Week in Review

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Week in Review

09/09/2023

For the week 9/4-9/8

[Posted 5:00 PM ET, Friday]

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Edition 1,273

President Biden said on Monday that he did not think workers at the nation’s three large automakers were likely to go on strike.  “I’m not worried about a strike,” Biden said in Philadelphia ahead of a Labor Day speech.  “I don’t think it’s going to happen.”

Well, Uncle Joe is clueless, yet again.  UAW President Shawn Fain has demanded a 40% wage gain (actually, 46% over four years), and a 32-hour work week with 40 hours of pay.  The contract with GM, Ford and Stellantis expires on Thursday, Sept. 14.  Yes, negotiations could always be extended but the UAW claims the Detroit Three are not bargaining in good faith. 

Ford said last week it had offered a 9% wage increase, plus lump sums, through 2027.  GM Thursday said it was offering essentially 16% over four years (10%, plus two, 3% lump-sum payments over the term of the offer).  Stellantis today is offering 14.5% plus lump sums.

Shawn Fain replied to the GM proposal: “After refusing to bargain in good faith for the past six weeks, only after having federal labor board charges filed against them, GM has come to the table with an insulting proposal that doesn’t come close to an equitable agreement for America’s autoworkers.  GM either doesn’t care or isn’t listening when we say we need economic justice at GM by 11:59pm on September 14th.  The clock is ticking.  Stop wasting our members’ time.  Tick tock.”

There are all kinds of other issues, particularly the new battery manufacturing plants that aren’t employing union labor and the UAW insists they be unionized.

What I didn’t know until this week was that the UAW’s strike fund would pay workers $500 a week while they are off, a major increase from past actions.

This is going to get ugly.  Fain has said the UAW would go on strike against any of the three automakers that have not reached a tentative contract agreement.

For his part, President Biden is not going to look good once the strike hits and he starts firing off comments.  If, and when, there is an inevitable settlement, it will be inflationary.  [Look at United Parcel Service, whose shares have tanked since a very expensive settlement with its workers a few weeks ago.]

But then there was an important CNN/SSRS survey that asked voters questions such as ‘does Joe Biden inspire confidence,’ to which 28% said ‘yes,’ 72% ‘no.’  And ‘does Biden have the stamina/sharpness to serve effectively as president,’ to which 26% responded ‘yes,’ 74% ‘no,’ with only 23% of independents saying ‘yes.’

Editorial / Wall Street Journal

“In a CNN poll this week, 76% of Americans said they were ‘seriously concerned’ that Mr. Biden’s age ‘might negatively affect’ his ability to serve another full term, and 73% also worried about his ‘current level of physical and mental competence.’  Among Democrats and left-leaners, the figures were 62% and 56%. Sixty percent of Mr. Biden’s copartisans feared his age might cost him the election….

“The age problem isn’t going away, and Mr. Biden isn’t doing a great job of managing it.  This week he began wearing a mask again, after first lady Jill Biden tested positive for Covid.  Mr. Biden took off the mask Tuesday to give remarks and hang a Medal of Honor on a Vietnam veteran, before he skedaddled up the aisle.

“ ‘What we made sure to happen is that there was a brief pause – when there was a pause in the program, the President left,’ press secretary Karine Jean-Pierre explained.  ‘That was done purposefully so that, again, he wasn’t – he wasn’t there for too long.’ Whether this is prudent health advice is for Mr. Biden’s doctors, and we don’t mean Dr. Jill.  But the country has long since moved on from Covid protocols.

“Regardless of party or ideology, we wish our political leaders good health, and Mr. Biden isn’t the only one who’s aging.  Mr. Trump is 77.  Yet given Mr. Biden’s public stumbles, verbal and literal, he can’t exactly go on a debate stage next year and pledge not to exploit his opponent’s youth and inexperience.  That was Reagan’s famous line against Walter Mondale in 1984 and, for the record, the Gipper was only 73.”

Last week I noted Daniel Henninger’s column in the Journal where he offered up Bill Clinton’s adage, essentially Democrats ‘will do what they got to do’ when it comes to Biden.

Last night on CNN, James Carville was asked if the Democrats would replace Biden on the ticket, and he talked about the “long and deep bench out there,” but beat around the bush on actually answering the question, until he said, “Depends on what happens…”

And that’s what it really is about.  Something will happen, potentially sooner than later.  To beat a dead horse, there is no way we see Joe Biden on the campaign trail next summer.

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Mike Pence / Wall Street Journal

“Republican voters face an important choice next year. It will determine both the fate of our party and the course of the nation.  Will we be the party of conservatism, or will we follow the siren song of populism unmoored to conservative principles?....

“Populist movements have long been part of America’s politics. They have most often been led by Democrats and leftists, such as William Jennings Bryan, Huey Long and Bernie Sanders.

“But a populist movement is now rising in the Republican Party. This growing faction would substitute our faith in limited government and traditional values for an agenda stitched together by personal grievances and performative outrage.

“Republican populists would abandon American leadership on the world stage, embracing a posture of appeasement in the face of rising threats to freedom.

“Republican populists would erode our constitutional norms. A leading candidate last year called for the ‘termination’ of ‘all rules, regulations, and articles, even those found in the Constitution,’ while his imitators have demonstrated a willingness to brandish government power to silence critics.

“Republican populists would have us trade in our time-honored principles for passing public opinion.

“That isn’t a trade I am willing to make. I am an unapologetic conservative who believes that strong national defense, limited government and traditional values must guide our nation as much today as they have guided our party for the past 50 years.

“Should the new populism of the right seize and guide our party, the GOP as we have long known it will cease to exist.

“If we are to defeat Joe Biden and turn America around, the GOP must be the party of limited government, free enterprise, fiscal responsibility and traditional values.”

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This Week in Ukraine….

--Ukraine said on Monday its troops had regained more territory on the eastern front and were advancing further south in their counteroffensive. Deputy Defense Minister Hanna Maliar said Kyiv’s forces had retaken about 1.16 square miles of land in the past week around the eastern city of Bakhmut.  She also reported unspecified “success” in the direction of two villages in the southern region of Zaporizhzhia, but gave no details.  Russia has not confirmed the Ukrainian gains, some 47 square km (18 sq miles) of territory since the start of June.

But Moscow has continued to carry out air strikes on Ukrainian targets including port infrastructure.

President Zelensky visited troops in the eastern Donetsk region, where Bakhmut is located, and in Zaporishzhia region, where Kyiv’s forces are trying to push southward to the Sea of Azov, on Monday. In his nightly address, delivered from a train, the president said the soldiers’ feedback on the course of the conflict would be taken seriously.

