Baltic Dry Index. 1306 +25 Brent Crude 74.95
“Forecasts may tell you a great deal about the forecaster;
they tell you nothing about the future.”
Warren
Buffett.
For more on America’s
new Cowboy Casino Capitalism, scroll down to Crooks Corner.
Below, more reasons
to think that stocks are in more than just another run of the mill
“correction.” From the bitcoin mania high in December to the stock market mania
high in January, it’s not a goldilocks market anymore. The market seems to this
old dinosaur trader, to be rolling over from bull to bear.
If inflation returns
in anything more than a token way, the grossly complacent central banksters,
will find themselves hopelessly behind the curve, trying to play catch up. That is the kiss of death for most stocks.
“Should you find yourself in a chronically leaking boat,
energy devoted to changing vessels is likely to be more productive than energy
devoted to patching leaks.”
Warren
Buffett.
April 24, 2018 / 1:56 AM
U.S debt deluge lifts bond yields to four-year high, Asia stocks down
TOKYO
(Reuters) - Asian stocks slipped and the U.S. dollar advanced on Tuesday, as a
deluge of U.S. government debt this week and the spectre of inflation and a
higher fiscal deficit drove U.S. borrowing costs near four-year highs.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.25 percent. Japan's Nikkei .N225 rose 0.7 percent thanks to fall in the yen.
U.S. bond prices have fallen for the past four days, pushing up the 10-year yield to 2.998 percent US10YT=RR, its highest level since January 2014.
“There are concerns about inflation, rising oil prices and also U.S. fiscal conditions,” said Hiroko Iwaki, senior strategist at Mizuho Securities, noting the U.S. budget deficit is expected to hit $1 trillion next year.
The bond market is bracing for combined sales of $96 billion in coupon-bearing Treasuries this week as the Treasury has ramped up its borrowing following last year’s massive tax overhaul and a two-year budget agreement reached in February.
Inflation worries are also mounting as oil and commodity prices have been rising in recent weeks.
----Investors are concerned that U.S. inflation, long subdued since the financial crisis a decade ago, could gain momentum as President Donald Trump’s tax cuts this year could stimulate an economy already near or at full employment.
More
U.S. economy is speeding up again, but inflation is warming up too, IHS Markit finds
Published: Apr 23, 2018 10:12 a.m. ET
The numbers: American companies grew faster in April,
especially manufacturers, in a reflection of a steadily expanding U.S. economy.
But inflationary pressures increased as well. The IHS Markit U.S. manufacturing PMI climbed to 56.5 this month from 55.5 and touched a three-and-a-half-year high. Readings over 50 indicate expansion.
A similar survey of service-oriented businesses that employ most Americans also rose. It edged up to 54.4 from 54.
At the same time, the survey showed the cost of raw or partly finished materials increased at the fastest pace in almost five years. Firms said the recently announced White House tariffs on steel as well as a large basket of Chinese goods were partly to blame.
What happened: Businesses boosted production in April to match an increase in new orders.
Companies also acted more aggressively to secure materials from suppliers because they are taking longer to deliver them. That suggests companies are running into bottlenecks, a potential hurdle for the economy if the situation gets worse.
Tight supplies also mean higher prices — aka inflation.
Even with new orders increasing, companies eased back on hiring. They focused more on improving efficiency — no surprise given a growing shortage of skilled labor.
Big picture: The economy is ramping up for a strong spring, but shortages of skilled labor, rising inflation and the threat of widespread tariffs could put a cap on U.S. growth despite recent tax cuts and higher federal spending.
Higher inflation could also spur the Federal Reserve to raise interest rates more aggressively, another potential drag on faster U.S. growth.
More
https://www.marketwatch.com/story/us-economy-is-speeding-up-again-but-inflation-is-warming-up-too-ihs-markit-finds-2018-04-23
How 3% Yields Could Reshape the Investing Landscape
By Sarah Ponczek, Dani Burger, and Luke Kawa
23 April 2018, 19:30 GMT+1
Ten-year Treasury yields sit closer to 3 percent than at any time
in the past four years, prompting investors to dust off their playbooks for how
to trade in an era of relatively higher rates.Rising rates isn’t exactly a new problem for markets -- the 10-year yield jumped 30 basis points in January alone -- but this time the spike’s driven by surging commodity prices, not heady economic gains. And that’s thrown a wrinkle into the discussion, particularly when it comes to equities.
“Historically, the stock market has done OK with rising inflation, provided economic momentum was also rising,” Jim Paulsen, chief investment strategist at Leuthold Group, wrote in a note to clients Monday. “Stocks also have performed well even when economic momentum has faded, if inflation also moderates. However, periods of stagflation have produced poor results in both the stock and bond markets.”
