Baltic
Dry Index. 1340 -07
Brent Crude 66.55
Spot Gold 3305 US 2 Year Yield 3.97 unch
US Federal Debt. 36.875 trillion!!!
Facts are stubborn, but statistics are more pliable.
Mark Twain
In the stock casinos, more disconnect from a fast arriving harsh global economic reality.
To dinosaur Graeme, around commodity and stock markets since autumn 1968, I think the stock casinos are heading towards a 1929 style crash landing. I can only hope to be wrong.
Asia-Pacific markets mostly rise after Wall Street
rally pauses
Updated Wed, May 21 2025 11:22 PM EDT
Asia-Pacific markets traded mostly higher
Wednesday after Wall Street halted its six-day win streak.
Japan’s benchmark Nikkei 225 slipped 0.23%
after the country reported that exports slowed for a second straight month as
the country reels under U.S. President Donald Trump’s sweeping tariffs.
South Korea’s Kospi climbed 0.58% while
the small-cap Kosdaq traded 0.95% higher.
Australia’s benchmark S&P/ASX 200
climbed 0.43%.
Hong Kong’s Hang Seng index rose
0.45% at the open, while mainland China’s CSI 300 traded flat.
The Bank of Indonesia is also slated to
release its policy decision later in the day. The bank slashed policy rates in
September 2024, and then again in January 2025, but has kept rates on hold at
5.75% since, HSBC noted in a report.
“Given growth weakness, Bank of Indonesia
may have to embark on a deep rate-cutting cycle,” the bank wrote.
“For several reasons, we believe it’s time
to restart the easing cycle in May,” the bank’s economists said, citing weak
first-quarter GDP growth and weakening currency against the greenback.
U.S. futures were little changed. S&P
500 futures wavered Tuesday night following a losing session on Wall Street
that snapped a winning streak. Futures tied to the broad index shed 0.2%, as
did Nasdaq 100 futures. Dow Jones Industrial Average futures lost
93 points, or 0.2%.
Overnight stateside, the three major
averages closed lower. Stocks slipped on Tuesday as the big tech-led rally lost
steam and the S&P 500 ended a six-day winning run.
The S&P 500 fell 0.39% to end
at 5,940.46, while the Nasdaq
Composite dipped 0.38% and closed at 19,142.71. The Dow Jones Industrial Average lost
114.83 points, or 0.27%, finishing at 42,677.24. Investors dumped tech stocks,
which had led the run over the past six days. The sector lost 0.5%. Nvidia slid 0.9%. Advanced Micro Devices, Meta Platforms, Apple and Microsoft also dropped.
Asia-Pacific markets live: Japan trade, Bank of Indonesia
S&P 500 futures are little changed after
benchmark snaps six-day win streak: Live updates
Updated Wed, May 21 2025 8:14 PM EDT
S&P 500 futures wavered Tuesday night
following a losing session on Wall Street that snapped a winning streak.
Futures tied to the broad index shed 0.1%, as
did Nasdaq 100 futures. Dow Jones Industrial Average futures lost
59 points, or 0.1%.
Tuesday night’s action comes after a tough
session for the three major averages. The S&P 500 ended a six-day
win streak, while the Nasdaq
Composite saw its first negative day in three. The Dow fell more than 100
points, breaking a three-day positive streak.
That marks a pullback amid a major
recovery rally for U.S. equities. Investors had been cheering progress on trade deals following
President Donald Trump’s announcement of broad and steep tariffs last month.
All three major averages are still above
where they traded on April 2, the day Trump unveiled his import tax policy. The
S&P 500 is now up on the year, a sharp reversal after at one point falling
on an intraday basis into bear
market territory, a term referring to a decline of at least 20% from a
recent high.
“The equity market’s recovery over the
past month has been extraordinary in terms of both speed and scale,” said
Kristian Kerr, head of macro strategy at LPL Financial. “While it may be
tempting to interpret this powerful rally as a definitive signal that risks
have subsided, the reality is that plenty of uncertainty remains.”
Investors are continuing to monitor
Washington, D.C, for updates on
the budget bill and the federal deficit. There is no economic data of
note expected on Wednesday.
