Baltic
Dry Index. 2430 -127 Brent Crude 62.04
Spot Gold 4237
US
2 Year Yield 3.54 -0.07
US Federal Debt. 38.394 trillion
US GDP 31.632 trillion.
It all comes down to interest rates. As an investor, all you're doing is putting up a lump-sump payment for a future cash flow.
Ray Dalio
To no one’s surprise, the US central bank cut its key interest rate yesterday and signalled a data driven meeting in late January.
The US stock
casinos rose on the news, while Asian stock casinos yawned. The weaponised US
dollar fell. Gold and silver rose.
Asia-Pacific markets give up early gains after
third Fed cut of the year
Published Wed, Dec 10 2025 6:51 PM EST
Asia-Pacific markets gave up earlier gains
to trade mostly lower Thursday, following the Federal Reserve’s third rate cut
of the year.
The U.S central bank reduced the Federal
Funds rate by 25 basis points to 3.5%-3.75%, and signaled that it was done
easing for now.
Fed Chair Jerome Powell said at his
post-meeting news conference that the reduction puts the Fed in a comfortable
position as far as rates go.
“We are well-positioned to wait and see
how the economy evolves,” Powell said, while noting that President Donald
Trump’s tariffs had fueled inflation.
The U.S. dollar index fell as much as
98.54 on Thursday, marking its weakest level since Oct. 21.
Japan’s Nikkei 225 started the day
in positive territory, but fell 0.91%. The Topix was also down 0.74%.
South Korea’s Kospi also reversed course
to dip 0.34%, and the small-cap Kosdaq was marginally above the flatline.
Hong Kong Hang Seng index slipped 0.1%
and mainland China’s CSI 300 lost 0.2%.
Shares of ZTE Corp dropped over 9.5%
after Reuters reported that the Chinese telecom equipment
maker might need to pay more than $1 billion to the U.S. government to settle
allegations of foreign bribery.
Australia’s S&P/ASX 200 inched up
0.15%, ending the day at 8,592.
In addition to the rate decision
Wednesday, the Fed also announced it would resume buying $40 billion in
Treasury bills, beginning Friday. Short-term Treasury yields moved lower as a
result.
The central bank also addressed the weak
labor market in its statement, removing language stating that it “remained
low.” This suggests its focus is shifting to supporting the economy, away from
inflation.
Overnight in the U.S., the Dow Jones Industrial Average jumped
on Wednesday, climbing 1.1% after the Fed decision, while the S&P 500 advanced 0.7% and
the Nasdaq Composite increased
0.3%.
Asia-Pacific
markets give up early gains after third Fed cut of the year
S&P, Nasdaq futures lower as Oracle results fail to stoke AI trade: Live updates
Updated Wed, Dec 10 2025 6:59 PM EST
S&P and Nasdaq futures fell Wednesday
night as Oracle’s results reignited fears about high-flying tech stocks even
after the Federal Reserve’s latest interest rate cut gave a boost to U.S.
equity markets in the prior session.
Futures tied to the Dow Jones Industrial
Average added 43 points, or 0.1%. S&P futures slipped about 0.1%, while
Nasdaq 100 futures fell more than 2%.
In after-hours trading, Oracle shares tumbled 11%
after the cloud computing company posted disappointing
quarterly revenue and raised its spending forecast. The report added
more fuel to the debate about how quickly tech companies will be able to see
returns on their AI investments. Other AI plays were also trading lower in
extended trading, including Nvidia,
which was down 1%, and CoreWeave,
which fell more than 3%.
Stocks rose in Wednesday’s session and got
a lift after a divided Fed announced
an interest rate cut for the third time this year and ruled
out a rate hike. The central bank’s Federal Open Market Committee cut its
key overnight borrowing rate by a quarter percentage point to a 3.5%-3.75%
range and signaled a
slower pace of rate cuts ahead.
Fed chair Jerome Powell said
the central bank is ”’well positioned to wait and see how the economy
evolves” and noted President Donald Trump’s tariffs have been a driver of
inflation.
The three major indexes closed in the
green, with the 30-stock Dow jumping about 497 points, or nearly 1.1%.