“The question of course is how long can this last,” said Peter Boockvar,
chief investment officer of Bleakley Financial Group, noting that current debt
levels for S&P 500 companies outside of banks are at extremely high levels.
“Stating the obvious, high debt levels along with higher interest rates is not
the best combination.”
Matt Maley, an equity strategist at Miller Tabak & Co., also says
staggering levels of investor leverage pose a risk. As rate rise, lenders
increase costs on margin accounts which in turn prompt a gradual unwind of
leverage that’s become too expensive, he said.
“When everyone has been talking about whether higher rates impact the
economy, the more important thing is how it will impact leverage,” Maley said
by phone. “It creates a headwind for the market.
Morehttps://www.bloomberg.com/news/articles/2018-04-23/how-3-percent-yields-could-reshape-the-investing-landscape
The S&P 500 just logged its longest stretch in correction territory in nearly a decade
Published: Apr 23, 2018 5:59 p.m. ET
The S&P 500 just recorded a dubious milestone. The broad-market
benchmark has put in its longest run in correction territory since May 1, 2008,
according to WSJ Market Data Group. The S&P 500 index SPX, +0.01% has been in correction territory, defined as a decline of at least 10% from a recent peak, for 51 trading sessions, including Monday’s lackluster finish for the index.
The S&P 500 slipped into correction territory on Feb. 8, along with the Dow Jones Industrial Average DJIA, -0.06% , and remains there because it hasn’t set a new high above its record set Jan. 26. MarketWatch explains here why an asset doesn’t flip in and out of correction territory and must exceed its previous apex in order to exit the correction phase.
As of Monday’s close, the S&P 500 index is off about 7.1% from its recent peak, while the Dow is 8.2% shy of its late-January record, and the Nasdaq Composite Index COMP, -0.25% is off 6.1% from its recent record, put in on March 12.
Since 1950, the average correction has run about 61 trading days, according to WSJ MDG, while the past five corrections have run about 37 trading sessions.
There may still be hope that the S&P 500, and the broader market, claws its way from out of the doldrums, according to Jeffrey Kleintop, the chief global investment strategist at Charles Schwab & Co. Corrections, on average, run about 13 weeks. So far, the current phase is running around 10 weeks.
More
https://www.marketwatch.com/story/the-sp-500-just-logged-its-longest-stretch-in-correction-territory-in-nearly-a-decade-2018-04-23
“Long ago, Ben Graham taught me that ‘Price is what you pay; value is what you get.’ Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”
Warren Buffett.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today, more on the Great Trump
Trade War blunder in aluminium. Retreat! Retreat! Retreat! Still is this any way to be running the
global economy?
Below, why shoot first ask
questions later, is rarely a good idea. Shame about all those shareholders and
manufacturers getting whipsawed in aluminium prices, but that’s life now in
America’s Cowboy Casino Capitalism. Next week it might be America’s over
protected sugar producers turn, who knows?
“Risk comes from not knowing what you’re doing.”
Warren Buffett.
U.S. Softens Stance on Rusal Sanctions; Aluminum Plunges
By Jack Farchy, Yuliya Fedorinova, and Saleha Mohsin
23 April 2018, 13:15 GMT+1 Updated
on 23 April 2018, 15:24 GMT+1
The U.S. softened its position on sanctions against Russian metals giant
United Co. Rusal, sparking a record plunge in aluminum prices.For the first time, the U.S. Treasury discussed a path for lifting the sanctions on Rusal, saying it would provide relief if Oleg Deripaska relinquished control. It also extended the deadline for companies to wind down dealings with the Russian aluminum producer by almost five months.
Rusal petitioned to be removed from the sanctions list and Treasury granted the extension while it considers the appeal, according to a statement from Treasury Secretary Steven Mnuchin.
“Rusal has felt the impact of U.S. sanctions because of its entanglement with Oleg Deripaska, but the U.S. government is not targeting the hardworking people who depend on Rusal and its subsidiaries,” Mnuchin said.
Aluminum plunged in response as traders speculated that supply disruptions could ease. Prices fell as much as 9.4 percent, the most ever. U.S. metal producers also dropped, with Alcoa Inc. sliding 12 percent.
QuickTake: How U.S. Sanctions on Russian Aluminum Shook Markets
Washington’s clarification follows two weeks of chaos in global metal
markets. Aluminum shot to multi-year highs as manufacturers scrambled to secure
supply. A German lobbying group said European plants may be forced to close and
carmakers could face supply shortages.
