Friday, 29 August 2025

PCE Inflation Day. Cracker Barrel Cracks.

Baltic Dry Index. 2017 -29              Brent Crude 68.24

Spot Gold 3409                      US 2 Year Yield 3.62 +03

US Federal Debt. 37.291 trillion

US GDP 30.231 trillion.

The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default.

Alan Greenspan

It is dress up Friday, the last stocks casino trading day of August.

No matter what the US central bank’s favourite inflation indicator comes up with later today, the Great AI Bubble will likely bubble up to new highs.

Asia-Pacific markets trade mixed, breaking ranks with Wall Street

Published Thu, Aug 28 2025 7:40 PM EDT

Asia-Pacific markets traded mixed Friday, breaking ranks with Wall Street as investors also assessed a slate of economic data in the region.

Japan’s Nikkei 225 slid 0.41%, while the Topix lost 0.39% after core consumer prices in Tokyo rose at a slower pace in August. The Tokyo core CPI, which strips out fresh food but includes energy, climbed 2.5% from a year earlier, matching Reuters’ economists’ forecasts, and easing from July’s 2.9% increase. The figure, however, remained above the Bank of Japan’s 2% target.

Japan’s unemployment rate also eased to 2.3% in July, down from 2.5% the previous month.

South Korea’s Kospi lost 0.22% while the Kosdaq Index slipped 0.27% after South Korea’s ex-first lady Kim Keon Hee was reportedly indicted over corruption and bribery charges. Kim is the wife of former South Korean President Yoon Suk Yeol, who was removed from office and arrested earlier this year for his short-lived declaration of martial law. The South Korean won weakened 0.15% to 1,387.38 against the dollar.

Australia’s S&P/ASX 200 fell 0.14%.

Hong Kong’s Hang Seng index added 0.51% while mainland’s CSI 300 rose 0.13%.

India’s Prime Minister Narendra Modi is due to meet China’s President Xi Jinping for the 25th Shanghai Cooperation Organization summit over the weekend in Tianjin, which will be Modi’s first visit to China in seven years.

New Delhi and Beijing could engage in talks in Tianjin, as India’s foreign ministry has flagged the possibility of bilateral meetings on the sidelines of the summit.

Overnight stateside, the three major averages closed higher. The broad market S&P 500 index finished 0.32% higher at 6,501.86 after hitting a new all-time intraday high above the 6,500 level. The Nasdaq Composite ended the day up 0.53% at 21,705.16, while the Dow Jones Industrial Average rose 71.67 points, or 0.16% to end at 45,636.90, which was also a record.

Asia-Pacific markets: Nikkei 225, Kospi, CSI 300

Stock futures are little changed after S&P 500′s record high, inflation data looms: Live updates

Updated Fri, Aug 29 2025 7:22 PM EDT

U.S. equity futures were little changed on Thursday evening, after the S&P 500 registered a fresh record driven by renewed optimism around the artificial intelligence trade.

Futures tied to the Dow Jones Industrial Average slipped 62 points, or 0.1%. S&P 500 futures pulled back 0.07%, while Nasdaq 100 futures declined 0.09%.

Investors also parsed fresh corporate earnings in extended trading. Shares of Ulta Beauty advanced about 3% after hours following a strong full-year outlook, while Autodesk stock gained more than 10% thanks to better-than-expected guidance. Shares of Dell Technologies slipped 5% following a soft outlook for the current quarter.

Stocks are coming off a winning session, with the S&P 500 closing up 0.3% at 6,501.86 — the first time above the 6,500-mark. Earlier, the broad-based index set an all-time intraday high. The Nasdaq Composite added 0.5%, while the Dow Jones Industrial Average ended the day up about 0.2%. The Dow’s 45,636.90 finish was also a new record.

Better-than-expected quarterly earnings from Nvidia helped solidify investor confidence in the health of the AI trade. Although Nvidia’s earnings initially sparked some concern tied its data center business and only slightly better-than-expected revenue for the current quarter, the report helped lift peer chip stocks that initially pulled back. Nvidia stock ultimately ended the day down less than 1%.

“I think if someone is trying to ring the bell at the top for AI, they’re underestimating how quickly penetration grows. We’re probably in the first quarter or first third of that cycle for AI,” Fundstrat Global Advisors co-founder and head of research Tom Lee told CNBC’s “Power Lunch” on Thursday.

Investors will now turn their attention to fresh inflation data to cap off the final trading day of August with the personal consumption expenditures index. Economists polled by Dow Jones expect that the PCE reading for July will show an increase of 0.2% for the month and 2.6% for the year.

