Baltic
Dry Index. 969 +03
Brent Crude 77.37
Spot Gold 2675 US 2 Year Yield 4.27 -0.01
Speculative stock movements are carried too far in both directions, frequently in the general market and at all times in at least some of the individual issues.
Benjamin Graham.
Not much need for my two cents worth today as the articles speak loudly for themselves.
But will today’s US jobs report kick off the start of the downward revisions, or will team Biden leave the revisions to happen under team Trump’s watch, now just ten days away?
Nikkei leads losses in Asia as investors assess
Japan pay and household spending data
Updated Fri, Jan 10 2025 11:47 PM EST
Asia-Pacific markets mostly fell Friday,
with investors assessing November pay and household spending out from Japan.
Real
household spending in Japan fell 0.4% year on year in November, a
softer fall compared to the 0.6% decline expected by a Reuters poll of
economists. The fall was also less than the 1.3% decline seen in October.
The average real income per household
stood at 514,409 yen ($3,252.98) in November, up 0.7% from the previous year.
Separately, the People’s Bank of China
announced it it would suspend treasury bond purchases
temporarily, Reuters reported. This was due to the bonds being in short
supply, with the PBOC adding it would resume bond buying depending on supply
and demand in the government bond market.
Hong Kong’s Hang Seng index lost 0.47%
after the announcement, after initially posting gains, while mainland China’s
CSI 300 was down 0.46%.
Japan’s Nikkei 225 fell 1.02%,
leading losses in Asia, with the broad-based Topix seeing a smaller loss of
0.68%. Heavyweight Fast Retailing lost as much as 7.83% despite posting strong
first-quarter results.
South Korea’s Kospi was marginally below
the flatline, and the small-cap Kosdaq was down 0.82%.
Australia’s S&P/ASX 200 also slipped
0.52%, after being in positive territory earlier in the session.
Overnight in the U.S., markets were closed
on Thursday due to the funeral of former president Jimmy Carter, but traders
will assess labor data on Friday stateside, with nonfarm payroll numbers for
December.
Economists expect the Bureau of Labor
Statistics on Friday morning to report a gain of 155,000 in nonfarm payrolls, a
step down from the surprising
227,000 increase in November but about in keeping with the four-month
average. The unemployment rate is forecast to hold steady at 4.2%.
Asia
markets live: Japan pay data, household spending, PBOC bond
Stock futures slide as Wall Street braces for
Friday’s jobs report: Live updates
Updated Fri, Jan 10 2025 11:43 PM EST
U.S. stock futures fell on Friday morning
as investors anxiously await the release of new economic data on Friday.
S&P 500 futures shed
about 0.28%, and Nasdaq 100
futures fell 0.32%. Futures
tied to the Dow Jones Industrial Average dropped 79 points, or 0.18%.
The moves come as Wall Street is gearing
up for December’s nonfarm payrolls reading, which is scheduled to come out at
8:30 a.m. ET on Friday. Economists polled by Dow Jones expect
to see an increase of 155,000, less than the gain of 227,000 in November’s
reading. Additionally, the unemployment rate is projected to remain at
4.2%.
“If we get a strong report, which … we’re
anticipating we will, we may find that the market reaction to that is not
great, because it just is one more reason why the Federal Reserve may not lower
interest rates this year,” Brenda Vingiello, chief investment officer at Sand
Hill Global Advisors, said on CNBC’s “Squawk Box” Thursday.
The market does not expect a rate cut from
the central bank at its next meeting later this month, with fed funds futures
trading data pricing in only about a 7% chance of a quarter-point cut,
according to the CME FedWatch tool.
Earlier this week, the Institute for
Supply Management’s services index showed
an acceleration in growth in the U.S. services industry in December as
well as a rise in prices, which intensified concerns about stickier inflation.
Further, private sector companies added
fewer jobs than expected last month, according to payroll service
provider ADP.
All three of the major averages are on
track for weekly losses, with the S&P 500 off 0.4% and
the Nasdaq Composite down
0.7%. The 30-stock Dow is
on pace for a 0.2% decline on the week. The New York Stock Exchange was closed
on Thursday to take part in a national
day of mourning for late former President Jimmy Carter.
