Baltic Dry Index. 1747 +44 Brent Crude 73.92
Insanity,
repeating the same thing over and over again, and expecting a different result.
Albert
Einstein.
While it’s far to
early to tell if we are starting to see a tariff slowdown effect on the global
economy, that’s the way to play the latest statistics from Asia, and so far the
trade war tariffs are only affecting a tiny proportion of global trade. But not
for much longer.
We are in August now,
with the next set of US anti-China trade war tariffs about to kick in in a few
days, and how by the end of the month. We are on the cusp of repeating the
1930s and expecting a different result. Trump’s tariffs are now scaring the
horses and frightening the children. America’s November mid term elections are
starting to turn messy.
Below, a very
different Christmas looms before us.
Asia Stocks Mixed, Japan's Bond Yields Head Higher: Markets Wrap
By Adam Haigh and Andreea Papuc
Updated on 1 August 2018, 04:22 GMT+1
Asian equities were mixed as investors sifted through the latest news on
the U.S.-China trade front and positive results from Apple Inc. Bonds fell as
Japanese yields climbed higher after the central bank said it would allow more
flexibility in yield movements.
Stocks rose in Japan and South Korea, while they drifted elsewhere in
the region. In a move seen as pressuring China back to the negotiating table,
the Trump administration will propose raising to 25 percent its planned 10
percent tariffs on $200 billion in Chinese imports, three people familiar with
the internal deliberations said. Earlier, the S&P 500 Index capped a fourth
monthly gain after Bloomberg reported that the U.S. and China were trying to
restart talks aimed at averting a full-blown trade war. The offshore yuan
slipped as China weakened its fixing for the currency to the lowest since May
2017.
“The
tariff issue is ongoing, I think it’s a negotiating tactic,” Nick Griffin,
chief investment officer at Munro Partners, said on Bloomberg Television. “How
much we take of this as real and affecting earnings is questionable at this
stage. In terms of an actual earnings effect, it’s not that big at the moment,
it’s mainly just sentiment and risk appetite and for that it’s a moving feast.”
Central
banks remained in focus after the Bank of Japan tweaked its policy settings
Tuesday, with the Bank of England expected to hike rates Thursday. The yen held
most of its losses from yesterday, when the BOJ move disappointed those who had
seen a chance of an outright hike in the bond-yield target. Meanwhile, the
Federal Reserve is expected to hold its fire at its meeting Wednesday.
More
August 1, 2018 / 4:41 AM
Asian factories slow as China-U.S. trade conflict intensifies
HONG
KONG (Reuters) - Manufacturing activity across Asia slowed in July, deepening
concerns about the region’s economic outlook as an intensifying trade conflict
between the United States and China sent shudders through their trading
partners.
A
survey of purchasing managers released on Wednesday showed China’s
manufacturing sector grew at its slowest pace in eight months in July, with new
export orders suffering the worst slump since mid-2016.
Similar surveys revealed slowing activity across Asia.
Factory activity in the euro zone, where trade tensions were showing
signs of easing, was expected to keep up the pace. In the United States it was
seen cooling slightly, but still strong enough for the Federal Reserve to stay
on track for two rate hikes this year even if it was likely to hold rates
steady this week.
Last month, China and the United States slapped tit-for-tat tariffs on
$34 billion of each other’s goods and another round of tariffs on $16 billion
is expected in August.
----
China’s Caixin/Markit Manufacturing Purchasing Managers’ index (PMI) dropped to
50.8 from June’s 51.0, broadly in line with an official survey on Tuesday.
The headline number remained above the 50-point mark that separates
growth from contraction for the 14th consecutive month, but a reading on new
export orders showed a marked contraction at 48.4.
“It is clear that smaller manufacturers are reducing inventories for
export deliveries and production is going down,” said Iris Pang, Greater China
economist at ING in Hong Kong, adding this was evidence the trade conflict was
starting to bite.
“This is just the beginning. If we see tariffs on the (extra) $200
billion, whether it’s 10 percent or 25 percent, it covers almost half of
exporters. It will have a wide impact.”
---- The mood outside China, the main trade partner for most Asian economies, is turning sour as well.
