Baltic Dry Index. 1622 +10 Brent Crude 77.50
If you put the federal
government in charge of the Sahara Desert, in 5 years there'd be a shortage of
sand.
Milton Friedman
In Asian stocks today, keep taking the snake oil elixir. Never
mind the Trump Trade War, forget about the currency wars, so what if there are
signs that the global economy is slowing, that the Trump – Kim Jong-un deal is
unravelling, that Her Majesty’s GB government is unravelling too, that Trump is
headed to NATO in Brussels to demand
more cash, buy more stocks, buy more!
To this old dinosaur stock and commodity trader and market follower
since 1968, I would sell out into any rally. It’s never a good idea to set out
on a voyage in the face of an approaching hurricane, and we have more than one
hurricane lined up and approaching shore.
There’s a very real chance that Trump’s trade war escalates
rapidly, and how if President Trump slaps tariffs on European autos. There’s a very real chance HMG’s Prime
Minister May will be ousted over the summer, probably triggering a new general
election that GB’s new communist Labour Party would win, sending Scotland off
on its own, and delivering Northern Ireland to the Republic of Ireland irrespective
of the majority wishes.
There’s a very real chance of a diminished NATO after this
week’s coming acrimonious meeting, and will Trump still go ahead meeting with
Putin, following the overnight Novichok death in Salisbury, England? And if the
meeting still goes ahead, what kind of message does that send to Moscow,
Beijing, and Pyongyang?
Far from risk-on, it’s risk-off, return of capital rather
than seeking new return on capital. I’ll pass on the snake oil currently on
offer. I suspect that Xiaomi just sent
out a critical message. And higher interest rates have just started out on a
multi-year road back to normalisation.
The most important single
central fact about a free market is that no exchange takes place unless both
parties benefit.
Milton Friedman
July 9, 2018 / 12:55 AM
Asia shares rally on U.S. jobs relief, sterling slugged by politics
SYDNEY
(Reuters) - Asian share markets rallied on Monday as favourable U.S. jobs data
whetted risk appetites, while sterling slipped after two members of the British
government resigned over Brexit and put the future of Prime Minister Theresa
May in doubt.
The pound peeled off around a third of a U.S. cent to $1.3290 GBP=D3 as news broke British Brexit Secretary David Davis and Brexit Minister Steven Baker had resigned.
The loss came just two days after a meeting at May’s Chequers country residence supposedly sealed a cabinet deal on Brexit and underlines the deep divisions in her ruling Conservative Party over the departure from the EU.
----Sentiment in other markets was mostly positive after Friday’s U.S. payrolls report showed tame wages and more people looking for work.
“The combination of rising employment and increased labour force participation suggests healthy but not tightening labour market conditions in June, something that will allow the Fed to continue to hike rates at a gradual pace,” said Kevin Cummins, a senior U.S. economist at RBS.
The balanced report helped Wall Street end last week in the black and Japan's Nikkei .N225 followed up with gains of 1.4 percent on Monday.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS climbed 1.1 percent, on top of 0.7 percent rally on Friday when the launch of U.S. tariffs on Chinese imports came and went without too many fireworks.
“While trade tensions fan concerns about the future, incoming data show
a soaring U.S. economy, a healthy labour market, and some rebound in Europe and
Japan,” said Barclays economist Michael Gapen.
“For now, overall policies and financial conditions still support growth
and investment,” he added. “A sharper-than-expected China slowdown from a
domestic credit crunch and external trade tensions could be the main risk to
global growth.”
More
July 9, 2018 / 2:31 AM
Smartphone maker Xiaomi's weak Hong Kong debut casts shadow on tech listings
Xiaomi priced its Hong Kong initial public offering (IPO) at HK$17 per share, the bottom of an indicative range, raising $4.72 billion in the world’s biggest technology float in four years.Its shares touched a low of HK$16 in opening deals. By 0234 GMT, the stock was trading at HK$16.48, down 3 percent, while the main Hong Kong stock market index .HSI was 1.4 percent higher.
The IPO pricing valued the firm, which also makes internet-connected home appliances and gadgets, at about $54 billion, almost half its original $100 billion ambition earlier this year.
“Trading below the issue price suggested that investors still felt the valuation of the stock was relatively high as compared with Tencent and Apple,” said Linus Yip, chief strategist at First Shanghai Securities.
Xiaomi’s HK$17 price represents a multiple of 39.6 times 2018 earnings, while iPhone maker Apple (AAPL.O) is trading at 16 times and Chinese social media and gaming giant Tencent Holdings (0700.HK) at 36.
