Friday, 22 November 2024

Stocks In Wonderland. The West’s Big ICC Problem.

Baltic Dry Index. 1576 -40           Brent Crude  74.20

Spot Gold 2688                US 2 Year Yield 4.34  +0.03

The market is a pendulum that forever swings between unsustainable optimism (which makes stocks too expensive) and unjustified pessimism (which makes them too cheap). The intelligent investor is a realist who sells to optimists and buys from pessimists.

Benjamin Graham.

In the stock casinos, bubble on . What’s not to like, if you look away from the problems of the global economy, two never ending wars, a lamest lame duck US leadership, the German and western auto industry collapse, and a big new western global hypocrisy problem.

Asia markets mostly rise while China stocks falter; investors assess Japan inflation, Singapore GDP data

Updated Fri, Nov 22 2024 11:35 PM EST

Asia-Pacific markets mostly rose Friday, tracking a rally on Wall Street that saw the S&P log gains for a fourth straight day.

As the rare outliers, Hong Kong’s Hang Seng index seesawed to lose 1.3% in a choppy trading session, while mainland China’s CSI 300 declined over 1%.

Investors might be taking a wait-and see approach while awaiting clarity on U.S.-China tariffs, said Eugene Hsiao, head of China equity strategy at Macquarie Capital, who believed additional stimulus announcements from Beijing may not come until the next parliament meeting in March.

Investors in Asia also assessed Japan’s October consumer price index data. The core inflation, excluding volatile fresh food prices, rose 2.3% from a year ago, slightly above the estimated 2.2%, according to analysts polled by Reuters. That’s cooler than 2.4% in the previous month.

The overall CPI came in at 2.3%, versus 2.5% in September.

Japan’s Nikkei 225 jumped 0.86% while the broad-based Topix rose 0.68%. Elsewhere, Australia’s S&P/ASX 200 eked out gains of 0.96%, reversing two days of losses.

South Korean blue-chip Kospi index rose 1.08% while small-cap Kosdaq gained 0.2%.

Singapore third-quarter GDP expanded 5.4% from a year ago, notably outpacing the revised 3.0% in the prior quarter. On a quarter-on-quarter basis, the economy grew by 3.2%, accelerating from the 0.5% in the second quarter, according to the Ministry of Trade and Industry.

Singapore also raised its projection of this year’s economic growth to “around 3.5%,” from “2.0 to 3.0%”

Overnight stateside, the three major indexes rose, on track to close the week higher.

The Dow Jones Industrial Average climbed 462 points, or 1.06%, to finish at 43,270.35, while the S&P 500 gained 0.53% to close at 5,948.71. The tech-heavy Nasdaq Composite edged up 0.03% to end at 18,972.42.

Crude oil prices rose more than 2% after Putin confirmed that Russia had fired a hypersonic intermediate-range ballistic missile into Ukraine and warned that more could follow, the latest in a series of escalations.

Asia-Pacific markets Live Updates: Japan CPI, Singapore GDP

Dow closes more than 450 points higher as investors snap up stocks tied to the economy: Live updates

Updated Thu, Nov 21 2024 4:22 PM EST

The Dow Jones Industrial Average and the S&P 500 rose Thursday as investors poured into cyclical stocks poised to benefit from an accelerating economy and rotated out of technology shares.

The Dow gained 461.88 points, or 1.06%, to finish at 43,870.35. The S&P 500 added 0.53% to close at 5,948.71. The tech-heavy Nasdaq Composite eked out a 0.03% gain to end at 18,972.42.

“This is the week where everyone is rethinking the Trump trade,” said Mark Malek, chief investment officer at Siebert. “People are taking it a little more seriously. It’s not enough to just say ‘we think the sector is going to do well’ — you have to have some answers.”

Some of Thursday’s winners included bank stocks such as Goldman Sachs, industrials giant Caterpillar and retailer Home Depot. The Russell 2000 Index, viewed as a barometer for small companies and beneficiary of a possible boost to the economy from President-elect Donald Trump, added more than 1%.

Investors assessed results for artificial intelligence chip juggernaut Nvidia, which was up more than 190% this year into the results. Shares seesawed after the company reported better-than-expected third-quarter results and issued strong guidance. Some traders attributed earlier declines in the stock to slowing revenue growth from previous quarters, or concerns that the chipmaker didn’t exceed the most optimistic guidance estimate. Shares ultimately ended the session higher by 0.5%.

