Baltic Dry Index. 1457 -13 Brent Crude 72.50
"There may be a recession in stock prices, but not anything in the nature of a crash."Irving Fisher, leading U.S. economist, New York Times, Sept. 5, 1929
Today is bad news
Monday apparently, with Asian markets falling on renewed US sanctions on Iran,
concern over rising US and others interest rates, fears over the outcome of
tomorrow’s US elections, and the continuing trade war between America and the
rest of the world, especially China. Dow futures are forecasting a sharply
lower US opening.
But will it be
followed by bad news Wednesday, as the outcome of the US elections sinks in?
Will a correction in stocks turn into a bear market for most stocks? Has Trump’s
trade war already done too much damage to the global economy? Did the trade
wars drag purchases out of 2019 into 2018 in an attempt to beat the tariffs?
With new 25 percent US
punitive tariffs against China starting on January 1, will all the new
uncertainty and higher prices, cause consumers to scale back spending this
Christmas?
Below, bad news
Monday.
Asian markets fall on profit-taking, while Xi praises globalization
By Dow
Jones Newswires Published: Nov 4,
2018 11:16 p.m. ET
After the best week in years for a number of Asian stock markets — following
the worst month in years for many — the region’s equities started Monday on a
down note amid profit-taking after Friday’s surges.Japan’s Nikkei NIK, -1.29% slid 1.3% after its best week since mid-2016, following Friday’s declines in the U.S. and amid persistent concerns about rising borrowing costs, U.S.-China trade conflicts and their effects on corporate results. Subaru 7270, -4.90% fell about 5% and Uniqlo parent Fast Retailing 9983, -4.91% was off 4.7%.
Read: Bank of Japan’s Kuroda says large-scale monetary easing no longer the best policy
Chinese stocks were off even after President Xi Jinping praised globalization and China’s commitment to free trade as he kicked off a trade expo in Shanghai. The Shanghai Composite SHCOMP, -1.11% fell about 1% while the smaller-cap Shenzhen Composite 399106, -1.04% was of 0.6%.
See: Xi touts free trade, China’s massive market at import expo
Hong Kong stocks were among the region’s biggest decliners. After ending last week with a 4.2% gain, the most in seven years, the Hang Seng Index HSI, -2.35% was down 2.7%. Trade worries persisted, as did concerns about the mainland economy, after a new report found China’s service-sector growth fell to a 13-month low in October. Tencent 0700, -4.28% was down 4% while automaker Geely 0175, -4.55% fell 5% and smartphone-component maker AAC 2018, -7.90% shed 7%.
Korea’s Kospi SEU, -1.36% shed 1.5% after its 3.5% surge Friday, its best day in seven years. Index heavyweight Samsung 005930, -1.36% was down almost 2%. Benchmarks in Taiwan Y9999, -0.50% and Singapore STI, -1.80% posted losses around 1%.
More
China's services sector growth slowest in 13 months as orders dry up - Caixin PMI
November 5, 2018 / 2:38 AM
BEIJING,
Nov 5 (Reuters) - China’s services sector chalked its slowest growth in over a
year last month as the volume of new orders dried up, a private survey showed,
suggesting a further loss in economic momentum as a rough 2018 draws to a
close.
The slowdown in the services sector - which accounts for more than half
of China’s economy and is an important generator of jobs - is particularly
worrying for policy makers as they have been counting on it to offset rising
pressure on exports from a heated trade row with the United States.
The Caixin/Markit services purchasing managers’ index (PMI) fell to 50.8
in October from 53.1 in September, the lowest since September 2017, and
creeping closer to the 50 line that separates growth from contraction.
Any prolonged weakness in the services sector would complicate Beijing’s
efforts to steady growth in the face of the trade dispute with the United
States, a manufacturing slowdown at home and campaigns to curb excess capacity,
pollution and corporate debt.
A cooling this year of the Chinese property market, another major
contributor to the economy, has also weighed on demand for real estate
services.
Significantly, Caixin’s sub-index for new business orders showed
virtually no growth at 50.1 in October, down from 52.4 the previous month and
the worst performance since a contraction in November 2008 during the global
financial crisis.
More
World Economy Risks Returning to Sync, This Time to the Downside
By Enda Curran, Alessandro Speciale, and Rich Miller
4 November 2018, 05:00 GMT
The world’s major economies that entered 2018 accelerating in sync risk
entering 2019 decelerating in sync.The shift is being led by China, where the economy’s weakest performance since 2009 is set to worsen unless a peace can be struck in the trade war with the U.S. Factory readings from Asia already show a fallout, with Taiwan, Thailand and Malaysia slipping into contraction territory.
The euro-area too is losing momentum, expanding in the third quarter at half the pace of the prior three months as Italy and Germany stagnated. That comes just as inflation is picking up, setting up a complex 2019 for European Central Bank policy makers who have pledged to dial down monetary support.
The question is whether the U.S. can resist the downdraft, providing
ballast for the rest of the world.
While a tightening labor market gives reason
to hope it can, most economists forecast growth will ebb a bit in 2019 on the
back of protectionism, higher interest rates and the fading support of tax
cuts.
