Baltic
Dry Index. 2112 +33 Brent Crude 67.36
Spot Gold 3631 US 2 Year Yield 3.54 unch.
US Federal Debt. 37.465 trillion
US GDP 30.258 trillion.
The function of entrepreneurs is to reform or revolutionize the pattern of production by exploiting an invention or, more generally, an untried technological possibility for producing a new commodity or producing an old one in a new way, by opening up a new source of supply of materials or a new outlet for products, by reorganizing an industry and so on.
Joseph A. Schumpeter
As bubbles go, our latest stock casinos bubble just gets bigger and more divorced from reality, with each passing day, week and month.
Bubbles end badly and this one will too but knowing when and why is unknowable. Given the size of the current AI bubble, when it bursts the losses and wreckage will be gargantuan. More creative destruction?
Later today, the latest reading on US consumer inflation. It better be mild to PPI good.
Japan’s Nikkei 225 hits a new high as SoftBank
surges over 10%
Published Wed, Sep 10 2025 7:57 PM EDT
Japan’s benchmark Nikkei 225 notched a record
high of 44,396.95 on Thursday, mirroring gains on Wall Street overnight on
Fed-rate cut hopes and positive inflation data.
One of Nikkei 255′s heavyweights, tech
investment firm SoftBank Group, jumped past 10% to notch a second straight day
of gains. It follows a Wall Street Journal report that OpenAI struck a
roughly $300 billion, five-year cloud-computing deal with Oracle, citing
sources familiar with the matter.
Oracle shares closed
35.95% higher Wednesday stateside after the cloud giant reported
gobsmacking cloud demand numbers. Oracle now sees $18 billion in cloud
infrastructure revenue in fiscal 2026, with the company calling for the annual
sum to reach $32 billion, $73 billion, $114 billion and $144 billion over the
subsequent four years.
“Expect a nice bump higher for Softbank…
as investors joined the dots between this and Oracle’s connection, when only
months ago Masayoshi Son and Larry Ellison stood together as Trump announced
the Stargate program,” said Andrew Jackson, head of Japanese equity strategy at
ORTUS Advisors.
SoftBank’s link to Oracle stems from their
joint role in the high-profile Stargate program, a $500
billion U.S. initiative announced in January by U.S. President Donald
Trump alongside OpenAI’s Sam Altman, Oracle’s Larry Ellison and SoftBank
founder Masayoshi Son.
Energy and utilities stocks led gains on
the Nikkei 225. Mitsui Mining and Smelting rose more than 5% while electrical
components manufacturer Fujikura traded 4% higher. Meanwhile, the Topix index
reversed course to climb 0.2%.
South Korea’s Kospi advanced 0.65%, and
the small-cap Kosdaq climbed 0.39%.
Over in Australia, the ASX/S&P 200
declined 0.44%.
Hong Kong’s Hang Seng Index fell 0.29%,
while the Hang Seng Tech index was flat. The mainland’s CSI 300 reversed course
to gain 1.77%.
India’s benchmark Nifty 50 was flat in
early trade, while the Sensex index was up 0.15%.
U.S. equity futures were little changed in
early Asian hours, as Wall Street awaited a key consumer inflation gauge for
August due out Thursday morning stateside.
Overnight stateside, most of the key U.S.
benchmarks rose to hit new record closing highs after the latest producer price
index data showed that inflation was cooling.
The broad market S&P 500 finished up 0.3%
at 6,532.04, a record close for the index. It had risen about 0.7% at its peak
to 6,555.97, scoring a new all-time intraday high as well. The Nasdaq Composite edged up
0.03% to end at 21,886.06, likewise notching a closing high after hitting an
all-time intraday high before its afternoon pullback.
The Dow Jones Industrial Average lost
220.42 points, or 0.48%, to finish at 45,490.92, bogged down by a decline
in Apple shares as
the latest
iPhone announcement failed to impress investors.
Japan's
Nikkei 225 hits a new high as SoftBank surges over 10%
Oracle stock gains 36% to post best day since
1992, adding $244 billion in value
Published Wed, Sep 10 2025 9:34 AM EDT Updated
Wed, Sep 10 2025 4:28 PM EDT
Oracle stock
roared 35.95% higher on Wednesday after reporting gobsmacking cloud
demand numbers, setting the company to a historic gain.
The cloud giant
posted an all-time high and had its best day since 1992. Oracle gained $244
billion in market cap and is now at $922 billion.
The company said Tuesday after the bell
that it has $455 billion in remaining performance obligations, up 359%
from a year earlier.
