Nvidia/AI, Was That It? Fighting The Fed.

Baltic Dry Index. 2046 +05             Brent Crude 67.47

Spot Gold 3391                      US 2 Year Yield 3.59 -02

US Federal Debt. 37.287 trillion

US GDP 30.229 trillion.

Canada is a place of infinite promise. We like the people, and if one ever had to emigrate, this would be the destination, not the U.S.A. The hills, lakes and forests make it a place of peace and repose of the mind, such as one never finds in the U.S.A.

John Maynard Keynes

With just two trading days left in the month it’s hard to see reality returning in the stock casinos before the month-end, but given tariffs wars, President Trump’s attempt to turn the US central bank into the Bank of Italy, and a slowing global and US economy, I suspect a harsh reality is in store for the stock casinos in September – December 2025.

Did reality just start seeping in to Nvidia’s almighty stock bubble?

Asia-Pacific markets trade mixed as investors assess Bank of Korea policy decision

Published Wed, Aug 27 2025 7:45 PM EDT

Asia-Pacific markets traded mixed Thursday as investors digested the Bank of Korea policy decision.

South Korea’s central bank kept its policy rate unchanged at 2.5% for the second straight meeting despite an uncertain trade environment for the country. The move was in line with expectations of economists polled by Reuters.

South Korea’s Kospi added 0.28% and the small-cap Kosdaq lost 0.33%. The South Korean won strengthened 0.24% to 1,389.8 against the greenback.

Japan’s Nikkei 225 climbed 0.24%, while the Topix inched higher by 0.14%.

Australia’s S&P/ASX 200 was flat.

Australian rare earths producer Lynas Rare Earths plans to raise about A$750 million ($488 million) through a discounted share sale to boost its processing and exploration activities. The miner will issue stock at A$13.25, about a 10% discount compared to its last close. The company also announced that its shares have been placed on a trading halt.

Shares of Australian flag carrier Qantas rose to a record high Thursday after its full-year earnings results beat estimates, buoyed by resilient demand across its domestic and international networks.

The carrier reported a 15% jump in underlying profit before tax to A$2.39 billion ($1.6 billion), beating the Visible Alpha consensus estimate of A$2.38 billion. Its revenue rose 8.6% to A$23.82 billion for the year ended June 30.

Hong Kong’s Hang Seng index slid 0.79% while mainland’s CSI 300 declined 0.18%.

India’s Nifty 50 started the trading session down 0.59% following Wednesday’s holiday closure. Secondary U.S. tariffs of 25% on Indian shipments kicked in Wednesday, pushing overall duties on the country’s exports to 50%.

“The risks to growth for the Indian economy have naturally become more real,” Barclays wrote in a note. India’s top exports to the U.S., which are electrical machinery as well as gems and jewelry, face the largest tariff increases, said the bank. Its analysts, however, expect trade talks between the Indian and U.S. delegations to continue.

Asian chip stocks will also be in the spotlight after Nvidia reported better-than-expected earnings and revenue on Wednesday, and said sales growth this quarter will remain above 50%. The stock, which is up 35% this year after almost tripling in 2024, slipped in extended trading, however, as data center revenue fell short of estimates for the second straight period.

Overnight, the three major benchmarks closed higher stateside. The S&P 500 ticked higher and ended the day up 0.24% at 6,481.40, setting a fresh all-time closing high. The Nasdaq Composite closed up 0.21% at 21,590.14, and the Dow Jones Industrial Average gained 147.16 points, or 0.32%, to finish at 45,565.23.

Asia-Pacific markets: Bank of Korea decision, Nifty 50, India markets

S&P 500 futures fall from record as Nvidia declines following earnings: Live updates

Updated Thu, Aug 28 2025 7:20 PM EDT

Stock futures fell on Wednesday evening as investors weighed Nvidia’s latest quarterly results.

S&P 500 futures traded 0.3% lower, and Nasdaq 100 futures slipped nearly 0.5%. Meanwhile, futures tied to the Dow Jones Industrial Average were down 12 points, or 0.03%.

In extended trading, shares of Nvidia – which makes up about 8% of the S&P 500, per FactSet – fell around 3%, even after its second-quarter results beat Wall Street’s estimates. Chip stocks also came under a bit of pressure following the artificial intelligence bellwether’s results, as AMD, Taiwan Semiconductor and Broadcom each fell 1% in sympathy.

Heading into the print, investor expectations were elevated as the S&P 500 closed at a record high. Even though Nvidia’s results surpassed expectations, investors were setting the bar even higher.

