Baltic Dry Index. 1388 +83 Brent Crude 65.10
Spot Gold 3217 US 2 Year Yield 3.98 +0.02
US Federal Debt. 36.867 trillion!!!
[A]
crash is coming, and it may be terrific. …. The vicious circle will get in full
swing and the result will be a serious business depression. There may be a
stampede for selling which will exceed anything that the Stock Exchange has
ever witnessed. Wise are those investors who now get out of debt.
Roger
Babson, speech at the Annual Business Conference in Massachusetts on 5th September,
1929.
Don’t look now, but it’s beginning to look like 1930 again.
Without a swift end to the Trump trade wars on friend and foe alike, it all goes increasingly rapidly wrong now with each passing month.
Coming next, unemployment, vastly reduced consumption, increased national debts, reduced entitlements, massive debts default. More fiat money printing?
Central bank digital currencies in an effort to de-dollarise the global economy and get capitalism working again? Good luck with that.
Asia-Pacific markets fall as investors assess
Moody’s U.S. downgrade, China data
Updated Mon, May 19 2025 11:41 PM EDT
Asia-Pacific markets fell Monday as
investors assess the latest slate of economic data from China and Moody’s
downgrade of the U.S. credit rating.
Hong Kong’s Hang Seng index declined
0.73%, while mainland China’s CSI 300 dropped 0.48%.
Japan’s benchmark Nikkei 225 slipped 0.54%
while the Topix lost 0.36%. South Korea’s Kospi declined 0.47% and the
small-cap Kosdaq traded 0.77% lower.
Australia’s benchmark S&P/ASX 200 was
down 0.15%.
The Reserve Bank of Australia kickstarts
its two-day meeting.
On Friday, Moody’s Ratings downgraded
the U.S. sovereign credit rating by one level from Aaa to Aa1, citing
mounting challenges in funding the federal budget deficit and the increasing
cost of refinancing debt in a high-interest-rate environment.
With this downgrade, Moody’s has joined
the ranks
of other major rating agencies. S&P made the first move in 2011, and
Fitch followed suit in 2023, both reducing the U.S. rating to AA+.
Moody’s latest rating downgrade on its own
may not cause a big sell-off in U.S. stock and bond markets as seen from the
2011 and 2023 rating downgrades, Vasu Menon, OCBC’s managing director of the
investment strategy team said in a note.
“It does however reinforce concerns about
the growing U.S. budget deficit and debt, but these are not new and have been
discussed extensively for the past few months, and even years,” he noted.
U.S.
stock futures declined after the S&P 500 posted a four-day rally
on the back of U.S. and China’s temporary tariff cuts and encouraging inflation
reports. Futures tied to the Dow Jones Industrial Average dropped 292 points,
or 0.7%. S&P 500 futures slipped 0.7%, while Nasdaq 100 futures fell 0.8%.
Overnight
stateside on Friday the three major averages closed mixed. The S&P 500 rose for a fifth
session and posted a sharp weekly gain, as investors looked past the release of
disappointing consumer sentiment data and persistent inflation worry.
The broad market index climbed 0.70% to
end at 5,958.38, while the Nasdaq
Composite gained 0.52% to close at 19,211.10. The Dow Jones Industrial Average gained
331.99 points, or 0.78%, settling at 42,654.74. Friday’s advance put the
30-stock benchmark into positive territory for 2025.
Asia-Pacific
markets live: RBA, China housing sales, China industrial
Stock futures slide after U.S. debt downgrade
highlights deficit risk: Live updates
Updated Mon, May 19 2025 8:03 PM EDT
Stock futures fell Sunday evening as
investors responded to Moody’s downgrade of the U.S.′ credit rating.
Futures tied to the Dow Jones Industrial
Average dropped 292 points, or 0.7%. S&P 500 futures pulled back 0.7%,
while Nasdaq 100 futures lost 0.8%.
Moody’s on Friday bumped the
country’s rating down by one notch to Aa1 from Aaa, bringing the agency in line
with its peers. The firm cited the financing challenges tied to the federal
government’s growing budget deficit and the ramifications of rolling over
existing U.S. debts in a period of high borrowing costs.
The debt downgrade could pressure bond
prices and raise yields at a time when the economy is already under pressure
from President Donald Trump’s unfolding
tariff policy.
“The fundamental factor of less foreign
demand for them and the growing size of the pile of debt that needs to be
constantly refinanced is not going to change,” said Peter Boockvar, chief
investment officer at Bleakley Financial Group, of the U.S. rating change.
