Friday, 6 December 2024

US Jobs Day. To Revise Or Not to Revise?

 Baltic Dry Index. 1160 -20          Brent Crude  72.11

Spot Gold 2639                US 2 Year Yield 4.15  +0.02

When under the pretext of fraternity, the legal code imposes mutual sacrifices on the citizens, human nature is not thereby abrogated. Everyone will then direct his efforts toward contributing little to, and taking much from, the common fund of sacrifices. Now, is it the most unfortunate who gains from this struggle? Certainly not, but rather the most influential and calculating.

Frederic Bastiat.

Later today, the US jobs report for November. With the US elections out of the way, will the Bureau of Lying Labor Statistics start revising down their previous statistics or will they wait for Team Trump 2.0?

Either way, the stock casinos are jumpy at the 2024 extreme highs.

Dow drops more than 200 points, S&P 500 retreats from record as big payrolls report looms: Live updates

Updated Thu, Dec 5 2024 4:13 PM EST

U.S. stocks were lower on Thursday as investors awaited Friday’s big jobs report.

The Dow Jones Industrial Average dipped 248.33 points, or 0.55%, to close at 44,765.71. Meanwhile, the Nasdaq Composite slipped 0.18% to end at 19,700.26. The S&P 500 dropped 0.19%, settling at 6,075.11.

The three major averages saw solid gains in the previous session, posting record closes.

“The problem you have is that valuations are stretched across the board,” said Keeley Teton portfolio manager Brian Leonard in an interview with CNBC. “You’re sitting at records, but there’s not a lot of enthusiasm or euphoria. Historically, when the records happened, the valuations were more reasonable.”

Traders on Thursday looked ahead to key U.S. employment data on Friday. Economists polled by Dow Jones forecast the U.S. economy added 214,000 jobs in November.

This labor report could inform the Federal Reserve’s rate decision at its policy meeting later this month. On Wednesday, Fed Chair Jerome Powell said that the U.S. economy is strong enough for the central bank to move carefully on rate cuts.

“The labor market is better, and the downside risks appear to be less in the labor market,” he said. “Growth is definitely stronger than we thought, and inflation is coming [out] a little higher. So, the good news is that we can afford to be a little more cautious as we try to find neutral.”

Bitcoin traded marginally lower, falling below $100,000 after breaking above it for the first time late Wednesday. That overnight move briefly led crypto-related stocks such as MicroStrategy and Coinbase higher. However, these names had also given up those advances, with MicroStrategy dropping 4.8% and Coinbase shedding 3.1%.

Stock market news for Dec. 5, 2024

Stock futures are little changed ahead of key jobs report: Live updates

Updated Fri, Dec 6 2024 12:34 AM EST

Stock futures were near the flatline Friday morning as investors awaited key payrolls data.

Futures tied to the Dow Jones Industrial Average dipped 42 points, or 0.1%. S&P 500 futures shed 0.08%, while Nasdaq 100 futures were flat.

Several companies posted strong quarterly results after the closing bell and saw their shares take off. Ulta Beauty jumped 12% after posting higher-than-expected earnings and revenue for the fiscal third quarter. GitLab and Docusign gained 7% and 14%, respectively, on quarterly beats.

Investors are now turning to Friday’s jobs report, anticipating it will provide a clearer picture into the health of the domestic labor market and shape the Federal Reserve’s rate decision at its Dec. 17-18 policy meeting. Economists polled by Dow Jones expect that nonfarm payrolls increased by 214,000 in November, which would mark a huge hike from October’s gain of just 12,000.

“With market expectations for solid rebound in payrolls, an even stronger print above expectations could force the Fed to think twice about the pace of rate cutting next year,” said Charlie Ripley, senior investment strategist at Allianz Investment Management.

Given the continued strength of the U.S. economy, Fed Chair Jerome Powell has previously said that policymakers don’t need to be “in a hurry to lower rates.”

Stocks closed Thursday’s session lower, retreating from records the major indexes hit in the previous session. Week to date, the S&P 500 is up 0.7%, while the tech-heavy Nasdaq Composite has gained 2.5%. The 30-stock Dow is down 0.3% in the period.

Stock market today: Live updates

In other news, OPEC delays, more layoffs, the EU in decline.

OPEC+ members to delay oil production increases

Published Thu, Dec 5 2024 7:34 AM EST Updated Thu, Dec 5 2024 8:42 AM EST

The OPEC+ oil producers’ alliance has postponed plans to unwind several formal and voluntary crude production cuts into 2026 amid a lukewarm outlook for global demand, according to delegate sources and internal documents.

