Baltic
Dry Index. 1029 +32
Brent Crude 75.98
Spot Gold 2660 US 2 Year Yield 4.25 unch.
“Considerable uncertainty is attached to all economic estimates"
Alan Greenspan, Chairman Federal Reserve Board, testimony 1994.
Will 2025 turn into a bonds v stocks battle? Well maybe in the EU and USA, but in China neither look like a winner in 2025, as China’s economy reels from deflation, largely caused by the end of China’s real estate bubble.
China stocks extend declines with bond yields
hitting record lows as PBOC reportedly signals rate cuts
Published Thu, Jan 2 2025
China stocks extended declines on Friday
in a bumpy start to the new year, despite gains in the broader Asia-Pacific
region, as investors assessed Beijing’s policy signals.
Mainland China’s benchmark CSI 300 index
dropped 0.18% in a volatile session, extending
declines the day before. Hong Kong’s Hang Seng index rose 1.36%.
China’s bond yields hit record lows with
the 10-year yield dropping 1.5 basis point to 1.598%, and 30-year government
bond yield down 2.9 basis points at 1.819%, according to LSEG data.
The People’s Bank of China is reportedly
planning to cut interest rates “at an appropriate time” this year, the Financial Times reported citing comments from the
central bank. The country’s 7-day reverse repo rate is currently set at 1.5%.
In the year ahead, China will expand
issuance of ultra-long bonds and ramp up efforts to boost consumption, senior
officials from China’s National Development and Reform Commission told
reporters Friday.
The officials reiterated plans to
subsidize purchases of smartphones, smart watches and tablets, while increasing
vocational training, pensions and support for gig economy workers.
Separately, China’s commerce ministry
proposed to impose export restrictions on certain technology used to make
battery components and for processing critical minerals like lithium and
gallium, according to a notice issued on Thursday.
Investors in Asia will continue to assess
the political uncertainty in South Korea as the country’s corruption watchdog
seeks to execute an arrest warrant for impeached President Yoon Suk Yeol, according to local media Yonhap News. Yoon’s short-lived
martial law attempt on Dec. 3 has led to a political turmoil in the country.
South Korean markets, however, appeared to
shrug off the political chaos, with the Kospi index gaining 2.01%
and the small-cap Kosdaq rising 2.30%. SK Hynix saw its shares surge 5.43%, as
the chipmaker said it would unveil plans to position itself as a “full stack AI memory
provider” at Consumer Electronics Show 2025 next week.
Australia’s S&P/ASX 200 rose 0.72%.
Japan markets remained closed for a
holiday.
The three major U.S. indexes ended the
first trading session of the new year lower, extending the weakness at the end
of 2024, signaling the markets may not see a “Santa Claus rally” this year.
Investors were hoping for a “Santa
Claus Rally” which spans the last five trading days of a year and the
first two trading days of the following January. During this stretch of time,
the S&P 500 has gained an averaged 1.3% while nearly 80% of the time
finishing higher, Dow Jones Market Data going back to 1950 showed.
Overnight stateside, the blue-chip Dow Jones Industrial Average lost
151.95 points, or 0.36%, to end at 42,392.27, while the S&P 500 dropped 0.22% to
5,868.55 and tech-heavy Nasdaq
Composite shed 0.16% to 19,280.79.
That marked the fifth straight session in
the red for the S&P 500 and Nasdaq, their longest losing streaks since
April. Big tech stocks weighed down the market, with Apple falling 2.6%, and
Tesla slumping 6% on lower annual deliveries.
Asia-Pacific markets live updates: South Korea turmoil, PBOC rate cuts
CNBC Daily Open: Treasury yields are putting
pressure on stocks again
Published Thu, Jan 2 2025 8:00 PM EST
What you need to know today
U.S. markets start the year in the red
U.S.
stocks began the year on a downbeat mood, with all
major indexes dipping on Thursday, giving up earlier gains. The U.S.
dollar index hit its highest level in more than two years. The
pan-European Stoxx 600 index
added 0.6%, reversing
earlier losses. Oil and gas stocks led gains, up 2.3% although Europe’s
banking index lost 0.3%.
Tesla deliveries reverse gains
Shares
of Tesla slumped 6.1%
after the company reported that total deliveries in the fourth quarter of
2024 fell
year on year. Not only was that Tesla’s first annual drop in deliveries,
the figure was also below expectations, according to a consensus of estimates
compiled by StreetAccount. Delivery are the closest approximation of sales
reported by Tesla.
