Baltic Dry Index. 1073 -36 Brent Crude 50.95
The difference
between a misfortune and a calamity is this: If "Glenlivet" Juncker fell into the Thames,
it would be a misfortune. But if someone dragged him out again, that would be a
calamity.
Mrs May, with apologies to Benjamin Disraeli
For more on a new French war on Poland scroll
down to the EUSSR section below. In the EUSSR, the mad get madder by the day.
My money’s on Poland to win.We open with Asian markets firing only on half cylinders. Even so the crude oil price, the Baltic Dry Index and US auto sales, all suggest that something bigger is at play in the global economy. Despite the seasonal lift from the northern hemisphere spring, the global economy seems to be running out of steam. The rump-EUSSR is picking a most dangerous time to start playing Russian roulette over Brexit. And who needs a war between France and Poland?
With major Asian markets closed, Australian stocks retreat
Published: May 2, 2017 11:32 p.m. ET
Japan, Hong Kong, South Korea indexes closed for holidays
Stock prices increased early Wednesday in Asia, where some major markets are closed for holidays as traders await the latest statement from the U.S. Federal Reserve.But Australian stocks lagged behind for a second session as bank stocks continue to weigh on activity there.
The S&P/ASX 200 XJO, -1.08% slid 0.6% after falling Tuesday to end a seven-session winning streak. An underwhelming fiscal first-half report from Australia and New Zealand Banking Group to start that sector’s earnings season cast a cloud over the market there..
ANZ ANZ, -2.91% declined 2.1% Tuesday and fell a further 2% Wednesday as analysts continued to weigh in on the report.
Credit Suisse said that while it is inclined to be more negative on the stock after the report, which included margin pressures amid heightened competition, there is a risk of being too downbeat given the potential of capital returns.
Banks make up a big weighting for the S&P/ASX 200. National Australia NAB, -2.62% declined 1.9%, and Westpac WBC, -1.89% fell 1.3%.
The weakness among the lenders more than offset a partial rebound in oil-related stocks in Australia amid a bounce in crude prices in Asia on Wednesday. Futures rose nearly 1%, offsetting some of the decline seen overnight.
With markets in Japan, Hong Kong and South Korea closed, Chinese equities started Wednesday’s trading slightly lower, with the Shanghai SHCOMP, -0.33% and Shenzhen 399106, -0.32% composite indexes down 0.2%.
More
iPhone sales ‘pause,’ and Apple may be in trouble
Published: May 2, 2017 9:08 p.m. ET
Opinion: Tim Cook admits consumers are waiting for next iPhone, which could push smartphone rebound to 2018 fiscal year
Apple Inc. Chief Executive Tim Cook’s rare acknowledgment Tuesday that customers are delaying iPhone purchases serves as a warning that iPhone sales could continue to lag for a second consecutive year.Apple AAPL, +0.63% reported fiscal second-quarter earnings Tuesday with lower-than-expected revenue and iPhone unit sales, causing its shares to dip nearly 2% in after-hours trading after closing at record highs for two straight sessions. Apple stock has gained almost 27% this year as the S&P 500 index SPX, +0.12% has added 6.8%.
Importantly, Apple’s revenue guidance for the current quarter also missed analyst estimates, and Cook gave a hint as to why in the conference call.
“We’re seeing what we believe to be a pause in purchases on iPhone, which we believe are due to the earlier and much more frequent reports about future iPhones,” Cook told analysts on Tuesday.
That is an unusual admission by an executive team that never discusses new products in the works and rarely admits weakness, even as iPhone unit sales declined for the fourth time in five quarters. The only similar admission was in July 2012, when former CFO Peter Oppeheimer admitted that speculation around new iPhones caused buyers to pause in the third fiscal quarter, historically Apple’s weakest as it is just ahead of the customary iPhone launch.
Apple is now in that quarter, and the effects will only increase.
More
In EUSSR news, Macron, the man likely
to become the next French President, wants to sanction Poland. The inmate
asylum run by the inmates just continues to get worse. Everyone picks on Greece
(again.)
Poland outraged after Macron comments on Le Pen and Putin
Poland protested on Tuesday after French presidential candidate Emmanuel
Macron named its most powerful politician alongside Russia's Vladimir Putin as
the leaders of 'regimes' allied with his far-right opponent Marine Le Pen.
The perceived slur against Jaroslaw Kaczynski, head of the governing Law
and Justice Party (PiS), follows comments from Macron last week that, if
elected, he would urge the European Union to impose sanctions on Poland for
violating democratic norms.
Together, the two incidents are likely to make for testy relations
between Macron and the biggest of the EU's eastern ex-communist nations if, as
expected, he wins the election on Sunday.
"We all know who Le Pen's allies are: the regimes of (Hungarian
Prime Minister Viktor) Orban, Kaczynski, Putin. These aren't regimes with an
open and free democracy. Every day they break many democratic freedoms,"
Macron said on Monday.
Poland's Foreign Ministry said in a statement: "Pointing to a
supposed alliance between Le Pen and the leader of Law and Justice is a
manipulation. And the inclusion of Jaroslaw Kaczynski in the ranks of 'Le Pen's
friends who break numerous freedoms' is improper and highly unsuitable."