The sources could only speak anonymously because of the sensitivity of talks.

Under its formal output strategy, the broader OPEC+ coalition is now restricting its combined production to 39.725 million barrels per day (bpd) until Dec. 31, 2026, after previously only applying this quota throughout 2025.

Eight OPEC+ members will now extend their 2.2 million-barrel-per day voluntary production decline into the first quarter, and will begin hiking production incrementally between April and September 2026. Several OPEC+ members will also be postponing the unwinding of a second 1.7-million-barrels-per-day cut until the end of next year. This latter production decline was previously only set to last through 2025.

Despite these sets of production trims and ongoing conflict threatening the hydrocarbon-rich Middle Eastern region, global oil prices have remained subdued for the better part of this year, under pressure from a tepid demand outlook. The Ice Brent contract with February expiry and front-month January Nymex WTI futures were both trading flat at 1:31 p.m. London time, compared with their Wednesday close prices.

Adding to geopolitical uncertainty is the imminent White House return of President-elect Donald Trump — who has led his electoral campaign on pledges to further unleash the output of the world’s largest oil producer.

“While today’s decision by OPEC+ to delay the unwinding of some of its oil production cuts until April 2025 buys the group some time, the backdrop of weak global oil demand means that it could easily find itself back in a similar position in three months’ time,” analysts at Capital Economics said in a note.

“In our view, the fundamentals for oil prices remain weak, and the risks to prices are skewed to the downside.”

OPEC+ members to delay oil production increases

Airbus Cuts Over 2,000 Jobs in Space and Defense Divisions

5 December 2024

The aerospace industry has been grappling with challenges since the pandemic.

Supply chain issues, rising costs, and delays have left even the biggest players looking for ways to streamline operations.

Airbus, one of the largest names in the industry, is now taking drastic steps in its defense and space divisions to stay competitive, according to Ziare.

The European aerospace giant plans to lay off 2,043 employees by mid-2026, according to sources speaking to Reuters.

The cuts will affect senior management and other roles across Germany, France, the United Kingdom, Spain, and smaller operations in other countries.

Germany will see the largest reduction, with 689 positions to be eliminated. France and the U.K. follow with 540 and 477 layoffs, respectively.

Headquaters Also Affected

The company first announced plans for cuts in October, citing losses in its space systems division and delays in satellite projects like OneSat.

Rising defense costs have also played a role. Airbus formally presented the layoff plan to labor unions on Wednesday after a year-long review of its efficiency in defense and space operations.

While the space systems division will bear the brunt of the layoffs, other parts of the company, including its headquarters, will also be affected.

Airbus representatives declined to comment on the specifics of the cuts.

CEO Guillaume Faury has previously stated that Airbus aims to bolster its defense and space divisions in the future, particularly its satellite operations. But for now, rising costs have forced the company to reduce its workforce.

Airbus’s broader business has also faced setbacks this year. Engine shortages and lingering supply chain disruptions have slowed aircraft deliveries.

The company revised its target for 2023, reducing planned deliveries from 800 to 770 planes. It also pushed back its goal of producing 75 narrow-body planes per month from 2026 to 2027.

Airbus Cuts Over 2,000 Jobs in Space and Defense Divisions

France's toppled government adds to the European Union's bigger political problems

Updated December 5, 2024 5:29 PM ET 

LONDON — French President Emmanuel Macron has vowed to see out his current term until 2027 and name a new government in the next few days, amid a spiraling political criss that has threatened to engulf his leadership.

Speaking Thursday at his official residence in the Elysée Palace in Paris, Macron thanked the outgoing Prime Minister Michel Barnier for his "dedication," after a majority of National Assembly lawmakers voted to remove Barnier Wednesday, forcing him to resign. Macron accused the opposition parties of choosing "chaos," saying they "don't want to build, they want to dismantle."

The political instability in France — and simultaneously in Germany, where the governing coalition collapsed a month ago — could have wide-ranging consequences for European security, as well as trans-Atlantic relations, analysts tell NPR, just weeks before President-elect Donald Trump enters the White House. With a war still raging on Europe's doorstep, caretaker governments will now control two of the continent's most powerful economies.

President Macron had appointed Barnier to head the government only three months ago, after snap elections this summer left no party with a majority in a deeply divided parliament.

On Wednesday, legislators from opposing extreme flanks came together in a vote of no confidence against Barnier, over his proposed 2025 national budget. Now, with the government toppled and no approved budget, Macron knows he must act quickly, according to Mathieu Gallard, a pollster at Ipsos.

