Wednesday, 28 November 2018

Will The Fed Cave In to Trump?


Baltic Dry Index. 1339 +122   Brent Crude 60.82

'Sorry losers and haters, but my I.Q. is one of the highest – and you all know it! Please don’t feel so stupid or insecure, it’s not your fault.'

Donald J. Trump.

We are rapidly approaching the month-end dress up the markets period in stocks, this month a vital month ending if the markets are to head of a wave of fund redemptions for year end. 

Rapidly approaching the G-20 meeting, where President Trump takes on all comers, but the main event is against China’s President Xi. The World’s leading debtor up against the world’s leading creditor. Will sanity prevail and President Trump defer or abandon his January 1st tariff increase from 10 percent to 25 percent? At this point it’s anyone’s guess, with media opinion swinging yes or no with each passing day. My guess is no.

It’s Federal Reserve Chairman speech day too. Will Chairman Powell buckle under President Trump’s latest assault on his independence? He’s now getting Trump’s blame for the stock market selloff and the General Motors layoffs. Might as well blame him for Brexit too.

Below, short term politics trumps reason and economics in our markets for now.

Asian shares tentative ahead of Trump-Xi meeting, Fed speech

November 28, 2018 / 12:34 AM
SYDNEY (Reuters) - Asian shares dithered on Wednesday and the dollar jumped to a near 1-1/2-year top as risk assets rowed back amid conflicting signals on prospects for de-escalating the Sino-U.S. trade dispute.

MSCI’s broadest index of Asia-Pacific shares outside Japan see-sawed between positive and negative territory and last was flat. Australian and South Korean stocks were both down 0.2 percent.
Japan’s Nikkei gained 0.7 percent. Chinese indices shed small early gains. The blue-chip index was flat. 

Asian markets had slipped on Tuesday after U.S. President Donald Trump told the Wall Street Journal it was “highly unlikely” he would accept China’s request to hold off on a planned increase in tariffs to 25 percent from 10 percent.

However, White House economic adviser Larry Kudlow sought to brighten the mood by confirming a dinner powwow between Trump and his Chinese counterpart Xi Jinping at an coming G20 gathering in Argentina. He also held open the possibility that the two countries would reach a trade deal.

The news boosted Wall Street’s main indexes, which finished in positive territory after spending much of the session in the red.

It was still unclear whether the two sides had agreed on a formal agenda for the leaders’ meeting after the G20 summit and Kudlow said there were no scheduled talks on the ground for their advisers.

At the same time, a German magazine reported citing EU sources that Trump could impose tariffs on imported cars from next week, sending European auto stocks sharply lower.

---- Investors will now turn attention to a speech on Wednesday by Federal Reserve Chair Jerome Powell for further clues on how many more times the U.S. central bank is likely to raise interest rates.

The event has become more critical as signs of a global slowdown and nearly two months of market volatility have clouded an otherwise rosy U.S. picture, prompting speculation the Fed will go slow on rate hikes next year.

Traders will watch the speech in light of Trump’s criticism of Powell in a newspaper interview in which the president said interest rates and other Fed policies were damaging the U.S. economy.
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Stock market’s selloff is only half-done, and final leg will come in 2019, warns Morgan Stanley strategist

By Sue Chang  Published: Nov 27, 2018 4:57 p.m. ET
Elon Musk’s cringe-inducing Twitter meltdown, the rise and fall of bitcoin, and the record-breaking oil plunge — for some 2018 can’t end soon enough. But be careful for what you wish for as the bear that has rampaged through the stock market is expected to return in the new year, according to one Wall Street strategist.

“The Rolling Bear market is now better understood by the consensus; and more importantly, it is better priced, with forward price/earnings falling 18% from peak to trough. In short, while 90% of the price damage has been done by this bear, we’ve likely only served 50% of the time,” said Mike Wilson, an equity strategist at Morgan Stanley, in a note to clients.

Wilson was among the handful of market watchers to predict the recent market wipeout even as stocks were trading at record levels.

“The Rolling Bear is tired from all the mauling he has done this year. However, he is likely just resting rather than hibernating,” he said. ”The final leg of this bear likely won’t come until numbers are reduced for 2019, although that should feel a lot less painful than the multiple compression stage we experienced in 2018.”

