Baltic
Dry Index. 1347 -41
Brent Crude 65.43
Spot Gold 3214 US 2 Year Yield 3.97 -0.01
US Federal Debt. 36.871 trillion!!!
By means of glasses, hotbeds,
and hot walls, very good grapes can be raised in Scotland, and very good wine
too can be made of them at about thirty times the expense for which at least
equally good can be brought from foreign countries. Would it be a reasonable
law to prohibit the importation of all foreign wines, merely to encourage the
making of claret and burgundy in Scotland?
Adam
Smith. The Wealth of Nations, 1776.
In Asia, central banks are cutting interest rates, providing mild support to stocks.
In America, long bond yields continue to rise, prompting more warnings on stocks.
In the tariff war on China, creative accounting soars.
Asia-Pacific markets rise as investors parse China
loan prime rate cut
Updated Tue, May 20 2025 11:41 PM EDT
Asia-Pacific markets climbed Tuesday as
China cut its key lending rates by 10 basis points in a move to boost its
economy, at a time when trade tensions threaten to derail growth.
The People’s Bank of China trimmed the
1-year loan prime rate to 3.0% from 3.1%, and the 5-year LPR to 3.5% from 3.6%.
Hong Kong’s Hang Seng index rose
1.28%, while mainland China’s CSI 300 added 0.48%.
Japan’s benchmark Nikkei 225 rose 0.45%, while
the Topix added 0.32%. South Korea’s Kospi climbed 0.29% while
the small-cap Kosdaq jumped 0.62%.
Likewise, Australia’s benchmark
S&P/ASX 200 rose 0.39%.
The Reserve Bank of Australia is slated to
release its policy rate decision later in the day.
Australia’s inflation has been easing,
with the most recent headline inflation coming in at
a four-year low of 2.4% in the first quarter of 2025.
The Reserve Bank of Australia has emphasized
in its previous monetary policy statement that bringing inflation
to its 2% to 3% target range sustainably remains its
highest priority. The Commonwealth Bank of Australia expects the RBA to cut the
cash rate by 25 basis points to 3.85%.
The RBA said in its previous
monetary policy statement that returning inflation sustainably to its
target of between 2% and 3% “within a reasonable timeframe” is its
highest priority.
Investors are also assessing the world’s
largest battery manufacturer Contemporary Amperex Technology which rose
over 11% in its Hong Kong trading debut on Tuesday.
Shares were trading at 292 Hong Kong dollars apiece on the Hong
Kong stock exchange, compared with the initial public offering price of HK$263 dollars per share.
U.S. stock futures were little
changed. S&P 500 futures rose
less than 0.1%. Nasdaq 100
futures were down 0.1%, while futures tied to the Dow Jones Industrial Average added
54 points, or 0.14%.
Overnight stateside, the three major
averages closed
higher. The S&P 500 posted
a slim gain on Monday as Treasury yields came off their highs and investors
sought to look past Moody’s downgrade of the United States’ credit rating. The
benchmark added 0.09% and closed at 5,963.60, marking its sixth consecutive
winning session.
The Nasdaq Composite inched up
0.02% to end at 19,215.46. The Dow
Jones Industrial Average rose 137.33 points, or 0.32%, and settled at
42,792.07. The 30-stock index was aided by a rebound in UnitedHealth, which saw an 8% jump
after a recent bout of hard selling.
Asia-Pacific
markets live updates: RBA decision, China LPR
CNBC Daily Open: Markets see slim gains – but dark
clouds loom as yields spike, trade talks turn testy
Published Mon, May 19 2025 10:18 PM EDT
U.S.
stocks mostly eked out slim gains overnight, as investors look past Moody’s
downgrade of the U.S.‘s credit rating last Friday. This extends the
markets’ rally from last week on the U.S.-China’s temporary trade truce.
But there are dark clouds on the horizon.
Moody’s downgrade continues to grip the bond market with the 30-year Treasury
yield surging past 5% Monday, hitting
levels not seen since November 2023. Bridgewater Associates founder
and billionaire
Ray Dalio warned that the U.S.’s lower sovereign credit rating
understates the threat to U.S. Treasurys, saying the credit agency isn’t taking
into account the risk of the federal government simply printing money to pay
its debt.
JPMorgan CEO Jamie Dimon also
cautioned that markets are too complacent on tariffs, and expects
S&P 500 earnings growth to collapse as companies pull or lower guidance
amid trade policy uncertainty.
On the trade negotiations front, China accused
the U.S. of undermining the two countries’ preliminary trade agreement,
after the U.S. issued an industry warning against using Chinese chips that
singled out Huawei.
