Baltic Dry Index. 1376 +46 Brent Crude 74.44
“The difference
between successful people and really successful people is that really
successful people say no to almost everything.”
Warren
Buffett.
Is it going to be
boom or bust for US stocks? And as goes America, so still largely goes the rest
of the global stock markets. While US stock pickers focus on Facebook’s results of yesterday, pondering if the Facebook data scandal will show up in their next set of
quarterly figures, Bloomberg suggests that it’s the next nine days that really
count. And is AMD’s boost from crypto-mining, a positive or a negative? Unicorn
farming, it seems to me.
Others think, US
stocks have already slipped into the new bear market. To this old dinosaur
market watcher, sentiment seems to have greatly changed since US stocks peaked
way back in January, and a nasty trade war is about to get real starting next
month. Iran is back in Trump’s gunsights too, no later than May 12th.
Below, more reasons
to get back to cash, it seems to me.
The Next 9 Days Will Teach Us a Lot About the U.S. Economy
After years of being off target, Fed officials are close to
an inflation bull’s-eye
By Jeanna Smialek
The week ahead could finally clinch it.
Data released over the next nine days could show both accelerating prices and pay, like pieces of a data puzzle clicking into place. Other major economic headlines will bring key news for the central bank, from a Treasury refunding to bellwether earnings reports. Here’s what to watch as the Fed closes in on a milestone that will make it a rarity in the post-crisis world: a monetary authority that has hit all of its targets on the nose.
GDP, Employment Cost Index (April 27)
Gross domestic product data for the first quarter will be the main event on Friday, but a side act – the Employment Cost Index – could easily steal the show. The figures will be released alongside GDP at 8:30 a.m. Financial markets are sensitive to any signs of stronger inflationary pressures, and they interpreted a jump in average hourly earnings back in February as a sign that the central bank might pick up the pace. If this quarterly series on labor costs comes in stronger than expected, it could have a similar effect. Any pickup would be welcome news at the Fed, though: Officials have been puzzled that slow pay gains have persisted despite low unemployment.Gauge of U.S. Worker Costs May Steal GDP's Spotlight This Friday
For what it’s worth, GDP is likely to show a slowdown to 2 percent for the first quarter from 2.9 percent at the end of 2018. That fits a pattern of early-in-the-year slowdowns, and economists expect a second-quarter rebound.
More
Nasdaq 100 Rallies After-Hours on Facebook, Chipmaker Earnings
By Lu Wang and Jeran Wittenstein
What started as a depressing earnings season for tech companies is
finally showing some signs of hope.
The PowerShares QQQ Trust, the biggest exchange-traded fund tracking the
Nasdaq 100 Index, climbed 1.3 percent as of 6:25 p.m. in New York Wednesday, as
companies from Facebook to Advanced Micro Devices announced results that beat
analyst estimates. Nasdaq 100 mini futures advanced 0.6 percent.
While post-earnings spikes in stocks such as Alphabet and Twitter have
proved fleeting this week, any sustained gains would come a long way to soothe
investor anxiety over an industry whose leadership has been called into
question.
Facebook shares jumped 7 percent after the social-media company’s user
engagement and ad sales showed no signs of damage from a data privacy
controversy that erupted toward the end of the first quarter.
Semiconductor stocks, the subject of much hand-wringing lately, were
buoyed by a better-than-expected revenue forecast from AMD, which rallied 9
percent, and positive comments from Qualcomm on demand from China. Chipmakers
Nvidia and Micron Technology also rose.
But it wasn’t all good news. EBay fell 4 percent after revenue
expectations fell short of analyst projections.
More
‘Big bear market’ for stocks lasting several months appears to have begun
Published: Apr 25, 2018 4:43 p.m. ET
‘Lasting and painful downtrend’ could last until bottom due in August, McClellan says
The “big bear market” for stocks that market timer Tom McClellan has been expecting appears to have begun, as Tuesday’s broad selloff turned a key technical indicator down from an already negative position to convey a “promise” of lower lows.McClellan, publisher of the McClellan Market Report, said there could be a pause in the downtrend this week, as his market-timing signals point to a minor top due on Friday. But with his “price oscillator” turning lower following the Dow Jones Industrial Average’s DJIA, +0.25% 425-point drop, and the S&P 500 index’s SPX, +0.18% 1.3% slide on Tuesday, he turned bearish for short- and intermediate-term trading styles. He has been bearish for long-term trading styles since Feb. 28.
“I have been looking for a big downturn in late April....We appear to have gotten that downturn now,” McClellan wrote in a note to clients. He said it is possible that the big down move pauses briefly in honor of the minor top signal due Friday, “but it should be a lasting and painful downtrend, heading down toward a bottom due in late August.”
His bearishness for all trading styles was a result of the McClellan Price Oscillator, a technical indicator using exponential moving averages of closing price data, turning down after it was already in negative territory, as the chart below shows.
“Turning down a Price Oscillator while it is still below zero conveys the promise of a lower closing low on the ensuing move,” McClellan wrote.