Meanwhile, wildfires surrounding Los
Angeles have persisted, including the Palisades Fire – which is deemed “one
of the most destructive natural disasters” in the city’s history. Fear
and uncertainty pertaining to the blazes sent shares of Edison International more than
10% lower in Wednesday’s
session.
Stock market today: Live updates
'Trump 2.0' looms large over the global economy
9 January 2025, 01:29 GMT
Inflation, interest rates and tariffs mean
2025 is shaping up to be an intriguing year for the global economy. One in
which growth is expected to remain at a "stable yet underwhelming"
3.2%, according to the International Monetary Fund. So what might that mean for
all of us?
Exactly a week before Christmas there was
a welcome gift for millions of American borrowers - a third interest
rate cut in a row.
However, stock markets fell sharply
because the world's most powerful central banker, US Federal Reserve chair
Jerome Powell, made clear they shouldn't expect as many further cuts in 2025 as
they might have hoped for, as the battle against inflation continues.
"From here, it's a new phase, and
we're going to be cautious about further cuts," he said.
In recent years, the Covid pandemic and
the war in Ukraine have led to sharp price rises around the world, and although
prices are still increasing the pace has slowed markedly.
Despite that, November saw inflation push up in the US,
eurozone and UK to to 2.7%, 2.2% and 2.6% respectively. It highlights the
difficulties many central banks face in the so-called "last mile" of
their battle against inflation. Their target is 2%, and it might be easier to
achieve if economies are growing.
However, the biggest difficulty for global
growth "is uncertainty, and the uncertainty is coming from what may come
out of the US under Trump 2.0", says Luis Oganes, who is head of global
macro research at investment bank JP Morgan.
Since Donald Trump won November's election
he's continued to threaten new tariffs against key US trading partners, China, Canada and
Mexico.
"The US is going into a more
isolationist policy stance, raising tariffs, trying to provide more effective
protection to US manufacturing," says Mr Oganes.
"And even though that is going to
support US growth, at least in the short term, certainly it's going to hurt
many countries that rely on trade with the US."
New tariffs "could be particularly
devastating" for Mexico and Canada, but also be "harmful" to the
US, according to Maurice Obstfeld, a former chief economist at the
International Monetary Fund, and a previous economic advisor to President
Obama.
He cites car manufacturing as an example
of an industry that "depends on a supply chain that is spread across the
three countries. If you disrupt that supply chain, you have massive disruptions
in the auto market".
That has the potential to push up prices,
reduce demand for products, and hurt company profits, which could in turn drag
down investment levels, he explains.
Mr Obstfeld, who is now with the Peterson
Institute for International Economics, adds: "Introducing these types of
tariffs into a world that is heavily dependent on trade could be harmful to
growth, could throw the world into recession."
The tariffs threats have also played a
role in forcing the resignation of Canada's
Prime Minister Justin Trudeau.
More
'Trump 2.0" looms large over
the global economy - BBC News
Tesla's easy money from clean car credits
at risk under Trump
January 09, 2025
Tesla has pocketed $11 billion from the
sale of regulatory credits to rival automakers needing help to hit tough emissions
targets — easy money that could dry up if President-elect Trump
rolls back Biden-era regulations.
Why it matters: Tesla's
billionaire CEO, Elon
Musk,
is spearheading Trump's effort to cut government red tape, but this is one
instance in which reversing Biden's environmental policy would significantly
hurt his own company's bottom line.
- 43%
of Tesla's
net profit through
September 2024 came from selling regulatory credits to other carmakers.
Absent a change in policy, that revenue
stream is likely to soar in coming years as legacy carmakers scramble to buy
emissions credits from Tesla (whose electric lineup is fully compliant) as
allowed under the government's clean car rules.
- With
its car sales declining, however, Tesla's net profit margin would lag that
of General Motors without those credit revenues propping up its
performance.
The big picture: Transportation
is the leading source of climate-changing CO2 emissions. Under Biden, the EPA
has enacted ever-stricter limits on tailpipe emissions.
Automakers could comply by selling a
mix of more efficient gas, hybrid and electric vehicles, but there's no
disputing that lots more EVs are essential to hitting such targets.