Zelensky also rebuffed Western officials who say Ukraine is gaining ground too slowly. “Ukrainian forces are moving forward.  Despite everything, and no matter what anyone says, we are advancing, and that is the most important thing. We are on the move,” Zelensky wrote on Telegram.

--Ukrainian Defense Minister Oleksi Reznikov submitted his resignation on Monday in the biggest shakeup of the defense establishment in 18 months of war with Russia.  Reznikov has been at the forefront of Kyiv’s lobbying for Western weapons to right Russia’s invasion, but his departure after months of corruption allegations against his ministry is not expected to have a big impact on military operations.

President Zelensky said on Sunday he was sacking Reznikov and proposed Rustem Umerov, a Crimean Tartar and ex-lawmaker who runs the State Property Fund, to replace him. 

While the counteroffensive has received criticism by some Western officials for making slow progress, Reznikov was not seen as involved in day-to-day military operations.  The 57-year-old former lawyer was not implicated personally by corruption allegations leveled by Ukrainian media at the defense ministry, most notably over procurement. But the accusations prompted calls for him to be fired, and Reznikov portrayed himself as the victim of a smear campaign.

Zelensky has said he has a zero tolerance line on corruption as Kyiv tries to advance its bid to join the European Union and show it is enforcing the rule of law.

Reznikov praised Ukraine’s fierce wartime resistance against Russian forces, saying, “There is an understanding that Ukraine is a shield of Europe in the east.”  He has been tipped to become Ukraine’s ambassador to London.

--Ukraine said on Monday that Russian drones had detonated on the territory of NATO member Romania during an overnight air strike on a Ukrainian port across the Danube River, but Bucharest denied its territory had been hit.

“According to Ukraine’s state border guard service, last night, during a massive Russian attack near the port of Izmail, Russian ‘Shakheds’ fell and detonated on the territory of Romania,” a foreign ministry spokesperson said, referring to Iranian-made drones.  “This is yet another confirmation that Russia’s missile terror poses a huge threat not only to Ukraine’s security, but also to the security of neighboring countries, including NATO member states.”

The Danube has become a vital export corridor for Ukrainian grain, and Russia has targeted the route with regular air strikes.

At least two people were injured in the latest attack on southern Odesa region on Sunday.

Then Wednesday, Romania’s defense minister conceded parts of what could be a Russian drone fell on Romanian territory.

--Monday, Vladimir Putin and Turkish President Erdogan met in Sochi to see if the Black Sea grain deal could be revived.  Russia has complained that under the deal its own food and fertilizer exports faced obstacles and that not enough Ukrainian grain was going to countries in need.  So the bastards blow it up!

--Early Tuesday, Russia said it shot down Ukraine-launched drones targeting Moscow in Istra district of the capital region and the Kaluga region, the defense ministry and Moscow’s mayor said.

--Wednesday, the commander of Ukraine’s ground forces, Oleksandr Syrskyi, said the situation along the eastern frontline remains difficult and the main task for Ukraine’s troops is to ensure reliable defense and prevent the loss of strongholds.

“The enemy does not abandon his plans to reach the border regions,” Syrskyi wrote on Telegram.  “Our main task is to ensure reliable defense, to prevent the loss of our strongholds and positions in the Kupiansk and Lymansk directions, as well as to successfully move forward and reach the designated lines in the Bakhmut direction.

--Secretary of State Antony Blinken arrived in Kyiv on Wednesday morning, announcing a new package of U.S. assistance.  He met with President Zelensky and his Ukrainian counterpart, Dmytro Kuleba.  Moscow launched missile attacks on Kyiv a few hours prior to Blinken’s arrival.  Kyiv’s air defenses shot down all the missiles before they reached their targets.

But then Blinken’s trip was overshadowed by yet another heinous Russian attack, this one on the eastern city of Kostiantynivka, which killed at least 17 people.  President Zelensky condemned the attack, which hit a market, shops and a pharmacy. 

“This Russian evil must be defeated as soon as possible,” Zelensky said, describing it as a deliberate attack on a “peaceful city.”

--Early Wednesday, a Russian drone attack on the Danube port of Izmail in the Odesa region killed one person and damaged infrastructure, the region’s governor said.  Several agricultural and port facilities were hit, said Oleh Kiper, the governor.

--Rustem Umerov was approved as defense minister by parliament on Wednesday.  Writing on Facebook after, he said, “Our main objective is victory.  I will do everything possible and impossible for Ukraine’s victory – when we will liberate every centimeter of our country and each person.”

--Thursday, Ukrainian generals claim they had breached Russia’s formidable first line of defenses in the south.  “Yes, it’s true,” said Yuriy Sak, an advisor to Ukraine’s defense minister, when asked if the breach had happened.  “Little by little, I think we’re gaining momentum,” he said.

“We are now between the first and second defensive lines,” one of Ukraine’s top generals in the South, Brig. Gen. Oleksandr Tarnavskiy, told British media.

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--According to the New York Times, Russia has begun using a terrifying new method to stop Ukraine from clearing minefields: “They will lace a pasture filled with mines with a flammable agent,” the Times reported from the south. “Once the Ukrainians get to work clearing an opening, the Russians will drop a grenade from a drone, igniting a sea of fire and explosions.”

--Putin said in a television interview on Tuesday, without citing evidence, that Western powers had installed Volodymyr Zelensky, who is of Jewish heritage, as president of Ukraine to cover up the glorification of Nazism.  In justifying its invasion of Ukraine, which it calls a “special military operation,” Russia accuses Kyiv’s leaders of being neo-Nazis pursuing a “genocide” of Russian-speakers – an assertion that Kyiv and Western countries dismiss as a baseless pretext for a war of acquisition.

Putin was answering a question from a Russian reporter and his comments were shown on Russian state TV.  Zelensky has said some of his grandfather’s brothers were killed in the Holocaust.

--Chinese lenders have stepped in to extend billions of dollars to Russian banks as western institutions pulled back their operations in the country during the first year of Moscow’s invasion of Ukraine.

According to the latest official data analyzed for the Financial Times by the Kyiv School of Economics, China’s exposure to Russia’s banking sector quadrupled in the 14 months to the end of March this year.

The lenders took the place of western banks, which came under acute pressure from regulators and politicians in their home countries to exit Russia, while international sanctions made doing business much harder.

The moves by Chinese banks are also part of a shift by Russia to adopt the renminbi rather than the U.S. dollar or euro as a reserve currency.

