The euro retreated against the US dollar on Monday to a five-week low to $0.99941 at 10:00 am CET, continuing in this way a downtrend that started days ago after the publication of the minutes of the Federal Open Market Committee (FOMC) meeting. Market participants are reacting to the fact that Federal Reserve policymakers may continue to raise interest rates to cool inflation. Recently, Federal Reserve Bank of Kansas City President and Chief Executive Officer Esther George noted the central bank would be raising interest rates until it is clearly evident that inflation is on the way down. Major European stocks also opened the day with losses. NN: Euro is trading under the dollar… Its all about the coming energy crunch in Europe this winter….. As Europe gives up the greeneewinnee ghost and switch back on nasty fossil fuels this will reverse… Also the interest rate advantage the dollar has will change as the EC raises rates
You Just Witnessed a 7 Trillion dollar Stock Market Manipulation and it is FAILING!
(Bloomberg) — A sober warning for Wall Street and beyond: The Federal Reserve is still on a collision course with financial markets. Stocks and bonds are set to tumble once more even though inflation has likely peaked, according to the latest MLIV Pulse survey, as rate hikes reawaken the great 2022 selloff. Ahead of the Jackson Hole symposium later this week, 68% of respondents see the most destabilizing era of price pressures in decades eroding corporate margins and sending equities lower. A majority of the more than 900 contributors, who include strategists and day traders, reckon inflation has topped out. Still, a whopping 84% say it may take two years or longer for the Jerome Powell-led central bank to bring it down to the official long-term target of 2%.
In the meantime, American consumers will cut spending, and unemployment will climb over 4%. All these bearish sentiments underscore the deep skepticism held by investors in the face of an unexpected $7 trillion equity rebound of late. While stocks fell last week, S&P 500 has still trimmed its 2022 loss to 11% versus the 23% decline through its mid-June nadir. US futures have opened the week lower in Asia trading. “This is a bear-market trap,” Victoria Greene, founding partner at G Squared Private Wealth, said in an interview. “Inflation is the big, bad boogie man. Even if there really is a sustained decrease in inflation, it could take a while before prices actually come down significantly.”
The survey results spell trouble for dip buyers, who have re-emerged after the horrendous first half — driven by bets on a less-hawkish monetary tightening cycle while a slew of quant funds have shifted to a bullish positioning. In turn, shares around the world have clawed back some of the worst losses while the 10-year Treasury yield has fallen back to around 3% from the peak near 3.5% earlier this year. A fast pace of monetary tightening, and the resulting economic fallout, is the biggest risk for money managers all over the world, with interest rates a key driver of corporate valuations. The bad news, per survey participants, is that inflation will deliver a meaningful blow to margins, pushing stocks lower. While inflation’s effect on profit margins is very much an open question, the majority of MLIV readers appear closer to the bearish spectrum of a heated Wall Street debate on where stocks are headed. As elevated prices persist, consumers are likely to buy less during the next six months, a majority of respondents say. That’s in line with warnings from the world’s largest retailer, Walmart Inc., that soaring inflation is forcing shoppers to pay more for essentials at the expense of other discretionary items. A cutback in consumer spending would impose a clear drag on profits posted by S&P 500 companies, which are also grappling with higher wages, rising inventories and continued supply-chain problems in China. While the S&P 500’s margins peaked a year ago, the trough may not come until the fourth quarter, according to Bloomberg Intelligence. Consensus estimates for net-income margins have fallen about a half percentage point for both the third and fourth quarters since the start of this earnings season, with communication services, health care and consumer sectors among the weakest groups, BI data show. “It’s rare for the Fed to aggressively tighten policy without causing market volatility,” said John Cunnison, chief investment officer at Baker Boyer Bank. “Stocks aren’t wildly cheap right now, but they’re not as expensive as they were six months ago, especially growth companies.” NN: I saw trillion dollar buying from one investment bank after another….. Blew me away. I KNEW this rally back would fail and so said and so traded. The velocity of the buying and the volatility burnt my ass….. I never thought trillion dollar traders would be so stupid. Their loses has started and many players will be wiped out on this next wave down. Some of the dumbest trading by institutions i have ever seen. I got my ass handed to me. Their was just no way to get a handle on the numbers. No way of knowing how much they would commit and no way of trading without taking on huge risk on this biggest, sharpest rally back in the shortest period of time I have ever seen… It happens especially in great trades. We have now entered the next wave of the bear market and it i believe will give us new much lower lows in all stock market indices….