“While Nvidia’s story of huge beats has underscored the dramatic rise in AI growth, investors would be prudent to consider whether Nvidia out pacing estimates to such a degree is sustainable,” said AXS Investments CEO Greg Bassuk.

He expects the ongoing “tug-of-war” between bulls and bears to fuel potential volatility in the chipmaking stock.

Some other technology stocks felt the pressure. Amazon slumped 2.2%, while Alphabet declined nearly 5%, falling for a second session on antitrust fears. Snowflake was one bright spot in the sector, popping nearly 33% after the company topped Wall Street’s estimates and lifted its product revenue guidance for the fiscal year. Salesforce rallied 3.1%.

Bitcoin also hit a fresh milestone, hitting a fresh intraday all-time high and crossing the $99,000 level for the first time as investors maintained their hopes that a second Trump presidency will usher in supportive regulation for the industry.

Stock market news for Nov. 21, 2024

Adani’s indictment: How one of India’s biggest empires descended into chaos

Published Thu, Nov 21 2024 4:04 AM EST

Gautam Adani, the billionaire chairman of India’s Adani Group, was indicted on Wednesday along with seven others in New York federal court for his involvement in a large-scale bribery and fraud scheme.

Following the news, the conglomerate saw shares of its companies nosedive. Adani Enterprises is one of the country’s top three conglomerates. It has businesses in many sectors, including ports, airports, renewables and cement.

The latest development comes after the conglomerate spent most of 2023 attempting to move beyond allegations of accounting fraud and stock market manipulation made by short seller Hindenburg Research.

Here’s a timeline of Adani headlines in the past year, tracking a series of allegations and counter-allegations since the publication of Hindenburg’s report, up until his indictment.

January 2023

At the start of last year, Hindenburg announced its short position in Adani Group, accusing Adani of engaging in “brazen” stock manipulation and accounting fraud, calling it the “largest con in corporate history.”

Adani-affiliated stocks saw a sharp sell-off after the report was released, and Adani’s net worth plunged by $6 billion overnight.

The conglomerate rebutted Hindenburg’s accusations of embezzlement and fraud with a 413-page response, calling the latter’s report a “malicious combination of selective misinformation,” adding that it has “always been in compliance with all laws.”

Around that time, Adani Enterprises kicked off a 200 billion rupee ($2.45 billion) secondary share sale which was fully subscribed in spite of the short-seller storm.

March 2023 to May 2023

In March, India’s Supreme Court sets up an independent six-member panel to investigate the allegations made in the Hindenburg report.

Then in May, the court-appointed panel said it has “drawn a blank” in its probe into Adani group, according to Reuters.

December 2023 to January 2024

By the end of 2023, Adani Enterprise shares had recovered from the fallout and concluded the year with smaller declines of 26%.

India’s top court in January announced that the Adani Group will not be subject to additional investigations beyond the scrutiny by the market regulator, providing significant relief to the conglomerate.

At the time, Adani took to X, expressing his gratitude for those who have “stood by” the group. “Truth has prevailed,” he wrote, adding that “our humble contribution to India’s growth story will continue.”

Adani subsequently catapulted to become the richest person in Asia again, according to the Bloomberg Billionaires Index in January.

More

Adani's indictment: How one of India's biggest empires descended into chaos

In UK news, yet another inept budget has big bad economic consequences.

UK firms flag over $1 billion in costs from increase in national insurance, wages

By Reuters  November 21, 20242:54 PM GMT

Nov 21 (Reuters) - British companies have flagged an increase of about 820 million pounds ($1.04 billion) in costs related to a rise in employers' social security contributions following Finance Minister Rachel Reeves' maiden budget in October.

They also expect the increase in National Insurance Contributions (NIC) that employers pay and the minimum wages to fuel inflation.

Here's what some companies across sectors have said so far:

RETAILERS

British supermarket chain Sainsbury's (SBRY.L), opens new tab, which employs around 150,000 people, said it was facing headwinds of 140 million pounds from the national insurance change.

Marks & Spencer (MKS.L), opens new tab said the national insurance increase would cost it around 60 million pounds in its next financial year, which starts in April. A 6.7% rise in minimum wage will add another 60 million pounds.

