SpaceX’s Starship

Travel Tuesday: Uruguay 

Uruguay is the only country in the world to track 100% of its cattle. This means every cow in Uruguay is accounted for, which helps ensure high-quality beef production and allows consumers to know exactly where their beef comes from. 

GDP $77 billion 

Biggest Export Frozen bovine meat 

Biggest Trading Partners China, Brazil, Argentina, USA, the Netherlands 

Political System Presidential representative democratic republic. The President is both the head of state and the head of government. 

National Animal The Southern Lapwing 

Next Election 27 October

 SpaceX’s Starship

This weekend SpaceX accomplished a world first after one of its super heavy boosters was safely caught by a 140m high landing tower.

The super heavy booster (which is, at launch, full of enough fuel to propel the 3,000 tonne Starship rocket into space with 16.6m pounds of thrust) was caught by the landing tower’s Mechazilla’s pincers some five minutes after launch, enabling it to be reused.

The ability for systems and hardware to be reused will also dramatically bring down the cost of launching rockets into space. The semi-reusable Falcon 9s for example have reduced launch costs 10-fold, according to an estimate by Citigroup.

It’s hoped that these rocket systems will pave the way for SpaceX to send astronauts to the moon within the next couple of years and eventually on to Mars. Of course, NASA has already paid SpaceX some $2.8bn to help develop Starship, with the intention of it delivering astronauts to the moon by 2026.

Presently spending on Nasa makes up around half of a percent of the US’ Federal Budget, a significant reduction from previous decades. For example, helping to bridge the gap between Houston and the Moon was the Apollo programme, which between 1960 and 1973 came with a price tag of $25bn. When accounting for inflation, this gargantuan figure would be the equivalent of around $200bn in today’s money, equal to the GDP of Hungary or building over thirteen Channel Tunnels. Such was the level of resources being ploughed into the mission, by 1966 NASA accounted for 4.4% of the Federal Government’s total budget as hundreds of thousands of people focused their attention towards the moon.

On 20 July 1969, the legendary line “that's one small step for [a] man, one giant leap for mankind” was transmitted to back to earth as Neil Armstrong became the first person to leave his footprints on the moon. But as Neil Armstrong, Michael Collins and Buzz Aldrin came back down to earth, so too did NASAs budget. For example, though in 1969 some 2.3% of the Federal Budget was spent on NASA, ten years later it stood at just 0.87%.

UK Labour Market

UK wage growth came in line with expectations this morning as it eased to its lowest levels since June 2022. Against forecasts of a 4.6% print, average earnings excluding bonuses rose by 4.6% on an annualised basis over the three months to August, while average including bonuses rose by 3.8%.

The latest data therefore indicates that regular pay in the UK is now £648 a week, up around £3 from last month.

When adjusted for inflation, real wage growth eased 50bps from 1.9% to 1.4% for regular pay excluding bonuses.

This came as the UK’s unemployment was estimated at 4.0% in June to August 2024, 10bps down from last month’s print and marginally lower than expectations.

With the topic of wage growth being a key consideration of for the Bank of England, these figures will be closely evaluated by Threadneedle Street. Markets are little changed on their implied expectations for the Bank of England’s next MPC meeting on 7 November however. Presently, markets are implying that there is around a 94% chance of a 25bps rate cut priced in for the November meeting.

Today’s Data

Following this morning’s UK labour market print, attention will turn to Canadian Inflation figures released at 1330 where the market consensus is pointing to a 1.8% print. Alongside a few Fed speakers speaking later today, attention will then turn to quarterly inflation figures from New Zealand at 2245.