- The
EPA estimates that compliance would mean 56 percent of new cars sold would
be electric by 2032.
The other side: Trump claims
President Biden's policies are akin to an "EV mandate," and has said
he'd relax EPA standards, which he also did during his first term.
Friction point: In the
meantime, EV sales aren't increasing as fast as expected, which means carmakers
face substantial penalties for noncompliance.
- One
way to avoid such fines is to purchase tradeable "emissions
credits" from companies that have exceeded the standards by selling
lots of electric cars — primarily Tesla.
- As
long as EPA standards keep rising and EV sales lag, demand for credits
will increase, driving up the costs of compliance for most automakers —
and fattening Tesla's coffers.
The bottom line: Trading
emissions credits is big money, and Tesla is the clear winner, as long as Trump
doesn't pull the rug out from under his first buddy.
In other news.
Reeves ‘will be forced to hold Spring Budget’ to
settle gilt jitters, Abrdn predicts
Thursday 09 January 2025 1:56
pm | Updated: Thursday 09 January 2025 3:46 pm
Chancellor Rachel Reeves will be forced to
hold a spring Budget this year to rein in government spending and settle
investors’ nerves, after the cost of government borrowing hit multi-decade
highs this week, Abrdn has predicted.
Despite ministers insisting the gilt market was functioning in an “orderly” way and no
emergency measures would be taken, the FTSE 250 investor said it expects Reeves
to step in with a Budget in March when the government’s fiscal watchdog
publishes new growth forecasts.
Rachel Reeves has previously pledged to
hold only one Budget a year.
Abrdn’s warnings come after UK government bond yields surged higher and the pound slumped today as investors fret over the outlook
for the UK economy and the prospect of rising inflation this year.
The pound fell below $1.23
against the dollar in early trades today and is currently down 0.7 per cent
against the dollar and 0.6 per cent against the euro.
Earlier this week, 30-year government bond
yields reached their highest this century and 10-year government yields jumped
to 4.82 per cent, the highest since August 2008.
“A long time for the market to speculate
with confidence continuing to erode”
While Reeves outlined plans for £70bn of
annual spending in October, Matthew Amis, an investment manager at Abrdn, said
the volatility showed “investors need confidence” to buy government debt
otherwise “gilt yields will continue to move higher and the currency will
continue to weaken”.
“The spending review is not due to be
delivered until June, that’s a long time for the market to speculate with
confidence continuing to erode,” he added. “We ultimately expect to see a
Spring budget alongside the OBR forecasts, where she signals greater cuts to
government spending.”
Rising gilt yields are expected to have
all but wiped out the Chancellor’s fiscal headroom and could lead to the
government breaking its self imposed fiscal rules, requiring government
spending to be met by tax receipts.
More
Reeves 'will be forced to hold Spring Budget' to settle gilt jitters, Abrdn predicts
Potentially crippling port strike averted after dockworkers, ports and shipping companies reach a tentative deal
Updated 5:48 AM EST, Thu January 9, 2025
A potentially crippling strike up and down
America’s East and Gulf Coasts has been avoided – at least for now – after
longshoremen and the shipping and port companies reached a tentative deal on a
new contract Wednesday.
The United States Maritime Alliance, the
group representing ship lines and port and terminal operators, which uses the
acronym USMX, and the International Longshoremen’s Association (ILA), a union
which represents 50,000 members who fill 25,000 jobs spread between three dozen
locations at 14 port authorities from Maine to Texas, jointly announced that
they agreed on a six year deal Wednesday. The deal is not complete until it is
ratified by the union’s membership.
Without a deal, the port workers were set
to go on strike on the morning of January 16.
“We are pleased to announce that ILA and
USMX have reached a tentative agreement,” the two sides said in a joint
statement. “This agreement protects current ILA jobs and establishes a
framework for implementing technologies that will create more jobs while
modernizing East and Gulf coast ports – making them safer and more efficient,
and creating the capacity they need to keep our supply chains strong.”
“This is a win-win agreement that creates
ILA jobs, supports American consumers and businesses, and keeps the American
economy the key hub of the global marketplace, the two sides added.”