Meta’s new president of global affairs
Meta is replacing its
president of global affairs Nick Clegg, a former British deputy prime minister,
with Joel Kaplan, the company’s current policy vice president and a former
Republican Party staffer. It’s a sign of how tech companies are positioning
themselves for U.S. President-elect Donald Trump’s incoming
administration in Washington.
Russia gas stops flowing
Ukraine
halted the flow of Russian gas to several European countries on New Year’s Day
in a
widely expected move, Russia’s state-owned energy giant Gazprom confirmed on
Wednesday. The European Commission said it had been working to ensure the 27-nation bloc
was prepared for such a scenario — though some countries are more at risk than
others.
[PRO] Sentiment near euphoria level
Investor
optimism has only grown despite a rough ending to December. A barometer tracked
by Bank of America indicates
that investor sentiment is near euphoria level — but that’s, contrarily, a
signal to sell. Savita Subramanian, the bank’s equity and quant strategist,
explains what that means for investors.
The bottom line
As the first trading day of the year
opened, all major indexes advanced, giving rise to the hope that stocks could
begin 2025 bright and cheery.
But, like workers shedding the new year
festivities and glumly marching back to the office, stocks lost their sheen,
began tilting down and closed the session lower.
The Dow Jones Industrial Average retreated
0.36%, the S&P 500 fell
0.22% and the Nasdaq
Composite lost 0.16%. Their loss on Thursday means the S&P and
Nasdaq have closed lower for five consecutive sessions, their longest losing
streaks since April.
The likely culprit? Rising Treasury
yields. After dipping initially, the 10-year Treasury yield began
to climb and, at 12 p.m. U.S. time, was close to touching 4.6%. That coincided
with the time stocks began to decline: The S&P 500 lost around 60 points
between 12 p.m. to 1 p.m.
Even though the 10-year yield eventually
levelled off at the end of the day, persistently high yields are a threat to
stocks because they represent a safer avenue where investors can stash their
cash. When Treasurys can give a guaranteed 4.6% return, the risk of betting on
stocks seems less attractive.
Treasurys might be even more appealing
this year because analysts don’t expect the S&P to return anywhere near its
23.31% surge in 2024. It’s more likely to gain 9% in 2025, on a median basis,
according to the CNBC
Market Strategist Survey released in December.
Given that backdrop, stocks may not
adequately compensate investors for the risk they are taking relative to owning
bonds.
More
CNBC Daily Open: Treasury yields are putting pressure on stocks again
In other news, the USA v China trade war is heating up even before Donald Trump resumes the US presidency.
Winter arrives in the USA and Europe.
China hits Lockheed Martin, Raytheon and Boeing
with export ban after US arms sales to Taiwan
2 January 2025
China banned
the export of
dual-use products to over two dozen US defence contractors, targeting top
players like Lockheed Martin and Raytheon, as it objected
to Washington’s latest
arms sales to Taiwan.
Beijing imposed the
ban on 28 US defence contractors, placing 10 of them on an unreliable entities
list over weapons sales to Taiwan, the commerce
ministry said on Thursday.
The decision, “based on China’s export control
law and regulation on export control of dual-use items”, was taken to
“safeguard national security and interests and fulfil international obligations
including non-proliferation,” the ministry said.
The targeted firms also included General
Dynamics and Boeing.
The 10 “unreliable entities” were engaged
in the American weapons sales to Taiwan “despite strong opposition” from
Beijing.
“The so-called military technology
cooperation seriously undermines China’s national sovereignty and territorial
integrity, violates the One China principle and the provisions of the three
joint communiques between China and the US, and significantly threatens peace
and stability in the Taiwan Strait,” a ministry spokesperson said.
China considers
Taiwan a part of its territory and does not rule out the use of
force to “reunite” the island.
The export ban mimics last month’s
sanctions on defence and aerospace entities involved in a previous sale
of weapons
to Taiwan. The
sanctions targeted Insitu, Hudson Technologies, Saronic Technologies, Raytheon
Canada, Raytheon Australia, Aerkomm, and Oceaneering International Inc.
The firms under the latest ban will be
barred from import and export activities in China and from making new
investments. Their officials cannot enter the country and their work permits or
residency will be revoked.
It was not immediately clear how many
individuals would be impacted by the decision.
Taiwan last month
received a batch
of 38 advanced Abrams battle tanks from the US in a
significant boost to the island’s land defence capabilities. Another 42 tanks,
considered the heaviest in the world, are due to be delivered this year, and 28
the year after.
The island has been upgrading its defence
capabilities – acquiring F-16 fighter jets, missiles, submarines and artillery
systems from the US – in the face of increasing
military drills
by China.
