London Irvine Report: Special Update 16/08/2025 Tariff Deflation? US Consumers Worried.

Baltic Dry Index. 2044 + 05 Brent Crude 65.85

Spot Gold 3336 U S 2 Year Yield 3.75 +0.01

US Federal Debt. 37.237 trillion

US GDP 30.203 trillion

Both optimists and pessimists contribute to society. The optimist invents the aeroplane, the pessimist the parachute.

George Bernard Shaw

The great Alaskan summit over, no one seems to know what, if anything, was accomplished. Europe’s warmongers are spinning it as a win for Russia. America’s anti-Trump media are spinning it the same way.

But with nothing apparently accomplished, is it a win for anyone? How many more dead Ukrainians does Europe’s NATO warmongers want in their proxy war on Russia and for what? At least President Trump is trying to bring this proxy war to a negotiated end.

In the stock casinos, more disconnect, although that’s getting harder to sustain with each passing week.

S&P 500 closes lower Friday, but logs its second weekly gain

Updated Fri, Aug 15 2025 4:18 PM EDT

The S&P 500 slipped on Friday after hitting a record high, as investors took some gains off the table after a strong week.

The broad market index settled down 0.29% at 6,449.80. The Nasdaq Composite shed 0.40% to end the day at 21,622.98. The Dow Jones Industrial Average outperformed, rising 34.86 points, or 0.08%, to close at 44,946.12, thanks to a 12% jump in UnitedHealth. However, it was well off its all-time high reached earlier in the day.

A decline in chip stocks and weak consumer sentiment data hurt the market Friday. Applied Materials fell 14% to lead the VanEck Semiconductor ETF (SMH) down by 2%. Nvidia lost nearly 1%.

Meanwhile, the University of Michigan’s consumer sentiment index fell to 58.6 in August from 61.7 last month due to worries over inflation.

The major averages remained on solid footing for the week, however. The Dow outperformed, up 1.74%. The S&P 500 and Nasdaq respectively gained 0.94% and 0.81% week to date, thanks to new consumer inflation data that raised hopes for a Federal Reserve rate cut next month.

“The AI boom and the required Fed rate cuts are supporting the market, so we don’t think we’ll have a tradable pullback in the S&P, despite the horrible seasonality of August and September,” said Jay Hatfield, CEO and CIO at Infrastructure Capital Advisors. “We’re actually kind of grinding higher still.”

July’s retail sales data, released on Friday morning, also painted a still-healthy picture for the U.S. consumer. Retail sales rose 0.5% last month, meeting expectations from the Dow Jones consensus. Retail sales excluding automobiles gained 0.3%, also matching estimates.

Stock market news for Aug. 15, 2025

Consumer sentiment surprises lower in August as inflation expectations perk up

Aug. 15, 2025 10:01 AM ET

The U.S. consumer sentiment index slid to 58.6 in August from 61.7 in July, compared with the 61.9 consensus, according to a University of Michigan survey released on Friday.

Last month's pullback in sentiment -- the first time that has occurred in four months -- comes as inflation expectations perked up, with year-ahead implied inflation rising to +4.9% from +4.5% in July and five-year-ahead implied inflation advancing to +3.9% from +3.4% in July.

"This month ended two consecutive months of receding inflation for short-run expectations and three straight months for long-run expectations," Surveys of Consumers Director Joanne Hsu said in a statement. "Still, both readings remain well below the highs seen briefly in April and May 2025."

Consumer expectations index: 57.2 in August vs. 56.5 expected and 57.7 prior.

Current conditions index: 60.9 vs. 67.9 consensus and 68.0 in July.

"Overall, consumers are no longer bracing for the worst-case scenario for the economy feared in April when reciprocal tariffs were announced and then paused," Hsu said. "However, consumers continue to expect both inflation and unemployment to deteriorate in the future."

