Baltic Dry Index. 1691 +58 Brent Crude 67.27
Spot Gold 3311 US 2 Year Yield 4.01 -0.03
US Federal Debt. 36.959 trillion
US GDP 30.062 trillion.
People of the same trade seldom
meet together, even for merriment and diversion, but the conversation ends in a
conspiracy against the public, or in some contrivance to raise prices…. But
though the law cannot hinder people of the same trade from sometimes assembling
together, it ought to do nothing to facilitate such assemblies, much less to
render them necessary.
Adam
Smith, The Wealth Of Nations, 9 March 1776.
In the stock casinos, no news from the USA v China trade talks in London yesterday, is good news. President Trump said so yesterday.
But, as Mandy Rice-Davis, said at trial in the 1963 Profumo scandal, “well he would say that, wouldn’t he.” Actually, “well he would, wouldn’t he.”
Well maybe. But for the second time the US negotiating team scurried off to a foreign city to meet with a Chinese team already making a scheduled visit.
Who is showing weakness to whom? Who is apparently desperate for a deal, any deal?
At best, at least the London talks will continue this morning. At worst, what if no oily joint PR press release is the outcome if President Xi, following Canada's lead, continues plays hardball?
Already there are signs that global trade is starting to die.
China and U.S.
set to continue trade talks as Trump touts ‘good reports’ from London
Published
Mon, Jun 9 2025 3:12 AM EDT
U.S.-China
trade talks were set to continue in London on Tuesday, as the world’s top two
economies strive to sort out differences following a call between the leaders
of the two countries.
President Donald Trump’s top trade
officials met their Chinese counterparts in London on Monday, with Treasury
Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade
Representative Jamieson Greer negotiating on behalf of the U.S.
Trump has
authorized Bessent’s team to potentially remove U.S. restrictions on the sales
of chipmaking software, jet engine parts and ethane, The Wall Street Journal reported, citing sources familiar
with the matter.
Trump
said that the talks were going well and he was “only getting good
reports,” according to Reuters.
China’s
Foreign Ministry said Saturday that Vice Premier He Lifeng, Beijing’s
lead trade negotiator, will be in the U.K. from June 8 to13. Commerce Minister
Wang Wentao and China International Trade Representative and Vice Minister of
Commerce Li Chenggang also participated in Monday’s talks, according to state media.
National
Economic Council Director Kevin Hassett on Monday told CNBC’s “Squawk Box” that the U.S. was
seeking confirmation China would restore the flows of critical
minerals.
“The
purpose of the meeting today is to make sure that they’re serious, but to
literally get handshakes ... and get this thing behind us,” Hassett said.
He added
that he expected it “to be a short meeting with a big, strong handshake.”
“Our
expectation is that ... immediately after the handshake, any export controls
from the U.S. will be eased, and the rare earths will be released in volume,
and then we can go back to negotiating smaller matters,” Hassett said.
The
discussions will continue on Tuesday morning, a source familiar with the
situation told CNBC’s Megan Casella.
The talks
come after Trump last week said he
had held a lengthy phone call with Chinese President Xi Jinping as
both look to avert a full-blown trade war.
Diplomatic
efforts by both sides have ramped up after weeks of heightened trade tension
and uncertainty after Trump announced sweeping import tariffs on China and
other trading partners in April.
Beijing
retaliated, and a tit-for-tat escalation in duties ensued before both sides
agreed in Geneva in May to temporarily slash duties for 90 days and to
facilitate talks. At the time, the U.S. tariff on Chinese imports was cut from
145% to 30%, while China’s levies on U.S. imports were lowered from 125% to
10%.
China and
the U.S. have since repeatedly accused each other of violating the Geneva
agreement, with Washington saying Beijing was slow to approve the export of
additional critical minerals to the U.S., while China criticized the U.S.
imposing new restrictions on Chinese student visas and additional export
restrictions on chips.