Britain's third-largest supermarket Asda said the national insurance change would cost it 100 million pounds next year and warned it would "probably be inflationary to some degree".

Primark-owner Associated British Foods (ABF.L), opens new tab said the national insurance change would cost the clothing retailer, which employs 40,000 people in the UK, "tens of millions" of pounds, though the rise in the minimum wage was anticipated.

Kitchen and joinery retailer Howden Joinery (HWDN.L), opens new tab said the expected annualised cost impact of higher contributions to employers' national insurance and the increase in the national minimum wage was around 18 million pounds.

LOGISTICS

International Distribution Services (IDSI.L), opens new tab, the owner of Royal Mail, which employs nearly 130,000 people in Britain, said changes to the NIC will cost around 120 million pounds a year.

TELECOM

BT (BT.L), opens new tab, employer of more than 100,000 people, said the NIC change would increase its costs by close to 100 million pounds next year, about 0.5% of its total cost base.

PUBS & RESTAURANTS

JD Wetherspoon (JDW.L), opens new tab, a major British pub operator that employs more than 40,000 people, said its annual costs would increase by about 60 million pounds in 2025, with its NIC rising by an estimated two-thirds.

British pub group Young & Co's Brewery (YNGa.L), opens new tab, which employees about 7,700 people, warned that rising NIC and minimum wages will increase its annual costs by about 11 million pounds, starting April.

HOMEBUILDERS

Persimmon (PSN.L), opens new tab expects costs from a hike in national insurance to be about 5 million pounds over the next year.

Vistry (VTYV.L), opens new tab also estimated a 5-million-pound impact in fiscal year 2025 from the increase in employer NIC.

More

UK firms flag over $1 billion in costs from increase in national insurance, wages | Reuters

In other news, the west’s hypocrisy exposed to the world. Arrest Putin but not Netanyahu. A big problem for the west now exists.

Netanyahu Faces Down War Crimes Arrest Warrant

November 21, 2024

The arrest warrant issued for Israeli Prime Minister Benjamin Netanyahu by the International Criminal Court throws a potential wrench into diplomacy and ramps up tensions over his country’s conduct of the military campaign against Hamas. Israel rejected the warrants and has vehemently denied the war crimes charges, saying its operations adhere to international law. It’s up to individual governments to enforce it and there’s little chance that Netanyahu will face trial.

Many of Israel’s Western allies, including the UK, France, Germany and Canada, are ICC signatories, which could complicate travel by Netanyahu. The Netherlands, for example, has said it will respect ICC warrants, but Hungary called the move “shameful.” The court also issued warrants for former Israeli Defense Minister Yoav Gallant and Hamas military chief Mohammed Deif, who Israel says is dead. Meanwhile, in Israel’s other military campaign against Hezbollah in Lebanon, it’s enjoying a new operational freedom.

Israel's Netanyahu Faces Down ICC War Crimes Arrest Warrant - Bloomberg

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.

European car sales flat in October, EVs gain ground, ACEA says

21 November 2024

(Reuters) - New car sales in Europe were flat in October, after falling for two consecutive months, industry data showed on Thursday, while the transition to fully electric or hybrid models gained ground in the month.

An uptick in total sales in Spain and Germany, of 7.2% and 6% respectively, offset a contraction in France, Italy and Britain, the European Automobile Manufacturers Association (ACEA) said.

WHY IT'S IMPORTANT

European automakers are struggling with weak demand, high production costs, and managing the shift to EVs, while trying to fend off competition from China.

BY THE NUMBERS

The number of new vehicles registered in October in the EU, Britain and the European Free Trade Association (EFTA) rose 0.1% year-on-year to 1.04 million.

Sales of fully electric cars (BEVs) rose for the second consecutive month, up 6.9% in October, while those of hybrid cars (HEVs) rose by 15.8%.

Registrations in the EU, Britain and EFTA at Volkswagen rose 12.6%, while they fell by 16.7% at Stellantis and by 0.4% at Renault.

Sales were down 23.1% at EV maker Tesla and down 10% at China's SAIC Motor.

In the EU, total new car registrations rose 1.1% year-on-year. Germany saw sales increase with 6%, after three months of losses.