Since “promise” isn’t the same as a “guarantee,” he said the indication can get revoked if the Price Oscillator turns up right away. “I do not expect that outcome this time, but I acknowledge it is a possibility,” McClellan said.
The Dow closed Wednesday up 60 points, after erasing an earlier loss of as much as 201 points. The S&P 500 tacked on 0.2%. See Market Snapshot.
The Dow is down 9.5% from its Jan. 26 record close of 26,616.71, and the S&P 500 is 8.1% below its record peak. While many on Wall Street believe a bear market is defined by a decline of 20% or more from a bull-market top, McClellan, who doesn’t believe in percentage-decline definitions, said stocks are already in a bear market.
More
A $3 Trillion Credit Market Has Corporate Bond Investors on Edge
By Adam Tempkin and Brian W Smith
25 April 2018, 09:00 GMT+1 Updated
on 25 April 2018, 14:54 GMT+1
A huge swath of the corporate bond market is looking increasingly
vulnerable.
Bonds with the lowest investment grade have been a market darling over
the past decade, ballooning in size as low global interest rates drew fund
managers seeking higher returns. But as borrowing costs climb to a four-year
high just as investors begin to anticipate a downturn in the global economy,
some analysts are starting to sound the alarm.
“We’re late in the credit cycle, and trying to figure out when
everything turns,” said Erin Lyons, a senior credit strategist at New
York-based research firm CreditSights Inc. “Some of these may eventually be
downgraded.”
Notes
in the lowest rungs above high-yield junk -- in the BBB group from S&P
Global Ratings or the Baa bucket from Moody’s Investors Service -- total about
$3 trillion, almost the size of Germany’s gross domestic product. The concern
is that as rates rise it will cost companies more to roll over their
obligations, and if earnings begin to slump as economic growth slows, that
could blow out leverage ratios and lead to credit-rating cuts.
The high-grade bond market in the U.S. already has the lowest credit
quality mix since the 1980s, according to CreditSights, and there are signs
investors are getting nervous. A Bloomberg Barclays gauge of average corporate
bond spreads has surged to a six-month high since since reaching an all-time
low in early February.
“We’re wary of companies that have seen their debt-to-equity ratios
deteriorate,” said Tim Ng, the chief investment officer at New York-based
Clearbrook Global Advisors, which advises on $28 billion of assets. “As
interest rates increase, if they go too high, the higher debt-to-equity ratios
and leverage will have a negative effect on cash flows.”
The big push into the bottom end of high-grade bonds was driven by the
search for yield amid record-low rates following the 2008 financial crisis and
unprecedented stimulus from central banks. Investors who were comfortable in
A-rated bonds moved to BBBs, and those who were comfortable in BBBs dipped into
high yield, according to Lyons of CreditSights.
More
“If you aren’t
thinking about owning a stock for 10 years, don’t even think about owning it
for 10 minutes.”
Warren Buffett.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
After Trade War Team Trump
trashed China’s telecom company ZTE, a nervous world awaits how China intends
to fight back. Boeing and agriculture products, are likely in the firing line,
unless Team Trump toss ZTE some sort of lifeline. This is no way to be running
an integrated global economy. The next Lehman gets closer by the day.
Export ban has put ZTE ‘in a state of shock’ as China warns US against irresponsibility
If no settlement is reached with the US, the seven-year export ban would not only put ZTE, China’s largest listed telecommunications equipment maker, out of business, but deal a major blow to the country’s hi-tech ambitions
PUBLISHED : Friday, 20 April, 2018, 12:07pm UPDATED :
Saturday, 21 April, 2018, 9:02am
China’s foreign ministry on Friday warned the United States government
about turning the tide in Sino-US relations as an export ban threatens to put
ZTE Corp, the country’s largest listed telecommunications equipment maker, out
of business.
Relations between the two countries, which has become
tense because of a potential trade war, are now at a crossroads, the ministry
said.
“We hope the US doesn’t go against the flow,” ministry
spokeswoman Hua Chunying said. “If the US policy is based on all kinds of
possible nonsense, it is extremely irresponsible and extremely dangerous.”
ZTE has vowed to take all available legal means to challenge the seven-year ban on the export of American-made
parts, including semiconductors, to the Shenzhen-based company that was
imposed this week by the US government, criticising the decision
as “extremely unfair”.
That ban has not only become the latest flashpoint between the world’s
two largest economies, it also exposed the soft underbelly of China’s hi-tech
ambitions: a dependence on advanced US technology, especially
semiconductors.
The US action against Hong Kong-listed ZTE has given fresh urgency to
the Chinese government’s efforts to expand the domestic semiconductor industry,
which would help the country’s hi-tech companies become less reliant on
foreign-developed chips.
China’s goal of gaining an edge in every strategic hi-tech field, from
artificial intelligence and robotics to 5G mobile systems, depends on how
quickly and broadly it can develop the domestic supply chain for semiconductors
on par with the US.