Beijing has demanded
that the U.S. President Donald Trump administration “correct its mistakes,” a
spokesperson for China’s Ministry of Commerce told a reporter, calling the U.S.
Commerce Department’s guidance “discriminatory” and “market distorting.”
What you need to know today
Pound rallies on Brexit’s exit
The
British pound rose against the U.S. dollar after the U.K. and the
European Union came to a landmark
deal to reset their post-Brexit relations. The agreement covers a
range of matters including security, energy, trade, travel and fisheries. Both
sides said they would continue working toward a deal addressing unresolved
issues such as allowing young people to work and travel freely in Europe
again.
U.S. markets eke out slim gains
The S&P
500 rose slightly Monday as investors looked past Moody’s downgrade of
the United States’ credit rating. The benchmark added 0.09% to mark its sixth
consecutive winning session. The Nasdaq Composite inched up 0.02%. The Dow
Jones Industrial Average rose 137.33 points, or 0.32%, due in part to
UnitedHealth’s stock rebounding by an 8% jump after a recent bout of hard
selling. European
stock markets were unchanged Monday, with the pan-European Stoxx 600
closing flat.
China says U.S. undermined trade talks
with Huawei chip warning
China accused
the U.S. of undermining the two countries’ preliminary trade agreement
after the U.S. issued an industry warning against using Chinese chips that
singled out Huawei.
Beijing has demanded
that the U.S. President Donald Trump administration “correct its mistakes,” a
spokesperson for China’s Ministry of Commerce told a reporter.
Trump’s tariffs drive customs fraud
The U.S.’s new tariffs have pushed Chinese
exporters to increasingly commit an existing shipping fraud, which works by
significantly understating the value of goods or mislabeling them, often both.
Shipments are then routed through shell companies that will fail to pay
tariffs, default and cease operation. Experts warn that U.S. businesses are
underestimating civil and criminal risks by partnering with such exporters.
More
CNBC Daily Open: Moody’s downgrade continues to grip bond markets
JPMorgan CEO Jamie Dimon says markets are too
complacent on tariffs, expects S&P 500 earnings growth to collapse
Published Mon, May 19 2025 2:30 PM EDT Updated
Mon, May 19 2025 5:48 PM EDT
JPMorgan
Chase CEO Jamie Dimon said
Monday that markets and
central bankers underappreciate the risks created by record U.S. deficits, tariffs and
international tensions.
Dimon, the veteran CEO and chairman of the
biggest U.S. bank by assets, explained his worldview during his bank’s annual
investor day meeting in New York. He said he believes the risks of higher
inflation and even stagflation aren’t properly represented by stock market
values, which have staged a comeback from lows
in April.
“We have huge deficits; we have what I
consider almost complacent central banks,” Dimon said. “You all think they can
manage all this. I don’t think they can,” he said.
“My own view is people feel pretty good
because you haven’t seen effective tariffs,” Dimon said. “The market came down
10%, [it’s] back up 10%. That’s an extraordinary amount of complacency.”
Dimon’s comments follow Moody’s rating
agency downgrading the
U.S. credit rating on Friday over concerns about the government’s growing debt
burden. Markets have been whipsawed over the past few months over worries that
President Donald Trump’s
trade policies will raise inflation and slow the world’s largest economy.
Dimon said Monday that he believed Wall
Street earnings estimates for S&P
500 companies, which have already declined in the first weeks of
Trump’s trade policies, will fall further as companies pull or lower guidance
amid the uncertainty.
In six months, those projections will fall
to 0% earnings growth after starting the year at around 12%, Dimon said. If
that were to happen, stocks prices will likely fall.
“I think earnings estimates will come
down, which means PE will come down,” Dimon said, referring to the price to
earnings ratio tracked closely by stock market analysts.
The odds of stagflation,
“which is basically a recession with inflation,” are roughly double what the
market thinks, Dimon added.
More
Trump
tariffs: Chase CEO Jamie Dimon says markets are too complacent
Chinese exporters are offering sweet deals to U.S.
businesses. They often come wrapped in fraud
Published Mon, May 19 2025 8:03 PM EDT
Chinese exporters are offering lucrative
deals to U.S. customers with promises of bearing the full burden of tariffs.
Look beneath and there’s a web of illicit activity that’s propping up these
shipments from China.
By using the “delivered-duty-paid” shipping approach where sellers
pay for all import duties, and by under-invoicing shipments, some Chinese
sellers are able to offer U.S. customers pre-tariff prices, while still turning
a profit, according to legal experts and industry veterans.
