Monday, 10 September 2018

Trump v China. Fed Tighter For Longer. Unicorns Crash.


Baltic Dry Index. 1490 +06   Brent Crude 77.24

Ethereum co-founder Vitalik Buterin told Bloomberg that the days of explosive growth in the blockchain industry have likely come and gone.

We open the new week with more of the same from Donald Trump and his dodgy trade war team. Don’t like our Chinese tariffs, well shift manufacturing back to the USA, Trump told Apple. Apple, wisely said nothing.

With the critical for President Trump, mid-term elections just under two months away, Trump’s trade war against China and Canada, is likely to go into overdrive as it plays well with Trump’s core support. Europe is likely to get added to the firing line too, the nearer we get to November. President Trump will likely double down on “MAGA” and getting his base support out in the cause of the promised land.

“The moment you doubt whether you can fly, you cease for ever to be able to do it.”

President Trump, with apologies to J. M. Barrie, and Peter Pan

September 10, 2018 / 2:03 AM

Asian shares on slippery slope as Trump ups ante in trade war

SYDNEY (Reuters) - Asian shares started the week in the red on Monday, faltering for the eighth straight day while the dollar climbed as U.S. President Donald Trump raised the stakes in the heated trade dispute with China.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was last down 0.6 percent, extending losses from last week when it dropped 3.5 percent for its worst weekly showing since mid-March.

Japan's Nikkei .N225 opened lower but quickly pared losses after revised second-quarter gross domestic product data showed the world's third-biggest economy grew at its fastest pace since 2016.
Chinese shares weakened, with the blue-chip index .CSI300 off 0.6 percent while Shanghai's SSE Composite .SSEC stumbled 0.4 percent. Hong Kong's Hang Seng index .HSI slipped 0.8 percent.
On Friday, Wall Street stocks ended lower while world share indexes registered their biggest weekly declines in almost six months after Trump threatened tariffs on a further $267 billion worth of Chinese imports, on top of earlier promises to levy duties on $200 billion worth of Chinese goods.
Beijing has warned of retaliation if Washington launches any new measures, but it is running out of room to match them dollar-for-dollar, raising concerns it could resort to other measures such as weakening the yuan or taking action against U.S. companies in China.

“The overall sense is that the United States will continue to escalate the pressure until China submits to U.S. demands which does not seem likely any time soon,” JPMorgan said in a note.

“Overall, the impact of tariffs and high levels of uncertainty will both continue to weigh on markets into the end of the year.”

Chinese trade data released on Saturday could give Trump more reason to turn up the heat. China’s trade surplus with the United States widened to a record in August.
More

September 8, 2018 / 9:04 PM

Trump tells Apple to make products in U.S. to avoid China tariffs

(Reuters) - U.S. President Trump tweeted on Saturday that Apple Inc (AAPL.O) should make products inside the United States if it wants to avoid tariffs on Chinese imports.

The company told trade officials in a letter on Friday that the proposed tariffs would affect prices for a “wide range” of Apple products, including its Watch, but it did not mention the iPhone.

Trump, speaking on Friday aboard Air Force One, said the administration had tariffs planned for an additional $267 billion worth of Chinese goods.

Trump tweeted that “Apple prices may increase because of the massive Tariffs we may be imposing on China - but there is an easy solution where there would be ZERO tax, and indeed a tax incentive. Make your products in the United States instead of China. Start building new plants now.”

Apple declined to comment.

The technology sector is among the biggest potential losers as tariffs would make imported computer parts more expensive. Apple’s AirPods headphones, some of its Beats headphones and its new HomePod smart speaker would also face levies.

“The burden of the proposed tariffs will fall much more heavily on the United States than on China,” Apple said in its letter.

It was a bad news weekend too, for collapsing emerging market economies and currencies, and a shot across many deeply indebted stocks too. The Fed is starting to think in terms of higher for longer for interest rates, which will likely drive the dollar higher yet again.

The puzzle now is which emerging market economy will be the first one to default. From Argentina, via Turkey, via South Africa, to Indonesia, there’s plenty of choice out there.

September 10, 2018 / 5:04 AM

Stronger U.S. economy may warrant 'restrictive' rates - Boston Fed's Rosengren

Eric Rosengren switched from advocating low interest rates to tighter monetary policy, he argued it was time to start crawling back toward “normal” rates even with 5 percent unemployment and weak growth and inflation.

Two years later, Rosengren has joined colleagues in beginning to lay the groundwork for those rate hikes to potentially continue longer and to a higher level than currently expected as the outlook for the economy strengthens. 

Rates may not only need to become “restrictive,” but the definition of that may be moving up as well, Rosengren said in an interview with Reuters on Saturday following an economic conference here.

“This is not hair on fire. There is upward pressure on inflation, and given that we are already at 2 percent, labour markets are already tight ... that is going to be a situation where we start persistently having inflation above what our target is,” Rosengren said. “There is an argument to normalize policy and probably be mildly restrictive.”