Naming Kaczynski in the same breath as Putin is especially sensitive for
the Polish side, as the PiS leader has always suspected Russia's involvement in
a 2010 plane crash there in which his brother, Polish President Lech Kaczynski,
and 95 others were killed. Russia denies blame, and an inquiry by the previous
Polish government returned a verdict of pilot error.
"We also want to remind that anyone who knows the history and
Poland's internal situation has no right to accuse Poles of affinity towards
imperial Russia," the foreign ministry said.
More
Relief map for Greek debt? Not without a fight or two
Pretty much everyone agrees that Greece needs debt relief; what they
don't agree on is what debt relief means.
Easing Greece's fiscal path forward is likely to be the next great
struggle in the country's agonizing, seven-year, three-package bankruptcy saga
now that a bailout pact has opened the door a crack to discussions on relief.
Only this time it will not just pit Greece against its lenders, but
lender against lender as well.
Start with the numbers: At the last count, the Greek government owed 314
billion euros ($343 billion) despite writing off about 100 billion euros owed
to private bondholders in 2012.
That's more than the gross domestic product of South Africa.
It's also equivalent to around 179 percent of GDP, a ratio which despite
improvements in Greece's economic performance goes up every time lenders make a
bailout payment to Athens.
This is why debt relief is on the agenda -- with Greece perhaps
quixotically pushing for something as early as May 22, when the Eurogroup of
euro zone finance ministers meets to sign off on Tuesday's staff-level pact on
support for Athens.
The battle will be fought on a number of fronts.
Firstly, there is the issue of whether the International Monetary Fund
will participate financially in the current, third bailout.
The IMF says Greece's debt is unsustainable -- with or without the
reform measures taken -- and it doesn't want to keep throwing money at the
problem while that is so. Indeed, it is not allowed to by its charter.
"For the IMF to be entering into a program with Greece would
require that the program can walk on two legs. One leg is the leg of reforms
and the other leg is that of debt sustainability," IMF Managing Director
Christine Lagarde said last month.
The European Union lenders -- the European Commission, European Central
Bank and European Stability Mechanism -- want the IMF involved, primarily
because it brings in an outside enforcer.
But the Europeans themselves have so far refused to say what they plan
to do, preferring a general pledge to provide debt relief once certain reform
criteria are achieved.
More
We close for today, with a world
without the EUSSR. Life goes on, get over it Brussels. If the rump-EUSSR is to
survive at all, use Brexit as an opportunity for long overdue real reform.
Scottish whisky maker Loch Lomond bets big on China with distribution deal
James Titcomb1 May 2017 •
8:28pm
One of Scotland’s oldest whisky producers is banking on rising Chinese
appetite for scotch after signing a distribution deal with China’s biggest food
company.Loch Lomond Group, whose brands include Littlemill and Glen Scotia, said the partnership with the state-backed agriculture and food & beverage giant Cofco would pave the way for its whiskies to be sold across China.
Whisky sales in China have increased 12-fold in the last decade as the country’s rising middle class develops a taste for single malt, with bottles popular as gifts.
The Asia-Pacific region now accounts for almost two thirds of global
spirits consumption, according to International Wine & Spirits Research,
and grew by 4.5pc last year.
China is one of the fastest growing regions with major drinks
multinationals such as Diageo targeting the country. The value of imported
spirits is expected to reach the $3.2bn mark by 2020 with the biggest of growth
from China.
Loch Lomond, which was founded in 1814 and
is based in West Dunbartonshire, said consumers in China prized the
authenticity of scotch whisky. The company’s Littlemill distillery was founded
in 1772.“The heritage, authenticity and provenance of our brands have proven to be attractive for consumers in China and around the world,” chief executive Colin Matthews said.
Whisky accounted for the vast majority of the £1.06bn in Scottish food and drink exports to Asia last year. Producers sold £895m to Asian countries in 2017, up 3pc.
The growth has helped to cushion declines in overall scotch exports in recent years, with consumers in markets such as Brazil, hit by economic turmoil, buying less.
More
http://www.telegraph.co.uk/business/2017/05/01/scottish-whisky-maker-loch-lomond-bets-big-china-distribution/?WT.mc_id=e_DM425237&WT.tsrc=email&etype=Edi_Cit_New_AEM_Daily&utm_source=email&utm_medium=Edi_Cit_New_AEM_Daily_2017_05_02&utm_campaign=DM425237
"If the EU cannot resolve a small problem the size of Greece, what is the point of Europe?"
Romano Prodi, former President of the European Commission, former Italy Prime Minister.
At the Comex silver depositories
Tuesday final figures were: Registered 33.59 Moz, Eligible 163.48 Moz,
Total 197.07 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, mainstream media finally gets it. All is not
well in the US economy and Trumpmania will not fix it either. If the Fed
pursues raising interest rates in 2017 they will likely trigger the next
recession. But the Fed may do that anyway, on the logic that the recession will
be small and short, and a recession in the first or second year of a new
presidency usually generates a strong recovery in years three and four. It also
tends to focus minds in the Congress. The Fed’s next rate increase is currently
factored in for June.