The ILA and USMX reached a deal in October
on wages, which increased hourly pay by 10% in the first year and 62% over the
six-year tentative deal. That ended a three-day strike. Workers returned to
work and negotiators were sent back to the table to work out the rest of the
contract. Negotiators met on Tuesday for the first time since mid-November.
Wednesday’s deal is agreement on all other
items including automation, which was a key issue for the union who believed
jobs would be lost.
The sides did not publicly disclose the
details of the agreement. But a source familiar with the negotiations said that
as the final details of the contract were being worked out this week, there was
a compromise reached on technology at the ports, Automation was the key
sticking point for the union over concerns they would lose jobs.
Fully automated technology is still out of
the contract, but it does allow for semi-automation. USMX can implement new
technology like cranes that can perform some tasks without human involvement.
However, the contract gives the ILA guaranteed jobs directly associated with
any new technology, the source said.
Management had argued ports need to
introduce technology to improve productivity – not to eliminate union jobs. But
the union said it was not convinced its members would go unhurt by new
technology.
More
Global banks will cut as many as 200,000 jobs in the next three to five years as artificial intelligence encroaches on tasks currently carried out by human workers, according to an analysis by Bloomberg Intelligence. Back office, middle office and operations are likely to be most at risk, while customer service could see changes as bots manage client functions. The findings point to far-reaching changes in the industry, feeding through to improved earnings. In 2027, banks could see pretax profits 12% to 17% higher than they would otherwise have been — adding as much as $180 billion to their combined bottom line — as AI powers an increase in productivity
UK Currency Plunges as Selloff Deepens - Bloomberg
Apple’s inaccurate AI news alerts shows the tech
has a growing misinformation problem
Published Wed, Jan 8 2025 9:36 AM EST Updated
Wed, Jan 8 2025 12:16 PM EST
An artificial intelligence feature on
iPhones is generating fake news alerts, stoking concerns about the technology’s
ability to spread misinformation.
Last week, a feature recently launched
by Apple that
summarizes users’ notifications using AI, pushed out inaccurately summarized
BBC News app notifications on the broadcaster’s story about the PDC World Darts
Championship semifinal, falsely claiming British darts player Luke Littler had
won the championship.
The incident happened a day before the
actual tournament’s final, which Littler did go on to win.
Then, just hours after that incident
occurred, a separate notification generated by Apple Intelligence, the tech
giant’s AI system, falsely claimed that Tennis legend Rafael Nadal had come out
as gay.
The BBC has been trying for about a month
to get Apple to fix the problem. The British state broadcaster complained to
Apple in December after
its AI feature generated a false headline suggesting that Luigi Mangione,
the man arrested
following the murder of
health insurance firm UnitedHealthcare CEO Brian Thompson in New York, had shot
himself — which never happened.
Apple was not immediately available for
comment when contacted by CNBC. On Monday, Apple told the BBC that it’s working
on an update to resolve the problem by adding a clarification that shows when
Apple Intelligence is responsible for the text displayed in the notifications.
Currently, generated news notifications show up as coming directly from the
source.
“Apple Intelligence features are in beta
and we are continuously making improvements with the help of user feedback,”
the company said in a statement shared with the BBC. Apple added that it’s
encouraging users to report a concern if they view an “unexpected notification
summary.”
The BBC isn’t the only news organization
that has been affected by Apple Intelligence inaccurately summarizing news
notifications. In November, the feature sent an AI-summarized
notification wrongly
claiming Israeli Prime Minister Benjamin Netanyahu had been arrested.
The mistake was flagged on the social
media app Bluesky by Ken Schwencke, a senior editor at investigative journalism
site ProPublica.
CNBC has reached out to the BBC and The
New York Times for comment on Apple’s proposed solution to its AI feature’s
misinformation issue.
More
Apple AI fake news alerts highlight the tech's misinformation problem
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.
Budget
will force majority of firms to hike prices, survey suggests
Wednesday
08 January 2025 11:37 am
A
majority of businesses will lift prices in the next year due to the government’s
national insurance hike, a new survey suggests, adding to fears that the
Budget might stoke inflationary pressures.
Over
half of respondents (54 per cent) to Grant
Thornton’s business outlook tracker said they will need to pass on
higher employment costs to customers through higher prices in 2025.
