Baltic Dry Index. 1117 -09 Brent Crude 69.63
"Stock prices have reached what looks like a permanently
high plateau."
Prof. Irving Fisher, Yale economist, autumn 1929.
The Dow is now a hairs breadth away from
generating a new Dow sell signal. Now some professional money managers are
starting to question has a new bear market already started, and if so, what it
might mean.
Professional money managers absolutely hate up-down,
up-down markets. Few can make money in such markets and most go on to make
embarrassing losses. On down legs, the front running algo traders disappear,
pulling out of supporting the markets. The casino goes back to being a
temporary game of chance. Professional money managers much prefer the central
bankster’s rigged roulette wheel, and Greenspan-Bernanke-Yellen “Put.”
Below, rising nervousness that January’s
high, was THE HIGH.
"Stocks are cheap at current prices."
Calvin Coolidge, 30th United States President, spring 1929.
Tumbling tech stocks lead Asian-market slide
Published: Mar 28, 2018 12:48 a.m. ET
Technology stocks led the way lower in Asia on Wednesday, dragged by the
sector’s slide in the U.S., as the region lost its early-week gains. The Nikkei Stock Average NIK, -1.61% ended morning trading down 1.8%, reversing much of Tuesday’s 2.7% jump. SoftBank 9984, -3.45% slid 3.3% and Nintendo 7974, -2.59% shed 2.5% even as the yen reversed some of the gains it made in U.S. afternoon trading.
A number of Asia Pacific stock indexes were down at least 1%, including Hong Kong’s. There, a gauge of technology stocks fell 2.4% as Tencent 0700, -3.24% lost 2.1%, while smartphone-component suppliers AAC Technologies AAC, -5.46% and Sunny Optical 2382, -6.36% both dropped more than 4%.
South Korea’s Kospi SEU, -1.26% slid 1.3%, with index heavyweight Samsung Electronics 005930, -2.44% falling 2.5%.
Ayaz Ebrahim, portfolio manager for emerging markets Asia-Pacific at J.P. Morgan Asset Management, said the fund manager had reduced its “significant overweight” position in tech stocks during the past 18 months.
The asset manager has shifted into financial stocks. “We believe higher interest rates will benefit insurance companies as well as banks,” he said.
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Opinion: Stocks may already be in a bear market — and here’s how long it could last
Published: Mar 27, 2018 4:33 p.m. ET
The Dow Jones Industrial Average surged 670 points on Monday, but fell 345
points on Tuesday. It will hit bottom on March 4, 2019, at 18,328.27.That’s on the assumption that a major bear market began at the Jan. 26 highs, and that the ensuing bear market will be average both in terms of length and loss.
That would mean we face 11 more months of a declining market, in which the Dow DJIA, -1.43% will drop another 5,529 points (or 23.2%) from Tuesday’s close. The Dow has already slumped 2,759 points, or 10.4%, from its record close of 26,616.71 on Jan. 26.
Of course, we don’t know yet whether we’re in a major bear market. The Dow’s impressive rally on Monday surely let the bulls breathe a little more easily.
But Monday’s surge was followed by Tuesday’s drop, and the Dow Theory, the oldest stock-market timing system in widespread use today, came within a hair’s breadth of issuing a major bear market signal on both Friday and Tuesday.
And we’re not out of the woods, since last week’s decline called into serious question the idea that the bull market is alive and well after surviving its late-January/early-February correction. So it’s important to face squarely what investors will be up against if indeed a bear market started at the late-January highs.
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The Lesson From Stock Corrections Past? 200 Days of Pain
By Lu Wang, Sarah Ponczek, and Elena Popina
28 March 2018, 00:24 GMT+1 Updated
on 28 March 2018, 02:58 GMT+1
Remember the last time stocks fell so hard? You probably don’t, and that’s
making today’s market seem harsher than it is.It’s a fact of the life of the mind -- things always seem worse in the present. In reality, they’re not. In this bull market alone there’s been five other corrections like this one, and it’s taken around seven months on average for equities to climb out of their hole. Based on that path, the current jitters won’t be fully eradicated until August.
