Baltic Dry Index. 2259 +157 Brent Crude 80.04
Spot Gold 2016 US 2 Year Yield 4.84 -0.08
"Sooner or later a crash is coming, and it may be terrific."
Roger Babson, speech to National Business Conference, Sept. 5th, 1929.
In the stock casinos a pause or something more? Roger Babson’s prediction above was off by about six weeks.
No, I’m not expecting a market crash this week, that would ruin the month-end money manager bonuses and probably wipe out the year-end bonuses too, but complacency now rules in every stock casino, and suddenly the Wall Street pros are laying off risk to a gullible public.
Earlier this fall, Morgan Stanley (MS.N) bought $300 million worth of protection against losses on some of its loans from Blackstone Group (BX.N) and other investors, two sources familiar with the matter said.
That struggling oil price suggests caution here to me. What if the global economy is finally rolling over from monetary boom to monetary bust?
Asia markets
largely rebound from Monday; oil eases slightly on Israel-Hamas truce extension
UPDATED TUE, NOV 28 2023 12:27 AM
EST
Asia-Pacific markets were mixed on Tuesday, a
day after the region saw all its major indexes end the day in negative
territory.
Earlier on Tuesday, oil prices
eased somewhat lower after Qatar said the truce between Israel and Hamas has
been extended by a further two days.
The Brent futures contract
for January fell 50 cents, or 0.62%, to trade at $80.08 a barrel, while West Texas Intermediate crude
futures reversed earlier losses to post a 0.4% gain and trade at at $75.16 a
barrel.
In Australia, the S&P/ASX 200 gained
0.39% and closed at 7,015.2, ahead of its October inflation readings on
Wednesday.
South Korea’s Kospi was
up 0.35%, while the small-cap Kosdaq saw a larger gain of 0.49%.
Japan’s markets slipped lower,
with the Nikkei 225% and Topix both shedding 0.23% and 0.3% respectively.
Hong Kong’s Hang Seng index lost
0.44%, also extending its losses from Monday, while the mainland Chinese CSI
300 index was marginally below the flatline.
Overnight in the U.S., all three major indexes
lost ground on Monday, a day after the major averages posted a four-week
winning streak.
Stocks have rallied since the 10-year Treasury yield retreated
from the 5% mark it briefly topped in late October. The S&P 500 is up 8.5%
so far this month, while the Dow has added 6.9% and the Nasdaq has jumped
10.8%.
On Monday, the Dow Jones Industrial Average lost
0.16%, while the S&P
500 shed 0.2%. The Nasdaq Composite saw
the smallest loss, edging lower by 0.07%.
Asia stock markets today: Live updates, oil prices, Israel-Hamas (cnbc.com)
European
stocks head for flat open as markets struggle to find momentum
UPDATED TUE, NOV 28 2023 12:50 AM
EST
European markets are heading for a flat open
Tuesday, continuing lackluster sentiment seen at the start of the week in the
region and beyond.
Asia-Pacific
markets traded in mixed territory overnight, a day after the
region saw all its major indexes end the day in negative territory. Meanwhile, U.S.
stock futures were flat Monday night as traders analyzed the
strong gains seen throughout November and the trading month nears its end.
European
markets live updates: stocks, news, data and earnings (cnbc.com)
Stock
futures are little changed as investors assess pause in November rally: Live
updates
UPDATED TUE, NOV 28 2023 12:40 AM
EST
Stock futures were flat Tuesday as traders
analyzed the strong gains seen throughout November and the trading month nears
its end.
Dow
Jones Industrial Average futures added
just 13 points, or 0.04%. S&P 500 and Nasdaq 100 futures were
both near flat.
Shares of Zscaler slid
nearly 7% in after-hours action on Monday. The cloud security company
maintained its expectations for fiscal 2024 billings of $2.52 billion to $2.56
billion. Zscaler otherwise posted adjusted earnings and revenue that came ahead
of expectations in the fiscal first quarter.
The moves follow a losing
day on Wall Street. The Dow and S&P 500 both
finished Monday’s session around 0.2% lower, while the Nasdaq Composite inched
down nearly 0.1%.
Monday’s modest retreat comes
near the end of November’s strong trading month, which concludes with
Thursday’s close. The Dow and S&P 500 are on pace to finish the month 6.9%
and 8.5% higher, respectively. The technology-heavy Nasdaq has climbed 10.8% in
November.
Investors paid
particular attention to stocks tied to online shopping during
the Cyber Monday trading session. “Buy now, pay later” stock Affirm popped
nearly 12%. Shopify jumped
almost 5%, while Amazon advanced
0.7%.