“The story is that we will probably re-synchronize,” said Joachim Fels,
global economic adviser at Pacific Investment Management Co. “But this time on
the downside.”
It’s a marked turnaround from April, when the International Monetary Fund declared the world was enjoying the most united upswing since 2010. Its mood changed in October when cut its global outlook for the first time in two years and said growth had plateaued.
There are other signs the peak has passed for the global economy. IHS
Markit’s purchasing manager indexes for China and the euro area all retreated
last month to drive the overall reading to an almost two year low, while the
U.S. gauge was little changed. Most countries have now seen their PMIs decline
over the last three months.
“The latest data strongly supports the view that the best days in the
post-2008 financial crisis growth cycle have been seen,” said Alan Ruskin,
global co-head of foreign-exchange research at Deutsche Bank AG.
Morehttps://www.bloomberg.com/news/articles/2018-11-04/world-economy-risks-returning-to-sync-this-time-to-the-downside?srnd=premium
Bond Traders Prepare for Week Full of Risk by Dumping Treasuries
By Emily BarrettIn an ordinary week, another super-sized round of Treasury note and bond auctions -- this time, a record $83 billion -- and heightened talk of a trade deal with China might weigh on the market. Add in the wildcard of the U.S. midterm elections and turbulence in equities, and the outlook is even muddier. Trades hedging the risk of higher yields over the coming days have piled up, and Barclays Plc is among banks taking refuge in curve steepening positions.
The only predictable development may be the Federal Reserve’s decision on Nov. 8, and that, too, is seen as clearing the way for higher yields. Market participants widely expect policy makers to indicate that they’re on track to deliver another rate hike in December.
“The Fed could mail this one in because the market’s not expecting them
to do anything magical at this meeting,” said Jim Caron, a fixed-income
portfolio manager at Morgan Stanley Investment Management.
---- “Given that the market expectation for this meeting is so sanguine, it’s a very low bar for the Fed to surprise, and they have many avenues to surprise us,” he said.
More
https://www.bloomberg.com/news/articles/2018-11-04/bond-traders-prepare-for-week-full-of-risk-by-dumping-treasuries?srnd=premium
U.S. ratchets up pressure on Iran with resumption of sanctions
November 5, 2018 / 5:27 AM /
Updated 18 minutes ago
WASHINGTON (Reuters) - The United States reimposes oil and financial
sanctions against Iran on Monday, significantly turning up the pressure on
Tehran in order to curb its missile and nuclear programs and counter its
growing military and political influence in the Middle East.
The move will restore U.S. sanctions that were lifted under a 2015
nuclear deal negotiated by the administration of President Barack Obama, and
add 300 new designations in Iran’s oil, shipping, insurance and banking
sectors.
President Donald Trump announced in May that his administration was
withdrawing from what he called the “worst ever” agreement negotiated by the
United States. Other parties to the deal, including Britain, France, Germany,
China and Russia, have said they will not leave.
Details of the sanctions will be released at a news conference scheduled
for 8:30 a.m. EST (1330 GMT) with Secretary of State Mike Pompeo and Treasury Secretary
Steven Mnuchin.
China, India, South Korea, Japan and Turkey - all top importers of
Iranian oil - are among eight countries expected to be given temporary
exemptions from the sanctions to ensure crude oil prices are not destabilized.
Morehttps://uk.reuters.com/article/us-usa-iran-sanctions/u-s-ratchets-up-pressure-on-iran-with-resumption-of-sanctions-idUKKCN1NA0DJ
"This crash is not going to have much effect on business."
Arthur Reynolds, Chairman of Continental Illinois Bank of Chicago, October 24, 1929
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Not the usual scoundrels
today. Today, the people who forecast this winter’s weather.
“It is
better to be roughly right than precisely wrong.”
Winter Outlook favors warmer temperatures for much of U.S.
Wet southern states to contrast drought in West
October 18, 2018
Additionally, El Nino has a 70 to 75 percent chance of developing. “We expect El Nino to be in place in late fall to early winter,” said Mike Halpert, deputy director of NOAA’s Climate Prediction Center. “Although a weak El Nino is expected, it may still influence the winter season by bringing wetter conditions across the southern United States, and warmer, drier conditions to parts of the North.”
El Nino is
an ocean-atmosphere climate interaction that is linked to periodic warming in
sea surface temperatures in the central and eastern equatorial Pacific. During
the winter, typical El Nino conditions in the U.S. can include
wetter-than-average precipitation in the South and drier conditions in parts of
the North.
Other climate patterns that can affect winter weather are challenging to predict on a seasonal time scale. The Arctic Oscillation influences the number of arctic air masses that penetrate into the South and could result in below-average temperatures in the eastern part of the U.S. The Madden-Julian Oscillation can contribute to heavy precipitation events along the West Coast – which could play a large role in shaping the upcoming winter, especially if El Nino is weak, as forecasters predict.
The 2018 U.S. Winter Outlook (December through February):
Temperature
·
Warmer-than-normal
conditions are anticipated across much of the northern and western U.S., with the
greatest likelihood in Alaska and from the Pacific Northwest to the Northern
Plains.
