Thursday, 1 May 2025

US And Global Economies, Mayday, Mayday, Mayday. Ripoff Paris!

Baltic Dry Index. 1386 -12         Brent Crude 61.03

Spot Gold 3230               US 2 Year Yield 3.60 -0.05

US Federal Debt. 36.792 trillion!!!

There is no sin so great as ignorance. Remember this.

Rudyard Kipling

With much of the world’s markets closed today for Mayday, it’s usually time for the bulls to run riot in the few stock casinos remaining open.

In the real economy, the US economy contracted, the Fed’s favourite inflation gage was tame but Goldie expects Trump’s tariff wars to cause it to increase by about one percent.

The crude oil price and gold fell in expectation of an arriving US led global recession. I think a near global depression far more likely by H2 25.

Japanese and Australian markets rise following choppy trade on Wall Street; most Asian markets closed for holiday

Published Wed, Apr 30 2025 7:44 PM EDT

Japanese and Australian markets rose Thursday after swings on Wall Street overnight, as data pointing to a contraction in the U.S. economy in the first quarter heightened investors’ fears of a looming recession.

Several Asia-Pacific markets, including South Korea, Hong Kong, China and India were closed for the Labor Day holiday.

Japan’s benchmark Nikkei 225 rose by 0.92% in choppy trade while the broader Topix index climbed 0.28% after the country’s central bank held interest rates steady at 0.5% in a unanimous vote.

Yields on 10-year Japanese Government Bonds (JGBs) fell sharply by 4.3 basis points to 1.269% following the Bank of Japan’s decision. Meanwhile, yields on 20-year JGBs fell 2.5 basis points to 2.210% 

The Japanese yen depreciated 0.45% against the U.S. dollar to 143.43.

Over in Australia, the S&P/ASX 200 benchmark was up 0.14% at 8,137.4.

The country’s surplus on trade goods widened sharply to 6.9 billion Australian dollars ($4.42 billion) in March, from a revised reading of 2.85 billion Australian dollars the month before.

The latest number is well above the 3.9 billion Australian dollar surplus forecast in a Reuters poll and comes as iron ore exports recovered from weather disruptions and gold shipments climbed, data released by the Australian Bureau of Statistics on Thursday showed.

In this time, Australia’s exports jumped 7.6% year-on-year, while imports declined 2.2%.

U.S. futures jumped after two of the so-called “Magnificent Seven” stocks — Meta Platforms and Microsoft — posted their quarterly results.

In extended trading, shares of Meta advanced more than 4% on stronger-than-expected revenue in the first quarter. Meanwhile, Microsoft’s shares surged 8%, after delivering better-than-expected results on the top and bottom lines in the fiscal third quarter, as well as strong results from its Azure cloud business and upbeat guidance.

Overnight stateside, the S&P 500 and the 30-stock Dow Jones Industrial Average notched their seventh consecutive winning day despite the volatility.

The broad-based market index advanced 0.15% to close at 5,569.06, while the Dow Jones index added 141.74 points, or 0.35%, settling at 40,669.36.

Meanwhile, the Nasdaq Composite ended the day flat at 17,446.34.

Asia markets live updates: Japanese and Australian stocks rise

U.S. economy shrank 0.3% in the first quarter as Trump policy uncertainty weighed on businesses

Published Wed, Apr 30 2025 8:30 AM EDT

The U.S. economy contracted in the first three months of 2025, fueling recession fears at the start of President Donald Trump’s second term in office as he wages a potentially costly trade war.

Gross domestic product, a sum of all the goods and services produced from January through March, fell at a 0.3% annualized pace, according to a Commerce Department report Wednesday adjusted for seasonal factors and inflation.

Economists surveyed by Dow Jones had been looking for a gain of 0.4% after GDP rose by 2.4% in the fourth quarter of 2024. However, over the past day or so some Wall Street economists changed their outlook to negative growth, largely due to an unexpected rise in imports as companies and consumers sought to get ahead of the Trump tariffs implemented in early April.

Indeed, imports soared 41.3% for the quarter, driven by a 50.9% increase in goods. Imports subtract from GDP, so the contraction in growth may not be viewed as negatively given the potential for the trend to reverse in subsequent quarters. Imports took more than 5 percentage points off the headline reading. Exports rose 1.8%.

Consumer spending slowed during the period but was still positive. Personal consumption expenditures increased 1.8% for the period, the slowest quarterly gain since Q2 of 2023 and down from a 4% gain in the prior quarter.

Moreover, private domestic investment soared during the period, rising 21.9%.

