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Nissan Motor will slash planned global production for October & November by 30%

Nikkei with the report on the impact of the semiconductor chip shortage on Japanese automaker Nissan.

Nissan stopped operations at a U.S. plant for two weeks in August due to stalled semiconductor output in Malaysia. On the other hand, September vehicle output exceeded forecasts (conservative forecasts though)
Nikkei notes also:
  • Honda Motor expects to cut production by 10% at each of its three Japanese vehicle assembly plants in early November.
  • Toyota Motor’s to reduce global output by 15% in November

Putin said OPEC+ countries are increasing oil output a bit more than agreed

Russian President Vladimir Putin said the OPEC+ group of leading oil producers was increasing output slightly more than agreed, but:
  • “Not all oil-producing countries are in a position to ramp up production quickly”
Putin also provided some broader background comments, none of this is new but a useful recap if you need:
  •  “From 2012-2016, investment in oil production totalled around $400 billion/year, and in recent years, even before the pandemic, this decreased by 40%, and now it amounts to $260 billion”
  • said that investment cycles for energy projects are 15-30 years
Underinvestment is contributing to the recent rise in prices for oil.
Oil price update:
Oil news out of Russia overnight

BITO bitcoin ETF is headed for trouble with position limits looming

Bitcoin ETF has used up two-thirds of its position limit

Bitcoin ETF has used up two-thirds of its position limit
Bitcoin is down today so there might be some flows out of the new US bitcoin ETF (BITO) that launched on Tuesday. The larger problem is that it is destined to run into position limits. According to Bloomberg, it can only hold 5000 futures contracts due to CME rules and is already two-thirds of the way there. Another $600m would get it to the limit.
An option is to buy longer dated contracts but that’s going to introduce a negative tracking error with long-dated futures trading above spot. I don’t see the volume slowing down so eventually this is going to be a big problem.
This all comes back to the SEC, which has tried to shove everything into the futures market to please the people at the CME. In something like oil — which is extraordinarily difficult to store, transport and physically transact — a futures-based ETF makes sense but in bitcoin it’s stupid.
An ETF holding ‘physical’ bitcoin is obvious and should have been approved five years ago. There’s no tracking error and it would have alleviated so many problems with scam brokers and the huge tracking error in the Greyscale bitcoin trust. Hopefully this expedites it.
In any case, it makes you wonder why every decision seems to benefit the CME.

S&P closes at a new all time record. Indices close near session highs.

Nasdaq up for the 6th time in 7 days

The broader US stock indices are closing near session highs. In the process, the S&P index is closing at a new all-time record high. The old all time high close was on September 2 at 4,536.95.
Other highlights for the stock market today includes:
  • The S&P index reached a new all-time intraday high is at 4551.44
  • The S&P index closed higher for the seventh consecutive day
  • The NASDAQ index reversed the declines from yesterday and is now up six of the last seven trading days. The index is around 1.26% away from its all-time high.
  • The Dow industrial average snapped its two day win streak

The final numbers are showing:

  • Dow industrial average fell -6.28% or -0.02% at 35603.09
  • S&P index close higher by 13.59 points or 0.3% at 4549.79
  • NASDAQ index rose 94.03 points or 0.62% at 15215.71