Just because bouts of losses are normal doesn’t mean they’re painless, especially when momentum stocks are leading the way lower. But the statistic is a reminder that it’s unrealistic to expect a market recovery to involve a straight line back up.
----Since 2009, the average correction in U.S. stocks has lasted 200 days and lopped 14 percent from the S&P 500. That means if this one ended this week -- an unlikely prospect, given the index just posted its fourth consecutive move of greater than 1.5 percent -- it would be the second shortest and second shallowest of them all.
It seems even worse because of how placid markets have been since the
last disruption. While individual stocks are regularly rising and falling 5
percent nowadays, consider that in 2016 and 2017 the S&P 500 went through
several multi-month stretches without posting a single up or down day of more
than 1 percent.
That hasn’t been the case lately. The S&P 500 dropped 1.7 percent on
Tuesday, erasing more than half of the previous day’s 2.7 percent rally.
Futures on the gauge climbed 0.2 percent at 9:57 a.m. in Hong Kong.
Stock turbulence as measured by the benchmark anxiety gauge, the Cboe
Volatility Index, is much higher. At 22.5 now after rising for the third time
in four days, the measure is nearly twice its level for the previous two years.
There have already been 22 days in which the S&P 500 moved more than 1
percent in the first three months of the year, triple the total for all of
2017.
More
Next,
Trump’s Great Chinese Trade War back on? China pushes back, saying no deal to
threats.
March 28, 2018 / 5:41 AM /
Updated 13 minutes ago
China preparing list of retaliatory tariffs on U.S. imports: Global Times
BEIJING (Reuters) - China will soon
announce a list of retaliatory tariffs on United States exports to China to
counter an expected announcement from the United States of proposed new tariffs
on Chinese imports, the Global Times said Wednesday.
The Chinese list will target a large number of major U.S. imports to
China, said the English-language editorial.
The widely-read state run Global Times is run by the ruling Communist Party’s
official People’s Daily, although its stance does not necessarily equate with
Chinese government policy.
Trade tensions between the two countries flared last week after U.S.
President Donald Trump imposed tariffs on steel and aluminum imports and
targeted China by announcing plans for tariffs on up to $60 billion of Chinese
goods.
Alarm over a possible trade war between the world’s two largest
economies has chilled financial markets as investors anticipated dire
consequences should trade barriers go up due to Trump’s bid to cut the U.S.
deficit with China.
Markets are now waiting for the U.S. to publish a list of Chinese
products that could be targeted with additional tariffs after a U.S. inquiry
found China guilty of intellectual property theft and unfair trade.
“Compared to China’s list, the U.S. list hurts itself more than China.
The tougher the move, the stronger the impact on Washington,” said the Global
Times in its editorial.
“This will deal a heavy blow to Washington that aggressively wields the
stick of trade war and will make the U.S. pay a price for its radical trade
policy toward China,” the tabloid outlet said.
The Global Times said the United States was naive to think it could make
China agree to unreasonable demands as China’s economy is strong and stable,
while it has “weathered bluster before from previous U.S. administrations”.
And finally, “hedge
fund manager talks up his book.” How quaint!
Tesla is just months from a total collapse, says hedge-fund manager
Published: Mar 27, 2018 11:26 a.m. ET
Unless Elon Musk “pulls a rabbit out of his hat,” Tesla will be bankrupt
within four months, says John Thompson of Vilas Capital Management. “Companies eventually have to make a profit, and I don’t ever see that happening here,” he told MarketWatch. “This is one of the worst income statements I’ve ever seen and between the story and the financials, the financials will win out in this case.”
Thompson manages $25 million and his Tesla TSLA, -2.39% short is the fund’s biggest position. To be fair, he’s been betting big against Tesla for years, which, of course, means he’s endured some brutal stretches.