U.S.
press secretary Karoline Leavitt on Sunday said that the London talks would
focus on moving forward with the Geneva agreement, noting the two sides’
strategic interests in each other’s markets.
No quick
fix
Analysts
said the Monday talks were unlikely to make much progress in resolving
disagreements and sector-specific tariffs targeting a range of strategic
industries, ranging from technology and critical minerals to manufacturing and
agriculture.
Rebecca
Harding, chief executive of the Centre for Economic Security, told CNBC on
Monday that China and the United States “are locked in an existential battle at
the moment.”
More
China
and U.S. set to continue trade talks as Trump touts 'good reports'
Asia-Pacific
markets climb as investors await details of U.S.-China trade talks
Updated
Tue, Jun 10 2025 12:26 AM EDT
Asia-Pacific
markets climbed Tuesday as investors awaited further details on the U.S.-China
trade talks, which were slated to
continue for a second day.
Officials
from both countries held trade
talks in London on Monday, with U.S. Treasury Secretary Scott Bessent,
Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer
meeting with their Chinese counterparts led by Beijing’s Vice Premier He Lifeng.
Christian
Floro, market strategist at Principal Asset Management foresees that the
“market backdrop will remain uncertain in the period ahead,” in light of the
“fluid nature of trade policy.”
Urging
investors to prepare for continued market volatility, Floro noted that now is
an opportune time to look at “previously overlooked value-oriented stocks and
international equities.”
He
identified investment opportunities in domestic-oriented sectors such as
utilities, real estate and financials which are typically less sensitive to
trade-related shocks. Pockets of opportunities can also be found in software
and internet companies, Floro added in a Tuesday note.
Japan’s
benchmark Nikkei 225 climbed
0.92%, while the broader Topix index increased by 0.43%.
In South
Korea, the Kospi index
advanced 0.42%, while the small-cap Kosdaq added 0.77%.
Mainland
China’s CSI 300 index
moved up 0.16% while Hong Kong’s Hang Seng Index rose 0.33%.
Over in
Australia, the S&P/ASX
200 benchmark advanced 0.73%.
Meanwhile,
India’s benchmark Nifty 50 BSE
Sensex started the day flat.
U.S.
stock futures rose in Asian hours, after President Donald Trump said
that the talks with China were going well and he was “only
getting good reports,” according to Reuters.
Overnight
stateside, moves on all three key benchmarks on Wall Street were muted. The
broad-based S&P 500 inched
up 0.09% and notched a second winning session, closing at 6,005.88. The Nasdaq Composite climbed
0.31% to end at 19,591.24. The Dow
Jones Industrial Average ticked down 1.11 points and closed at
42,761.76.
Asia
stock markets today: live updates for June 10 2025
Europe to follow
global markets higher as China-U.S. trade talks continue in London
Updated
Tue, Jun 10 2025 12:35 AM EDT
Good
morning from London, welcome to CNBC’s live blog covering all the action in
European financial markets as well as the latest regional and global business
news, data and earnings.
Futures
data from IG suggests London’s FTSE will
open 11 points higher at 8,838, Germany’s DAX up 62 points at 24,234,
France’s CAC 40 up
23 points at 7,807 and Italy’s FTSE MIB 83 points higher
at 40,545.
Global
markets have been buoyed by trade talks that are taking place between U.S. and
Chinese officials in London this week, with hopes rising that both sides can
avert large-scale punitive tariffs and a trade war.
Global
markets will be keeping an eye on the talks, which are set to continue Tuesday.
The
latest U.K. unemployment figures are also due, but there are no other
significant earnings or data reports Tuesday.
European markets on Tues June 10: China-US talks, Stoxx 600, DAX, FTSE
US Container
Imports Just Dropped 10% From the Last Month
June
9,2025
The
latest shipping data just arrived, and it reveals a sharp drop in overall
container volumes for May 2025 — they’re now down 9.7% from April.
It’s the
first drop after months of growth in these imports, and reflects the impacts of
large-scale tariff changes, as well as the removal of the de minimis exemption for China imports.