Stock market futures slipped following the report while Treasury yields moved higher.

GDP Q1 2025:

Key Inflation Measure Slowed To Multiyear Low In March—But Tariff Bump On The Horizon

April 30, 2025

Topline

Inflation moderated as expected in March, according to data released Wednesday morning, with President Donald Trump’s tariffs looming large as many economists expect the trade policy to complicate the slow burning descent toward historically palatable inflation.

Key Facts

The Commerce Department’s personal consumption expenditures (PCE) index rose 2.3% from March 2024 through last month, slightly exceeding consensus economist forecasts of 2.2% headline PCE inflation.

Core PCE inflation, the Federal Reserve’s preferred inflation measure as it excludes often volatile food and energy expenditures, was 2.6% in March, matching estimates of 2.6%.

Core PCE inflation was its mildest since March 2021 last month, though it remains above the Fed’s 2% goal as it has been since early 2021.

Headline PCE decreased less than 0.1% from February to March on a seasonally adjusted basis and core PCE climbed less than 0.1% last month, in line with projections of no headline increase and a 0.1% core increase.

What We Don;t Know

How Trump’s trade war will impact inflation moving forward. Trump wrote to social media last week he believes “there is virtually No Inflation.” But economists view tariffs as inflationary, projecting inflation to tick back up as the levies take hold. Goldman Sachs economists project core PCE inflation will come up nearly a full percentage point to 3.5% in August, which would mark the worst inflation since September 2024.

----What To Watch For

The Fed’s rate-setting Federal Open Market Committee will meet May 6-7. Trump has repeatedly demanded the central bank lower rates, but financial markets aren’t so confident. Traders price in just 9% odds of a rate cut at the May conclave, according to CME Group’s FedWatch Tool tracking derivatives contracts betting on monetary policy decisions.

Key Inflation Measure Slowed To Multiyear Low In March—But Tariff Bump On The Horizon

In other news. 

Homebuyer mortgage demand drops further, as economic uncertainty roils the housing market

Published Wed, Apr 30 20257:00 AM EDT

Mortgage rates didn’t move much last week, but homebuyers continued to pull back amid concerns over the broader economy.

Applications for a mortgage to purchase a home dropped 4% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was just 3% higher than the same week one year ago, even though interest rates last year were considerably higher.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, decreased to 6.89% from 6.90%, with points increasing to 0.67 from 0.66, including the origination fee, for loans with a 20% down payment. That rate is 40 basis points lower than the same week one year ago.

“Mortgage application activity, particularly for home purchases, continues to be subdued by broader economic uncertainty and signs of labor market weakness, dropping to the slowest pace since February,” said Joel Kan, MBA’s vice president and deputy chief economist. “With slowly-increasing housing inventory in many markets and first-time homebuyers still in the mix, FHA purchase applications fared better with only a slight decline.”

Applications to refinance a home loan dropped 4% for the week and were 42% higher than the same week one year ago.

“Refinance activity dipped again, as mortgage rates remained close to 7%, and borrowers hold out for a bigger decline in rates. Given the pullback in refinancing, the average loan size for refinances declined to just under $290,000, the lowest level in three months,” Kan added.

Homebuyer mortgage demand drops further, as economic uncertainty roils the housing market

HSBC becomes latest brokerage to cut S&P 500 annual target below 6000 mark

29 April 2025

(Reuters) - HSBC on Tuesday became the latest global brokerage to slash its year-end target for the S&P 500 index below the 6000 mark, weighed down by slower U.S. economic growth and tariff-related pressure on corporate earnings.

The London-based brokerage cut its target to 5600 from 6700, which is in line with BofA Global Research's forecast.

"Nearer term, the market should trade between recession and stagflation fears until the Fed cuts and tariff turmoil subsides," said HSBC strategists in a note.

Global brokerages have been aggressively revising their targets for the benchmark index following Trump's evolving tariff policy as they are expected to dent corporate America's earnings and push the U.S. economy into a likely recession.

The widely tracked U.S. benchmark index has fallen 6% so far this year.

"Uncertainty should cap valuations given the lack of visibility to long-term earnings growth," HSBC said, as it trimmed its earnings-per-share estimate for the index by 5% to $255, which is below the consensus expectations of $264.

The brokerage's base case for this year is that the world's largest economy will avoid both a recession and stagflation.

On a quarterly basis, it forecasts GDP growth of 1% for the year and expects the Federal Reserve to deliver its next rate cut in June.

Given the uncertain macro backdrop, HSBC prefers defensive stocks that include large caps and value stocks.

