Baltic Dry Index. 1217 +124 Brent Crude 60.16
“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
Following last weeks
stock market rout, the perma-bulls were out again promoting and testing “buy
the dip” in an effort to dress up the month-end figures, from appalling to bad,
and so hopefully prevent a tidal wave of fund redemptions hitting at year end.
To this old dinosaur market
watcher, it looks far more like a dead cat bounce in US stocks, bouncing off
the January – March support. 2019 is not shaping up to be a repeat of 2017 and
2018. 2019 is shaping up to be a year of Trump’s 25 percent tariffs, rising
interest rates albeit with some relief from the falling crude oil price and a
year of falling US capex and stock buybacks, as the effect of the Trump tax
cuts ends.
Add in political gridlock,
and a Democratic run House looking to get even with President Trump for
dethroning “President” Hillary Clinton, and next year looks to be more like 1974 and
the crusade against President Nixon, just with vicious trade war on top.
Below, the dead cat
bounce Trumped.
Asia puts brave face on Trump threat, oil subdued
November 26, 2018 / 10:38 PM
SYDNEY (Reuters) - Asian share markets
fought to keep a global rebound alive on Tuesday after U.S. President Donald
Trump seemed to quash hopes of a trade truce with China, clouding what had been
a bright start to the week.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dithered either side of flat and was last up 0.2 percent. E-Mini futures for the S&P 500 ESc1 dipped 0.1 percent and spreadbetters pointed to a subdued start for the major European Bourses.
In an interview with the Wall Street Journal, Trump said he expects to move ahead with raising tariffs on $200 billion in Chinese imports to 25 percent from 10 percent currently.
Trump said it was “highly unlikely” he would accept China’s request to hold off on the increase, planned for Jan. 1.
The comments ran counter to recent speculation about a possible deal when Trump meets Chinese President Xi Jinping at the G20 summit in Buenos Aires later this week.
“Trump’s pessimistic view on the chances of a game-changing China trade
deal may puncture global equity markets’ optimistic start to the week,” said
Sean Callow, a senior FX analyst at Westpac in Sydney.
“Combined with last week’s harsh report from the U.S. trade
representative, investors have only the flimsiest hope that the Trump-Xi
meeting in Argentina will amount to more than a hill of soybeans.”
----
Shares in Apple Inc (AAPL.O) fell after-hours in reaction to
Trump’s comments that tariffs could also be placed on laptops and iPhones
imported from China.
---- In commodity markets, oil prices laboured with record production by Saudi Arabia. Oil had climbed nearly 3 percent on Monday but that was seen as largely a technical correction after weeks of heavy losses, driven both by oversupply and demand worries.
U.S. crude CLc1 was off 9 cents at $51.54 a barrel, while Brent LCOc1
futures inched up 3 cents to $60.51.
More
Trump Signals U.S. Likely to Go Ahead With China Tariff Increase
By Sarah McGregor
Updated on 27 November 2018, 03:05 GMT
President Donald Trump said he’ll likely
push forward with plans to increase tariffs on $200 billion of Chinese goods,
indicating he would also slap duties on all remaining imports from the Asian
nation if negotiations with China’s leader Xi Jinping fail to produce a trade
deal.
Trump, in an interview with the Wall Street Journal published Monday, said he’s prepared to impose tariffs on a final batch of $267 billion of Chinese shipments if he can’t make a deal with Xi when they meet at the Group of 20 meeting in Argentina, which starts Nov. 30. The rate could be either 10 percent or 25 percent, Trump said.
Trump said that Apple Inc.’s iPhones and laptops imported from China could be hit by new tariffs. Americans could “very easily” handle a 10 percent duty, he said.
The only deal the U.S. will accept is for China to open up its economy
to allow American companies to compete fairly, Trump said.
“The only deal would be China has to open up their country to
competition from the United States,” the president said, according to the
newspaper. “As far as other countries are concerned, that’s up to them.”
---- "This is largely a negotiation tactic," said Tao Dong, vice chairman for Greater China at Credit Suisse Private Banking in Hong Kong. "Putting high stakes pressure onto the other side seems to be a consistent pattern from the Trump administration."
The U.S. already imposed tariffs on $50 billion on Chinese products
earlier this year, which Beijing retaliated against on a dollar-for-dollar
basis. China has since added retaliatory duties on an additional $60 billion of
American products.
Chinese
officials have said their key outcome from the Trump-Xi meeting is to convince
the U.S. to hold off from the tariff increase, the Wall Street Journal
reported, without identifying the officials.
More
Capital-Spending Slowdown Flashes a Warning for 2019 U.S. Growth
By Sho Chandra and Liz McCormick
Juiced by President Donald Trump’s tax cuts, business investment helped
deliver a robust U.S. economy in the first half of 2018, but signs have
multiplied that the growth driver is faltering.
Companies face tariff-related uncertainty, cooling global demand and
rising borrowing costs, while plunging oil prices are menacing the energy
sector. Meanwhile, the U.S. and China are settling in for a protracted trade
war, the boost from lower taxes is projected to fade next year and a
politically divided Congress will probably shirk from additional stimulus.
These challenges will test corporate
America’s appetite to invest in the kind of faster-growth, higher-productivity
future the Trump administration has promised. While such spending picked up in
early 2018 after plodding along for years, a string of weak reports raises
questions about the outlook. With firms using tax savings for buybacks and dividends rather than
investment, the best gains may already be over.
