Things are seldom what they
seem,
Skim milk masquerades as
cream;
Highlows pass as patent
leathers;
Jackdaws strut in peacock's
feathers.
HMS Pinafore.
HMS Pinafore.
The big story this
morning, well covered in mainstream media, is the overnight air attack on Syria
by the USA, UK, and France. While we await the dust to settle and find out
more, the official line is that we were forced to act due to Assad using chemical
weapons last week, some 100 to possibly 150 missiles were used, supposedly
against 3 chemical weapons targets, which seems excessive, and according to the
Pentagon, Russia and Syria weren’t pre-informed of the targets, unlike last
years 59 missile attack on a Syrian airbase. Russia seems not to have
interfered with the attack, while Syria claims to have downed 13 missiles, and
that tipped off by Russia, the targets were evacuated days ago.
Truth is the first
casualty of war, and that is highly likely in this case. Russia may not have been directly informed of
the targets, but indirectly as both Israel and Turkey were likely informed and
instructed to leak, to stand down Russia from starting World War Three. Given
the number of missiles involved, it seems likely that more than three targets
were struck, or intended to be struck, while Syria downing 13 missiles just
after Friday the Thirteenth, seems more like something out of a second rate
Hollywood action film. Supposedly it’s a “one off” air attack, unless Assad
uses chemical weapons again, although for the record he denies using them at
all.
So what does this all
mean for our markets? Not much it seems to me, in far away GB, they’ve got more
that enough troubles on their plate, without this Syrian storm in a teacup. For
that’s all it becomes, once Russia was placated not feel threatened and need to
act defensively. But we’ll leave filling
in all the action story gaps to mainstream media.
April 13, 2018 / 11:03 AM / Updated 37 minutes ago
U.S., Britain, France launch air strikes in Syria
WASHINGTON/BEIRUT
(Reuters) - U.S., British and French forces pounded Syria with air strikes
early on Saturday in response to a poison gas attack that killed dozens of
people last week, in the biggest intervention by Western powers against Syrian
President Bashar al-Assad.
U.S.
President Donald Trump announced the military action from the White House. As
he spoke,
explosions rocked Damascus.
British
Prime Minister Theresa May and French President Emmanuel Macron said their
forces had joined in the attack.
With more
than 100 missiles fired from ships and manned aircraft, the allies struck three
of Syria’s main chemical weapons facilities, U.S. Defence Secretary Jim Mattis
and Joint Chiefs of Staff Chairman General Joseph Dunford said.
Mattis
called the strikes a “one time shot,” but Trump raised the prospect of further
strikes if Assad’s government again uses chemical weapons.
“We are
prepared to sustain this response until the Syrian regime stops its use of
prohibited chemical agents,” the U.S. president said in a televised address.
The Syrian
conflict pits a complex myriad of parties against each other with Russia and
Iran giving Assad military and political help while fractured opposition forces
have had varying levels of support at different times from the West, Arab
states and Turkey.
The
strikes risked raising tension in an already combustible region but appeared
designed not to trigger a military response from Russia and Iran.
More
Now back to the increasingly
volatile, troubled markets. More trouble lies ahead as we normalise interest
rates and inflation returns with higher oil prices and Trump’s import tariffs.
Dow's 122-point stumble driven almost entirely by JP Morgan, Boeing stocks
Published: Apr 13, 2018 5:37 p.m. ET
The Dow Jones Industrial Average slumped on Friday as the banking sector
declined. The Dow industrials DJIA, -0.50%
ended 122.91 points, or 0.5%, lower at 24,360.14, with nearly 80 points of that
downdraft produced by declines in JP Morgan Chase & CO. JPM, -2.71%
and Boeing Co. BA, -2.43%
The slide for JP Morgan, down 2.7%, came even as the banking behemoth released
results for the first-quarter that were better than expected, along with a
number of other upbeat earnings reports from the banking sector. Still, that
group was the greatest drag on the broader market. Part of the reasoning is that expectations for earnings to outperform have set up a scenario in which investors are taking profits after the fact, rather than placing further bets on banks, market participants said. Meanwhile, the S&P 500 index SPX, -0.29% closed off 0.3% at 2,656.30, with the banking sector XLF, -1.51% down 1.6%, while the Nasdaq Composite Index COMP, -0.47% closed down 0.5% at 7,106.65.