Electrified vehicles - either BEV, HEV or plug-in hybrids (PHEV) - sold in the bloc accounted for 55.4% of passenger car registrations in October, up from 51.3% in the previous year.

QUOTES

"As we head towards the end of the year, carmakers are increasingly rolling out discounts and deals to sell off any unsold stock," said Felipe Munoz, Global Analyst at market research firm JATO Dynamics in a separate statement on Wednesday.

"This is helping registration figures stabilise and shouldn't be mistaken as an indication of market recovery", he added.

CONTEXT

The European Union approved at the end of October increased tariffs on Chinese-built electric vehicles of up to as much as 45.3%.

European car sales flat in October, EVs gain ground, ACEA says

Stalled European Electric Vehicle Sales Trigger 4,000 Job Cuts At Ford

Nov 20, 2024,02:04pm EST

Automobile manufacturing giant Ford has announced 4,000 job cuts across its European operations blaming stalled electric vehicle sales in the continent.

The move is said to be part of a wider restructuring program, with the company's employees in Germany and the U.K. bearing the brunt of the announced cuts that will occur over the next three years.

Ford's German workforce will see a reduction in headcount by 2,900 while 800 British jobs will also go, with the remaining 300 job cuts spread across Europe. A spokesperson in the U.K. said Ford had to act in the face of weak demand for EVs and challenging trading conditions.

However, the company is aiming to achieve all the job cuts through largely "voluntary means" by the end of 2027, the spokesperson added.

While Ford committed $50 billion in 2023 towards developing a new range of EVs as well as expanding its current range, its foray has been anything but challenging. The latest announcement is the company's second round of European cuts in less than a couple of years, following a decision in February last year to trim its workforce.

Ford and its Western peers are facing strong competition from relatively cheaper EV imports from China hitting the European market. In response, the European Union has slapped tariffs on Chinese imports, which were raised in October to as high as 45.3% in variable bands depending on vehicle assembly lines and components.

Stalled European Electric Vehicle Sales Trigger 4,000 Job Cuts At Ford

Risk of new eurozone crisis is rising, warns central bank

20 November 2024

A surge in borrowing and “sluggish” growth have pushed the eurozone to the brink of debt crisis, the European Central Bank (ECB) has warned.

The ECB said investors were becoming increasingly concerned about government borrowing across the single currency bloc, which has barely grown in recent years.

In its latest financial stability review, it said:”Headwinds to economic growth from factors like weak productivity make elevated debt levels and budget deficits more likely to reignite debt sustainability concerns.”

It added that a collapse of trust in politicians over the past three decades had made it more difficult to deal with economic shocks.

The central bank singled out France as a key source of political instability that had “rekindled concerns about sovereign debt sustainability”.

Europe’s second largest economy is struggling to cut spending and control public borrowing in a development that threatens to plunge Paris into a period of prolonged economic and political turmoil.

Addressing the wider challenges facing the bloc, the ECB’s report added: “Projected high levels of sovereign debt in several countries limit the policy space available for governments to respond to adverse shocks.

“While the aggregate euro area debt-to-GDP ratio has declined considerably from its pandemic peak, debt levels remain high in many countries”.

It warned that debt-laden countries had little financial firepower to deal with another crisis.

The ECB said: “The longer-term trend of rising political fragmentation observed over the past three decades has made it more challenging to form stable government coalitions. This may contribute to delays in reaching agreement on key fiscal and structural reforms while also raising economic policy uncertainty. Furthermore, rising geopolitical uncertainty may imply an additional burden for sovereigns in dealing with the consequences of geopolitical fallout [such as] energy subsidies.

---- It said Europe was walking a dangerous tightrope of low growth and high debt against a backdrop of uncertainty for the bloc as Donald Trump prepares to reenter the White House in January.

More

Risk of new eurozone crisis is rising, warns central bank

Covid-19 Corner

This section will continue until it becomes unneeded.

Long-Term Risk for Autoimmune, Autoinflammatory Skin Disorders Increased After COVID-19

John Jesitus  November 20, 2024

A population-based study has shown a slightly elevated risk for patients’ developing skin disorders, including alopecia areata (AA), alopecia totalis (AT), vitiligo, and bullous pemphigoid (BP), more than 6 months after COVID-19 infection. In addition, the authors reported that the COVID-19 vaccination appears to reduce these risks.

The study was published in JAMA Dermatology on November 6.