"Regarding the adoption of the budget, everything is stalled, nothing can move in the parliament before we have a new government," says Gallard. "It's really uncharted territory, since we have never been in this kind of situation."

The main challenge stems from the fact that none of the political groups in the French parliament have a clear majority, nor do any of them want to negotiate or compromise with one another, Gallard says, while the electoral system means there is very little incentive for that to change, even if Macron calls a fresh national vote in 10 months, which is as soon as the constitution allows after the last election.

----Meanwhile, in neighboring Germany, Chancellor Olaf Scholz lost support from his previous political coalition partners, over economic and budget policies as well. Now he's limping along to a confidence vote later this month and federal elections in February.

All this adds up to something that European leaders must soon take seriously, says Tanja Börzel, a political science professor at the Freie Universität, or Free University, in Berlin. While she doesn't believe the European Union "faces an existential threat, yet," she says, "it's a major challenge."

And the timing of these twin political crises is particularly unfortunate, given that polarization and societal distrust of government has been rising on both sides of the Atlantic, Börzel says. "These two countries have always, very often, taken the lead in helping Europe to speak one voice. I think that's what is required more than ever with Trump taking over the presidency in the U.S."

More

France's toppled government adds to Europe's larger political problems : NPR

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.

Business leaders fear recession, labour shortages, World Economic Forum says

5 December 2024

LONDON (Reuters) - Business leaders globally are worried about the risk of recession, labour shortages and rising inflation, despite some signs of improvement in economic conditions, a World Economic Forum survey said on Thursday.

Extreme weather events are an increasing concern, following a year of record temperatures, severe flooding and wildfires, including in major economies such as Brazil, Germany, Indonesia and the United States, according to the survey of more than 11,000 business leaders from G20 countries.

The WEF Executive Opinion Survey shows "a significant level of anxiety among business leaders in G20 countries", said Carolina Klint, chief commercial officer, Europe at Marsh McLennan, a WEF partner, along with Zurich Insurance.

Economic downturn is seen as the top risk for business leaders over the next two years, followed by labour and/or talent shortages and then inflation. Poverty and inequality ranked fourth, and extreme weather events came in fifth, the survey showed.

In individual country surveys, concerns about adverse risks from technology, including artificial intelligence, featured highly, coming in as the top risk for doing business in Indonesia, number three in the United States and number four in Britain, the survey showed.

Business leaders fear recession, labour shortages, World Economic Forum says

'We're in a recession,' says former Bank of Canada governor Stephen Poloz

4 December 2024

Former Bank of Canada governor Stephen Poloz says Canada is in a recession , arguing the economy’s weakness has been masked by strong population growth.

“I would say we’re in a recession, I wouldn’t even call it a technical one,” said Poloz, now special adviser to Osler, Hoskin & Harcourt LLP, during a webinar on Tuesday. “A technical one is a superficial definition that you have two quarters of negative growth in a row, and we haven’t had that, but the reason is because we’ve been swamped with new immigrants who buy the basics in life, and that boosts our consumption enough.”

On Friday, Statistics Canada reported that gross domestic product per capita had declined for the sixth consecutive quarter, falling by 0.4 per cent in the third quarter. This measure has been negative in eight out of the last nine quarters. Growth in the Canadian economy this year came in above forecasts at 2.1 per cent for the second quarter, before dropping to one per cent in the third quarter.

“We did have one pop up in the previous quarter, but that was a pretty minor thing,” said Poloz. “And the only good news, if I caught that, is government spending. That’s not the sort of thing to build your recovery on.”

Poloz said the Canadian consumer has suffered a 30 per cent increase in the cost of living following the recent inflationary period, which has reduced spending. Additionally, inflation has fallen faster than was predicted, which Poloz argues only happens during a recession.

The recent threat by incoming U.S. president Donald Trump to slap a 25 per cent tariff on all imports from Canada also remains a source of uncertainty for Canada’s growth going into next year.

A report by the Canadian Chamber of Commerce said that if tariffs on Canada and Mexico were implemented on inauguration day, it would lead to a 2.6 per cent hit to Canada’s GDP and a 1.6 per cent decline to the U.S. economy.

Poloz said the tariffs could also pose an inflationary risk for central banks, which would put them in an “awkward place” as they would have to keep rates higher for longer, just as the economy is slowing.

“There’s the presentation to the (central) bank, the economy is slowing, but inflation is picking up because of tariffs,” Poloz said. “What do you do? I think most central banks are going to say, I gotta be worried about the inflation part. And so that’s a recipe for deeper stagflation.”