The S&P 500 SPX, +0.33% and the Dow Jones Industrial Average DJIA, +0.44% are poised to close out November in the red as worries about tighter liquidity resulting from the Federal Reserve’s interest-rate hikes and a trade war with China triggered an exodus from stocks.

The strategist predicted a rehash of this year in 2019, forecasting a price target of 2,750 for the S&P 500, with the index likely stuck between 2,650 and 2,800 for the bulk of the year.
More
https://www.marketwatch.com/story/stock-markets-selloff-is-only-half-done-and-final-leg-will-come-in-2019-warns-morgan-stanley-strategist-2018-11-27

Oil prices rise on North Sea outage, ahead of OPEC, G20 meetings

November 28, 2018 / 12:56 AM / Updated an hour ago
SINGAPORE (Reuters) - Oil prices rose by one percent on Wednesday ahead of an OPEC meeting next week at which the producer club is expected to decide some form of supply cut to counter an emerging glut.

The shutdown of Britain’s largest North Sea oilfield for repairs also supported prices, traders said.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $52.11 per barrel at 0448 GMT, up 55 cents, or 1.1 percent from their last settlement. 

International Brent crude oil futures LCOc1 were up 57 cents, or 1 percent, at $60.78 per barrel.

The Buzzard oilfield, which pumps about 150,000 barrels per day (bpd) has closed temporarily after the discovery of pipe corrosion. A smaller field linked to Forties, Total’s Elgin-Franklin, is also shut for maintenance. As a result, trade sources said three cargoes due to load in December had been cancelled.

Despite Wednesday’s rise, oil prices have still lost around 30 percent in value since early October, weighed down by an emerging supply overhang and by widespread weakness in financial markets.

The crude oil price slump since October is so far on par with the 2008 price crash and steeper than that of 2014/2015.

The Organization of the Petroleum Exporting Countries (OPEC) will meet at its headquarters in Vienna, Austria, on Dec. 6 to discuss output policy.

The OPEC-meeting will follow a gathering by the Group of 20 (G20) nations, which includes the world’s biggest economies, in Argentina this weekend, at which the Sino-American trade dispute as well as oil policy are expected to be discussed.

While most analysts expect some form of supply cut from the OPEC meeting, sentiment in oil markets remains negative.

---- A concern to global markets is a slowdown in global trade as a result of the Sino-American trade dispute, swelling debt and a strong dollar that puts pressure on emerging markets.

The World Trade Organization (WTO) said in its latest outlook, published on Tuesday, that “trade growth is likely to slow further into the fourth quarter of 2018”, with growth likely at its slowest since Oct. 2016.
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Finally, as we all await the coming G-20 showdown between President Trump and President Xi, President Trump puts guts above brains. I wonder what they make of that in Beijing, the Fed, the stock market or GM closing US manufacturing plants in part due to Trump tariffs on steel and aluminium.

Trump Says He’s ‘Not Even a Little Bit Happy’ With Fed’s Powell

By Mike Dorning
President Donald Trump renewed his attack on Federal Reserve Chairman Jerome Powell, telling the Washington Post he’s “not even a little bit happy” with his choice to head the central bank.

“So far, I’m not even a little bit happy with my selection of Jay,” Trump told the Post on Tuesday, using Powell’s nickname. “Not even a little bit.”

Trump, who has repeatedly criticized the Fed for its interest-rate increases, complained at length about Powell in the interview. He said the central bank’s policies are responsible for recent stock market declines and for GM’s announcement this week that it would close five factories in North America and lay off 14,000 workers next year, the Post reported.

“I’m doing deals and I’m not being accommodated by the Fed,” Trump told the Post. “They’re making a mistake because I have a gut and my gut tells me more sometimes than anybody else’s brain can ever tell me.”
More
https://www.bloomberg.com/news/articles/2018-11-27/trump-says-he-s-not-even-a-little-bit-happy-with-fed-s-powell?srnd=premium

(On the Duchess of Cambridge) 'Who wouldn’t take Kate’s picture and make lots of money if she does the nude sunbathing thing. Come on, Kate!'

Donald J. Trump.

Crooks and Scoundrels Corner

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

No crooked banksters or bent politicians today, today the start of a new oil growth industry? What goes up must come down? Well at least is safer than decommissioning old, spent out, nuclear plants.

