Thursday, 25 May 2017

Skating On Thin Ice.

Baltic Dry Index. 934 -15     Brent Crude 54.19

Play the market only when all factors are in your favor. No person can play the market all the time and win. There are times when you should be completely out of the market, for emotional as well as economic reasons.

Jesse Livermore.

We open today with a worrying retail stumble in America. While it’s not quite “as goes Tiffany’s, so goes America,” trouble in the one percenter’s coal mine might just be the canary croaking, to mangle metaphors. There’s a whole lot of other reasons to worry too. The next Lehman is approaching and there’s little that “the Donald” or Janet Yellen can do to prevent it, or mitigate it. Interest rates are already in the basement, and President Trump is in a seditious war with America’s deep state.

The American War Party, the Clintonistas, the Democrats, the Hollywood pornographers, and Silly Con Valley, are all out to delegitimise President Trump and his “deplorables,” and bring him down like Richard Nixon. At best a four year trench war of attrition lies ahead. At worst, one side or both, go nuclear, ending the war in a big bang.

Below, US stocks skating on thin ice. Call up the Plunge Protection Team.

There is nothing new on Wall Street or in stock speculation. What has happened in the past will happen again, and again, and again. This is because human nature does not change, and it is human emotion, solidly build into human nature, that always gets in the way of human intelligence. Of this I am sure.

Jesse Livermore.

Tiffany Tumbles After Jeweler Reports Surprise Sales Decline

by Stephanie Hoi-Nga Wong
24 May 2017, 11:51 GMT+1 24 May 2017, 12:15 GMT+1
Valentine’s Day did little to help Tiffany & Co. stave off a broader retail slump.

The New York-based jeweler posted an unexpected sales decline in the first quarter, with sluggish demand in the Americas and Asia weighing on results. That sent shares down as much as 6.6 percent in early trading on Wednesday.

The surprise drop signals that Tiffany faces a slow recovery from a tourism slump and shrinking foot traffic in the U.S. To boost sales and draw younger customers, the company has been renovating stores and introducing new designs, such as the HardWear collection promoted by singer Lady Gaga.

Tiffany blamed slow results in the Americas region on “lower spending by both foreign tourists and local customers.”

The shares declined as low as $87.02 in early trading after the results were posted. Tiffany had climbed 20 percent this year through Tuesday’s close.

Valentine’s Day typically brings a surge of shopping to the jeweler, but it wasn’t enough to salvage results in the latest quarter. Same-store sales -- a key measure -- fell 2 percent in the period. Analysts had projected a gain of 1.7 percent on average, according to Consensus Metrix.

The stock market should be more worried about the hard economic data

Published: May 24, 2017 5:31 p.m. ET
The election of Donald J. Trump as president in November unleashed a wave of confidence among businesses, consumers, and investors that prosperity was just around the corner.

This so-called “soft” data, based mostly on sentiment surveys, point to a surging economy in which 3% GDP growth—which we haven’t seen consistently since the 1990s—was within reach. Consider:

•The University of Michigan Consumer Sentiment index stood at 97 in April, just off its 13-year high of 98.5 set in January. The Conference Board Consumer Confidence Index at 120.3 in April also remains strong, though it slid from recent highs in February and March.

•The Business Roundtable CEO Economic Outlook Index, which polls CEOs of the nation’s largest corporations on their expectations for sales and hiring over the next six months, showed its biggest increase in the first quarter since the fourth quarter of 2009.

•The NFIB Index of Small Business Optimism also slipped a bit last month, but April was the sixth consecutive month for high optimism, “a hot streak not seen since 1983,” the NFIB reported.

•The Wells Fargo/Gallup Investor and Retirement Optimism Index hit a 16-year high in the first quarter at +126. That’s the most optimistic investors have been since November 2000, when the index stood at +130 (although Gallup points out that the surge has been driven largely by Republicans, whose confidence is now 209 points higher than it was in the third quarter of 2016, something this column noted in March).

•The Dow Jones Industrial Average DJIA, +0.36% S&P 500 SPX, +0.25%  and Nasdaq Composite COMP, +0.40%  indexes are all on five-day winning streaks. The S&P set a record close on Wednesday, and the other two are within a whisker of their all-time highs.

If you look only at “soft” data and sentiment, the economy and markets are in Nirvana, Valhalla, and Paradise combined.

Back in the real world of “hard” data, however, things aren’t quite so great.

•Retail sales, where consumers translate all that positive sentiment into cash purchases, rose 0.4% in April, less than expected, after a couple of soft months. “Consumer confidence may be through the roof but retail sales, and consumer spending in general, have been stuck on the ground,” Econoday observed.

•Sales of new cars and trucks fell in April for the fourth consecutive month, and inventories are piling up at dealers. That inevitably leads to “incentives,” i.e., deep discounts, which cut into auto makers’ profits. So, GM is planning to lay off 4,000 employees and Ford is cutting 10% of its workforce, including former CEO Mark Fields. “There are growing signs that America’s car market is running out of gas,” The Economist wrote.