Here’s how the scheme plays out:
Chinese exporters, often through freight
forwarders — companies that handle the logistics of shipping merchandise —
understate the value of goods or mislabel them, often both, in the shipping
documents to draw lesser duties.
Shipments are then routed through shell
companies, registered under names of foreign entities or individuals, that act
as “importers of record,” which the U.S. government deems
responsible for the accuracy of customs filings and all applicable duties.
Importers are required to secure a minimum $50,000 customs bond from U.S. surety
providers as a guarantee to the government that they will pay tariffs. When
they fail to settle the tariffs on time, the bond covers the duties. Once the
bond has been utilized, often these shell companies default and cease operations,
only to quickly set up a new entity — and the cycle repeats.
“Often these companies don’t bother to
file bankruptcy. They simply turn off the phone, close email accounts, and
choose whatever mailing address they have [to open a new firm],” said David
Forgue, partner at Chicago-based law firm Barnes, Richardson & Colburn,
making it difficult for the surety to chase them for tariff reimbursement.
More
China
exporters use dubious workarounds to dodge U.S. tariffs
In other news, another probable EV fire
collapses yet another multi story car park. Just wait until governments
everywhere force us all into driving EVs.
Photos show burned-out cars at Jacksonville
International Airport after fire
May 18, 2025
Photos shared by the Jacksonville Fire and
Rescue Department on Saturday, May 17, give a better look at the
devasting fire that swept through a Jacksonville International Airport parking
garage a day earlier.
In the just-released images, several
burned-out cars are
shown on the third level of the hourly parking structure. According to
estimates from city and airport officials, 50 vehicles were damaged in the
mid-day May 16 blaze that forced the closure
of JIA for several hours and the indefinite closure of the parking garage
to allow experts to assess the structural safety of the building.
Jacksonville airport parking options
limited after parking garage fire
A day after the fire that caused no
serious injuries, the daily parking garage and daily surface parking lot
remained closed to incoming vehicles, limiting on-airport parking mostly to the
outlying "economy lots," which were 95% full as of noon.
The hourly parking garage is a parking
structure located directly across from the airport terminal, with an
upper-level drop-off area for departing passengers and a lower-level pick-up
area for arriving passengers separating the two buildings.
The daily parking garage structure and
daily surface lot parking extend out beyond the hourly parking garage, which is
used most often for short stays at the airport to drop off or pick up family
members or friends who are traveling to and from the airport. The ground floor
of the facility also houses several rental car pick-up and drop-off facilities.
What started the fire at Jacksonville
International Airport?
It was too early to tell what ignited the
blaze.
Jacksonville Fire and Rescue Department
chief Keith Powers said airport video indicated that the fire began in one
vehicle on the second parking level and damaged an estimated 50 other cars,
burning so intensely that the heat triggered a partial collapse of the garage's
second and third floors. A secondary collapse followed about 30 minutes later,
he said.
Photos show burned-out cars at Jacksonville International Airport after fire
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.
Will
The US Enter A Recession This Year? Most Retail Traders Feel It's Unlikely,
Hope For ‘Energetic' Market Highs
19
May 2025
Stocktwits
users have become hopeful that the economy will skirt a recession following
recent positive developments. The U.S.-China trade talks and recent tech deal
news flowing out of the Middle East have apparently allayed retail traders'
concerns.
A
poll asking users “Do you think the U.S. will fall into a recession in 2025?”
received responses from nearly 51,000 users and 106 comments.
Most
users (56%) said a recession is unlikely, 11% said they were unsure, and 33%
foresaw a recession.
The
latest results compare favorably with Stocktwits’ previous poll. In mid-March,
when the market trended lower, 31% said there were “too many warning signs of a
recession,"and 17% said the economy was already in a recession. About
one-fifth of the respondents said President Donald Trump’s policies will decide
where the economy will head.
That
was when the Trump administration tested waters via sweeping
tariffs with major trading partners. The president made good his promise
and announced punitive levies, although he later put the implementation
on hold. But he proceeded with a vindictive stance against China,
ratcheting up tariffs to 145%,
After
a series of moves and countermoves, both nations decided last week to suspend
the implementation for 90 days.
Among
those respondents who commented on the poll, one bullish watcher said they
already bought the dip, suggesting they expect better times ahead.
Another
sounded uber-bullish. “We are more than capable of working our way out of
anything close to a recession. We are reaching all-time energetic highs,” they
said.
