InvestMacro

By JustMarkets

The US reporting season continues to gain momentum, but indices are reacting sluggishly. As the stock market closed yesterday, the Dow Jones Index (US30) increased by 0.31%, and the S&P 500 Index (US500) decreased by 0.07%. Technology Index NASDAQ (US100) lost 0.27%.

In the technology sector, gains in Apple (AAPL) stocks were offset by declines in Alphabet (GOOGL) stock. The US Department of Justice filed a lawsuit against Google, claiming that the search engine giant violated the antitrust laws by abusing its monopoly in advertising technology. Microsoft Corporation (MSFT), which ended the day just below opening levels, rose by 4% on the release of its report. The company’s quarterly earnings beat Wall Street estimates.

Investors are betting that the Fed will stop raising rates soon, pause briefly, and then begin cutting rates closer to the end of the year. Why are investors waiting for a rate cut? For investors, lower rates make borrowing less expensive and tend to raise the price of everything from stocks to bonds and digital assets. Fed officials predict that their key short-term rate, now at 4.5%, will eventually reach 5-5.25%. Futures markets show that most investors expect the rate to peak at 4.75-5%. Fed officials point to a robust labor market as a factor that can keep inflation high. Now at 3.5%, the unemployment rate is the lowest in 50 years. Businesses continue to raise wages to retain and attract workers, which boosts consumer spending. Employers, in turn, tend to pass on their higher labor costs to their customers in the form of higher prices. Both trends, the Fed fears, will keep inflation well above the 2% target. But the latest news suggests that the labor market is already starting to fall, and the Fed will be forced to stop raising rates.

Equity markets in Europe traded without a single dynamic on Tuesday. German DAX (DE30) yesterday declined by 0.07%, French CAC 40 (FR40) gained 0.26%, Spanish IBEX 35 (ES35) jumped by 0.33%, British FTSE 100 (UK100) yesterday closed the day down by 0.35%.

Yesterday, GfK Consumer Confidence data for Germany showed signs of further improvement. The seasonally adjusted S&P Global Eurozone PMI Composite Output Index was above the 50 mark, indicating that business activity in the region is recovering and the risk of recession is declining.

Norway’s gas riches are causing a wave of optimistic forecasts for the Norwegian krone. Danske Bank A/S and Bank of America Corp. believe the NOK currency is a bargain since Norway is now receiving trillions of kroner from energy exports. Over the past decade, the króna has lost about a third of its value against the euro. According to Morgan Stanley, the Norwegian currency is likely to rise 15% against the dollar this year.

Natural gas is rising cautiously amid projected colder weather. Growing rumors of cold weather approaching the United States and the rest of the Northern Hemisphere are boosting natural gas prices.

Asian markets also traded flat yesterday. Japan’s Nikkei 225 (JP225) added 0.57%, and China’s FTSE China A50 (CHA50) did not trade and will not trade until the end of the week due to the holidays. Hong Kong’s Hang Seng (HK50) also did not trade, India’s NIFTY 50 (IND50) decreased by 1.1%, and Australia’s S&P/ASX 200 (AU200) ended the day down by 0.06%.

The Australian dollar reached a 5-month high on inflation growth. Consumer prices jumped from 7.3% to 8.4% on an annualized basis. The core CPI quarterly reading was 1.9% in December, instead of the expected 1.6% and 1.8% previously. The preferred RBA average CPI was 6.9% annualized through the end of 2022. Interest rate futures markets raised the likelihood of a 25 basis point RBA hike at the February 7 monetary policy meeting.

In New Zealand, the Consumer Price Index rose to a 7.2% annualized rate in the fourth quarter, slightly above analysts’ expectations of 7.1% but below the RBNZ forecast of 7.5%. The data suggests that the RBNZ will raise interest rates by another 0.5% at its next meeting.

The key consumer price indicator in Singapore remained at 5.1% y/y, slightly higher than forecast. Overall inflation fell to 6.5% year-on-year from 6.7%. The central bank has previously stated that core inflation is likely to remain around 5% in early 2023. It also forecast a core inflation rate of between 3.5% and 4.5% in 2023, with the overall inflation rate ranging from 5.5% to 6.5%.

The Japanese prime minister said Sunday that he would appoint a new governor of the Bank of Japan next month, as Kuroda’s second five-year term expires on April 8.