----He said the Fed does not need to move faster than the current gradual pace, which has translated into roughly one rate hike per quarter, with the next expected later this month. That steady pace is a luxury gained by starting early, he said, skirting the need to move more quickly and catch up with a tightening economy.

But the terrain has shifted since. Between growth hovering around 3 percent, roughly full employment, and risks that global trade tensions could “embed” faster price hikes, Rosengren said “we have a pretty good idea what the path will be if we don’t have a big surprise.”
More

In EUSSR news, yet another nation has swung right. Mrs Merkel’s Mad Migrant policy of 2015, seems to have brought down another centre left government, opening up a whole lot more trouble for the dead hand of Brussel’s bureaucrats. Soon, add Sweden to the awkward division of Poland, the Czech Republic, Slovakia, Hungary, Austria, Holland and Italy.

Sweden Headed for Political Gridlock After Inconclusive Election

By Rafaela Lindeberg, Amanda Billner, and Niklas Magnusson
9 September 2018, 19:34 GMT+1 Updated on 10 September 2018, 06:27 GMT+1
Sweden may face weeks or even months of political gridlock after an inconclusive election result left the biggest Scandinavian economy without a clear candidate to form a government.

Neither the Social Democrat-led coalition of Prime Minister Stefan Lofven nor the opposition Alliance bloc won enough votes to form majority governments.

Sweden is the latest European country in which a populist surge fueled by anti-immigration sentiment is changing the political landscape. Though Lofven has presided over an economic upswing that has fed a rise in employment, Sunday’s vote shows many Swedes were more concerned about tackling a record influx of foreigners after about 600,000 immigrants entered the country of 10 million over the past five years.

A near complete preliminary count of electoral districts gave Lofven’s parties 144 seats in the 349-member parliament, and the Alliance 143 seats. The anti-immigration Sweden Democrats, which aren’t part of either bloc, were poised to get about 62 seats, not quite as many as some pre-election polls indicated but significantly better than in 2014.

The result is set to trigger a potentially bitter contest between Lofven and Ulf Kristersson, who leads the Moderate Party that dominates the Alliance bloc. Lofven has made clear he rejects the nationalist agenda of the Sweden Democrats, ruling out cooperation with the party. Kristersson has been less clear. The 54-year-old former gymnast, who has led the Moderates for a little less than a year, was quick to call on Lofven to step down after the vote count became clear.

At Nordea Bank AB, the biggest Nordic lender, economist Andreas Wallstrom warned that the result sets the stage for a protracted period during which the main parties will fight to form a viable government.
More

Rounding out a bad start to the new week, the price of unicorns keeps falling. It looks like a rocky road all round, as President Trump, leads his supporters to “MAGA,” the Promised Land.

Crypto Wipeout Deepens to $640 Billion as Ether Leads Declines

By Adam Haigh and Eric Lam
10 September 2018, 01:06 GMT+1 Updated on 10 September 2018, 05:47 GMT+1
The cryptocurrency bear market plumbed a fresh 10-month low, led by a tumble in Bitcoin’s biggest rival.

Ether slumped 9.5 percent from its level at 5 p.m. New York time on Friday, according to Bloomberg composite pricing. Bitcoin lost 2.5 percent, while the market capitalization of digital assets tracked by CoinMarketCap.com shrank to $197 billion, down about $640 billion from its January peak.

Cryptocurrencies have declined for five of the past six weeks amid concern that a broader adoption of digital assets will take longer than some had anticipated. That worry was underscored over the weekend after the U.S. Securities and Exchange Commission temporarily suspended trading in two securities linked to cryptocurrencies and Ethereum co-founder Vitalik Buterin told Bloomberg that the days of explosive growth in the blockchain industry have likely come and gone.

----Cryptocurrencies remained under pressure on Monday despite reports that Citigroup Inc. has developed a new mechanism for investing in the space. The U.S. bank plans to act as an agent issuing so-called digital asset receipts, or DARs, to enable trading by proxy without direct ownership of the underlying coins, a person with knowledge of the plans said.

The Bloomberg Galaxy Crypto Index of major virtual currencies dropped 4.5 percent at 12:44 p.m. in Hong Kong, heading for its lowest close since mid-November.

Ether has tumbled faster than Bitcoin in recent months on concern that blockchain-related firms are cashing out of the second-biggest cryptocurrency. Many startups that raised Ether from investors in their initial coin offerings will eventually need to sell their holdings to cover expenses like salaries and development costs.
More

“All the world is made of faith, and trust, and pixie dust.”

J.M. Barrie, Peter Pan

Crooks and Scoundrels Corner

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

Today, yet another sign of trouble directly ahead. A less than perfect time to expand the all against all Trump trade wars. Time to declare victory and get global supply chains working again. Some chance before the US November mid-term elections, now about 60 days away.

“To die will be an awfully big adventure.”

J.M. Barrie, Peter Pan

The Trade Slowdown Has Already Begun

As tariffs pile up, the world economy is starting to look holed below the waterline.
By David Fickling
7 September 2018, 07:25 GMT+1
One of the paradoxes of this year’s trade tensions is that in many parts of the world, it doesn’t yet feel like a crisis.