Before last year’s invasion, more than 60 percent of Russia’s payments for its exports were made in what the country’s authorities now refer to as “toxic currencies,” such as the dollar and euro, with renminbi accounting for less than 1 percent.  Now the renminbi total is 16 percent, according to Russia’s central bank (an honest player, by the way, vs. the cesspool of lies emanating from the Kremlin).

--Meanwhile, U.S., British and European Union officials are planning to jointly press the United Arab Emirates to halt shipments of goods to Russia that could help Moscow in its war against Ukraine, the Wall Street Journal reported on Monday.  A UAE official, in response to a Reuters request for comment, said the country “strictly abides by UN sanctions and has clear and robust processes in place to deal with sanctioned entities.”  The UAE is “continuously monitoring the export of dual-use products,” which have both civilian and military applications, under its export control legal framework, the official added. 

Frankly, utter B.S. on the part of the UAE.

--Lastly, Walter Isaacson’s biography “Elon Musk” is being released next week and in an excerpt, we learn that Musk had ordered the deactivation of Starlink satellite service near the coast of Crimea last September in order to prevent a Ukrainian drone attack on a Russian naval fleet.

The Starlink satellite internet service, operated by Musk’s SpaceX, has been a digital lifeline in Ukraine since the early days of the war for both civilians and soldiers in areas where digital infrastructure has been destroyed.

The excerpt said that Musk had conversations with a Russia official that led him to worry that an attack on Crimea could spiral into a nuclear conflict.  Late Thursday, Musk responded on X, formerly known as Twitter, that he hadn’t disabled the service but had rather refused to comply with an emergency request from Ukrainian officials to enable Starlink connections to Sevastopol on the occupied Crimean peninsula.  That was in effect an acknowledgement that he had made a decision to prevent a Ukrainian attack.  Think about how much power this one man has.  He has near-total control over connectivity in the war zone.

“The obvious intent being to sink most of the Russian fleet at anchor,” Musk wrote on X.  “If I had agreed to their request, then SpaceX would be explicitly complicit in a major act of war and conflict escalation.”

To which an angry Mykhailo Podolyak, a senior adviser to President Zelensky, replied that Musk’s “interference” had allowed Russia’s naval fleet to continue firing cruise missiles at Ukrainian cities.

“As a result, civilians, children are being killed.  This is the price of a cocktail of ignorance and big ego,” Podolyak wrote on X.

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Wall Street and the Economy

It was a light week for economic data of import, with July factory orders down 2.1%.

But the ISM services sector reading of 54.5 for August (50 the dividing line between growth and contraction) was much better than forecast, and not exactly good news for the Fed as employment, prices and new orders all jumped from the prior month.  Investors are concerned that if the economy doesn’t show signs of drag, inflation would turn higher, rather than continue  the favorable trend of the past year.

The Atlanta Fed’s GDPNow barometer for third-quarter growth is still at 5.6%.

Freddie Mac’s 30-year fixed-rate mortgage is 7.12%, down from the high of 7.23% two weeks ago.

The Wall Street Journal ran a headline titled “Real-Estate Doom Loop Threatens Banks,” more of what we have covered before in this space.

“With the commercial real-estate market now in meltdown, those trillions of dollars in loans and investments are a looming threat for the banking industry – and potentially the broader economy.  Banks’ exposure is even bigger than commonly reported. The banks are in danger of setting off a doom-loop scenario where losses on the loans trigger banks to cut lending, which leads to further drops in property prices and yet more losses….

“Nearly $900 billion in commercial property loans are maturing this year and next, forcing many landlords to seek out more expensive financing from private investors and banks still willing to lend.”

Regarding Commerce Secretary Gina Raimondo’s trip last week to China, she told the Sunday talk shows that she warned China that the patience of U.S. business was “wearing thin,” saying American companies deserved a “predictable environment and a level playing field.”

“China is making it more difficult,” Raimondo told CBS’ “Face the Nation.” “I was very clear with China that we need to – patience is wearing thin among American business… And hopefully China will heed that message so we can have a stable growing commercial relationship.”

Raimondo has said U.S. firms faced new challenges, among them unexplained large fines, raids on businesses and changes to a counterespionage law. She also confronted Chinese officials on her email being hacked in advance of her trip.  “They suggested that they didn’t know about it and they suggested that it wasn’t intentional,” she told CNN.

Europe and Asia

S&P Global reported out the final eurozone PMI for August, a composite reading of 46.7, a 33-month low.  The services sector reading for the EA20 was 47.9, a 30-month low.  [Manufacturing was released last week, just 43.5.]

Service sector readings for August:

Germany 47.3 vs. 52.3 in July
France 46.0
Italy 49.8 vs. 51.5
Spain 49.3 vs. 52.8
Ireland 55.0

UK 49.5 vs. 51.5

Not good trends.

Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank:

“The eurozone didn’t slip into recession in the first part of the year, but the second half will present a greater challenge.  The once stabilizing services sector turned into a drag for the economy while manufacturing has not bottomed out yet, most probably.  The disappointing numbers contributed to a downward revision of our GDP nowcast which stands now at -0.1% for the third quarter.

“Input price increases surprisingly picked up putting the perspective of rapidly decreasing inflation into question. The prime suspect is likely the wage hikes, which are not necessarily in sync with the business cycle, given their often longer term nature….

“Among the big eurozone countries, the main drag is coming from Germany and France, where activity in the service sector weakened at the fastest rate this year.”

Related to the above, a look at second-quarter GDP in the eurozone, put out by Eurostat, had it increasing by 0.1% compared with the previous quarter, up 0.5% when compared to Q2 2022.

2023Q2 vs. 2022Q2

Germany -0.1%, France 1.0%, Italy 0.4%, Spain 1.8%, Netherlands -0.3%, Ireland -0.7%.

Finally, Eurostat reported July industrial producer prices fell by 0.5% in the euro area over June, and were down 7.6% year-over-year.

July retail trade decreased by 0.2% in the eurozone vs. June, and down 1.0% from a year ago.

Turning to Asia…China’s private Caixin service sector PMI for August was a highly disappointing 51.8 vs. 54.1 in July.

And China’s exports for August fell 8.8% year-on-year, while imports contracted 7.3%.  It was the fourth consecutive month of falling exports, though August’s decline was better than analysts expected, and measured against July’s 14.5% Y/Y decline.  Coupled with the worsening property slump and weak consumer spending, it seems increasingly unlikely Beijing will achieve its target of 5% growth for the year.

Exports to the U.S. in August fell 9.5% from a year earlier, down 19.6% to the EU.  Exports to Russia advanced 16%, after surging 52% in July and a 91% jump in June, per the General Administration of Customs.

Japan reported its August services PMI came in at a solid 54.3, up from July’s 53.8.