S&P 500 (F) (US500) 4,016.95 −2.86 (−0.071%)

Dow Jones (US30) 33,733.96 +104.40 (+0.31%)

DAX (DE40) 15,093.11 −9.84 (−0.065%)

FTSE 100 (UK100) 7,757.36 −27.31 (−0.35%)

USD Index 101.94 -0.20 (-0.20%)

• – Australia Consumer Price Index (q/q) at 02:30 (GMT+2);
• – Singapore Consumer Price Index (m/m) at 07:00 (GMT+2);
• – German Ifo Business Climate (m/m) at 11:00 (GMT+2);
• – Canada BoC Interest Rate Decision at 17:00 (GMT+2);
• – Canada BoC Monetary Policy Report at 17:00 (GMT+2);
• – US Crude Oil Reserves (w/w) at 17:30 (GMT+2);
• – Canada BoC Press Conference at 18:00 (GMT+2).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By Joshua R. Smith, University of Washington and Zerina Kapetanovic, Stanford University

This experimental setup shows an ultra-low-power wireless communications device that could one day be used in tiny remote sensors.
Zerina Kapetanovic, CC BY-ND

A new ultra-low-power method of communication at first glance seems to violate the laws of physics. It is possible to wirelessly transmit information simply by opening and closing a switch that connects a resistor to an antenna. No need to send power to the antenna.

Our system, combined with techniques for harvesting energy from the environment, could lead to all manner of devices that transmit data, including tiny sensors and implanted medical devices, without needing batteries or other power sources. These include sensors for smart agriculture, electronics implanted in the body that never need battery changes, better contactless credit cards and maybe even new ways for satellites to communicate.

Apart from the energy needed to flip the switch, no other energy is needed to transmit the information. In our case, the switch is a transistor, an electrically controlled switch with no moving parts that consumes a minuscule amount of power.

In the simplest form of ordinary radio, a switch connects and disconnects a strong electrical signal source – perhaps an oscillator that produces a sine wave fluctuating 2 billion times per second – to the transmit antenna. When the signal source is connected, the antenna produces a radio wave, denoting a 1. When the switch is disconnected, there is no radio wave, indicating a 0.

What we showed is that a powered signal source is not needed. Instead, random thermal noise, present in all electrically conductive materials because of the heat-driven motion of electrons, can take the place of the signal driving the antenna.

No free lunch

We are electrical engineers who research wireless systems. During the peer review of our paper about this research, published recently in Proceedings of the National Academy of Sciences, reviewers asked us to explain why the method did not violate the second law of thermodynamics, the main law of physics that explains why perpetual motion machines are not possible.

Perpetual motion machines are theoretical machines that can work indefinitely without requiring energy from any external source. The reviewers worried that if it were possible to send and receive information with no powered components, and with both the transmitter and receiver at the same temperature, that would mean that you could create a perpetual motion machine. Because this is impossible, it would imply that there was something wrong with our work or our understanding of it.

One way the second law can be stated is that heat will flow spontaneously only from hotter objects to colder objects. The wireless signals from our transmitter transport heat. If there were a spontaneous flow of signal from the transmitter to the receiver in the absence of a temperature difference between the two, you could harvest that flow to get free energy, in violation of the second law.

The resolution of this seeming paradox is that the receiver in our system is powered and acts like a refrigerator. The signal-carrying electrons on the receive side are effectively kept cold by the powered amplifier, similar to how a refrigerator keeps its interior cold by continuously pumping heat out. The transmitter consumes almost no power, but the receiver consumes substantial power, up to 2 watts. This is similar to receivers in other ultra-low-power communications systems. Nearly all of the power consumption happens at a base station that does not have constraints on energy use.

A simpler approach

Many researchers worldwide have been exploring related passive communication methods, known as backscatter. A backscatter data transmitter looks very similar to our data transmitter device. The difference is that in a backscatter communication system, in addition to the data transmitter and the data receiver, there is a third component that generates a radio wave. The switching performed by the data transmitter has the effect of reflecting that radio wave, which is then picked up at the receiver.

A backscatter device has the same energy efficiency as our system, but the backscatter setup is much more complex, since a signal-generating component is needed. However, our system has lower data rate and range than either backscatter radios or conventional radios.

What’s next

One area for future work is to improve our system’s data rate and range, and to test it in applications such as implanted devices. For implanted devices, an advantage of our new method is that there is no need to expose the patient to a strong external radio signal, which can cause tissue heating. Even more exciting, we believe that related ideas could enable other new forms of communication in which other natural signal sources, such as thermal noise from biological tissue or other electronic components, can be modulated.

Finally, this work may lead to new connections between the study of heat (thermodynamics) and the study of communication (information theory). These fields are often viewed as analogous, but this work suggests some more literal connections between them.

About the Author:

Joshua R. Smith, Professor of Electrical and Computer Engineering and of Computer Science and Engineering, University of Washington and Zerina Kapetanovic, Acting Assistant Professor of Electrical Engineering, Stanford University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

By JustMarkets

The US indices closed higher on Monday as shares of major technology companies and chipmakers were on the upside ahead of reports from tech giants. At Monday’s close, the Dow Jones Index (US30) increased by 0.73%, and the S&P 500 Index (US500) added 1.19%. NASDAQ Technology Index (US100) gained 2.01% yesterday.