Read: Existing-home sales stall in April as tight supply pushes properties to record low time on the market

Banks are scaling back lending. Commercial & industrial loans outstanding fell to around $2.1 trillion earlier this month, below November’s peak and marking the seventh consecutive month of no growth in these key loans. Every time that has happened since the 1960s, “a recession was either in progress or would start soon,” wrote Wolf Richter on the Wolf Street blog. He called it “a big red flag…Something is seriously wrong.”

Legendary Investor Asher Edelman Says "I Have No Doubt" PPT Behind Market Rally

by Tyler Durden  May 24, 2017 9:21 AM
Legendary vulture investor Asher Edelman, the 1980s model for Gordon Gekko, strayed into what must’ve been uncomfortable territory for CNBC during an appearance on "Smart Money" when he discussed his view that the government’s "plunge protection team" is the only thing propping up the current market rally, and said he suspects that it has again been recently een intervening in the market to keep stocks at record highs. 

Edelman simply notes that he doesn’t want to be in the markets right now because “I don’t know when the plug is going to be pulled."

Few can explain the market's recent resilience, holding near record highs despite weak economic data and intensifying geopolitical tensions. The main benchmarks have risen for the fourth straight day following last week’s “Trump Dump" despite a terror attack in the U.K., the worst soft economic data since February e2016, and surprisingly low trading volume.

The “plunge protection team” was created by President Ronald Reagan one year after the stock market crash in 1987, when the president called for the creation of the “Working Group on Financial Markets.”

It’s believed – as the name would suggest and as has been profiled on countless occasions on this website previously – that the group’s mandate is to maintain stability in the market and head off any severe crashes like what was seen in 1987. It's believed the group reports only to the president, though the head of the Treasury, head of the Securities and Exchange Commission and Federal Reserve Chairman are also involved. The team, according to Asher, steps in to execute trades on all exchanges when the market isn't behaving as it would like, working only with big banks like Goldman Sachs Group and Morgan Stanley. 

Wed May 24, 2017 | 12:25pm EDT

U.S. House Democrats seek info from Deutsche Bank on Trump accounts

Democrats on a U.S. of House of Representatives panel have asked Deutsche Bank (DBKGn.DE) to provide information on whether any accounts connected to President Donald Trump have ties to Russia, adding another dimension to probes into connections between Moscow and Trump.

Democrats on the U.S. House Financial Services Committee said on Wednesday they had sent a letter the previous day to Deutsche Bank Chief Executive Officer John Cryan seeking details of internal reviews to determine if Trump's loans for his real estate business were backed by the Russian government.

The congressional inquiry also seeks information about a Russian "mirror trading" scheme that allowed $10 billion to flow out of Russia.

“Congress remains in the dark on whether loans Deutsche Bank made to President Trump were guaranteed by the Russian government, or were in any way connected to Russia," the Democrats wrote. "It is critical that you provide this committee with the information necessary to assess the scope, findings and conclusions of your internal reviews.”

The Democrats requested the documents from the bank, but cannot compel it to hand over the information. The committee has the power to subpoena the documents, but that would require cooperation from committee Republicans who make up the majority of the panel because the party has control of the House. No Republicans signed on to the document request.

Citing media reports, the Democrats called for the bank to hand over any documents tied to internal reviews of Trump’s personal accounts at the bank. They also said the bank should state publicly that it had reviewed both the "mirror trading" scheme and Trump’s accounts.

Meanwhile, back in the EUSSR, the rats are fighting over the perceived Brexit loot.

“Of course, there will be transfers of sovereignty. But would I be intelligent to draw the attention of public opinion to this fact?”

Jean-Claude Juncker. Failed Luxembourg Prime Minister and ex-president of the Euro Group of Finance Ministers. Confessed liar. European Commission President.

Wed May 24, 2017 | 11:02am EDT

Rivals fight for post-Brexit EU agencies ahead of October decision

Rival European cities face a five-month fight to host two European regulators that will have to leave post-Brexit London, with officials setting out procedures for determining their new locations via a stepped voting system.

According to an EU paper, member states will be asked to decide on new homes for the European Medicines Agency (EMA) and the European Banking Authority (EBA) by October 2017.

The voting process will start with a verdict on the EMA, the larger of the two bodies, and the country selected for this body will not be able to host the banking watchdog as well.

Countries have until July 31 to submit bids for both agencies and the voting session will take place on the margins of a meeting of European affairs ministers in October, according the 18-page May 19 paper seen by Reuters.

Leading contenders to house the EMA are already jockeying for position, with Spanish Health Minister Dolors Montserrat setting out the case for Barcelona to host the agency during a visit to Brussels on Wednesday.

"Barcelona is ready to host the EMA now," she said, noting that the Spanish city had already identified a building to house the organization.

"No-one is offering a better combination of location, facilities, services and a high quality of life from both a professional and social perspective than Barcelona."

Milan, Copenhagen and Dublin are among other European cities campaigning actively to host the EMA, although in total 21 of the 27 countries that will form the EU after Britain leave have expressed some degree of interest.