China hits Lockheed Martin, Raytheon and Boeing with export ban after US arms sales to Taiwan
1 big thing: 🥶 Long-duration Arctic
blast begins
January 02, 2025
An Arctic outbreak featuring punishing
cold weather is beginning across much of the U.S. at the same time that Europe prepares for plunging temperatures.
Why it matters: About three weeks
of cold east of the Rocky Mountains — potentially accompanied by major winter
storms — will boost natural gas prices, pose a risk of power outages and
disrupt travel.
Threat level: The cold will hit
the U.S. in waves, with the first moving in this week, a second early next week
on the heels of a significant Plains to Mid-Atlantic winter storm, and
additional ones after that.
- Each
push is likely to be colder than the one preceding it.
- By
early next week, daily high temperatures may be stuck in the single digits
across parts of the Midwest, with the possibility of temperatures dropping
to 32°F all the way to the Gulf Coast.
- Highs
in Washington, D.C., may not get much above freezing for several days in a
row during the Jan. 4-10 period, with the possibility of even colder
weather arriving after that.
- This
cold snap may affect at least 200 million people before it ends. Millions
of these Americans may see increased heating bills as natural gas prices
spike, and some could be affected by power outages.
More
Europe’s Cold Snap to Further Deplete Gas
Inventories
Thu 2 January 2025 at 12:20 pm GMT
(Bloomberg) -- The UK is bracing for snow
and ice over the next few days, while Nordic countries also face freezing
temperatures as European gas inventories fall at the fastest pace since 2021.
The cold snap across the north of the
region heralds a colder-than-usual January, boosting energy demand as gas
storages deplete. The sub-zero temperatures also coincide with the end of the
Ukraine-Russia pipeline transit deal, leaving the region without a key source
of gas supply.
Yellow warnings for snow and ice are in
place in the UK for the next five days, following in the wake of stormy
conditions, according to the Met Office. The UK Health Security Agency also
issued an amber alert until Jan. 8, with the highest risks from low
temperatures expected in the north of England.
“At this stage there is a fair amount of
uncertainty over exactly which areas will see disruptive snow, with parts of
Wales, northern England and the Midlands most likely to see some impacts,” said
Dan Holley, deputy chief forecaster for the Met Office.
The winter storm that passed over the UK
is now hitting Norway and Sweden. Temperatures in Oslo could drop to as low as
-15C (5F) by Sunday, according to forecaster Maxar Technologies Inc.
Ski resorts around Mont Blanc, such as
Chamonix in France and Courmayeur in Italy, are expecting more than a meter of
snow over the coming week.
Europe’s Cold Snap to Further Deplete Gas Inventories
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.
"What
Is The Biggest Risk For 2025" And 13 Other Highlights From DB's 2025
Market Survey
Thursday,
Jan 02, 2025 - 01:40 AM
The
Deutche Bank 2025 global financial market survey had 471 responses from around
the world, and was conducted between the 10th and 13th of December 2024. Here
are the 14 main highlights:
1. Only
2% believe US growth will be below 1% in 2025, whereas that’s the average
expected for Europe. The average expected for the US in 2.5%, no
respondents think Europe will be at or above this level.
2.
A global trade war is seen as the biggest observable risk for 2025, followed by
a tech stock plunge and concerns over inflation and bond yields
3.
Investors think Trump means business on tariffs but an average score of 5 means
that they don’t think he’ll be as aggressive as the campaign pledges. Only 6.4% think
he’ll be more extreme (8 and above)
4.
The overwhelming majority (90%) believe the German debt brake will be
reformed. However,
only 12% believe the change will be significant.
5.
German respondents were much more confident that there will be reform of some
description, with
only 2% thinking the debt brake will remain in its current form.
6.
DB asked this question 3 times in both 2021 and 2024. Less think there’s a US
tech bubble in 2024 than in 2021 but the overall number is still high. There’s been no
real increase in the bubble score for the Mag-7 through 2024, even with a 72.5%
climb YTD. Bitcoin sees the highest bubble risk and European equities are seen
furthest away from this...
7.
For the Mag-7 in 2025 while 33% believe they’ll decline and 22% think by more
than 10%, 67% think they’ll be higher with an average overall gain of
6.8% expected, albeit down from the 12.9% expected in 2024.
8.
YE 2025 Treasury yield expectations (average 4.2%) are a bit lower than current
levels with only 4% believing we’ll end 2025 >5%
More
"What Is The Biggest Risk For 2025" And 13 Other Highlights From DB's 2025 Market Survey | ZeroHedge
Covid-19 Corner
This section will continue until it becomes unneeded.
After
a long lull, Covid-19 levels are surging in the US
January
1, 2025
After
a relatively slow start to the respiratory virus season, Covid-19 levels in the
United States began ramping up just ahead of the winter holidays.