Moody’s downgrade “is symbolic in the sense that here’s a major rating agency
that’s calling out that the U.S. has strained debts and deficits.”
The downgrade comes after a winning
week on Wall Street as investors cheered the White House’s deal with
China to temporarily
slash levies. The agreement was seen as a breakthrough for global trade
after Trump’s initial plan for broad and steep import taxes was unveiled last
month.
The technology-heavy Nasdaq Composite led
the way, surging more than 7%. The broad S&P 500 jumped over 5% and posted
a five-day winning streak.
The blue-chip Dow rallied more than 3%
last week. Friday’s gain of over 300 points pushed the 30-stock average into
positive territory for 2025.
Investors on Monday will monitor speeches
from U.S. central bank officials such as Atlanta Federal Reserve President
Raphael Bostic, New York Fed President John Williams and Dallas Fed President
Lorie Logan scheduled throughout the day. Leading indicators data is due in the
morning.
Stock
market today: Live updates
China slaps anti-dumping duties on plastics from
the U.S., EU, Japan, and Taiwan
Published Sun, May 18 2025 2:44 AM EDT Updated
Sun, May 18 2025 6:10 AM EDT
China on Sunday announced anti-dumping
duties as high as 74.9% on imports of POM copolymers, a type of engineering
plastic, from the United States, the European Union, Japan and Taiwan.
The commerce ministry’s findings conclude
a probe launched in May 2024, shortly after the U.S. sharply increased tariffs
on Chinese electric vehicles, computer chips and other imports.
POM copolymers can partially replace
metals such as copper and zinc and have various applications including in auto
parts, electronics and medical equipment, the ministry has said.
In January, the ministry said initial
investigations had determined that dumping was taking place, and implemented
preliminary anti-dumping measures in the form of a deposit starting from
January 24.
According to Sunday’s announcement, the
highest anti-dumping rates of 74.9% were levied on imports from the United
States, while European shipments will face 34.5% duties.
China slapped 35.5% duties on Japanese
imports, except for Asahi Kasei Corp, which received a company-specific rate of
24.5%.
General duties of 32.6% were placed on
imports from Taiwan, while Formosa Plastics received a 4% tariff and
Polyplastics Taiwan 3.8%.
Hopes have risen that the U.S.-China trade
war is easing after the two sides said on Monday they had agreed to slash
reciprocal tariffs in a 90-day truce, a deal that state mouthpiece the Global
Times said on Friday should be extended.
The Asia-Pacific Economic Cooperation
group of nations warned of “fundamental challenges” facing the global trading
system in a communique on Friday after a meeting in South Korea.
China
slaps anti-dumping duties on plastics from the U.S., EU, Japan, and Taiwan
China's April retail sales growth of 5.1% misses
expectations as consumption remains a worry
Published Sun, May 18 2025 10:09 PM EDT
China’s retail sales growth slowed in
April, data from the National Bureau of Statistics showed Monday, signaling
that consumption remains a worry for the world’s second-largest economy.
Retail sales rose 5.1% from a year earlier
in April, missing analysts’ estimates of 5.5% growth, according to a Reuters
poll. Sales had grown
by 5.9% in the previous month.
Industrial output grew 6.1% year on year
in April, stronger than analysts’ expectations for a 5.5% rise, while slowing
down from the 7.7% jump in March, indicating the impact from U.S.
tariffs was not as harsh as was being expected.
“We should be aware that there are still
many unstable and uncertain factors in [the] external environment,” the
statistics bureau said. “The foundation for sustained economic recovery needs
to be further consolidated.”
Fixed-asset investment for the first four
months this year, which includes property and infrastructure investment, rose 4.0%, slightly lower than analysts’ expectations for a
4.2% growth in a Reuters poll. The drag from real estate worsened within fixed
asset investment, falling 10.3% for the year as of April.
The urban unemployment rate in April eased
to 5.1% from 5.2% in March, at a time when U.S.-China trade war had led
economists to warn about substantial job losses in China.
U.S. President Donald Trump had placed
tariffs of 145% on imports from China that came into effect in April, while
Beijing had retaliated with 125% levies on American imports.
Trade-war fears have receded after a
meeting of U.S. and Chinese trade representatives in Switzerland earlier this
month led to a lower set of levies between the world’s two largest economies.
Beijing and Washington agreed to roll back most tariffs for 90 days, allowing
some room for further negotiation to reach a more lasting deal.
