“U.S. Equity Indexes Rebound; Treasuries Decline: Markets Wrap.”
The convulsions in U.S. equity markets showed signs of abating, with indexes bouncing back from Thursday’s big losses, but stocks remain on track for their worst week in more than a year as interest-rate fears haunt investors.
The S&P 500 Index opened higher Friday after entering a correction the day before, while European and Asian markets dropped, capping a selloff that’s wiped more than $5 trillion from global stocks since January. Treasury 10-year yields hovered near a four-year high.
The Stoxx Europe 600 Index headed for its worst week since 2016 and has erased almost half a year’s gains. China’s benchmark fell the most in almost two years earlier, while the MSCI World Index is set for its biggest weekly drop since 2011. A measure of U.S. bond-market volatility soared, as core European bond yields dropped.
Equity traders have yet to get comfortable with a jump in benchmark U.S. 10-year yields to the highest in four years, and worries over unwinding bets against volatility in stocks continue to cast a shadow over markets. The negative superlatives have piled up quickly: the S&P 500 has erased its gain for the year, closed at a two-month low and is on track for its worst week since 2011. The Dow plunged more than 1,000 points for the second time in four days Thursday.
Elsewhere, oil headed toward its worst week in more than a year as the global risk-asset rout further rankled investors already concerned over growing U.S. supply. Gold declined along with most industrial metals. South Africa’s rand strengthened as speculation intensifies that President Jacob Zuma will soon resign.
“U.S. budget deal sets up wider fight over deficits, immigration.”
The budget deal passed by U.S lawmakers early on Friday will alleviate the spending fights that marked President Donald Trump’s first year in office, but sets the stage for a battle over immigration and who is to blame for exploding deficits ahead of November’s congressional elections.
In a pre-dawn vote on Friday to approve massive new spending and end a 5-1/2-hour government shutdown, scores of conservatives in the House of Representatives revolted against their leadership in what could be a sign of Republican Party turmoil this election year.
The brief shutdown was forced by Senator Rand Paul, a Tea Party Republican, who used procedural rules to prevent passage of the budget deal before Thursday’s midnight deadline.
While conservatives, such as those in the far-right House Freedom Caucus, embraced a tax overhaul last year that will expand the nation’s debt, they adamantly oppose domestic spending increases that the budget deal allows.
Democrats have their own problems with the measure. While they applaud more spending on veterans, the military, disaster aid and fighting opioid addiction, many are enraged it does not come with any guarantee that Congress will help “Dreamers,” people brought illegally to the United States as children. Trump has pledged to work out a deal on Dreamers, but only if the agreement includes $25 billion in funding for his promised border wall with Mexico and curbs on legal immigration.
Democrats need a net gain of 24 seats in the House and two in the Senate to win back control of both chambers in November’s elections. If no deal on Dreamers is reached – something favored by the majority of Americans – Democrats plan to take the issue to voters.
“Winter Olympics 2018: South and North Korean athletes unite during opening ceremony in Pyeongchang.”
Hosts South Korea produced a show of unity with neighbours North Korea during the opening ceremony of the 2018 Winter Olympics in Pyeongchang. Their athletes entered under the same flag during the parade, after months of tension in the Korean peninsula. «We are stronger than all the forces that want to divide us,» declared Olympic president Thomas Bach.
Russia is banned from the Games, and the forthcoming Paralympics, as a consequence of the 2016 McLaren report which claimed more than 1,000 of the country’s sportspeople benefitted from state-sponsored doping. The International Olympic Committee invited 169 Russians who have met the anti-doping criteria to compete as independent athletes and their team will be known as the ‘Olympic Athletes from Russia’.
North Korea ice hockey player Chung Gum Hwang and South Korean bobsledder Won Yun-jong were joint flagbearers. An estimated 35,000 spectators inside the Olympic Stadium were given seat warmers, wind shields, hats and gloves with temperatures as low as -6C during the two hour-long ceremony.
Senior political figures from North Korea and USA – two of the countries at the centre of the political row – were both present. Kim Yo-jong, the influential sister of North Korea leader Kim Jong-un, was sat one row behind USA vice-president Mike Pence in the VIP section.
South Korea’s president Moon Jae-in shook hands with her and said at the ceremony: «I would like to take this opportunity to convey greetings and a message of friendship from the people of Korea.
The 18 days of competition will feature 2,925 athletes competing in 15 sports under 93 flags chasing 102 gold medals. Six countries are participating in the Winter Games for the first time: Ecuador, Eritrea, Kosovo, Malaysia, Nigeria and Singapore.
“Climate Change Just Got a Little Less Terrible.”
There are some 20,000 research papers listed on Google Scholar, a search engine for academics, that mention the worst-case scenario for climate change, one where an overpopulated, technology-poor world digs up all the coal it can find. Basically, it’s the most cataclysmic estimate of global warming.
This scenario is important to scientists. It focuses minds on the unthinkable and how to avoid it. According to a provocative new analysis from the University of British Columbia, it’s also wrong.
This is good news. The researchers contend that current goals of reducing coal, oil and gas consumption may be closer than we think, thus allowing us to set the bar even higher in our efforts to reduce pollution. The bad news is that this is good news in the way a destabilizing climate-shift is preferable to planetary extinction: We are still in a lot of trouble.
The basic issue has to do with coal. Quite simply, the more we burn, the faster we destroy the atmosphere. The darkest scenario assumes much more coal burning will take place in this century than is likely to happen, according to the study’s authors. For example, the most extreme worst-case storyline assumes that by 2100 coal would grow to 94 percent of the world energy supply. In 2015, that figure was about 28 percent.
The 2015 Paris Agreement called for limiting warming to from 1.5 degrees to 2 degrees Celsius (3.6 degrees Fahrenheit). Global average temperatures have already risen almost 1C in the past century. The 1.5C goal may already be impossible, and 2C would require major emissions reductions and, later this century, technological advances to pull enough carbon out of the air.
There are no crystal balls, particularly on the timelines which govern climate-economic models. It’s not impossible that societies will return to coal in the way they are now fleeing it, particularly if population growth continues apace and technological aspirations fall short. “Humans are very hungry for energy,” van Ruijven said. If renewables hit a wall, oil and gas dry up and we punt forever on climate change, “we might well be excavating all the coal we can put our hands on.”