·
The Southeast,
Tennessee Valley, Ohio Valley and Mid-Atlantic all have equal chances for
below-, near- or above-average temperatures.
·
No part of the
U.S. is favored to have below-average temperatures.
More
Arctic Oscillation and Polar Vortex Analysis and Forecasts
October 29, 2018
Dr. Judah Cohen from Atmospheric and Environmental Research
(AER) recently embarked on an experimental process of regular research, review,
and analysis of the Arctic Oscillation (AO).
This analysis is intended to provide researchers and practitioners real-time
insights on one of North America’s and Europe’s leading drivers for extreme and
persistent temperature patterns.
----Summary
- The Arctic Oscillation (AO) is currently neutral and is predicted to quickly turn negative this week and then trend positive back to neutral for next week.
- The current neutral AO is reflective of mixed pressure/geopotential height anomalies across the Arctic and mixed pressure/geopotential height anomalies across the mid-latitudes. The North Atlantic Oscillation (NAO) is currently positive with negative pressure/geopotential height anomalies across Greenland and Iceland and is predicted to stay close to neutral through next week.
- Currently, troughing/negative geopotential height anomalies dominate much of Western and Central Europe with ridging/positive geopotential height anomalies in Eastern Europe. This will generate in northly flow and cold temperatures across much of Western Europe including the United Kingdom (UK) and mild temperatures in Eastern Europe. This pattern is predicted to mostly persist for the next two weeks.
- Troughing/negative geopotential height anomalies are predicted for Central Asia bookended by ridging/positive geopotential height anomalies in West and East Asia over the next two weeks. This will result initially in relatively cold temperatures for Western Siberia extending southwestward towards the Middle East that will slowly creep eastward over the next two weeks.
- Currently troughing/negative geopotential height anomalies with normal to below normal temperatures dominate eastern North America with ridging/positive geopotential height anomalies and above normal temperatures dominating western North America. However next week the pattern is predicted to weaken and in part retrograde westward allowing normal to below normal temperatures being pulled westward into the Western United States.
- In the Impacts section, I discuss what I am watching in the evolution of the polar vortex (PV) in the coming weeks and why I feel that the atmospheric background is currently favorable for a PV disruption.
More
The only function of economic forecasting is to make astrology look respectable."
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?
New tech delivers high-tech film that blocks electromagnetic interference
Cost-effective process used to make strong, flexible films that allow light in but keep electromagnetic interference out
Date:
November 1, 2018
Source:
NYU Tandon School of Engineering
Summary:
Researchers have fashioned low-cost EMI-blocking composite films, employing
spin-spray layer-by-layer processing (SSLbL), letting them produce high-quality
films in less time than traditional methods, such as dip coating.
Electromagnetic interference (EMI), which can harm smartphones, tablets,
chips, drones, wearables, and even aircraft and human health, is increasing
with the explosive proliferation of devices that generate it. The market for
EM-blocking solutions, which employ conductive or magnetic materials, is
expected to surpass $7 billion by 2022.
Andre Taylor, associate professor of chemical and biomolecular
engineering at the NYU Tandon School of Engineering, along with a team that
included Yury Gogotsi, Distinguished University and Charles T. and Ruth M. Bach
Professor Materials Science and Engineering at Drexel University, and Menachem
Elimelech, Roberto C. Goizueta Professor of Chemical & Environmental
Engineering at Yale University used an innovative technique to produce
relatively low-cost EMI-blocking composite films.
The study, "Layer-by-Layer Assembly of Cross-Functional
Semi-transparent MXene-Carbon Nanotubes Composite Films for Next-Generation
Electromagnetic Interference Shielding," appears in the October 31, 2018
issue of Advanced Functional Materials. Lead authors include Guo-Ming
Weng, a post-doctoral fellow at NYU Tandon, and Jinyang Li, associate professor
of materials science and engineering at Southwest Jiaotong University, Chengdu,
China.
To fashion the films, the team employed spin-spray layer-by-layer
processing (SSLbL), a method Taylor pioneered in 2012. The system employs
mounted spray heads above a spin coater that deposit sequential nanometer-thick
monolayers of oppositely charged compounds on a component, producing high
quality films in much less time than by traditional methods, such as dip
coating.
The process allowed them to fashion flexible, semi-transparent
EMI-shielding film comprising hundreds of alternating layers of carbon nanotube
(CNT), an oppositely charged titanium carbide called MXene -- a family of
carbide flakes first engineered by Gogotsi -- and polyelectrolytes. Taylor
explained that those charge characteristics confer benefits beyond EMI
shielding.
----"The
primary interest in adding carbon materials to shielding was to add conductive
pathways through the film," said Taylor. "But the SSLbL system is
also much faster than traditional dip coating, in which a component to be
shielded is repeatedly dipped in a material, rinsed, then dipped again in
another layer, and on and on. That takes days. Our system can create hundreds
of bi-layers of alternating MXene and CNT in minutes."
More
The monthly Coppock Indicators finished October.
DJIA: 25,116 +176 Down. NASDAQ:
7,306 +232 Down. SP500: 2,712 +146 Down. All three slow indexes went sharply down in
October, suggesting there’s more of the correction to come.
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