The listing comes at a delicate time for Hong Kong’s stock market, with the benchmark index hitting a nine-month low last week as investors fret over escalating trade tensions between the United States and China.
----Xiaomi’s float failed to attract strong interest among investors with the retail tranche gathering demand that was only 9.5 times the number of shares on offer, according to its filing on Friday.
By contrast, China Literature Ltd (0772.HK), the e-book arm of Tencent Holdings (0700.HK), late last year raised $1.1 billion in its Hong Kong IPO amid heavy demand, with the retail portion being 625 times oversubscribed.
More
July 8, 2018 / 7:21 AM
After Pyongyang put-down, Pompeo stands by 'difficult' denuclearisation talks
TOKYO/WASHINGTON
(Reuters) - U.S. Secretary of State Mike Pompeo brushed off North Korean
charges that he used “gangster-like” diplomacy in negotiations in Pyongyang,
saying on Sunday after meeting his Japanese and South Korean counterparts that
he would keep pursuing denuclearisation talks with North Korea.
Pompeo
said in Tokyo there was still a lot of work to do, but he was confident North
Korean leader Kim Jong Un would stick to a commitment to abandon nuclear
weapons he made during a summit with U.S. President Donald Trump in Singapore
last month.
----Pompeo spoke after North Korea said the talks “brought us in a dangerous situation where we may be shaken in our unshakable will for denuclearisation, rather than consolidating trust.”
The statement was carried by the official KCNA news agency on Saturday
soon after Pompeo left Pyongyang, raising questions about the future of talks
in which he is trying to persuade Pyongyang to give up a nuclear weapons
programme that threatens the United States.
“That was a fairly serious insult directed against Pompeo,” said
Christopher Hill, who formerly served as U.S. ambassador to South Korea and
lead negotiator with North Korea.
More
Finally, inflation is
slowly returning in America, even before President Trump forces Iranian oil from
the market. Is an oil shock coming this autumn, if Trump forces up to 2 mbpd
from the global market?
Trump trade wars are heating up, but don’t forget about rising inflation
By Jeffry
Bartash Published: July 7, 2018
12:01 p.m. ET
Inflation in the U.S. closing in on a 10-year high. Will it let up?
The ever-expanding Trump trade wars have emerged as perhaps the biggest hurdle for the U.S. economy, but rising inflation might still be the biggest threat.By one measure, inflation is still fairly tame. Hourly wages for American workers only rose slightly in June, keeping the yearly increase in worker pay at a mild 2.7%. Wages typically 3% to 4% a year when the unemployment rate is as low as it now at 4%.
Other yardsticks of inflation such as wholesale and consumer prices have crept not quite into the danger zone, but close enough. The producer price index topped 3% in May and the consumer price index climbed to 2.8% — both six-year highs.
Fresh
readings this week are likely to show consumer inflation pushing close to 3%
and maybe even hitting the highest level in almost a decade. Rising rents,
higher medical costs and a surge in gasoline prices have driven inflation
higher over the past year.
Is inflation going to keep rising? Most economists and senior Federal
Reserve officials think it will taper off.
Gas prices usually start to ease off near the end of the summer driving
season, for one thing.
“Don’t fret about a 3% headline rate — that’s a gasoline story that will
at some point run out of fuel,” said senior economist Avery Shenfeld of CIBC
Economics.
More
When government - in pursuit
of good intentions - tries to rearrange the economy, legislate morality, or
help special interests, the cost come in inefficiency, lack of motivation, and
loss of freedom. Government should be a referee, not an active player.
Milton Friedman
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today, after starting a trade war with NATO, NAFTA and others, tearing
up treaties, and ditching the Pax-Americana rule book developed since 1945, can
trust in the USA ever be restored in continental Europe again? While forever is
a very long time, not soon if at all, is the answer for now.
But with nothing to replace US leadership in the short run, a dodgy Euro
nowhere near ready to replace dollar supremacy, and a whole raft of dodgy
European banks all too likely to fail at the next global recession, the EUSSR
and NATO don’t have, and never ever made a plan B.
Below, while there may be no plan B now, why there likely will be one by
mid next decade. Europe has just been forced into thinking the unthinkable. A
pan Eur-Asian partnership by mid century?
July 8, 2018 / 8:13 AM
Transatlantic ties hang in the balance as Trump comes to Europe
BRUSSELS/WASHINGTON
(Reuters) - European leaders say they no longer have any illusions about Donald
Trump as they welcome the U.S. president at a NATO summit this week, but they
fear his “America first” agenda may force a moment of reckoning that works to
no-one’s benefit.
After searching for stability and familiarity in U.S. foreign policy in
Trump’s first year in office, America’s friends in Europe have come to accept
the president as an unpredictable political insurgent. But that does not make
it any easier to see their own priorities undermined.