Read the full story: Stock market ends solid week on a sour note as bank shares slump after earnings
https://www.marketwatch.com/story/dows-100-point-stumble-in-afternoon-trade-driven-almost-entirely-by-jp-morgan-boeing-stocks-2018-04-13
GE's Credit Rating Is at Risk
Profit reductions caused
by an accounting rule change inflate leverage and steepen the path to lowering
that debt burden through earnings growth.
By Brooke Sutherland
Updated on 14 April 2018, 03:32 GMT+1
General Electric Co.'s financial restatements call attention to risks that
credit-rating firms won't be able to ignore much longer.The industrial giant, whose shares have plunged more than 20 percent this year as it grapples with the fallout from a deterioration in its cash flow, provided more details late Friday on the impact to 2016 and 2017 financials from accounting rules changes. New standards for revenue recognition and other adjustments will result in a roughly $2.5 billion reduction to GE's 2017 industrial segment profit, more than what the company had estimated in November.
It's
important to note that the restatements aren't connected to the SEC investigation into the way GE accounts for
long-term service contracts. 1 Instead, the update is a fine-tuning
of restatements GE has been flagging for a while now. But the official restated
2017 results should make it clear that GE's 2018 outlook is unrealistic and will likely need to be walked back. On
that basis, it's hard to see how credit-rating companies can still be
comfortable with their current outlooks.
More
April 13, 2018 / 2:01 PM
Musk insists Tesla does not need more capital, predicts profit soon
(Reuters) - Tesla Inc (TSLA.O) will be profitable in the third and
fourth quarters of this year and will not have to raise any money from
investors, billionaire Chief Executive Elon Musk said on Friday, driving shares
in the electric carmaker higher.
Tesla has
already sought this month to play down widespread Wall Street speculation that
it would need to return to capital markets this year to raise more funds for
the money-losing company as it ramps up production of the Model 3 sedan seen as
crucial to its long-term profitability.
The Silicon
Valley car maker, which has consistently fallen short of promised production
targets and is fighting bad publicity over a fatal crash of a car using its
Autopilot system, said 10 days ago it would have positive cash flow from the
third quarter.
Musk went
further on Friday in a tweeted response to a story in The Economist which cited
estimates Tesla would need $2.5 billion to $3 billion this year in additional
funding.
“The
Economist used to be boring, but smart with a wicked dry wit. Now it’s just
boring (sigh). Tesla will be profitable & cash flow+ in Q3 & Q4, so obv
no need to raise money,” Musk wrote.
Tesla
shares, which have gained nearly 10 percent since disclosing the Model 3
production numbers on April 3, were up 1.8 percent in afternoon trading on Wall
Street.
More
In other news, will a
growing drought add to US inflation pressure? It’s far to early to tell, but it
warrants close attention in coming months.
Report: Drought expands; Oklahoma sees worst conditions
- By RUSSELL CONTRERAS and JULIAN HATTEM Associated Press
- Apr 12, 2018
On the southern high plains, Oklahoma remains ground zero for the worst drought conditions in the United States. About 20 percent of the state is facing exceptional drought conditions — the worst possible classification.
Most of Colorado also is under severe drought and almost all of the Texas Panhandle is seeing extreme drought or worse conditions.
The federal drought map shows dry conditions have intensified across northern New Mexico and expanded in Arizona.
Nearly half of New Mexico and Arizona are facing extreme drought or worse conditions while about 60 percent of Utah is under severe drought. according to the National Drought Mitigation Center.
Along the Rio Grande in New Mexico, the irrigation allotment will be less than half of what farmers received last year due to subpar snowmelt from the mountains.
Like other states, Utah's drought can be traced to a 12-week stretch of low precipitation this winter, when the mountains saw some of the lowest snow totals in recent history — also an ominous sign for the state's renowned skiing sites.
"People come here to ski Utah powder, and when you don't have it snowmaking has to take over," said Brian McInerney, a hydrologist at the National Weather Service. "Snowmaking is not as good as what you get naturally from the atmosphere."
Much of Utah's water reserves were replenished last winter, after a bruising period from 2012 to 2016 that nearly depleted the state's water reserves.
As a result, lack of water isn't a concern now, McInerney said.
But danger of forest fires will be elevated as the hot summer edges closer, he said.
Another update later.
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. For some a new bear signal, for others a take
profits and get back to cash signal.
DJIA. Buy:
29/7/16 - 18,432. Sell: 29/3/18 –
24,103.
SP500. Buy: 29/7/16 –
2,174. Sell: 29/3/18 – 2,641.
NASDAQ. Buy: 29/7/16 –
5,762. Sell: 29/3/18 – 7,063.
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