Baltic
Dry Index. 1815 +14 Brent Crude 81.03
Spot Gold 2322 US 2 Year Yield 4.89 -0.03
In
the run up to the UK General Election on July 4, the LIR will play its part.
Politics is perhaps the only profession for which no preparation is thought necessary.
Robert Louis Stevenson.
After
last Friday’s stellar dress up stocks for the month-end, can the stock casinos
build on that performance this week or was that it?
Going
for higher stock prices this week are expected interest rate cuts by the ECB
and Bank of Canada.
Likely
to drag on EU stock casinos this week, European elections, with polls showing a
swing to the right in many, if not most, EU nations. S&P lowering France’s
credit rating last Friday wont help Macron in France.
Asia markets rise
as China factory activity expands at fastest pace in nearly two years
UPDATED MON, JUN 3 2024 10:22 PM EDT
Asia-Pacific stock markets rose Monday after a
private survey showed China’s manufacturing activity expanded at its fastest
pace in nearly two years.
The Caixin survey showed manufacturing PMI
rose to 51.7 in May from 51.4 the previous month, at its fastest pace since
June 2022. It was also higher than a Reuters poll forecast of 51.5.
The private survey comes after official data on Friday that showed
China’s manufacturing sector unexpectedly contracted in May.
Hong Kong’s Hang Seng index jumped
2%, while mainland China’s CSI 300 turned positive to rise 0.22% after the
data.
Investors will also focus on India
markets as exit polls over the weekend suggested Prime Minister
Narendra Modi and his Bharatiya Janata Party-led alliance was set for a rare
third consecutive term in power.
Japan’s Nikkei 225 was
about 1% higher, while the broader Topix index gained 0.86%.
In Australia, the S&P/ASX 200 added
0.72%.
South Korea’s Kospi rose
1.80%, while the smaller-cap Kosdaq was 0.26% higher.
Wall Street futures were calm ahead of the first
trading day in June, with the Dow
Jones Industrial Average futures up 25 points, or less than
0.1%.
S&P 500 futures were
flat, and Nasdaq 100 futures were
down 0.1%.
The main indexes are coming off a
strong May, with all three notching their sixth positive month in seven. The Nasdaq Composite rose
6.9%, its best month since November 2023.
Asia
markets live updates: China Caixin PMI, India elections (cnbc.com)
Wall Street Breakfast: The Week Ahead
Jun. 02, 2024 6:49 AM ET
Wall Street will be zeroed in on the May jobs report this week, which hits Friday. The update on nonfarm payrolls will be the last one before the Federal Reserve meets on June 11-12, amid growing uncertainty on the timing of rate cuts. The April PCE inflation report released Friday showed the Fed's official target, the 12-month Core PCE, came in at 2.8%, steady from March's reading. Things are a little bit different across the Atlantic, where the European Central Bank is expected to cut on June 6. June 6 is also the 80th anniversary of D-Day.
----Investors
will also be watching Nvidia (NVDA) just ahead of the 10-for-1 stock split that
becomes effective after the close on Friday.
More
Wall Street Breakfast: The Week Ahead | Seeking Alpha
In other news, on the subject of why US consumers might have run out of cash and
credit, the BLS revised US Q1 24 GDP down last week from +1.6% to
+1.3%.
But the big killer was the Bureau of Labor Statistics Quarterly Census of Employment and Wages, revising Q4 23 wages down to 58.5 billion, a downward revision of 73 billion. Consumers, apparently, had 73 billion less to spend in Q4 than was originally thought by the BLS.
A difficult summer coming up for all if US consumers really cut back. “As goes America so goes the world” is still pretty accurate if no longer almost 100%.
S&P downgrading the French credit rating on Friday, right before the EU elections this week, is a gift to the right in France, especially Le Pen.
ECB and Bank of Canada expected to cut their key interest rates this
week.
Ratings agency S&P downgrades French credit score
from AA to AA-
Fri, 31 May 2024 at 9:29 pm BST
Ratings agency S&P on Friday
downgraded France's credit score for the first time since 2013, citing a
deterioration in the country's budgetary position.
S&P justified its decision to
lower its rating for the EU's second-largest
economy to "AA-" from "AA" by saying the budget deficit was
forecast to remain above three percent of GDP in 2027.
At 5.5 percent of GDP, the French
budget deficit in 2023 was "significantly higher than we previously
forecast", it said.
France's
general government debt will increase to about 112 percent of GDP by 2027 from
around 109 percent in 2023, "contrary to our previous expectations",
the US-based agency added.
