Baltic Dry Index. 1303 Brent Crude 65.77
Spot Gold 3270 US 2 Year Yield 3.96 +0.04
US Federal Debt. 36.909 trillion!!! US GDP 30.036 trillion.
Japan’s auction of 40-year government debt met demand that was the weakest since July, an outcome that risks fueling further volatility for global bonds.
Nissan Plans $7 Billion Funding With UK Government Backing - Bloomberg
No need for my input this morning. Most of President Trump’s tariffs were struck down in a US court as illegal. No need for China or the EU to kowtow!
But the courts ruling left open: Trump might still be able to temporarily launch import taxes of 15% for 150 days on nations with which the U.S. runs a substantial trade deficit. The ruling notes that a president has this authority under Section 122 of the Trade Act of 1974.
A slew of tort damage suits now seems likely against the Trump administration.
A Great Relief Rally to get underway before stocks dress up the month-end Friday?
But a massive reversal of the Yen Carry trade threatens to blow up stocks in June.
Federal court
blocks Trump from imposing sweeping tariffs under emergency powers law
Updated
1:56 AM GMT+1, May 29, 2025
WASHINGTON
(AP) — A federal court on Wednesday blocked President Donald Trump from imposing
sweeping tariffs on imports under an
emergency-powers law, swiftly throwing into doubt Trump’s signature set of
economic policies that have rattled global financial markets, frustrated trade
partners and raised broader fears about inflation intensifying and the economy
slumping.
The
ruling from a three-judge panel at the New York-based U.S. Court of
International Trade came after several lawsuits arguing Trump’s “Liberation
Day” tariffs exceeded his authority and left the country’s trade policy
dependent on his whims.
Trump has
repeatedly said the tariffs would force manufacturers to bring back factory
jobs to the U.S. and generate enough revenue to reduce federal budget deficits.
He used the tariffs as a negotiating cudgel in hopes of forcing other nations
to negotiate agreements that favored the U.S., suggesting he would simply set
the rates himself if the terms were unsatisfactory.
White
House spokesperson Kush Desai said that trade deficits amount to a national
emergency “that has decimated American communities, left our workers behind,
and weakened our defense industrial base — facts that the court did not
dispute.”
The
administration, he said, remains “committed to using every lever of executive
power to address this crisis and restore American Greatness.”
But for now, Trump might not have the threat of import taxes to exact his will on the world economy as he had intended, since doing so would require congressional approval. What remains unclear is whether the White House will respond to the ruling by pausing all of its emergency power tariffs in the interim.
The
ruling amounted to a categorical rejection of the legal underpinnings of some
of Trump’s signature and most controversial actions of his four-month-old
second term. The administration swiftly filed notice of appeal — and the
Supreme Court will almost certainly be called upon to lend a final answer — but
it casts a sharp blow.
The case
was heard by three judges: Timothy Reif, who was appointed by Trump, Jane
Restani, named to the bench by President Ronald Reagan and Gary Katzman, an
appointee of President Barack Obama.
“The
Worldwide and Retaliatory Tariff Orders exceed any authority granted to the
President by IEEPA to regulate importation by means of tariffs,” the court
wrote, referring to the 1977 International Emergency Economic Powers Act.
The
ruling left in place any tariffs that Trump put in place using his Section 232
powers from the Trade Expansion Act of 1962. He put a 25%
tax on most imported autos and parts, as well as on all foreign-made steel
and aluminum. Those tariffs depend on a Commerce Department investigation that
reveals national security risks from imported products.
More
Federal
trade court blocks Trump's sweeping 'Liberation Day' tariffs | AP News
Dow futures jump
500 points as court blocks Trump tariffs, Nvidia posts earnings beat: Live
updates
Updated
Thu, May 29 2025 9:00 PM EDT
Futures
surged Wednesday night as a federal court knocked down President Donald Trump’s
“reciprocal” tariffs. Solid earnings from artificial intelligence heavyweight
Nvidia also buoyed the market.
Futures tied to the S&P 500 rose
1.6%, while Nasdaq 100
futures gained 2%. Dow
futures added 511 points, or 1.2%.
On
Wednesday night, the U.S. Court of International Trade ruled that Trump overstepped
his authority when he imposed his “reciprocal”
tariffs. The judges ordered that the challenged tariff orders be vacated.
