Tuesday, 2 September 2025

Ding, Ding, Ding, Tariffs War Round Two. That London Fire.

Baltic Dry Index. 2024 -01            Brent Crude 68.43

Spot Gold 3496                      US 2 Year Yield 3.59 -03

US Federal Debt. 37.308 trillion

US GDP 30.239 trillion.

The Great Fire of London started on Sunday, 2 September 1666 in a baker's shop on Pudding Lane belonging to Thomas Farynor (Farriner). Although he claimed to have extinguished the fire, three hours later at 1am, his house was a blazing inferno.

At first, few were concerned – fires were such a common occurrence at the time. However, the fire moved quickly down Pudding Lane and carried on down Fish Hill and towards the River Thames. It spread rapidly, helped by a strong wind from the east. When it reached the Thames it hit warehouses stocked with combustible products including as oil and tallow.

The Great Fire of London | London Fire Brigade

With US stocks trading at infinity and beyond, the Shanghai Cooperation Organisation seems to have just signalled its entry into the Trump tariff wars.

What could possibly go wrong as the stock casinos enter the traditional stocks crash season of September - October?

Look away from the gold price now.

Asia markets trade mixed as investors assess SCO summit amid tariff uncertainty

Published Mon, Sep 1 2025 7:50 PM EDT

Asia-Pacific markets traded mixed as investors assessed the Shanghai Cooperation Organization meeting of leaders in Tianjin, with tariff uncertainty weighing on sentiment.

This comes after a U.S. federal appeals court on Friday ruled that most of President Donald Trump’s global tariffs are illegal.

India markets will be in focus after U.S. President Donald Trump said that India had offered to reduce its tariffs on U.S. imports to zero.

“They have now offered to cut their Tariffs to nothing, but it’s getting late. They should have done so years ago,” U.S. President Donald Trump wrote on Truth Social. He added that the U.S.′ relationship with India was “one sided.”

India’s benchmark Nifty 50 was flat, while the BSE Sensex index ticked up 0.18% in early trade.

Japan’s Nikkei 225 added 0.47%, while the broader Topix index rose 0.73%.

Over in South Korea, the Kospi index increased by 0.86%, while the small-cap Kosdaq moved up 0.83%. The country’s consumer price index rose 1.7% in August from the year before, after increasing by 2.1% the month before. This marks its slowest year-on-year rise since November and is marginally weaker than the 2% rise forecast by economists in a Reuters poll.

Hong Kong’s Hang Seng index fell 0.61% in choppy trade, while mainland China’s CSI 300 dropped 0.91%.

Australia’s S&P/ASX 200 pared earlier losses and was last seen flat.

The Australian Securities and Investments Commission said that its review panel had imposed a fine of $3.88 million Australian dollars ($2.52 million) on a local unit of French lender Societe Generale for failing to prevent suspicious orders in the electricity and wheat futures markets.

An investigation by the regulatory body found that Societe Generale Securities Australia, which is one of the largest participants on the ASX 24 derivatives market, had allowed two of its clients to place 33 suspicious orders between May 2023 and February 2024. That “volatile period” saw supply issues in global energy and wheat markets caused by the Russia-Ukrainian War, among other factors, the panel said.

Meanwhile, the country’s current account balance for the April to June quarter came in at a deficit of AU$13.7 billion Australian dollars, compared to the AU$14.7 billion deficit the quarter before and the AU$16 billion deficit forecast by economists polled by Reuters.

Spot gold rose 0.54% to $3,494.87 as of 11:55 p.m. ET Monday, after hitting a record high of $3,503.32 per ounce earlier in the session.

U.S. equity futures were little changed in early Asia hours at the start of what has historically been a seasonally poor month for equities, following new uncertainty about tariffs after the court decision.

U.S. markets were closed Monday for the Labor Day public holiday.