For all the turmoil in emerging-market currencies, equity investors in major markets seem ... relaxed? The milestone passed with little fanfare, but the S&P 500 index closed at a record high of 2,914.04 on Aug. 29. The day before, India’s Nifty 50 did the same. Other indexes in developed markets are only moderately below their January peaks.

With President Donald Trump expected to start implementing the next round of tariffs on $200 billion of Chinese goods within hours, it’s tempting to think the global economy is riding out the turmoil. Tempting, but mistaken. Look closely: The slowdown has begun.

Take trade volumes. It’s been extraordinarily unusual for the momentum of global commerce to head anywhere but up in recent decades. The only notable occasions when the world trade monitor compiled by the CPB Netherlands Bureau for Economic Policy Analysis has turned down in a sustained way since 2000 have been on the eve of the 2001 and 2008 recessions, and during the 2015 commodity slump.

You can now add 2018 to that list, with the index coming in negative throughout the second quarter of this year. That drop is particularly striking given that commodities, one of the largest and most volatile subsets of globally traded goods, have been doing quite well — the CPB’s indexes of fuels and non-fuel commodities both reached the highest levels since 2014 in May. The weakness is coming not from materials but from manufactured goods, as global supply chains seize up.

That’s consistent with the picture emerging on the ground. U.S. manufacturers “reported higher prices and supply disruptions that they attributed to the new trade policies,” according to the Federal Reserve’s July Beige Book, in addition to “higher input prices and shrinking margins.” The next edition, due out next week, is likely to show further impact, judging by the warnings from business leaders on the eve of the current round of levies.

Even that probably understates the extent of the underlying slowdown. In the U.S., port traffic has been running at record levels in recent months, suggesting the effect of tax cuts and a favorable monetary policy are more than making up for any trade jitters. However, a chunk of the movements probably relate to businesses stocking up early in order to beat the tariffs, according to the National Retail Federation, an industry group.

----For a better picture of what lies ahead, have a look at the way the world’s container-shipping lines are planning for the future. Order books that ran in excess of 1,000 vessels before the 2008 financial crisis haven’t cracked one-fifth of that level since Trump came to power. If the global economy is going to ride out this latest round of tension, the merchant fleets on which trade depends aren’t seeing it.

If all else fails, immortality can always be assured by spectacular error.

John Kenneth Galbraith.

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?

Researchers use graphene to detect mid-infrared light at room temperature and convert it into electricity

Posted: Sep 04, 2018

Researchers from ICFO and Yale have used graphene to efficiently detect mid-infrared light at room temperature and convert it into electricity. Detecting infrared light is of major importance for current applications in spectroscopy, materials processing, chemical, bio-molecular and environmental sensing, security and industry since the mid-infrared spectral region is the range where characteristic vibrational transitions and rotational excitations of many important molecules occur.

These vibrational and rotational excitations of many molecules, including hazardous and biological molecules, have frequencies that are found in the mid-infrared, which can be monitored by observing the absorption of light in this specific spectral range. However, currently available mid-infrared detectors are very inefficient, except those that can operate at cryogenic temperatures, because they incorporate superconducting elements. Thus, this low temperature limitation is a major drawback in having detectors integrated in devices for consumer products.

Now, ICFO researcher Renwen Yu, led by ICREA Prof. at ICFO Javier García de Abajo, in collaboration with Prof. Fengnian Xia’s group Yale University, have demonstrated that graphene can be used to fabricate very efficient mid-infrared detectors operating at room temperature.

The researchers have proposed and experimentally demonstrated that the collective oscillations of charge carriers – known as graphene plasmons — are capable of boosting the sensitivity by making use of the resonant coupling between mid-infrared light and those plasmons.

In their study, the team fabricated a device on a CVD graphene wafer composed of graphene-disk plasmonic resonators connected by quasi-1D graphene nanoribbons. They then shined mid-infrared light (12,2 mm wavelength) onto the setup and observed the excitation and high room-temperature absorption of IR plasmons on the surface of the graphene resonators and nanoribbons. They also observed that, thanks to the graphene nanostructures, the absorption of light that was being converted into an electrical responsivity was strongly linked to the level of the plasmonic absorption, with response times enabling detection at GHz speeds.

The results of this study show graphene to be an excellent material for ultrafast conversion of light to electrical signals at room temperature, triggering the development of very small-sized detectors that could be easily integrated into high-resolution mid-infrared cameras or high density integrated infrared photonic circuits aimed for applications such as security, bioassays or air quality monitoring, among others.

ICFO.

The monthly Coppock Indicators finished August.

DJIA: 25,965 +207 Down. NASDAQ: 8,110 +265 Up. SP500: 2,902 +168 Up.
All three slow indicators moved down in March, but the S&P and  NASDAQ have now turned up.  September will be critical for confirmation of this change.

No comments:

Post a Comment