In Australia, the PMI survey posted its lowest reading in two years.
There was also a slowdown in Japan, although smaller than initially estimated.
PMIs showed a contraction in Malaysia, a slowdown in Vietnam and Taiwan,
and a modest pick-up in Indonesia. South Korea’s exports showed slower than
expected growth.
----
In Asia, Taiwan and South Korea would be the biggest collateral casualties due
to their exposure to global supply chains.
More
July 31, 2018 / 11:51 AM
Trump blasts conservative megadonors Koch network as 'overrated'
WASHINGTON
(Reuters) - U.S. President Donald Trump on Tuesday slammed the powerful
Koch-led political operation as “globalist” and “a total joke,” rejecting the
conservative group amid signs of a growing public fissure between the president
and business over trade.
Trump’s comments follow news media reports that some officials within the Koch donor network - which has spent millions to help elect Republicans - are concerned the president’s trade policies could fuel a recession and want to scale back support of Republican candidates.
The Kochs are not the only business group critical of the president’s trade policies. The U.S. Chamber of Commerce, the nation’s largest business lobby, has publicly criticized the billions of dollars worth of tariffs the administration has targeted at China, Canada, Mexico and the European Union.
Trump has also escalated criticism in recent weeks of American companies that appear critical of his trade policies, including firing off threats at motorcycle manufacturers Harley Davidson (HOG.N).
The public spat with the Kochs comes less than four months before the
Nov. 6 midterm congressional elections that have Trump’s fellow Republicans
seeking to maintain control of both chambers of Congress and lay bare the
ongoing internal debate in the Republican Party about trade policy.
The Koch brand - including Koch Industries, the second-largest privately
held American company - has become synonymous in political parlance with
pro-business policies and libertarian ideology. The company and the Koch
political operations have pushed relentlessly for lower taxes, less regulation
and free trade.
The Koch-backed network of political organizations - which were founded
by brothers Charles and David Koch but now include a larger group of donors -
have historically spent millions of dollars backing like-minded Republican
candidates for office.
But as Trump has sought to pull his party toward more protectionist
trade positions, backers of free trade policies like the Koch network have been
reluctant to provide support. That could mean Republican candidates who seek to
closely align themselves with Trump on trade are forgoing backing from groups
like the Koch network.
“The globalist Koch Brothers, who have become a total joke in real
Republican circles, are against strong borders and powerful trade. I never
sought their support because I don’t need their money or bad ideas,” Trump
wrote on Tuesday in a post on Twitter.
“Their
network is highly overrated, I have beaten them at every turn.”
More
It is the maxim of every prudent master of a
family, never to attempt to make at home what it will cost him more to make
than to buy...What is prudence in the conduct of every private family, can scarce
be folly in that of a great kingdom.
Adam Smith. The Wealth Of
Nations, 1776.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
In trade war news, Team Trump seem set on crashing China’s economy. Be
careful what you wish for! As America’s largest creditor, and the second largest
national economy on planet earth, any Chinese slowdown, let alone crash, will
ripple all the way round planet earth.
U.S. Considers Higher Tariffs on $200 Billion in Chinese Imports
By Jenny Leonard and Jennifer Jacobs
Updated on 1 August 2018, 04:47 GMT+1
The Trump administration is considering more than doubling its planned
tariffs on $200 billion in Chinese imports, ratcheting up pressure on Beijing
to return to the negotiating table, three people familiar with the internal
deliberations said.
The U.S. imposed 25 percent tariffs on $34 billion of Chinese products
in early July, and the review period on another $16 billion of imports ends
Wednesday. President Donald Trump had threatened an additional $200 billion
with levies of 10 percent, a level the administration may raise to 25 percent
in a Federal Register notice in coming days, one of the people said.
At the same time, representatives of U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He are having private conversations as they look for ways to reengage in negotiations, according to people who spoke about the deliberations on condition of anonymity.
Holding an open door to talks while threatening worse consequences represents yet another increase in tension in the months-long standoff between the world’s two largest economies over trade. While the conflict nominally centers around the U.S.’s $375 billion annual goods trade deficit with China, it has morphed into a chapter in the nations’ broader strategic rivalry.