The April
2 announcement of Trump’s duties, the president’s constantly changing approach
toward trade policy, as well as inflation
fears fueled by the prospect of the tariffs, roiled markets last
month. Some companies have also highlighted
the levies and dialed back their forecasts, pointing to uncertainty around
trade policy and the impact on the consumer. For now, the judges’ decision
appears to have allayed investors’ worries.
Elsewhere, Nvidia shares jumped nearly
5% in after-hours trading. The chipmaker exceeded
expectations on the top and bottom lines in the first quarter, as
its data center business recorded year-over-year growth of 73%.
“Wednesday’s
Nvidia earnings report is pivotal not just for Nvidia but for the entire stock
market, as it can rejuvenate investor optimism across the board and help
investors to focus on the power of AI and less on headlines out of Washington
on tariffs and taxes,” said James Demmert, chief investment officer of Main
Street Research.
Stocks
are coming off of a lackluster session Wednesday. The S&P 500 ended the day
almost 0.6% lower, while the tech-heavy Nasdaq Composite lost 0.5%.
The Dow fell nearly
245 points, or 0.6%.
Major
U.S. indexes are on track to close the week—and month—higher. The S&P 500
and 30-stock Dow are up 1.5% and 1.2% this week, respectively, while the Nasdaq
has rallied nearly 2%. The tech sector has surged more than 10% in May, fueled
by AI
announcements from Big Tech player Alphabet.
This
month, the S&P 500 has gained 5.7%. The Dow has added 3.5%, while the
Nasdaq has jumped 9.5%.
The surge
in stocks comes after President Donald Trump on Sunday walked back his threat
to implement a 50% tariff on the European Union on June 1, delaying the
date to July 9. Although investors cheered the news, critiques
of Trump’s tariffs have emerged given their wild effect on markets.
Stock
market today: Live updates
Asia-Pacific
markets rise after U.S. court blocks Trump ‘reciprocal’ tariffs
Updated
Thu, May 29 2025 11:52 PM EDT
Asia-Pacific
markets mostly rose Thursday after a U.S. federal court ruled that President
Donald Trump exceeded
his authority with his “reciprocal” tariffs, dealing a blow to a major
tenet of the president’s economic agenda.
South
Korea’s Kospi rose 1.76% and the small-cap Kosdaq climbed 0.83%. The Bank of
Korea has cut its policy rate from 2.75% to 2.5%, its lowest level since
August 2022, in line with expectations among economists polled by Reuters.
Japan’s
benchmark Nikkei 225 rose
1.63% and the Topix climbed 1.44%.
Australia’s S&P/ASX 200 rose 0.31%.
Hong
Kong’s Hang Seng index advanced
0.84% while mainland China’s CSI 300 was 0.7% higher.
India’s
benchmark Nifty 50 started
the day 0.29% higher while the BSE Sensex moved up 0.34%.
Investors
will be keeping an eye out for Asian chip stocks after artificial intelligence
heavyweight Nvidia posted
stronger-than-expected earnings and revenue Wednesday, driven by a 73%
year-over-year surge in its data center business.
U.S.
futures rose, buoyed by the court ruling and Nvidia’s strong earnings report.
Futures tied to the S&P 500 jumped
1.44%, while Nasdaq 100
futures gained 1.76%. Dow
Jones Industrial Average futures added 483 points, or 1.15%.
Overnight,
the three major stock averages closed lower as investors parsed the latest
earnings reports and Federal Reserve meeting minutes.
The S&P 500 slid 0.56% to end
at 5,888.55, while the Nasdaq
Composite shed 0.51% and settled at 19,100.94. The Dow Jones Industrial Average fell
244.95 points, or 0.58%, and closed at 42,098.70.
Asia-Pacific
stock markets today: Live updates for May 29, 2025
Demand at Japan's 40-year bond auction sinks as
fiscal doubts prevail
28 May 2025
TOKYO (Reuters) -A lacklustre auction for
Japan's longest-dated bonds on Wednesday did little to relieve sovereign debt
markets where fiscal deficit concerns have driven a worrying surge in long-term
yields.
Heavily indebted Japan's government bonds
have become the "canary in the global duration coalmine," Goldman
Sachs analysts wrote last week after a very poor sale of 20-year bonds.
The Ministry of Finance sold about 500
billion yen ($3.46 billion) of 40-year bonds with a bid-to-cover ratio of 2.21,
the lowest since a sale in July last year and well below the historical average
of 3, signifying tepid demand.
The poor results come a week after Japan's
40-year yields touched a record high 3.675%, along with an all-time high for
30-year paper and a multi-decade peak for 20-year debt.