“The negative stock reaction feels like a bit of an incorrect knee-jerk reaction,” David Wagner, head of equity at Aptus Capital Advisors, said, adding that investors should be “buying the pullback.”

“The company is still growing over 50% on their guidance at a $50B quarterly revenue run rate – that’s remarkable, even for the current valuation,” he said.

Notably, Nvidia said there were no sales of H20 chips to China during the quarter, nor did the company assume any shipments in its guidance. The White House said earlier this month that it’s still working out the “legality” of its 15% export tax on Nvidia and AMD.

“That’s important because that’s just an unknown. Do they actually get that license for the H20 and start making sales?” Art Hogan, chief market strategist at B. Riley Wealth Management, told CNBC. “Not putting anything into the Q3 guide means that there’s more upside potential if, in fact, they get the license for the H20 into China.”

----The market is coming off a winning session Wednesday. The S&P 500 and the Nasdaq Composite similarly rose around 0.2%, with the broad market index hitting a record close, while the Dow Jones Industrial Average advanced 0.3%.

The market is on pace to score a monthly gain as well following Wednesday’s moves, as the S&P 500 and the Nasdaq are each up more than 2%, while the 30-stock Dow is up more than 3% in the period.

Investors have been shrugging off threats to the Federal Reserve’s independence from the Trump administration after President Donald Trump told Fed Board Governor Lisa Cook that she’s fired earlier this week, a move that Cook plans to legally challenge.

On Wednesday, Trump’s top economic adviser, Kevin Hassett, said that Cook should go on leave from the central bank even with her plans to file a lawsuit.

Stock market today: Live updates

Here’s what happened to financial markets after Nixon pressured the Fed

Published Tue, Aug 26 2025 11:20 AM EDT Updated Tue, Aug 26 2025 1:12 PM EDT

Investors wondering what President Donald Trump’s move to fire Federal Reserve Governor Lisa Cook might mean for financial markets today can look back half a century for some insight.

President Richard Nixon, aiming to clinch a second term in the White House, pressured then-Fed Chair Arthur Burns to loosen monetary policy before the 1972 election. Tape recordings of Oval Office discussions show Nixon, who went on to resign in 1974 for abuses tied to the Watergate scandal, used both direct and indirect actions to coerce Burns.

More than 50 years later, Nomura currency strategists led by Craig Chan said Trump’s decision to fire Cook, the first African-American woman to sit on the Fed, may “refocus” investors on how the market reacted to Nixon’s attempt to steer the central bank, using the earlier move as a possible guidepost for what to expect now.

In the current case, Trump cited unproven allegations of false statements Cook made when applying for a mortgage. Cook said the president “has no authority” to fire her.

To be sure, Chan said history “may not be a perfect match” given other variables and how markets have changed since the era of fixed exchange rates, the gold standard and the Bretton Woods post-war monetary system.

Still, the Nomura analyst noted historical parallels between Trump’s attempt to fire Cook on Monday and Nixon’s push for less-restrictive monetary policy in the early 1970s.

Here’s a look back at how markets fared back in the Nixon years, according to Chan:

Currency

The ICE U.S. Dollar Index (DXY), which measures the U.S. greenback against a basket of foreign currencies, saw a massive drop after the U.S. left the gold standard and suffered huge balance of payments deficits under Nixon.

The index first rose 0.5% from Nov. 6, 1972 — the day before the election — to a peak in January of the following year, which coincided with a high in stocks. But the dollar index then turned south, tumbling 18% to a July 1973 low.

Stocks

Similarly, a rise in stocks gave way to an eye-popping slide.

The Dow Jones Industrial Average added more than 6% between Nov. 6, 1972 and its peak in mid-January of 1973, right around the time of Nixon’s second inauguration. But within a year of hitting that high, the blue-chip average plunged as much as 19%.

Within two years of that Jan. 1973 peak, the 30-stock average at one point plummeted as much as 44%.

Treasurys

As inflation accelerated, the yield on the U.S. 10-year Treasury note surged.

In total, the 10-year yield rose more than 130 basis points between Nov. 6, 1972 and a high on Aug. 7, 1973. At one point, the yield touched a high of 7.58% — more than three percentage points above today’s level around 4.3%.

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Here's what happened to financial markets after Nixon pressured the Fed

In other news.

EU stands its ground on digital rules despite Trump warning

US president threatens retaliatory tariffs on countries that ‘discriminate’ against American tech groups

26 August 2025

The EU said it would keep moving forward with its landmark digital rules despite President Donald Trump threatening retaliatory tariffs against countries whose taxes or laws target US tech companies.