Traders will also parse a plethora of
corporate earnings slated for Wednesday. Lowe’s, Target, Canada Goose and TJX Cos. are all expected
before the bell, followed by Snowflake after
the market closes.
Stock market today: Live updates
In other news, after Japan, Germany?
Japan PM warns financial condition worse than
Greece’s
19 May 2025
Japanese prime minister Shigeru Ishiba
said his country’s financial condition was worse than Greece’s as he rejected
calls for tax cuts at a time of rising borrowing costs.
Mr Ishiba said he didn’t think it was a
good idea to fund tax cuts with government bonds just days after the economy
was reported to have shrunk for the first time in a year, and at a pace faster
than expected, in the face of US president Donald Trump’s trade policies.
Opposition parties have been putting
pressure on Mr Ishiba to cut taxes, including consumption tax.
Japan’s GDP for the
March quarter contracted by 0.7 per cent as against the median market forecast
of 0.2 per cent, data released last week showed.
“It’s important to recognise the dangers
of a society and a world with interest rates. The government is not in a
position to comment on interest rates, but the reality is we are facing a world
with them. Our country’s fiscal situation is undoubtedly extremely poor, worse
than Greece’s,” the prime
minister told the parliament on Monday.
“Japan is seeing
interest rates turn positive and its fiscal state is not good," he said,
warning of the rising costs of funding the already enormous national debt.
"While tax revenues are rising, social welfare costs are also increasing.”
According to the International Monetary
Fund, Japan’s general government debt as a percentage of gross domestic product
stood at 234.9 per cent as of 2025 while it was at 142.2 per cent for Greece.
Japan, however, has managed to escape a
fiscal crisis of the kind Greece witnessed in 2009 because domestic investors
hold most of its sovereign debt and it remains a major creditor to other
nations with significant foreign asset holdings.
Finance minister Katsunobu Kato said while
Japan was not facing difficulty raising funds through debt issuance now, it
must strive to maintain market trust in its finances.
"A loss of market trust in our
finances could lead to sharp rises in interest rates, a weak yen and excessive
inflation that would have a severe impact on the economy," Mr Kato told
the same parliament session.
The decline in GDP is being attributed to
stagnant private consumption and falling exports, suggesting Japan’s economy
was losing support from overseas demand even before Mr Trump announced sweeping
import tariffs on almost all major trading partners in early April.
Japan faces the prospect of at least a 24
per cent levy starting in July unless it can negotiate a deal with Washington.
In addition, the US has announced a 25 per
cent import levy on cars, steel and aluminium, dealing a blow to Japan's
economy which relies heavily on automobile exports to America. Japanese
automakers, in fact, are already feeling the pain.
Japan PM warns
financial condition worse than Greece’s
German battery firm’s collapse highlights industry
woes
19 May 2025
CustomCells, a German battery
manufacturer, has filed for bankruptcy due to payment issues faced by its
largest client. The future of its 200 employees remains uncertain.
Founded in 2012 as a spin-off from
the German research institute Fraunhofer-Gesellschaft, the company operates two
locations in Germany: its headquarters in Itzehoe (Schleswig-Holstein) and
a production plant in Tübingen (Baden-Württemberg). It specialises in
producing high-quality lithium-ion cells.
Battery manufacturer collapses despite
recent funding
The portal swr.de reports that the battery
manufacturer filed for bankruptcy unexpectedly. Notably, the federal state of
Baden-Württemberg recently announced a grant of 8 million euros
for the Tübingen plant to finance a pilot installation for
so-called round cells.
The company's financial woes stem
from the insolvency of its main client in the aviation industry,
resulting in millions of euros in overdue receivables. Despite
intensive efforts to attract new investors and secure state support, insolvency
could not be avoided.
Salaries secured only until June. What
lies ahead for the battery manufacturer?
The bankruptcy filing raises questions
about the future of approximately 200 employees. Currently, the company
continues to operate, with employees' salaries secured until the end of June
2025.
To save the company, a temporary
insolvency administrator has been appointed, and ongoing efforts are being made
to find an investor.
Volkswagen supplier on the brink. Over 600
employees face uncertainty
CustomCells is just one of several German
companies facing serious challenges. In April 2025, the automotive
parts supplier Bohai Trimet also declared bankruptcy, with Volkswagen among
its clients.