With all three major indexes at or near record highs, the gains for the month have been solid. The 30-stock Dow is up 0.01% week to date, but it has logged a 3.4% advance in August. The S&P 500 has tallied a 0.5% increase week to date, and is up 2.6% so far this month. The tech-heavy Nasdaq added about 1% this week, which has helped boost August’s gain to 2.8%.

Stock market today: Live updates

But….

Nvidia’s top two mystery customers made up 39% of the chipmaker’s Q2 revenue

Published Thu, Aug 28 2025 2:49 PM EDT Updated Thu, Aug 28 2025 3:06 PM EDT

Two Nvidia customers made up 39% of Nvidia’s revenue in its July quarter, the company revealed in a financial filing on Wednesday, raising concerns about the concentration of the chipmaker’s clientele.

“Customer A” made up 23% of total revenue, and “Customer B” comprised 16% of total revenue, according to the company’s second-quarter filing with the Securities and Exchange Commission.

That’s higher than the same quarter a year ago when Nvidia’s top two customers made up 14% and 11% of sales, according to the filing.

The company regularly publishes information on a quarterly basis about its top customers, but the disclosure this week is fueling a renewed debate about whether Nvidia’s explosive growth is being driven by a handful of large cloud providers such as MicrosoftAmazonGoogle and Oracle.

Nvidia finance chief Colette Kress said in a Wednesday statement that “large cloud service providers” made up about 50% of the company’s data center revenue. That’s important as the data center business made up 88% of Nvidia’s overall revenue in the second quarter.

“We have experienced periods where we receive a significant amount of our revenue from a limited number of customers, and this trend may continue,” Nvidia wrote in the filing.

Increasingly, analysts are looking to those cloud capital expenditure spending commitments to model the future growth of Nvidia.

“We see limited room for further earnings upside revision or share price catalyst in the near-term unless we have increasing clarity over upside in 2026 [cloud service provider] capex expectations,” wrote HSBC analyst Frank Lee in a note on Thursday. He has a hold rating on the stock.

But Nvidia’s Customer A and Customer B are not necessarily cloud providers. It’s a bit of a mystery, and an Nvidia representative declined to share the identities of Customer A and Customer B.

In its filing, Nvidia says it has both “direct customers” and “indirect customers.” Customer A and Customer B are listed as “direct customers.”

Direct customers are not the end users of Nvidia’s chips. They’re companies that buy the chips to build into complete systems or circuit boards that they then sell to data centers, cloud providers and end-users. Some of these direct customers are original design manufacturers or original equipment manufacturers like Foxconn or Quanta. Others are distributors or system integrators like Dell.

Indirect customers, meanwhile, include cloud service providers, internet companies and enterprises, which typically buy systems from Nvidia’s direct customers. Nvidia says it can only estimate revenue to indirect customers based on purchase orders and internal sales data.

Deciphering if any of those cloud providers are Nvidia’s mystery customers is difficult, in part because the chipmaker has wiggle room in the definitions of its direct and indirect customers.

Nvidia, for example, wrote in the filing that some direct customers buy chips to build systems for their own use.

Additionally, Nvidia noted that two of its indirect customers each accounted for over 10% of its total revenue, primarily buying systems through Customers A and B.

Contributing further to the mystery of it all, Nvidia said that an “AI research and development company” contributed a “meaningful” amount of revenue through both direct and indirect customers.

More

Nvidia's top two mystery customers made up 39% of its Q2 revenue

Japan’s top trade negotiator cancels trip to U.S. over trade deal issues

Published Thu, Aug 28 2025 12:59 AM EDT

Japan’s top trade negotiator Ryosei Akazawa canceled a trip to the United States on Thursday over issues related to the U.S.-Japan trade deal.

In a statement, Japan’s Chief Cabinet Secretary Yoshimasa Hayashi said that his trip would have involved the discussion of U.S. tariff measures.

“However, during the coordination with the US, because it became apparent that certain points required further technical discussion, the trip was cancelled, and it was decided that discussions will continue at the administrative level,” Hayashi told reporters.

Japanese media outlet Kyodo News said it has not been decided whether he will reschedule the trip, while Reuters said Akazawa could head to Washington as early next week after the outstanding issues are resolved, citing an anonymous government source.

Hayashi said Tokyo will urge the U.S. to amend its presidential order on reciprocal tariffs as soon as possible, and ask Washington to issue a presidential order to lower tariffs on automobiles and auto parts.