The same
container volumes are also down 7.2% from this time last year, and
month-over-month numbers have dropped even further for China imports
specifically, falling by 20.8%.
Lowest
Monthly Total Since March 2024
By any
measure, shipments are down. In fact, total container volumes in May added up
to the lowest monthly total since March 2024.
The new
stats come from Descartes Systems Group and its Global Shipping Report. The month of May 2025 ended just
over a week ago, and its this month that the report focuses on. What’s behind
the decrease? Frontloaded cargo and tariff impacts, according to the report.
“The drop
followed a wave of frontloading in April and reflects a broader adjustment to
shifting trade policies, including the expiration of the de minimis exemption
and ongoing tariff volatility. Although the U.S. lowered tariffs on goods
imported from China to 30% under a 90-day truce effective May 14, most imports
that arrived in May were booked under the earlier, higher rates.” -the Global
Shipping Report
Higher
Monthly Drop Than the 2020 Pandemic
Historically,
shipping volumes jump up between April and May, according to Descartes, which
notes that 2025 is the first year out of the last seven years to see a
month-over-month decline between these two months, with one exception: The 2020
pandemic.
Even in
2020, though, shipping volumes only dropped by 8.2%, a percentage that was just
beaten by the 9.7% decrease the nation experienced last month.
Back in
April, we covered a prediction from the ITS
Logistics’ Port Rail Ramp Index, which stated that cargo operators
should plan for a change in May or June. The index called it a “cliff event
similar to the impacts felt during the immediate COVID response.”
Now, we
have data on May shipments, and they have indeed fallen farther than the
pandemic months of April and May.
What’s in
the Future?
This news
is certainly not unexpected. Higher tariffs mean that vendors are finding
shipments to be costlier, and in many cases are pivoting to a new product or
strategy entirely. Others are still taking a wait-and-see approach.
Future
shipment volumes remain to be seen, but they seem likely to continue the
current trend. We’ll keep seeing the ripple effects of the higher tariffs for
months to come.
US
Container Imports Just Dropped 10% From the Last Month
In other news, a worrying European drought. Approx. 2.5 minutes.
Half Of Europe Hit By Drought In May |
WION Climate Tracker
Half Of Europe Hit By Drought In May | WION Climate Tracker - YouTube
To widen the market and to narrow the competition, is always the interest of the dealers…The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.
Adam
Smith, The Wealth Of Nations, 19 March 1776.
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.
UK
retail sales growth slowed in May, casting doubt on consumer resilience
Shoppers
traded down to cheaper items, especially in non-food areas such as clothing
9
June 2025
UK retail spending growth slowed to its weakest pace this year in May,
according to new data, casting doubt on the strength of consumer resilience.
The
value of retail sales increased at an annual rate of 1 per cent in
May, the lowest rate in 2025 and well below the average of 2.5 per cent
between January and May, according to figures published by the British Retail
Consortium on Tuesday.
The
figure also lagged behind the April inflation rate of 3.4 per cent, suggesting
a fall in real-terms spending.
Helen
Dickinson, chief executive of the British Retail Consortium, said consumers had
“put the brakes on spending”, especially on non-food items such as fashion and
full price, big-ticket purchases, held back “by lower consumer confidence”.
However,
food sales had remained steady, helped by several major football tournaments,
while gaming had also performed well because of popular new releases, she
added.
Official
data showed that in the three months to April, the inflation-adjusted sales
rose 1.8 per cent compared with the previous three months, the fastest rate
since July 2021. However, the BRC data suggest that the figures for May,
published on June 20, could be weaker.
In
the first three months of the year, the UK economy grew more than expected at
0.7 per cent, but economists, including at the Bank of England, expect the pace
to slow in the second quarter.
Linda
Ellett, UK head of consumer, retail and leisure at KPMG, which helps compile
the BRC data, said sunny weather had meant some shoppers made seasonal
purchases early, contributing to a slowdown in sales growth in May. She added
that spending appetite was also damped after households were hit by a rise in
essential bills in April.