“On balance, equities appear to
be in pause mode following strong November returns and in anticipation of
holiday spending trends,” said Terry Sandven, chief equity strategist at U.S.
Bank Wealth Management. “The tug of war between bull and bear camps remains
balanced. And that, in our view, suggests that market chop is perhaps more the
norm versus exception.”
Traders will follow economic data
on topics including housing prices and consumer confidence due Tuesday morning.
On the earnings front, CrowdStrike is
expected to report earnings after the bell.
Investors will also track a slate
of Federal Reserve officials set to deliver remarks throughout the day. Those
speakers include Chicago Fed President Austan Goolsbee, as well as Fed
Governors Christopher Waller and Michelle Bowman.
Stock
market today: Live updates (cnbc.com)
Wall Street gets
creative as regulators demand more capital
By Shankar
Ramakrishnan November 27, 2023 11:05
AM GMT
Nov
27 (Reuters) - Earlier this fall, Morgan Stanley (MS.N) bought $300 million worth of protection against
losses on some of its loans from Blackstone Group (BX.N) and other investors, two sources familiar with the
matter said.
The transaction,
details of which have not been previously reported, was effectively insurance,
structured as a sale of bonds called credit-linked notes, according to the
sources and regulatory filings.
By transferring
the risk to investors, the $1.4 trillion asset bank could reduce the amount of
capital it has to hold against those loans to cover for potential losses.
Morgan Stanley
and Blackstone declined to comment.
The
deal is one of several such credit risk transfer transactions that U.S. banks
are considering in the aftermath of a March crisis in the sector and as
regulators look to increase capital they
have to hold, bankers, lawyers and investors said.
Interviews with
eight people involved in the deals show different forms of credit-linked notes
and insurance contracts are being discussed to free up precious capital.
While it is known
that banks have been looking to offload risk through such transactions, these
interviews offer new details on the types of deals and their terms, providing a
rare window into a market that's shrouded in secrecy.
These deals help
banks meet capital requirements more efficiently, allowing them to keep
lucrative businesses that would otherwise become unprofitable.
But they come
with risks. Investors in these deals include lightly-regulated entities like
hedge funds, shifting risk to the shadow banking sector. That raises the
prospect that regulators will have less visibility and understanding of the
dangers that lurk in the financial system. The ability to shed the risk could
also encourage banks to get more aggressive on lending, leading to problems
later.
"If a bank
didn't manage interest rate risk well, does it appreciate potential risks
associated with these transactions?" said Jill Cetina, associate managing
director at Moody’s. "It raises the need for better and more fulsome
disclosure in banks' regulatory filings."
Over the last few
months, banks including JPMorgan Chase (JPM.N), Merchants Bank of Indiana and US Bancorp (USB.N), have sold the risk of losses on billions of dollars of
loans for cars, multi-family homes, private funds, junk-rated companies,
commercial equipment and consumers, these industry sources said.
More
Wall Street gets creative as regulators demand more
capital | Reuters
Exclusive: Beijing
bourse tells 'major shareholders' to refrain from selling, sources say
November
27, 2023 10:19 AM GMT
SHANGHAI/BEIJING
Nov 27 (Reuters) - The Beijing Stock Exchange has de facto implemented a new
policy that prevents major shareholders of companies listed on its bourse from
selling stock, worried that such sales could douse a long-desired rally, three
people familiar with the matter said.
The bourse,
launched two years ago, was set up to help facilitate funding for innovative
small companies, dubbed "little giants", but had languished due to
lack of investor interest.
But
the market's benchmark 50 Index (.CSI899050) has surged 46% this month on the back of recent
measures by authorities. These include lowering the required amount of funds an
investor must have in their stock account to invest, improving trading
mechanisms and encouraging mutual funds to participate in the market.
A "major
shareholder" is one with a stake of 5% or more and is required to make a
public filing with the relevant stock exchange before selling shares, according
to rules for China's bourses.
The Beijing
exchange has been rejecting those filings, said the people who were not
authorised to speak to media and declined to be identified.
It was not
immediately clear how long this new policy would remain in place, they added.
The Beijing
exchange and the China Securities Regulatory Commission did not immediately
reply to requests for comment.
The bourse said
separately in a statement on Monday morning ahead of this Reuters article that
it was closely monitoring trading to ensure normal market order.
The so-called
window guidance - where directives are made orally without written documents -
is aimed at protecting the rally, the sources said.
One noted that
without the guidance, the share price surge "could prompt institutional
shareholders to reduce their holdings which could knock the index down
again."
The Beijing
bourse currently houses 232 companies with a combined market capitalisation of
366 billion yuan ($50 billion).