Juiced by President Donald Trump’s tax cuts, business investment helped deliver a robust U.S. economy in the first half of 2018, but signs have multiplied that the growth driver is faltering.
Companies face tariff-related uncertainty, cooling global demand and rising borrowing costs, while plunging oil prices are menacing the energy sector. Meanwhile, the U.S. and China are settling in for a protracted trade war, the boost from lower taxes is projected to fade next year and a politically divided Congress will probably shirk from additional stimulus.
These challenges will test corporate America’s appetite to invest in the kind of faster-growth, higher-productivity future the Trump administration has promised. While such spending picked up in early 2018 after plodding along for years, a string of weak reports raises questions about the outlook. With firms using tax savings for buybacks and dividends rather than investment, the best gains may already be over.
Cummins Inc., Whirlpool Corp., Caterpillar Inc. and Stanley Black & Decker Inc. recently cited higher costs from the trade war. The strength of capital expenditures -- or capex -- may be the key to determining whether U.S. growth can continue outpacing peers, how much higher the Federal Reserve can raise interest rates, and whether the dollar’s value will keep rising.
“Capex is the No. 1 story,” said David Woo, head of global rates and foreign exchange strategy at Bank of America Corp. “There are hundreds of data points coming out every month but that’s the one that I watch,” and bond traders should too.
The trade war and likely political gridlock after the midterm elections pose “the biggest uncertainty for capex and therefore U.S. rates and the U.S. dollar,” said Woo, who’s analyzed the economy and markets for almost a quarter century.
More
Finally,
some US reality.
Watch: Six Years Ago Obama Promised to Buy a Chevy Volt. Now It Is Dead
26 Nov 2018Six years ago, President Barack Obama promised to buy a Chevy Volt after his presidency.
“I got to get inside a brand-new Chevy Volt fresh off the line,” Obama announced to a cheering crowd of United Auto Workers activists. “Even though Secret Service wouldn’t let me drive it. But I liked sitting in it. It was nice. I’ll bet it drives real good. And five years from now when I’m not president anymore, I’ll buy one and drive it myself.”
Now it looks like Obama will not get his chance to make good on the promise. General Motors announced Monday that it would cease production of the hybrid electric plug-in Volt and its gas-powered sister car the Cruze. The announcement came as part of a larger restructuring by the car company as it seeks to focus production around the bigger vehicles in favor with U.S. consumers.
https://www.breitbart.com/economy/2018/11/26/watch-six-years-ago-obama-promised-to-buy-a-chevy-volt-now-it-is-dead/
GM Takes Painful Measures to Avoid Another Near-Death Experience
By David Welch and John Lippert
26 November 2018, 21:48 GMT
What’s good for America hasn’t been so good for General Motors Co.
With gasoline prices falling and new electric cars beckoning, consumers are abandoning the conventional sedans that have defined the U.S. auto industry since the days of Henry Ford. Scarred by a financial crisis a decade ago, GM is moving unusually fast this time to reckon with the new reality, and Wall Street is applauding the move.
News Monday that GM would cut more than 14,000 jobs and, like Ford Motor Co., pull back from conventional sedans thrilled investors, sending the shares up 4.8 percent and lifting other automaker stocks. The largest U.S. automaker is cutting seven plants and eliminating unpopular sedan models during a time when auto sales remain brisk, a sign that Chief Executive Officer Mary Barra is making changes now before an economic downturn forces her hand.
“In the past, GM management didn’t react as quickly -- they went through
a sort of slow-speed crash that culminated in 2009 bankruptcy, and that’s a
lesson that was hard-learned,” said Maryann Keller, an independent auto analyst
in Stamford, Connecticut, who’s written several books about the company. “This
is a cyclical, highly competitive, slow-growing business. You can’t continue
producing unprofitable vehicles, especially when you’re making crazy
investments in mobility service business with no potential for profit in the
foreseeable future.”
Morehttps://www.bloomberg.com/news/articles/2018-11-26/gm-takes-painful-measures-to-avoid-another-near-death-experience?srnd=premium
"This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan... that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years."
R. W. McNeal, market analyst, as quoted in the New York Herald Tribune, October 30, 1929
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
In European trade war news,
President Trump fired a broadside at HMS May and the Juncker Europa, straddling
the Europa and scoring direct hits on the HMS May, leaving it on fire and
drifting aimlessly.
Trump says Brexit agreement may hamper U.S.-British trade; UK differs
November 26, 2018 / 8:04 PM
WASHINGTON (Reuters) - U.S. President Donald Trump said on Monday the
agreement allowing the United Kingdom to leave the European Union may make
trade between Washington and London more difficult, but the UK prime minister’s
office disputed his interpretation.
Trump told reporters outside the White House that the deal sounded like
it would be good for the European Union, but “I think we have to take a look
seriously whether or not the UK is allowed to trade.
“Because right now if you look at the deal, they may not be able to
trade with us,” he said. “And that wouldn’t be a good thing. I don’t think they
meant that.”
He said he hoped British Prime Minister Theresa May would be able to
address the problem, but he did not specify which provision of the deal he was
concerned about.
A spokeswoman for May’s office said the agreement struck with the EU
allowed the UK to sign trade deals with countries throughout the world,
including with the United States.
“We have already been laying the groundwork for an ambitious agreement
with the U.S. through our joint working groups, which have met five times so
far,” the spokeswoman said.
Under the deal secured with EU leaders on Sunday, the UK will leave the
bloc in March with continued close trade ties. But the odds look stacked
against May getting it approved by a divided British parliament.
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?
No update today. More tomorrow.
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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