Asia markets trade mixed as investors assess SCO summit

U.S. Stocks Are Now Pricier Than They Were in the Dot-Com Era

The S&P 500 has never been this expensive, or more concentrated in fewer companies

By Jack Pitcher  Aug. 31, 2025 9:00 pm ET

The S&P 500’s march to a record high this year hasn’t come cheap: By some measures, stocks have never been pricier.

Investors are now paying more than ever for each dollar of revenue the index’s members produce. The benchmark traded at 3.23 times sales on Thursday, a record high.  

Price-to-earnings ratios aren’t quite at records—thanks to juicy profit margins at many of the index’s most valuable companies—but they still sit at the extreme end of history. The S&P 500 currently trades at 22.5 times its projected earnings over the next 12 months, compared with the average of 16.8 times since 2000.

Many investors say the biggest U.S. stocks, most of which are technology companies, are worth every penny. Companies such as Nvidia and Microsoft are still boosting sales and profits at a rapid pace, and they have come to dominate the market. The 10 largest companies in the S&P 500 accounted for 39.5% of its total value at the end of July, the most ever, according to Morningstar. Nine have a market capitalization above $1 trillion.

“I’m not so worried about that in and of itself,” said Steve Sosnick, chief strategist at Interactive Brokers. “The big question is what can happen if the situation changes.”

Investors caught a glimpse of the downside of the market’s concentration in a handful of expensive stocks in April, when President Trump’s tariff plans triggered a brief selloff. The so-called Magnificent Seven tech stocks performed worse than the full S&P 500, which underperformed the same group of 500 stocks if each member were weighted equally. 

“The combination of very high valuations and very crowded trades certainly raises the susceptibility of the market to an extended downturn,” Sosnick added. “If everyone is effectively long the same things, where do the marginal buyers come from when they fall?”

More

U.S. Stocks Are Now Pricier Than They Were in the Dot-Com Era - WSJ

Trump calls India-U.S. trade relationship 'a totally one sided disaster' after Modi visits China

Published Mon, Sep 1 2025 9:19 PM EDT

U.S. President Donald Trump on Monday doubled down on his criticism of India, calling trade ties with the country “a totally one sided disaster!” after Indian Prime Minister Narendra Modi visited China to attend the Shanghai Cooperation Organization summit.

Trump in a post on Truth Social also said that India had offered to cut its tariffs to zero, but it was “getting late,” and that the country should have done so “years ago,” without elaborating on when such an offer was made.

This comes against the backdrop of the U.S. imposing 50% tariffs on the country, including secondary duties of 25% last month for purchasing Russian oil, which India has called “unfair, unjustified and unreasonable.”

Trump reiterated that India was buying oil and arms from Russia, and accused New Delhi of selling the U.S. “massive amounts of goods,” but imposing high tariffs on U.S. exports to India.

“The reason is that India has charged us, until now, such high Tariffs, the most of any country, that our businesses are unable to sell into India. It has been a totally one sided disaster!” he wrote.

Data from the World Trade Organization shows that India imposed a 6.2% average tariff on U.S. imports into the country in 2024, on a trade-weighted basis, while U.S. levied 2.4% on Indian goods. The trade-weighted average is the average rate of duty per imported value unit.

The U.S.-India relations have soured over the past couple of months, upending more than two decades of improving ties, with several U.S. officials increasing their criticism of New Delhi over its Russian oil imports. India has called out the U.S. and European Union for their trade with Russia, while targeting New Delhi.

India’s foreign ministry last month said “it is revealing that the very nations criticizing India are themselves indulging in trade with Russia. Unlike our case, such trade is not even a vital national compulsion [for them].”

Back in May, India had reportedly offered a “zero-for-zero” tariff deal on steel, auto components and pharmaceuticals on a reciprocal basis, up to a certain quantity of imports. However, both New Delhi and Washington failed to come to a trade deal, leading Trump to impose 50% tariffs on Indian exports.

India’s Modi met Chinese President Xi Jinping at the SCO summit in Tianjin held between between Aug. 31 and Sept. 1, with both sides affirming the importance of being partners, not rivals.