By
comparison, the Shanghai bourse is home to 2,256 firms worth 47 trillion yuan
in total, while almost 3,000 companies listed in Shenzhen have a total market
capitalisation of 31.9 trillion yuan. The Shanghai Composite Index (.SSEC) is up 0.4% this month, while the Shenzhen Composite
Index (.SZI) is down 0.8%.
Exclusive: Beijing bourse tells 'major shareholders'
to refrain from selling, sources say | Reuters
OPEC+ looking at
deeper oil cuts ahead of Thursday meeting
By Alex Lawler and Ahmad Ghaddar
November
27, 2023 4:45 PM GMT
LONDON, Nov 27
(Reuters) - OPEC+ is looking at deepening oil production cuts despite its
policy meeting being postponed to this Thursday amid a quota disagreement
between some producers, an OPEC+ source said on Monday.
Several analysts have said
they expect OPEC+ to extend or even deepen supply cuts into next year in order
to support prices, which on Monday were trading just above $80 a barrel , down
from near $98 in late September.
An
OPEC+ source said he expected there to be an option for a "collective
further reduction" on Thursday, without providing details. OPEC+ sources earlier this month said the
group was set to consider additional cuts.
The Organization
of the Petroleum Exporting Countries (OPEC) and allies led by Russia, known as
OPEC+, will begin its online meetings to decide oil output levels at 1300 GMT
on Thursday, according to a draft agenda seen by Reuters on Monday.
The
meeting was delayed from Nov. 26. OPEC+ sources said this was because of a
disagreement over output levels for African producers, although sources have
since said the group has moved closer to a compromise on this
point.
OPEC member
Kuwait is committed to any decisions issued by OPEC, especially those that
concern market quotas and oil production, the country's oil ministry said in a
post on social media platform X.
More
OPEC+ looking at deeper oil cuts ahead of Thursday meeting | 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.
Yesterday I wrote: In America, the Leading Economic Index is signalling recession ahead. I think it’s actually signalling that the US economy has already entered recession, but that won’t be officially declared for months.
The link below is to a chart that illustrates that likelihood.
US - Conference Board Leading Economic Index vs. GDP
Property
giant Signa set to make further insolvency filings - sources
November 27, 2023
FRANKFURT (Reuters)
-Austrian property group Signa could see more of its units file for insolvency
as soon as this week as the real estate empire is running out of cash, people
with direct knowledge of the matter said on Monday.
The group,
controlled by an Austrian magnate but whose business is anchored in Germany,
held talks with Elliott Investment Management to try to raise funds, according
to one of the people, describing the company's scramble for cash.
Signa did not
immediately respond to a request for comment. Elliott declined to comment.
Signa, which
is an owner of New York's Chrysler Building as well as scores of high-profile
projects and department stores across Germany, Austria and Switzerland, is
controlled by Austrian magnate Rene Benko.
Its
difficulties make the group the biggest potential casualty of a European
property crash, triggered by the steepest rise in borrowing costs in the euro's
25-year history, that has hit Germany and Sweden hardest.
On Friday,
Signa Real Estate Management filed for insolvency in a local court in Berlin,
according to a court filing.
That signaled
a worsening of conditions for the group, which, according to another person
with knowledge of the matter was seeking to secure fresh financing to see it
through until year end.
The group,
which values its assets at 27 billion euros ($29 billion), is made up of
numerous subsidiaries.
It has
borrowed heavily from banks, including Switzerland's Julius Baer, which
disclosed that it had an exposure of more than 600 million Swiss francs ($678
million).
Others too
have lent, including Austria's Raiffeisen Bank International.
More
Property giant Signa set to make further insolvency filings - sources (msn.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
China's respiratory illness surge not as high as pre-pandemic
- WHO official
By Andrew Silver November 27, 2023 10:27 AM GMT
SHANGHAI, Nov 27
(Reuters) - The spike in respiratory illnesses that China is currently
suffering is not as high as before the COVID-19 pandemic, a World Health
Organisation official said, reiterating that no new or unusual pathogens had
been found in the recent cases.
Maria Van
Kerkhove, acting director of the WHO's department of epidemic and pandemic
preparedness and prevention, said the increase appeared to be driven by a rise
in the number of children contracting pathogens that they had avoided during
two years of COVID restrictions.
"We
asked about comparisons prior to the pandemic. And the waves that they’re
seeing now, the peak is not as high as what they saw in 2018-2019," Van
Kerkhove told health news outlet
STAT in an interview on Friday.
"This is not
an indication of a novel pathogen. This is expected. This is what most
countries dealt with a year or two ago," she added.