HSBC becomes latest brokerage to cut S&P 500 annual target below 6000 mark

U.S. and Ukraine sign economic deal that includes terms for natural resources in the war-torn country

Published Wed, Apr 30 2025 8:04 PM EDT

The White House announced Wednesday night that it signed an economic partnership with Ukraine that includes an agreement on the ownership and extraction of natural resources from the war-torn nation.

Treasury Secretary Scott Bessent said the agreement, established as the United States-Ukraine Reconstruction Investment Fund, will allow the U.S. to “invest alongside Ukraine” to unlock its growth assets and ultimately accelerate its economic recovery.

“As the President has said, the United States is committed to helping facilitate the end of this cruel and senseless war. This agreement signals clearly to Russia that the Trump Administration is committed to a peace process centered on a free, sovereign, and prosperous Ukraine over the long term,” Bessent said. “President Trump envisioned this partnership between the American people and the Ukrainian people to show both sides’ commitment to lasting peace and prosperity in Ukraine.”

“To be clear, no state or person who financed or supplied the Russian war machine will be allowed to benefit from the reconstruction of Ukraine,” he added.

Yulia Svyrydenko, Ukraine’s economy minister, provided more details on the minerals deal outlined in the agreement, first noting in a post on X that “it is the Ukrainian state that determines what and where to extract” and that “subsoil remains under Ukrainian ownership.”

Ukraine and the U.S. will jointly manage and maintain co-ownership of the investment fund, with neither side holding a dominant vote, Svyrydenko said. It will be financed by new Ukrainian oil, gas and critical mineral licenses, with 50% of all revenue from the licenses going toward the fund.

Svyrydenko indicated in her post that the U.S. will also contribute to the fund, through it is unclear exactly how much.

U.S. and Ukraine sign economic deal that includes terms for natural resources in the war-torn country

Finally, they can resist anything except temptation.

Paris cafes caught pouring cheap wine after customers pay for posh plonk

29 April 2025

Cafes in tourist areas of Paris have been caught covertly pouring cheap wine in place of the premium glasses paid for by diners.

An investigation by Le Parisien newspaper found that wine fraud is rife in the French capital, with tourists often being the victims.

The outlet claims cafes are replacing fancy wines with budget alternatives. They discovered the fraud when sending two sommeliers to taste out the deception while pretending to be tourists.

Of the wine ordered by the glass, investigators said that a pour of chablis or sancerre at around €9 (£7.65) was substituted for a sauvignon, the cheapest wine on the menu at around €5 (£4.25).

One of the undercover sommeliers, wine merchant Marina Giuberti, found a €7.50 sancerre had been replaced by a cheaper sauvignon priced at €5.60, but she was charged the higher rate.

After complaining, the waiter brought her another glass of the wrong wine.

Giuberti said: “It’s a pity for the customer and for the image of the wine appellation, for the winemaker and for the restaurant owners who do a good job.”

Staff at brasseries and cafes in Paris confirmed that the practice is often encouraged by bosses looking to maximise their profits.

Sarah, a waitress with 30 years of experience working in restaurants, told Le Parisien: “I might put leftover wine in a single bottle for happy hour, or replace Bardolino with Chianti, which is much cheaper and tastes completely different.”

The “repotting” technique involves switching out the wine a customer has ordered with the contents of a more budget bottle.

A former employee of a Montmartre brasserie, Tristan, added that staff were “told off by the owner if the most expensive bottle went down too quickly”, and only once did a sommelier customer discover the ruse.

According to the hospitality worker, aside from French locals, “all other customers were getting ripped off”.

He said: “When I saw American tourists arriving on the terrace, I knew they were going to be had.”

Experts told Le Parisien that, by law, customers can insist on having wine poured from the bottle in front of them with the label visible.

Jérôme Bauer, Alsace winemaker and leader of the National Confederation of AOC (appellation contrôlée), told the outlet: “Cheating the customer rebounds on us, the producers, because a customer who has ordered a Côte du Rhône and gets served a Bordeaux wine will probably be disappointed and can turn away from that wine in the future.”

Paris cafes caught pouring cheap wine after customers pay for posh plonk

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.

UPS says it is cutting 20,000 staff and shuttering over 70 facilities

April 29, 2025

UPS plans to slash 20,000 jobs this year as part of a cost-cutting drive amid the shifting global trade landscape triggered by President Donald Trump's tariffs.

"Given the current macro-economic uncertainty, the company is not providing any updates to its previously issued consolidated full-year outlook," the company said.