Habeck: Putin may tighten gas further
German Minister for Economy and Climate Robert Habeck said on Monday that it is likely that Russian President Vladimir Putin may further tighten gas supplies to Europe, while also adding that Berlin is ready and has good chances to endure this winter without drastic economic measures. The comment is somewhat in contrast with this politician’s recent claim Berlin must ‘swallow bitter medicine’ to swift to a new energy model. The news comes amid the latest Gazprom’s decision to stop its gas flow through Nord Stream 1 due to another maintenance work starting from August 31 until September 2, while Kiev referred to this decision as ‘exclusively political.‘ NN: Of course Russia is going to fuck Europe…. What did the EU expect to happen when they started the Russian sanctions war….. Russia 5 Europe 0
Germany won’t keep nuclear plants in function to save gas
German Economy Minister Robert Habeck underlined on Sunday, during a discussion with citizens at the government’s open-door day, that the country will not extend the lifetime of its three remaining nuclear power plants in order to save gas. “It is the wrong decision given the little we would save,” stated Habeck, adding that the nuclear power plans would only be able to save 2% of gas use at most. He noted that such savings are not ample enough for Germany to reconsider its plans to exit nuclear energy. Nevertheless, Habeck noted that he might consider extending Bavaria’s nuclear power plant lifespan, should a stress test, results of which will be revealed in the coming weeks, display that such an action would be necessary for ensuring the stability and supply of the electricity network in the winter months. NN: Mistakes are amazing things… we all make them. How do you learn from your mistakes…. Well first and foremost you got to own them… You must realize you made a mistake…. and then you have to correct said mistake. Europe is in deep shit. But still they do not realize what the mistake is never mind owning up to them. They still don’t get it the green revolution is not here yet… It is coming but in the 30 years or more between now and then you have to use nukes and fossil fuel….
Gazprom Will Halt Nord Stream Gas Flows On Aug 31
Gazprom will stop all gas flows to Europe via the Nord Stream pipeline from August 31 until September 2, Russia’s gas giant Gazprom announced on Friday. The reason for the 3-day suspension of gas flows via the pipeline would be due to maintenance work at the Trent 60 gas compressor station, which would be carried out with Siemens. The maintenance was not planned and is expected to escalate tensions between Russia and the EU, and squeeze Germany, already in the midst of an energy crisis, by restricting gas supplies even more. Flows via Nord Stream have been reduced since mid-June after regularly scheduled maintenance continues to drag out over a gas turbine that was repaired by Siemens but never put back into operation. Siemens claims that the work on the turbine has been complete for weeks, and that it has been waiting in Germany for Gazprom to supply the necessary customs documents for its return. Gazprom, however, has stated that Siemens has not provided it with the necessary documents that would allow the turbine to be returned despite sanctions. The feud—which has now spilled over into Twitter with the two sides battling about the turbine by posting playlists for the lonely turbine—would be comical if it weren’t for the havoc the reduced gas shipments have had on Europe’s gas prices. Before the original turbine was sent off for repair, Germany warned that Russia may not resume the flow via Nord Stream when the repair work was complete—retaliation for the sanctions against Moscow. “Based on the pattern we’ve seen, it would not be very surprising now if some small, technical detail is found and then they could say ‘now we can’t turn it on any more’,” Germany said at the time. As it turns out, that “small, technical detail” is the hiccup in the return of the turbine. NN: Its called a vice. Why would Europe ever let itself get so dependent, especially German on a historic enemy. The atrocities the Russians committed on the Germans right after WW2 are unspeakable.