July household spending, though, was down 5.0% year-over-year, much more than expected.

But last night, the Cabinet Office reported that the economy expanded 1.2% in the second quarter over the first, compared with a flash reading of a 1.5% gain and after a downwardly revised 0.9% in Q1.  This was the second straight quarter of growth.  The annualized pace was 4.8% vs. a downwardly revised 3.2% increase in the prior period.  This was the steepest pace since Q2 of 2022, mainly supported by a strong contribution from net trade as exports rose the most in two years.

Street Bytes

--Stocks closed lower across the board this week, largely on the feeling that the strong economy will keep the Fed higher for longer.  Apple’s issues with China (see below) didn’t help.

The Dow Jones lost 0.7% to 34576 on the holiday shortened week, while the S&P 500 fell 1.3% and Nasdaq 1.9%.  Small- and mid-cap stocks did far worse.

--U.S. Treasury Yields

6-mo. 5.52%  2-yr. 4.98%  10-yr. 4.25%  30-yr. 4.33%

The 10-year hit 4.30%, intraday, before backing off.  Next week it’s all about the consumer price index, the last major piece of information for the Fed prior to its Open Market Committee gathering Sept. 19-20.  As of now, consensus is they’ll pause, but I’m sure Chair Powell will make it very clear they aren’t necessarily done.

--Oil prices climbed to over $90 a barrel on Brent (the global benchmark) – the first time it has breached that level this year, $87 on West Texas Intermediate (that which I quote each week below).  Saudi Arabia and Russia, the world’s second- and third-largest producers, said they would continue to limit output.  Saudi Arabia is constraining supply at around 9m barrels per day, 25% below its declared maximum output.  It has said it will continue to do so until the end of 2023.

Vladimir Putin and Saudi Crown Prince Mohammed bin Salman talked Wednesday and, according to a readout from the Kremlin, agreed that their supply cuts had ensured stability on global energy markets.

Separately, the Biden administration announced Wednesday it would prohibit drilling in 13 million acres of the National Petroleum Reserve (Alaska’s North Slope) and cancel all the existing leases in the Arctic National Wildlife Refuge.

This move is not as drastic as it sounds, as no major oil companies were going to launch projects in that specific area, and it would not stop the enormous Willow oil drilling project in the same vicinity that President Biden approved this year. 

Oil executives, though, saw the move as part of a sustained attack on their industry.

“What we’re seeing right now is, on all federal lands and all federal waters, they are doing everything they can to stifle production in the United States,” said Mike Sommers, president of the American Petroleum Institute.

Still, domestic oil production has increased by 1.3 million barrels a day since 2022 and is expected to hit records in 2023 and 2024, according to the Energy Information Association.  Natural gas production is also expected to continue to grow.  But most of that growth is occurring on private lands, Sommers said.

Editorial / Wall Street Journal

“The Biden re-election campaign ran an ad during Thursday’s NFL kickoff touting the President’s economic agenda, including his supposed success in making the U.S. more ‘energy independent.’  Yet his Administration’s relentless war on fossil fuels has left Americans more vulnerable to Mr. Putin’s tender mercies and dependent on China for green energy.

“U.S. gasoline prices have risen 60 cents a gallon this year as Saudi Arabia and Russia command the oil market.  The Administration flogs jobs created by its green-energy subsidies, but how many more are its climate policies destroying?  Employment in oil and gas extraction is 15% lower than before the pandemic.

“Sorry, Mr. President, unemployed roustabouts in Alaska aren’t going to be installing solar panels in the tundra.”

And staying on the topic of energy, Texas declared its first power emergency since a deadly winter storm two years ago and came close to rolling blackouts as soaring temperatures continue to roast the state.

The declaration of a so-called Level 2 emergency late Wednesday came in response to shrinking supplies of available power and meant the Electric Reliability Council of Texas, the state’s grid operator, had to draw on reserves while pushing consumers to curb usage. And the 100-degree air temps are continuing this weekend.  It’s going to be a close call to keep the grid stable.

Just last week I wrote how it’s been surprising that the state has weathered the intense heat of the past few months without blackouts.

--Apple shares plunged 3.6% on Wednesday, and another 3% Thursday, after a handful of Chinese ministries told their employees to stop using Apple’s iPhones at work, citing national security risks amid heightened geopolitical tensions with the United States, as first reported by the South China Morning Post.

The orders were handed down in August to employees at ministries whose portfolios are focused on investment, trade and international affairs.  The measures were understood to be aimed at eliminating perceived national security risks from using telecommunications devices made by a U.S. company.

A similar ban is believed to have been in place for years for some government bodies, but the latest order has expanded that ban.

The order only targets the iPhone, and does not involve other smartphones from foreign brands, sources told the SCMP.  The Wall Street Journal then had similar reporting.

Apple’s iPhone is also the only foreign-made smartphone with a dominant market share in China.  According to data from tech market tracker Counterpoint Research, the iPhone had 17.2 percent of the Chinese market – the same as Chinese phone maker Oppo, and only slightly behind China’s Vivo.  Apple itself has said it receives about 20 percent of its revenue from China, where the iPhone is manufactured.

Well, guess who is not surprised?  Moi!  This is what I’ve been talking about ad nauseam for years and years…President Xi playing the nationalism card.  [Now cloaked in official language citing ‘national security.’]

Washington has imposed its own bans on Chinese telecom devices, such as Huawei and ZTE since November 2021 for the purpose of “protecting the American people from national security threats involving telecommunications.”

And many Western countries have moved to ban TikTok, owned by Chinese tech giant ByteDance.

Speaking of Huawei, its latest flagship smartphone has been met with enthusiasm in China, where some consumers see the device as a symbol of national pride and evidence that the country can break through U.S. sanctions targeting Chinese home-grown tech champions.

The company surprised the market by launching the new Mate 60 and the more advanced Mate 60 Pro. 

Huawei is expected to rack up sales of no fewer than 7 million units of the Mate 60 series, according to Counterpoint Research, barring any supply glitches.

The Mate 60 Pro, which is equipped with Huawei’s in-house Kirin 9000s processor that was known to support 5G connectivity, came three years after the company last released a 5G smartphone, the Mate 40 series.

Under tightened U.S. restrictions imposed in 2020, Huawei cannot obtain advanced integrated circuits from major contract chip makers around the world, but early research by industry experts indicates that China’s Semiconductor Manufacturing International Corp., also under U.S. trade sanctions, used existing equipment to manufacture the 5G-capable chips for Huawei.