Germany’s Foreign Minister Heiko Maas warned in a recent speech that
“old pillars of reliability are crumbling”, in a veiled reference to the U.S.
withdrawal from the 2015 Iran nuclear deal to tariffs on EU metals exports and
the threat of more to come on cars.
On NATO’s old foe Russia, the administration has sent mixed messages by
intensifying a U.S. military build-up in Europe while railing against fellow
NATO members on defence spending and failing to coordinate on new sanctions on
Moscow in 2017.
The U.S. president - the de facto leader of the nearly 70-year-old North
Atlantic Treaty Organisation - has indicated what his message will be at the
two-day meeting from Wednesday: other governments must dramatically step up
military spending and lower import tariffs.
“I’m going to tell NATO: You’ve got to start paying your bills. The
United States is not going to take care of everything,” Trump told a rally last
week, adding: “They kill us on trade.”
U.S. officials and politicians regularly say Washington spends 70
percent of its defence budget on NATO, a claim that is flatly denied in Europe.
One senior EU official said the number is more like 15 percent. Like many of
the officials and diplomats quoted for this story, he asked not to be named
because he was not authorised to speak on the record.
EU officials also contend EU tariffs on most U.S. imports are already
low.
A disastrous NATO summit could provide even worse optics than the
divisive Group of Seven meeting in June, especially if a scheduled meeting with
Russia’s Vladimir Putin in Helsinki on July 16 is more convivial, NATO
diplomats said.
Wess Mitchell, assistant U.S. secretary of state for European affairs,
told diplomats and NATO officials in a recent speech in Brussels that Trump was
taking a new approach to problems that have festered for years, such as the
Middle East peace process - even if it means going it alone.
“In the actions we take, we are hoping to spur a multilateral response
to address some of the world’s toughest challenges,” Mitchell said.
More
So that the record of history
is absolutely crystal clear. That there is no alternative way, so far
discovered, of improving the lot of the ordinary people that can hold a candle
to the productive activities that are unleashed by a free enterprise system.
Milton Friedman
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?
PG&E Proposes World’s Biggest Batteries to Replace South Bay Gas Plants
How do you ensure grid reliability with batteries instead of gas? Call in Tesla and Vistra to build incredibly large storage plants.
Julian SpectorJuly
02, 2018
California utility PG&E wants to prove that massive batteries can replace gas peaker plants and save ratepayers money.
The company asked regulators to approve four energy storage plants to provide local capacity for the South Bay/Moss Landing sub-area. The request includes two of the largest battery systems ever proposed: a 300-megawatt/1,200-megawatt-hour project by Vistra Energy and a 182.5-megawatt/730-megawatt-hour project from Tesla.
Besides breaking the record for storage capacity — currently held by Tesla’s 100-megawatt system in Australia — this procurement will test a pivotal question in California’s effort to decarbonize the electric grid.
The saga began when gas generator Calpine sought “reliability must run” status for three of its plants, which would guarantee compensation in recognition of the facilities’ role in serving grid reliability.
In an unprecedented move, the California Public Utilities Commission overruled the request in January and told PG&E to seek out storage alternatives. The CPUC’s analysis concluded that buying new batteries would be a better deal for ratepayers than maintaining the existing, economically challenged gas plants.
That suggestion was hailed both as a harbinger of the high-tech, low-carbon future and a reckless gamble with grid reliability.
Whereas gas plants can run as long as the gas keeps flowing, batteries run out of charge.
"If we get a 110-degree day in August 2019 and there are rolling blackouts because the batteries ran out of juice after 4 hours and we needed them for another 8 hours, maybe the PUC would rethink getting rid of gas-fired generators," said Wade Schauer, research director at Wood Mackenzie's Americas Power & Renewables team, at the time. "Until then, that seems to be the objective the state legislature and the PUC are after."
PG&E's answer to such concerns seems to be to build bigger than we've ever seen before.
The Vistra plant would be triple the size of the largest battery
currently planned in the U.S., Fluence's Alamitos project. This would come
online in December 2020 and operate for 20 years. The Tesla project would come
online that same month and also operate for 20 years.
A 10-megawatt/ 0-megawatt-hour system from Micronoc Inc. would begin
operations in October 2019 for a 10-year term, and Hummingbird Energy
Storage would build a 75-megawatt/300-megawatt-hour system for a 15-year
contract starting December 2020.
Morehttps://www.greentechmedia.com/articles/read/pge-proposes-worlds-biggest-batteries-to-replace-south-bay-gas-plants#gs.kK9qKXs
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.
No comments:
Post a Comment