An
artificial intelligence (AI) bull said, “No way, impossible. NVDA WILL
NOT LET THAT HAPPEN GO AI.” Nvidia (NVDA) shares recovered nicely last
week after a series of AI investment deals struck with the Middle
East.
Some
users, however, opined that the U.S. economy was already in a recession or was
hurtling toward one. One of them said, “Q1 already had negative GDP, much less
trading in Q2, of course negative GDP again.”
The
advance first-quarter GDP estimate released late April showed that the economy
contracted at a 0.3% rate. The weakness stemmed primarily from an increase in
imports due to exporters pulling forward purchases ahead of the Trump tariffs
kicking in.
Covid-19
Corner
This
section will continue only occasionally when something of interest occurs.
After
delay, FDA approves Novavax’s Covid-19 vaccine, but only for older people and
those at high risk
May
18, 2025
After
a six-week delay, the US Food and Drug Administration has approved Novavax’s
Covid-19 vaccine, according to a letter from the
agency, but only for people 65 and older and those 12 and up who have at least
one underlying condition that puts them at higher risk of severe illness.
“Market
research and US C.D.C. statistics indicate that older individuals and those
with underlying conditions are the populations most likely to seek out COVID-19
vaccination seasonally,” Novavax President and CEO John Jacobs said in a
statement Saturday. “This significant milestone demonstrates our commitment to
these populations and is a significant step towards availability of our
protein-based vaccine option.”
The
US Centers for Disease Control and Prevention lists a wide range
of conditions that may make someone more likely to become severely ill with
Covid-19, including older age, asthma, diabetes, lung disease, obesity and
pregnancy.
The
Novavax Covid-19 vaccine, which uses more traditional protein-based technology
than the mRNA vaccines from Pfizer/BioNTech and Moderna, has been subject
to emergency use authorization since 2022. Pfizer and
Moderna’s vaccines have been FDA-approved for people 12 and up and remain
available under emergency use authorization for children as young as 6 months.
Novavax’s
vaccine had been on track for full approval April 1, but the FDA delayed the decision
while it sought more data, a source told CNN. The new approval letter issued
Friday requires Novavax to conduct postmarketing studies looking at the risk of
myocarditis and pericarditis – inflammation of the heart muscle and of the membrane
surrounding the heart – in people who receive the vaccine.
More
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 finds 'kill
switches' on solar panels sold by China - sparking fears of energy grid attack
16 May
2025, 16:22
Engineers
on American solar farms have discovered secret switches installed in
Chinese-manufactured parts which could wreak havoc on Western power grids.
U.S.
energy officials are assessing the risk posed by the unexplained communication
devices found inside power inverters - components of renewable energy systems
that connect solar panels to electricity grids - that were manufactured in
China.
Power
inverters are usually built to allow remote communication access, to carry out
updates and maintenance, but the companies that use them typically install firewalls
to prevent direct communication to China.
The
rogue communication devices found in the American power inverters give them
additional secret communication channels.
The
discovery has sparked fears that China may use these communication devices to
switch off power inverters remotely, or change their set
The
devices could destabilise power grids, damage energy infrastructure, and
trigger widespread blackouts. One source familiar with the matter told an outlet they are
"built-in way to physically destroy the grid."
The US
government has not publicly acknowledged the discoveries, and the existence of
the rogue devices had not previously been reported.
Asked
for comment by Reuters, the U.S. Department of Energy (DOE) said it continually
assesses risk associated with emerging technologies and that there were
significant challenges with manufacturers disclosing and documenting
functionalities.
The
source also told Reuters that more unexplained communication devices, including
cellular radios, have been found in batteries from multiple Chinese suppliers
over the past nine months.
Mike
Rogers, a former director of the US National Security Agency, said: "We
know that China believes there is value in placing at least some elements of
our core infrastructure at risk of destruction or disruption."
A
spokesman for the Chinese embassy in Washington said: "We oppose the
generalisation of the concept of national security, distorting and smearing
China's infrastructure achievements."
Two
former U.S. government officials have said that the U.S. and other countries
are reassessing China's role in strategic infrastructure due to escalating
tensions between the U.S. and China.
Renewable
energy systems across the Western world rely on Chinese-manufactured parts. It
is not yet known if the "kill switches" are present in any power
converters on UK solar farms.
More
US finds 'kill
switches' on solar panels sold by China - sparking fears of energy grid... -
LBC
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
It is
the maxim of every prudent master of a family, never to attempt to make at home
what it will cost him more to make than to buy...What is prudence in the
conduct of every private family, can scarce be folly in that of a great
kingdom.
Adam Smith. The Wealth of Nations, 1776.
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