Baltic Dry Index. 1515 +22 Brent Crude 81.23
"The
time to buy is when there's blood in the streets, even if the blood is your own."
Baron
Rothschild.
In our gun shy global
stock markets, today should be relief or rebound Friday. The margin call forced
selling over, the professional short sellers will cover, the algo High Frequency
Trader thieves will want to be neutral over the weekend, a few brave high risk
gamblers will want to take on positions as US corporate earnings reporting
season starts today, and generally the media and forever long, “buy more” stock
promoters will be out spinning like banshees that the correction is over, and
the robber Baron is right.
It isn’t, it’s just
beginning, as interest rates have a long way still to normalise, but I wouldn’t
try to get in the way of today’s relief rally, aka a dead cat bounce. The
bigger question is, can or will Wall Street and the New York Fed try to prop up
stocks until after the midterm elections next month, propping up Trump and the
Republicans, or will the deep state and the Fed pile on the pressure next week,
fighting President Trump and helping the Democrats?
I have my doubts that
any relief rally can be made to last until November 6th. Trump’s
Iran sanctions kick in on November 4th. With each passing week the
damage from the trade and currency wars grows. A massive US stock selloff probably
follows a Democrat Party victory in the November elections. The Dow Transports
have already signalled a top, with more Dow Transport weakness ahead from high
priced oil.
After today, my guess
is that smart money and insiders will be selling out into any attempt to keep
any relief rally running into November. Not to mention a Brexit summit coming
soon, an Italian financial crisis underway, a Bavarian election shock due on
Sunday, and a Saudi murder mystery unravelling faster than Russia’s Keystone
Kops GRU “spies.”
Below, wobbly Asia
bets on a dead cat bounce.
Asian Stocks Attempt Recovery as U.S. Futures Rise: Markets Wrap
By Adam Haigh
Updated on 12 October 2018, 05:16 GMT+1
Many Asian stocks recovered Friday after the biggest sell-off in global
equities since February, as U.S. stock futures extended gains and Treasury
yields ticked higher. The dollar steadied and the yen gave back some of its recent
gains.
The MSCI Asia Pacific Index climbed from the lowest level since May
2017, with shares in Hong Kong and South Korea leading the way. Benchmarks in
Tokyo and Shanghai struggled for traction. The yuan retreated, and was the
worst performing currency in Asia Friday after a weaker-than-forecast daily
fixing. That followed a Bloomberg report that U.S. Treasury staff concluded
that China isn’t manipulating its exchange rate.
Earlier in the U.S., tech shares, which bore the brunt of the selling
Wednesday, fared less badly Thursday as key benchmarks tumbled in excess of 2
percent for a second day.
Investors ascribed a number of reasons for the retreat in equities this
week, including worries over the U.S.-China trade war and increasing
preoccupation with the risk the American economy is nearing the end of an
extraordinarily prolonged expansion. Remarks by Federal Reserve Chairman Jerome
Powell last week that the central bank is “a long way” from a neutral level of
interest rates also fed into sentiment.
“Folks are re-rating whether the Fed is going to tighten too much -- I
think that’s the fear,” said Michael Arone, chief investment strategist at
State Street Global Advisors in Boston. Even so, “nothing’s really changed in
terms of the Fed’s path, and I think the economy continues to be quite strong,”
Arone said, concluding that investors “have had a violent overreaction.”
President Donald Trump made clear in remarks over the past two days that
his take is the Fed is to blame for sending the S&P 500 to a three-month
low. Next up for investors will be to assess corporate earnings for the
third-quarter. JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo &
Co. kick off the season for U.S. banks on Friday.
Elsewhere, how lucky
do you feel? Catching falling knives is for mugs.
The Stock Market's 67,000% Superstar Is Now a Huge Falling Knife
By Lulu Yilun Chen and Sofia Horta e Costa
11 October 2018, 12:05 GMT+1
Is it time to catch the global stock market’s biggest falling knife?For watchers of Tencent Holdings Ltd., it’s an increasingly pressing question. The Chinese internet giant’s record-breaking sell-off is getting worse, with Thursday’s 6.8 percent rout bringing losses since late January to $252 billion -- by far the biggest wipeout of shareholder wealth worldwide. The stock, one of the most widely held in emerging markets, has tumbled for an unprecedented 10 straight sessions.
As investors around the world debate whether the best days are over for the tech-led boom in global equities, Tencent has emerged as a key market bellwether. The company’s more than 67,000 percent return from its 2004 initial public offering through January trounced that of every other large-cap stock worldwide, and its slide this year presaged a steep drop in tech shares from Tokyo to New York.
Some money managers say it’s too soon to call a bottom.
“While it’s a good company and we obviously still like it, at the moment it’s the proxy of all the things investors want to avoid,” said Virginie Robert, the founder and president of Paris-based Constance Associes, whose global tech fund beat 99 percent of peers tracked by Bloomberg this year. Robert, who has an underweight position in Tencent, said she’ll refrain from adding to holdings until the company provides more clarity on its business outlook.
Jane Yip, a spokeswoman for Tencent, didn’t respond to requests for comment.
Founded by billionaire Pony Ma in 1998, Tencent had until recently captivated investors with its massively popular online gaming business, payments system and WeChat social networking platform.
The Shenzhen-based company’s integral role in the lives of hundreds of millions of Chinese helped propel average annual earnings growth of about 48 percent over the past decade, faster than Apple Inc.’s 35 percent.
Now questions are mounting over whether Tencent’s growth is sustainable. That’s partly because of macroeconomic concerns, including a slowing Chinese economy and a weakening yuan.
But the biggest worry for many observers is regulatory meddling from Beijing. The company’s cash cow -- online gaming -- has become a liability for the stock after an industrywide government crackdown left the business, which accounts for about 40 percent of Tencent’s revenue, clouded in uncertainty. The country halted approvals for new games in March and authorities have given little indication of when the ban will end.
More
https://www.bloomberg.com/news/articles/2018-10-11/the-stock-market-s-67-000-superstar-is-now-a-huge-falling-knife?srnd=premium
Tencent Music delays $2 billion U.S. IPO due to weak markets - sources
October 12, 2018 / 6:01 AM
HONG KONG (Reuters) - Tencent Music Entertainment has delayed its planned
U.S. initial public offering (IPO) until at least November as the owner of
China’s most popular music apps prefers to wait for global stock markets to
stabilise, three sources said.The music arm of tech giant Tencent Holdings (0700.HK) is expected to raise at least $2 billion (£1.5 billion) and was originally planning to launch its offering as soon as next week, the sources said.
However, Wall Street on Wednesday suffered its worst one-day drop in eight months, with the S&P 500 .SPX down 3.29 per cent. The index dropped a further 2.06 percent on Thursday.
“Are they really going to launch into this window?” asked one source involved in the deal, adding that the company had plenty of cash. “Why try and jam something out now?”
Chinese shares have also fallen, with the CSI 300 index of mainland Chinese blue-chips .CSI300 down 4.8 percent to a 27-month low on Thursday.
In total, Chinese companies have raised $7.5 billion from U.S. markets so far this year - the biggest amount since 2014 - according to Refinitiv data.
Tencent Music filed for its IPO earlier this month, setting a placeholder sum of $1 billion for registration purposes.
The company owns streaming apps QQ Music, Kugou and Kuwo as well as karaoke app WeSing, and claims more than 800 million monthly active users.
The number of Tencent Music shares to be sold were not disclosed and potential valuations were unclear. Its Swedish music streaming counterpart Spotify Technology SA (SPOT.N) is currently valued at around $27.1 billion.
More
https://uk.reuters.com/article/uk-tencent-music-ipo/tencent-music-delays-2-billion-u-s-ipo-due-to-weak-markets-sources-idUKKCN1MM0DF?il=0
Finally, the IMF presses their panic button one more time. Stocks anyone?
IMF warns trade friction, market turmoil to hurt Asian growth
October 12, 2018 / 3:33 AM
NUSA DUA, Indonesia (Reuters) - Sustained trade tensions could slash Asia’s
economic growth by up to 0.9 percentage point in coming years, the
International Monetary Fund said, urging policymakers in the region to
liberalize markets to offset the fall in export sales.The IMF also warned in its twice-yearly report on the Asia Pacific region that the market rout seen in emerging economies could worsen if the U.S. Federal Reserve and other major central banks tightened monetary policy more quickly than expected.
“Turmoil already seen in some emerging market economies could worsen,
with negative spillovers to Asia through reduced capital flows and higher
funding costs,” it said.
Changyong Rhee, director of the IMF’s Asia and Pacific Department, said
there would be no winners in Asia from the global trade frictions, as other
countries won’t be able to compensate fully for supply chain disruptions in
China and the United States - the world’s top two economies.
“Today’s growth headwinds, from financial market tightening to trade
tensions, could persist for some time,” he told a briefing on the report.
“For this reason, it will be important for policymakers to save their
ammunition for when it is truly needed,” he said.
The IMF maintained its forecast that Asia’s economy will expand by 5.6
percent this year but cut its projection for next year to 5.4 percent, down by
0.2 point from April.
The downgrade was due to the impact of financial market stress and
monetary tightening in some economies, as well as the damage from the
tit-for-tat tariff actions between the United States and China, the IMF said.
Existing, proposed and new retaliatory tariffs could cause maximum gross
domestic product (GDP) losses of 1.6 percent in China and close to 1 percent in
the United States, it said.
Other countries in Asia, many of which supply goods to China through
global value chains, would also see their economies slow substantially, the IMF
said.
Morehttps://uk.reuters.com/article/us-imf-worldbank-asia/imf-warns-trade-friction-market-turmoil-to-hurt-asian-growth-idUKKCN1MM05Q
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.
