Baltic Dry Index. 1327 -14 Brent Crude 73.17
The main purpose of the stock
market is to make fools of as many men as possible.
Bernard Baruch
The real story of the
day is likely to be whether the Fedsters dare to raise their key interest rate
for a second time this year. The smart money is betting they won’t. Wall Street
has them over a barrel. But do they? And if they do raise their interest rate,
just how much havoc will Wall Street unleash in retaliation?
Below, yet more signs
that thing have changed in 2018. More and more it looks like stock mania peaked
way back in January.
The difference between playing
the stock market and the horses is that one of the horses must win.
Joey Adams
Asian markets quiet, awaiting upcoming economic data
Published: May 1, 2018 10:55 p.m. ET
Asia-Pacific stock moves were muted in early trading Wednesday, after most
overseas benchmarks saw little change the previous day.Most markets in the region were closed Tuesday for the Labor Day holiday, and Japan will be closed Thursday and Friday.
Investors on Wednesday are awaiting cues from U.S.-China trade negotiations, along with the release of both a raft of April manufacturing data from Asia and the Federal Reserve’s latest policy statement. It isn’t expected to include another rate hike — that’s expected at June’s meeting.
Singapore stocks continued to be strong, with the Straits Times Index STI, -0.02% climbing 0.6% as equities there are supported by upbeat earnings news. The city-state’s biggest bank, DBS Group Holdings Ltd. D05, -0.88% , climbed a further 1.1% Wednesday to move deeper into record territory following Monday’s first-quarter report. The index is at levels last seen in late 2007, when it set a record high of 5%.
But most benchmarks in the region, including Japan’s Nikkei NIK, -0.30% and South Korea’s Kospi SEU, -0.38% , were within 0.3% of their latest closing level.
Notable individual movers include Samsung BioLogics 207940, -15.57% , which tumbled as much as 20% after South Korea’s financial watchdog accused the company of accounting-rules violations. It denies the allegation.
More
May 2, 2018 / 5:35 AM
China's vice premier to meet U.S. trade delegation in Beijing - state TV
BEIJING (Reuters) - Chinese Vice Premier Liu He will meet a U.S. trade delegation in Beijing this week to exchange views on issues of mutual concern, state television said on Wednesday.U.S. and Chinese officials will hold highly anticipated trade talks in China on Thursday and Friday, U.S. Treasury Secretary Steven Mnuchin said this week.
https://uk.reuters.com/article/uk-usa-trade-china/chinas-vice-premier-to-meet-u-s-trade-delegation-in-beijing-state-tv-idUKKBN1I30C0?il=0
China Is Weakening Its Currency Before U.S. Trade Talks Begin
Bloomberg News
2 May 2018, 03:35 GMT+1
China weakened its daily currency fixing by more than traders and
analysts had expected before high-ranking U.S. officials arrive in the country
to discuss trade issues.
The People’s Bank of China cut the reference level to 6.3670 per dollar,
weaker than the average estimate of 6.3610 in Bloomberg survey of 21 traders
and analysts. The deviation is the biggest since Feb. 7 and continues a pattern
set in April when the fixing was weaker than expected on all but one day,
according to Bloomberg calculations.
"The move in the fixing today is aggressive," said Ken Cheung,
a currency strategist at Mizuho Bank Ltd. in Hong Kong. "China may want to
weaken the yuan pre-emptively before the trade talks with the U.S., so that
they have room to strengthen the currency" if needed, Cheung said, adding
that policy makers may also be keen to arrest the yuan’s advance against a
basket of peers.
U.S. Treasury Secretary Steven Mnuchin, White House advisers Larry
Kudlow and Peter Navarro, and Commerce Secretary Wilbur Ross will be in Beijing
in a bid to narrow the U.S. trade deficit.
The yuan fell 0.4 percent to 6.3565 per dollar at 10:23 a.m. in Beijing,
and lost 0.3 percent in Hong Kong.
"China might be concerned that potential worsening of trade
conflicts with the U.S. will likely hurt exports, and it might be sending a
signal that the currency can be weakened further if tension escalates,"
said Qi Gao, a Singapore-based strategist at Scotiabank. "The PBOC won’t
allow rapid declines, as such moves could trigger large capital outflows and
are hard to contain."
https://www.bloomberg.com/news/articles/2018-05-02/china-is-weakening-its-currency-before-u-s-trade-talks-beginAnd in Fed news, dare the Fed raise rates again?