The U.S. statement also adds pressure on Deripaska as he tries to save
the company without surrendering control. He owns 48 percent of Rusal and
controls it through a shareholder agreement with others including Glencore Plc
and Viktor Vekselberg, who is also under sanctions.
"If there were previously doubts if Rusal will remain sanctioned if
Deripaska sells out, now we have a clear answer," Oleg Petropavlovskiy,
analyst at BCS Global Markets, said by phone. "Changing ownership
structure would be a solution for the company."
More
Aluminum Drops Most in Seven Years After U.S. Signals Rusal Sanctions Relief
By Luzi-Ann Javier
23 April 2018, 13:38 GMT+1
Aluminum’s retreat from a record surge gained momentum Monday as the U.S.
opened the door to relief from sanctions on giant Russian producer United Co.
Rusal.The metal headed for the biggest loss since November 2010 in London, pushing down shares in producers such as Alcoa Corp. Nickel also plunged after jumping in the past two weeks on speculation it could also be roiled by sanctions.
Commodities markets have been rocked this month as the curbs on Rusal, the largest aluminum supplier outside China, set off a rush for alternative supplies. The U.S. will provide sanctions relief to Rusal if Oleg Deripaska relinquishes control and extended the deadline for companies to wind down dealings with Russian aluminum producer, the Treasury Department said in guidance published on Monday.
“If that is the case, all the supply issues that people were worried about over the last week just disappear,” Ryan McKay, a commodity strategist at TD Securities in Toronto, said in a telephone interview. “Without the sanctions, it’s a pretty well-supplied market.”
Aluminum for delivery in three months dropped 5.5 percent to
$2,333 a metric ton at 1:37 p.m. on the London Metal Exchange. Alcoa slumped 8
percent before regular trading at 8:25 a.m. in New York. Century Aluminum Co.
plunged 4.5 percent.
“When you combine ignorance and leverage, you get some pretty
interesting results.”
Warren Buffett.
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?
Scalable manufacturing process spools out strips of graphene for use in ultrathin membranes
Date:
April 18, 2018
Source:
Massachusetts Institute of Technology
Summary:
Engineers have developed a scalable manufacturing process that spools out
strips of graphene for use in ultrathin membranes.
MIT engineers have developed a continuous manufacturing process that
produces long strips of high-quality graphene.
The team's results are the first demonstration of an industrial,
scalable method for manufacturing high-quality graphene that is tailored for
use in membranes that filter a variety of molecules, including salts, larger
ions, proteins, or nanoparticles. Such membranes should be useful for
desalination, biological separation, and other applications.
"For several years, researchers have thought of graphene as a
potential route to ultrathin membranes," says John Hart, associate
professor of mechanical engineering and director of the Laboratory for
Manufacturing and Productivity at MIT. "We believe this is the first study
that has tailored the manufacturing of graphene toward membrane applications,
which require the graphene to be seamless, cover the substrate fully, and be of
high quality."
Hart is the senior author on the paper, which appears online in the
journal Applied Materials and Interfaces. The study includes first
author Piran Kidambi, a former MIT postdoc who is now an assistant professor at
Vanderbilt University; MIT graduate students Dhanushkodi Mariappan and Nicholas
Dee; Sui Zhang of the National University of Singapore; Andrey Vyatskikh, a
former student at the Skolkovo Institute of Science and Technology who is now
at Caltech; and Rohit Karnik, an associate professor of mechanical engineering
at MIT.
Growing graphene
For many researchers, graphene is ideal for use in filtration membranes.
A single sheet of graphene resembles atomically thin chicken wire and is
composed of carbon atoms joined in a pattern that makes the material extremely
tough and impervious to even the smallest atom, helium.
Researchers, including Karnik's group, have developed techniques to
fabricate graphene membranes and precisely riddle them with tiny holes, or
nanopores, the size of which can be tailored to filter out specific molecules.
For the most part, scientists synthesize graphene through a process called
chemical vapor deposition, in which they first heat a sample of copper foil and
then deposit onto it a combination of carbon and other gases.
Graphene-based membranes have mostly been made in small batches in the
laboratory, where researchers can carefully control the material's growth
conditions. However, Hart and his colleagues believe that if graphene membranes
are ever to be used commercially they will have to be produced in large
quantities, at high rates, and with reliable performance.
moreFaced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof.
John Kenneth Galbraith
The monthly Coppock Indicators finished March.
DJIA: 24,103 +272 Down
10. NASDAQ: 7,063 +300 Down 13. SP500: 2,641 +202 Down 10.
All
three slow indicators moved down in March. For some a new bear signal, for
others a take profits and get back to cash signal.
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