Last April, for instance, the stock hit a record high around the $300 mark, and Musk was right there to troll the Tesla bears:
From
that point, the stock continued to break new ground, eventually topping out at
$389.61. But despite Tesla’s strong performance in 2017, Thompson’s fund still
managed to churn out a 65% gain for the year.
Now, Tesla’s back to where it was when Musk fired off his “Shortville”
tweet, and Thompson is confident his bet is about to pay off nicely.
In fact, Thompson says if his prediction comes true, his fund could
surge by another 50%. With that in mind, he says he’s investing $500,000 of his
own money.
“Tesla, without any doubt, is on the verge of bankruptcy,” he told
clients in an email over the weekend. He explained that funding will be hard to
come by in the face of problems in delivering the Model 3, declining demand for
the Model S and X, extreme valuation and a likely downgrade of its credit
rating by Moody’s from B- to CCC.
More
Tesla Shares Plunge on Mounting Model 3 Doubts, Crash Probe
By Dana Hull
Updated on 27 March 2018, 21:59 GMT+1
Tesla
Inc. is taking it on the chin for trailing expectations and facing new
investigations.
The
shares fell 8.2 percent Tuesday to the lowest in almost a year, while its
non-convertible debt is at a new all-time low. Tesla’s stock and bonds
fell as analysts cast doubt on the electric-car maker
reaching its production targets for the all-important Model 3 sedan. The U.S.
National Transportation Safety Board also announced it’s conducting its second investigation this year into a Tesla
car crash.
Model
3 deliveries have fallen short of Chief Executive Officer Elon Musk’s lofty
goals since the company started building it in July. Investors may be starting
to lose patience at an inopportune time -- the NTSB is sending two
investigators to examine issues raised by a fatal Tesla crash that occurred
Friday in California. A deadly Uber Technologies Inc. accident that happened
days earlier also is having ripple effects for the broader self-driving car
industry, including Tesla supplier Nvidia Corp.
More
"There
may be a recession in stock prices, but not anything in the nature of a
crash."
Prof.
Irving Fisher, Yale economist, September 1929.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today, the opinion of the South China Morning Post. But President Xi probably feels that after
President Trump’s boasts, he can’t be seen to lose face, especially with a
North Korea – President Trump summit coming up.
It’s a long way from trade tariffs to war, but China and the US must act as grown-ups to steer relations
Tom Plate says fair play and mutual respect are missing in the China-US squabble over trade, and both sides must recognise that the relationship cannot be seen in purely monetary terms
PUBLISHED
: Monday, 26 March, 2018, 4:27pm UPDATED : Monday, 26 March, 2018, 7:11pm
Americans
who worry about China’s fate do not do so carelessly. Their concern is sincere
and well-informed. Suggestions and criticism are offered not as the sabotage of
capitalist counter-revolutionaries but out of the shared instinct of global
cosmopolitans. Why not give bilateral peace a chance? Or do we simply accept
that the two great nations are “destined for war”, as a recent book title by a
famous Harvard professor has it.
Is US President Donald Trump’s new
national security adviser of the “destiny” ilk? One joke making the rounds
about the oft-truculent John Bolton is that he’s never met a war he didn’t
like. Another is that Bolton is the proverbial bull in the China shop. Soon we
will have a better fix on his attitudes towards China, not to mention North Korea: the position of
chief of national security requires no US Senate confirmation. His work will
begin soon, and he is not the sort of man for whom silence is golden.
His appointment rounded out a blustery week when the ship
of state seemed to be rocking more than ever. The punch-up of punitive
tariffs against the steel and aluminium exports of China, among other
nations, was a chilling reminder that US foreign policies tend to be anchored
in the swamp of contemporary domestic politics, with no vision beyond the
pressing present.
