, which generates
weaker employment growth, creating a vicious cycle for the economy. “This
debunks the view that the September jobs report puts a recession off the
table,” Ramsey said.
More
7 big clues that a recession is going to clobber the stock market
UK
debt woe as borrowing costs surge again amid fresh market jitters over US
election result
5
November 2024
UK
borrowing costs hit a post-Budget peak yesterday
Yields
on ten-year UK bonds – known as gilts – surpassed levels seen last week to
reach a new one-year high of 4.541 per cent.
Meanwhile,
an auction of new ten-year gilts attracted the weakest demand since December,
with bids covering the £3.75billion on offer 2.81 times.
Investors
are anxious about Chancellor Rachel Reeves’s £162billion borrowing binge to
fund her spending pledges – and is expected to add to inflation pressures.
That
has pushed back expectations of how quickly the Bank of England will cut
interest rates, resulting in a sell-off of bonds – whose yields rise as their
prices fall.
The
sheer scale of bond issuance coming to the market is also weighing on the
price.
The
Bank is expected to cut rates by a quarter of a percentage point tomorrow and
markets will be closely watching for clues on its next move.
Experts
warned that the rise in gilt yields could jeopardise the Chancellor’s plans for
balancing the books because it will add billions to the cost of paying interest
on the Government’s debt pile.
Some
of this was planned for but the bond market fall-out has so far been worse than
expected.
Richard
Hughes, chairman of the Office for Budget Responsibility (OBR), told the
Commons Treasury select committee yesterday: ‘We had expected the gilt market
to be a bit surprised.’
The
OBR had forecast the Budget to cause a quarter of a percentage point rise in
yields. He said where they had settled was ‘broadly in line with that
expectation, maybe a little bit above, but not significantly’.
But
after he spoke, yields rose further.
Julian
Jessop, economics fellow at the Institute of Economic Affairs (IEA), pointed
out that yields on five-year gilts were expected to average 3.6 per cent
in the fourth quarter of this year and 4 per cent between 2025 and 2028.
But
yesterday they were trading at more than 4.4 per cent, a five-year high. ‘Of
course, a lot could still happen between now and 2028,’ Jessop said. ‘But the
early signs are not encouraging.’
Yields
on UK bonds are rising faster than those on their US and German
equivalents.
More
UK debt woe as borrowing costs surge again amid fresh market jitters over US election result
Covid-19 Corner
This section will continue until it becomes unneeded.
Federal immunity protections do not apply to COVID-19 wrongful death case in assisted living facility, court rules
Kimberly Bonvissuto November 5, 2024
A
federal court has remanded a COVID-19 negligence and wrongful death lawsuit
filed against a Florida assisted living community to state court. The federal
court recently ruled the case did not fall under federal protections in place
during the pandemic.
The
US Court of Appeals for the Eleventh Circuit delivered a 2-1
split decision last
week in a case involving healthcare provider protections implemented under the
Public Readiness and Emergency Preparedness, or PREP, Act. The PREP
Act offered
liability protection to healthcare providers when prioritizing distribution of
countermeasures — including COVID-19 vaccines — especially if done in
accordance with public health guidelines. The court’s dissenting opinion said
the case fell squarely under the PREP Act.
“Given
the strong dissent included in the opinion, we are assessing our options with
our legal counsel, and until we have completed our assessment we won’t be able
to offer any comments,” Sandi Poreda, a spokeswoman for the community involved,
Grand Villa, told McKnight’s Senior Living.
Sara
Schleider, a resident of Grand Villa of Delray Beach East, died of COVID in
June 2020. Her family filed a lawsuit in Florida state court alleging that
Grand Villa’s failure to provide personal protective equipment or take other
protection measures to prevent the spread of COVID-19 results in Schleider’s
death. The lawsuit named Grand Villa’s operating and management companies, GVDB
Operations LLC and JSMGV Management Company LLC.
Grand
Villa moved the case to US District Court for the Southern District of Florida,
claiming it was acting under the direction of a federal officer as part of the
“critical healthcare infrastructure.” The provider also argued that it had
immunity protections under the PREP Act.
But
the district court rejected Grand Villa’s arguments and remanded the case to
state court, prompting an appeal to the 11th Circuit Court. The appellate court
agreed with the district court, finding that compliance with federal guidelines
did not equate to acting under federal authority, particularly if those
guidelines were not followed. The appellate court also found that the PREP Act
did not completely preempt state law claims for negligence.
More
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.
Solar brick
based on perovskite, textile ceramic technology
A
European research team has sought to combine for the first time perovskite
solar cell technology with textile ceramic in a novel building-integrated
photovoltaic device. The result is a solar brick with potential for future
commercialiation, according to its creators.
November
5, 2024
A
research group led by the Universitat Internacional de Catalunya (UIC) in Spain
has developed a solar brick based on textile ceramic technology (TCT) and
perovskite photovoltaic cells.
The
new device is intended for applications in building-integrated photovoltaics
(BIPV). “We are planning to bring this technology to market,” the research's
corresponding author, Pedro Casariego, told pv magazine. “This was
the main goal of this research and a few parallel projects we are working on.”
TCT
was patented in 2011 and consists of a system made of ceramic units installed
in a grid of steel wires. It was conceived to be used on cover roofs, grounds,
and principally façade claddings, as well as a curtain wall that should make
ventilation inexpensive.
“Most
commonly, TCT is used as a dry construction system consisting of long shells
with widths between 0.6- and 2-meters,” the scientists explained. “One of the
advantages of the system is the reduced time construction, since traditional
ceramic cladding systems require a manual procedure on site where the bricks
are placed one by one joined by mortar. Moreover, the large length dimension of
the shells makes it possible to cover ground, façade and roof with the same
element.”
The
research group describes the 300 mm x 117 mm solar brick as a system
integrating a 99 mm × 99 mm perovskite solar module (PSM) compatible with TCT
mesh. It used welding to make the electrical connections for the module, which
was embedded in a groove with an inclined geometry.
It
also utilized stainless steel plates with the shape of a double L to achieve a
dry joint between PSM and the ceramic pieces. “It must be pointed out that the
groove is not always done in the center of the ceramic piece and can be made
further to the right or left to allow different possibilities and play a bit
with composition,” the academics explained.
---- Overall,
the solar brick was found to perform well “in general terms” with market
viability possibilities, with the main challenge being identified in the brittle
rupture of the ceramic pieces. “A revision of the solar brick design must
be carried out in future research,” the academics concluded.
The
novel technology was presented in the study “Design
of perovskite solar brick for textile ceramic technology,”
which was recently published in Construction and Building Materials.
The research team included scientists from the University
of Rome Tor Vergata in Italy and the French
Alternative Energies and Atomic Energy Commission (CEA).
Solar brick based
on perovskite, textile ceramic technology – pv magazine International
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
There
is a better way for everything. Find it.
Thomas A. Edison.