Consumer sentiment surprises lower in August as inflation expectations perk up | Seeking Alpha

Automobiles, promotions bolster rise in US retail sales in July

August 15, 2025

WASHINGTON (Reuters) -U.S. retail sales increased solidly in July, supported by strong demand for motor vehicles as well as promotions by Amazon.com and Walmart, though a softening labor market and higher goods prices could curb consumer spending growth in the third quarter.

The rise in retail sales last month together with an upward revision to June's data, reported by the Commerce Department on Friday, eased some concerns that economic activity was stalling following soft employment growth over the past three months.

"Retail sales do not give the economy a complete bill of health, but at least the consumer is not in headlong retreat and the outlook for continued moderate economic growth this quarter is positive," said Christopher Rupkey, chief economist at FWDBONDS. "The majority of import tariff price hikes on goods are still off in the future, however, so time will tell how consumers will react when they see higher prices on goods in shops at the mall in the months to come."

Retail sales rose 0.5% last month after an upwardly revised 0.9% gain in June, the Commerce Department's Census Bureau said. Economists polled by Reuters had forecast retail sales, which are mostly goods and are not adjusted for inflation, would increase 0.5% after a previously reported 0.6% rise in June.

Part of the rise in retail sales last month could be due to tariff-driven price increases rather than volumes. Sales increased 3.9% on a year-over-year basis.

Motor vehicles led the almost broad rise in sales, with receipts at auto dealerships advancing 1.6% after rising 1.4% in June. A rush to buy battery-powered electric vehicles ahead of the September 30 expiration of federal government tax credits helped to drive automobile sales in July, analysts at J.P. Morgan said.

Online sales rose 0.8% after increasing 0.9% in June. Amazon and Walmart held sales promotions last month to lure inflation-weary consumers with deep discounts, including on back-to-school essentials. Amazon extended its sales window to 96 hours, up from the typical 48, featuring aggressive promotions on categories ranging from apparel to electronics.

Automobiles, promotions bolster rise in US retail sales in July

America is barrelling toward a 'deflationary shock' as 3 forces hit consumer demand, a top economist says

Fri, August 15, 2025 at 12:17 AM GMT+1

There's a risk that inflation could turn negative soon, David Rosenberg says.
The top economist thinks the US is headed for a "deflationary shock."
Tariffs, immigration policies, and an aging population could hit consumer spending and growth, he said.

Inflation-weary consumers would be forgiven for thinking falling prices are a good thing, but that's not necessarily the case. Disinflation is usually welcomed news, but deflation signals something more dire is going on in the economy.

And deflation is exactly what may be in store for the US, according to one top economist.

David Rosenberg, the president of Rosenberg Research, thinks that America could be headed toward a "deflationary shock," a situation where prices decline rather than merely increase at a slower pace.

While consumers might perk up at the idea of lower prices, deflation is often thought to be a more difficult problem for policymakers to solve than high inflation. The Fed can raise interest rates to combat higher prices, but, in the case of deflation, central bankers can only lower interest rates until they hit 0% before needing to turn to other options to boost the economy.

That's one reason why countries like Japan and China, which have been slammed with deflation crises in the past, have seen their economists mired in long periods of anemic growth in the years that followed.

The US could be facing a similar fate, Rosenberg said, adding that he believed America was "following the footsteps" of those two nations in particular.

"We are now staring down the barrel of a deflationary shock, and it amazes me how all the bond bears, inflation-phobes, and Fed policy hawks are missing this secular shift as they continue to play by the old rules," Rosenberg wrote in a report on Wednesday.

He sees three reasons the US is headed for an era of deflation.

Tariffs could actually be deflationary

Tariffs are thought by economists to be inflationary, as companies can pass along the cost of import duties by raising prices for consumers.

But there's also a deflationary aspect to tariffs: Higher prices cause consumers to spend less, which could lower prices as demand falls relative to supply, Rosenberg said.

There are already signs that consumers are beginning to tighten their belts. While inflation rose to 2.7% in July, retail sales have been pretty weak, growing 0.6% in June after a 0.9% contraction in May, according to US Census Bureau data. July is expected to show retail sales grew 0.5%.