Bull run in stocks to morph into a bear market
Some market gurus are starting to worry the summer rally on Wall Street may be starting to fizzle, after stocks quickly lurched from oversold to overbought. Gene Goldman, chief investment officer of Cetera Financial Group, explained that stocks are likely headed for a pullback, even though the economy is in better shape than many Americans realize. “There’s been plenty of great news but the market needs a little bit of a pause. We’ve moved a little too fast, too quickly right now,” Goldman said, To support this view, he pointed to a handful of reasons why Friday’s slump in stocks might continue into next week, and possibly longer — even though he remains bullish on stocks over a longer time horizon. Cyclical sectors outperformed as stocks rallied in July and early August. But that trend appeared to come to an end this week, as defensive sectors retook the lead. “One sign that investors are getting nervous is cyclicals underperforming defensive sectors, and we’re starting to see that now,” Goldman said. Over the past week, consumer staples stocks and utilities were two top performers among the S&P 500’s 11 sectors. As a result, the Consumer Staples Select Sector SPDR fund XLP, -0.32%, an exchange-traded fund that tracks the sector, has risen 1.9%, while the Utilities Select Sector SPDR Fund XLU, -0.05% gained 1.3%. On the other hand, the two worst-performing sectors were materials and communications services, two cyclical sectors. The Materials Select Sector SPDR fund XLB, -1.84% was down 2.4% for the week, while the Communications Services Select Sector SPDR fund XLC, -1.62% shed 3.1%. Rising bond yields are another sign that the rally in stocks could be about to turn, Goldman said. Higher Treasury yields can pose a problem for stocks because they make bonds a more attractive investment by comparison. Stocks and bonds often moved in unison to start of the year, as expectations of tighter monetary policy from the Federal Reserve rattled both assets. But that dynamic appears to have shifted in August. Treasury yields turned higher earlier this month and started rising before stocks hit a rough patch late this week. The yield on the 10-year Treasury note TMUBMUSD10Y, 2.973% increased 35 basis points since Aug. 1, and it climbed 14 basis points since Monday to 2.897%. Bond yields rise as prices fall, and Goldman and others on Wall Street are now waiting to see if stocks will follow bond prices lower. Continue reading “Bull run in stocks to morph into a bear market”
Fed united on need for higher rates, divided over how high
Aug 18 (Reuters) – The Federal Reserve needs to keep raising borrowing costs to bring high inflation under control, a string of U.S. central bank officials said on Thursday, even as they debated how fast and how high to lift them. St. Louis Fed President James Bullard, who was among the central bank’s earliest advocates last year of a more muscular response to fast-building price pressures, said that given the strength of the economy he is currently leaning toward supporting a third straight 75-basis-point interest rate hike in September. “I don’t really see why you want to drag out interest rate increases into next year,” Bullard told the Wall Street Journal, saying he would like to get the Fed’s benchmark overnight interest rate to a target range of 3.75% to 4.00% by the end of this year. The Fed’s policy rate is currently 2.25%-2.50%. Earlier on Thursday, San Francisco Fed President Mary Daly said hiking rates by 50 or 75 basis points at the Fed’s next policy meeting on Sept. 20-21 would be a “reasonable” way to get short-term borrowing costs to “a little bit above” 3% by the end of this year, and on their way to a little bit higher in 2023. The exact pace would depend on employment data, which has shown brisk growth in recent months, and inflation, Daly told CNN International. Inflation, by the Fed’s preferred measure, is running at more than three times the central bank’s 2% target. With the global economic slowdown acting as a headwind on U.S. growth, she said “we have to take that into consideration as we ensure that we don’t overdo policy.” Fresh data on Thursday showing a dip in the number of Americans filing for unemployment benefits last week added to evidence that, save for the fast-cooling housing market, the economy is holding up despite the steepest round of Fed rate hikes since the 1980s. Investors may get a better read on the Fed’s likely actions in coming months next Friday, Aug. 26, when Fed Chair Jerome Powell gives a highly anticipated speech on the economic outlook at the annual global central bankers’ conference in Jackson Hole, Wyoming. Powell last month held the door open to another “unusually large” rate hike at the Fed’s next meeting, but also said “it likely