A bankruptcy proceeding has been filed for
all four of the company's subsidiaries, affecting approximately 680
employees. Their wages are secured for the next three months. The
insolvency manager is actively seeking investors to save the plants in
Harzgerode and Sömmerda.
German battery
firm’s collapse highlights industry woes
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.
Majority
of US companies say they have to raise prices due to Trump tariffs
Over
half (54%) of companies surveyed by insurer Allianz say they will have to raise
prices to accommodate cost of tariffs
Tue
20 May 2025 14.00 BST
A
majority of US companies say they will have to raise their prices to
accommodate Donald
Trump’s tariffs in
the US, according to a new report.
More
than half (54%) of the US companies surveyed by insurance company Allianz said
they will have to raise prices to accommodate the cost of the tariffs. Of the
4,500 companies across nine countries, including the US, UK and China, surveyed
by Allianz only 22% said they can absorb the increased costs.
The
unpredictability of US trade policy has also dented exporters’ confidence. The
survey found 42% of exporting companies now anticipate turnover to decline
between -2% and -10% over the next 12 months, compared to fewer than 5% before
2 April “liberation
day” – when Trump unveiled his tariff policy.
Though
Trump has pulled
back on many of the levies he initially proposed, key tariffs remain
in place, including a 10% universal tariff on all US imports, a 30% tariff on
Chinese imports and extra tariffs on specific industries like metal and auto
parts.
Trump
has insisted that tariffs will make America “very wealthy again”, though it
appears that American companies and consumers are simply expecting to pay
higher prices as the tariffs settle into place. In April, consumer expectations of
inflation reached their highest point since 1981, according to the University
of Michigan’s Institute for Social Research.
Instead
of immediately raising prices, which could deter customers, many companies have
spent months trying to get ahead of Trump’s tariffs by stockpiling goods to
temporarily circumvent them.
Nearly
eight out of 10 American companies said that they frontloaded shipments to
China before Trump announced his tariffs, with 25% saying they had started to
front-load before the November 2024 election.
Inflation
data from April showed that US price increases remained roughly level for the
month. Economists say that it will take a while for tariff-related price
increases to show up in data and companies have started to say they will pass
some of the cost of tariffs onto consumers.
“Given
the magnitude of the tariffs, even at the reduced levels announced this week,
we aren’t able to absorb all the pressure,” Doug McMillon, Walmart’s CEO, said in
an earnings call last week. “The higher tariffs will result in higher prices.”
More
Recession
indicators are out of control. When will this madness end?
May
19, 2025
They’re
everywhere. There’s no escape.
Americans
are on the lookout for signs of a recession. The signs have been with us,
depending on whom you ask, pretty much since the last recession in early
2020. First-quarter
GDP showed the economy shrinking by 0.3% instead of the forecast 0.4% growth.
Two straight negative quarters of GDP growth is viewed as a slam-dunk
indication that an official recession call is imminent, but is a drop of 0.3%
really that bad?
Clearly,
a trade war is not a welcome prospect and, understandably, millions of
Americans are on edge after years of recession predictions, geopolitical unrest
in the Middle East, a war in Europe, President Donald Trump’s tariffs, a
Federal Reserve seemingly stymied by the conflicting signs of economic growth
and the next potential political twist. If a recession is inevitable, they want
it over already.
You’d
better watch out. Recession indicators are coming for your peace of mind and
your summer
vacation,
mainly because there are so many of them. When a $70 million Alberto Giacometti
bronze bust failed
to sell at
a Sotheby’s auction last week, could that have been the thousandth harbinger of
recession or merely indicative of the fact that similar sculptures by the same
artist sold for $50 million in recent years?
These
days, everything except jobless claims, which have held
steady, and GDP appears to be a recession indicator. Last month, Beyonce
tickets were selling for less than $60. “The timing is tough with a potential
recession in the cards,” Samyr Laine, co-founder of Freedom Trail Capital, a
venture-capital firm, told
MarketWatch.
Or maybe Taylor Swift’s Eras tour stole Beyonce’s thunder?