Not the usual bent banksters and totally doubled
over politicians today. Today, so you still think nuclear power is safe, and
nuke operators and governments tell the truth.
Fukushima nuclear plant owner apologises for still-radioactive water
October 11, 2018 / 10:42 AM
TOKYO (Reuters) - The owner of the Fukushima nuclear plant, destroyed by
an earthquake and tsunami more than seven years ago, said water treated at the
site still contains radioactive materials that for years it has insisted had
been removed.
The admission by Tokyo Electric Power (Tepco) could ruin its chances of
releasing the water into the ocean, a move the nuclear regulator says is safe
but which local fishermen oppose.
Tokyo won the bid to host the 2020 Summer Olympics more than five years
ago, with Prime Minister Shinzo Abe declaring that Fukushima was “under
control” in his final pitch to the International Olympic Committee.
The nearly one million tonnes of stored water at the wrecked plant,
enough to fill about 500 Olympic swimming pools, still contained detectable
levels of potentially harmful radioactive particles, Tepco told a government
committee on Oct. 1.
Tepco (9501.T) apologised to the committee under the Ministry of Economy, Trade and Industry, which is looking into ways to dispose of the water.
A spokesman at Tepco confirmed the findings and the apology.
A 9.0-magnitude quake and tsunami in March 2011 triggered meltdowns at three of the Fukushima Daiichi plant’s six reactors, spewing radiation into the air, soil and ocean and forcing 160,000 residents to flee, many of whom have not returned.
It was the world’s worst nuclear disaster since Chernobyl 25 years earlier.
Hundreds of deaths have been attributed to the chaos of evacuations during the crisis and to the hardship and trauma refugees have experienced since then, but the government only last month acknowledged for the first time that one worker at the plant had died from radiation exposure.
Documents on the government committee’s website show that of 890,000
tonnes of water held at Fukushima, 750,000 tonnes, or 84 percent, contain
higher concentrations of radioactive materials than legal limits allow.
In 65,000 tonnes of treated water, the levels of radioactive materials
are more than 100 times government safety levels.
Radioactive readings of one of those isotopes, strontium-90, considered
dangerous to human health, were detected at 600,000 becquerels per litre in
some tanks, 20,000 times the legal limit.
More
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?
Research on light-matter interaction could improve electronic and optoelectronic devices
Fundamental research sheds light on new many-particle quantum physics in atomically thin semiconductors
Date:
October 10, 2018
Source:
Rensselaer Polytechnic Institute
Summary:
New research increases our understanding of how light interacts with atomically
thin semiconductors and creates unique excitonic complex particles, multiple
electrons, and holes strongly bound together.
A paper published in Nature Communications by Sufei Shi,
assistant professor of chemical and biological engineering at Rensselaer,
increases our understanding of how light interacts with atomically thin
semiconductors and creates unique excitonic complex particles, multiple
electrons, and holes strongly bound together. These particles possess a new
quantum degree of freedom, called "valley spin." The "valley
spin" is similar to the spin of electrons, which has been extensively used
in information storage such as hard drives and is also a promising candidate
for quantum computing.
The paper, titled "Revealing the biexciton and trion-exciton
complexes in BN encapsulated WSe2," was published in the Sept. 13, 2018,
edition of Nature Communications. Results of this research could lead to
novel applications in electronic and optoelectronic devices, such as solar
energy harvesting, new types of lasers, and quantum sensing.
Shi's research focuses on low dimensional quantum materials and their
quantum effects, with a particular interest in materials with strong light-matter
interactions. These materials include graphene, transitional metal
dichacogenides (TMDs), such as tungsten diselenide (WSe2), and topological
insulators.
TMDs represent a new class of atomically thin semiconductors with
superior optical and optoelectronic properties. Optical excitation on the
two-dimensional single-layer TMDs will generate a strongly bound electron-hole
pair called an exciton, instead of freely moving electrons and holes as in
traditional bulk semiconductors. This is due to the giant binding energy in
monolayer TMDs, which is orders of magnitude larger than that of conventional
semiconductors. As a result, the exciton can survive at room temperature and
can thus be used for application of excitonic devices.
More
But see:
Another weekend and a German election
forecast as a Merkel massacre. Well her Bavarian sister party anyway. If the
result goes as forecast, add a German crisis next week to all the other global
crisis we’ve got going underway. Have a great weekend everyone.
"On
the whole human beings want to be good, but not too good, and not quite all the
time.”
George
Orwell.
The monthly Coppock Indicators finished September.
DJIA: 26,458 +199 Down. NASDAQ:
8,046 +261 Down. SP500: 2,914 +166 Down.
All
three slow indicators moved down in March, but the S&P and NASDAQ turned up in August. September will be critical for confirmation
of this change. All 3 slow indicators failed to confirm August’s positive
change making October very vulnerable to a sell-off.
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