That prompted a slew of global investment
banks to raise their forecasts for China’s economic growth this year while
paring back expectations for more proactive stimulus as Beijing strives to
reach its growth target of around 5%.
The trade truce came as the economic toll
of tariffs on the economy was becoming difficult to ignore.
China’s factory activity fell to a
16-month low in April, with a gauge on new export orders dropping to its lowest
since December 2022.
The wholesale prices posted the steepest
drop in six months in April, while consumer prices fell for a third moth,
underscoring the persistent deflationary pressure in the economy.
China’s exports, however, surged more
than expected in April, as a jump in shipments to Southeast Asian countries
helped offset a sharp drop in outbound goods to the U.S.
In the first four months this year,
China’s exports to the U.S. dropped 2.5%, according to customs data. In April
alone, the U.S.-bound shipments plunged over 21% from a year earlier.
High-frequency indicators show container
bookings jumped last week following the tariff ceasefire, Tommy Xie, managing
director and head of Asia macro research at OCBC Bank said in a note Monday.
The seven-day average container booking
volume as of May 14 spiked by 277% compared to the week ending May 5, Xie said,
citing data from container tracking software provider Vizion.
Xie expects China’s economic expansion to
stay above 5% in the second quarter, following a robust
5.4% growth rate in the first quarter this year.
The Chinese government has
implemented a
raft of stimulus measures to stimulate consumption across different
sectors and support businesses impacted by the tariffs and bolster employment.
“With trade tensions defused and domestic
economy holding up well so far, we believe potential stimulus could be put on
hold for now,” Xiangrong Yu, chief China economist at Citi said in a note dated
May 15.
Earlier this month, the People’s Bank of
China announced to cut the seven-day reverse repurchase rates by 10 basis
points to 1.4% from 1.5%. That will bring down its main policy rate, known as
the loan prime rate, by around 10 basis points, according to the central bank’s
Governor Pan Gongsheng.
The PBOC is expected to announce the
one-year and five-year LPR for May on Tuesday.
China's
April retail sales growth of 5.1% misses expectations as consumption remains a
worry
In other news.
Trump says he will call Putin, Zelenskyy, and
NATO members on Monday to talk ceasefire, trade
Published Sat, May 17 2025 12:04 PM EDT
President Donald Trump said Saturday he plans to speak
separately to Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskyy on Monday in an
effort to reach a ceasefire.
“I WILL BE SPEAKING, BY TELEPHONE, TO PRESIDENT
VLADIMIR PUTIN OF RUSSIA ON MONDAY, AT 10:00 A.M. THE SUBJECTS OF THE CALL WILL
BE, STOPPING THE “BLOODBATH” THAT IS KILLING, ON AVERAGE, MORE THAN 5000
RUSSIAN AND UKRAINIAN SOLDIERS A WEEK, AND TRADE,” Trump said in a
Saturday post on
Truth Social.
“I WILL THEN BE SPEAKING TO PRESIDENT ZELENSKYY OF
UKRAINE AND THEN, WITH PRESIDENT ZELENSKYY, VARIOUS MEMBERS OF NATO,” he
continued. “HOPEFULLY IT WILL BE A PRODUCTIVE DAY, A CEASEFIRE WILL TAKE PLACE,
AND THIS VERY VIOLENT WAR, A WAR THAT SHOULD HAVE NEVER HAPPENED, WILL END. GOD
BLESS US ALL!!!”
Trump told reporters on Friday that he
was setting up talks with
Putin after the Russian president skipped peace talks between Russia and
Ukraine in Turkey. “I think it’s time for us to just do it,” Trump said.
“He and I will meet, and I think we’ll solve it or
maybe not,” Trump said in comments to reporters after boarding Air Force One,
as he departed for the U.S. following his four-day trip to the Middle East. “At
least we’ll know. And if we don’t solve it, it’ll be very interesting.”
Trump has
grown frustrated with
his administration’s efforts to facilitate a deal between Russia and Ukraine
and has told advisers in private discussions that mediating a peace deal has
been more difficult than he expected, CNN previously reported, citing sources.
During his campaign, the U.S. president repeatedly
said he would be able to end the war between Russia and Ukraine “in
24 hours” upon taking office.
Trump has lately taken to blaming both sides,
where he previously assigned blame solely on Ukraine’s Zelenskyy for making
“inflammatory statements” that “makes it so difficult to settle this war.” He
also accused the Ukrainian leader of adding to war complications by “boasting”
that Kyiv would not legally recognize ceding Crimea to Russia. Trump recently
chastised Putin for Russia’s strikes on Ukraine in late April that were ″not necessary, and very
bad timing.”