On Tuesday, bonds rallied after the
Ministry of Finance was said to have circulated a survey among major bond
buyers and accelerated gains after Reuters reported the ministry is considering
reductions to its sales of super-long bonds.
The swift recovery in JGBs in the previous
session may have damped demand at the 40-year auction, said Shoki Omori, chief
desk strategist at Mizuho Securities. He added that sovereigns like the United
States and Japan will likely face ever steeper borrowing costs.
"Even if many countries cut the
issuance, there is going to be pressure for long-end yields to go higher, so
that's a scary one," Omori said.
JGB yields ticked higher and the yen
erased losses after the auction on Wednesday. Thirty-year yields were affected
the most, up 10 basis points on the day at 2.93%, while 40-year yields rose 5
basis points to 3.335%.
Long-dated debt has sold off globally in
recent weeks on concerns tax cuts and a chaotic roll-out of sweeping tariffs by
U.S. President Donald Trump will stoke inflation and impel governments to spend
more. That has driven up the term premium - the extra yield offered to buyers
in exchange for locking up their money in longer-dated securities.
Moody's on May 17 became the last major
rating agency to strip the United States of its top grade because of growing
debt, which stands at about 124% of GDP.
But the situation is more precarious in
Japan where the debt ratio is double that and the central bank has slashed its
bond buying to support the economy. The Bank of Japan still holds more than
half of all outstanding JGBs, a holdover of decades of monetary stimulus.
Finance Minister Katsunobu Kato warned on
Tuesday that higher rates could further imperil Japan's finances and pledged
"appropriate" management of its debt.
A reduction in issuance of 20-, 30- or
40-year JGBs would be counterbalanced by increased sales of shorter-dated debt,
sources told Reuters, meaning overall issuance for the fiscal year would remain
at 172.3 trillion yen. BOJ Governor Kazuo Ueda said in parliament on Wednesday
that large swings in super-long JGB yields could affect yields on shorter-term
paper.
The weak auction and subsequent market
reaction add to pressure on the MOF to scale back super-long debt sales and
also for the BOJ to step in if necessary, said Frances Cheung, head of currency
and rates strategy at OCBC.
More
Demand at Japan's
40-year bond auction sinks as fiscal doubts prevail
Japan’s bond
market ignites fears of outflows from U.S., carry trade unwind and market
turmoil
Published
Wed, May 28 2025
1:02 AM
EDT Updated Wed, May 28 2025 3:28 AM EDT
Japan’s
bond market is igniting fears of capital flight from the U.S. and a carry trade
unwind as long-dated yields hover near record highs.
Yields
resumed their move higher Wednesday as demand for 40-year government bonds
reportedly dropped to its weakest level since July last year, according to
Reuters’ calculations, hovering near record highs hit last week.
Japan’s
40-year government bonds yields hit an all-time high of 3.689% Thursday and
were last trading at 3.318% — almost 70 basis points higher so far this year.
Yields on 30-year government debt are up more than 60 basis points this year at
2.914%, also not too far from all-time highs, while for 20-year debt they are
up over 50 basis points.
Higher
Japan government bond yields could spark a wave of capital repatriation with
Japanese investors pulling funds from the U.S. There could be a “trigger point”
where Japan’s investors suddenly move their capital from the U.S. back home,
Macquarie’s analysts said in a note.
Should
Japanese government bond yields continue to climb, the move could “trigger a
global financial market Armageddon,” said Albert Edwards, global strategist at
Societe Generale Corporate & Investment Banking.
Higher
yields and stronger yen will impact domestic appetite to invest abroad, he told
CNBC. “Investing in the U.S. was as much currency gains as it was seeking
superior interest rate returns.” Edwards singled out U.S. tech stocks, which
have seen large Japanese inflows, as being particularly susceptible to a
stronger yen.
Elevated
yields spell trouble for global markets in general as they translate to
increased borrowing costs, said David Roche, strategist at Quantum Strategy.
Japan being the world’s
second-largest creditor raises the stakes even higher. The country’s
net external assets hit an all-time high in 2024 at 533.05 trillion yen ($3.7
trillion).
“Tightening
global liquidity will reduce world growth to 1% and by raising long term rates
it will tighten financial conditions and extend the bear market in most
assets,” he said.
This
repatriation of funds to Japan is synonymous with the “end of U.S.
exceptionalism” and is mirrored elsewhere in Europe & China,” Roche added.
