The US stock market sees the biggest outflow of capital

US House Speaker Nancy Pelosi urged her Democratic colleagues to pass the Biden administration’s $3.5 trillion spending package. The House of Representatives is scheduled to vote on the infrastructure package this Thursday. US President Joe Biden indicated in his speech that the administration was going to make historic tax cuts for the middle class and increase taxes on large corporations and wealthy citizens.

Energy shortages around the world continue. Natural gas prices in Europe are at record highs. The gas crisis in Europe is already bigger than the oil shock of the 1970s in the United States. Oil prices increased for the fifth straight day on Monday, with Brent crude hitting $80 amid concerns about tight supply as some parts of the world see demand rise with pandemic conditions easing. Goldman Sachs raised its year-end forecast for Brent crude oil from $80 to $90 per barrel.

The 10-year Treasury yield jumped from 1.30% to 1.45% last week after the Fed signaled a reduction in its QE program. Rising yields and a rising dollar index are always negative for gold and silver prices, as these instruments are inversely correlated.

Coal prices in China also reached an all-time high. The National Energy Administration of China (NEA) has ordered coal and gas companies to increase production to ensure the country has enough energy to keep homes warm in winter. Car sales in China could rise in 2021, breaking a three-year slump. Vietnam plans to ease coronavirus measures and allow businesses to resume production from next week to support an economy hit by prolonged lockdowns.

Adding to the semiconductor shortages plaguing many industries appears to be a shortage of passive components such as capacitors. Chemi-Con, Nichicon, and Rubycon plants in Malaysia and Indonesia, where most of the well-known aluminum electrolytic capacitors are made, were closed in July and August. Meanwhile, the three listed companies together control about 50% of the market for these products. The current restrictions are expected to reduce capacitor shipments by 30-60%.

Evergrande’s foreign investors have not received an interest payment. Evergrande Payment was to be made on Thursday. The missed payment opens Evergrande’s grace period, which could lead to the largest default. It would also raise questions about the financial solvency of investors and could lead them to start selling their other assets to cover the losses.