Baltic Dry Index. 1530 -06 Brent Crude 84.41
“The
nature of the game as it is played is such that the public should realize that the
truth cannot be told by the few who know.”
Reminiscences of a Stock
Operator
While they don’t ring
a bell at the top, as the old stock market saying goes, they do wave a whole
lot of red flags. Yesterday it was the turn of the IMF to join the BIS in waving
a red flag over the increasing damage tariffs are causing to international
trade. It’s as close as the IMF gets to ringing a bell.
To this old dinosaur
market watcher, I detect a sentiment change underway in stocks. Complacency is
out, nervousness is in, talking up one’s book no longer has the same effect it
once did. Suppose US stock markets have already put in the top? With the
S&P 500, make that a compound double top failing at the February high. The
whole summer rally might have been a mistake.
As we get deeper into
crash season, and closer to the US midterm elections and a US clash with Iran
over oil sales, holding on to overpriced stocks isn’t for the fainthearted
anymore. Today’s hero flirts with
tomorrow’s zero, sentiment’s changing. How much longer before the klaxon sounds
and it’s “dive, dive, dive?”
Asia stocks at 17-month low as China lets yuan slip
October 9, 2018 / 1:41 AM
SYDNEY
(Reuters) - Asian shares hit 17-month lows on Tuesday as China allowed its currency
to slip past a psychological bulwark amid sharp losses in domestic share
markets, a shift that pressured other emerging currencies to depreciate to stay
competitive.
The IMF added to the malaise by cutting forecasts of global growth for
both this year and next, including downgrades to the outlook for the United
States, China and Europe.
“Risk sentiment is in a foul mood and stocks are sinking everywhere,”
said analysts at JPMorgan in a note.
“With Chinese economic momentum continuing to weaken alongside
increasing pressure from the U.S., currency weakness is the obvious release
valve,” they warned. “A lurch through the 7.0 level by year end is possible.”
China’s central bank on Tuesday fixed its yuan at 6.9019 per dollar, so
breaching the 6.9000 barrier and leading speculators to push the dollar up to
6.9320 in the spot market.
The drop should be a positive for exporters and did help Shanghai blue
chips briefly edge up 0.1 percent in early trade before trading almost flat.
Yet that follows a 4.3 percent slide on Monday which was the largest daily drop
since early 2016.
MSCI’s broadest index of Asia-Pacific shares outside Japan eased another
0.2 percent after ending Monday at its lowest point since May last year.
Japan’s Nikkei fell 1.2 percent, hurt in part by a rise in the
safe-harbor yen.
On Monday, a senior U.S. Treasury official expressed concern at the fall
in the yuan, adding that it was unclear whether Treasury Secretary Steven
Mnuchin would meet with any Chinese officials this week.
On Wall Street, the tech-heavy Nasdaq had fallen for the third straight day on Monday and growth stocks were pressured by worries rising bond yields might ultimately hobble the economy.
The S&P 500 lost 0.04 percent and the Nasdaq Composite 0.67 percent, while the Dow rose 0.15 percent as defensive stocks found buyers.
NO SAFETY NET
Yields on 10-year Treasury paper held at 3.24 percent on Tuesday, near a seven-year top.Treasuries have had a sort of safety net up to now as rising yields tend to dampen stocks and threaten the economic outlook, thus putting pressure on the Federal Reserve to go slow on policy tightening.
Yet
recently the Fed has sounded so bullish on the economy and so hawkish on rates
that the net has become frayed.
More
IMF Cuts Forecast for Global Growth as Trade War Takes Its Toll
By Andrew MayedaThe International Monetary Fund said the world economy is plateauing as the lender cut its growth forecast for the first time in more than two years, blaming escalating trade tensions and stresses in emerging markets.
On the eve of its annual meetings in Bali, Indonesia, the fund on Tuesday projected a global expansion of 3.7 percent this year and next, down from the 3.9 percent projected three months ago. It was the first downgrade since July 2016.
While the global economy is still on track to match last year’s pace,
which was the strongest since 2011, the new outlook suggests fatigue is setting
in and the overall performance masked mounting weakness in emerging markets
from Brazil to Turkey.
The fund left its 2018 U.S. forecast unchanged but cut its expectation
for next year, citing the impact of the trade conflict.
“The outlook is one of less balanced and more tentative expansion than
we hoped for last April,” IMF Chief Economist Maurice Obstfeld said in the
report.
Risks to the global outlook have risen in the last three months and tilt
to the downside, the IMF said. Threats include a further inflaming of the
trade war between the U.S and countries including China, and a
sharper-than-expected rise in interest rates, which would accelerate capital
flight from emerging markets.
The warning comes as finance ministers and central bankers from the
IMF’s 189 member nations prepare to meet this week in Bali, Indonesia for the
annual meetings of the fund and its sister institution, the World Bank. The
Trump administration’s trade dispute with China is expected to be front and
center, as are the consequences of the Federal Reserve and other major central
banks tightening monetary conditions after a decade of easy money.
If the trade war continues, it could take a significant bite out of
global growth, according to the fund. It estimates global output could fall by
more than 0.8 percent in 2020 and remain 0.4 percent below its trend line over
the long term, in a scenario where Trump follows through on all his threats,
including global duties on cars. Output could fall by more than 1.6 percent in
China and over 0.9 percent in the U.S. next year, according to the IMF’s
models.
More
World will be poorer and more dangerous without global economic cooperation, IMF chief economist says
Published: Oct 8, 2018 9:00 p.m. ET
IMF Chief Economist Maurice Obstfeld ripped up the script Monday and
delivered an impassioned plea to governments to continue to collaborate
internationally.
An IMF chief economist typically uses the forward of the agency’s annual
report on the health of the global economy to highlight key aspects of the
report.
But, in his last forward before his retirement, Obstfeld penned an essay
urging governments to continue to cooperate internationally and to take more
steps to make sure benefits from this cooperation are broadly shared.
“Without more inclusive policies, multilateralism cannot survive. And
without multilateralism, the world will be a poorer and more dangerous place,”
Obstfeld said.
The IMF chief economist did not specify any countries in particular. Given
the growing size of emerging and developing economies, the world’s richest
economies sense that they are getting fewer benefits from multilateralism now
than in the past.
“This change may tempt some to retreat into an imagined
self-sufficiency,” Obstfeld said.
But cooperation is vital because the world’s economies are now so
inter-linked, he said.
“Multilateralism must evolve so that every country views it to be in its
self-interest, even in a multipolar world,” Obsteld said.
This won’t happen unless governments take steps to reduce inequality, he
said.
The biggest challenge for many rich countries centers on the slow growth
of workers’ incomes, perceptions of lower social mobility and inadequate
government responses to structural economic change, he said.
Finally, Marketwatch
confirms that professional stock market money managers can’t see the future
better than anyone else. But they can talk up their buy side book.
Why Oct. 9 lives in stock-market infamy
Published: Oct 9, 2018 12:11 a.m. ET
CHAPEL HILL, N.C. — Oct. 9 is a fateful day in U.S. stock-market
history.
That’s because not just one, but two, major market turning points took
place on this day: Oct. 9, 2007, the top of the bull market that preceded the
financial crisis, and Oct. 9, 2002, the bottom of the bear market precipitated
by the bursting of the Internet bubble.
Numerologists, along with Nervous Nellies and paranoids, therefore are
holding their breath.
They can relax.
The first reason to breathe more easily: If indeed the major trend is already shifting from bull to bear, the exact day of the top will be Oct. 3 in the case of the Dow Jones Industrial Average DJIA, +0.15% and Sept. 20 in the case of the S&P 500 index SPX, -0.04% Oct. 9, 2018, therefore would not assume any special significance in the history books.
The second reason not to get too excited that two major trend changes occurred on the same day: It’s something we would have expected anyway on the basis of nothing more than pure randomness.
To appreciate why, consider the famous “birthday paradox:” How many people do you need to have together in a room before there is a greater than 50% probability that two of them have birthdays on the same month and day of the year?
The surprising answer: 23.
Since there have been 73 major trend changes since 1900, according to the bull and bear market calendar constructed by Ned Davis Research, we therefore should expect that at least two of them would occur on the same day. In fact, there should be more than one such day.
And indeed there are—three more, in fact. Those other days, for those of you who are fascinated by the stock market’s numerology, are Jan. 5 (1953 and 1960), April 28 (1942 and 1971), and Sept. 21 (1976 and 2001).
From this historical perspective, therefore, Oct. 9 doesn’t appear to be all that special.
----To illustrate, I sliced and diced my performance database to see what the best-performing stock market timers were saying on the day of the two Oct. 9 trend changes. What I found was depressing.
Consider first Oct. 9, 2007, the first day of the 2007-2009 bear market,
during which the S&P 500 fell by 56.8%—the worst bear market since the
Great Depression. As you can see from the accompanying chart, the
best-performing market timers on that day were recommending significantly
higher equity exposure levels than those with the worst records. This was the
case regardless of whether I focused on performance over the trailing one, five
or 10 years. As a bear market begins, needless to say, it would be better to
have a lower equity exposure than a higher one.
Morehttps://www.marketwatch.com/story/why-oct-9-lives-in-stock-market-infamy-2018-10-09
“It has always been my experience that I never benefited much from a move if I did not get in at somewhere near the beginning of that move.”
How to Trade In Stocks
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
In the great global trade war, China fires back.
China to raise export tax rebates amid trade war
October 8, 2018 / 1:02 PM
BEIJING (Reuters) - China will
increase export tax rebates from Nov. 1 and quicken export tax rebate payments
to support foreign trade, the cabinet said on Monday, as a trade war with the
United States escalates.
The rise in export tax rebates will “help reduce costs for the real
economy, help it cope with the complex international situation and maintain
stable foreign trade growth”, the cabinet said after a regular meeting.
The move conforms to rules of the World Trade Organization (WTO), it
said.
The tax rebate will be raised to 16 percent for those exports currently
getting a rebate of 15 percent or 13 percent, the cabinet said.
The rebate will be raised to 10 percent for those exports that currently
get a 9 percent rebate, though the rebate will be raised to 13 percent for
some, the cabinet said.
The rebate will be raised to 6 percent for exports currently getting a 5
percent rebate, though for sone it will be raised to 10 percent.
In September, China raised export tax rebates for 397 items, including
steel and electronic products,
in a bid to help exporters as the tariff war
with the United States worsened.
Chinese policymakers have been stepping up support for the slowing
economy as the full impact of U.S. trade tariffs has still to be felt.
Local governments will quicken special bond issuance for shanty-town
redevelopment but they will be barred from engaging in fund-raising in the name
of such housing projects, the cabinet said after a regular meeting.
China has injected hundreds of billions of dollars of policy loans into
redevelopment of shanty-towns. Analysts say the project has boosted property
demand as residents are encouraged to use cash compensation to buy a new home
when their existing home is demolished.
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?
Rolls-Royce Invests in Plug-and-Play Energy Storage Company to Expand Microgrid Offering
October 4, 2018
Rolls-Royce announced that it is investing in Berlin-based start-up company
Qinous GmbH, a provider of what it calls plug and play energy storage and
control systems.Qinous has gained experience in the integration of battery storage and energy systems in microgrids in more than 30 projects worldwide, including a Namibian luxury hotel and a hospital in Haiti.
Roll-Royce was already providing MTU Onsite Energy-branded diesel gensets to the company for its turnkey microgrid solutions. With the investment, Rolls-Royce will now help bring clean energy powered microgrids to the global hotel, hospital and emergency shelter markets.
Rolls-Royce said the investment will be used to expand the existing product portfolio and strengthen global sales and marketing activities.
Microgrids, combine cogeneration plants, diesel- and gas-powered gensets and renewable sources with batteries and a control system that links up all the elements in an intelligent energy management system that optimizes the energy usage technically and economically.
As a strategic investor, the aim is to set up a partnership with Qinous
for the development of innovative energy storage solutions and together offer
cleaner solutions designed to meet tomorrow’s needs,” explained Marcus A.
Wassenberg, CFO and Labor Director at Rolls-Royce Power Systems.
“With the use of energy storage and renewable sources, operators
of hotels, hospitals or schools are able to make significant fuel cost savings
and at the same time protect the environment,” said Qinous CEO Steffen
Heinrich.
Financial details of the individual investment being made by Rolls-Royce
are not being disclosed.
“I have
been in the speculative game ever since I was fourteen. It is all I have ever
done. I think I know what I am talking about. And the conclusion that I have
reached after nearly thirty years of constant trading, both on a shoestring and
with millions of dollars back of me, is this: A man may beat a stock or a group
at a certain time, but no man living can beat the stock market! A man may make
money out of individual deals in cotton or grain, but no man can beat the
cotton market or the grain market. It's like the track. A man may beat a horse
race, but he cannot beat horse racing.”
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.
No comments:
Post a Comment