Schellion
Horn, head of economic consulting at Grant Thornton, said this would “put
pressure on inflation” and force the Bank of England to keep interest rates
higher for longer.
The
survey, which included responses from 800 firms in the UK, also showed that a
majority (52 per cent) of businesses will reduce hiring, cut jobs or offer
lower pay packets to employees.
“Just
when there is light at the end of the tunnel, the market is now faced with
further cost increases,” Horn said.
Rachel
Reeves unveiled a £40bn tax raid in her first Budget, with businesses bearing
the brunt of the rise through a £25bn increase in employers’ national
insurance.
The
Chancellor also upped the minimum wage, piling extra pressure onto corporate
balance sheets.
Business
groups have sounded the alarm in recent weeks that the measures will force them
to cut jobs and hike prices. A similar report from the British Chambers of
Commerce, released earlier this week, suggested that 55 per cent of firms
expect to hike prices in the next three months.
Economic
momentum has also slowed. The UK contracted in October while forecasts from the
Bank of England suggest that the economy was stagnant in the final quarter.
With
price rises in the pipeline, the Bank will
likely be wary about cutting interest rates too fast in the new year
despite the slowdown in economic growth.
Andrew
Bailey, the Bank’s Governor, insisted that the Bank would take a “gradual”
approach to easing policy in December. Financial markets anticipate just two
interest rate cuts in 2025.
Budget will force
majority of firms to hike prices, survey suggests
Investors ‘are losing confidence’ in the UK
economy
Wednesday 08 January 2025 2:06
pm | Updated: Wednesday 08 January 2025 4:01
pm
UK government borrowing costs continued
rising on Wednesday, and the value of sterling dropped as investors
recalibrated their views on the UK economy.
The yield on the benchmark 10-year gilt,
which reflects the cost of borrowing, hit 4.78 per cent on Wednesday
afternoon, a
post-financial crisis high.
It came after the yield on the 30-year
gilt hit its highest level this
century yesterday.
The yield on the 30-year gilt continued rising on Wednesday afternoon, reaching
5.42 per cent.
The pound also suffered, dropping 1.1 per
cent against the dollar to trade at $2.134, its lowest level since April.
Helen Thomas, CEO of BlondeMoney said:
“Investors are charging the UK government more and more to hold its debt as
they are becoming increasingly concerned Rachel Reeves has put herself in a
straitjacket of her own making.
“The ECB is cutting rates to try to spur
growth whilst Trump has a big new mandate for action. In comparison the UK
government is taxing business and hurting consumer confidence whilst plunging
money into an unproductive public sector.
“The results are soggy. Economic data is
showing no growth and sticky inflation, a toxic mix for bond investors. They
are losing confidence in the UK.”
Kyle Ballinger, FX markets analyst at
Ballinger Group, said sterling’s sell-off was driven by “heavy gilt supply,
concerns about the UK government’s debt sustainability, and the inflationary
impacts of extra fiscal spending”.
What do rising gilt yields mean for the UK
economy?
Higher yields mean that the government has
to spend more money servicing debt, money that cannot be spent on public
services.
The upward movement reflects several
factors, including concerns that inflation will persist in the new year and the
potential impact of Donald Trump’s tariffs.
Both will likely slow the pace of interest
rate cuts, keeping borrowing costs higher.
The sell-off has heightened fears the
Chancellor will be forced to raise taxes or cut spending to meet her fiscal rules, which require
day-to-day spending to be met by tax receipts.
She left herself a buffer of £9.9bn in
October’s Budget to meet this pledge, but many economists think this might have
already disappeared due to the increase in borrowing costs.
“The razor thin headroom left in the
Autumn Budget has likely all evaporated,” Sanjay Raja, chief UK economist at
Deutsche Bank said.
More
Investors 'are
losing confidence' in the UK economy
Covid-19 Corner
This section will continue until it becomes unneeded.
Doctor
explains the one thing you need to know about HMPV amid 'new Covid' fears
8
January 2025
A
doctor has taken to TikTok to quell fears surrounding the human metapneumovirus
(HMPV). And she's assured her 100,000 followers that it's "nothing
new" and not akin to Covid-19.