The White House has an executive order setting the baseline tariff rate for Japan at 15%, but there has not been a written confirmation cutting the tariff rate for automobiles to 15% from 25%.

Akazawa reportedly said in July that the U.S. had promised to amend the executive order on reciprocal tariffs on Japan to include a “no-stacking” arrangement, in which tariffs will not stack on each other beyond 15%. That would be similar to the arrangement made with the European Union.

“We have confirmed with the United States that a sincere and prompt implementation of the Japan-US agreement is vital,” he said on Thursday.

Separately, Bank of Japan board member Junko Nakagawa said on Thursday that although tariff negotiations between the two sides have resulted in an agreement, many uncertainties remain.

He warned that exports and industrial production are projected to be negatively affected in Japan “for the time being,” saying that there will be a “reactionary decline” in light of front-loading from U.S. tariffs.
Corporate profits are also expected to decline, mainly in the manufacturing sector, Nakagawa said, “reflecting the effects of the deterioration in export profitability due to the increase in U.S. tariffs and of the slowdown in overseas economies.”

---- Reuters had earlier reported that also on the agenda for Akazawa’s trip was a written confirmation of the details of Japan’s $550 billion investment package for the U.S. in exchange for reduced tariffs on imports.

That comes after U.S. Commerce Secretary Howard Lutnick said in a Fox News interview on Monday stateside that the U.S. will make an announcement regarding the package.

The $550 billion package was announced as part of Tokyo’s deal with the U.S. in July, which saw so-called “reciprocal” tariffs on Japanese exports lowered to 15% from 25%. Tariffs on Japan’s key automobile sector were also cut to 15%.

However, sticking points emerged over the $550 billion investment package, with Trump touting the package as “our money to invest, as we like.”

“Some people are saying Japan is simply handing over $550 billion,” Akazawa said after the trade deal was announced. “But such claims are completely off the mark,” according a to Reuters report on July 25.

More

Japan's top trade negotiator reportedly cancels U.S. trip

In other news.

Did Cracker Barrel change their logo back? Company heeds Trump's advice, keeps old logo

August 27, 2025

Just days after launching a new logo, Cracker Barrel is restoring its previous one amid backlash.

Here's what we know about the controversy surrounding the Tennessee-based restaurant and old country store chain.

Why is Cracker Barrel changing its logo back?

On Aug. 19, Cracker Barrel announced "a new fall menu creative campaign" called "All the More" that involved new and returning menu items as well as "an enhanced brand look and feel."

The new logo removed the graphics of "the Old Timer," a farmer in overalls also known as "Uncle Herschel," and the cracker barrel itself. Both have been on Cracker Barrel's logo since 1977.

However, not everyone was a fan of the change. Cracker Barrel's proposed new logo drew criticism from many, including President Donald Trump.

"Cracker Barrel should go back to the old logo, admit a mistake based on customer response (the ultimate Poll), and manage the company better than ever before," Trump said in an Aug. 26 post on Truth Social.

Others expressed a fondness for "the Old Timer" character, while some politically conservative groups called the move a "woke rebrand."

"Go woke, go broke," the official White House social media account posted alongside an imitation of the 2015 Cracker Barrel logo featuring Trump and the phrases "America First" and "America is back.

It wasn't just politicians bashing the new logo, either - disapproval from Wall Street traders was evident when Cracker Barrel lost almost $100 million in market value on Aug. 21. The figure began to rebound on Aug. 22.

A week after promoting the proposed new logo, Cracker Barrel said it would keep the 2015 logo featuring "the Old Timer" and barrel graphic. The company's stock had already seen a spike in value Wednesday morning.

Taylor Budowich, White House deputy chief of staff, confirmed a Tuesday evening call with the company regarding the decision to keep the 2015 logo.

"[Cracker Barrel] thanked President Trump for weighing in on the issue of their iconic 'original' logo," Budowich wrote in an X post. "They wanted the President to know that they heard him, along with customer response (the ultimate poll), and would be restoring the 'Old Timer.'"

Did Cracker Barrel change their logo back? Company heeds Trump's advice, keeps old logo

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.

Shrinkflation. Due to shrinkflation my bottles of gin and tonic no longer seem to last as long as they used to.

Shrinkflation Is Real: 20 Grocery Items That Have Shrunk Most In Size

August 27, 2025

Have you noticed your bag of chips being less full or your bottles and cans looking slimmer? You're not imagining it. Companies opt for quietly shrinking products to account for inflation as opposed to increasing the price to avoid customer backlash, with some products seeing an up to 25 percent reduction in size. Here are the 20 products that have been the biggest victims of shrinkflation.

