Tuesday, 14 January 2025

US PPI Day. Global Bonds Signal Trouble.

Baltic Dry Index. 1093 +45          Brent Crude 80.54

Spot Gold 2668                 US 2 Year Yield 4.40 unch.  

They were a people so primitive they did not know how to get money, except by working for it.

Joseph Addison. (About the Irish?)

In the stock casinos, the flight out of the AI high tech bubble?

Have/are global bonds calling time on the great US stock bubble?

With US mortgages back at seven percent, is it all over for the real estate bubble in Florida?  What about real estate in LA/CA?

With more questions than answers and US inflation figures today and tomorrow, any sign of inflation returning will make Warren Buffett’s selling look like a stroke of genius.

Asia markets mostly rise after Wall Street’s mixed moves that saw investors rotate out of tech stocks

Updated Tue, Jan 14 202511:10 PM EST

Asia-Pacific markets mostly rose Tuesday after a mixed session on Wall Street that saw the Dow soar and the Nasdaq slip as investors rotated out of tech stocks.

Hong Kong’s Hang Seng index was up 1.41%, while mainland China’s CSI 300 climbed 1.74%.

Australia’s S&P/ASX 200 rose 0.32%, after falling for three straight sessions.

Japan’s markets were the only outlier, with the Nikkei 225 falling 2.1%. The Topix dipped 1.48%.

South Korea’s Kospi traded up 0.25% while the Kosdaq added 0.85%. Japan’s 40-year government bond yield rose to 2.755, its highest on record at since 2007, LSEG data showed.

Investors will continue monitoring India’s rupee after it weakened to a record low against the U.S. dollar. India on Monday reported inflation data for December, which declined for a second straight month year on year, coming in just below expectations at 5.22% and boosting the case for prospective interest rate cuts.

Thailand will be releasing its consumer confidence index for December.

Overnight in the U.S., the Dow Jones Industrial Average climbed, outperforming the market, while the Nasdaq Composite slipped as traders continued to sell off major tech stocks that have powered the bull market.

The 30-stock Dow rose 358.67 points, or 0.86%, to close at 42,297.12 as investors rotated into nontech shares such as CaterpillarJPMorgan and UnitedHealth. Meanwhile, the tech-heavy Nasdaq dropped 0.38% to 19,088.10. The S&P 500 inched up 0.16%, ending at 5,836.22.

All three benchmarks have declines for the past two weeks, with tech shares causing most of the damage.

Asia markets live: India rupee, Japan current account balance

European markets set to reverse negative momentum at the open, but bond yields are still in focus

Updated Tue, Jan 14 2025 12:43 AM EST

European markets are heading for a positive open Tuesday, reversing negative sentiment in the region, but investors will be keeping a close eye on borrowing costs for a number of core European economies this week as bond yields remain elevated.

The U.K.’s FTSE 100 index is expected to open 4 points higher at 8,226, Germany’s DAX up 106 points at 20,241, France’s CAC up 66 points at 7,472 and Italy’s FTSE MIB up 272 points at 35,082, according to data from IG.

Trading updates are set to come from OcadoJD SportsPersimmon and OMV on Tuesday. Lindt & Sprüngli will release its latest earnings.

Major European stock markets fell on Monday amid worries over rising government bond yields and a surging U.S. dollar, with the pan-European Stoxx 600 index seeing most sectors closing in the red.

Euro zone and U.K. government bond yields, as well as U.S. Treasurys, are being closely watched this week after the interest rate on short and long-dated government debt climbed to fresh multi-month highs last week and remained elevated on Monday.

Asia-Pacific markets and U.S. stock futures rose overnight as investors braced themselves for the U.S.′ latest producer price index, which measures wholesale inflation. Economists polled by Dow Jones predict that headline PPI grew 0.4%, while the core figure, which excludes food and energy, rose 0.3%.

The reading comes ahead of the closely followed consumer price index report on Wednesday. Both reports will inform the Federal Reserve’s next move on interest rates.