The
BRC figures chime with those from Barclays, which on Tuesday reported consumer
credit and debit card spending growing by an annual rate of only 1 per cent,
also below the latest pace of inflation.
Card
spending on clothing rose just 0.9 per cent in May while transactions in the
sector were up 3.8 per cent, which Barclays said indicated shoppers were
switching to cheaper items or brands. Spending on electronics and home
improvement contracted.
Barclays’
head of retail, Karen Johnson, said shoppers were “becoming more
value-conscious”, balancing essential spending with small luxuries such as
cinema trips, garden projects or short breaks. And while sunshine in the first
half of the month helped sales, “longer-term uncertainty continues to shape how
and where people choose to spend”, she added.
UK
retail sales growth slowed in May, casting doubt on consumer resilience
Recession
Risk After The Jobs Report
Jun
08, 2025, 09:19am EDT
---- Recession
Indicators
Accurately
forecasting an economic downturn in advance with any accuracy is exceptionally
challenging. However, in an environment with tariff threats, monitoring
specific high-frequency data can provide an early warning about increased
recession risks. These indicators are updated weekly or daily and have shown a
strong correlation with economic activity. Indeed, other indicators are
crucial, but they are typically only available on a monthly basis, sometimes
with a significant time lag. Despite the economic data remaining resilient,
consensus estimates of 2025 US GDP growth remain well below the levels seen
earlier in the year. Economists generally expect the drag from tariffs to slow
economic growth in the second half of the year.
Credit
Spreads
Baa
corporate bond data has a long history and provides a look at the “typical”
credit quality of companies, as Baa credit rating is the lowest level of
investment-grade bonds. The spread is the yield that investors demand beyond US
Treasury bond rates to compensate for the default risk associated with buying
corporate bonds. These spreads expand when investors worry that more bond
defaults could be on the horizon, typically driven by deteriorating economic
conditions. Spreads on Baa corporate debt are below the highs hit as stocks
bottomed in early April. The narrowing of spreads is consistent with a lower
risk of economic downturn.
Financial
Conditions
The
Chicago Fed produces the National Financial Conditions Index (NFCI) on a weekly
basis. It looks at 105 measures across three categories, risk, credit, and
leverage, to create a measure of financial conditions. According to the Chicago
Fed, “Positive values of the NFCI have been historically associated with
tighter-than-average financial conditions, while negative values have been
historically associated with looser-than-average financial conditions.” The
chart indicates that periods of tighter-than-normal financial conditions have
frequently been correlated with recessions. Similar to credit spreads, the
tightness of financial conditions has eased from the early-April highs.
Cyclical
Stock Performance
The
more economically sensitive cyclical stocks have recently been outperforming
the less economically sensitive defensive stocks. The improved performance of
cyclical stocks suggests that the economic growth scare is waning.
Yield
Curve
The
10-year Treasury minus 2-year yield is arguably the most well-known predictor
of recession. Historically, when the yield on the US 10-year Treasury falls
below the 2-year yield, also known as yield curve inversion, a recession is
likely to follow. Since the 1970s, a yield curve inversion has occurred
before every recession. The only blemishes on its record are
the 1998 and mid-2022 inversions, which did not produce subsequent economic
recessions. The US economy did see a significant slowdown in the first half of
2022 but rebounded in the second half. Unfortunately, even when the signal is
correct, it has widely variable lead and lag times. The yield curve still has a
better predictive track record than economists and is used in nearly every
Federal Reserve model; therefore, it is worth watching despite its flaws. The
curve is not currently inverted and has generally been steepening instead.
Jobs
The
labor market is the most crucial part of the economy since consumer spending
eventually wanes without wages to fund the purchases. Initial claims for
unemployment benefits are reported weekly, but the four-week moving average of
claims is used here to reduce volatility. Initial claims are ticking higher,
but the level is not exhibiting a strong uptrend or one consistent with
economic woes.