The
list of “soft data” recession indicators has almost no end. They include
Chipotle’s “burrito
index,” appointments at hairdressers
and a drop in sales at coffee shops. (If you are unwilling to stand in line at
Starbucks and pay $5.75 for a latte — or $4.75
if you don’t live in New York — maybe that means you’re using your
money wisely, and it bodes well for the U.S. economy?)
Even
fashion trends like skinny
jeans that
existed during the Great Recession are farcical fodder for the
recession-indicator grinder. The “lipstick
effect,”
another quirky sign of a potential downturn, posits that people want to make
themselves feel good when they are feeling financially insecure and, rather
than splashing out on luxury goods, buy a $20 lipstick instead.
Economist
predictions gone awry
When
will this madness end? Such internet memes are part clickbait and part genuine
curiosity about human beings and a desire to understand our behavior. These
memes are curious predictors, if there are genuine reasons to suspect a
recession is afoot — or they’re merely a form of reverse engineering to spur
more lipstick purchases and retroactively act as an I-told-you-so.
You
can look at consumer trends highlighted by social-media influencers or you
could look at the stock market, official measurements of consumer confidence
and hard data like jobs figures. Anecdotal evidence is colorful, but data are
more reliable: The University of Michigan’s gauge of U.S. consumer sentiment,
for what it’s worth, has now fallen
for five consecutive months and April retail sales were virtually
flat.
Economists
have also lowered their recession probability scores, although that has done
little to dull many recession indicators. Goldman Sachs economists cut their
probability of a recession over the next 12 months to 35% from 45% after Trump
lowered his China tariffs to 30% from 145% earlier this month. Similarly,
JPMorgan Chase said the chances of recession, while elevated, are now below
50%.
----Limitations
of an inverted yield curve
Other,
arguably more reliable indicators, have yet to bear fruit. There is something
endlessly fascinating and, perhaps, even sinister about the dreaded inverted
yield curve. There’s a “dark arts” aspect to the science behind it that makes
it compelling to observers. Even the name suggests an economy that’s been
distorted and mangled in an economist’s hall of mirrors.
An
inverted yield curve, as its name suggests, occurs when shorter-term yields are
higher than those of longer-term Treasurys, flipping the usual or “healthy”
spread between short- and long-term borrowing costs. An inverted curve suggests
that investors are more pessimistic about the long-term prospects of the
economy. At least, this one has some form.
The
San Francisco Fed has
long pointed out that
every U.S. recession over the past 60 years has been preceded by an inverted
yield curve. What’s more, it said an inverted yield curve has consistently been
followed by an economic slowdown. It is a reliable indicator, it’s true, but it
can take many, many, many months for the spread to presage a recession.
The
10-year yield recently was lower than the 2-year yield for the longest
span of time in history, more than two years or 783 days, surpassing a record
624-day inversion recorded in 1978. It finally became uninverted in August
2024. That was eight months ago, and we are still waiting for the promised
recession. That length of time stretches even the inverted-yield-curve signal’s
credibility.
More
Recession
indicators are out of control. When will this madness end?
Mortgage
rates jump above 7% after Moody’s downgrade of U.S. credit
‘The
timing is really not ideal for prospective buyers,’ economist says
Published: May
19, 2025 at 1:14 p.m. ET
Mortgage
rates surged after the credit-rating agency Moody’s downgraded U.S. debt.
Moody’s
cut the U.S.’s sovereign credit rating from
AAA to Aa1.
It was the last of the major credit-rating firms to strip the country of its
triple-A rating. S&P Global Ratings downgraded U.S. debt in the summer of
2011.
From
the archive (August 2011): U.S.
triple-A debt rating cut by Standard & Poor’s
The
downgrade of debt put
upward pressure on
bond prices on Monday morning. That pushed the 30-year fixed-rate mortgage up
12 basis points to 7.04%, according to Mortgage News
Daily.
It later settled at 6.99% later in the day.
Moody’s cited
an increase in government debt and interest-payment ratios that were
significantly higher than similarly rated sovereigns as reasons for its
decision.
Mortgage
rates tend to move in tandem with Treasury yields. With the 10-year yield
TY00
+0.20% going up,
the 30-year fixed mortgage rate was going to trend upward as well, Jake
Krimmel, a senior economist at Realtor.com, told
MarketWatch.