"GDP is, after all, only about spending," Rosenberg said, referring to how consumer spending accounts for around two-thirds of GDP growth in the US.

America is barrelling toward a 'deflationary shock' as 3 forces hit consumer demand, a top economist says

In other news.

China isn’t welcoming Nvidia back with open arms after Trump clears way for H20 exports

Published Fri, Aug 15 2025 5:33 AM EDT

Nvidia secured what was seen as a major win last month when the U.S. government announced it would allow it to resume sales of its made-for-China H20 chip. But it has since become clear that Beijing wont be rolling out the red carpet.

Despite the U.S. softening on chip export controls — which Beijing has long opposed — Nvidia is being welcomed back under increased distrust and scrutiny.

On Tuesday, Bloomberg reported that China had urged companies against using Nvidia’s H20 chips, or those from Advanced Micro Devices, especially for government and national security use cases, citing sources familiar with the matter.

In response to the report, Nvidia said in a statement that the H20 “is not a military product or for government infrastructure,” and that banning the sale of H20 in China would only harm U.S. economic and technology leadership with zero national security benefit.

In a separate report, The Information said regulators in China had gone so far as to order major tech companies, including ByteDance, Alibaba and Tencent, to suspend Nvidia chip purchases altogether until the completion of a national security review.

“We’re hearing that this is a hard mandate, and that [authorities are actually] stopping additional orders of H20s for some companies,” Qingyuan Lin, a senior analyst covering China semiconductors at Bernstein, told CNBC.

The news comes just weeks after Nvidia was summoned by Chinese officials over security concerns regarding potential tracking technology and “backdoors” in their chips.

It also throws a wrench into Nvidia’s plans to maintain market share in China, as CEO Jensen Huang tries to navigate his business through increasing tensions and shifting trade policy between the U.S. and China.

China not welcoming Nvidia back with open arms even if H20 curbs eased

Global Inflation/Stagflation/Recession Watch.

Given our Magic Money Tree central banksters and our spendthrift politicians, inflation/recession now needs an entire section of its own.

Why a landmark ruling from the world’s top court puts financial markets on notice

Published Fri, Aug 15 2025 1:11 AM EDT

Gripped by corporate earnings season and U.S. President Donald Trump’s back-and-forth tariff policy, investors largely shrugged off a historic climate ruling from the world’s top court.

But for some, the International Court of Justice’s (ICJ) recent advisory opinion on state’s legal obligations in the face of climate change could emerge as a watershed moment for financial markets.

Günther Thallinger, a board member at Allianz, one of the world’s biggest insurers, said that close watchers of the ICJ’s July 23 ruling described it as perhaps the most significant climate development since the 2015 Paris Agreement.

At the time, the pronouncement marked the ICJ’s first-ever opinion on climate change and laid out that climate action is not optional.

The court said in a unanimous ruling that governments and countries have a legal obligation to protect the environment from greenhouse gas emissions, protect present and future generations from the climate crisis and to cooperate internationally.

Notably, the ICJ also found that fossil fuel production, including licensing and subsidies, “may constitute an internationally wrongful act which is attributable to that State.”

The ruling, which was the brainchild of young law students in low-lying Pacific island states and championed by the government of Vanuatu, is widely expected to have far-reaching legal and political consequences.

Speaking in a personal capacity, Thallinger said that while the ICJ’s opinion is based on existing law and conventions, the ruling could yet have meaningful ramifications for a vast range of assets — whether one cares about climate change or not.

“If one takes as an investor what the International Court of Justice just said, then a revaluation of these assets needs to happen. Every prudent investor must do this now,” Thallinger told CNBC by video call.

“Even if they don’t like the discussion around climate change, even if they would say they denigrate the Court of Justice completely, they must expect that, in some countries, some governments, some courts are going to follow this opinion,” Thallinger said.

“If they follow this opinion, it has asset valuation implications, quite clearly. So, this opinion for investors, for capital market participants, really means something.”