According to a teardown of the handset by TechInsights, conducted for Bloomberg News, the new Kirin 9000s chip was fabricated by SMIC, suggesting the Chinese government is making some headway in attempts to build a domestic chip ecosystem.  So this calls into question the U.S.-led global campaign to prevent China’s access to cutting-edge technology, driven by fears it could be used to boost Chinese military capabilities.

The launch of the Mate 60 series was timed right ahead of Apple’s release of the iPhone 15 next week.

Bottom line, the Chinese government’s recent moves certainly are not going to help Apple sales there.

--Southwest Airlines on Wednesday flagged softer August leisure bookings and joined two other U.S. airlines in warning of higher fuel costs in the third quarter due to a jump in crude prices.

The largest U.S. domestic carrier said August bookings were at the lower end of its expectations, in part due to seasonal trends, but maintained that overall leisure demand and yields remain healthy.

The forecast comes as early signs emerge of domestic travel demand weakening, with inflationary pressures hurting consumers even as carriers hand out costly contracts to retain workers.  United Airlines and Alaska Air Group also warned of higher fuel costs in the current quarter.  In a regulatory filing, United said jet fuel prices have climbed over 20% since mid-July.

Southwest said it continues to forecast a “solid (third-quarter) profit,” but trimmed its expectations for revenue per available seat mile – a proxy for pricing power – to a 5% to 7% fall, compared with a 3% to 7% fall forecast earlier.

--TSA checkpoint numbers vs. 2019

9/7…93 percent of 2019 levels
9/6…98
9/5…115
9/4…115
9/3…88
9/2…119
9/1…124…Friday before Labor Day
8/31…123

--U.S. household net worth jumped to a record in the second quarter as the value of real estate holdings and stocks rose.

Household net worth increased $5.5 trillion, or 3.7%, in the April-June period to $154.3 trillion, a Federal Reserve report showed Friday.

The S&P 500 rallied in the period by the most since the end of 2021.  In the housing market, despite higher mortgage rates keeping a lid on sales, demand is still strong enough to keep prices elevated.

--Walmart is lowering starting wages for some entry-level jobs, a sign the labor market is cooling.  The retailer said it is making the pay for entry-level jobs more consistent across the store as part of a new policy implemented this summer.

Under the policy, all new workers, including cashiers, stockers, and people fulfilling online orders, will make the same hourly starting wage.  Previously, starting wages varied depending on the function the employee fulfilled at the store.

Earlier this year, Walmart bumped up its starting wage to $14 an hour from $12 an hour.  No current employees received pay cuts because of the policy.

--The Washington Post’s Jacob Bogage had an extensive piece on the growing issue of large U.S. property insures pulling back from offering coverage that homeowners in area vulnerable to natural disasters need most.

“Major insurers say they will cut out damage caused by hurricanes, wind and hail from policies underwriting property along coastlines and in wildfire country, according to a voluntary survey conducted by the National Association of Insurance Commissioners, a group of state officials who regulate rates and policy forms.

“Insurance providers are also more willing to drop existing policies in some locales as they become more vulnerable to natural disasters.”

U.S. insurers have disbursed $295.8 billion in natural disaster claims over the past three years, according to international risk management firm Aon.  That’s a record for a three-year period, according to the American Property Casualty Insurance Association.

It’s not just hurricanes and wildfires, “tornado alley” continues to shift eastward from the traditional Texas and Oklahoma through Kansas and Nebraska.

Check your policies carefully with each renewal.

--Amazon is about to be hit by an antitrust lawsuit from the Federal Trade Commission, according to a report in the Wall Street Journal.  Amazon hasn’t offered any concessions to the FTC in what could be the final talks before a lawsuit is filed.  Amazon has yet to comment.

But, for shareholders this might be good news, because in a breakup, Amazon could be worth more.  For example, a scenario where Amazon is broken into three parts – its own retail operation, a third-party retail or marketplace platform, and the cloud-computing business.

On the other hand, a breakup, if so ordered and approved by the courts, could take a decade, analysts say.

--Moderna on Wednesday said clinical trial data showed its updated Covid-19 vaccine will likely be effective against the highly-mutated BA.2.86 subvariant of the coronavirus that has raised fears of a resurgence of infections.  The company said its shot generated an 8.7-fold increase in neutralizing antibodies in humans against BA.2.86.

The CDC has previously indicated that BA.2.86 may be more capable of causing infection in people who previously had Covid or were vaccinated with previous shots.  The retooled shot has yet to be approved by the Food and Drug Administration.

But in a sign of how things have changed on the Covid front, shares in Moderna fell $1.  There was a time early in the pandemic that such news would be welcomed with a 15 to 20 percent increase in the share price.

--Kroger reported adjusted fiscal Q2 earnings of $0.96 per share, up from $0.90 a year earlier.  Sales for the quarter ended Aug. 12 were $33.85 billion, down from $34.64 billion a year earlier, less than the Street’s estimate.

Same-store sales, ex-fuel, were up just 1% year-over-year, compared with a 5.8% rise a year ago.

The supermarket chain, which is merging with smaller rival Albertsons in a $25 billion deal, sees 1% to 2% growth in identical sales for all of fiscal 2023, on the lower end of consensus.

Lower-income shoppers, who have tightened their budgets to adapt to dwindling food-stamp benefits and higher borrowing costs, are now seeking cheaper household items and groceries.

Separately, Kroger took a $1.4 billion charge related to a nationwide opioid settlement.

Regarding the Albertsons merger, to meet the approval of antitrust regulators, the two have agreed to sell more than 400 stores and other assets for about $1.9 billion.

--Summer movies reached $4 billion in box office sales between May and August for the first time since before the pandemic, according to ComScore, with Labor Day weekend in the U.S. marking the official end of the season.

“Barbie” continues to hit records after six weeks in theaters, with sales of over $1.38 billion, besting $1.36bn globally for The Super Mario Bros. Movie, and $852.9 million for Oppenheimer, according to BoxOfficeMojo.com.

The third installment of Sony’s Equalizer franchise, starring Denzel Washington, was first at the box office over Labor Day weekend, with $34.5 million in domestic sales (though probably $42 million by the end of Monday).

But with the Hollywood actor and writer strike ongoing, the fall lineup is thinning out.  Warner Bros. moved potential blockbuster Dune: Part Two to 2024.

Foreign Affairs

China/Taiwan: President Xi Jinping is skipping the world’s premier international forum of world leaders, the G-20, and no one seems to know exactly why.

I brought up last time that it could be diplomatic sparring with host India, the two with an ongoing border dispute.  Or Xi wants to bolster the newly expanded BRICS forum.  Or he wants to stay home to handle China’s economic troubles, but that’s not reason enough to not spend 36 hours or so on the world stage.

