Baltic
Dry Index. 2557 -137 Brent Crude 62.06
Spot Gold 4238 US 2 Year Yield 3.61 +0.04
US Federal Debt. 38.389 trillion
US GDP 31.630 trillion.
There is nothing so disastrous as a rational investment policy in an irrational world.
John Maynard Keynes
It is the last Fed day of 2025 and a cowed, increasingly politicised US central bank is expected to cut its key interest rate by another quarter of one percent.
Whether that will be enough to unleash the Santa Clause rally or just trigger year-end profit taking is the big question of December 2025.
Ominously, crude oil and the Baltic Dry shipping Index are falling, suggesting a slowing global economy.
Asia-Pacific markets mostly fall as investors
parse China inflation data, await Fed decision
Published Tue, Dec 9 2025 6:47 PM EST
Asia-Pacific markets mostly fell on
Wednesday as investors parsed China’s inflation data and awaited the Federal
Reserve’s interest rate decision.
Hong Kong Hang Seng index was 0.56%
lower, and the mainland CSI 300 declined 0.78% after China’s consumer prices
edged up 0.7% from a year earlier, its highest level since February last year.
The increase followed a 0.2% rise in October and matched the 0.7% gain expected
in a Reuters poll of economists.
Factory-gate prices fell 2.2% in November
from a year earlier, missing the forecast of a 2% decline and extending the
deflationary stretch into its fourth year. That was compared with a 2.1% fall
in October.
Over in Asia, Australia’s S&P/ASX 200 was flat.
Japan’s Nikkei 225 lost 0.22%, while
the Topix was unchanged. South Korea’s Kospi declined 0.12%, while the
small-cap Kosdaq rose 0.2%.
Traders are looking ahead to the Federal
Reserve’s closely watched interest rate announcement on Wednesday stateside,
the final one of the year. Markets largely expect the Fed to trim its benchmark
overnight lending rate by another 0.25 percentage point, matching the cuts made
in September and October.
Overnight in the U.S., the S&P 500 closed relatively
unchanged. The broad market index traded around the flatline, slipping just
0.09% to close at 6,840.51, while the Nasdaq Composite gained 0.13%
to end the day at 23,576.49. The Dow Jones Industrial Average fell
179.03 points, or 0.38%, to finish at 47,560.29. The 30-stock index was dragged
down by a decline in JPMorgan shares
on higher-than-expected 2026
expense projections.
Asia-Pacific
markets: Nikkei 225, Kospi, Hang Seng Index, Nifty 50
Investors warm up for long spell of discordant Fed
December 9, 2025 5:48 PM GMT
LONDON, Dec 9 (Reuters) - What is expected
to be one of the most ructious Federal Reserve policy meetings in years this
week could well prove to be the road test for financial markets on how U.S.
monetary policy debates will shape up in
2026.
Heading into the two-day
meeting that began on Tuesday, markets are pricing in an almost
certain chance of
an interest rate cut by the U.S. central bank's policy-setting Federal Open
Market Committee, even though the group is the most divided it has been in
years.
The weeks leading up to the meeting have
been stressful for investors, with little data to parse during a record 43-day
U.S. government shutdown, conflicting messages from Fed officials and the
unrelenting push from President Donald Trump's administration for lower rates.
Expectations that the Fed will reduce its
benchmark overnight interest rate by a quarter of a percentage point to the
3.50-3.75% range have climbed to 87% from 30% in the past three weeks, spurred
largely by New York Fed President John
Williams' recent support for an insurance rate cut.
Investment banks Morgan
Stanley, J.P. Morgan and BofA reacted by changing their calls to a cut at
the December 9-10 meeting.
Yet, analysts expect as many as five of
the 12 voting members of the FOMC will have divergent views, reinforcing the
refrain in markets that the Fed is turning more political.
The policy committee has not had three or
more dissents at
a meeting since 2019, and that has happened just nine times since 1990.
Analysts now expect such dissent will persist.
"The more dissent that you see, and
the more open it is, the more it does call into question about how willing the
Fed is to become more politicized," said Sally Greig, head of global bonds
at Scottish long-only investment manager Baillie Gifford.
"It raises questions about how
willing they are to keep life a little bit easier for them by erring on the
side of being a bit too dovish rather than a bit too hawkish, how concerned
they are for their own jobs."
Trump's appointees to the Fed's
seven-member Board of Governors have been dovish. His economic adviser Kevin
Hassett, a top candidate to succeed Fed Chair Jerome Powell next year, has
called for lower rates. Fed Governor Stephen
Miran, another Trump economic adviser who was appointed in September to
fill an unexpected board vacancy, has been pushing for oversized rate cuts.
Other FOMC members such as Kansas City Fed
President Jeffrey Schmid, St. Louis Fed President Alberto Musalem and Fed Vice
Chair Philip Jefferson, however, have been equally vocal about their preference
to keep rates steady.
When Williams, normally a more neutral
voice, was explicitly dovish about a December rate cut within weeks of Powell
saying in October that a December cut was far from certain, more
investors got twitchy about political pressure.
FOCUS ON POWELL'S SUCCESSOR
Even if the Fed cuts rates this week and
signals it will hold them steady in January, "the market may not give that
signal credence, given the 180-degree turnaround from the hawkish signals at
the October meeting and minutes," Standard Chartered Bank analysts Steve
Englander and John Davies wrote this week.
Traders pointed to rising volatility
priced into short-term interest rate options and steepening long-term yields as
a sign of such concern.
"There's more sensitivity now and
people are having to decide whose comments you place weight on," a bond
trader in London said.
Yet, barely 75 basis points of Fed easing
is expected by the end of next year, according to rates futures markets.
Fabio Bassi, head of cross-asset strategy
at J.P. Morgan, says investors should not focus only on the December meeting.
"Powell's Fed, which is in charge
now, is not leaning towards very aggressive action, they are delivering
insurance cuts."
Trump, however, seems bent on lower
borrowing costs ahead of the U.S. midterm elections late next year. The
Republican president, who has voiced repeated
displeasure with Powell's stewardship of the Fed, said support for
immediately cutting rates would be a requirement for anyone he chose to lead
the central bank, according to a Politico interview published on Tuesday.
More
Investors
warm up for long spell of discordant Fed | Reuters
In commodity news, wither gold in 2026? My guess, gold trading above $5,000 a troy ounce.
A historic year for gold: Could prices climb
higher in 2026?
9 December 2025
After a historic 2025 that saw gold soar
over 60% and break more than 50 record highs, investors are now turning their
attention to whether the precious metal can sustain its upward trajectory into
2026.
Despite leading major asset classes in
year-to-date performance, putting it on track for its best year since 1979,
experts think gold may still have room to climb next year. Others warn that
risks remain.
Unlike previous years when single events
dominated gold’s trajectory, this year saw multiple drivers at play.
Sustained central bank buying, persistent
geopolitical friction, elevated trade uncertainty, lower interest rates, and a
weakening US dollar all combined to fuel demand for the metal as a safe-haven
asset.
According to the World Gold Council’s
latest report, geopolitical tensions contributed roughly 12 percentage points
to year-to-date performance, while dollar weakness and slightly lower interest
rates added another 10. Momentum and investor positioning accounted for nine
points, with economic expansion contributing a further 10.
Central banks also continued to buy
aggressively, keeping official-sector demand well above pre-pandemic norms.
Forecasts from the World Gold Council
Looking ahead, the Council expects many of
the forces that powered gold’s extraordinary rally in 2025 to remain relevant
in 2026.
However, the starting point is now
fundamentally different. Unlike at the beginning of 2025, gold prices have
already priced in what the WGC describes as the “macro consensus”. That's
expectations of stable global growth, moderate US rate cuts, and a broadly
steady dollar.
In this environment, the Council notes
that gold appears fairly valued. Real interest rates are no longer falling
significantly, opportunity costs are neutral, and the strong positive momentum
seen in 2025 has begun to fade.
Investor risk appetite remains balanced,
rather than tilting decisively toward caution or exuberance.
As a result, in its baseline scenario, the
WGC sees gold trading within a narrow range in 2026, with performance likely
limited to between –5% and +5%.