Household paper products like toilet paper have seen the highest rate of change. Some brands have reduced their roll size by 100 sheets, but the price has stayed roughly the same.

Cereal is another item that has been heavily affected by shrinkflation. Some family-sized boxes have gone from 24 ounces to 21, but the price has increased by over a dollar.

Candy and chocolate have seen a high rate of change, for good and bad, given the sugar content. Cadbury, for example, reduced their chocolate bar size by 10 percent, the price staying the same.

Does your bag of Lay's seem more airy lately? It's not just you. Family-sized bags have decreased by around two ounces, but the price has risen by over a dollar.

If you've felt your afternoon granola bar snack no longer satisfying you, it's not your appetite. Granola bars have gotten smaller, with some brands not even bothering to change the package size, so it's even more noticeable.

Have you noticed your dish soap or laundry detergent disappearing before your eyes way faster? Some brands have decreased in size by 10 percent, but the price has stayed consistent.

Cooking a bag of pasta isn't what it used to be. Packages have reduced in weight by 10 to 13 percent, so now the bag that used to contain exactly one pound is about three ounces short of a pound.

Loaves of bread have decreased in size by roughly 10 percent. Slices have become noticeably smaller, making it harder to hold all your sandwich ingredients.

More

Shrinkflation Is Real: 20 Grocery Items That Have Shrunk Most In Size

How Would An AI Recession Impact AI Commercialization?

Aug 26, 2025, 02:19pm EDT

I am at the 2025 IEEE Hot Chips Symposium at Stanford University and there are a lot of presentations and exhibits on semiconductor devices, many focused on artificial intelligence. I will write separately about these but I wanted to provide some thoughts related to recent economic developments and comments about AI that have been talking about a possible bubble in the AI market.

There was an August 6 posting to Yahoo Finance, derived from a Fortune article by Nick Lichtenberg. It points out that in the summer of 2025 consumer spending is slowing. This is likely due to increased unemployment and lower job growth, at least partially due to lower anticipated employee needs with the implementation of AI in industry.

He pointed out that Giant tech companies have spent so much on data centers in 2025 that their spending is now contributing more to U.S. economic growth than consumer spending. My colleague, Jim Handy of Objective Analysis presented this slide during the 2025 FMS in early August showing that the quarterly ratio of hyperscale data center spending (mostly on infrastructure to support huge AI workflows) to revenue has increased over 10% since 2023 and if the trend continued would soon be double the 2023 ratio.

This trend reflects the significant spending on Ai infrastructure but also that so far this spending has exceeded AI related revenues. Is this sustainable? A few days ago people started to write about an MIT study, which indicates that for many companies, getting a real financial return from AI has been elusive. The market value of AI related companies took a major hit after the release of this report.

The report is based on a multi-method research design that includes a systematic review of over 300 publicly disclosed AI initiatives, structured interviews with representatives from 52 organizations, and survey responses from 153 senior leaders collected across four major industry conferences. The report says that Just 5% of integrated AI pilots are extracting millions in value, while the vast majority remain stuck with no measurable P&L impact. This divide does not seem to be driven by model quality or regulation, but seems to be determined by approach.

The report says that popular AI tools like ChatGPT and CoPilot primarily enhance individual productivity, not P&L performance. Most enterprise-wide pilot programs fail due to brittle workflows, lack of contextual learning, and misalignment with day-to-day operations. It also indicates that programs which include external partners familiar with the use of AI see twice the success rate than internal only builds. The report says that the core barrier to scaling these AI systems is not infrastructure, regulation, or talent. It is learning.

---- As several industry pundits have been pointing out, the current AI frenzy has many of the hall marks of prior industry bubbles, such as the Internet Bubble in the early 2000’s and the railroad bubble in the 19th century. Such a bubble will lead to a major correction and likely a reduction in current investments. But that will not mean that there is no future for AI or that AI work will cease.

However, an AI recession will likely lead to far more focused use of AI and the big models currently being developed to be used in ways that will enhance value for businesses and increase the effectiveness of employees. I think that the best way to think about the current wave of AI is that it is best as an Augmented Intelligence, in particular for increasing the intelligence and agency of individual humans and including human judgement, rather than the wholesale replacement of humans.

How Would An AI Recession Impact AI Commercialization?