In a sign the trade standoff is reverberating through Chinese politics, the Politburo signaled Tuesday that policy makers will focus more on supporting economic growth amid risks from a campaign to reduce debt and the dispute with Trump. The communique, which followed a meeting of the country’s most senior leaders led by President Xi Jinping, said the campaign to reduce leverage will continue at a measured pace while improving economic policies to make them more forward-looking, flexible and effective in the second half.
The public comment period on the U.S. tariffs aimed at $200 billion ended Aug. 30 after public hearings Aug. 20-23, according to the U.S. Trade Representative’s office. Announcing a higher tariff is required ahead of the hearings and will send a signal that the Trump administration is upping the pressure on China to make serious concessions.
Asian equities were mixed as investors processed the latest news on the U.S.-China trade front. The yuanell against a trade-weighted basket of currencies for a fourth day to a level that’s near the lowest on record, suggesting policy makers are allowing further weakness.
Trump directed trade representative Robert Lighthizer to raise the tariff rate to 25 percent, the people said, adding that the change isn’t final yet and may not go forward after a public review.---- The next wave of U.S. tariffs is set to kick in as soon as Wednesday, with the possible imposition of duties on another $16 billion of Chinese imports. The implementation could be delayed for weeks as the administration works out the details of which products it will target. Officials in Beijing have vowed to respond with the same amount of tariffs on U.S. products.
More
‘Electrification of Everything’ Would Spike US Electricity Use, but Lower Final Energy Consumption
“Higher overall efficiency of electric technologies is one reason that power demand does not grow even faster.”
July 30, 2018
Widespread deployment of EVs, heat pumps, and other electric technologies could increase U.S. electricity consumption by nearly 40 percent by mid-century, according to a new government report.
The report, the second in the National Renewable Energy Laboratory’s Electrification Futures Study series, analyzes the demand-side impacts of a transition to electricity in transportation, residential and commercial buildings, and industry through 2050.
The report authors developed three scenarios to assess changes in electricity demand growth under varying levels of economy-wide electrification. The scenarios are based on cost and performance projections in the first EFS report, as well as the authors’ review of current trends, the academic literature and use of an updated version of the EnergyPATHWAYS bottom-up modeling tool.
The “reference” scenario anticipates only incremental change in electrification by mid-century. The “medium” scenario assumes “low-hanging fruit” opportunities are harvested but stop short of transformational change in electrification. The “high” scenario envisages a future in which a mix of technology advancements, policy support and consumer enthusiasm “enables transformational change in electrification.”
According to Trieu Mai, NREL senior researcher and lead author of the study, the sector with the most potential for transformational change by 2050 is transportation. Among the three sectors tracked in the study, transportation starts with the smallest electrification share. Transportation accounts for nearly 30 percent of U.S. primary energy consumption but less than 1 percent of electricity demand.
In an interview, Mai said there are ample opportunities for
electrification in transportation, especially for the light-duty vehicle fleet.
The medium scenario found opportunities for short-haul freight electrification.
The high scenario found that “long-haul opportunities do exist but might be
contingent on some advancement in battery technologies,” according to Mai.
Market penetration of plug-in electric light-duty vehicles reaches
nearly 84 percent in the high scenario — compared to just 11 percent in the
reference case. More than 240 million light-duty electric cars and trucks, 7
million medium- and heavy-duty electric trucks, and 80,000 electric buses are
estimated to be on the road by 2050 under the same scenario. In all, under the
high scenario, electric vehicles account for up to 76 percent of vehicle miles
traveled by mid-century.
Morehttps://www.greentechmedia.com/articles/read/widespread-electrification-could-increase-u-s-electricity-consumption?utm_source=Daily&utm_medium=email&utm_campaign=GTMDaily#gs.4rc0ia4
The monthly Coppock Indicators finished July.
DJIA: 25,415 +213 Down. NASDAQ:
7,672 +259 Down. SP500: 2,816 +166 Down.
All
three slow indicators moved down in March and have continued down ever since.
For some a new bear signal, for others a take profits and get back to cash
signal.
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