But the outlook is far from settled, as
three alternative scenarios could shape a different path.
In a "shallow economic slip" —
characterised by softer economic growth and additional Fed rate cuts — gold
could rise by 5% to 15% as investors shift toward defensive assets, extending
the gains of 2025.
----Predictions from Wall Street
Despite a more measured outlook from the
WGC, major investment banks continue to predict further upside for gold in
2026.
J.P. Morgan Private Bank projects prices
could reach between $5,200 and $5,300 per ounce, citing strong and sustained
demand as a key driver.
Goldman Sachs forecasts gold at around
$4,900 per ounce by the end of next year, supported by continued central bank
buying.
Deutsche Bank offers a wide range of
$3,950 to $4,950, with a base case near $4,450, while Morgan Stanley
anticipates prices closer to $4,500, although it warns of near-term volatility.
Supporting this optimism is the ongoing
accumulation of gold by central banks, particularly in emerging markets, as
well as the view that many institutional investors remain underexposed to the
metal.
More
A historic year
for gold: Could prices climb higher in 2026?
In other news.
German exports unexpectedly rise in October due to
EU trade
By Maria Martinez December 9, 2025 7:18 AM GMT
BERLIN, Dec 9 (Reuters) - German exports
rose slightly in October, beating expectations for a decline thanks to EU
trade, while exports to the United States and China fell strongly.
Exports rose by 0.1% in October compared
with the previous month, data from the federal statistics office showed on
Tuesday.
The result compared with a forecast 0.5%
decrease in a Reuters poll.
Imports were down 1.2% on a calendar and
seasonally adjusted basis.
The foreign trade balance showed a surplus
of 16.9 billion euros ($19.68 billion) in October, up from 15.3 billion euros
in September and 14.6 billion euros in October 2024.
Exports to EU countries rose by 2.7% on
the month, while exports of goods to countries outside the EU declined by 3.3%.
Exports to the U.S. decreased by 7.8% on
September, while exports to China decreased by 5.8%.
($1 = 0.8589 euros)
German exports unexpectedly rise in October due to EU trade | Reuters
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.
China's
Li says tariff consequences increasingly evident
By Reuters December 9, 20253:23 AM GMT
BEIJING,
Dec 9 (Reuters) - China's Premier Li Qiang said on Tuesday the "mutually
destructive consequences of tariffs have become increasingly evident" over
2025, in remarks at a "1+10 Dialogue" including the heads of the IMF,
World Trade Organization and World Bank.
Without
naming U.S. President Donald Trump, China's second-highest ranking official
told the meeting in Beijing that greater effort was needed to reform global
economic governance due to the trade barriers.
China's
trade surplus topped $1 trillion for the first time in November, trade data showed on
Monday, which economists say is linked to Trump's tariffs diverting shipments
from the world's second-largest economy to other markets, putting pressure on
manufacturing sectors in those economies.
"Since
the beginning of the year, the threat of tariffs has loomed over the global
economy," Li told the meeting, which also includes senior officials from
the OECD and International Labour Organization.
Li
also said artificial intelligence is becoming central to trade, highlighting
models such as China’s DeepSeek as drivers of the global transformation of
traditional industries and as catalysts for growth in new sectors, including
smart robots and wearable devices.
China's Li says tariff consequences increasingly evident | Reuters
Thyssenkrupp
warns of deep net loss in 2026 on steel restructuring costs
By Christoph Steitz and Tom Käckenhoff December 9, 20257:51 AM GMT
ESSEN,
Germany, Dec 9 (Reuters) - Thyssenkrupp (TKAG.DE), opens
new tab expects
to swing to a net loss of up to 800 million euros ($931 million) in 2026,
blaming restructuring provisions at its steel unit, which the German
conglomerate is trying to sell to India's Jindal Steel International.
The
German conglomerate is engaged in talks with Jindal Steel that could result in
a firm bid for Thyssenkrupp Steel Europe (TKSE) after due diligence has been
completed.