So, are we headed for a recession? Here’s what the Fed looks for
Published: May 1, 2018 3:17 p.m. ET
There is no single, sure sign of a downturn, but here are four warning signals
It’s the topic gripping markets as the U.S. economy approaches the longest expansion on record: When will the U.S. fall into recession, and how will we know?The bad news is, there’s no single variable that can tell you a recession is about to come. But it turns out that a few, in combination, give you a pretty good idea. According to the St. Louis Fed, this is what usually happens before a recession:
• Oil prices have shot up ahead of nearly every post-war recession; asset bubbles swelled before the two most recent recessions; and the yield curve has inverted before all recessions since 1960.
So with that in mind, MarketWatch has distilled those into four charts — on oil, the yield curve, and simple valuation methods for the stock market and housing.
----The yield curve, here, is just the yield on the 10-year TMUBMUSD10Y, +0.38% minus the 2-year TMUBMUSD02Y, -0.32% . For the stock market, so-called Tobin’s Q was used, which is the value of stocks divided by the book value. For housing, prices were compared to rent.
Looking at the data above, a few things stand out. For one, oil prices CLM8, +0.36% are on the upswing, as OPEC has acted to limit supply.
The stock market DJIA, -0.27% doesn’t appear to be as overvalued as the dot-com boom, and the housing market doesn’t appear to be as overvalued as it was during the subprime boom. Interestingly, what’s different from the run-up to the last two recessions is that both markets appear to be overvalued at the same time.
One piece of good news, is that yield curve hasn’t inverted, though it has flattened out considerably.
The question of precisely why an inverted yield curve is a good predictor of a recession is still a matter of debate.
More
https://www.marketwatch.com/story/so-are-we-headed-for-a-recession-heres-what-the-fed-looks-for-2018-05-01
Finally, is it all over for Tesla? Burning through cash unsustainably, way behind on production, already being sued for corporate malfeasance, did time just run out on Tesla?
Tesla sued for more than $2 billion, accused of copying design of Nikola hydrogen trucks
Published: May 1, 2018 10:04 p.m. ET
Tesla Inc. is being sued for more than $2 billion by electric-hydrogen truck
startup Nikola Motor Co., which is claiming its patents were infringed.In a lawsuit filed Tuesday in Arizona, Nikola claims Tesla TSLA, +2.05% copied the design of its big rigs, which Nikola first unveiled in May 2016.
According to a court filing, in early November 2017, Nikola sent a cease-and-desist letter to Tesla pointing out features on the electric Tesla Semi that resembled features on its own semi trucks — including the wraparound windshield, mid-entry door and aerodynamic fuselage — and demanded Tesla delay the public unveiling of the Semi until the infringement issues were settled. Tesla did not respond, the filing said, and Elon Musk unveiled the truck at an event in Hawthorne, Calif., on Nov. 16.
Nikola said the introduction of Tesla’s truck has caused “confusion in the market” and hurt its ability to attract investors and partners, and the company is seeking damages “in excess of $2 billion” — roughly the jump in Tesla’s market cap after it unveiled the Semi.
“It’s patently obvious there is no merit to this lawsuit,” a Tesla spokesperson said Tuesday night.
Tesla’s Semis made their first cargo deliveries in March, but mass production is not expected to begin until 2019, with the first deliveries coming in 2020. A number of major companies, including UPS Inc. UPS, -0.93% , PepsiCo Inc. PEP, -1.79% and Walmart Inc. WMT, -1.19% have already placed pre-orders.
In January, Nikola announced plans to build a $1 billion factory in Arizona. At the time it claimed to have more than 8,000 pre-orders for its hydrogen fuel-cell electric semi trucks, and expects to begin production in 2021.
Nikola and Tesla have feuded before, and the companies’ names are based on the same inventor — Nikola Tesla.
https://www.marketwatch.com/story/tesla-sued-for-more-than-2-billion-accused-of-copying-design-of-nikola-hydrogen-trucks-2018-05-01
One of the funny things about
the stock market is that every time one person buys, another sells, and both
think they are astute.
William Feather
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today, trouble builds in the Great Global Trump Trade War. I suspect
that we are just one slight misstep away from disaster.
Trump Extends Relief, Confusion as Allies Given Tariff Reprieve
By Justin Sink and Andrew Mayeda
1 May 2018, 10:30 GMT+1
President Donald Trump drew short shrift from key economic allies after he
offered a second temporary exemption on metal-import tariffs rather than the
permanent waiver most are demanding.The U.S. said late Monday it would delay until June 1 import tariffs of 25 percent on steel and 10 percent on aluminum for the EU, Mexico and Canada. The White House also said it reached agreements-in-principle with Argentina, Australia and Brazil to remove the levies, which were introduced on national security grounds.