The federal government recently introduced a two-month pause on the goods and services tax for a select number of goods, in an effort to help stimulate consumer spending. Poloz said such a measure could help Canadians with their bills in the short term, but will do little to improve long-term economic growth.

“There are so many other ways to boost the economy that would provide a longer lasting effect,” he said. “So giving away these things is kind of like giving somebody a fish instead of giving them a fishing rod, right?”

'We're in a recession,' says former Bank of Canada governor Stephen Poloz

Covid-19 Corner

This section will continue until it becomes unneeded.

Long Covid: Majority of young people recover from condition within two years, study finds

4 December 2024

Most young people who were confirmed to have long Covid three months after a positive test recover within two years, the largest study of its kind has found.

The Children and young people with Long Covid (CLoCK) study found that 70 per cent of children aged between 11 and 17 had recovered within a 24-month period.

Researchers at University College London (UCL) asked more than 12,600 young people about their health three, six, 12 and 24 months after taking a PCR test for Covid between September 2020 and March 2021. They were also asked to recall their symptoms at the time of taking the test.

For the study, the team defined long Covid as a person having more than one symptom, such as tiredness, trouble sleeping or headaches, alongside problems with either mobility, self-care, doing usual activities, pain, or feeling very worried or sad.

Of those who participated, there were 943 who had tested positive when first approached and who provided answers at every time point.

Among this group, 233 were deemed to have long Covid three months after initially testing positive.

At six months, 135 continued to meet the research definition of long Covid, decreasing to 94 at 12 months.

This reduced to 68 two years after the initial positive test, meaning that 165 of the 233 young people (70 per cent) who had long Covid had recovered.

The study’s chief investigator and first author, Professor Sir Terence Stephenson, said: “Our findings show that for teenagers who fulfilled our research definition of long Covid three months after a positive test for the Covid virus, the majority have recovered after two years.

“This is good news but we intend to do further research to try to better understand why 68 teenagers had not recovered.”

More

Long Covid: Majority of young people recover from condition within two years, study finds

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.

US-China crack organic solar cell code to hit toxin-free 20% power efficiency

Wed, December 4, 2024 at 10:22 AM GMT

A new design principle has been identified that could eliminate the use of toxic chemicals in solar cell manufacturing.

The standard manufacturing process of organic cells involves toxic solvents. This environmental concern has hindered the widespread adoption of organic solar cells.

Researchers at Linköping University (LiU) have revealed a new design principle for eco-friendly, high-efficiency organic solar cells.

To unlock this potential, they delved into the molecular shapes and interactions within organic solar cells. This led to the identification of a design principle that allows for the use of environmentally friendly solvents.

“To realise mass production of organic solar cells, with printed technologies for example, on a large scale, we need to find methods that don’t use toxins. Otherwise, it’s not good for the environment or for those working in the factories,” said Feng Gao, professor of optoelectronics at LiU.

Use of toxic chemicals in organic solar cells

Organic solar cells are gaining popularity due to their cost-effectiveness, ease of manufacturing, and flexibility.

As compared to silicon solar cells, they are made from electrically conductive plastics or organic electronics. This allows these flexible, lightweight cells to be integrated into various surfaces, such as windows, walls, and clothing.

Over the years, organic solar cells have significantly improved in efficiency, now converting around 20% of sunlight into electricity.

These organic solar cells are typically manufactured by mixing chemicals and applying them to a surface. The chemicals then evaporate, leaving behind the solar cell material.

Unfortunately, these chemicals often contain harmful substances, raising environmental concerns. Some of the toxic chemicals used are chlorobenzene, chloroform, and dichloroethane.

These solvents are used for dissolving the organic materials that make up the solar cell.

To address this challenge, the LiU team partnered with researchers in China and the US.

They identified a range of non-toxic solvents that could be used to manufacture efficient organic solar cells.

“To choose the right solvent, it’s important to understand the entire solar cell manufacturing process. This includes knowing the initial structures of the solution, observing the dynamic processes during evaporation and checking the final structure of the solar cell film,” explained Rui Zhang, lead author and researcher at the Department of Physics, Chemistry and Biology at LiU.

More

US-China crack organic solar cell code to hit toxin-free 20% power efficiency

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

World Debt Clocks (usdebtclock.org)

Another weekend and trouble in Europe, South Korea and a strange murder in NYC. Is the Biden top in the stock casinos before the Trump tariff wars bring in the next global depression? I don’t know either, but I’m not willing to bet against Warren Buffett in the stock casinos. Have a great weekend everyone.

Everyone wants to live at the expense of the state. They forget that the state wants to live at the expense of everyone.

Frederic Bastiat.

 

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