Trump to call Putin,
Zelenskyy, NATO members Monday to talk ceasefire
Trump tells Walmart to ‘eat the tariffs’ after
retailer warned it will raise prices
Published Sat, May 17 2025 11:16 AM EDT Updated
Sat, May 17 2025 5:40 PM EDT
President Donald Trump blasted Walmart on Saturday after the
country’s largest retailer warned this week that it will have to raise prices
because of tariffs.
“Walmart should STOP trying to blame
Tariffs as the reason for raising prices throughout the chain,” Trump wrote on Truth
Social. “Between Walmart and China they should, as is said, “EAT THE TARIFFS,”
and not charge valued customers ANYTHING. “I’ll be watching, and so will your
customers!!!”
Walmart CFO John David Rainey said in an
interview with CNBC on Thursday that, “We have not seen price increases at this
magnitude, in the speed in which they’re coming at us before, and so it makes
for a challenging environment.”
As a retail giant and the largest grocer
in the country, Walmart is often seen as a bellwether for the health of
retailers and U.S. consumers.
Rainey said he is “pleased with the
progress that’s been made by the [Trump] administration on tariffs from the
levels that were announced in early April, but they’re still too high.” That is
despite a 90-day reprieve that lowered
duties on Chinese imports to 30%. Goods from dozens of other countries face a
10% duty. Walmart imports electronics and toys from China and produce including
avocados and bananas from Central and South America.
He said that the retailer wants to keep
its prices lower than competitors, especially at a time when shoppers are
seeking discounts. To do that, he said Walmart will absorb some of the
tariff-related higher costs and he expects suppliers to absorb some higher
costs, too.
Rainey said the company will “try to work
with suppliers to keep prices as low as we can.”
Walmart echoed that sentiment on Saturday
when asked to comment on Trump’s post.
“We have always worked to keep our prices
as low as possible and we won’t stop,” Walmart said in a statement. “We’ll keep
prices as low as we can for as long as we can given the reality of small retail
margins.”
Walmart joined a growing number
of companies that have increased prices or warned that higher prices are coming
due to tariffs. Microsoft said earlier
this month that it has increased the
recommended retail prices of Xbox video game consoles and some
controllers.
Barbie maker Mattel announced earlier this month
it is moving production out of China, but still expected to have price
increases its toys. And Ford warned last
week it would have to raise prices on
some cars.
More
Trump tells
Walmart to 'eat the tariffs' after retailer warned it will raise prices
Microsoft CEO says up to 30% of the company’s code
was written by AI
29 April 2025
During a fireside chat with Meta CEO Mark
Zuckerberg at Meta’s LlamaCon conference on Tuesday, Microsoft CEO Satya
Nadella said that 20% to 30% of code inside the company’s repositories was
“written by software” — meaning AI.
Nadella gave the figure after Zuckerberg
asked roughly how much of Microsoft’s code is AI generated today. The Microsoft
CEO said the company was seeing mixed results in AI-generated code across
different languages, with more progress in Python and less in C++.
Microsoft CTO Kevin Scott previously said
he expects 95% of all code to be AI generated by 2030.
When Nadella threw the question back at
Zuckerberg, the Meta CEO said he didn’t know how much of Meta’s code is being
generated by AI.
Microsoft CEO says
up to 30% of the company's code was written by AI | TechCrunch
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.
This
Recession Forecasting Tool Hasn't Been Wrong Since 1966 -- and It Has a Clear
Message for Wall Street
May
17, 2025
Wall
Street hasn't been hurting for catalysts of late. Following a nearly
two-and-a-half-year climb in the Dow Jones Industrial Average (DJINDICES:
^DJI), S&P 500 (SNPINDEX: ^GSPC), and Nasdaq
Composite (NASDAQINDEX: ^IXIC), which was spurred by the rise of
artificial intelligence (AI), investors have been hypnotized
in 2025 by President Donald Trump's ever-changing tariff policies, wild swings in
Treasury bond yields, and the return of stock-split
euphoria.
But
it's fair to question whether Wall Street and the investing community are
missing the bigger picture: The U.S. economy.
Although
the economy and stock market aren't tied at the hip, corporate earnings often
ebb and flow with the domestic economy. According to one recession forecasting
tool, which hasn't been wrong in 59 years -- and has
only been incorrect once when back-tested to 1959 -- things
may not be as rosy for the U.S. economy and stock market as they appear on the
surface.