“It is the sovereign right of the EU and its member states to regulate economic activities on our territory which are consistent with our democratic values,” European Commission spokesperson Paula Pinho said in response to Trump’s threat, issued via his Truth Social platform late on Monday.

“This is also why this was not part of our [trade] agreement with the US,” Pinho added.

Trump threatened tariff and export controls on countries whose taxes, rules or laws on tech companies “discriminate” against the US.

The threat came only days after Brussels and Washington outlined the full details of their transatlantic trade deal struck in Scotland in late July, in which the EU agreed to 15 per cent tariffs on most of its goods.

One EU official said the trade deal had “bought [the EU] some breathing space” but that Brussels had always expected other issues would require additional negotiations with Washington.

The official added that Brussels was adopting a strategy of remaining calm and not responding to all of Trump’s statements literally.

“It was obvious this would happen [on digital rules],” said an EU diplomat. “Concessions are seen by him [Trump] as a sign of weakness making him come back for more.”

The US had pressed for changes to the EU’s digital regulations as part of the trade talks, according to people involved. Washington especially took aim at the bloc’s landmark Digital Services Act (DSA), which forces big tech companies to police their platforms more aggressively.

But Brussels resisted the pressure from the US government, which believes the EU is unfairly targeting American companies and infringing freedom of speech principles championed by the Maga movement.

Pinho stressed that trade and digital rules were “separate questions”. She said that the bloc would continue to implement the framework trade agreement.

The EU aimed this week to propose legislation to lower tariffs on US imports of industrial goods and some agrifood products to the bloc, she said. The US has pledged to reduce tariffs of 27.5 per cent on European cars to 15 per cent when it does so.

Trump’s attack on digital rules and taxes also coincides with Brussels needing to decide on a number of investigations into American tech companies.

The EU has yet to decide on one of its investigations into Elon Musk’s X under the DSA. In preliminary findings last year, Brussels said X was in breach of the bloc’s regulations for deceptive design and insufficient access to data and transparency.

The EU also has to choose whether it wants to impose potential new fines on Apple and Facebook owner Meta under the Digital Markets Act, which is designed to curb tech giants’ dominance of the digital marketplace.

Apart from the European legislation, several EU member states, including France, Italy and Spain, have digital services taxes.

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EU stands its ground on digital rules despite Trump warning

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.

Bank of England’s Mann: ‘Squeeze out’ inflation with rate holds

Tuesday 26 August 2025 5:40 pm

Inflation is likely to become “persistently elevated” unless it is squeezed out with a more restrictive monetary policy than the Bank of England is currently predicting, a top Bank of England official has warned.

In a hawkish speech delivered on Tuesday, Monetary Policy Committee member Catherine Mann said the spectre of further price rises looked “greater than the judgement incorporated in the baseline forecast” produced by the UK’s central bank in May.

“A more persistent hold on Bank Rate is appropriate right now, to maintain the tight – but not tighter – monetary policy stance needed to lean against inflation persistence persisting,” she said at a panel event on the future of central banking in Mexico.

The external MPC member, whose ‘activist’ approach to monetary policy has earned her a reputation as one of the Bank’s most enigmatic rate-setters, also warned that heading to calls for faster rate cuts now risked greater price rises in the future and set off a round of secondary effects.

“By squeezing out inflation today, you prevent it from persisting in the future,” she said. “If this policy is not followed, even tighter policy would be required later to remove the resulting higher inflation and rein in the expectations drift.”

Mann’s comments follow a string of recent data suggesting the UK economy could be entering into another bout of inflation, led predominantly by sudden jumps in food inflation.

On Tuesday, the British Retail Consortium said that a “significant” jump in the cost of staples like eggs and butter had driven food inflation to hit 4.2 per cent in August. The industry body’s forecasts show food inflation is likely to hit six per cent before the end of the year, as fears of another winter cost of living squeeze weighs on consumer sentiment.

Mann cited research showing consumer inflation expectations to be especially sensitive to food and shop price rises, meaning there is a greater risk of second-round effects via more upward pressure on wages in the future.

“The projected inflation hump is higher than in our forecast in May, and together with elevated food prices and inflation expectations, increases the risk of attention threshold effects,” she said, referring to whether recent food price rises will lead to workers demanding pay rises when inflation peaked at over nine per cent.

