Is It All Over?

Baltic Dry Index. 1309 -14     Brent Crude 77.55

“There is only one side of the market and it is not the bull side or the bear side, but the right side.”

Jesse Livermore

This morning, with just two days left to dress up the month-end close, the quarter’s close, and the half year close, the big question in everyone’s mind is, is it all over?

Well it is all over for Germany’s chance of retaining the World Cup, as they crashed out yesterday 2-0 to lowly Korea, who also crashed out despite their unexpected win. The German football team might have to seek asylum now in Russia. But it’s far from over in the Great Global Trump Trade War, with Washington continuing to send out mixed signals, adding to rising confusion about the wisdom of staying invested in over priced stocks.

So, will it be dress up Thursday and Friday in stocks, ahead of what promises to be an unnerving Trumpian July, or did yesterday’s stock market action signal the start of a summer rout?

While the jury’s still out, it’s starting to look more and more like January was the top in market mania stocks. Trade wars have an uncanny way of sinking most boats.

Below, why “is it all over” is the question of the day. Even worse, what happens next if it is? Will Deutsche Bank turn into the next Lehman?

“It has always been my experience that I never benefited much from a move if I did not get in at somewhere near the beginning of that move.”

Jesse Livermore, How to Trade In Stocks

June 28, 2018 / 2:26 AM

Asian shares flirt with nine-month low on mounting trade war fears

TOKYO (Reuters) - Asian stocks slumped to nine-month lows on Thursday on growing worries the U.S. administration’s approach to trade is harming global economic growth even as it appeared to be modifying its approach to curb Chinese investments in U.S. technology firms.

U.S. oil prices hit a 3-1/2-year high as plunging U.S. crude stockpiles compounded supply worries in a market already uncertain about Libyan exports, a production disruption in Canada and Washington’s demands that importers stop buying Iranian crude.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.25 percent to a nine-month low in early trade while Japan’s Nikkei shed 0.30 percent.

The U.S. S&P 500 lost 0.60 percent on Wednesday to one-month closing low.

MSCI’s broadest gauge of the world’s stock markets fell to its lowest level in almost three months, on course to post its fourth month of loss in the last five. Its emerging market index hit the weakest level since mid-August.

In China, the markets have taken a battering as worries about a wobbly yuan and the trade spat with the United States have left investors bracing for a rocky final six months of the year.

----Trump said on Wednesday he will use a strengthened national security review process to thwart Chinese acquisitions of sensitive American technologies, a softer approach than imposing China-specific investment restrictions.

Although that lifted U.S. stocks initially, optimism quickly evaporated after White House economic adviser Larry Kudlow said Trump’s announced plan did not indicate a softened stance on China.

Markets remain anxious about Trump’s hard line approach to get better trade deals, with early signs his stance may not only be backfiring but also hurting the global economy.

More

https://uk.reuters.com/article/uk-global-markets/asian-shares-flirt-with-nine-month-low-on-mounting-trade-war-fears-idUKKBN1JO05P

The Dow and S&P 500 blow their biggest intraday gain since February

By Mark DeCambre  Published: June 27, 2018 5:13 p.m. ET

The Dow Jones Industrial Average on Wednesday relinquished its biggest point gain since February, as selling in shares of bank and technology-and-internet companies offset gains in the resurgent energy sector.

The Dow DJIA, -0.68% ended the session off 165.52 points, or 0.7%, at 24,117.59, after the blue-chip gauge touched an intraday high up 285.91 points. That retreat represents the largest turnaround lower for the Dow since Feb. 21, when the gauge rose 303.24 points to end down 166.97 points, according to WSJ Market Data Group. The S&P 500 index SPX, -0.86%  also marked its largest blown lead since February, after it peaked up 0.85%, but finished the session down 0.9% at 2,699, ending below a psychological, round-number level at 2,700 for the broad-market index.

Wednesday’s reversal comes as trade-related worries have created anxieties among investors fearful that the current tit-for-tat spat between the U.S. and its trade partners China and the European Union morph into a trade war that damages global economies.

An early burst higher in the session, partly underpinned by a White House statement that appeared to imply a more moderated approach by President Donald Trump to curb Chinese investments in U.S. technology companies, gave way to selling.

The technology-laden Nasdaq Composite Index COMP, -1.54% given the focus on tech, saw a more pronounced tumble on the day, off 1.5% at 7,445.08.

https://www.marketwatch.com/story/the-dow-and-sp-500-blow-their-biggest-intraday-gain-since-february-2018-06-27

June 28, 2018 / 3:36 AM

China says carefully monitoring U.S. policies on inbound investments

BEIJING (Reuters) - China’s commerce ministry said on Thursday it would carefully monitor U.S. policies on inbound investments, stressing that the country opposes using national security as grounds to restrict foreign investments.

U.S. President Donald Trump said on Wednesday he will use a strengthened national security review process to thwart Chinese acquisitions of sensitive American technologies, a softer approach than imposing China-specific investment restrictions.

The U.S. Treasury Department has recommended that Trump use the Committee on Foreign Investment in the United States (CFIUS), whose authority would be enhanced by new legislation in Congress, to control investment deals. The legislation expands the scope of transactions reviewed by the interagency panel to address security concerns, Trump said.

“China will closely monitor the legislation process and evaluate its potential impact on Chinese companies,” Chinese commerce ministry spokesman Gao Feng told reporters in a regular briefing in Beijing.

“China does not agree with (the U.S.) tightening foreign investment conditions using national security as reasons,” he said.

The proposed investment restrictions are part of the Trump administration’s efforts to pressure Beijing into making major changes to its trade, technology transfer and industrial subsidy policies after U.S. complaints that China has unfairly acquired American intellectual property through joint venture requirements, unfair licensing and strategic acquisitions of U.S. tech firms.

Commerce ministry’s Gao also said cooperation between China and Europe would bring a “warm current” to the global economy as both parties strongly opposes unilateralism and protectionism.

On Monday, Chinese Premier Li Keqiang said at a joint news conference with French prime minister Edouard Philippe that he believed frictions and disputes between China and the United States could be resolved via talks.

“There are no winners from Fighting a trade war,” he told reporters.

More

https://uk.reuters.com/article/uk-usa-china-trade/china-says-carefully-monitoring-u-s-policies-on-inbound-investments-idUKKBN1JO08I?il=0

June 27, 2018 / 2:44 PM

Automakers warn U.S. tariffs will cost hundreds of thousands of jobs, hike prices

WASHINGTON (Reuters) - Two major auto trade groups on Wednesday warned the Trump administration that imposing up to 25 percent tariffs on imported vehicles would cost hundreds of thousands of auto jobs, dramatically hike prices on vehicles and threaten industry spending on self-driving cars.

A coalition representing major foreign automakers including Toyota Motor Corp (7203.T), Volkswagen AG (VOWG_p.DE), BMW AG (BMWG.DE), and Hyundai Motor Co (005380.KS), said the tariffs would harm automakers and U.S. consumers. The administration in May launched an investigation into whether imported vehicles pose a national security threat and President Donald Trump has repeatedly threatened to quickly impose tariffs.

“The greatest threat to the U.S. automotive industry at this time is the possibility the administration will impose duties on imports in connection with this investigation,” wrote the Association of Global Automakers representing major foreign automakers. “Such duties would raise prices for American consumers, limit their choices, and suppress sales and U.S. production of vehicles.”

The group added: “Rather than creating jobs, these tariffs would result in the loss of hundreds of thousands of American jobs producing and selling cars, SUVs, trucks and auto parts.”

----The Alliance of Automobile Manufacturers, representing General Motors Co (GM.N), Ford Motor Co (F.N), Daimler AG (DAIGn.DE), Toyota and others, urged the administration in separate comments filed Wednesday not to go forward.

“We believe the resulting impact of tariffs on imported vehicles and vehicle components will ultimately harm U.S. economic security and weaken our national security,” the group wrote, calling the tariffs a “mistake” and adding imposing them “could very well set a dangerous precedent that other nations could use to protect their local market from foreign competition.”

More

https://uk.reuters.com/article/uk-usa-trade-autos/automakers-warn-u-s-tariffs-will-cost-hundreds-of-thousands-of-jobs-hike-prices-idUKKBN1JN1TL

US markets at peak with bull run at tipping point, warn economists

Tim Wallace  Tom Rees  26 June 2018 • 7:25pm

The nine-year bull run in financial markets could be at an end as higher interest rates, a trade war, falling profits, eurozone imbalances and a potential US recession finally tip markets from boom to bust, economists have warned.

US markets are now at their peak and have no further to run, analysts at Bank of America Merrill Lynch believe.

As a result they recommend investors slash exposure to risky assets and instead buy gold, US treasuries and the dollar. This bear market will only come to an end when the Federal Reserve stops hiking interest rates and eases policy once more, which they believe will happen when sufficient, weak economic data appear.

More

https://www.telegraph.co.uk/business/2018/06/26/barrage-threats-economy-set-tip-bull-run-bear-market-nine-year/?WT.mc_id=e_DM788971&WT.tsrc=email&etype=Edi_Cit_New_AEM_Daily&utm_source=email&utm_medium=Edi_Cit_New_AEM_Daily_2018_06_27&utm_campaign=DM788971

Trump's Trade War Pushes China Closer to Old Foe India

By Karthikeyan Sundaram and Iain Marlow

27 June 2018, 23:00 GMT+1 Updated on 28 June 2018, 04:47 GMT+1

China has lowered import barriers on some Indian goods

Questions remain over key flashpoints, such as border disputes

https://www.bloomberg.com/news/articles/2018-06-27/trump-s-trade-war-pushes-china-closer-to-old-foe-india

Merkel Says ‘All of Us Are Very Sad’ About Germany’s World Cup Loss

By Arne Delfs  27 June 2018, 19:11 GMT+1

• Bizarre moment as German chancellor talks soccer with robot
• Long string of past soccer trophies isn’t a real consolation

https://www.bloomberg.com/news/articles/2018-06-27/merkel-says-all-of-us-are-very-sad-about-german-world-cup-exit

“To learn that a man can make foolish plays for no reason whatever was a valuable lesson. It cost me millions to learn that another dangerous enemy to a trader is his susceptibility to the urgings of a magnetic personality when plausibly expressed by a brilliant mind.”

Jesse Livermore, Reminiscences of a Stock Operator

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

China again. Two can play by Trump rules i.e. none.

June 27, 2018 / 7:07 AM

Trade war or not, China Inc already reining in American brands

SHANGHAI (Reuters) - As Beijing and Washington veer towards a full-blown trade war, American brands in China face what may be an even bigger threat: local rivals armed with innovative products and the Chinese government’s blessing.

American household names like Apple (AAPL.O), Starbucks (SBUX.O) and Procter & Gamble’s (PG.N) Pampers are seeing their dominance challenged, a potential threat to the hundreds of billions of dollars U.S. firms make in China.

According to an analysis of data from Bain and Kantar, local brands snatched almost three-quarters of China’s 639 billion yuan ($97 billion) market for fast-moving consumer goods - a category that includes items like soft drinks and shampoo - last year, up from two-thirds in 2013.

The data, shared with Reuters, shows that U.S. products like Pampers, Colgate (CL.N) toothpaste and Mead Johnson infant formula saw their market share drop around 10 percentage points in the past five years. The data was based on a survey of 40,000 urban households.

At the same time, savvy Chinese brands like SeeYoung, offering a popular silicon-free shampoo, and Pechoin, a maker of skincare products that plays up local ingredients, gained rapidly.

“Local competition is now extremely high on the agenda of foreign firms in China,” said Bruno Lannes, Shanghai-based partner with Bain & Co, the consultancy that co-authored the report.

“In order to win in China now they need to beat not just traditional competitors,” he said. “But they need to win against local companies that are faster and more innovative than they had realized.”

American brands have long enjoyed a vaunted status in China. U.S. fast food, beverages and coffee chains are ubiquitous in China’s cities, while consumers lap up U.S.-branded infant formula, designer jeans, cars and smartphones.

That dominance, however, is threatened by China’s push to bolster domestic brands by creating champions in certain categories and weeding out weaker players to improve quality.

Brewing trade tensions could exacerbate this slippage, threatening more than $180 billion in sales by U.S. firms in China last year, according to an analysis of 121 U.S.-listed American firms that broke out data for China sales in the most recent fiscal year.

The total is likely far higher as many U.S. firms with a major China presence - including Starbucks, McDonald’s (MCD.N) and Walmart (WMT.N) - don’t break out China sales.

Apple made $44.8 billion in China in the last fiscal year, P&G around $5.2 billion and the sports apparel maker Nike (NKE.N) $4.2 billion.

A trade war now looks more likely after talks in Beijing and Washington failed to defuse grating issues between the two countries over a trade imbalance, technology transfers and barriers that firms face doing business in China.

----Chinese brands are getting increasingly confident about taking on overseas brands, including in high-tech sectors.

In China’s auto market, the world’s largest, domestic car brands - helped by supportive policies - have sneaked up on foreign brands over the past five years, challenging Ford Motor Co (F.N), General Motors Co (GM.N), and the electric carmaker Tesla Inc (TSLA.O).

The government’s promotion of electric vehicles as a key industry has lured dozens of new Chinese competitors to enter the market.

Ian Zhu, a partner at NIO Capital, the investment affiliate of NIO, a Chinese electric vehicle start-up, said a shift to smart, electric and autonomous cars would bolster local brands as the vehicles increasingly become entertainment and work spaces rather than just a means of transport.

More

https://www.reuters.com/article/us-usa-trade-china-brands/trade-war-or-not-china-inc-already-reining-in-american-brands-idUSKBN1JN0KW

“I never hesitate to tell a man that I am bullish or bearish. But I do not tell people to buy or sell any particular stock. In a bear market all stocks go down and in a bull market they go up.”

Jesse Livermore

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 21^st century onwards?

Siemens Tests Ammonia as a Form of Energy Storage for Renewables

The company has opened a novel new facility to study the efficiency of converting electricity to hydrogen, and then to ammonia, and back.

Jason Deign June 27, 2018

The German industrial giant Siemens is investigating the use of ammonia as a way to store and transport hydrogen in energy systems with high penetration of renewables. 

The company this month opened a £1.5 million ($2 million) proof-of-concept plant in Harwell, Oxfordshire, U.K. to test the efficiency of converting electricity to hydrogen, and then to ammonia, and then back.

The plant, funded one-third by Siemens and two-thirds by government agency Innovate U.K., is thought to be the first of its kind in the world. 

The U.K. Science and Technology Facilities Council, University of Oxford and Cardiff University are also attached to the project, which includes a wind turbine, a nitrogen generator, a water electrolysis system, a Haber-Bosch reactor and a 30-kilowatt electric genset. 

Ian Wilkinson, program manager for the project within Siemens, told GTM that the research into ammonia was complementary to Siemens’ work on other energy storage technologies, such as batteries. 

But batteries are primarily useful for electricity, which in the U.K. only accounts for around a quarter of all energy use, he said. “Chemical fuels have a [use case], including energy storage of electricity but also beyond it,” he said. 

“It’s pretty apparent that we will need a range of energy storage solutions to decarbonize our electricity generation," Wilkinson added. "I think a lot of different storage technologies will be required.”

For short-term, low-capacity applications, it is likely that batteries would be the dominant storage technology, he said. 

But where longer-duration, large-scale storage is needed, ammonia could play a role, particularly if the energy has to be transported from one place to another or stored in a location devoid of hills for pumped hydro or caves for compressed air. 

“For big-capacity, long-duration storage, chemical fuels are hard to beat,” Wilkinson said. “Of course, we use chemical fuels a lot today, and they are ubiquitous for a reason. It’s just that all of our fuels right now are fossil-based.”

Ammonia has similar storage and transportation characteristics to fossil fuels but without the potential to release carbon into the atmosphere, he noted. Hydrogen, which is the prime focus of current non-carbon chemical fuel efforts, is not so easy to store or move around.

Another point in ammonia’s favor is that the gas is already manufactured, stored and transported at industrial scale, so it is a familiar and low-cost compound to handle.

The boiling point of the gas is -33 degrees Celsius, so although it needs to be kept cold when in a liquid state, the level of refrigeration necessary is not excessive.

The ammonia industry produced around 140 million metric tons of the compound worldwide in 2016, according to the United States Geological Survey.

More

https://www.greentechmedia.com/articles/read/siemens-ammonia-hydrogen-energy-storage#gs.taWxDOk

Harwell, in Oxfordshire, just south of scenic Abingdon on the River Thames, is just a pretty 24 miles away from me, via the scenic route via Empress Matilda’s stronghold of Wallingford, as she battled with rival King Stephen, “when Christ and his saints were asleep”, according to the Anglo-Saxon Chronicle.

https://www.historyextra.com/period/medieval/where-history-happened-stephen-and-matilda/

The monthly Coppock Indicators finished May.

DJIA: 24,416 +201 Down. NASDAQ: 7,442 +276 Down. SP500: 2,705 +180 Down.

All three slow indicators moved down in March and have continued down in April and May. For some a new bear signal, for others a take profits and get back to cash signal.