‘Compelling Evidence’

“This well-executed study by Heo et al. provides compelling evidence to support an association between COVID-19 infection and the development of subsequent autoimmune and autoinflammatory skin diseases,” wrote authors led by Lisa M. Arkin, MD, of the Department of Dermatology, University of Wisconsin School of Medicine and Public Health in Madison, Wisconsin, in an accompanying editorial.

Using databases from Korea's National Health Insurance Service and the Korea Disease Control and Prevention Agency, investigators led by Yeon-Woo Heo, MD, a dermatology resident at Yonsei University Wonju College of Medicine, Wonju, Republic of Korea, compared 3.1 million people who had COVID-19 with 3.8 million controls, all with at least 180 days’ follow-up through December 31, 2022.

At a mean follow-up of 287 days in both cohorts, authors found significantly elevated risks for AA and vitiligo (adjusted hazard ratio [aHR], 1.11 for both), AT (aHR, 1.24), Behçet disease (aHR, 1.45), and BP (aHR, 1.62) in the post-COVID-19 cohort. The infection also raised the risk for other conditions such as systemic lupus erythematosus (aHR, 1.14) and Crohn’s disease (aHR, 1.35).

More

Medscape Registration required.

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 goes mainstream as Levidian launches Gen2 LOOP decarbonisation tech

20 Nov, 2024

Newsdesk

Cambridge CleanTech innovator Levidian has launched its second generation LOOP technology – a major step forward for the graphene industry. It will see Levidian deliver unparalleled levels of graphene production that is less carbon intensive, more affordable and a higher quality than anything else on the market today, the company says.

It has installed its first industrial scale unit at its Cambridge HQ and is working towards an annual production target by 2030 of 50,000 tonnes from a global network of devices, which will make the business one of the world's largest producers of graphene – if not the largest.

The company plans to deploy its first industrial LOOP at a customer site in partnership with clean hydrogen developer Hexla next year.

Graphene has almost endless use cases and is already being deployed in a variety of products to boost performance and drive down their carbon footprint, such as:-

  • Batteries that charge 30 per cent faster and last 27 per cent longer
  • Concrete – a 30 per cent reduction in carbon emissions, 35 per cent stronger
  • Tyres – 23 per cent reduction in rolling resistance

Levidian’s market-leading LOOP system provides heavy emitters and hard-to-abate industries such as landfill and aluminium producers with a route to both decarbonise their processes and open up new revenue streams from the graphene and hydrogen that is produced. This unlocks decarbonisation projects that might not otherwise happen due to cost.

At the heart of LOOP is a patented ‘nozzle’ where microwave energy is applied to crack methane into its component parts, creating clean hydrogen and capturing carbon in the form of high purity graphene.

A single nozzle will be capable of producing around 15 tonnes of graphene a year – enough, for example, to transform the performance of thousands of electric vehicles with graphene-enhanced batteries and tyres so that cars can go further for longer with less impact on the environment.

John Hartley, CEO of Levidian, said: “We believe that graphene is going to play a central role in helping the world’s most carbon intensive businesses to decarbonise, solving the business case on decarbonisation projects thanks to its short return on investment, and delivering performance improvements on just about every product it touches.

“With this latest technology release, we’re setting graphene on a pathway to the mainstream, putting all the old issues of quality and scale aside to deliver unparalleled levels of graphene production that is less carbon intensive, more affordable and a higher quality than anything else on the market today.”

Levidian already has 10 LOOPs deployed or under construction globally including a pioneering biogas to hydrogen pilot at United Utilities’ Manchester Bioresources Centre, which is supported by the Department for Energy Security and Net Zero’s Hydrogen BECCS Innovation Programme.

Unlike other graphene production techniques, which typically start with environmentally harmful mining for graphite, Levidian cracks methane into hydrogen and carbon using a patented plasma process.

More

Graphene goes mainstream as Levidian launches Gen2 LOOP decarbonisation tech

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

World Debt Clocks (usdebtclock.org)

Another weekend and Thanksgiving and Christmas fast approaching. A great big western political leadership problem fast approaching too, thanks to the ill thought out International Criminal Court that Blair’s Britain should never have joined. Have a great weekend everyone.

Cash combined with courage in a time of crisis is priceless.

Warren Buffett. 

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