Licensing and subsidies

On the issue of licensing and subsidies, Thallinger said the ICJ’s ruling could prove to be a significant development.

That’s because licensing and permitting for the mining sector, for example, and government subsidies for fossil fuels could be at risk following the court opinion. The burning of fossil fuels such as coal, oil and gas is the chief driver of the climate crisis.

“If subsides are unlawful, then one should expect that subsidies are somehow stopped at a certain point in time,” Thallinger said.

----The U.S. and China, the world’s two biggest carbon emitters, provided a mixed response to the ICJ’s ruling.

“As always, President Trump and the entire administration is committed to putting America first and prioritizing the interests of everyday Americans,” White House spokeswoman Taylor Rogers said in response to the court opinion, Reuters reported.

A spokesperson for China’s Foreign Ministry, meanwhile, said the ruling has a “positive significance” for advancing international climate cooperation and sought to reaffirm the Asian country’s status as a developing country.

----Companies with significant environmental footprints, such as those in the oil and gas, mining and heavy industry sectors, are likely to face increased litigation risk, which could affect their costs, valuation and reputation, Johannesen told CNBC by email.

Climate: Why a landmark ICJ ruling puts financial markets on notice

Technology Update.

With events happening fast in the development of solar power and graphene, I’ve added this section.

This weekend, something different. Why the moon moves from low in the night sky to higher in the night sky over a month.

I also get to see the moonrise and its position change on the horizon, much like the Sun. What I have trouble grasping is how this takes place in only a months time? Does the Earth have a month-long wobble, or what?

Thanks for the great question, and it’s excellent that you were observant enough to notice that change in the rising and setting position of the Sun and Moon over the course of the year. While in the question you mention that you understand why the Sunrise and Sunset positions change, let me start there and then move onto the Moon, because the explanation is somewhat connected, and is related to the geometry of the orbits and rotations in the Earth-Moon-Sun system.

The Earth rotates counter-clockwise on its axis (picture a spinning top). Because of this motion, celestial bodies such as the Sun, Moon and stars appear to rise in the eastern sky and set in the western sky. In addition, the Earth is tilted on its axis by 23.5 degrees, relative to the plane of the orbit of the Earth around the Sun. Because of this, the Sun’s rise and set positions vary by up to 23.5 degrees north or south of due east or west throughout the course of a year (the orbital period of the Earth around the Sun).

The Moon’s pattern is close to that of the Sun’s. It orbits the Earth on a plane that is approximately 5.1 degrees offset from the orbital plane of the Earth around the Sun. This causes the position of the moonrise and Moonset to vary up to 28.6 degrees north or south (that’s 23.5+5.1 degrees).

The Moon orbits completely around the Earth in 28.5 days, about once a month. This causes the Moon to move through its 28.6 degree range of variation much quicker than the Sun appears to, creating a noticeable position change against the horizon each night. The Moon also doesn’t rise at the same time each night. Due to the speed of Earth’s rotation and the Moon’s orbit, the Moon rises about 50 minutes later each day. Interestingly, all these changes in relative position to the Sun make the Moon appear to go through its waxing and waning phases.

----I hope this answers your question, and clarifies why the Moon rises and sets in different positions over the course of a month. Please do not hesitate to contact me directly or the Ask an Astronomer page with follow-up question!

Dr. Aaron Rizzuto
UT Austin

How does the direction of the moonrise change? - Ask an Astronomer

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

World Debt Clocks (usdebtclock.org)

Exponent Calculator

Enter values into any two of the input fields to solve for the third.

Exponent Calculator

This weekend’s music diversion. Approx. 14 minutes. Next week, Mr. Handel goes highbrow setting music to Shakesphere.

Giovanni Punto - Horn Concerto No.11 in E-major

Giovanni Punto - Horn Concerto No.11 in E-major - YouTube

Next, Trump’s universal tariffs. Approx. 7 minutes and 12 minutes.

Grocery CEO explains how Trump's tariffs are impacting prices at his store