“The U.S. decision prolongs market uncertainty, which is already affecting business decisions,” The European Commission, the EU’s executive arm that coordinates trade policy for the 28-nation bloc, said in a statement. “The EU should be fully and permanently exempted from these measures, as they cannot be justified on the grounds of national security.”
The president’s decision to delay the tariffs gives the White House breathing room as it weighs leaving the Iran nuclear accord later this month, prepares for disarmament talks with North Korea’s Kim Jong Un and as Treasury Secretary Steven Mnuchin leads a contingent of cabinet members to China this week to try to head off a brewing trade dispute between the world’s two-biggest economies. U.S. Trade Representative Robert Lighthizer has been sent to negotiate with countries seeking permanent waivers from the metals levies.
Trump dangled a permanent exemption as incentive to reach a tentative Nafta deal in the Americas, though talks continue with no immediate agreement in sight. Canada is the biggest steel exporter to the U.S.
The 30-day extension prolongs the standoff with the EU, the world’s
largest trading bloc. European officials have said the U.S. tariffs violate
international trading rules, and they have threatened to retaliate with levies
on iconic American brands such as Harley Davidson motorcycles and Kentucky
bourbon.
The EU and U.S. should “develop a positive trade agenda in the interests
of both sides,” Steffen Seibert, German Chancellor Angela Merkel’s chief
spokesman, said on Twitter Tuesday. “Fundamentally, the German government’s
expectation remains a permanent exemption.”
----Trump’s embrace of trade barriers this year has sparked fears of tit-for-tat retaliation that could undermine consumer confidence and stymie the strongest global economic expansion in years.
The U.K. government on Tuesday called the exemption extension “positive,” but added: “We remain concerned about the impact of these tariffs on global trade and will continue to work with the EU on a multilateral solution to the global problem of overcapacity, as well as to manage the impact on domestic markets.”
The dispute comes as Washington seeks to stave off a separate trade conflict with China. The president has threatened to slap tariffs on as much as $150 billion in Chinese imports in retaliation for alleged violations of intellectual property, while Beijing has vowed to retaliate.
More
Smoot and Hawley ginned up The
Tariff Act of 1930 to get America back to work after the Stock Market Crash of
'29. Instead, it destroyed trade so effectively that by 1932, American exports
to Europe were just a third of what they had been in 1929. World trade fell
two-thirds as other nations retaliated. Jobs evaporated.
Elaine Chao
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?
Businesses Are Buying More Renewable Power Than Ever Before
By Brian Eckhouse
30 April 2018, 21:00 GMT+1 Updated
on 1 May 2018, 05:01 GMT+1
AT&T Inc. and Walmart Inc. are among 36 businesses, government agencies and universities that have agreed to buy 3.3 gigawatts of wind and solar power so far this year. That’s on track to shatter the previous high of 4.8 gigawatts of disclosed deals last year, according to a report Monday by Bloomberg New Energy Finance.
One of the key reasons is that smaller companies are more comfortable doing these deals now.
“There’s a blueprint now,” said Kyle Harrison, a New York-based analyst at Bloomberg New Energy Finance. “So it’s a lot easier for other companies to do it.” In addition to the 4.8 gigawatts in announced deals last year, BNEF also estimates 600 megawatts of undisclosed contracts were signed in Asia.
The
gains are also due to local renewables program and growing demand in
international markets like Mexico and Australia.
There are several reasons clean power is attractive. Renewable energy is often the cheapest source of electricity. Long-term contracts to buy clean power from wind and solar farms can also act as hedges against uncertain wholesale prices.
Google and other big technology companies have driven the trend, but the pool of clean-power buyers is deepening.
Smaller companies have benefited from growing standardization in the ways companies agree to buy clean energy. Sometimes these companies are recruited to buy wind and solar power from the same power plant as larger buyers that function “like anchor tenants,” Harrison said.
Other findings from the BNEF report:
- Of the 3.3 gigawatts of clean-power deals signed this year, 76 percent involve U.S. power projects
- The 15 clean-power deals signed globally in April will add almost 1.1 gigawatts of new wind and solar power
- Industrias Penoles SAB signed the largest agreement in April, a 245-megawatt wind-power contract that’s also the biggest such deal in Mexico since a landmark energy-market reform
- Mumbai Metro signed India’s second-biggest corporate power-purchase agreement
The monthly Coppock Indicators finished April.
DJIA: 24,163 +255 Down. NASDAQ:
7,066 +282 Down. SP500: 2,648 +188 Down.
All
three slow indicators moved down in March and continued down in April. For some
a new bear signal, for others a take profits and get back to cash signal.
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