Xi has attended every G-20 leaders’ summit since taking power in 2012, and he’s sought to burnish his image as a peacemaker, telling President Biden at last year’s meeting in Bali, Indonesia, that it was a statesman’s responsibility to “get along with other countries.”

But if he went to India he’d face questions over China’s economic trajectory, Beijing’s military aggression toward Taiwan and his support for Russia after its invasion of Ukraine.

Xi’s failure to show up certainly doesn’t allay investor concerns that China is becoming increasingly unpredictable, with Commerce Secretary Raimondo saying businesses in China told her the abrupt policy swings had made the nation nearly “uninvestable.”

North Korea: Kim Jong un plans to travel to Russia this month, as early as next week, to meet with Vladimir Putin to discuss the possibility of supplying Russia with more weaponry for its war in Ukraine, according to American and allied officials.

Kim will probably travel by armored train to Vladivostok, on the Pacific coast of Russia, where he would meet with Putin.  It’s possible he could go to Moscow, though not likely.

Putin needs artillery shells and antitank missiles, and Kim would like Russia to provide North Korea with advanced technology for satellites and nuclear-powered submarines, officials say.  And Kim needs food aid.

Separately, Pyongyang launched its first operational “tactical nuclear attack submarine” and assigned it to the fleet that patrols the waters between the Korean peninsula and Japan, state media said on Friday.  Kim, who attended the launch ceremony on Wednesday, said arming the navy with nuclear weapons was an urgent task and promised to transfer more underwater and surface vessels equipped with tactical nuclear weapons to the naval forces, news agency KCNA reported.

Iran: The International Atomic Energy Agency on Monday reported no progress in talks with Iran on sensitive issues such as reinstalling surveillance cameras and explaining uranium traces at undeclared sites, according to two quarterly reports seen by Reuters.  At the same time, Iran’s stock of uranium enriched to up to 60% purity, close to the roughly 90% of weapons grade, continued to grow albeit at a slower pace, one of the confidential IAEA reports to member states showed.

The IAEA’s 35-nation Board of Governors meets next week.

Here’s the thing.  Iran and the IAEA announced an agreement in March on re-installing surveillance cameras introduced under a deal with major powers in 2015 but removed at Iran’s behest last year.  I wrote of this at the time…but only a fraction of the cameras and monitoring devices the IAEA wanted to set up have been installed.  This is all you need to know.

But, additionally, Iran’s stock of uranium enriched to 60%, and going from 60% to 90% is easy, is now almost three times the roughly 42kg that by the IAEA’s definition is theoretically enough, if enriched further, to produce a nuclear bomb.

Niger: France has started talks with Niger’s military over the possible withdrawal of French troops from the West African country, according to French officials, in the wake of a coup that ousted the country’s elected president.

A withdrawal of French troops from Niger would deliver a huge blow to Western efforts to fight Islamist insurgents in the Sahel, the semiarid belt running along the southern edge of the Sahara. U.S. and European governments had worked closely with Niger President Mohamed Bazoum in the fight against al Qaeda and Islamic State militants in the region.

Tens of thousands of protesters gathered outside a French military base in Niger’s capital Niamey on Saturday demanding that the troops leave.

It’s rather pathetic that French President Emmanuel Macron has presided over a rapid loss of French influence in the region, including its troops being kicked out of neighboring Mali and Burkina Faso, saying little.

As for the American presence in Niger, an estimated 1,000 troops, the Pentagon said this week they were repositioning some of the personnel and assets, but are not looking to exit.  A spokesman said they hope that the situation on the ground gets resolved diplomatically, and that there is no immediate threat to U.S. personnel or violence on the ground.

Random Musings

--Presidential approval ratings….

Gallup: 42% approve of President Biden’s job performance, 53% disapprove; 39% of independents approve (Aug. 1-23).

Rasmussen: 43% approve, 55% disapprove (Sept. 8).

The above-mentioned CNN poll gave Biden a 39% approval rating, 61% disapprove.

--A new Wall Street Journal poll, found that among Republican primary voters nationwide, Donald Trump received 59%, while Ron DeSantis has fallen to 13% from 24% in April.

Nikki Haley was at 8%, Vivek Ramaswamy 5%, Chris Christie 3%.

The survey also found Donald Trump and Joe Biden about dead-even in a hypothetical rematch, with low interest among voters for two third-party candidates.  Trump had 40% support to 39% for Biden, with potential Green Party and Libertarian candidates drawing a combined 3%.  A significant share – some 17% - were undecided.

In a head-to-head test that excluded other candidates, Trump and Biden were tied, with 46% each and 8% undecided.

The Journal poll, conducted Aug. 24 to Aug. 30, also found that 59% of voters disapprove of Biden’s handling of the economy.  Nearly 3 in 4 voters say that inflation “is headed in the wrong direction,” the outlet reported.

And the poll showed that 73% of voters think Biden is too old to run for president while only 47% think Trump is too old.  Thirty-six percent of voters think that Biden is mentally up for the job while 46% of voters think Trump is mentally capable of being president.

For Trump, his character is a liability.  About 38% of voters think Trump is honest while 45% of voters think Biden is.  Forty-eight percent of voters think that Biden is a likable person while 31% of voters think Trump is.

A new CNN/SSRS poll of hypothetical matchups vs. Joe Biden found that only former South Carolina Gov. Nikki Haley beat Biden beyond the margin of error…49% to 43%.

Trump drew 47% against Biden’s 46%, while Mike Pence bested him 46% to 44%.  Sen. Tim Scott and former New Jersey Gov. Chris Christie each beat Biden by 2 points.

Ron DeSantis broke even at 47% apiece, while Vivek Ramaswamy trailed Biden 45% to 46%.

The CNN survey had Trump leading with 52% of Republican primary voters and GOP-leaning independents, ahead of DeSantis with 18%.  Nikki Haley was third at 7%

Bret Stephens / New York Times…on the question, ‘Why is President Biden so unpopular when the economy is doing pretty well, and other metrics, like inflation and homicides are falling?’

It’s not just a failure to communicate all the good news….

“There’s another explanation: The news isn’t all that good. Americans are unsettled by things that are not always visible in headlines or statistics but are easy enough to see.

“Easy to see is the average price of a dozen eggs: up 38 percent from January 2022 and May of this year. And white bread: up 25 percent.  And a whole chicken: up 18 percent. As for the retail price of gasoline, it’s up 63 percent since January 2021, the month Biden became president.

“Yet none of these increases make it into what economists call the core rate of inflation, which excludes food and energy.  The inflation ordinary people experience in everyday life is not the one the government prefers to highlight.