China's National
Health Commission spokesperson Mi Feng said on Sunday the surge in acute
respiratory illnesses was linked to the simultaneous circulation of several
kinds of pathogens, most prominently influenza.
The
spike became a global issue last week when the World Health Organization asked China for more information, citing a report on
clusters of undiagnosed pneumonia in children by the Program for Monitoring
Emerging Diseases.
China and the WHO
have faced questions about the transparency of reporting early in the pandemic,
which emerged in the central Chinese city of Wuhan in late 2019. The WHO said
on Friday no new or unusual pathogens had been found in the recent illnesses.
Health officials
urged local authorities on Sunday to increase the number of fever clinics, as
hospitals are warning of long waits in northern areas like Beijing and Liaoning
province where cases among children appear to be especially high.
Spread by young
adults in the workplace and children at school, new cases of respiratory
illnesses could peak in the next couple of weeks, Li Tongzeng, the chief
physician at the infectious diseases department at Beijing You'an Hospital told
the Global Times newspaper.
In the report
published on Monday, Li also warned of the potential for a second wave peaking
during the New Year holidays, as the elderly could become more at risk of
infection during family gatherings.
China's respiratory illness surge not as high as
pre-pandemic - WHO official | Reuters
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.
Alibaba's research arm shuts quantum computing lab amid
restructuring
By Casey Hall November 27, 2023 10:07 AM GMT
SHANGHAI,
Nov 27 (Reuters) - Chinese tech giant Alibaba (9988.HK) has cut a quantum computing laboratory and team
from its research arm, donating both the lab and related experimental equipment
to Zhejiang University, the company said on Monday.
A spokesperson
for Alibaba's DAMO Academy, Alibaba's in-house research initiative which
included the lab, said the academy would continue to focus on technology
research with the aim of being a leader in artificial intelligence (AI)
research.
Earlier, a person
with knowledge of the matter had told Reuters that the lab, and its 30
employees, represents a small part of Alibaba's overall R&D team.
The source said
Zhejiang University would try and recruit the affected employees to work on its
own quantum research.
DAMO Academy was
launched in 2017 by Alibaba Group to research advanced technologies such as AI
and machine learning.
The closure of
the lab is the latest internal change at Alibaba, which said in March it would
split its business into six units and spin-off its cloud division.
That spin-off
was scrapped this month, and new CEO Eddie Wu said each of
Alibaba's businesses would face the market more independently and that they
would conduct a strategic reviews to distinguish between "core" and
"non-core" businesses.
Alibaba's research arm shuts quantum computing lab
amid restructuring | Reuters
"The high tide of prosperity will
continue."
Andrew
W. Mellon, Secretary to the Treasury, 1928.
The
Rise and Fall of Andrew Mellon.
October
14, 2019
---- Mellon never had as much control over the
private financial system and industry as the elder Morgan did. However, after
his appointment as treasury secretary, Mellon did have one source of power
Morgan did not: a large administrative state, and in that difference lay his
power. Mellon, more than Morgan, would fuse government and business to make the
world safe for monopolists. Throughout the 1920s, Mellon ran the Treasury
Department, set tax and government debt policy, and sat as the chairman of the
Federal Reserve.
----Patman had been threatening impeachment of Mellon for the
past year, but few believed him. Now he spoke for an hour, laying out his case
in crisp terms that revealed his training and experience as a county
prosecutor. Members of Congress scrambled to understand the charges, and the
peculiar process of an impeachment, with “page boys moving like shadows about
the chamber, rushing for law and reference books.”
He unveiled the
charges, one by one. He started with an old anti-corruption statute prohibiting
the secretary of the treasury from being involved with commerce or seagoing
vessels. The charges grew more incendiary. Mellon had, as treasury secretary
and thus boss of the Bureau of Internal Revenue, given his own companies tax
refunds. He held bank stocks while serving as chair of the Federal Reserve. He
also owned a massive distillery while enforcing Prohibition, and illegally
traded with the Soviet Union. Patman even noted that Mellon had had the
Treasury Department launch a magazine dedicated to the use of aluminum in
architecture, while controlling the Alcoa aluminum monopoly. The basic
accusation was self-dealing; Mellon had been transacting his own business at
the Treasury Department, and had retained control, if not formal ownership, in
over three hundred corporations engaged in global commerce.
----On February 4, 1932, less than a month after
Patman filed his articles of impeachment, Mellon resigned. Hoover appointed him
ambassador to England, where he would attempt to work out loans accrued during
the war.
More.
The Rise and Fall of Andrew Mellon - The American
Prospect