Its supply chain business suffered the most last quarter, with revenue plunging nearly 15%, primarily due to the divestiture of Coyote Logistics.

The cost-cutting drive comes after UPS told investors earlier this year it would reduce its Amazon business by 50% by mid-2026, citing profitability reasons.

"This was not their ask," Tomé said on an investor call in January. "This was us. This was UPS taking control of our destiny."

On Tuesday, UPS said the restructuring could expand depending on further network review. In the first quarter, it said it made $80 million in savings and booked $23 million in related costs.

UPS says it is cutting 20,000 staff and shuttering over 70 facilities

Mass layoffs in trucking and retail coming – Apollo

Monday, April 28, 2025

Apollo Global Management forecasts a severe U.S. recession triggered by recent tariffs, which will lead to widespread layoffs in the trucking and retail sectors amid rising economic uncertainty.

The report, available on Apollo’s website, paints a grim scenario:

The trucking industry, critical to U.S. logistics, faces significant challenges as tariffs disrupt trade, particularly with China. A sharp decline in container ship voyages from China is expected to reduce freight volumes, thereby lowering demand for trucking services. Imports account for an estimated 20% of U.S. trucking volumes, so a decline in imports will have a significant impact on the industry. With fewer goods to transport, carriers will face reduced workloads and underutilized fleets, forcing them to cut labor costs. 

Apollo predicts that domestic freight activity will sharply slow by mid-May, with mass layoffs likely to follow as firms strive to maintain financial stability. The slowdown in trucking will put a lot of pressure on trucking companies that have been dealing with the Great Freight Recession, one of the longest and deepest downturns in history. 

The retail sector is also bracing for substantial layoffs. Tariffs will cause supply chain disruptions, leading to inventory shortages, especially for goods from China. The decline in container shipments will leave retailers struggling to stock products, as longer lead times further complicate inventory management. Retailers may need to find alternative suppliers or reduce product offerings, both of which present challenges.

Retailers also face declining consumer confidence driven by economic fears and tariff-induced inflation. Record-low consumer confidence scores reflect cautious spending, particularly on non-essential items, resulting in reduced store traffic and sales. Companies like Chipotle and Southwest Airlines have noted that consumers are saving more due to economic concerns. Rising credit card delinquencies and minimal payments indicate financial strain among consumers, further reducing purchasing power and exacerbating retail sales declines. Apollo expects retailers to cut jobs in June, amidst declining demand and higher costs.

Apollo’s broader economic outlook highlights a sharp decline in corporate spending, with new orders falling and inventories rising before tariffs took effect. Companies are lowering earnings forecasts and cutting investments due to a gloomy economic outlook, increasing the likelihood of layoffs across other industries.

The tariff-driven slowdown could lead to stagflation—stagnant growth combined with high inflation—according to Apollo’s analysis. Unlike typical recessions, where falling demand reduces inflation, trade disruptions are expected to drive up costs. Federal Reserve surveys indicate rising prices across supply chains, squeezing consumer purchasing power as incomes stagnate. Low consumer and business confidence, coupled with cautious spending, heightens the risk of stagflation.

Declining consumer confidence is mirrored by reduced corporate spending and investment. As firms anticipate weaker demand, they are scaling back capital expenditures and revising earnings downward, reinforcing economic stagnation. This response reflects both immediate cost pressures and a longer-term adjustment to a trade-restricted economy.

Apollo warns that rising prices and sluggish growth will heavily burden businesses and consumers. This stagflation scenario poses policy challenges, as traditional monetary tools may struggle to curb inflation while supporting growth. Strategic interventions are needed to mitigate the impact on vulnerable sectors and communities.

Apollo’s forecast paints a grim picture for the U.S. trucking and retail industries. Tariffs are disrupting supply chains and consumer behavior, putting both sectors at risk. Layoffs are often viewed as a necessary step to manage rising costs and minimize losses. Apollo’s analysis serves as a critical warning, urging strategic preparations to navigate the impending economic storm.

Mass layoffs in trucking and retail coming - Apollo - FreightWaves

Covid-19 Corner

This section will continue only occasionally when something of interest occurs.

New antiviral compounds show broad protection against COVID-19 variants

30 April 2025

AVI-4773 and related MPro inhibitors outperform existing treatments like nirmatrelvir in preclinical studies, offering a promising path toward pan-coronavirus therapies.

Since the start of the coronavirus disease 2019 (COVID-19) pandemic, numerous novel antiviral therapeutic agents have been developed to target key proteases involved in severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) replication. Nirmatrelvir and ensitrelvir, for example, are main protease (Mpro) inhibitors that are currently approved for the clinical treatment of COVID-19.