Over the past two decades, China has tried everything to catch up to the
US in chip development, including forced intellectual property transfer via
joint ventures and overseas acquisitions.
In response to the US sales ban against ZTE, senior Chinese officials
have met this week with industry bodies, regulators and the country’s powerful
National Integrated Circuit Investment Fund about speeding up already
aggressive plans for the sector, according to Reuters, citing two people with
direct knowledge of the talks.
“President Xi Jinping had anticipated this situation some time ago. That
is why China sharpened its technology focus in its 13th five-year plan from
2016 to 2020,” Jefferies equity analyst Edison Lee said.
----ZTE
said the US Department of Commerce had ignored how the company had reported the
breaches and hired an authoritative US law firm to conduct an independent
investigation. The US regulator had also ignored ZTE’s investment in resources,
including more than US$50 million last year, to learn and comply with US export
control laws and regulations, after pleading guilty in 2016 to violating US
sanctions, according to the company’s statement on Friday.
Under the export ban, ZTE will no be able to receive
goods from US chip suppliers Qualcomm, Intel and Micron Technology, optical
components suppliers Maynard, Acacia, Oclaro and Lumentum, as well as software
suppliers Microsoft and Oracle.
At a news conference on Friday, ZTE chairman Yin Yimin said the US export ban has put the
company “in a state of shock” as it would damage the interests of the firms’
employees and shareholders, as well as telecommunications network operators and
smartphone users around the world.
Without the US-made chips and other components that it
needs, ZTE would be hard-pressed to meet its network equipment
and smartphone orders around the world, as well as advance its
telecommunications research and development efforts.
“There is no quick way for China to develop its
semiconductor industry. It will take time,” Jefferies’ Lee said.
More
"Were we to be directed from Washington when to sow and when to reap, we should soon want bread."
Thomas Jefferson
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?
Graphene origami as a mechanically tunable plasmonic structure for infrared detection
Date:
April 24, 2018
Source:
University of Illinois College of Engineering
Summary:
Researchers have successfully developed a tunable infrared filter made from
graphene, which would allow a solider to change the frequency of a filter in
infrared goggles simply by controlled mechanical deformation of the filter
(i.e., graphene origami), and not by replacing the substance on the goggles
used to filter a particular spectrum of colors.
Soldiers often need to see through smoke, fog, dust or any other
airborne obscurant and detect the presence of toxins or other chemicals in the
field or on the front lines. To identify those chemicals, they use infrared
(IR) sensors and spectroscopy, which allow a specific color of light to shine
at a particular frequency corresponding to each chemical. Identifying each
chemical will require a soldier to coat the goggle with a unique filter,
enabling the chemical signature to come through at a specific frequency (i.e.,
a specific color).
Researchers at the University of Illinois, however, have successfully
developed a tunable infrared filter made from graphene, which would allow a
solider to change the frequency of a filter simply by controlled mechanical
deformation of the filter (i.e., graphene origami), and not by replacing the substance
on the goggles used to filter a particular spectrum of colors.
The research is funded by the Air Force Office of Scientific Research,
which is interested in sensors that are not only sensitive to different IR
wavelengths, but also mechanically controllable and tunable. The results are
published in a paper titled "Mechanically Reconfigurable Architectured
Graphene for Tunable Plasmonic Resonances" in Light: Science &
Applications.
This application is another in a series of discoveries of "wonder
material" graphene by SungWoo Nam, an Assistant Professor of Mechanical
Science and Engineering at the University of Illinois at Urbana-Champaign.
"Typically when you place graphene on a substrate, it is extremely
transparent and absorbs only about three percent of light," Nam noted.
"At certain angles, you can see it. We use this versatility to make other
structures like flexible and transparent sensors out of graphene."
Because it's one-atom thin, graphene is normally used while flat. Nam's
research team asked a question: what would happen if through origami
(paper-folding art), you wrinkled the graphene?
Could you change the properties
of graphene by altering its topography?
According to Nam, scientists haven't tried this idea before with other
conventional materials because they are brittle and not able to be bent without
breaking. What's unique about graphene is that it is not only thin, but it is
resilient, meaning it doesn't break easily when it is bent.
"Let's say we create graphene wrinkles by mechanical
deformation," Nam said. "If you get a certain dimension, is there
going be any changes in the way the light is going to be absorbed by the
graphene? We wanted to link the dimensions of the wrinkled graphene to its
optical absorption."
Nam's team discovered that indeed, wrinkled graphene absorbs light
differently depending on the structure and dimensions through plasmonic
resonances, thus producing different colors. In addition, unlike paper, which
can't easily be flattened after folding or crumpling, graphene can be
re-stretched to become flat and wrinkle free again. Not only that but the
amount of light absorption can be altered by a factor of approximately 10.
More
"Our country is in
serious trouble. We don't have victories any more. We used to have victories
but [now] we don't have them. When was the last time anybody saw us beating,
let's say, China, in a trade deal? They kill us. I beat China all the time. All
the time."
Donald Trump. Campaign launch
rally, 15/6/15
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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