The
other weekly job data is ongoing claims for unemployment benefits, which are
also off its lows and show a slow uptrend. The uptrend suggests that it is
taking longer for those losing their jobs to find new ones. Recall that the
number of employees in the US has more than doubled since 1970, so even though
the current roster of those receiving unemployment benefits is as high as it
was during the 1969-1970 recession, the numbers aren’t comparable. The labor
market is softening, but it has not yet reached the tipping point.
The
closely watched monthly jobs report was released on Friday. Payroll job
growth was slightly better than expected at 139,000, but the previous two
months were revised lower. The household survey reported job losses of 696,000,
but the labor force contracted by a similar amount, leaving the unemployment
rate unchanged at 4.2%.
(Emphasis
mine.)
Examining
the employment of prime working-age people, aged 25 to 54, can provide a good
indicator of the labor market’s condition. In addition to being a crucial
group, the measure also avoids some of the demographic distortions associated
with other methods. Prime-age employment to population ratio fell
month-over-month, but using the three-month average to remove volatility, it
held steady. The trend appears to be flat to lower, which adds some concern to
the outlook.
Overall,
job growth is adequate, with the labor market bending lower but not yet
breaking. Markets reacted favorably to the monthly jobs report on Friday,
indicating less worry about the economic outlook, with US Treasury yields and
stocks moving higher.
More
Recession Risk
After The Jobs Report
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.
Billion-dollar
battery plant pauses construction amid electric vehicle and tariff uncertainty
7 June 2025
A Japanese company has halted construction on a $1.6 billion factory in South
Carolina to help make batteries for electric BMWs, citing “policy and market
uncertainty.”
While AESC didn't specify
what those problems are, South Carolina's Republican governor said the company is dealing with the potential loss of
federal tax breaks for electric vehicle buyers and incentives for EV businesses
as well as tariff uncertainties from President Donald Trump's administration.
“What we’re doing is urging
caution — let things play out because all of the these changes are taking
place,” Gov. Henry McMaster said.
AESC announced the suspension
in construction of its plant in Florence on Thursday,
“Due to policy and market
uncertainty, we are pausing construction at our South Carolina facility at this
time," the company's statement said.
AESC promised to restart
construction, although it didn't say when, and vowed to meet its commitment to
hire 1,600 workers and invest $1.6 billion. The company said it has already
invested $1 billion in the Florence plant.
The battery maker based in
Japan also has facilities in China, the United Kingdom, France, Spain and
Germany. In the U.S., AESC has a plant in Tennessee and is building one in
Kentucky. The statement didn't mention any changes with other plants.
The South Carolina plant is
supposed to sell battery cells to BMW, which is building its own battery
assembly site near its giant auto plant in Greer. BMW said the construction
pause by AESC doesn’t change its plans to open its plant in 2026.
AESC has already rolled back
its South Carolina plans. They announced a second factory on the Florence site,
but then said earlier this year that their first plant should be able to handle
BMW's demand. That prompted South Carolina officials to withdraw $111 million
in help they planned to provide.
The company is still getting
$135 million in grants from the South Carolina Department of Commerce and $121
million in bonds and the agency said a construction pause won't prompt them to
claw back that offer.
South Carolina is investing heavily
in electric vehicles. Volkswagen-owned Scout Motors plans to invest more than
$4 billion and hire 10,000 people for a plant to build its new electric SUVs
scheduled to open in 2027.
The state has for decades
made big bets on foreign manufacturers like BMW, Michelin and Samsung that have
paid off with an economic boom this century, but there is uneasiness that
Trump's flirtation with high tariffs might stagger or even ruin those important
partnerships.
More
Billion-dollar battery plant pauses construction amid electric vehicle
and tariff uncertainty
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
There
is no art which one government sooner learns of another than that of draining
money from the pockets of the people.
Adam
Smith, The Wealth Of Nations, 9 March 1776.
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