More
Japan
government bonds: high yields spark fears of carry trade unwind
In other
news, seriously, no kidding? Just wait until July 9th when smuggling
gets underway. Now probably unneeded.
Fraudsters are
using ingenious hacks to pay lower tariffs on overseas products - like lying
May 27,
2025
Companies
are finding new ways to evade President Donald Trump‘s sweeping
global tariffs, according to a new report.
Several Chinese firms are helping companies find ways to bring
their products to the U.S. while avoiding high tariff costs, The
New York Times reports, which experts say amounts to
customs fraud.
One of
these tricks includes telling U.S.
Customs and Border Protection that
the product is worth less than it is, the Times reports.
Tariffs are based on a percentage of the import price.
Another
trick involves reporting that the product is made of a different material than
it actually is, according to the Times. For example, a company may
report that a polyester shirt is made of cotton, because the latter is subject
to a lower tariff.
A company
could also send a product through another country that is subject to a lower
tariff first, before shipping it to the U.S.
Leslie
Jordan, an apparel manufacturer, told the Times these schemes
are putting “many honest companies at a competitive disadvantage.”
“People
can’t afford it,” Jordan said. “They’re desperate.”
David
Rashid, executive chairman of the car part company Plews, said that “those
willing to cheat are going to continue to win the day” if more isn’t done to
stop tariff evasion.
John
Foote, a customs lawyer at Kelley Drye & Warren, told the Times that
the uptick in cheating is a “sign of entering a high tariff era.”
White
House spokesperson Kush Desai told the Independent that the
Trump administration’s tariffs policy is aimed at addressing the “persistent
trade deficits” that he said have “decimated American industry, and left
American workers behind.” Desai added: “Instead of trying to find illegal
workarounds to tariffs, foreign exporters would be better off telling their
governments to negotiate a trade deal with the United States.”
The Trump
administration has yet to officially finalize a single new trade deal.
Last
month, Trump announced sweeping tariffs on nearly every country in what he
called “Liberation Day” for the U.S. Soon afterward, he paused most
reciprocal tariffs for 90 days, leaving only 10 percent blanket
tariffs in place.
Some
countries still face higher tariffs, however. Trump briefly placed a 145
percent tariff on Chinese goods before lowering the tax to 35 percent this
month. In return, China lowered its tariff on U.S. goods from 125 percent to 10
percent.
The White House eased the tariffs on China after several aides
warned Trump that his new levies would cause his supporters to suffer
financially, according to The
Washington Post.
Trump’s
trade policies have left many feeling uncertain about the future. His
administration has announced new or revised tariff policies more than 50 times
since he took office, according to a recent tally by the Post.
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.
Consumer
Confidence Jumps, Though Recession Fears Remain
May
27, 2025
Americans
are feeling more optimistic about the economy and labor market than they have
in months.
The
U.S. consumer confidence index, a key recession indicator, improved in May
after five months of decline, though the numbers indicate there still may be a
potential recession ahead, according to a report released
Tuesday.
The
Conference Board found that its consumer confidence index increased by more
than 12 points this month after reaching a five-year low in April. The
expectations index—which measures Americans’ short-term outlook on market
conditions—also surged, but still fell below the threshold of 80, a marker of a
potential recession.
Here’s
what you should know about the increase in consumer confidence.
Why
did consumer confidence improve?
The
agreement reached by the U.S. and China earlier in May to significantly reduce
their tariffs against each other for 90 days appears to have eased consumer
concerns about the economy.
“The
rebound was already visible before the May 12 US-China trade deal but gained
momentum afterwards,” said Stephanie Guichard, the Conference Board’s senior
economist for global indicators.
Tuesday’s
report found that tariffs are still top of mind for many consumers, with some
survey respondents voicing concerns about increased prices. Many large
retailers have walked back from their commitment to not elevate prices for
consumers after reporting slips in their first quarter earnings.
The
Trump Administration announced on May 12
that the U.S. and China would each reduce their tariffs on the other country by
115% for the 90-day period, meaning that U.S. tariffs on Chinese goods would
drop to 30% and Chinese tariffs on American exports would come down to 10%. The
deal marked the second major pullback in Trump’s tariffs, after he previously
paused sweeping tariffs against most of the world’s countries in April. Allies
and other trading partners are fighting to ease some delayed import taxes as
negotiations with the European Union remain
ongoing ahead
of a July 9 deadline.