European markets live updates: stocks, news, data and earnings

Global Bond Tantrum Is a Wrenching and Worrisome Start to New Year

Mon, January 13, 2025 at 1:12 PM GMT 

(Bloomberg) -- For those unsettled by the relentless rise in government bond yields in the US and across much of the world lately, the message from markets is getting clearer by the day: Get used to it.

The world’s biggest bond market and global bellwether is leading a reset higher in borrowing costs, with the prospect of a prolonged period of elevated rates carrying consequences for economies and assets everywhere.

Just days into 2025, yields on US government debt are surging as the risks to supposedly super-safe assets mount. The economy continues to power ahead — Friday’s blowout employment report provided the latest evidence — while the Federal Reserve is rethinking the timing of further interest-rate cuts and Donald Trump is returning to the White House with policies prioritizing growth over debt and price fears as borrowing has soared.

The rate on 10-year notes alone has soared more than a percentage point in four months and now is within sight of the 5% barrier last breached briefly in 2023 and otherwise not seen since before the global financial crisis nearly two decades ago. Yields edged higher on Monday as traders’ expectations for Fed easing dwindled further and oil prices rose.

Longer-dated US bonds have already touched 5%, with that milestone now seen by many on Wall Street as the new normal for the price of money. Similar spikes are playing out internationally, with investors increasingly wary of debt from the UK to Japan.

“There is a tantrum-esque type of environment here and it’s global,” said Gregory Peters, who helps oversee about $800 billion as co-chief investment officer at PGIM Fixed Income.

For some, the shift upward in yields is part of a natural realignment after years of a near-zero rate environment following the emergency measures taken after the financial crisis and then Covid. But others see new and worrisome dynamics that present major challenges.

Given its role as a benchmark for rates and signal of investment sentiment, the tensions in the $28 trillion US bond market threaten to impose costs elsewhere. Households and businesses will find it more expensive to borrow, with US mortgage rates already back at around 7%, while otherwise upbeat stock investors are beginning to fret higher yields could be a poison pill for their bull market.

More

Global Bond Tantrum Is a Wrenching and Worrisome Start to New Year

In other news.

Inflation fears mount as oil prices surge

13 January 2025

Oil prices have risen to a six-month high, raising fresh inflation fears for Rachel Reeves as she grapples with a surge in borrowing costs.

Brent crude has risen as much as 2.4pc today to more than $81 - hitting its highest level since August following new US sanctions on Russian oil announced last week.

It comes as the Chancellor already faces pressure from bond markets as investors are spooked by Britain’s rising inflation and weak growth.

Long-term government borrowing costs rose to a fresh 27-year high today ahead of inflation figures on Wednesday which are expected to show prices rose by 2.6pc in the year to December.

Susannah Streeter of Hargreaves Lansdown said: “Inflation concerns are set to be exacerbated with a jump in oil prices, which is set to filter through to costs at the pumps.”

David Morrison of Trade Nation said: “Crude oil certainly looks as if it has finally broken out above its long term downtrend which has kept prices suppressed since September 2023, or even going back to March 2022 when it peaked after Russia’s invasion of Ukraine.”

He added: “Fundamentally, crude is getting a boost from the cold weather across Europe and parts of the US.

“It is also getting a lift from fresh US sanctions on Russian oil sales. The energy sector is getting an overdue lift now, as oil and natural gas heads higher following a long period in the doldrums.”

Inflation fears mount as oil prices surge

China exported a record amount of goods last year, swelling its trade surplus to almost $1 trillion and underscoring how global commerce remains unbalanced despite government protectionism and efforts by companies to diversify their supplier bases.

US importers trying to buy as much from China as they can before Donald Trump returns to the White House are driving part of the trade gap, with exports to the US in December rising to the highest in two years and taking the total for the year to $525 billion.

The Chinese surplus with the 10 countries in Asean also jumped to a record, with part of that likely driven by exports of parts for electronics, to be assembled in Vietnam and then shipped to the US and elsewhere. 

But the strength of demand for Chinese products is global — exports last year to Indonesia and Brazil grew by double digits, while shipments to France and Germany climbed more than 6%, buoyed by exports of millions of electric vehicles and other products.