(Realtor.com
is operated by News Corp subsidiary Move Inc., and MarketWatch publisher Dow
Jones is also a subsidiary of News Corp.)
Mortgage
rates going up is “really not ideal for prospective buyers,” Krimmel
added.
The
housing market, meanwhile, is mired in a crisis of affordability. Elevated
mortgage rates and record-high home prices have put homeownership out of reach
for many Americans, as demonstrated in the chart below.
Against
this backdrop, “the housing market really does not need another factor pushing
mortgage rates up — or preventing them from coming down,” Krimmel said.
Economic
uncertainty is also weighing on residential builders, who are responsible for a
critical part of housing supply. In their most recent housing-market confidence
reading, builders
expressed a heightened level of pessimism. The reasons cited for the gloomy
outlook include high interest rates, policy uncertainty and building-material
costs.
The
silver lining is that the housing market is becoming more buyer-friendly.
Price
cuts are becoming more commonplace. More builders are slashing prices on new
homes, with 34% cutting prices in May, which was up from 29% the previous
month. The size of the average price cut was 5%.
More
selling homeowners are offering concessions to buyers in some markets. About
25% of listings on Zillow
ZG -2.79% , a major real-estate platform, saw
a price cut in April. That was the highest share for this busy time of year
since the company began
keeping track in
2018.
The
median sale price of a U.S. home as of April, the most recent month for which
complete data are available, was $438,500, according to data from the
real-estate brokerage Redfin
RDFN
-2.22% . That was up 1.4%
from a year ago.
Mortgage rates jump above 7% after Moody’s downgrade of U.S. credit - MarketWatch
Covid-19
Corner
This
section will continue only occasionally when something of interest occurs.
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.
Archer enters
partnership with Paragraf for Biochip development
19 May
2025
Archer
Materials, a company developing quantum technology for medical diagnostics, has
signed an agreement with UK graphene-based electronics company Paragraf.
The agreement
is to advance development of Archer’s Biochip potassium ion sensor for testing
of chronic kidney disease. The agreement will be in two stages, with each stage
of work to be carried out over three months at a total estimated cost of
£222,000.
The
partnership is intended to accelerate technical progress towards meeting the
blood potassium sensing target product profile (TPP) using a gFET. Work
performed by Paragraf with Archer will complement the activities ongoing in
Sydney.
Stage
one will involve developing and optimising measurement protocol, improving gFET
quality checks, and proprietary work on the sensor functionalisation. The
expected outcomes include enhanced sensor accuracy, as well as data to improve
foundry fabrication processes and device qualification procedures.
Stage
two will build on stage one and include chip redesign to move from lab testing
devices to more product representative chips. The teams will also work on
sensor stability, lifetime and robustness. These are key metrics in the TPP.
It is
expected that the work will result in several pieces of intellectual property
(IP) that will enable Archer’s sensing product. All product-specific IP
generated from the work in the partnership will be owned by Archer, in
accordance with the agreement.
Paragraf
is developing the commercialisation of mass-produced graphene-based electronic
devices using standard semiconductor processes. Graphene Hall Sensors (GHS) and
Graphene Field-Effect Transistors currently in production, and other
semiconductor devices in development, make use of Paragraf’s proprietary
graphene growth process to fully harness the wonder material’s myriad features.
Archer
will be working with Paragraf’s engineering and business development teams with
both teams leveraging their expertise in a range of fields from semiconductor
manufacturing, biological sensing, chemistry, and the medical diagnostics
industry. The development and learning on the sensing chip will feed directly
into the ongoing work around integration with other sensing components as well
as the product’s cartridge design.
Commenting
on the Paragraf partnership, Simon Ruffell, CEO of Archer, said, “Formalising
an agreement with Paragraf ensures the acceleration of the Biochip’s
development. The work will be critical for producing a first sensor prototype
which will, in turn, allow us to continue building strategic partnerships to
support latter stages of product development and clinical trials for regulatory
approval.”
Archer partners
with Paragraf for Biochip development
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
The
trouble with the world is not that people know too little; it's that they know
so many things that just aren't so.
Mark
Twain
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