The Russell 2000 index of
small-capitalization stocks notched a record close. Smaller companies
tend to benefit more from lower rates than larger companies because their
borrowing costs are more closely linked to market rates.
Although markets rallied toward the latter
half of Wednesday’s session, some investors suggest being cautious ahead given
that the central bank remains in a wait-and-see mode over the path of future
monetary policy.
“We’re not surprised to see near term
optimism in the markets given that the Fed continues to cut rates even though
the economy is growing, however, we think the rose colored glasses may come off
once investors realize that the path to lower interest rates may take longer —
or may not materialize at all — to the extent that they believe it will,” said
Chris Zaccarelli, chief investment officer for Northlight Asset Management.
F.L.Putnam Investment Management chief
market strategist Ellen Hazen said that greater uncertainty regarding future
interest rates and conflicting data around the state of the U.S. economy could
“lead to higher volatility and risk premia across risk markets like equities as
we go into 2026.”
Stock
market today: Live updates
Divided Fed lowers rates, signals pause and one
cut next year as growth rebounds
December 10, 2025 10:26 PM GMT
WASHINGTON, Dec 10 (Reuters) - A sharply
divided Federal Reserve cut interest rates on Wednesday but signaled borrowing
costs are unlikely to drop further in the near term as it awaits clarity on the
direction of a job
market showing signs of softening, inflation that "remains
somewhat elevated" and an economy it sees picking up steam next year.
New policymaker projections issued
after the U.S. central bank's final two-day meeting of 2025 showed a median
expectation for a single quarter-percentage-point cut next year, the same as in
September. But it was accompanied by a wide range of estimates that starkly
illustrated the depth of disagreement about where to take monetary policy in
2026 and beyond in an economy being reshaped by President Donald Trump's
policies and an artificial intelligence investment boom.
"In considering the extent and timing
of additional adjustments to the target range for the federal funds rate, the
Committee will carefully assess incoming data," the rate-setting Federal Open Market Committee, opens new tab said in a
policy statement that was tweaked to add language that in the past has been
used to signal a pause in policy actions - an outlook at odds with market
expectations still leaning toward two rate cuts in 2026.
Policymakers' refreshed estimates -
hindered by incomplete data about the economy after a six-week government
shutdown - also showed they expect inflation to slow to around 2.4% by the end
of next year even as economic growth accelerates to an above-trend 2.3% and the
unemployment rate remains at a moderate 4.4%, an outlook that should dispel
worries about potential stagflation that have persisted this year.
The wide disagreement on the appropriate
policy for such an environment also showed how challenging it could be to build
a consensus in a policymaking body about to experience a leadership change,
with Trump expected to nominate
a successor to Fed Chair Jerome Powell within the next few weeks.
THREE POLICYMAKERS DISSENT
In a press conference after the meeting,
Powell said: "I would note that having reduced our policy rate by 75 basis
points since September and 175 basis points since last September, the fed funds
rate is now within a broad range of estimates of its neutral value, and we are
well positioned to wait to see how the economy evolves."
Powell, who repeatedly referenced being in
a strong position to wait on the next move, added, though, that Fed officials
have made no decision about what to do with rates at their next policy meeting
in late January.
Major U.S. stock indices closed higher,
while the dollar weakened against a basket of currencies and Treasury yields
dropped.
More
Divided
Fed lowers rates, signals pause and one cut next year as growth rebounds |
Reuters
Gold gains after Fed rate cut, silver hits
all-time peak
Published Wed, Dec 10 2025 6:39 AM EST Updated
Wed, Dec 10 2025 4:03 PM EST
Gold prices reversed course to rise on
Wednesday after the Federal Reserve’s rate cut, though uncertainty over next
year’s policy outlook persisted, while silver hit an all-time peak.
Spot gold rose 0.7% at $4,236.57 per
ounce. U.S. gold futures for February delivery settled 0.3% lower at $4,224.70.
The Fed cut interest rates in another
divided vote, but signalled it will likely pause further reductions in
borrowing costs as officials look for clearer signals about the direction of
the job market and inflation.
“Gold traders like the result today, it’s
trading at day’s highs after surviving a bout of profit-taking,” said Tai Wong,
an independent metals trader.
Lower interest rates raise the appeal of
non-yielding assets to investors.
A majority of U.S. central bankers believe
they will need to cut short-term interest rates next year, but are widely split
over how much. A large group are opposed to any cuts at all, while three
pencilled in a rate hike.
---- Spot silver rose to a record
peak of $61.85. Prices have surged 113% so far this year, supported by rising
industrial demand, falling inventories, and its designation as a critical
mineral by the U.S.
“In our view, the outperformance from
silver reflects speculative money flowing into a more levered play following
gold’s pullback,” analysts at SP Angel wrote in a note. “Alongside speculative
flows, silver is benefiting from a tight physical market, having seen a supply
squeeze in October.”
Gold
gains after Fed rate cut, silver hits all-time peak
In other news.
Amazon pledges massive $35 billion worth of
investments in India with focus on AI
Published Wed, Dec 10 202512:42 AM EST
Amazon on Wednesday committed to investing
over $35 billion in India’s cloud and artificial intelligence space by 2030, as
hyperscalers race to get a foothold in the market.
The commitment, unveiled at the Amazon Smbhav Summit in New Delhi,
builds on nearly $40 billion already invested in the country.
In a press
release,
Amazon said the new funds will target AI-driven digitization, export growth and
job creation, aligning with India’s national priorities to build up its local
AI environment.
By 2030, Amazon said the plan is expected
to generate an additional 1 million direct, indirect, induced and seasonal jobs
in India, quadruple exports to $80 billion and deliver AI benefits to 15
million small businesses.
India is one of the fastest‑growing
regions for AI spending within Asia Pacific, Deepika Giri, IDC’s regional head
of research for big data & AI, told CNBC.
“A major gap, and therefore a significant
opportunity, lies in the shortage of suitable compute infrastructure for
running AI models,” Giri said.
She added that countries across Asia are
accelerating efforts to build sovereign AI capabilities as the technology
becomes more regionalized due to trade tensions and tariffs, with
infrastructure as a central pillar of those strategies.
The investment highlights Amazon’s bet on
India’s booming digital economy, where it has been building fulfillment
centers, as well as data centers and payments infrastructure under its Amazon
Web Services subsidiary.
It also comes soon after Microsoft announced
plans to invest $17.5
billion in
India’s AI infrastructure as Big Tech players accelerate their push into the
market.
“We are humbled to have been a part of
India’s digital transformation journey over the past 15 years,” said Amit
Agarwal, senior vice president for emerging markets at Amazon.
“Looking ahead, we’re excited to continue
being a catalyst for India’s growth, as we democratize access to AI for
millions of Indians.”
Amazon pledges
massive $35 billion worth of investments in India with focus on AI
How China Inc is marching into Vietnam amid US
tariffs
December 10, 2025 6:12 AM GMT
HANOI, Dec 10 (Reuters) - Chinese firms
are expanding in Vietnam, leading investment inflows and sending record
shipments to Hanoi in defiance of U.S. calls for decoupling, as the Communist
neighbours beef up ties.
Recent steps that Hanoi had long resisted
on security grounds include sensitive tech contracts for Chinese telecoms
firms Huawei and ZTE; approval
of Chinese loans for
high-speed rail links; and Chinese-made COMAC planes
cleared by regulators for a leading airline.
Hanoi's overtures to Beijing may reflect
its long-standing policy of balancing foreign ties after pledges made to
Washington in
trade talks, said Alexander Vuving of the Asia Pacific Center for Security
Studies.
But if the trend continues, Vietnam
"may become a 'torn country' rather than a 'swing state'," he added,
citing risks to Western relations.
While the Southeast Asian nation opened
its economy to U.S. multinationals and technology after Washington lifted its
embargo in the 1990s, it stayed cautious over China, after their 1979 war and
disputes over South China Sea boundaries.
Now Beijing's
influence is rising and
U.S. ties are strained by tariffs.
Chinese firms make pledges to transfer
technology, rare until now, and increasingly view Vietnam as a consumer market
rather than just an assembly base, a Reuters review of data and industry
interviews showed.
The shift has been turbocharged by tariffs
of 20% imposed by Washington, said Phan Xuan Dung, a researcher at the
ISEAS-Yusof Ishak Institute in Singapore.
"Vietnamese officials were displeased
by what they saw as punitive U.S. measures, and this pushed them to hedge by
leaning economically further into China," he added.
Vietnam's foreign ministry and the White
House did not respond to requests for comment.
China's foreign ministry said economic
cooperation benefits both countries.
RECORD IMPORTS FROM CHINA
Despite U.S. pressure to curb reliance on Chinese
technology and components, imports from China stood at about $168 billion
through November, up nearly 30% on the year and already well above all of 2024,
itself a record year, Vietnamese data shows.
Nearly one-third are electronic parts,
often re-exported in goods bound for the United States. Consumer imports,
including vegetables and cars, are also climbing.
Fading anti-China
sentiment among
younger Vietnamese is helping drive the surge, dovetailing with Beijing's push
to find new markets amid U.S. tariffs, and emboldening Chinese companies to
take on domestic champions.
E-scooter maker Yadea (1585.HK), opens
new tab sold
more than 36,000 units in Vietnam in the year's first 10 months, ranking fourth
nationwide, according to non-public registration data obtained by Reuters.
Though far behind domestic EV leader
VinFast (VFS.O),
opens new tab,
Yadea is its main rival in the fast-growing electric market, while internal
combustion engine leaders Honda (7267.T), opens
new tab and
Yamaha (7272.T),
opens new tab lose ground as Vietnam
phases out petrol vehicles.
EV giant BYD (002594.SZ), opens
new tab,
which is expanding dealerships and charging stations nationwide, also keeps
sales figures confidential.
Yadea and BYD did not respond to requests
for comment.
Chinese retailers and tech giants are also
advancing.
More
How China Inc is
marching into Vietnam amid US tariffs | Reuters
China executes banker for taking £116 million
bribes
09 December 2025
China has executed a former senior banker
for accepting £116m in bribes in the latest corruption purge by President Xi
Jinping.
Bai Tianui, the former general manager of
the asset management firm China Huarong International Holdings, was killed on
Tuesday in the northern city of Tianjin.
Bai, according to prosecutors, abused his
position in the state-owned offshore investment company between 2014 and 2018,
having accepted a “huge amount” of bribes amounting to 1.1bn yuan.
In a statement, the court said: “The
amount of bribes received by Bai Tianhui was extremely large, the crime’s
circumstances were particularly serious and the social impact was particularly
severe.”
It added that Bai’s crime had “harmed the
interests of the state” and the Chinese people and “he should be severely
punished according to law”.
The Supreme People’s Court, China’s
highest court, said the facts of the case were “clear” and the evidence against
Bai was “conclusive and sufficient”, so his sentence was “appropriate”.
Officials did not detail how Bai was
executed, but said he was allowed to meet with close relatives beforehand.
The Tianjin High People’s Court upheld his
death penalty after rejecting his appeal on Feb 24.
In China, a death sentence handed down by
lower courts must be submitted for review to the Supreme People’s Court.
Huang had been set up to handle bad loans
from state banks and was renamed China Citic Financial Assets Management after
a government-orchestrated bailout in 2021.
It was one of four companies formed in
1999 to help clean up bad debt piles choking China’s banking system, and the
company later expanded into investment, loan and property businesses.
Bai is the second senior executive from
the firm to be executed for corruption.
More
China executes banker for taking £116 million bribes
The London Banker Henry Fauntleroy forged to keep his bank solvent. He was executed for it in 1824.
Charles P. Kindleberger,
author Manias, Panics and Crashes.
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
deflationary strains persist even as consumer inflation hits 21-month high
By Reuters December 10, 2025 3:52 AM GMT
BEIJING,
Dec 10 (Reuters) - China's annual consumer inflation accelerated to a 21-month
peak in November, mainly driven by food prices, while factory-gate deflation
deepened, with underlying trends suggesting domestic demand remains weak and
unlikely to recover in the near term.
The
$19 trillion economy is on course to meet Beijing's growth target of
"around 5%" for the year, buoyed by policy support and
resilient goods exports. But economic
imbalances have worsened this year as U.S. President Donald Trump's global trade war has added to
persistently soft consumer demand, putting the onus on policymakers to step up
stimulus measures.
The
consumer price index (CPI) rose 0.7% from a year earlier, National Bureau of
Statistics data showed on Wednesday, matching a 0.7% expansion in a Reuters
poll of economists. It had increased 0.2% in October.
The
pickup in consumer inflation was mainly driven by rising food prices, which
increased 0.2% year-on-year after dropping 2.9% in October.
But
annual core inflation, which excludes volatile prices of food and fuel, was
unchanged at 1.2% last month. On a monthly basis, CPI dipped 0.1% versus a 0.2%
rise in October and a forecast gain of 0.2%.
Factory-gate
deflation has also dragged on for three years in China, hobbling the world's
second-biggest economy, even as the government has stepped up a campaign to
curb industrial overcapacity and made calls on key sectors to scale back
cut-throat competition. The latest data showed few signs of a recovery in the
deflationary impulse.
The
producer price index (PPI) fell 2.2% year-on-year in November, compared with a
2.1% fall in October and worse than the forecast for a 2.0% drop. The index was
up 0.1% from October.
"China’s
latest inflation figures indicate an economy that is warming up on the surface
but is still battling deep-seated deflationary pressures underneath," said
Zavier Wong, market analyst at investment firm eToro.
"Manufacturers
are still cutting prices to shift excess supply, and that persistent decline
highlights how weak demand conditions remain."
'WAVE
OF POLICY SUPPORT' EXPECTED TO BOOST DEMAND
Most
analysts expect deflationary pressures to linger next year.
Falling
prices of everyday items underlined the challenge authorities face as firms,
hobbled by low demand, try to lure buyers with discounts.
Total
spending on fast-moving consumer goods such as packaged food and drinks, toilet
paper and toothpaste in China grew 1.3% year-to-date, supported by a 2.4%
decline in average selling price, according to a report by Bain & Co on
Tuesday.
Analysts
say the government needs to stabilise the faltering property sector, lower the
youth unemployment rate and build a better social safety net to encourage
spending to foster sustainable longer-term growth.
In
the near term, however, more policy support is required to inject confidence,
they said.
More
China's
deflationary strains persist even as consumer inflation hits 21-month high |
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.
Battery discharge sets new record in Irish electricity system in
November
Battery discharge has reached a record high of 362MW in Ireland’s
transmission system in November.
December 9, 2025
Battery discharge has reached a record high of 362MW in Ireland’s
transmission system in November.
According to the latest data from state-owned transmission system
operator (TSO) EirGrid, this record was reached on Tuesday, 25 November, when
demand was high and renewable generation from wind was low.
This new battery dispatch record comes as EirGrid and fellow TSO
SONI launched a major update last month, which allows battery units to be fully
integrated into the real-time electricity market. The launch of Ireland’s new
scheduling and dispatch programme was
covered last month in a guest article on Solar Power Portal by
Yayu Yang, product manager at GridBeyond.
Overall, this new change allows batteries to charge and discharge
power more efficiently in the electricity market.
Diarmaid Gillespie, Director of System Operations at EirGrid,
said: “As we would expect in November, with the clocks having changed, evenings
getting shorter and the weather colder, we continued to see an increase in
demand on the system last month.
“Notably we saw the highest demand for a Sunday since January of
this year with batteries playing an ever increasing role in meeting peak demand
on the power system.”
The highest demand peak Gillespie referrers happened on the last
day of the month, Sunday 30 November, with a record peak of 5,144MW. According
to EirGrid, the overall electricity system demand in Ireland last month was
3,088GWh, up from the 2,969GWh registered in October.
Out of that total electricity system demand, 40.6% came from
renewable sources, 34.6% of which from wind and a mere 1% from solar PV.
Renewables share is up more than five percentage points from the same period a
year ago when 34% of electricity came from renewables in November 2024.
The remaining share came from gas generation, with 42%, while 17%
was imported via interconnection.
Battery discharge
sets new record in Irish electricity system
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt Clocks
(usdebtclock.org)
I do not like debt and do not like to invest in companies that
have too much debt, particularly long-term debt. With long-term debt, increases
in interest rates can drastically affect company profits and make future cash
flows less predictable.
Warren Buffett
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