“Easy to see is the frequent collapse of public order on American streets….

“Easy to see is that the kids are not alright….

“Easy to see is that the border crisis has become a national one. …In New York City alone*, more than 57,000 migrants seek food and shelter from the city’s social services on an average night.

“Nobody can say for certain how many migrants who crossed the border during Biden’s presidency remain in the U.S., but it’s almost certainly in the millions.  In 2021 the president dismissed the initial surge of migrants as merely seasonal.  ‘Happens every year,’ he said.

“Easy to see is that the world has gotten more dangerous under Biden’s watch. The president deserves credit for arming Ukraine, as he does for brokering a strategic rapprochement between Japan and South Korea.  But he also deserves the blame for a humiliating Afghanistan withdrawal that almost surely played a part in enticing Vladimir Putin into launching his invasion of Ukraine and whetted Beijing’s appetite for Taiwan.

“How large a part is unquantifiable.  Yet it was predictable – and predicted.

“Easy to see is that the president is not young for his age….

“Easy to see are tents under overpasses, from the Brooklyn-Queens Expressway in New York to the I-5 in Seattle.  And the zombified addicts passed out on sidewalks in practically every city and town.  And the pharmacies with everyday items under lock and key to prevent shoplifting. And women with infants strapped to their backs, hawking candy or gum at busy intersections. And news reports of brazen car thefts, which have skyrocketed this year.

“ ‘There is a great deal of ruin in a nation,’ Adam Smith said.  Not all the ruin mentioned above is Biden’s fault, and none of it is irreversible.  But there’s much more ruin than his apologists – blinkered by selective statistics and too confident about the president’s chances next year – care to admit.”

*New York City Mayor Eric Adams said this week that the influx of migrants “will destroy New York.”

Editorial / Wall Street Journal

“The latest Wall Street Journal poll is getting headlines for its news that support for Donald Trump nationwide is now up to 59% in the GOP primary race.  But for our money the most important harbinger for 2024 is contained in the responses to another survey question.

“The poll finds that in a 2024 general-election test President Biden and the former president are tied at 46%.  Given Mr. Trump’s myriad legal problems, this shows how weak an incumbent Mr. Biden is. But a poll this far out from Election Day also doesn’t tell you much given how events can change.

“The better insight comes when respondents were asked: ‘Do Donald Trump’s indictments make you more likely or less likely to vote for him, or have no impact on whether or not you would vote for Donald Trump?’

“Among Republican primary voters, here are the responses: More likely to vote for Mr. Trump 48%; less likely 16%, and no effect on their vote 36%....

“This is exactly the result that Democrats want: Keep the focus on Mr. Trump so he wins the nomination, and then convict him in trials before the general election in November.

“That strategy is reinforced by the responses when the WSJ survey asked registered voters the same question about the indictments. Their responses: 24% were more likely to vote for Mr. Trump, but 37% were less likely, and 35% said it would have no effect.

“The Republican peril is that more than one-and-a-half times as many voters say the indictments make them less likely to vote for Mr. Trump than more likely. This reflects the tilt of independent voters, as well as the 16% of GOP voters who say the indictments make them less likely to vote for Mr. Trump.

“These responses are before any of the coming four trials, three of which are already scheduled before the 2024 general election. An acquittal or hung jury could work in Mr. Trump’s favor, which is why the Democratic indictment strategy is high risk.

“But one or more convictions would probably confirm the judgment of voters who say they are less likely to vote for Mr. Trump.  If Republicans nominate Mr. Trump, they are likely to be sailing into a political headwind that will be difficult to overcome.”

--In a new UC Berkeley Institute of Government Studies poll co-sponsored by the Los Angeles Times, former President Trump dominates his rivals so heavily in California that he’s on track to win all of the state’s delegates for next year’s Republican convention – a haul that would give him a major chunk of the votes needed to secure the nomination.

In late July, the California Republican Party changed its rules so that if a candidate wins more than 50% of the statewide vote in the state’s March 5 primary, he or she will claim all 169
GOP delegates – the most of any state in the nation.  Previously, the rules allocated delegates by congressional district.  A candidate needs just over 1,200 convention delegates to win the nomination.

The poll shows about 55% of likely Republican voters plan to cast their primary ballots for Trump, with Ron DeSantis’ support having plummeted to 16% - less than half of what he had earlier this year.

--A federal judge on Wednesday found Donald Trump liable for defaming the writer E. Jean Carroll by denying in 2019 that he had raped her, and said jurors will decide only how much the former president should pay in damages.

The decision by U.S. District Judge Lewis Kaplan in Manhattan comes ahead of a scheduled Jan. 15, 2024, civil trial, after a jury in May ordered Trump to pay Carroll $5 million for sexual assault and a separate defamation.

--The director of information technology at Mar-a-Lago has agreed to cooperate with special counsel Jack Smith in a deal that will allow him to avoid criminal charges in the federal case over former president Trump’s alleged mishandling of classified documents, a new court filing shows.

The witness, identified by several media outlets as Yuscil Taveras, had previously recanted “false testimony” in the classified docs case, after switching lawyers and learning that he had left himself exposed to possible perjury charges.

--In the Georgia case accusing Trump of conspiring to reverse his 2020 election loss, the former president may seek to move it to federal court, according to a Thursday court filing.  Federal court would be a more favorable venue for Trump because he would face a more politically diverse jury pool than in Fulton County, Georgia.  A federal trial would also allow him to argue that he is immune from prosecution for actions he took as part of his official duties as president.

Separately, we learned today that the special grand jury in Fulton County recommended charges against Republican Sen. Lindsey Graham and former GOP Sens. David Perdue and Kelly Loeffler of Georgia, but District Attorney Fani Willis did not charge them when she returned an indictment last month against Donald Trump and 18 co-defendants.  It was up to Willis to decide how closely to stick to the special grand jury’s recommendation.

--The Justice Department revealed in a court filing on Wednesday that Hunter Biden will face a new federal grand jury indictment on gun charges by the end of the month.

“The Speedy Trial Act requires that the Government obtain the return of an indictment by a grand jury by Friday, September 29, 2023, at the earliest.  The Government intends to seek the return of an indictment in this case before that date,” the office of special counsel David Weiss said in a document filed in the U.S. District Court for the District of Delaware.

The aforementioned CNN poll found that 44% of voters feel Joe Biden’s actions are appropriate re Hunter, and 55% say they are inappropriate.