“This is a very historic kind of print
right here from Oracle with this backlog,” Ben Reitzes, technology research
head at Melius Research, told CNBC’s “Closing Bell: Overtime”
on Tuesday. “The Street was looking for about $180 billion in RPO and they’re
talking about a number that is a multiple of that. That is astounding.”
Oracle has been one of the biggest
benefactors of the artificial intelligence boom
thanks to its cloud
infrastructure business and its access to Nvidia’s graphics processing
units, or GPUs, which are both needed to run large workloads. But competition
is fierce, and Oracle is jostling with other cloud providers like Microsoft, Amazon and Google for customers.
Oracle’s founder, Larry Ellison, added
$100 billion to his net worth on Wednesday. Bloomberg reported that he had
topped Tesla CEO Elon Musk as the world’s richest person.
Forbes, which also ranks the world’s wealthiest people,
still had Musk ahead of Ellison in their list, which hadn’t been updated since
5 p.m. EST Tuesday.
Oracle now sees $18 billion in cloud
infrastructure revenue in fiscal 2026, with the company calling for the annual
sum to reach $32 billion, $73 billion, $114 billion and $144 billion over the
subsequent four years.
More
Oracle
stock posts best day since 1992, tops $900 billion market cap
U.S. producer prices unexpectedly fell 0.1% in
August
10 September 2025
U.S. producer prices fell unexpectedly
last month, dropping 0.1% from July.
The Labor Department reported
Wednesday that its producer price index — which captures inflation in the
supply chain before it hits consumers — showed that wholesale inflation
decelerated in August after advancing 0.7% in July. Wholesale services prices
fell 0.2% from July on smaller profit margins at retailers and wholesalers,
which might be a sign that those companies are absorbing the cost of President
Donald Trump’s sweeping taxes on imports.
Compared to a year earlier, producer
prices rose 2.6%.
Excluding volatile food and energy prices,
so-called core producer prices also fell 0.1% from July and were up 2.8% from a
year earlier.
The numbers were lower than economists had
forecast.
The wholesale price report came out day
before the Labor Department releases its consumer price index. The CPI is expected
to show that consumer price inflation picked up slightly last month, rising
0.3% from July, an uptick from a 0.2% increase the month before. Compared with
a year earlier, consumer prices are expected to have risen 2.9% in August, up
from a 2.7% year-over-year increase in July.
Wholesale prices can offer an early look
at where consumer inflation might be headed. Economists also watch it because
some of its components, notably measures of health care and financial services,
flow into the Federal Reserve’s preferred inflation gauge — the personal
consumption expenditures, or PCE, price index.
U.S. producer
prices unexpectedly fell 0.1% in August
CNBC’s The China Connection newsletter: A rival AI
strategy
Published Wed, Sep 10 2025 6:11 AM EDT
The big story
China is taking a lean and mean approach
to artificial intelligence as the tech rivalry with the U.S. intensifies.
In the U.S., companies and policymakers
are chasing massive investments. OpenAI has warned it will need $115 billion through 2029, while Washington has made
splashy announcements — including billions of dollars in domestic pledges by
Apple and Meta.
Beijing, in contrast, is spending less and
focusing on practical use cases. At the start of the year, Beijing
discreetly launched a 60.06 billion yuan ($8.42 billion) national AI fund, and
in recent weeks has rolled out sweeping plans to integrate the tech across the
economy and society — part of a wide-ranging initiative called “AI+.”
China is “consolidating its energy to do
something big,” Shan Zhiguang, a director at the State Information Center, a
government-affiliated policy think tank, told reporters Tuesday.
Even if China lags behind in advanced
chips, the country is on a different path versus the U.S., which Shan sees as
pursuing human-level artificial general intelligence.
China’s chips are “usable,” Shan said, and
that’s sufficient. He oversees the information and industrial development
department.
Just this week, the government announced
plans to integrate AI into the power grid and coal sector. That
builds on a broader plan released in August to promote AI across six priority areas, from industry to
consumption and international cooperation.
So far, U.S. restrictions on China’s
access to Nvidia’s best chips haven’t stopped DeepSeek and other local
companies from producing competitive — and often cheaper — generative AI
models.
“China’s approach to the AI tech race is
characterized by resourcefulness and adaptation,” said Clifford Kurz, director,
S&P Global Ratings. “While currently lagging in advanced hardware, China is
leveraging its significant financial resources, talent pool, and existing
infrastructure to overcome these hurdles.”
More
CNBC's
The China Connection newsletter: A rival AI strategy
In other news.
No honeymoon period for France’s new PM as
protests erupt
Published Wed, Sep 10 2025 4:36 AM EDT
There’ll be no honeymoon period for
France’s newly named Prime Minister Sébastien Lecornu, with financial markets
and the public showing increasing restlessness over France’s political and
fiscal impasse.
Lecornu, who was only appointed as
France’s new prime minister on Tuesday after the unceremonious ousting of PM
Francois Bayrou at the start of the week, faces an immediate challenge as a
mass public protest is unfolding Wednesday.
The grassroots “Let’s Block Everything”
movement has called on disgruntled voters to show their dissatisfaction over
the messy state of French affairs with acts of civil disobedience, urging
protestors to blockade transport networks, public buildings and other services.
Paris police said Wednesday morning that
75 people have already been arrested, according
to a France 24 report.
Images have emerged of disorder erupting in the capital.
Lecornu’s baptism of fire comes just hours
after Bayrou handed in his resignation to French President Emmanuel Macron on
Tuesday. Bayrou’s downfall came after losing a confidence vote in the National
Assembly on Monday evening, as a result of failing to win support for proposed spending
cuts and tax rises in the national 2026 budget.
Lecornu, a longtime Macron ally and
defense minister, is now France’s fifth prime minister in less than two years.
The formal handover of power between Bayrou and Lecornu is due to take place on
Wednesday at midday local time.
There’s no doubt that Lecornu is
inheriting something of a poisoned chalice. He has been put in charge of a
fragile minority government prone to challenges, demands and upheaval from
parties on both the far left and right — as the ousting of Bayrou and his
predecessor, Michel Barnier, less than a year ago, has proven.
Lecornu will now have to steer a budget
through France’s completely fractured parliament, macro strategists at Deutsche
Bank flagged Wednesday.
“There were no signs last night that this
task will become easier, with the far-right and far-left maintaining calls for
snap elections while the centre-left Socialists said that Macron ‘persists in a
path in which no socialist will participate’,” they bank’s analysts said in a
note.
Lecornu also faces an uphill battle as he
tries to balance the competing expectations of financial markets and the
public.
While the former demands fiscal
consolidation from France’s leadership, the latter is opposed to spending cuts
and reforms — such as raising the retirement age and reforming the pension
system — that economists see as necessary to balance the books.
Doing so is vital, as France’s budget
deficit now stands at 5.8% of gross domestic product (GDP) in 2024, while its
debt pile amounted to 113% of GDP in 2024. Both levels are far above EU rules
demanding that individual members’ deficits should not exceed 3% of GDP, while
their public debt should not surpass 60% of economic output.
More
No honeymoon
period for France's new PM as protests erupt
Up next, how the “experts” got the PPI wrong
and their guesses on today’s CPI report.
US PPI data set to show sticky inflation ahead of
key CPI report
09/10/2025 07:00:00 GMT |
- The
US Producer Price Index is set to rise 3.3% YoY in August, at the same
pace as in July.
- The
Fed is widely expected to cut the policy rate in September, with increased
odds for a 50 bps trim.
- The
August PPI could have a limited impact on the US Dollar ahead of the CPI
release on Thursday.
The United States (US) will publish the
August Producer Price Index (PPI) on Wednesday. The report, produced by the
Bureau of Labor Statistics (BLS), will be published one day ahead of the
Consumer Price Index (CPI) data for the same month, scheduled for Thursday.
Both indexes measure inflation, with the
CPI focused on the total value of goods and services consumers buy, and the PPI
measuring inflation at the wholesale, or producers' level. Generally
speaking, PPI increases will ultimately be reflected in the CPI as
producers pass on higher prices to consumers. When released before the CPI, it
is an early indicator of higher price pressures.
What to expect in the next PPI data
report?
Producer inflation in the US is expected
to rise at an annual rate of 3.3% in August, following a similar reading in
July. The core PPI inflation, which excludes the volatile food and energy
prices, is forecast to rise 3.5% YoY, easing from the 3.7% posted in the
previous month. Over the month, the PPI and core PPI are seen advancing by 0.3%
each.
The CPI report tends to have a broader
impact on financial markets, and given that it is scheduled for release 24
hours after the PPI report, the latter can have a reduced impact on the USD.
Inflation is one of the two legs on which
the Federal Reserve (Fed) bases its monetary policy decisions. Central banks
tend to be hawkish with increasing inflationary pressures, and dovish when
pressure eases.
Given tepid employment figures released
last week, market players have already fully priced in an upcoming
interest rate cut when the Fed meets next week. The question now is
whether the central bank will go for a 25 basis points (bps) trim or 50 bps,
with the odds of the latter increasing ahead of the event.
More
US Producer Price
Index expected to show slight easing in August
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.
America’s
middle-class spending power withers to historic low
9
September 2025
Middle-class
spending power in America has withered to a historic low as super-rich
households increasingly drive the US economy, new analysis shows.
Households
earning between $60,000 (£44,000) and $150,000 have seen the biggest drop in
their share of the US economy out of any income group, according to figures
from Moody’s Analytics.
People
in the middle earning bracket in America now make up just 28pc of US consumer
spending – down from 37pc in 1992, when George HW Bush was president.
At
the same time, the richest
people in America have
boosted their share of spending, pushing out these middle earners.
Since
1992, the proportion of spending by the top 10pc – defined as those earning
more than $250,000 per year – has soared from 35pc to 48pc. Spending among the
lowest-income households has also fallen from 12pc to 9pc of total US consumer
outlays.
Mark
Zandi, the chief economist at Moody’s Analytics, warned the split is only
likely to get worse. “The share of the economic pie going to the middle class
is shrinking, and that’s going to continue,” he said.
Globalisation
and the rise of China as
a manufacturing giant since the 1990s have played a key role in hitting jobs in
middle-income sectors.
“Many
of those middle-class workers got crushed by globalisation. The manufacturing,
transportation, distribution and construction sectors got hit hard. That’s what
a lot of the middle-class jobs are, and they just evaporated,” Mr Zandi said.
“Globalisation
has increased the size of the pie, but the distribution of the pie has become
skewed to folks that benefit from a more globalised economy. That flows into
our fractured politics.”
Trump’s
tariffs ‘won’t bring back jobs’
The
decline of America’s middle class is a problem that Donald Trump has repeatedly
referenced and which he claims his global
trade war will address.
When
he announced his sweeping liberation day tariffs on April 2, Mr Trump claimed
that “jobs in factories will come roaring back into our country” and that they
would “supercharge our domestic industrial base”.
However,
Mr Zandi warned that Mr Trump’s tariffs will not solve the problem.
“De-globalisation
is not the answer. That ship has sailed. It’s not like tariffs are going to
bring those jobs back to the US. Even if they have brought some investment
back, there are no jobs. It’s going to be very counterproductive,” Mr Zandi
said.
Official
figures on Friday showed that the US economy lost 12,000 manufacturing jobs in
August, and the sector has lost 78,000 jobs since the start of the year.
Mr
Trump’s trade tariffs have
increased costs for manufacturing companies, which typically import materials
even if their factories are based in the US. The construction and wholesale
trade sectors have also been shedding jobs.
America’s
middle-class spending power withers to historic low
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.
Scientists Unveil Carbon-14 Diamond Battery Designed to Deliver
Power for 5,700 Years Without Recharging
September 9, 2025
Scientists are developing a new type
of nuclear
diamond battery capable of generating power
continuously for thousands of years, without ever needing to be recharged. The
technology, described by researchers at the University of Bristol in
early studies and now pursued by start-ups such as NDB Inc., embeds
radioactive carbon inside a synthetic diamond, creating what they describe as a
long-lived and inherently safe power source.
A Battery Powered by Radioactive Carbon
At the heart of the innovation
lies carbon-14, a radioactive isotope produced in graphite blocks
from nuclear reactors. With a half-life of around 5,730 years, carbon-14 releases
a steady trickle of energy as it decays. By encasing it within a lab-grown
diamond, researchers discovered they could not only convert this energy
into electricity but also use the diamond itself as a protective shield to
prevent harmful radiation from escaping.
Dr. Tom Scott, who led early experiments
at Bristol, told the BBC that the diamond battery “would have no moving parts,
no emissions, and require no maintenance,” adding that it could serve as a safe
way to repurpose nuclear waste. While the power output of each cell is tiny,
the near-eternal lifespan makes it uniquely suited for low-energy devices that
cannot be easily recharged or replaced.
Game-Changer for Space Exploration
One of the most immediate applications
is in space technology. Conventional solar
panels struggle in shadowed regions or
beyond the reach of the Sun’s rays, while radioisotope thermoelectric
generators (RTGs), used in missions like Voyager and Curiosity,
rely on scarce and tightly regulated plutonium-238. A diamond
battery, light and stable, could keep spacecraft instruments running for
centuries, offering a potential solution for missions to the outer planets or
even interstellar probes.
NASA has already signaled interest in
alternative long-duration power supplies, as outlined in its radioisotope
power systems strategy. Experts say
that if scalable, the diamond battery could drastically cut reliance on
traditional RTGs, though its relatively low power density remains a major
limitation.
Beyond Space: Medical and Everyday Use
Back on Earth, the idea of a battery
that never needs charging sparks obvious interest for consumer
electronics and medical devices. A pacemaker powered by
such a battery, for example, could operate for decades without replacement
surgery. Similarly, environmental sensors placed in remote or hazardous areas
could collect data indefinitely without human intervention.
More
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
At the
heart of capitalism is creative destruction.
Joseph
A. Schumpeter
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