Trump and Professor Peter Navarro’s nest of trade hawks in the White
House may not realise it, but the very concept of a trade deficit is a tricky
calculation. Unlike, say, the Japanese, Americans spend far more than they
save, and love being able to stuff loads of cheap toys made in China under the
Christmas tree for the kids. Beijing has put billions of its hard-earned
renminbi into US Treasury bonds and other such capitalist instruments. It’s not
ready to short America – yet, anyway.
Steel overcapacity? The Chinese deserve recognition for substantially
reducing it even in the face of social stress on the mainland. There’s not much
coverage of this in the US media. Some editors seem uncomfortable with positive
news from China.
We note that not only is China being targeted with tariffs, but so is
Japan. One is a putative “competitor”, and the other a putative “ally”? They
get the same back of the Trump hand. Why?
I can offer a backstory: in the 1990s, in the middle of the California
recession, Washington criticised the Japanese for unfair trade practices with
relentless rhetorical ferocity. And they were our strategic partner. Then
president Bill Clinton called off the blame game after an appeal by then deputy
Treasury secretary Lawrence Summers, a brilliant man. Clinton was said to have
said something like: “You’re right. We have vital interests with the Japanese
other than economic. Let’s calm it down.” And it was.
Similarly, we also have vital considerations with China that cannot be
calibrated only in dollars and renminbi. As the late Warren Christopher, US
secretary of state in Clinton’s first term, would say to me, it is impossible
to imagine a stable world emerging without a seriously enmeshed China-US
relationship. Together, our two great nations comprise about 23 per cent of the
globe’s population. True grievances need to be negotiated with fair sense, not
political spit.
More
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?
Softbank to Build World’s Biggest Solar Park in Saudi Arabia
By Vivian Nereim and Stephen Cunningham
28 March 2018, 05:39 GMT+1
Saudi Arabia has signed a memorandum of understanding with SoftBank
Group Corp. for a $200 billion solar power project in the kingdom, calling
it the single largest of its kind in the world.SoftBank founder Masayoshi Son said he envisions the project, which runs the gamut from power generation to panel and equipment manufacturing, as a way to help wean Saudi Arabia off its dependence on oil for electricity, create as many as 100,000 jobs and shave $40 billion off power costs. The total capacity to be built under its umbrella will be 200 gigawatts by 2030, the company said.
Saudi Crown Prince Mohammed Bin Salman is on a three-week tour of the
U.S., his first visit since being designated the successor of his father, King
Salman bin Abdulaziz. He and Son signed the memorandum of understanding in New
York on Tuesday. The deal deepens SoftBank’s ties with the world’s largest
crude exporter and advances the crown prince’s ambition to diversify Saudi
Arabia’s economy.
“It’s a huge step in human history. It’s bold, risky and we hope we
succeed doing that,” Prince Mohammed said late Tuesday night as he left a press
briefing at the Plaza Hotel.
“The kingdom has great sunshine, great size of available land and great
engineers great labor, but most importantly, the best and greatest vision,” Son
told reporters at the briefing.
SoftBank was said to be planning to invest as much as $25 billion in Saudi Arabia over the next three to four years. That’s a boost for Prince Mohammed, who’s been at the forefront of the Vision 2030 campaign to diversify the kingdom’s economy away from oil by that year. SoftBank is said to have aimed to deploy as much as $15 billion in a new city called Neom that Prince Mohammed plans to build on the Red Sea coast.
The Japanese company’s Vision Fund is also said to plan investments of as much as $10 billion in state-controlled Saudi Electricity Co. as part of efforts to diversify the utility into renewables and solar energy, and SoftBank will also have some of its portfolio companies open offices in Neom.
More
https://www.bloomberg.com/news/articles/2018-03-28/saudi-arabia-softbank-ink-deal-on-200-billion-solar-project
The monthly Coppock Indicators finished February
DJIA: 25,029 +283 Up 01. NASDAQ: 7,273 +313 Up 03. SP500: 2,714 +212 Flat.
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