It's
been 59 years since this recession indicator wasn't accurate
There
isn't any data point or forecasting tool on the planet that can guarantee
what's going to happen next with the U.S. economy and/or Wall Street. But
there are select metrics, forecasting tools, and events that
have strongly correlated with directional moves in the Dow, S&P 500, and
Nasdaq Composite throughout history. For instance, notable
declines in M2 money supply have historically led to economic downturns and
tough times for Wall Street.
Perhaps
Wall Street's biggest concern at the moment has less to do with Trump's tariff
policies, and everything to do with what the Federal Reserve Bank of New
York's recession probability
tool says comes next.
The
New York Fed's recession predicting tool analyzes the spread (difference in
yield) between the 10-year Treasury bond and three-month Treasury bill to
calculate how likely it is that a recession will take shape over the next 12
months.
In
a healthy economy, the Treasury yield
curve slopes
up and to the right. This is to say that longer-dated bonds maturing in 10 to
30 years sport higher yields than Treasury bills maturing in a year or less.
The longer your money is tied up in an interest-bearing asset, the higher the
yield should be.
When
the yield curve inverts is where trouble starts brewing. This is where
short-term Treasury bills have higher yields than long-term Treasury bonds.
It's typically an indication that investors are worried about the outlook for
the U.S. economy.
The
New York Fed's recession probability forecast is updated on a monthly basis,
with the May 2025 update pointing to a 30.45% chance of a U.S. recession taking
shape by April 2026. While this is well off the 2023 high of a greater than 70%
chance of a recession occurring -- this was the highest reading in four decades
-- every probability reading above 32% since 1966 has eventually been followed
by a U.S. recession.
The
New York Fed's recession probability forecast is updated on a monthly basis,
with the May 2025 update pointing to a 30.45% chance of a U.S. recession taking
shape by April 2026. While this is well off the 2023 high of a greater than 70%
chance of a recession occurring -- this was the highest reading in four decades
-- every probability reading above 32% since 1966 has eventually been followed
by a U.S. recession.
Since
we're coming off the steepest
inversion of the 10-year/three-month yield curve in four decades, it's only
natural that it's taken a bit longer for the yield curve to attempt to right
itself. This un-inversion of the yield curve, coupled with the history behind
the New York Fed's recession probability tool, strongly points to a U.S.
recession taking shape.
More
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.
Finely-tuned
TiO₂ nanorod arrays enhance solar cell efficiency
17 May
2025
A
research team led by Prof. Wang Mingtai at the Hefei Institutes of Physical
Science of the Chinese Academy of Sciences has developed a finely tuned method
for growing titanium dioxide nanorod arrays (TiO2-NA) with controllable
spacing without changing individual rod size and demonstrated its application
in high-performance solar cells.
Their
findings, published in Small Methods,
offer a new toolkit for crafting nanostructures across clean energy and
optoelectronics.
Single-crystalline
TiO2 nanorods excel at harvesting light and conducting charge,
making them ideal for solar cells, photocatalysts, and sensors. However,
traditional fabrication methods link rod density, diameter, and length—if one
parameter is adjusted, the others shift accordingly, often affecting device
efficiency.
In
this study, by carefully extending the hydrolysis stage of a precursor film,
the team showed that longer "gel chains" assemble into smaller
anatase nanoparticles. When the anatase film is subjected to hydrothermal
treatment, those anatase nanoparticles convert in situ into rutile ones,
serving as seeds for nanorod growth. The hydrolysis stage provides an effective
way to control the rod density without altering the nanorod dimensions.
Using
this strategy, they produced TiO2-NA films with constant rod
diameter and height, even as the number of rods per area varied. When
incorporated into low-temperature-processed CuInS2 solar cells,
these films achieved power conversion efficiencies above 10%, peaking at 10.44
%.
To
explain why spacing matters so profoundly, the team introduced a
Volume-Surface-Density model, clarifying how rod density influences light
trapping, charge separation, and carrier collection.
This
study overcomes the limitations of traditional methods for regulating
nanostructures by establishing a complete system linking "macro-process
regulation–microstructure evolution–device performance optimization."
More
information: Wenbo Cao et al, Unveiling Growth and Photovoltaic
Principles in Density‐Controllable TiO2 Nanorod Arrays for Efficient Solar
Cells, Small Methods (2025). DOI:
10.1002/smtd.202500264
Finely-tuned TiO₂
nanorod arrays enhance solar cell efficiency
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months.
Irving Fisher. NY Times,
October 16, 1929.
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