U.S. Treasury Secretary Scott Bessent on Monday played down the idea that U.S. tariffs were bringing countries like China and India closer together, describing the SCO summit as “performative,” according to Reuters.

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Trump calls India-U.S. trade relationship 'a totally one sided disaster'

Gold scales four-month peak on US rate-cut bets; silver at 14-year high

1 September 2025

(Reuters) - Gold hit a more than four-month high on Monday as U.S. Federal Reserve interest rate cut bets this month and a softer dollar heightened bullion's allure, while silver breached $40 per ounce for the first time since 2011.

Spot gold gained 0.9% to $3,477.89 per ounce by 0847 GMT, hitting its highest point since April 22. U.S. gold futures for December delivery gained 0.9% to $3,548.0.

Spot silver jumped 2.7% to $40.72 per ounce, its highest since September 2011.

The U.S. dollar was trading near its lowest since July 28 against rivals, making greenback-priced bullion cheaper for overseas buyers. [USD/]

"Gold, and especially silver, extended Friday's strong gains, supported by sticky U.S. inflation, weakening consumer sentiment, (expected) rate cuts ... and concerns over Fed independence," Saxo Bank's head of commodity strategy, Ole Hansen, said.

The U.S. personal consumption expenditures price index rose 0.2% month-on-month and 2.6% year-on-year, in line with expectations, data showed on Friday.

"Silver is making a move higher in response to expectations of lower rates, while a tight supply market is helping to maintain an upward bias," KCM Trade's chief market analyst, Tim Waterer said.

In a social media post last week, San Francisco Federal Reserve Bank President Mary Daly reiterated her support for a rate cut, citing labour market risks.

"The market is watching for Friday's U.S. job market report, anticipating that this would allow the Fed to resume rate cuts from September onwards (given) this supports investment demand," said UBS analyst Giovanni Staunovo.

The August non-farm payrolls, due Friday, are expected to have grown by 78,000 jobs, a Reuters poll showed, versus 73,000 in July.

Non-yielding gold typically performs well in a low-interest-rate environment.

More

Gold scales four-month peak on US rate-cut bets; silver at 14-year high

In other news, “tariffs? What tariffs?”

China’s August factory activity beats estimates, expanding at fastest pace in five months: private survey

Published Sun, Aug 31 2025 10:12 PM EDT

China’s manufacturing activity unexpectedly returned to growth in August on the back of a recovery in new orders and export business, a private survey showed Monday, helped by an extended trade-war truce with the U.S.

The RatingDog manufacturing purchasing managers’ index came in at 50.5, sharply beating estimates of 49.7 from economists polled by Reuters.

The gauge signaled the fastest rate of expansion since March, rebounding from July’s 49.5. A reading below 50 signals contraction while one above that threshold suggests an expansion.

The improvement was in part driven by a recovery in new export orders, indicating the “resilience of external demand in the face of tariffs,” Zichun Huang, China economist at Capital Economics said in a note. The gains in overall output and new orders were more muted, suggesting “little improvement in domestic demand,” Huang added.

Average raw material costs rose at their fastest pace in nine months, prompting some businesses to pass on the higher expenses to consumers. The average sale prices stabilized after eight months of declines, the survey showed.

Beijing has sought to curb excess capacity and the price wars sweeping across industrial sectors that have weighed on businesses’ bottom lines.

That said, profit trends interpreted from the PMI data showed only a slight recovery and remain under pressure overall, Yao Yu, founder of RatingDog, said in a statement.

While overall business confidence improved, employment in the manufacturing sector remained bleak, the survey showed, as business owners remained cautious with staffing, reducing jobs for a fifth straight month.

“The latest upturn resembled a breath of relief rather than a sustained rally,” Yu said, cautioning about persistent weak domestic demand, “potentially overstretched external orders,” and a slow profit recovery.