Slumping Car Sales Are Latest Data to Rattle Bets on Growth
Investment managers are tempering their postelection optimism
Updated May 2, 2017 4:15 p.m. ET
A soft patch in the economy is damping expectations for a stimulus-driven,
postelection boom, prompting many investors to retreat from bets on growth.The first quarter marked the weakest U.S. growth in three years, according to the initial Commerce Department reading on Friday. The Federal Reserve’s preferred measure of inflation, the personal-consumption expenditures price index, dropped 0.2% in March from a month earlier, pushing annual increases back below the central bank’s 2% target, data showed Monday. Even longtime economic bright spots such as consumer spending and car sales have recently begun to fade, with sales at General Motors Co. and Ford Motor Co. declining sharply in April.
Economists say these signs run counter to the bets on faster growth under President Donald Trump that fueled a postelection stock rally, reflecting early excitement about the likely impact of potential tax cuts, deregulation and infrastructure spending.
Investment managers are tempering their optimism, with 44% saying in a Northern Trust survey taken in late March that they expect the economy to accelerate over the next six months, down from 55% in the previous quarter.
“Moderate is going to be as good as it gets for the near-term, with a longer-term outlook suggesting even weaker growth,” said Lindsey Piegza, chief economist at Stifel Financial Corp. Ms. Piegza believes the economy will grow at about 1.5% annually for the next one-to-two years before a recession takes hold.
That has implications for the Fed, which is set to keep rates unchanged when it concludes its May policy meeting on Wednesday. Investors have penciled in two more rate increases before the end of the year, with fed funds futures showing 70% odds of a June increase.
----But the souring in the current outlook reflects the evolution of a broader postcrisis trend, in which the economy has expanded steadily while struggling to grow at an annual pace above 3%. The U.S. is in one of its longest periods of expansion since the Second World War, but many fear that the economy will struggle to maintain even its modest pace of growth, much less accelerate rapidly.
Lacy Hunt, executive vice president at Hoisington Investment Management
Co. in Austin, Texas, noted that the supply of highly liquid money, called M2,
an indicator of overall demand, has grown at a below-average annual rate of
5.5% over the three months that ended in mid-April, down from 6.8% in 2016.
M2’s pace tends to rise and fall with demand for goods and services.
Another measure of the relationship between money and GDP, known as
velocity, hit a fresh record low in the first three months of the year after
more than a decade of decline. In effect, for each increase in the money
supply, the associated increase in gross domestic product is smaller.
Together with decelerating credit growth, tightening lending standards
and a rising fed funds rate, slowing money growth and velocity suggest softer
economic growth ahead, Mr. Hunt said.
“We’re headed for a severe slowdown and the risk of an accident is
high,” he said.
More
Mrs. May: The
Ten Commandments. “Glenlivet” Juncker was a great believer in some of them.
With apologies to Joe
Orton and Loot.
Technology Update.
With events happening
fast in the development of solar power and graphene, I’ve added this section.
Updates as they get reported. Is converting sunlight to usable cheap AC or DC
energy mankind’s future from the 21st century onwards? DC? A quantum
computer next?
German project looks to home photovoltaic systems to help grid
Grid operator Tennet and solar battery maker Sonnen GmbH have launched a
pilot project that will tap home photovoltaic (PV) systems to help iron out
imbalances on Germany's power network.
TenneT and Sonnen's e-Services subsidiary aim to sign up 6,000 household
PV producers equipped with storage batteries by the end of May.
The project will be supported by blockchain technology from IBM, which
works as an inexpensive transaction-processing system for tracking and
recording encrypted information.
It holds potential to link up small energy "prosumers" and
make them independent of centralized power providers.
"A home storage unit for solar power on its own is less valuable
than one that can be used collectively," said Philipp Schroeder, director
of sales and marketing at Bavaria-based Sonnen.
"We will be able to create a big virtual power line. That is
revolutionary."
The two partners aim to initially pool 24 megawatts (MW) of power
capacity for TenneT to use as a buffer for variable wind power.
"Balancing" power is so far handled mainly by traditional
power plants while surplus wind power is often dealt with by curbing turbine
output or throwing output away.
"We want to find out how we can reduce the waste of wind power by
storing it in Sonnen batteries that we can access in the North while releasing
power from solar energy stored at Sonnen batteries in southern Germany,"
said Urban Keussen, board chairman of the board at TenneT's German unit.
Germany currently subsidizes renewable power producers with billions of
euros a year, regardless of demand.
----Germany has 15 million detached
houses and 1.7 million photovoltaic units, but only 50,000 home storage units.
Should 10 percent of all households use solar plus storage in 10 years,
that would create capacity of some 6 gigawatts of power,
he said, equivalent to six nuclear plants.
More
The monthly Coppock Indicators finished April
DJIA: 20,941 +149 Up. NASDAQ: 6,048 +190 Up. SP500: 2,384 +152 Up.
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