In
previous years, Covid-19 levels have typically started to rise in early
November and reach their seasonal peak by the end of December. But this year,
levels were nearly the lowest they’ve ever been through October and all of
November, according to wastewater surveillance data from the US
Centers for Disease Control and Prevention.
Trends
started to shift in early December, though, with levels rising from low to high
by the middle of the month. In the week ending December 21, there was nearly
three times as much Covid-19 circulating in the US than there was during the
week ending December 7, CDC data shows.
This
surge happened in all regions of the country, but there has been a particularly
sharp uptick in the Midwest, where Covid-19 levels are nearly twice as high as
they are in other parts of the country.
Some
experts worry that the rapid rise after an unusually long lull could have left
many people vulnerable to disease spread at the height of the holiday season.
In
a social media post in
mid-December, Dr. Michael Hoerger, a researcher at the Tulane University School
of Medicine, called the latest wave of Covid-19 transmission a “’silent surge,’
coming on late out of nowhere.”
Hoerger
runs a Covid-19 forecasting model that pulls heavily from the CDC wastewater
surveillance data, and his estimates suggest that without any testing or
isolation policies in place, there was a 1 in 8 chance of Covid-19 exposure at
a gathering of 10 people on Christmas Day. On a plane of more than 100 people,
there was a 3 in 4 chance of exposure.
The
rapid rise in cases corresponds with a newly dominant coronavirus variant
called XEC.
XEC
is a hybrid of two JN.1 variants, which was the Omicron subvariant that
accounted for most cases during last winter’s surge, according to the CDC.
Agency data shows that
the XEC variant has been circulating in the US for months but overtook one of
the so-called FLiRT variants – KP.3.1.1 – between the end of November and the
first week of December. From December 8 to 21, XEC accounted for 45% of new
cases, up from 15% of cases two months earlier.
Variants
are expected as “gradual changes to the virus, known as mutations, result in
new viruses that look different to your immune system,” the CDC
says.
But this novelty is what makes it easier for variants to escape your immunity
and make you sick.
More
After a long lull, Covid-19 levels are surging in the US
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.
Cuneiform-like
data storage tech boasts four times the density of binary
By Ben Coxworth December 31, 2024
Cuneiform, the world's oldest form of writing, involved
making indentations in clay tablets. Scientists have now developed a data
storage system that's like cuneiform on steroids – and it's capable of storing
more data than a typical hard disc drive.
The
experimental new technology was created by Abigail Mann and colleagues at
Australia's Flinders University.
Instead of a clay tablet, the system utilizes an
inexpensive polymer film composed of sulfur and a chemical compound known as
dicyclopentadiene. Data is stored on that film in the form of a series of
nanoscale indentations. These tiny indents are made (and read) using a fine-tip
probe mounted on an atomic force microscope … not by a reed
stylus.
In previous attempts at such "indent-based"
data storage systems, the indents served as binary code. The presence of an
indent represented a 1, while the absence of an indent represented a 0.
Not only were the polymer substrates that were used in
these earlier systems difficult to produce, they also weren't very stable or
finely workable. That's where the Flinders polymer comes in.
It's sensitive enough that the depth of
each indent can be precisely tweaked. As a result, instead of data being stored
via two-state binary code, it can be stored via a three-state ternary code in
which the absence of an indent is a 0, a 0.3- to 1.0-nanometer-deep indent is a
1, and a 1.5- to 2.5-nanometer-deep indent is a 2.
This capability boosts the system's data density
four-fold over binary coding.
What's more, the indents remain intact and readable
until the polymer is heated to 140 ºC (284 ºF) for just 10 seconds, thus
erasing it. The film can then be rewritten with new data. In tests performed so
far, the material remained functional through four write-read-erase-rewrite
cycles.
As an added bonus, the indent-writing process can be
performed at room temperature, keeping the system's energy requirements
relatively low.
"This research unlocks the potential for using
simple, renewable polysulfides in probe-based mechanical data storage, offering
a potential lower-energy, higher density and more sustainable alternative to
current technologies," says Mann, who is a PhD student in Flinders'
College of Science and Engineering.
A paper on the research was recently published in the
journal Advanced Science.
Source: Flinders University
Cuneiform-like
data storage tech boasts four times the density of binary
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
Another weekend, the first in 2025 and
another weekend closer to Trump 2.0. Have a great weekend everyone.
"It
is always the best policy to speak the truth, unless of course, you are an
exceptionally good liar."
Jerome K. Jerome, 19th century English novelist.
No comments:
Post a Comment