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Recap August 29: Food Shortages Accelerating, Chaos in Afghanistan, Inflation (Recap Ep138)

In this week’s recap, U.S. stocks moved higher Friday & for the week, as the S&P 500 (1st time above 4,500) & Nasdaq hit new records, with Fed Chairman Powell stressing that the central bank shouldn’t overreact to the recent spike in inflation, meaning the easy money policies will continue for now. European stocks rose on Friday. The pan-European STOXX 600 index closed +0.4% higher, with mining stocks up +1.9%, while real estate stocks added +1.5%. Commodity-linked stocks were the best weekly performers, as they bounced back from steep losses. Asian-Pacific shares were mixed on Friday, as Chinese markets responded to a burst of central bank liquidity, as investors took comfort in the largest weekly cash injection into the banking system since February.

A supply chain crunch that was meant to be temporary now looks like it will last well into 2022, as the surging delta variant upends factory production in Asia & further disrupts shipping, posing more shocks to the global economy. Manufacturers continue to reel from shortages of key components & higher raw material & energy costs are being forced into bidding wars to get needed inputs, unsettling world trade.

U.S. President Biden commits to his Aug. 31 deadline for completing a frantic airlift of Americans, at-risk Afghans & foreign nationals wanting to escape Afghanistan. Decision defies allied leaders & G7 who want to give the evacuation more time, & opens Biden to further criticism that he once again, caved to Taliban deadline demands. New reports of human rights abuse fuel concern about the fate of 1000’s of people who fear retribution if they are not evacuated in time. Many analysts see a hostage situation quickly developing.

Tesla plans to sell electricity directly to customers in Texas; South Korea to make antitrust changes to its Telecommunications Law; Waymo launches autonomous cab service in San Francisco; South Korea’s central bank raised its key interest rate to 0.75%; Hermeus receives $60M to fund testing of world’s fastest aircraft; China has dominated the rare earths market globally; uncontrolled wildfires in Siberia break records; a treasure trove of Nazi artifacts uncovered after the flood in Hagen, Germany.

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