The continuous emergence of highly transmissible, pathogenic, and immune-evading SARS-CoV-2 variants has weakened the efficacy of existing antiviral agents. Moreover, the looming threat of future pandemics due to coronaviral reservoirs in bats and other small mammals emphasizes the importance of identifying novel therapeutics with pan-coronavirus activity.

A recent study published in Science Advances reports the recent discovery of Mpro inhibitors that exhibit broad activity against SARS-CoV-2 and other coronaviruses.

Building the scaffold

Previously, the researchers of the current study screened 862 million custom molecules against the SARS-CoV-2 Mpro structure, which led to the identification of several scaffolds with micromolar inhibitory activity. AVI-1084, for example, exhibited a median inhibitory concentration (IC50) of 29 μM.

This scaffold was subsequently used to contract a library of over 17,000 analogs that were evaluated for their binding activity to and docking into Mpro. Seven of these analog compounds exhibited in vitro Mpro activity, the most potent of which was AVI-3570 with an IC50 of 1.5 μM. The improved potency of these compounds was attributed to fluoro- and chloro- substitutions in the thiophene ring of AVI-1084 that increased their interactions with the Mpro S2 pocket.

However, none of the seven identified compounds were capable of modifying the key pyridinone group occupying the S1 pocket. When an isoquinoline group was used to replace the pyridinone ring, AVI-3318 was created and found to be 50-fold more potent than AVI-1084.

X-ray crystallography of the AVI-3318-MPro complex provided similar results to the docking simulation assay and confirmed all hypothesized major interactions between the compounds and both the S1 and S2 pockets of Mpro. Additional structure-activity relationship (SAR) expansion involved adding various side chains at the remaining two positions of the dihydrouracil core in an effort to further improve compound potency.

AVI-4303, which is a C5 benzotriazole analog, exhibited ten-fold higher potency than AVI-3318. Comparatively, N1 propargyl analogs including AVI-4516 and AVI-4773 successfully bound to the S1 site with a nanomolar IC50, which is 100-fold more potent than the des-propargyl molecule AVI-4375, which had an IC50 of 7.4 μM.

More

New antiviral compounds show broad protection against COVID-19 variants

China releases white paper on COVID-19 origins tracing: Report

The next step in origin-tracing work should focus on the U.S., China's National Health Commission said

April 30, 2025 / 13:31 IST

China released a white paper on COVID-19 prevention, control and origins tracing on Wednesday, the state-run Xinhua news agency reported, lauding its own contributions while casting doubts on the United States.

The next step in origin-tracing work should focus on the U.S., China's National Health Commission said according to Xinhua.

The U.S. should not continue to "pretend to be deaf and dumb", but should respond to the legitimate concerns of the international community, the white paper said.

China releases white paper on COVID-19 origins tracing: Report

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.

Did Spain’s push for renewable energy have any impact on its mass power blackout?

30 April 2025

The mass electrical blackout across SpainPortugal and parts of France sparked hours of chaos before power returned – with the after-effects still being felt.

Both Spain and Portugal’s power grid operators have ruled out a cyber attack, but the cause of the outage is still under investigation.

In a span of just five minutes, between 12.30pm and 12.35 pm local time on Monday, solar PV generation plunged by more than 50 per cent to 8 gigawatts (GW) from more than 18 GW, the data showed.

There have been reports that a lack of “inertia” in the grid may have contributed to the blackout. Grid inertia helps maintain electricity supplies at a stable frequency, and is created by generators with spinning parts – such as turbines running in fossil fuel generators or hydropower – which solar panels and wind turbines do not have. In a blackout, you need to rebuild inertia before bringing things back online.

Speaking to The Independent, Kristian Ruby, secretary general of European electricity industry group Eurelectric, suggested that there was a technical problem in a high voltage cable linking the French and Spanish grid, which is known as an interconnector.

However, Mr Ruby warned that it would take “weeks, if not months” for there to be a proper technical analysis confirming what went wrong, and he added that it is unlikely that such alone would have caused the problem.

“The power system is perhaps the most advanced and complex machine that we have in the world,” he explained. “It’s a combination of millions of different units that are injecting power into the same system, which transports it out to millions of end-users.

More

Did Spain’s push for renewable energy have any impact on its mass power blackout?

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

World Debt Clocks (usdebtclock.org)

Beware of false knowledge; it is more dangerous than ignorance.

George Bernard Shaw 

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