The EMA employs nearly 900 staff and acts as a one-stop-shop for approving and monitoring the safety of drugs across Europe. With an annual budget of $360 million and attracting 36,000 experts a year to London for its meetings, it is a prized asset.

Wed May 24, 2017 | 2:46pm EDT

Macron government denies ethical misstep by minister

A morality campaign by France's new government took a knock on Wednesday when media disclosed that one minister had rented business offices from his female partner, though the government defended him and said there was no cause for resignation.

Richard Ferrand, a close ally of President Emmanuel Macron, was reported by the satirical weekly Le Canard enchaine to have rented office space from his partner from 2011 for health insurance companies he headed. Ferrand denies any wrongdoing.

The conservative Republican party said in a statement that it would ask prosecutors to look into the matter.

With Macron's government about to unveil a draft law aimed at cleaning up French political life, which is frequently beset by corruption scandals, government spokesman Christophe Castaner admitted: "This (the disclosure) comes at a bad time."

"But one thing is certain. There is nothing illegal here. There is nothing that is not correct morally," Castaner told Europe 1 radio, later telling journalists there was no question of Ferrand resigning as minister for territorial cohesion.
“A good politician is quite as unthinkable as an honest burglar.”
H. L. Mencken.

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Below, was the Wall Street Journal sold a pup, by whom, and why? Cui bono? Suspicious old me, I’d be checking the options and CFD activity in both stocks.
Wed May 24, 2017 | 4:07am EDT

Bunge says not in talks with Glencore following approach

U.S. grains trader Bunge Ltd (BG.N) said on Tuesday it was not in talks with Swiss mining and commodities group Glencore Plc (GLEN.L), after the latter said it had made an informal approach to discuss "a possible consensual business combination."

Both statements were triggered by a Wall Street Journal story that stated that Glencore had made a takeover approach to Bunge. Bunge shares ended trading in New York up 16.6 percent at $81.70, giving the company a market capitalization of $11.4 billion, on investor expectations of a possible deal.

However, Bunge subsequently said it was not engaged in business combination discussions with either Glencore or Glencore Agriculture Ltd, a joint venture owned by Glencore and two Canadian pension funds.

Glencore had said in its statement earlier that "discussions may or may not materialize and there is no certainty that any transaction will occur."

In a sign of its limited appetite to negotiate a sale to Glencore, Bunge said it was "committed to continuing to execute its global agri-foods strategy and pursuing opportunities for driving growth and value creation."

Prior talks between Glencore and Bunge focused on a partnership in North America rather than the sale of Bunge, according to people familiar with the discussions, who requested anonymity to disclose them. Glencore also expressed interest in an acquisition of Bunge, however Bunge did not wish to pursue it, one of the sources added.

Glencore's interest in Bunge fueled ongoing speculation that, after a string of poor results, the world's big grain trading houses are ripe for a wave of consolidation similar to the mergers and acquisitions in the farm chemicals and seed industries.

Bunge shares were down 3.4 percent at $78.95 in after-hours trading in New York on Bunge's statement.
Large grain traders have struggled in recent years as a global oversupply and thin trading margins have squeezed their core commodity trading operations, including those of Bunge and rivals Archer Daniels Midland Co (ADM.N), Cargill Inc [CARG.UL] and Louis Dreyfus Co.

The companies, collectively known as the ABCDs of global grain trading, are also facing stiffer competition from players such as China's COFCO Corp [CNCOF.UL], which recently scooped up Noble Agri and Nidera, and Japan's Marubeni Corp (8002.T), which bought U.S. grain handler Gavilon in 2012.

Merger expectations have been bubbling in the sector for months as commodities prices remain stubbornly low. A series of bumper grain and soybean harvests in the United States and South America also mean there is little chance of a supply disruption that global grain traders could profit from.
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?

The world’s largest floating solar power plant just went online in China

By Dallon Adams Updated May 23, 2017 4:05 pm
China has announced that the largest floating photovoltaic (PV) facility on earth has finally been completed and connected to the local power grid. Long reviled for its carbon emission record, this is the Chinese government’s latest achievement in its ongoing effort to lead the world in renewable energy adoption.

Located in the city of Huainan in the Anhui province, the 40-megawatt facility was created by PV inverter manufacturer Sungrow Power Supply Co. Ironically, the floating grid itself was constructed over a flooded former coal-mining region.

Floating solar farms are becoming increasingly popular around the world because their unique design addresses multiple efficiency and city planning issues. These floating apparatuses free up land in more populated areas and also reduce water evaporation. The cooler air at the surface also helps to minimize the risk of solar cell performance atrophy, which is often related to long-term exposure to warmer temperatures.

This is just the first of many solar energy operations popping up around China. In 2016, the country unveiled a similar 20MW floating facility in the same area. China is also home to the Longyangxia Dam Solar Park, a massive 10-square-mile, land-based facility touted as the largest solar power plant on earth.

This transition to solar is in large part due to the rapidly plummeting cost of the technology itself. By 2020, China could reduce prices offered to PV developers by more than a third with solar power plants projected to rival coal facilities within a decade. The nation has also announced plans to increase its use of non-fissile fuel energy sources by 20 percent.

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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