Barclays Bank upgraded AMD (AMD), Qualcomm Incorporated (QCOM), and NVIDIA Corporation (NVDA) forecasts, raising shares by more than 9%, 6%, and 7%, respectively.

The Federal Reserve’s slowdown in interest rate hikes is becoming obvious. According to the latest Federal Reserve CME data, the US Federal Reserve is set to raise interest rates by 25 basis points at the FOMC meeting on February 1 and another 25 basis points at its next meeting in March. The US central bank will then hold rates until the fourth quarter. Investors also expect a US rate cut of about 50 basis points at the end of the year.

Stock markets in Europe mostly rose Monday. Germany’s DAX (DE30) gained 0.46%, France’s CAC 40 (FR40) added 0.52%, Spain’s IBEX 35 Index (ES35) jumped by 0.29%, Britain’s FTSE 100 (UK100) closed up by 0.18% yesterday.

According to Governing Council spokesman Klaas Knot, the European Central Bank should continue to raise interest rates by 0.5% at its next two meetings, and the time for slowing the pace of increases is “still a long way off.” The hawkish head of the Dutch central bank had already argued last week for the ECB to continue tightening policy, arguing that core inflation is still rising, even though the basic indicator is slowing.

China has been setting the trend for oil prices lately. The reopening of China’s economy has led to an increase in demand, which at the current supply level has given an impulse to oil prices. This week is a holiday week in China, so oil quotes will depend on the current demand/supply and the dynamics of the dollar index. Analysts expect a spike in COVID-19 cases after the holidays as the Chinese travel freely for the first time in three years.

Asian markets mostly rose yesterday. Japan’s Nikkei 225 (JP225) added 1.33%, and China’s FTSE China A50 (CHA50) was not trading and will not trade for the rest of the week due to the holiday. Hong Kong’s Hang Seng (HK50) was also not trading yesterday, India’s NIFTY 50 (IND50) increased by 0.50%, and Australia’s S&P/ASX 200 (AU200) ended the day up by 0.07%.

In Australia, the manufacturing PMI index dipped below the 50 mark for the first time. The index fell from 50.2 to 49.8. The service sector PMI rose from 47.3 to 48.3. Tomorrow’s quarterly CPI data will be scrutinized for clues to the Reserve Bank of Australia’s interest rate decision. A survey of economists suggests that the overall Consumer Price Index will rise from 7.6% to 7.8% year-over-year. Rising inflation will undoubtedly force the RBA to act more aggressively.

S&P 500 (F) (US500) 4,019.65 +47.04 (+1.18%)

Dow Jones (US30) 33,628.84 +253.35 (+0.76%)

DAX (DE40) 15,102.95 +69.39 (+0.46%)

FTSE 100 (UK100) 7,784.67 +14.08 (+0.18%)

USD Index 102.07 +0.06 (+0.06%)

• – Australia Manufacturing PMI (m/m) at 00:00 (GMT+2);
• – Australia Services PMI (m/m) at 00:00 (GMT+2);
• – Japan Manufacturing PMI (m/m) at 02:30 (GMT+2);
• – Japan Services PMI (m/m) at 02:30 (GMT+2);
• – French Manufacturing PMI (m/m) at 10:15 (GMT+2);
• – French Services PMI (m/m) at 10:15 (GMT+2);
• – Germany Manufacturing PMI (m/m) at 10:30 (GMT+2);
• – Germany Services PMI (m/m) at 10:30 (GMT+2);
• – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+2);
• – Eurozone Services PMI (m/m) at 11:00 (GMT+2);
• – UK Manufacturing PMI (m/m) at 11:30 (GMT+2);
• – UK Services PMI (m/m) at 11:30 (GMT+2);
• – Eurozone ECB President Lagarde Speaks at 11:45 (GMT+2);
• – US Manufacturing PMI (m/m) at 16:45 (GMT+2);
• – US Services PMI (m/m) at 16:45 (GMT+2);
• – New Zealand Consumer Price Index (q/q) at 23:45 (GMT+2).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By ForexTime

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By Sam Polzin, Purdue University and Jayson Lusk, Purdue University 

Grocery prices soared by 11.8% in 2022 – the swiftest pace since the early 1980s. Rapid inflation is, naturally, leading to concerns that it’s getting harder for Americans to put food on the table.

Indeed, Feeding America, a nonprofit that supports and connects roughly 60,000 food banks and pantries nationwide, has said that at least half of its members are seeing more demand for their services. And many journalists are reporting about struggling parents waiting in long lines for free food.

We are experts on food and agricultural economics. Together we have created a new data dashboard that tracks U.S. food insecurity – the technical term for having trouble getting enough nutritious food – based on publicly available information.