However, Chinese demand for the world’s products didn’t grow anywhere nearly as fast, with imports only expanding 1.1% last year, well below the 5.9% rise in exports.

A big question now is whether China’s efforts to boost the domestic economy can boost that demand for foreign goods, or will the world’s second-biggest economy continue to rely on the rest of the world to make up for its weak economy and lackluster consumer demand.

Another unknown: Whether Trump — who enters office one week from today — will use the latest figures from Beijing as more justification for one of his most consequential campaign promises of the 2024 election: imposing universal tariffs on China as a way to correct imbalances in the global trading system and boost job growth at home.

Supply Chain Latest: China's Record Year for Exports - 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.

Poor UK voters, fooled by inept socialists yet again.

UK CFOs set to cut hiring and slash investment following Budget

Monday 13 January 2025 6:00 am   

Finance chiefs at UK businesses are focused on cutting costs in the wake of the Budget, with investment and hiring set to suffer as a result.

Over half (52 per cent) of CFOs surveyed by Deloitte said cost reduction was a strong priority for their business in the wake of the Chancellor’s tax raid.

The survey showed that hiring intentions in the final quarter of last year fell at the fastest pace since early 2020, while a net 58 per cent of firms expect to cut discretionary spending.

In addition, less than one in five CFOs (18 per cent) said it was a good time to take additional risk onto their balance sheet, the weakest risk appetite in over a year.

“With cost control to the fore in the wake of the Budget, CFOs have trimmed expectations for corporate investment, discretionary spending and hiring in the next 12 months,” Ian Stewart, chief economist at Deloitte said.

The survey is another indication that the measures announced in the government’s first Budget have knocked business confidence and weighed on economic activity.

Rachel Reeves hiked employers’ national insurance in October’s fiscal event while also lifting the minimum wage by 6.7 per cent, imposing significant extra costs on many UK firms.

These measures have added headwinds to an economy that was already losing momentum in the second half of 2024.

Official figures show that the UK unexpectedly contracted in October for the second straight month while the Bank of England’s latest projections indicate that the economy was stagnant in the final quarter of 2024.

Despite the impact of the Budget, Stewart predicted that the economy would grow faster this year than last on the back of “easy fiscal policy” and lower interest rates.

Deloitte’s survey shows that UK CFOs expect to see three interest rate reductions in 2025, one more than currently priced in by financial markets.

This is partly due to lower wage growth, with the survey suggesting that wage growth will ease to 3.2 per cent in the next year, down from four per cent in the previous report.

UK CFOs set to cut hiring and slash investment following Budget 

Stakes are high for UK economy ahead of crunch week of data

Monday 13 January 2025 6:00 am  |  Updated:  Monday 13 January 2025 7:23 am

Investors will be paying close attention to the UK economy again this week ahead of a series of crunch data releases.

The latest inflation figures, covering December, will be published on Wednesday before GDP figures for November will be released on Thursday.

City economists expect inflation to remain unchanged at 2.6 per cent, while the economy is projected to return to growth having suffered two months of contraction.

But the data releases come at a time when the economy is facing particular scrutiny from international investors following last week’s sell-off in UK government debt.

Although bond yields rose all over the world, gilt yields increased faster than peers. The yield on the 30-year gilt hit its highest level since 1998 on Wednesday before the 10-year gilt hit a post-financial crisis high on Thursday.

Commentators suggested this reflected unease with the government’s economic agenda as well as lingering fears about the persistence of inflation.

While the turmoil in gilt markets had calmed by the end of the week, investors remain tetchy.

Economists at Goldman Sachs said: “The recent sell-off raises the stakes for the upcoming inflation data releases”.

If inflation comes in higher than expected, or if growth fails to materialise, then the sell-off could resume with renewed intensity.

Analysts at Investec said markets will be “especially sensitive” to any signs of stubborn price pressures in the inflation report.