will become appropriate to slow the pace of increases” to give policymakers time to take stock of how higher borrowing costs are affecting the economy. Fed officials’ remarks Thursday suggest an emerging split in the central bank between those who want to push rates higher quickly, and those who are more cautious because of potential damage to the job market and the risk of a rise in the U.S. unemployment rate, now at 3.5%. But both Bullard and Daly said they felt that once rates get to a certain level, the Fed will not quickly reverse course. Bullard said market expectations of rate cuts were “definitely premature.” Daly said she supported a “raise-and-hold” strategy. “The worst thing you can have as a business or a consumer is to have rates go up and then come rapidly down… it just causes a lot of caution and uncertainty,” Daly said. “I do think we want to not have this idea that we’ll have this large hump-shaped rate path where we’ll ratchet up really rapidly this year and then cut aggressively next year – that’s not what’s on my mind.” Trading in futures contracts tied to the Fed’s policy rate suggested investors see that rate rising to a range of 3.50%-3.75% by March of next year, but then starting to fall a few months later. Speaking at a separate event, Kansas City Fed President Esther George said she and her colleagues would continue to debate the question of how fast to raise rates, but that they would not stop tightening policy until they are “completely convinced” that inflation is coming down. The recent easing of U.S. financial conditions, including a surge in stock prices, may have been based on an overly optimistic sense that inflation was peaking and the pace of interest rate increases was likely to slow, she said. Minneapolis Fed President Neel Kashkari, the most hawkish of Fed policymakers, said the central bank needs to “urgently” bring down inflation. “The question right now is, can we bring inflation down without triggering a recession?” he said at an event in Wayzata, Minnesota. “And my answer to that question is, I don’t know.” NN: I Know: Its never happened before and it will not happen this time. The only way to stop inflation is to stop inflation expectations and demand. And the only way that happens is a recession… the bigger the inflation the more the FED raises rates and the bigger the economic downturn… We have over 150 years of history on this…..
US Is in a Bear Market Rally….. that is DOOMED
- BofA says the S&P 500’s summer surge of 17.4% in 41 trading days is a ‘classic’ bear market rally
- The Fed still has to work to bring down inflation and that could mean another pullback for stocks.
- The bank found that just four large-cap stocks contributed 30% of the index’s recent gain.
The summer surge in the S&P 500 should be considered an average bear-market rally and the index remains vulnerable to falling under its recent lows, according to Bank of America. The investment bank in its weekly Flow Show note published Friday looked at 43 bear-market rallies, marked by gains of more than 10%, since 1929. It found the average of those past bear-market rallies was 17.2% in 39 trading days. The S&P 500 in 41 trading days piled on 17.4% through the close of Thursday’s session. The index on Friday moved at around 4,226. “Thus far [a] classic bear rally, and ultimately self-defeating rally…you think SPX >4500 and Fed going to stop hiking?,” said BofA, referring to the Federal Reserve’s rate-hike campaign to cool down the hottest inflationary environment in four decades. The S&P 500’s jump from its June 16 low found fuel from investors interpreting comments by Federal Reserve Chairman Jerome Powell as a “pivot” toward policy makers considering cutting interest rates in the face of a slowing economy and potentially cooler inflation. Headline inflation did ease in July, to 8.5% from June’s 9.1% rate which marked a 41-year high. The “pivot” trade and the resurgence of meme stocks underscored the market’s waning fear of Fed policy. But investors this week heard Fed officials voice support for a third consecutive rate hike of 75 basis points at the Fed’s September meeting. Fed Chairman Jerome Powell will speak next Friday at the central bank’s symposium in Jackson Hole, Wyoming.
Bank of America said it holds the “cyclical bear” view that stocks have moved near the top of their trading range and that the market has yet to see “ultimate lows” which may come next year.
U.S. Natural Gas Storage Sees Minimal Injection as Exports Rise and you thought it was a European problem
Falling far short of market expectations, the United States added only 18 billion cubic feet into its natural gas inventories for the week ending August 12, the Energy Information Administration (EIA) noted in its weekly natural gas inventory report on Thursday.