The MPC’s more dovish members have been arguing that Bank officials should be more concerned about the UK’s flat-lining economic growth than the likelihood of inflation remaining above target persistently. Mann addressed the “increasing tension” faced by the MPC, saying it made “the monetary policymaker’s job harder in both decision-making and communication”.

But she said until there was more evidence that the UK’s slowing economy was sparking a “downside risk to demand” from consumers and businesses, it was “not [her] central case”.

She added: “However, I stand ready for a forceful policy action, in the form of larger, more rapid Bank Rate cuts, should the downside risks to domestic demand start materialising.”

Bank of England's Mann: 'Squeeze out' inflation with rate holds

German labour costs higher than in other industrialised countries, study shows

27 August 2025

BERLIN (Reuters) -Unit labour costs in German industry were 22% higher last year than the average of 27 industrialized countries examined by the Germany Economic Institute IW in a report seen by Reuters on Wednesday.

Unit labour costs in Germany were 15% higher than in the euro zone average in 2024, the study showed. Only Denmark and Belgium have higher industrial labour costs.

Unit labour costs are considered an important measure of price competitiveness and indicate how high labour costs are per unit of value added.

The above-average productivity in Germany was not sufficient to compensate for the disadvantage of high labour costs, according to the study.

"The shortage of skilled workers is pushing wages further up," said Christoph Schroeder, the author of the study. "Costs at the German location are likely to continue rising in the coming years."

In the period from 2018 to 2024, which was marked by multiple economic and geopolitical crises, unit labour costs in German industry rose by 18%.

However, real value added declined in Germany during the same period due to structural problems such as demographic change, uncertainty in the business sector, concerns about rising social security contributions, and China's technological catch-up, the study said.

German labour costs higher than in other industrialised countries, study shows

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.

One in ten UK banking jobs at risk from AI

Wednesday 27 August 2025 5:30 am  |  Updated:  Tuesday 26 August 2025 4:32 pm

Bankers across the UK could be on the chopping block as the industry piles billions into AI.

The push into the modern tech will put some 27,000 roles at risk – representing ten per cent of the UK banking sector’s workforce. 

By 2030, banks across the country will have piled over £1.8bn into generative AI by 2030, fresh data shared with City AM has revealed.

The bullish gen AI plans are set to result in “productivity gains” across the industry, with around 50 per cent of cost-savings coming from back office functions. Near 82 per cent of work hour reductions are set to come from back office and administrative tasks.

The findings, from Juniper Research and Zopa Bank, unveiled banks will cut 178m work hours over the next five years.

The research suggests gen AI developments would equate to 100 per cent return on investment with £1.8bn saved by 2030. 

Britain’s Big Four banking giants – HSBC, Natwest, Barclays and Lloyds – have beefed up their AI artillery in the last year as the firms continue to face off in a tech arms race.

Lloyds began its AI expansion last year, with the flagship announcement of its ‘AI Centre for Excellence’ headed up by former Amazon executive Rohit Dhawan. Meanwhile, Natwest joined forces with OpenAI to focus on “bank-wide simplification”.

The pressure has intensified as tech-savvy challengers entered the scene leveraging their abilities to streamline operations.

Zopa kicks off major AI push

Digital bank Zopa has ramped up its AI plans on the back of the new findings. 

The fintech has launched a five-year campaign – dubbed Jobs 2030 – with the aim to reskill 100,000 banking workers in AI disciplines by 2030.

The campaign will include “industry-aligned training tailored specifically to the UK banking sector”, a gen AI Engineering Programme and later the creation of Zopa Coding Academy.

Clare Gambardella, chief customer officer at Zopa Bank, told City AM the fintech would pull from across the industry to meet the “steep number”.

She added “several fintechs” were dealing with “the same kind of problems” in regards to AI and the campaign would leverage abilities across the sector.

It follows Zopa and fintech peer Clearscore smashing their “25 million actions” target to help UK consumers better their financial resilience in a cost-of-living campaign earlier this year.

Gambardella said the AI campaign would echo the collaborative aspect of Zopa’s personal finance mission through allowing firms to lead education opportunities in their area of expertise.

The mission follows FTSE 100 banking titan Lloyds sending a fleet of its bankers to Cambridge University for “AI bootcamp” earlier this year as the industry races to get ahead of the curve.

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One in ten UK banking jobs at risk from AI

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

World Debt Clocks (usdebtclock.org)

If farming were to be organised like the stock market, a farmer would sell his farm in the morning when it was raining, only to buy it back in the afternoon when the sun came out.

John Maynard Keynes