“The durability of the improvement depends on whether exports truly stabilize and whether domestic demand can pick up pace,” Yu added.

The results of the private survey was still more upbeat than the official reading released Sunday, which showed manufacturing activity shrank for a fifth straight month in August, coming in at 49.4 compared with 49.3 in July.

The non-manufacturing PMI index, covering services and construction, expanded to 50.3 in August from 50.1 in the prior month.

Private surveys have tended to paint a better picture than official polls over the previous years on the back of stronger exports. The private survey covers a smaller batch of over 500 mostly export-oriented firms, while the official PMI surveys a larger sample of over 3,000 companies in mostly upstream sectors.

China’s exports growth has beaten expectations in recent months, driven largely by a surge in shipments to Southeast Asia and European countries, while shipments to the U.S. have declined for four straight months.

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China's August factory activity beats estimates, expanding at fastest pace in 5 months

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.

Dollar hits lowest since end-July ahead of US jobs data

September 1, 2025

(Reuters) -The dollar hit a 5-week low on Monday as investors looked ahead to a raft of U.S. labour market data this week that could affect expectations for the Federal Reserve's monetary easing path.

Traders were also assessing Friday's U.S. inflation figures and a court ruling that most of Donald Trump's tariffs are illegal, as well as the U.S. president's ongoing tussle with the Fed over his attempt to fire Governor Lisa Cook.

Money markets have recently priced an around 90% chance of a 25-basis-point Fed rate cut in September and around 100 bps of easing by autumn 2026, according to the CME FedWatch tool.

Against a basket of currencies, the dollar eased 0.22% to 97.64, after hitting 97.552, its lowest level since July 28. It clocked a monthly decline of 2.2% on Friday.

Investors will be focussed on Friday's U.S. nonfarm payrolls report, which will be preceded by data on job openings and private payrolls.

Analysts said the U.S. economy is no longer outperforming as it did for much of the past decade, justifying a weaker dollar, and further signs of a softening labour market are expected to bolster that narrative.

"Severe weakness (in economic data) would point to an even more forceful Fed response than market pricing predicts, but if May/June weakness is revealed as a statistical mirage, rate cuts would seem unwarranted given the almost certain prospect of rising inflation over the next year or so," Societe Generale economist Klaus Baader said.

Some analysts still see the chance of a 50-bp move by the Fed later this month.

The euro was up 0.35% to $1.1724, while sterling edged 0.18% higher to $1.3528. U.S. markets are closed for a holiday on Monday.

Political risks are in focus as the French government faces likely defeat in a confidence vote over plans for sweeping budget cuts.

Analysts noted that such risks tend to weigh on the currency only when there are clear signs of contagion within the euro area, something that is not evident at the moment.

Investors are keeping a close eye on trade policy while the U.S. continues negotiations with key trading partners.

"We do not see much market impact from the court ruling," Jefferies economist Mohit Kumar said.

"The matter would pass on to the Supreme Court which is likely to rule in favour of Trump."

The greenback has also been weighed down by worries over Fed independence, as Trump steps up his campaign to exert more influence over monetary policy.

"Fiscal dominance risks should be more clearly apparent in both higher long-end U.S. inflation break-evens and a higher risk discount on the dollar, none of which is materializing yet," George Saravelos, head of forex strategy at Deutsche Bank, said.

"Fiscal dominance" refers to a scenario where central banks are pressured to ease monetary policy to help finance large budget deficits.

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Dollar hits lowest since end-July ahead of US jobs data

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.

Why I don’t use AI (or summaries) in the LIR. Although friends and family unkindly say I’ve been operating on AI for seven decades.

Approx. 25 minutes.

Is AI Slop Killing the Internet?

Is AI Slop Killing the Internet?

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

World Debt Clocks (usdebtclock.org)

I think both sides [China and United States] should work hard to build a new type of relationship between big powers. The two sides should cooperate with each other for a win-win result in order to benefit people from the two countries and the world.

Xi Jinping


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