The data we’re collecting ourselves, as well as the information that we’ve compiled from other sources, including the Census Bureau, isn’t yet reflecting a sharp uptick in households without enough to eat. U.S. food insecurity has remained at troubling and yet relatively flat levels.

Based on all the data we’ve included in our dashboard, we estimate that over the course of 2022 somewhere between 11% and 15% of those living in the U.S. struggled with securing their next meal.

This range relies, in part, on internet-based surveys that can often produce food insecurity estimates that are higher than official government data. Because it is expensive to reach a true random sample of Americans, cheaper online surveys are commonly unrepresentative of the U.S. population but still prove to be a key tool for measuring changes compared with previous online surveys.

Official estimates are delayed and possibly low

Food insecurity is officially assessed based on a series of survey questions developed by the U.S. Department of Agriculture Economic Research Service. Every December, the federal government uses this measure to assess food insecurity for the past year. Following extensive analysis, it releases that data in September of the next year.

The official food insecurity rate hovered around 10.5% from 2019 to 2021, according to the USDA.

During those same three years, however, other researchers detected both lower and much higher rates. Our average of these surveys suggests that national levels may have peaked at nearly 19% in the months following the onset of the COVID-19 pandemic the U.S. in March 2020.

Within about six months, food insecurity returned to the 10%-11% range, based on our average of available data.

A mismatch between the facts and the coverage

Why are reports of long lines at food banks and increased demand for free food apparently at odds with the relative stability in the national food insecurity rate?

One reason could be that food insecurity rates, which generally overlap with social and economic inequality, can differ sharply.

For example, Nassau County, which spans many of New York City’s largely affluent Long Island suburbs, had a food insecurity rate of 5.7% in 2020. In nearby Bronx County, New York state’s lowest-income county, the food insecurity rate was more than three times that, at 19.7%, according to Feeding America’s Map the Meal Gap study.

As a result, food security can get worse or better in particular communities without affecting the national rate.

Another explanation could be that government programs and nonprofits that help people get enough food are succeeding. The number of people getting Supplemental Nutrition Assistance Program benefits, sometimes referred to as “food stamps” and generally just called SNAP, increased by 2.8% from January to October 2022, to 42.3 million.

In some states, SNAP benefits remain at the elevated levels instituted when the COVID-19 pandemic began.

Survey data from our Consumer Food Insights reports also shows that the average length of time households receive SNAP benefits increased from 9.5 months to 12.4 months in 2022.

Nearly 7% of households were visiting food pantries in December 2022, according to the Census Bureau, up from 4.4% in 2019. At the same time, the USDA announced an additional US$2 billion in funding to emergency food providers to deal with elevated food costs.

The charitable food system is decentralized, making it hard if not impossible to determine whether the amount of food donated to Americans overall has changed. As Feeding America reports, the 2.5 billion meals that its network provided in the first half of 2022 came from a range of donors, with its corporate partners playing a big role.

The data further suggests that, while consumer confidence about the overall economy is at a historically low level, fears of an economic downturn don’t reflect the fact that many people still have more money saved up than they did before 2020. Similarly, unemployment, which dipped to 3.5% in December 2022, is at the historically low levels last seen before the COVID-19 pandemic.

Finally, researchers have found that incomes over time and accumulated savings are more closely tied to whether families will experience food insecurity than what their breadwinners currently earn. Because the disposable incomes of many Americans rose in 2020 and 2021, it will probably take a deeper economic shock than the nearly 12% increase in grocery prices registered between December 2021 and December 2022 to make food insecurity soar.

Getting clearer pictures

To be clear, we do not mean to suggest that food insecurity is not a serious issue or that having more than 1 in 10 Americans struggle to get enough to eat is acceptable.

Rather, we noticed that policy and research interest in food insecurity spiked in the year following COVID-19 shutdowns, resulting in much more data on the topic before dwindling in 2021. Today, the public is paying more attention to the topic again.

Food banks and SNAP benefits collectively have provided around $130 billion in annual economic relief for low-income Americans in recent years, a number that includes a sharp increase in benefits. We believe that these efforts are vital.

We propose that conducting and releasing more frequent high-quality surveys would help bring sustained attention to the issue, clarify trends and allow experts like us to make better predictions.

And because all food insecurity surveys are subject to sampling errors and offer only a snapshot regarding a single time frame, we believe that pooling the multiple surveys featured in our data dashboard can better inform policymakers and charities that seek to address food insecurity and rapidly respond when levels spike.

About the Author:

Sam Polzin, Food and Agriculture Survey Scientist, Purdue University and Jayson Lusk, Professor of Agricultural Economics, Purdue University

This article is republished from The Conversation under a Creative Commons license. Read the original article.