Despite
ongoing concerns over tariffs’ potential impact, some consumers were hopeful
about the prospect of potential trade deals being reached. And consumer
confidence overall increased across all age and income groups and political
affiliations.
What
concerns remain?
The
economic attitudes of consumers of all ages and income levels are still lower
than they were six months ago, and the expectations index remains below the key
recession indicator threshold after the decline of previous months.
While
the report found that consumer sentiment ticked up regarding various areas of
the economy, from the present situation to the short-term prospects for
employment and future income, expectations for job availability also weakened
for the fifth month in a row.
The
U.S. unemployment rate stands at 4.2%, which is on par with its average over
the last year, according to the U.S. Department of Labor’s latest report.
Consumer
Confidence Jumps, Though Recession Fears Remain
Macy’s
CEO says retailer will hike some prices as tariffs cut into profits
Published
Wed, May 28 2025 6:55 AM EDT
Macy’s cut its
full-year profit guidance on Wednesday even as it beat Wall Street’s quarterly
earnings expectations, as the retailer’s CEO said it will hike prices of
certain items to offset tariffs.
In
a news release, the department store operator said it reduced its earnings
outlook because of higher tariffs, more promotions
and “some moderation” in discretionary
spending.
Macy’s stuck by its full-year sales forecast, however.
For
fiscal 2025, Macy’s now expects adjusted earnings per share of $1.60 to $2,
down from its previous forecast of $2.05 to $2.25. It reaffirmed its full-year
sales guidance of between $21 billion and $21.4 billion, which would be a
decline from $22.29 billion in the most recent full year.
About
15 cents to 40 cents per share of the guidance cut is due to tariffs, CEO Tony
Spring told CNBC. He said about 20% of the company’s merchandise comes from
China.
Macy’s
will raise some prices and stop carrying certain items to mitigate the hit from
tariffs, he added.
“You’re
dealing with it on both the demand side as well as the increased cost side. And
so navigating that, we have a series of different scenarios to try to figure
out kind of what will be the reality, and we want our guidance to reflect the
flexibility of that uncertainty, so that we can react in real time to how we
serve or better serve the consumer,” Spring said.
Spring
said the company will be “surgical” about its pricing approach.
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.
Electric car
fires surge 77% amid growing concern over battery safety
27 May
2025
Fires
involving electric cars have surged by 77% in just two years, highlighting
mounting safety concerns over the lithium-ion batteries.
According
to new data released by business insurer QBE, 232 electric vehicle (EV) fires
were recorded by UK fire services in 2024 - up from 131 in 2022 as the number
of EVs on British roads more than doubled during the same period.
The
figures, obtained by QBE through Freedom of Information requests to UK fire
services, show a broader trend: lithium-ion battery fires are escalating across
all categories, with a 93% overall rise since 2022.
“Electric
vehicle fires are not only becoming more frequent - they’re also far more
intense,” said Adrian Simmonds, practice leader for Property Risk Solutions at
QBE Insurance. “These fires burn hotter, spread faster and require ten times
more water to extinguish than a typical combustion engine fire.”
The
primary danger lies in the batteries themselves. When damaged, overcharged or
exposed to extreme heat, lithium-ion cells can undergo “thermal runaway” - a
rapid and uncontrollable rise in temperature that can lead to explosive fires.
In the
confined battery packs of EVs, this can result in significant damage, prolonged
burn times, and serious threats to both occupants and emergency responders.
London
remains the hotspot for such incidents, with the capital recording the highest
number of lithium-ion battery fires (407 in 2024), although the specific number
involving EVs within the capital was not separately disclosed. Greater
Manchester and West Yorkshire followed with 100 and 94 battery fires
respectively.
QBE is
calling on the UK government to accelerate provisions in the Product Regulation
and Metrology Bill, currently under parliamentary review, to crack down on
unregulated battery products and ensure only vehicles meeting the highest
safety standards are sold.
In
October 2024, the Department for Business and Trade launched the "Buy
Safe, Be Safe" campaign to raise awareness about the risks of purchasing
unsafe or uncertified electrical goods online. However, QBE believes that more
needs to be done.
“Education
is crucial,” said Simmonds. “From knowing how to charge vehicles safely, to
understanding the signs of battery failure, consumers must be equipped with the
knowledge to protect themselves and their property.”
Electric car fires
surge 77% amid growing concern over battery safety
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
Nothing
is easy, but who wants nothing?
Donald
Trump
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