--Senate Minority Leader Mitch McConnell said on Wednesday he will finish his term as party leader and his term as senator following two recent episodes of seemingly freezing up during public remarks.  McConnell told reporters he does not have anything to add to the report by the congressional physician on his health, which found no evidence that he had suffered a stroke or seizure.

Sen. Rand Paul, R-Ky., has often been at odds with his fellow Kentuckian when it comes to policy priorities, and he told reporters Tuesday that he had his doubts over the letter from Dr. Brian Monahan, the Capitol’s attending physician, that cleared Senate Minority Leader Mitch McConnell to continue his duties.

“I don’t think it’s been particularly helpful to have the Senate doctor describing it as dehydration, which I think even a non-physician seeing that probably aren’t really accepting that explanation,” Paul said.  “Everybody’s seen the clips, it’s not a valid medical diagnosis for people to say that’s dehydration.”

Republican Sen. Josh Hawley of Missouri, who voted against McConnell last year to serve as the Senate’s minority leader, said he is just as concerned about McConnell’s health as he is about Joe Biden’s health.

“You can’t have it both ways.  You can’t say that you’re concerned about Joe Biden but you’re not concerned about Mitch McConnell.  It’s either one or the other,” he said.

Hawley said he hopes the minority leader’s health is not a distraction for Republicans ahead of the 2024 elections, adding that the episodes make it difficult to criticize Biden for his age.

But Sen. Mitt Romney (R-Utah) told reporters Tuesday, “We might lose from Mitch McConnell 20 seconds a day, but the other 86,380 seconds are pretty darn good so I’m supporting him.”

--Rep. Nancy Pelosi, 83, announced she would seek re-election in 2024, ending months of speculation about her political future.

--The Proud Boys’ former leader Enrique Tarrio has been jailed for 22 years for orchestrating the attack on the Capitol on Jan. 6, 2021.  It is the longest sentence handed down so far over the attack, which happened as lawmakers were certifying President Biden’s election victory.  Prosecutors had recommended a sentence of 33 years in prison.

Tarrio was convicted in May of seditious conspiracy, and multiple other counts. He has been in jail since his arrest last year.

U.S. District Court Judge Timothy Kelly, a Trump nominee who presided over the sentencing hearing, concluded that Tarrio began planning an attack on the Capitol in December 2020 and instituted a rigid command structure.

“Tarrio was the ultimate leader, the ultimate person who organized, who was motivated by revolutionary zeal,” Judge Kelly said.  “I don’t have any indication that he is remorseful for the actual things that he was convicted of.”

Before he learned his fate on Tuesday, an emotional Tarrio apologized to police and residents of Washington, DC for his role in the riot.

Republican presidential candidate Vivek Ramaswamy said the 22-year prison sentence was “wrong,” and boasted that he’s alone in the GOP field in being courageous enough to speak up for those convicted in the Jan. 6 attack on the Capitol.

Yes, this is the man who says he wants to be the great uniter.

--We note the passing of former New Mexico governor, congressman, and diplomat, Bill Richardson, 75.  He was just on various news programs a week earlier in relation to his efforts to get North Korea to release American soldier Travis King.

Richardson succeeded Madeleine Albright in early 1997 as ambassador to the United Nations under President Bill Clinton, and then was Clinton’s energy secretary.

--The weather….

The past three months have been the hottest ever measured, according to the Copernicus Climate Change Service, an EU-funded program, and the World Meteorological Organization.  Last month was the warmest August on record – and the second hottest month ever, after July 2023 – with temperatures an estimated 1.5C (2.7F) above preindustrial averages.  That is the threshold that the world is trying not to pass, though scientists are more concerned about rises in temperatures over decades, not merely a blip over a month’s time.

In August sea-surface temperatures also hit 20.98C (69.8F), their highest monthly average.

So far, 2023 is the second hottest year on record, behind 2016, according to Copernicus.

After all the deadly wildfires in Greece this summer, torrential rains flooded homes and roads there on Monday and Tuesday.  Wednesday, it was announced three had died in flooding, with some regions receiving up to 18 inches of rain in 48 hours.  Understand that Athens gets about 16 inches of rain in a normal year.

Seven people were killed in flooding in Turkey.  At least four had died in floodwaters in Bulgaria.

In Madrid, Spain, after an intensely hot August throughout the country, they too saw record rainfall over the weekend, with residents asked to stay home and soccer matches postponed due to flooding in several regions.  Maximum red weather alerts were issued by the national weather agency, indicating extreme danger.

High waters swept a fire truck into a river in southeastern China early Tuesday, leaving at least five of nine crew members missing, as the second tropical storm in recent days, Haiku, hit the mainland.

Haiku scraped along the coastline of Fujian and Guangdong provinces Tuesday morning, bringing up to 2 feet of rainfall to some areas as it moved inland, according to China’s meteorological agency.

And then the remnants of Haiku slammed Hong Kong and Shenzhen with record rains, Friday, Hong Kong receiving 6.2 inches in one hour, according to the Hong Kong Observatory headquarters, the biggest rainfall since records began in 1884.  Over 100 were injured.  Shenzhen, a tech metropolis of 17 million next to Hong Kong, had 8 inches in about two hours, the most intense rainfall there since records began in 1952.

Here in Summit, New Jersey, the last five days we’ve seen 90 degrees, the first heat wave of the entire season.  Until this month, just ten individual days where the air temp hit 90, from May through August, and never three in a row, the definition of a heatwave in these parts.

I see our friends in Dallas, Texas, by contrast, have been smashing records daily, including 104, 106, 108 and 108 the last four days.  Air temp.  Ugh.

Lastly, the stories out of the Burning Man festival in Nevada were beyond gross.  After less than an inch of rain turned the desert into a sea of mud, let’s just say the sanitation, including the toilets, was less than ideal.

And let’s hope that Hurricane Lee isn’t dominating the news cycle next week.  That would be a good sign.

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Pray for the men and women of our armed forces…and all the fallen.

Pray for Ukraine.

God bless America.

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Gold $1942
Oil $87.34

Regular Gas: $3.80; Diesel: $4.46 [$3.75 / $5.04 yr. ago]

Returns for the week 9/4-9/8

Dow Jones  -0.7%  [34576]
S&P 500  -1.3%  [4457]
S&P MidCap  -3.6%
Russell 2000  -3.6%
Nasdaq  -1.9%  [13761]

Returns for the period 1/1/23-9/8/23

Dow Jones  +4.3%
S&P 500  +16.1%
S&P MidCap  +5.9%
Russell 2000  +5.1%
Nasdaq  +31.5%

Bulls 49.3
Bears 21.9

Hang in there.

Monday, we remember 9/11…and never forget…

Brian Trumbore

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