Economy Minister Bruno Le Maire reaffirmed the government's goal of slashing the public
deficit to below three percent of GDP in 2027, telling newspaper Le Parisien
that the main reason for the downgrade was because "we saved the French
economy".
A credit downgrade risks putting
off investors and making it more difficult to pay off debt. Earlier this year,
influential ratings agencies Moody's and Fitch spared handing France a lower
note.
S&P also maintained its
"stable" outlook for France on Friday on "expectations that real
economic growth will accelerate and support the government's budgetary
consolidation", albeit not enough to bring down its high debt-to-GDP ratio.
Ratings
agency S&P downgrades French credit score from AA to AA- (yahoo.com)
Bank of Canada looks set to cut rates next week on signs
inflation tide turning
May 31,
2024
Investing.com -- Bets on the Bank of
Canada pivoting to rate cuts next week received a major boost as data showing a
significant dent to the economy and inflation suggests that higher rates are no
longer needed.
"All ducks appear to be in a row
for the Bank of Canada to kick-start the policy easing cycle and lower the
overnight rate by 25 basis points to 4.75% on Wednesday," RBC said in
Friday note.
Money markets are now pricing in an
80% chance the BoC will move cut rates on Jun. 5, according to data from LSEG.
The increased bets on a June rate cut
were boosted by data Friday showing Canadian GDP unexpectedly to 1.7% in Q1,
while the Q4 print of 1% was sharply revised lower to 0.1%.
But not everyone is so sure.
A deeper dive into Friday's GDP data
showed several signs of underlying growth, ScotiaBank Economics said in a
Friday note, "not least of which that growth in consumer spending is
at its strongest in years and needs no help from rate cuts."
Final domestic demand, which is a
cleaner gauge of underlying momentum in the economy, Scotiabank says, was up by
2.9% sequentially seasonally adjusted annual rate in Q1.
"That was the strongest growth
in final domestic demand that Canada has seen since 2022 Q1," it added.
RBC, however, believes the slowing
economic backdrop is "raising confidence that lower inflation readings
will continue despite signs of a reacceleration in the stronger U.S.
economy."
At the prior meeting in April, BoC
Governor Tiff Macklem laid out the carpet for a rate cut, noting that the
requirements for rate cut appeared to be in place but needed to see more
evidence on slowing inflation.
The two CPI reports since the April
meeting that both surprised on the downside should "provide the BoC with
enough evidence," RBC said.
Bank of Canada looks set to cut rates next week on
signs inflation tide turning (msn.com)
Asian
factory activity expands in May on robust global demand
By Leika Kihara June 3, 2024 4:37 AM GMT+1
TOKYO, June 3 (Reuters) - Asian factory activity
expanded in May as manufacturers benefited from broadening global demand,
private surveys showed on Monday, adding to hopes for sustained economic
recovery in the region where China is showing early signs of rebound.
Manufacturing activity expanded in Japan for the
first time in a year and in South Korea at the fastest pace in two years, due
in part to hints of a pick-up in the automobile and semiconductor sectors, the
surveys showed.
China's private Caixin survey also showed factory
activity rising at the fastest pace in about two years in May on strong
production and new orders, offering hope of a broad-based recovery in Asia and
other parts of the world.
The robust readings point to recovery in the
manufacturing sector underpinning Asian growth and cushioning the blow from any
market volatility caused by uncertainty over the U.S. monetary policy outlook.
----Japan's final au Jibun Bank
manufacturing purchasing managers' index (PMI) rose to 50.4 in May from 49.6 in
April, having last climbed above the 50.0 threshold - which separates growth
from contraction in activity - in May 2023.
South Korea's PMI also rose to 51.6 in May, the
highest reading since May 2022 and coming after two months below the 50 mark,
showed a survey from S&P Global.
----Manufacturing activity in
May also expanded in Taiwan, Indonesia, Vietnam and the Philippines, private
surveys showed.
Asian
factory activity expands in May on robust global demand | Reuters
Finally, commodities. OPEC+ extends production cuts through 2025,
just as the Asian economies are speeding up . Food price inflation into 2025?
Oil alliance
OPEC+ extends collective crude production cuts into 2025
The influential
Organization of the Petroleum Exporting Countries and its allies, collectively
known as OPEC+, on Sunday agreed to extend their official crude output cuts
into 2025, also stretching two other sets of supply curbs over different
periods.
The decision came in
line with the forecasts of analysts and OPEC+ delegates who told CNBC prior to
the meeting that the alliance would likely extend its existing cuts.
Under official
policy, the coalition will produce a combined 39.725 million barrels per day
next year, according to a table published by the OPEC Secretariat. The figure
marks the production levels required of individual members before applying any
additional production adjustments and factors in the group departure of
long-standing OPEC member Angola earlier this January.
It also includes an
increase in the UAE output by 300,000 barrels per day, which will be phased in
gradually starting January 2025 until the end of September next year.
In a
Google-translated statement carried by the state-owned Saudi Press Agency, a
subset of the OPEC+ alliance, including kingpins Saudi Arabia and Russia, said
they would extend a set of nearly 1.7 million barrels per day of voluntary cuts
that were set to expire at the end of this year. These reductions will now be
implemented throughout 2025.
This smaller group of
OPEC+ member will also stretch another round of voluntary output cuts totalling
2.2 million barrels per day until the end of the third quarter of this year.
These trims were initially only scheduled to last until the end of the second
quarter.
“The quantities of
this reduction, amounting to 2.2 million barrels per day, will then be restored
gradually, on a monthly basis, until the end of September 2025,” the statement
said.
More
Oil
alliance OPEC+ extends collective crude production cuts into 2025 (cnbc.com)
Global Cocoa Shortage Much
Worse Than Previously Forecasted As Prices Surge
SATURDAY,
JUN 01, 2024 - 11:05 PM
The International
Cocoa Organization has admitted that the global cocoa shortage will be
significantly larger than previously forecasted. Cocoa prices in New York have
rebounded in recent weeks, inching above the $9,330 per ton mark to close the
week.
First reported by
Bloomberg, ICCO forecasted demand will exceed production by 439,000
tons, driven mainly by higher cocoa grinding in consuming countries. This
is the second estimate for the current October-September year and is much larger
than the February forecast for a deficit of 374,000 tons.
"Currently available data reveal that cocoa
grinding activities have so far been unrelenting in importing countries despite
the record cocoa price rallies," the ICCO, adding, "As the 2023-24
season progresses, it is certain the season will end in a higher deficit than
previously expected."
After the 'great cocoa' run-up in New York in the first 3.5 months of the year, through the first half of April, from $4,000 a ton to over $12,000 (a record high), prices crashed into May, down 44%. But in the last nine trading sessions, prices have surged to $9,330, or about 39%.
The ICCO has increased its
estimate for global cocoa grindings to 4.86 million tons, up from the initial
forecast of 4.78 million tons, and increased its production projection by
12,000 tons to 4.46 million tons.
More
Global Cocoa Shortage Much Worse Than Previously Forecasted As Prices Surge | ZeroHedge
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.
The
far-right is set to make huge gains in European elections. It could define the
next five years of European politics
Updated 5:47 AM EDT, Fri May 31, 2024
CNN — This is a historic and pivotal year for democracy
across the globe. Around 70
countries – from the United States to South Africa, via Mexico and Taiwan – will hold elections in 2024.
After
India’s huge and ongoing six-week ballot, however, the biggest election in
terms of voter numbers will happen next week, when 373 million Europeans can go
to the polls and elect 720 members of the next European Parliament.
Once
the votes have been tallied from across the 27-nation bloc, it is widely
expected that the results will show a significant shift to the right, which
could have major implications for the political direction of the European Union
at a time when it is battling multiple crises, many of them
global.
From
the war in Ukraine to coping with mass migration, the rise of China to the
threat of climate change, it’s hard to see how a bloc
of diverse countries could possibly speak with one voice.
Of
course, differences in opinion among the member states is nothing
new. EU politics has always relied on awkward alliances between countries and
political ideologies that represent vastly different electorates.
The
EU’s political center has undeniably moved to the right over the past two
decades, however.
----The
rightward shift of the political center in this coalition has been gradual. In
1994, the main socialist group S&D had the most MEPs. In 1999, it
was overtaken by the center-right European People’s Party (EPP).
The
EPP, best explained as conservatives in the mold of former German Chancellor
Angela Merkel, has been the dominant force in EU politics
ever since.
While
the EPP has been able to lead a mainstream centrist coalition with the left and
liberals at a European level, MEPs are still beholden to domestic politics
happening back in their own countries.
For
example, it’s not easy for a conservative to work with a liberal on a pan-EU
policy that would share the burden of asylum seekers if voters back home are
becoming attracted to loud, anti-immigration populists. The louder the domestic
noise – and the greater the risk of losing their own seat in parliament – the
trickier cross-party politics at a Brussels level becomes.
----While the right-wing European Conservatives and
Reformists (ECR) and far-right Identity and Democracy
(ID) groups are expected to finish fourth and fifth respectively in
terms of seat numbers, their combined tally, which could be upwards of
140, according to the Politico Poll of Polls, will be hard for the EPP to ignore. The EPP is
currently predicted to win 165 seats to 143 for the socialist S&D.
More
Covid-19 Corner
This
section will continue until it becomes unneeded.
Research Suggests Unusual Form of Cell Death Causes Severe COVID-19 Lung
Damage
Ferroptosis
may be the driving force behind severe pulmonary manifestations of COVID-19.
5/30/2024 Updated: 5/30/2024
SARS-CoV-2
infection may cause severe pulmonary conditions such as pneumonia,
inflammation, and acute respiratory distress syndrome, but until now,
researchers have not understood the driving force behind lung damage caused by
COVID-19.
In a recently published paper in Nature Communications,
researchers at Columbia University discovered that a relatively new form of
iron-dependent cell death called ferroptosis is the underlying mechanism
causing extreme and potentially fatal pulmonary conditions in COVID-19
patients.
“This finding adds crucial insight to our
understanding of how COVID-19 affects the body that will significantly improve
our ability to fight life-threatening cases of the disease,” Brent Stockwell,
chair of the department of biological sciences at Columbia and co-lead author
of the study, said in a news release.
What Is
Ferroptosis?
Human cells have powerful mechanisms for
maintaining survival, but when those mechanisms become impaired, lipid
peroxides—generated through normal metabolic activities—can accumulate to toxic
levels, damage cell membranes, and kill cells through ferroptosis.
Ferroptosis
was first identified in
2012 by Mr. Stockwell and differs from apoptosis—the most common form of cell
death that occurs with aging and in some disease processes. Ferroptosis is an
unusual type of cell death linked to altered iron metabolism, glutathione
depletion, glutathione peroxidase 4 inactivation, and increased oxidative
stress.
Since
proposing the concept, Mr. Stockwell’s lab has demonstrated that ferroptosis
can occur in healthy contexts as part of the body’s normal processes. For
example, cell death can remove cells infected with SARS-CoV-2, inhibiting the
replication and spread of the virus or counteract diseases like cancer, which
involves rapid cell growth.
On the other
hand, ferroptosis can be destructive, attacking healthy cells in patients with
neurodegenerative diseases or causing severe manifestations of COVID-19 and
possibly even long COVID.
The ability
to stop ferroptosis could pave the way for treatments that improve COVID-19
outcomes, the paper’s findings suggest.
More
Research Suggests Unusual Form of Cell Death Causes
Severe COVID-19 Lung Damage | The Epoch Times
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.
Engineers
find new way to make ‘wonder material’ Graphene that could change the world
May 31, 2024
Engineers have found a new
way to produce the “wonder material” Graphene that could
finally allow it to make the most of its potential.
When it was discovered by
creating a single layer of carbon atoms in 2004, scientists hailed the material
as a potential revolution. It is extremely conductive and very strong, and
experts said it could transform everything from energy storage to medical
devices and personal electronics.
But that potential has never fully
been realised. That is in part because it is hard to make cleanly and at scale.
One of the problems is that it is
difficult to make cleanly and without impurities. But researchers say the new
process allows graphene to be made in a way that is reducible and clean.
They did so by acting on a finding
that the quality of the graphene was linked to oxygen. If there is even a small
part of oxygen around, then it drastically affects the growth rate of the
graphene and means that it might not be possible to use it.
“We show that eliminating virtually
all oxygen from the growth process is the key to achieving reproducible,
high-quality CVD graphene synthesis,” said senior author James Hone, from
Columbia University. “This is a milestone towards large-scale production of
graphene.”
Engineers have traditionally made
graphene in two ways. The first uses tape to peel away layers of a piece of
graphite until it is thin enough to be used as graphene – which produces
clean samples, but at a tiny scale that makes them impossible to use
industrially.
The other allows for much more
production and is known as CVD growth. It involves passing a carbon-containing
gas such as methane over a copper surface at incredibly high temperatures,
which leads the methane to break apart and forces the carbon atoms to rearrange
into a layer of graphene.
That allows them to be made up to the
size of meters across. But they have also suffered from problems with being
dependable in their quality.
Researchers had already found that
any oxygen in that process would slow it down or even etch the graphene away.
Since then, engineers have been trying to build new systems that could control
the oxygen and stop it undermining the process.
Now scientists say they have
dramatically improved that process, allowing the graphene to grow faster and
dependably. They found that the graphene produced also showed all the necessary
behaviours that could allow for it to be used at scale.
The work is reported in a new paper,
‘Reproducible graphene synthesis by oxygen-free chemical vapor deposition’,
published in the journal Nature.
Engineers find new way to make ‘wonder material’
Graphene that could change the world (msn.com)
Next, our
latest new section, the world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
Men are more easily governed through their vices than through their virtues.
Napoleon Bonaparte.