Attention will likely centre on services inflation, which rate-setters have flagged as a good gauge of homegrown inflationary dynamics. Services inflation fell to 5.0 per cent in November, and most analysts expect to see it continue falling in the months ahead.

However, many economists are worried that the measures announced in the Budget – such as the minimum wage hike and the national insurance increase – could buttress inflationary pressures.

More

Stakes are high for UK economy ahead of crunch week of data

Covid-19 Corner

This section will continue until it becomes unneeded.

Below, it sounds like “safe and effective,” big pharma already has control of the UK’s Covid 19 inquiry outcome.

Compare and contrast the UK v USA.

COVID-19 Inquiry will not shy from criticising social media disinformation, Sky News told

12 January 2025

The chair of the UK COVID-19 Inquiry will not "hesitate to make recommendations about the use of social media" and its role in spreading "misinformation and disinformation" around vaccines, the secretary to the inquiry has told Sky News.

The independent public inquiry resumes on Tuesday with Module 4 looking at Vaccines and Therapeutics.

Ben Connah, secretary to the inquiry, said: 'In this module, we will be looking specifically at misinformation and disinformation and whether that led to vaccine hesitancy.

"If the chair,[woman, sofa, pouffe? Ed.] Baroness Hallett, thinks there are recommendations to be made about the use of social media, then she won't hesitate to do that. She's got a very broad scope and she's determined to use it."

The inquiry has been set up to examine the UK's response to and impact of the COVID-19 pandemic and to learn lessons for the future.

This includes the way the government used public health messaging to engage with sometimes hard-to-reach communities. The lessons learned during the pandemic can be applied to encourage vaccine uptake for childhood immunisation programmes for diseases like polio and measles.

One of the reasons that this inquiry is looking specifically at vaccines is to make sure that the UK is in the best position possible going forward when it comes to not just a COVID vaccine, but that of other vaccines.

"If there are issues around things like vaccine hesitancy that the chair ,[woman, sofa, pouffe? Ed.] of the inquiry, Baroness Hallett, can make recommendations on that would lead to broader benefits for society, I'm sure she'll do that'," Mr Connah explained.

Kirit Mistry worked as a COVID champion in Leicester during the pandemic and has contributed to the inquiry's Every Story Matters campaign which allows the public to share their story. His job was to try to engage with local communities to counter the disinformation being promoted on social media.

"People may have lost somebody and they were putting it down to the vaccination that was the cause of that, so it was trying to get people to understand that being hesitant and working off misinformation is not the right way because we need to protect ourselves," he told Sky News.

More

COVID-19 Inquiry will not shy from criticising social media disinformation, Sky News told

Doctors Ask Supreme Court to Block California Board From Penalizing Certain COVID-19 Views

The physicians say California cannot take away their free speech rights on public health grounds.

By Matthew Vadum  1/12/2025 Updated:1/12/202

Three doctors are asking the U.S. Supreme Court to prevent a California agency from investigating them over their opposition to state-approved COVID-19 policies.

The California Medical Board considers the expression of the doctors’ dissenting views on the disease as potentially dangerous misinformation that should be suppressed. The board argues it has legal authority to discipline the doctors for speech it deems to be medical misconduct. The physicians counter that just because they have medical licenses doesn’t mean they forfeit their free speech rights under the First Amendment.

The emergency application in Kory v. Bonta was docketed by the high court on Jan. 8, one of the applicants’ attorneys, Richard Jaffe of Sacramento, California, told The Epoch Times.

The application for an injunction was submitted to Supreme Court Justice Elena Kagan, who oversees urgent appeals from California.

It is unclear when the Supreme Court will act on the application.

The justices could grant an injunction against the state, deny the injunction, or schedule the case for oral argument.

The application was brought by medical doctors Pierre Kory and Brian Tyson, osteopathic physician Le Trinh Hoag, Physicians for Informed Consent, and Children’s Health Defense, a nonprofit founded by Robert F. Kennedy Jr.

President-elect Donald Trump, who will be inaugurated on Jan. 20, has nominated Kennedy to be secretary of the U.S. Department of Health and Human Services. Kennedy, an attorney, is also listed as co-counsel on the application.