Dismantling the oil industry: rough North Sea waters test new ideas

November 27, 2018 / 7:11 AM
LONDON (Reuters) - Scottish marine salvage group Ardent is adapting the tanks it used to refloat the Costa Concordia, the cruise ship wrecked off the Italian coast in 2012, to decommission North Sea oil platforms.

It is one of several companies trying new ideas to win business in the market for dismantling disused oil platforms. 

In Britain’s aging oil fields alone, the opportunities could be worth up to 17 billion pounds ($21.85 billion) before 2025, according to industry body Oil and Gas UK. The ideas could then be deployed to other maturing fields such as in the Gulf of Mexico and southeast Asia.

Ardent says it needs at least two companies to sign up for a project to get off the ground. Well-Safe, another company offering a new approach, also needs several operators to commit.

So far, Ardent has found it challenging to persuade companies to be the first to sign up.

“Everyone is queuing to be second,” said Ardent’s Decommissioning Director Stuart Martin.

Oil companies are keen to reduce costs in a part of the market dominated by major global players such as TechnipFMC (FTI.N), Schlumberger, Saipem (SPMI.MI) and AllSeas.

Beyond the floating tanks, Ardent has also joined forces with oil services firm WorleyParsons (WOR.AX) and technology and shipping group Lloyd’s Register, to bring a one-stop-shop service.

This could save money by cutting out the need for lots of different contractors. Well-Safe proposes coordinating decommissioning work across companies to share equipment and staff.

“You got to give Well-Safe and the others a real tip of the hat. We all want them to win. It’s in the best interest of the industry,” said Jim House, CEO of Neptune Energy, which is planning decommissioning for its Juliet and Minke fields in the North Sea.

Oil platforms are usually removed piece by piece and taken to the shore using complex vessels. The floating tanks that Ardent used to lift the Costa Concordia, are much cheaper to use, industry experts say.

But Ardent says it would need contracts for at least two buoyant tanks to go below current costs per ton of steel removed and three to get below its target cost reduction of around a third. Britain’s industry regulator, the Oil and Gas Authority, has set a target of 35 percent cost cuts compared with 2015 levels.

Well-Safe’s main lever for cost reduction also depends on several operators committing to contracts.
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'I had some beautiful pictures taken in which I had a big smile on my face. I looked happy, I looked content, I looked like a very nice person, which in theory I am.'

Donald J. Trump.

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?

Simulations suggest graphene can stretch to be a tunable ion filter

Date: November 26, 2018

Source: National Institute of Standards and Technology (NIST)

Summary: Researchers have conducted simulations suggesting that graphene, in addition to its many other useful features, can be modified with special pores to act as a tunable filter or strainer for ions (charged atoms) in a liquid. 

The concept, which may also work with other membrane materials, could have applications such as nanoscale mechanical sensors, drug delivery, water purification and sieves or pumps for ion mixtures similar to biological ion channels, which are critical to the function of living cells. The research is described in the November 26 issue of Nature Materials.

"Imagine something like a fine-mesh kitchen strainer with sugar flowing through it," project leader Alex Smolyanitsky said. "You stretch that strainer in such a way that every hole in the mesh becomes 1-2 percent larger. You'd expect that the flow through that mesh will be increased by roughly the same amount. Well, here it actually increases 1,000 percent. I think that's pretty cool, with tons of applications."

If it can be achieved experimentally, this graphene sieve would be the first artificial ion channel offering an exponential increase in ion flow when stretched, offering possibilities for fast ion separations or pumps or precise salinity control. Collaborators plan laboratory studies of these systems, Smolyanitsky said.

Graphene is a layer of carbon atoms arranged in hexagons, similar in shape to chicken wire, that conducts electricity. The NIST molecular dynamics simulations focused on a graphene sheet 5.5 by 6.4 nanometers (nm) in size and featuring small holes lined with oxygen atoms. These pores are crown ethers -- electrically neutral circular molecules known to trap metal ions. A previous NIST simulation study showed this type of graphene membrane might be used for nanofluidic computing.
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'The worst thing a man can do is go bald. Never let yourself go bald.'

Donald J. Trump.

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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