Covid-19 Corner

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

FDA approves updated COVID-19 shots with limits for some kids and adults

August 27, 2025

WASHINGTON (AP) — U.S. regulators approved updated COVID-19 shots Wednesday but limited their use for many Americans — and removed one of the two vaccines available for young children.

The new shots from Pfizer, Moderna and Novavax are approved for all seniors. But the Food and Drug Administration narrowed their use for younger adults and children to those with at least one high-risk health condition, such as asthma or obesity. That presents new barriers to access for millions of Americans who would have to prove their risk — and millions more who may want to get vaccinated and suddenly no longer qualify.

Additionally, Pfizer’s vaccine will no longer be available for any child under 5, because the FDA said it was revoking the shot’s emergency authorization for that age group.

Parents will still be able to seek out shots from rival drugmaker Moderna, the other maker of mRNA vaccines, which has full FDA approval for children as young as 6 months. But the company’s Spikevax vaccine is only approved for children with at least one serious health problem.

The revamped vaccines target a newer version of the continuously evolving virus and are set to begin shipping soon. But it could be days or weeks before many Americans know if they’ll be able to get one, with access dependent on decisions by federal health advisers, health insurers, pharmacies and state authorities.

The new restrictions — previewed by FDA officials in May — are a break from the previous U.S. policy, which recommended an annual COVID-19 shot for all Americans 6 months and up.

The approach reflects heightened skepticism about the ongoing risks of COVID-19 and the need for yearly booster shots from Health Secretary Robert F. Kennedy Jr. and FDA Commissioner Marty Makary, both outspoken critics of wide-scale vaccinations.

“The American people demanded science, safety, and common sense. This framework delivers all three,” Kennedy wrote on social media.

Novavax's shot is only open to people 12 or older, not younger children, and carries the same risk-based restrictions that are now in place for Moderna and Pfizer. It's the nation's only traditional, protein-based COVID-19 vaccine.

More

FDA approves updated COVID-19 shots with limits for some kids and adults

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.

NatPower unveils £1bn plan for 'UK's largest' battery storage project

28 August 2025

One of the UK's most advanced battery storage projects is being proposed for Teesside, in order to help stabilise the grid and electrify ships at the nearby port

NatPower UK has today unveiled plans for a one of the UK's largest long-duration battery storage systems at a site on Teesside, as part of a £1bn project designed to combine utility-scale grid storage capacity with dedicated infrastructure to help charge up electric ships at the nearby port.

The clean energy developer said it had secured an agreement with Sembcorp Utilities Ltd to build the 1GW battery energy storage system (BESS) at a 32-acre site at the Wilton International industrial park in Redcar, which it said would be fully funded by £1bn in private investment.

NatPower said the Teesside GigaPark would be one of the UK's highest-capacity and longest-duration energy storage projects (LDES), capable of providing 4GWh of storage capacity initially, with potential to double output to 8GWh in the future.

The company said the trail-blazing project would provide battery storage duration well in excess of the one to two hours worth of storage that has been delivered by most UK BESS projects to date.

By providing clean, flexible power to the grid at such a scale, the project is expected to help support the growing influx of renewables onto the grid and curb the costs of switching off wind and solar farms to avoid overloading the electricity system.

At the same time, associated port infrastructure is being designed from the outset to power electric ships at berth - a process known as 'cold ironing' - in addition to offering recharging capability for electric propulsion systems for future vessel types, NatPower UK said.

The project, which already holds a 1GW connection agreement with the National Energy System Operator (NESO) for a 400kV connection to a nearby substation, is earmarked to begin operations by 2028.

NatPower UK estimated the project would create around 200 jobs during the construction phase, in addition to providing long-term employment for locals and delivering affordable, reliable renewable power for nearby industrial sites and the port. The firm has also committed to establishing a community benefit fund totalling £2m a year.

"Teesside, our most advanced GigaPark, located at Wilton International, will be the blueprint for how we combine high-capacity renewable energy storage with the electrification of ports and industry," said Stefano Sommadossi, CEO at NatPower UK and NatPower Marine. "Within five years, we can transform one of the UK's most important industrial hubs into a net zero economic powerhouse and then replicate this model in ports across the globe."

More

NatPower unveils £1bn plan for 'UK's largest' battery storage project | BusinessGreen News

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

World Debt Clocks (usdebtclock.org)

Another weekend and which fast food chain’s logo and advertising will get the benefit of President Trump’s input, just like Cracker Barrel, this weekend? Have a great weekend everyone.

Debt is a prolific mother of folly and of crime.

Benjamin Disraeli

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