California’s executive and legislative branches are “threatening California physicians with professional discipline for their viewpoint speech contrary to the mainstream COVID narrative,” according to the application.

After the Federation of State Medical Boards in July 2021 encouraged its member medical boards in the United States to punish physicians for advancing perceived “COVID misinformation” and “disinformation” among patients and the public, California Medical Board President Kristina Lawson announced in February 2022 that the board planned to sanction physicians for what it called “COVID misinformation.”

More

Doctors Ask Supreme Court to Block California Board From Penalizing Certain COVID-19 Views | The Epoch Times

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.

China: JinkoSolar’s perovskite tandem solar cell hits record 33.84% efficiency

Bojan Stojkovski  Sat, January 11, 2025 at 1:17 PM GMT

Shanghai-headquartered solar module manufacturer JinkoSolar has announced its latest breakthrough in the development of N-type TOPCon-based perovskite tandem solar cell, which achieved a record conversion efficiency of 33.84%.

Independently tested by the Shanghai Institute of Microsystem and Information Technology under the Chinese Academy of Sciences, the cell surpassed JinkoSolar's previous record of 33.24%. The newest innovation marks the company's 27th world record for PV product efficiency and power output.

Passivation tech powers tandem cell efficiency

JinkoSolar developed a record-breaking perovskite tandem solar cell that incorporates its N-type high-efficiency monocrystalline TOPCon technology as the bottom layer, with enhanced efficiency achieved through innovations in full-area passivated contact, perovskite interfacial defect passivation, and bulk defect passivation technologies.

According to the firm, the results surpass the conversion efficiency limit of single-junction crystalline silicon cells, demonstrating the compatibility of TOPCon as a mainstream solar cell technology with next-generation perovskite/silicon tandem cells. This breakthrough paves the way for new advancements in the future of the photovoltaic industry, JinkoSolar stated in a press release.

"Once again, we have achieved remarkable progress in solar cell efficiency as a result of our ongoing investments in R&D and steadfast commitment to excellence. This milestone strengthens our confidence in our ability to achieve further technological breakthroughs as we work toward building a greener and more sustainable energy future,” Jin Hao, CTO at JinkoSolar, pointed out.

Perovskite materials have long been hailed as a game-changer in solar technology due to their potential for high efficiency and low manufacturing costs. Their unique properties allow for flexibility in design and integration, making them an attractive option for next-generation solar cells.

However, one of the major challenges has been their tendency to degrade over time, which poses a significant concern for their use in commercial applications. Solar products, particularly those installed in outdoor environments, need to withstand harsh weather conditions, temperature fluctuations, and UV exposure over many years, which cam make them less suitable for long-term, large-scale energy generation.

Next-gen solar cells could reach 43% conversion

Back in September 2024, Chinese manufacturer LONGi set a new world record for perovskite-tandem solar cell efficiency, reaching 34.6%. This surpassed the previous record of 33.7%, held by Saudi Arabia’s King Abdullah University of Science and Technology (KAUST) for a perovskite-silicon tandem device.

This bilayer interface passivation strategy is said to enhance both electron transport and hole blocking. LONGi's tandem team developed the two-terminal prototype devices, which have achieved a certified efficiency of 34.6%.

While further technical details were not provided, LONGi mentioned that the commercial-sized two-terminal tandem cells for mass production (M6) and the world’s first square meter four-terminal tandem modules have been certified with efficiencies of 30.1% and 25.8%, respectively.

The silicon-perovskite tandem solar cell is regarded as the leading technology for next-generation ultra-efficient solar cells, with a theoretical maximum efficiency of up to 43%, significantly exceeding the 33.7% Shockley-Queisser limit for single-junction cells.

China: JinkoSolar’s perovskite tandem solar cell hits record 33.84% efficiency

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

World Debt Clocks (usdebtclock.org)

"To turn $100 into $110 is work. To turn $100 million into $110 million is inevitable.

Edgar Bronfman, Chairman, Seagrams.


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