The low injection rate for the week, compared to expectations of around 30 Bcf, pushed natural gas futures up early on Thursday, according to Natural Gas Intelligence. Heading into the fall and winter, this is a comparatively low injection rate. During the same week last year, the inventories gained 46 Bcf. Recently, U.S. natural gas futures have been gaining significant ground at highs surpassing anything seen in well over a decade due to increased momentum in exports that could leave the country short of supplies.
Earlier this week, Bloomberg reported that U.S. supplies are still more than 10% below normal levels for this time of year.
Natural gas futures had slipped somewhat earlier in the week as traders calculated the supply was recovering, ahead of the EIA’s Thursday report. Overall, natural gas prices have remained highly volatile throughout the year. On Monday, U.S. natural gas futures slipped. On Tuesday, they surged 7%. On Wednesday, prices rose to fresh highs but closed with slight losses. On Thursday, at the time of writing, U.S. natural gas futures were trading up around 0.80%, shortly after the EIA’s inventory release. The EIA also noted on Thursday that natural gas exports from Texas into Mexico have increased significantly, based on the most recent data from May 2022. During May, exports from pipelines in West Texas heading to Mexico averaged 1.6 billion cubic feet per day. That is a record level and represents a 12% increase from January through May. Increases in exports for West Texas to Mexico have doubled since 2019. NN: their is one hell of a winter time energy crises brewing. Reality is US natural gas producers are starving US market because their gas is worth 600% more when exported….
Millennials the most useless generation until…. Generation Z came along
Study Claims American Millennials Are The Most Useless Population In The World
A study seeking to measure the overall competency of age groups throughout the globe has found that American Millennials are without a doubt the least skilled population in the world. The ETS study tested individuals aged 16 to 65 across 23 countries, and measured Literacy, Numeracy, and “problem-solving in technology-rich environments.” Across the board American Millennials scored a ‘feeble wet fart’ on the competency scale when compared with their foreign counterparts. Long thought to be the most technologically savvy and educated generation in history, American Millennials (people aged 16-34) just can’t hack it when it comes to the skills employers are looking for. Japan crushed it, but there was no indication as to whether or not the Japanese culture’s infatuation with tentacle porn had any bearing on workplace competency.
Here are some key findings from the ETS study:
- In literacy, U.S. millennials scored lower than 15 of the 22 participating countries. Only millennials in Spain and Italy had lower scores.
- In numeracy (ability to apply math to everyday situations), U.S. millennials ranked last, along with Italy and Spain.
- In PS-TRE (problem solving in a technology rich environment), U.S. millennials also ranked last, along with the Slovak Republic, Ireland, and Poland.
- The youngest segment of the U.S. millennial cohort (16- to 24-year-olds), who could be in the labor force for the next 50 years, ranked last in numeracy along with Italy and among the bottom countries in PS-TRE. In literacy, they scored higher than their peers in Italy and Spain.
- Top-scoring U.S. millennials (those at the 90th percentile) scored lower than top-scoring millennials in 15 of the 22 participating countries, and only scored higher than their peers in Spain.
- Low-scoring U.S. millennials (those at the 10th percentile) ranked last along with Italy and England/Northern Ireland and scored lower than millennials in 19 participating countries.
- Although a greater percentage of young adults in the U.S. are attaining higher levels of education since 2003, the numeracy scores of U.S. millennials whose highest level of education is high school and above high school have declined.
- U.S. millennials with a four-year bachelor’s degree scored higher in numeracy than their counterparts in only two countries: Poland and Spain.
To summarize: American Millennials are the overall worst generation in the world when it comes to useful skills. Even if American Millennials didn’t finish dead last in EVERY SINGLE CATEGORY, they managed to finish at or near the bottom across the board. Now I’m still a little confused as to how American Millennials shit the bed so hard on this one. I even took some of the practice questions and found them to be pretty damn easy…So what gives? ETS, the firm who administered the test, is based out of Princeton, New Jersey. That threw out my idea that maybe there was a cultural bias in the test. So for now I’m going to just watch this video below on repeat while I sit around and try and come up with any logical explanation as to why American Millennials failed so hard compared to our global counterparts: