Baltic Dry Index. 1622 +10 Brent Crude 78.56
“October:
This is one of the peculiarly dangerous months to speculate in stocks. The
others are July, January, September, April, November, May, March, June,
December, August and February.”
Mark
Twain
It is time to start
building Arks. Though GB and Ireland haven’t had any meaningful rain for weeks,
storm clouds are gathering practically everywhere, though you wouldn’t know
that by the action in global stock markets, and the endless hype from the
legions of stock pedlars.
In GB, with a wobbly
divided government waiting to fall over the summer, and communists waiting in
the wings, our Great Storm is just about to hit. A no deal Brexit now looks
better than anything negotiated so far, but can Europe, running a massive trade
surplus with GB, survive a Trump trade war and a no deal Brexit?
Below complacency and
hopium sweep planet earth yet again, who needs Noah anyway!
“It is hard for us, without being flippant, to even see a scenario
within any kind of realm of reason that would see us losing one dollar in any
of those [CDS] transactions.”
Joseph J. Cassano, a former A.I.G. executive, August 2007, on Credit
Default Swaps that wiped out A.I.G in 2008.
Asian Stocks Rise for Third Day as Trade Fears Ebb: Markets Wrap
By Adam Haigh
Updated on 10 July 2018, 04:35 GMT+1
Stocks in Asia advanced for a third straight session, taking a regional
index up from a nine-month low amid optimism the upcoming earnings season will
be robust enough to overshadow a rise in trade tensions.
Equities in Japan, Hong Kong and South Korea rose after the S&P 500
Index climbed to the upper end of its recent trading range. Shares in Shanghai
were little changed. The yen fell past 111 per dollar and 10-year Treasury
yields headed higher as risk aversion faded. With U.S. President Donald Trump
focusing on a Supreme Court pick and upcoming trip to Europe, trade-war
headlines have faded since last Friday’s imposition of U.S. and Chinese tariff
hikes. Chinese and U.S. gauges of inflation are among the next indicators for
traders to review.
With JPMorgan Chase & Co. and Wells Fargo among those companies
kicking off earnings season later this week, there’s hope that strong results
can buffet a run of positive economic data. While trade tension may have put a
lid on investment gains, it has done little to estimates for profits which are
still expected to grow at 20 percent in the second quarter.
“Strong U.S. growth is leading the global expansion and powering
corporate earnings, but uncertainty around the outlook is rising and financial
conditions are tightening,” said Richard Turnill, global chief investment
strategist at BlackRock Inc.
The
pound remained under pressure after the resignation of two of U.K. Prime
Minister Theresa May’s most senior ministers in one day, throwing the U.K.
government into turmoil over negotiations to leave the European Union.
Elsewhere, crude fluctuated around $74 a barrel in New York as U.S. crude
stockpiles were seen declining for the fourth time in five weeks.
More
July 9, 2018 / 12:37 PM
Tesla hikes prices in China as trade war hits carmakers
SHANGHAI (Reuters) - U.S. carmaker Tesla Inc (TSLA.O) has hiked prices on its Model X and S
cars by about 20 percent in China, becoming the first automaker to raise prices
in the world’s largest automotive market in response to a U.S.-China trade war.
The move is also the first indication of how much higher Chinese tariffs
on certain U.S. imports will flow through to showroom floors, with other
automakers likely to follow suit or shift a greater portion of production to
China.
The tariffs will dent margins at Tesla and other automakers who make
cars in the United States and ship to China, as they have been increasingly
betting on the world’s largest automotive market to boost profits.
“Raising the prices is going to hurt sales, but money-losing Tesla has
to raise prices because they can’t afford to fully absorb the higher costs of
the tariffs,” CFRA research analyst Efraim Levy said.
“Considering they claim to be capacity-constrained, they should be able
to shift sales elsewhere.”
For Tesla especially, rapidly burning cash and struggling to turn a
profit, China is key. Sales in the country accounted for about 17 percent of
its revenue last year.
In May it slashed up to $14,000 off its Model X in China after Beijing
announced major tariff cuts for imported automobiles, but the new tariffs have
now erased that.
More
This reliable indicator of a bear market in stocks — and a recession — just flashed a warning
By Howard
Gold Published: July 9, 2018 12:52
p.m. ET
Has the unemployment rate already hit bottom in this economic cycle?
Last Friday the Labor Department put out a very solid monthly jobs report, and the media treated it accordingly: Employment increased by 213,000 in June and hourly earnings rose by 2.7% on an annual basis.Both were well within economists’ consensus, and Wall Street seemed pleased: The Dow Jones Industrial Average DJIA, +1.31% gained almost 100 points and the S&P 500 index SPX, +0.88% rose slightly less than 1% on Friday. Both are rising sharply on Monday as well.
But most pundits underplayed what may turn out, in retrospect, to be the most significant data point: The unemployment rate rose last month, to 4% from 3.8% in May.
That may not seem like a big deal. It’s still around the lowest unemployment rate since 2000, and June’s increase was driven by 601,000 people entering the labor force, as a good economy drew more job seekers.
But in a column I wrote last year, I went back to 1948, when the Labor Department first started tracking unemployment, and showed that historically, when the unemployment rate hit its low for the cycle, a bear market and recession haven’t been far behind.
As the table from that column shows, the low unemployment rate of each business and market cycle over the past 70 years preceded a recession by 9.2 months and a bear market by 14.8 months on average.
----That appears counterintuitive. The cyclically low unemployment rate is almost always a sign that things are great, and few economists ever predict a recession is around the corner while the economy is firing on all cylinders.
Yet at that very peak, strains are developing below the surface, like pressures building up in the earth before a volcano erupts, and complacent lenders and investors take risks they never would have taken when memories of the last recession were fresh in their minds. The late Hyman Minsky laid out this dynamic in which booms sow the seeds of busts, mostly because of financial speculation.
Back to the unemployment rate. I took a deeper dive into the monthly rates in the last two economic cycles and found that after the rate hit its low point for the cycle, it generally rose a bit and then bounced around near that low before heading up for good as the cycle turned and a recession and/or bear market began.
More
https://www.marketwatch.com/story/this-reliable-indicator-of-a-bear-market-in-stocks-and-a-recession-just-flashed-a-warning-2018-07-09
Finally, as President Trump tries to ban Iranian oil sales, pushing prices higher since OPEC can’t make up the difference, Norway is about to toss a big spanner in the oil works. With the summer maintenance season just getting underway in many oil producing regions in the northern hemisphere, and the Atlantic hurricane season underway in the Atlantic and Gulf of Mexico, President Trump is playing Russian roulette with an autumn oil spike.
July 10, 2018 / 2:05 AM
Brent leads crude prices higher as Norway oil workers get ready to strike
TOKYO (Reuters) - Oil prices rose on Tuesday on escalating concerns over potential supply shortages, with Brent crude leading the way as hundreds of oil workers in Norway were set to strike later in the day.
Brent crude LCOc1 had added 32 cents, or 0.4 percent, to $78.39 per
barrel by around 0303 GMT, following a 1.2-percent climb on Monday.
U.S. light crude futures were up 17 cents, or 0.2 percent, at $74.02.
They gained 5 cents to settle at $73.85 a barrel the session before.
Hundreds of workers on Norwegian oil and gas offshore rigs are due to
strike on Tuesday after rejecting a proposed wage deal, a move which will
likely affect the production of at least one field, Shell’s Knarr.
That potentially adds to disruptions in other oil producers amid tensions
in the Middle East.
The United States says it wants to reduce oil exports from Iran, the
world’s fifth-biggest producer, to zero by November, which would oblige other
big producers to pump more.
Saudi Arabia, fellow members of the Organization of the Petroleum
Exporting Countries (OPEC) and allies including Russia agreed last month to
increase output to dampen price gains and offset global production losses in
countries including Libya.
The market has grown concerned that if the Saudis offset the losses from
Iran, that will use up global spare capacity and leave markets more vulnerable
to further or unexpected production declines.
“The bottom line becomes the available spare capacity within OPEC ...
and the markets have started to focus on that,” said Victor Shum,
vice-president for energy at IHS markets in Singapore.
“It is likely that concern will support prices all through the summer,
while demand continues to be strong during the summer peak,” he said.
Libya’s national oil production fell to 527,000 barrels per day from a
high of 1.28 million bpd in February following recent oil port closures, the
head of the National Oil Corporation said in a statement on Monday.
In Canada, an outage at the 360,000-barrel per day (bpd) Syncrude oil
sands facility reduced flows into Cushing, Oklahoma, the delivery point for
U.S. futures.
Morehttps://uk.reuters.com/article/us-global-oil/brent-leads-crude-prices-higher-as-norway-oil-workers-get-ready-to-strike-idUKKBN1K0029
Alan Schwartz, CEO Bear Stearns, March 12, 2008.
Bust March 16, 2008.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
No crooks or scoundrels today,
they like the poor will always be with us, today World Cup viewing figures so far. The USA
drops 40 million viewers, China, India and Europe add 200 million viewers. America
fades as the rest of the world rises.
Trump’s MAGA campaign started
about a decade to late, although the Great Recession 2008-2009, Black Monday
1987 and the Great Greenspan markets rig that built China, plus the Great
Nixonian Error of fiat money that built America’s Pacific Ocean of unrepayable
debt, have probably made MAGA unachievable anyway. Next decade brings in a
tidal wave of unfinanced pension obligations, made unsolvable by a decade of
ZIRP and NIRP.
In the short term we have
probably passed peak prosperity, though very few can see the wood for the trees.
Tomorrow will not be like today which was like yesterday. Tomorrow all our
debts will fall due in the west. Today, if Trump’s Great Global Trade War goes
awry.
World Cup viewing figures soar as China switches on
surge in Chinese interest in the World Cup could offer advertisers a
huge new market as television viewing figures for the tournament soar.
The average audience for this year’s tournament in the group stage
across the world has jumped to 815m viewers, easily surpassing the 623m average
for the entire 2014 World Cup, Fifa figures have indicated.
Chinese advertisers, such as property giant Dalian Wanda and smartphone
maker Vivo, have ramped up their spending for the tournament. Chinese
companies’ sponsorship makes up a third of the event’s total advertising
revenue and their spending has climbed to $835m (£628m). The US, the second
largest advertising spender for the tournament, lags far behind, putting in
just $400m.
In the UK, ITV is expected to be one of the big winners from ad spending
on the tournament. The broadcaster holds the rights to England’s money-spinning
semi-final match against Croatia on Wednesday.
Although China failed to reach this summer’s World Cup, it dominated the
table of so-called one-minute reach figures, occupying all 10 of the top spots.
The world’s four most populous countries – India, China, US and
Indonesia – all failed to reach the tournament and interest in China is growing
despite only qualifying once, in 2002.
Following the group stages, China has recorded 14 out of the top 20
largest TV audiences and 45m viewers tuned in for Argentina’s clash with
Iceland in the group stages. Viewing figures for 11 matches in this year’s
group stage beat the average audience during the 2014 World Cup final.
Traders on currency markets have also been gripped by the tournament.
Bank of America Merrill Lynch found the daily volume of the 20 major currencies
dipped 30pc on average in the 2014 World Cup compared to historical levels as
“traders are occupied” by matches. Trading activity then surged 15pc in the
week following the final.
It warned that events that would normally generate higher levels of
trading, such as the ongoing spat between the US and its major trading partners
over tariffs, are “potentially being underpriced as trade activities are
delayed until after the final game”.
If the financial
system goes down, our business is going down and, trust me, yours and everyone else's is going down, too.
Lloyd
Blankfein’s CEO Goldman Sachs, threat 2008. “Mr. Goldman Sacks.”
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?
11 Lithium-Ion Battery Makers That Don’t Need Cobalt
Demand for cobalt is affecting battery markets, but luckily not all lithium-ion batteries require the metal.
July 09, 2018
If
you’ve been paying attention to the debate about lithium-ion battery materials,
then you will know there is a price
problem with lithium, but the real market danger is with cobalt.
While experts doubt that cobalt scarcity will halt the growth of the lithium-ion battery business, demand for the metal is affecting battery markets and increasing the Democratic Republic of the Congo’s stranglehold on supplies.
To the uninitiated, this might seem like a major threat to the lithium-ion energy storage business. But it’s not, for the simple reason that not all lithium-ion batteries need cobalt.
Lithium iron phosphate (LFP), lithium manganese oxide (LMO) and lithium titanate (LTO) batteries are cobalt-free.
The catch is that their energy density is lower than that of lithium nickel manganese cobalt oxide (NMC) or lithium nickel cobalt aluminum oxide (NCA) chemistries.
This can make LFP, LMO and LTO batteries somewhat limited for use in electric vehicles, although these chemistries are still touted for use in vehicle electrification, sometimes combined with other ingredients.
Despite their lower energy density, LFP batteries “are definitely safer and offer a cycle life similar to the more common NMC batteries,” said Mitalee Gupta, energy storage analyst with GTM Research.
Plus, they also work for stationary storage and there are many companies that can supply them. Here are 11 to watch.
While experts doubt that cobalt scarcity will halt the growth of the lithium-ion battery business, demand for the metal is affecting battery markets and increasing the Democratic Republic of the Congo’s stranglehold on supplies.
To the uninitiated, this might seem like a major threat to the lithium-ion energy storage business. But it’s not, for the simple reason that not all lithium-ion batteries need cobalt.
Lithium iron phosphate (LFP), lithium manganese oxide (LMO) and lithium titanate (LTO) batteries are cobalt-free.
The catch is that their energy density is lower than that of lithium nickel manganese cobalt oxide (NMC) or lithium nickel cobalt aluminum oxide (NCA) chemistries.
This can make LFP, LMO and LTO batteries somewhat limited for use in electric vehicles, although these chemistries are still touted for use in vehicle electrification, sometimes combined with other ingredients.
Despite their lower energy density, LFP batteries “are definitely safer and offer a cycle life similar to the more common NMC batteries,” said Mitalee Gupta, energy storage analyst with GTM Research.
Plus, they also work for stationary storage and there are many companies that can supply them. Here are 11 to watch.
More
“Acknowledge
the complexity of the world and resist the impression that you easily
understand it. People are too quick to accept conventional wisdom, because it
sounds basically true and it tends to be reinforced by both their peers and opinion
leaders, many of whom have never looked at whether the facts support the
received wisdom. It's a basic fact of life that many things "everybody
knows" turn out to be wrong.”
Jim
Rogers
The monthly Coppock Indicators finished June.
DJIA: 24,271 +221 Down. NASDAQ:
7,510 +267 Down. SP500: 2,718 +169 Down.
All
three slow indicators moved down in March and have continued down in April. May
and June. For some a new bear signal, for others a take profits and get back to
cash signal.
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