Irish
paediatrician Dr Niamh Lynch has used the power of social media in an attempt
to reassure her followers. Her advice follows videos circulating online showing
hospitals seemingly overrun with HMPV patients, including
children seen coughing in long queues for paediatric units.
Unverified
reports of overwhelmed crematoriums and funeral homes have also surfaced.
However, Dr Lynch stated: "I see this every day of the week, every week of
the winter, because its nothing new. We deal with HMPV all the time."
China's
centre for disease control (CDC) has also dismissed reports of another pandemic. Mao Ning, a
Chinese foreign ministry spokesperson, said on Friday: "Respiratory
infections tend to peak during the winter season."
Ning
added that the diseases appear to be less severe and spread on a smaller scale
compared to the previous year, according to the
Mirror.
Dr Lynch explained that the symptoms of HMPV are similar to the common flu and
are treated as such.
She
added: "It can cause upper respiratory symptoms like sore throats or ears
- it can cause a croupy cough and it can cause a little bit of wheeze. You
manage it much the same as you with any other viral illness - so with pain
relief, fluids, and plenty of rest and contacting your doctor if you're
concerned about yourself or your child."
According
to her, individuals are bringing up HMPV in the "same sentences as Covid
just to get our attention and scare us that little bit more." The surge in
infection rates might be attributed to advancements in technology used to
monitor the disease, reports Surrey
Live.
Notably,
unlike Covid-19, HMPV is not a novel virus, having been present for several
decades, which means there is some level of immunity within the global
population due to past infections. In response, a TikTok follower shared:
"It's not new. My twins had this over a year ago. Sickest they have ever
been."
Doctor explains the one thing you need to know about HMPV amid 'new Covid' fears
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.
CES 2025:
Could Zoltux's Instant Solar Kit Be the Answer to Hassle-Free Solar Power?
January
8, 2025
We
love solar
power for being clean, saving on electrical bills and providing
backup power during outages. Solar adoption can save you money in the long run,
but it can take a while to break even due to the high initial expense, which is
why Zoltux's Instant Solar Kit,
showcased at CES
2025 as part of a Kickstarter project, has us so intrigued.
The
company claims that its solar setup can be installed in just five minutes. The
price for the 800-watt Instant Solar Pod, which includes mounts, solar
panels, inverter and wiring, is just $1,199, not including the 30% solar
tax credit (assuming it applies). According to Zoltux, this makes its payback
period three to four years rather than the decade-plus it may take
with traditional solar.
Balcony
solar in the US
On its
face, plug-and-play solar offers a way to get solar power without a major
installation process or regulatory hurdles, although there are caveats to this
in the US. Essentially, instead of installing permanent solar panels to your
roof, you install "balcony solar," a type of solar power generation
popular in Germany and supported by the country's utilities. Think of it as
being halfway between a portable
solar panel and a rooftop solar panel. Connecting an inverter to this
setup lets you feed the power directly to an AC plug to support your
usage.
This
is allowed in the US, but often requires an interconnection agreement and
permission to operate anything that feeds power back into the grid. To get
around this, Zoltux is using AI to ensure there's zero feedback into the grid,
which, in theory, means you wouldn't be subject to these regulations. The
company is also attempting to integrate a smart home energy
system so the inverter can sync with a smart thermostat, Alexa and lights and
optimize your home energy use.
After
installing the solar panels yourself, you can hook them up to a standard
120-volt US outlet, which Zoltux says is inherently bidirectional, meaning it
can both output electricity and receive it. It says the inverter also goes up
higher than 120-volt and is UL 1741 SB compliant, although it's currently not
certified. It's working on getting it before the Kickstarter launch.
More
CES 2025: Could
Zoltux's Instant Solar Kit Be the Answer to Hassle-Free Solar Power?
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
Another
weekend and as of January 1st, Indonesia became the latest full
member of the growing BRICS alliance. How many new members will Team Trump
drive in, if Trump continues bullying Canada, Denmark and Panama? I suspect we
will not have to wait too long to find out. Canada, Denmark and Panama, next
perhaps? Have a great weekend everyone.
A great
company is not a great investment if you pay too much for the stock.
Benjamin Graham.
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