Thyssenkrupp
has for years tried to divest its steel division, Germany's largest, but
efforts have collapsed mainly due to pension liabilities of 2.7 billion euros
that are tied to the business.
HIGH
IMPAIRMENTS DUE TO ASIAN RIVALRY, TARIFFS
TKSE
caused impairments of 600 million euros in the past fiscal year, Thyssenkrupp
said, due to exposure to fierce Asian competition, U.S. tariffs and a generally
weak European economy, a trend that has impacted most of Thyssenkrupp's units.
Frankfurt-listed
shares in the group sank 4% in early trading, with market participants pointing
to the disappointing outlook.
Noting
a challenging market environment, Thyssenkrupp said that free cash flow before
M&A - closely watched by investors to determine the group's ability to earn
money - would be at a negative 300 million to 600 million euros in 2026.
This
compares with 363 million euros in 2025, a third consecutive year of positive
free cash flow.
Adjusted
operating profit is expected at 500 million to 900 million euros in 2026, below
the 918 million forecast in a company-provided poll.
Thyssenkrupp,
which recently spun off a minority of its warship division TKMS (TKMS.DE), opens
new tab and
is looking to sell stakes in all of its businesses, proposed to keep its
dividend unchanged at 0.15 euros per share for 2025 compared with 2024.
($1
= 0.8593 euros)
Thyssenkrupp warns of deep net loss in 2026 on steel restructuring costs | Reuters
Covid-19
Corner
This
section will continue only occasionally when something of interest occurs.
Off topic but close.
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.
Fusion energy
industry presses US government for billions in support
By Timothy
Gardner December
9, 20255:14 AM GMT
WASHINGTON, Dec 9 (Reuters) - Fusion
energy industry leaders met with U.S. Department of Energy officials on Monday
to urge them to facilitate billions of dollars for projects seeking to generate
electricity by the process that powers the sun.
The department in November created an
Office of Fusion in a reorganization that focused on fossil fuel and
nuclear energy while eliminating renewable energy offices.
The Trump administration has rescinded
billions of dollars that former President Joe Biden authorized to subsidize
hydrogen and renewable energy projects.
Andrew Holland, CEO of the Fusion
Industry Association, said the leaders urged the officials to steer some of
that money to fusion so companies can compete in the race with China.
"Now is the time for the U.S. to
make a significant investment, and that means over a billion dollars per year
in annual appropriations and a one-time infrastructure investment,"
Holland said. "If they ask for it, we are confident Congress would pass
it."
Companies and physicists at national
laboratories have been trying for decades to use lasers or large magnets to
foster fusion reactions, in which light atoms are forced together to release
huge amounts of energy.
In 2022, the Lawrence Livermore National
Laboratory in California briefly achieved net energy gain in a fusion experiment using
lasers. But generating more energy from of a fusion reaction than required to
spark it has been a tall hurdle.
The fusion leaders also spoke to the
officials about Trump's plan to launch an integrated artificial intelligence
platform called Genesis Mission to harness federal scientific
datasets to train next-generation technologies they said could benefit fusion.
"The Energy Department and the
Genesis Mission can ensure the U.S. remains at the forefront, bridging the gap
between research and commercialization," said Marvi Matos Rodriguez,
senior vice president of technology at fusion company Zap Energy.
Fusion energy industry presses US government for billions in support |
Reuters
Britain records new wind power generation record, NESO says
Dec 8 (Reuters) - Britain posted a new wind generation record,
producing enough power for more than 23 million homes, the National Energy
System Operator said on Monday.
NESO highlighted that wind generated 23,825 megawatts of
electricity at 1730 GMT on December 5, beating the previous high of 22,711 MW
set on November 11. At the time, wind supplied 47.4% of Britain's electricity
demand.
Britain now hosts five of the world's largest offshore wind farms,
and in July set a solar generation record of 14 GW, accounting for nearly 40%
of power generation at the time, NESO added.
NESO said the country's 47 operational offshore wind farms provide
nearly 17% of national electricity output.
Britain records
new wind power generation record, NESO says
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt Clocks
(usdebtclock.org)
I'd rather be vaguely right than precisely wrong.
John Maynard Keynes
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