Baltic Dry Index. 1271 Brent Crude 53.08
All you need is faith, trust and a little bit of pixie dust.
The PPT,
with apologies to Peter Pan.
Day two of President
Trump’s re-election campaign was almost as spectacular as day one. The Dow
Industrials swung from a 600 point decline to close with a 260 point gain. It’s
amazing what HFT algo thieves frontrunning the Treasury Secretary’s Plunge
Protection Team can accomplish. President Trump clearly wants to be judged by
the performance of stocks.
One has to have great
sympathy for the poor Democrats, just days away from taking over the House of
Representatives and embarking on the persecution of President Trump, in the
lead up to the Democrats either impeaching him for defeating Hillary Clinton,
or forcing him not to stand at the next election.
Who knew President
Trump had a secret nuclear team of stock resurrection men.
Below, Marketwatch
covers yesterday’s Miracle on Wall Street. How it all ends is anyone’s guess,
but my guess is that the ending won’t be pretty.
So
come with me where dreams are born and time is never planned. Just think of
happy things and your heart will fly on wings forever in never never land.
The PPT,
with apologies to Peter Pan.
Stocks stage huge turnaround to end higher, with Dow swinging more than 800 points
Blue-chip gauge fell more than 600 points at session low
Volatility continued to reign Thursday, with stocks erasing heavy losses to end higher in a late-session turnaround that saw the Dow Jones Industrial Average end more than 800 points above its session low.The rebound came after stocks initially struggled to build on the previous session’s sharp rally, which in turn was a snapback from the worst Christmas Eve performance in history.
The Dow Jones Industrial Average DJIA, +1.14% rose 260.37 points, or 1.1%, to end at 23,138.82, after dropping as much as 611 points at its session low. The S&P 500 SPX, +0.86% also erased a sharp decline to rise 21.13 points, or 0.9%, finishing at 2,488.83. The Nasdaq Composite COMP, +0.38% erased a loss of more than 3% to close at 6,579.49, a gain of 25.14 points, or 0.4%.
On a percentage basis, the Dow’s move from a 2.67% decline at its session low to a positive finish marked its biggest such intraday swing since Oct. 4, 2011, when it recovered from a fall of 2.75% at its low, according to Dow Jones Market Data. The Thursday turnabout was the largest such swing for the S&P 500 since May 25, 2010, and the largest for the Nasdaq since Nov. 18, 2008.
On Wednesday, the Dow ended with a gain of 1,086.25 points, or 5%, at 22,878.45. The S&P 500 soared 5% to end at 2,467.70 and the Nasdaq rose 5.8% to 6,554.36.
The Dow’s Wednesday rebound marked its largest-ever one-day point rise. On the more relevant percentage basis, all three major indexes logged the strongest one-day gains since March 23, 2009, and it was the best-ever day-after-Christmas performance for the equity gauges. It comes on the heels of a brutal selloff in a shortened Christmas Eve session Monday, which featured the lowest closes for all three indexes since 2017.
Light holiday trading volume and computer-driven trading have been blamed for extremely choppy December price action, which has seen a number of sharp daily moves and a rise in volatility. Stocks remain down sharply for the month and lower for the year, with the Nasdaq Composite in a bear market and the S&P 500 and Dow solidly in correction territory.
There has been little in the way of fresh fundamental catalysts. The rebound was broad-based, with the materials sector leading gains with a 1.8% rise, while the health-care, energy, consumer staples and industrials sectors rising more than 1%.
While investors got an assurance over Federal Reserve Chairman Jerome Powell’s job on Wednesday, there remains no resolution to other big issues, such a continuing government shutdown as Washington tussles over funding for President Donald Trump’s proposed border wall.
There was upbeat news for global trade, with the U.S. expected to send a delegation to hold talks with Chinese officials during the week of Jan. 7, according to Bloomberg News. It would mark the first meeting since the G-20 summit in Argentina earlier this month, which yielded a 90-day tariff truce.
However, trade optimism might be tempered by a report from Reuters that the Trump administration is moving closer to issuing an executive order in the new year that would ban U.S. companies from using telecommunications equipment made by China’s Huawei and ZTE 000063, -2.51% .
Investors likely took some comfort in the market’s ability to come back from the day’s initial decline as analysts sought to make sense of Wednesday’s surge.
“Such rallies are not uncommon in troubled times, and we have experienced many of them in past bear markets. To call for a bottom, we need at least a couple of days of strength, not just in price, but also in trading volume, breadth of the market, and fundamentally supported environment,” said Hussein Sayed, market strategist at FXTM, in a note.
West Texas Intermediate crude prices CLG9, +2.35% fell nearly 3% to $44.86 a barrel, after snapping back by 8% on Wednesday.
European stock markets reopened Thursday with losses after an extended Christmas break.
In Asia, the Nikkei 225 index NIK, -0.37% soared 3.9%, though China’s Shanghai Composite Index SHCOMP, +0.15% eased 0.6%.
more
‘Completely Bizarre’ Stock Moves Leave Traders Scratching Heads
By Abhishek Vishnoi, Min Jeong Lee, and Matthew Burgess
·
·
Some Asia traders decide to stay out of the
stock market
Elsewhere, away from the magic of Wall Street, a
grimmer reality prevails.
Nissan to cut China auto output over three months as demand slows - source
December 28, 2018 / 3:56 AM
TOKYO (Reuters) - Nissan Motor Co (7201.T) plans to cut vehicle production in
China by 30,000 units in the coming months, a person briefed on the matter told
Reuters, as global automakers grapple with falling demand in the world’s
biggest car market.
After Ford Motor Co (F.N) and Hyundai Motor Co (005380.KS), Nissan becomes the latest
automaker to cut production in the country, where slowing economic growth and a
crippling trade war with the United States have pummelled vehicle sales in the
past few months.
Nissan plans to cut production in China by a total of 30,000 units
during the December-February period from its initial output plans, said the
person who declined to be identified as the plans are not public.
Automakers set initial plans on how many vehicles to produce at each of
their plants. These plans can be modified due to demand, supply chain issues
and other factors. It was not known how much Nissan had planned to produce in
the three months.
---- Japan’s Nikkei business daily reported late on Thursday that Nissan plans to cut production at three plants in China, including one in Dalian, where it produces the popular Qashqai and Infiniti QX50 SUV crossover models, and in Zhengzhou, where it makes the X-Trail SUV crossover, one of its top-selling models, and Venucia brand models.
A Nissan spokeswoman in Beijing declined on Friday to comment on future
production plans.
China is Nissan’s second-largest market, accounting for roughly
one-quarter of its annual global vehicle sales. It sold 1.5 million vehicles in
China last year, and earlier this year said it planned to boost sales to 2.6
million units by 2022, making China its biggest market in terms of vehicle
sales.
But a stretch of booming demand for cars in China seems to have come to
an end, with the market on track to post a fall in annual sales for the first
time since at least 1990. Nissan’s group sales in China rose 3.9 percent in the
January-November period, slowing from a 12 percent jump a year ago.
More
ECB sees global economic slowdown in 2019
December 27, 2018 / 9:10 AM
FRANKFURT (Reuters) - The global economy is set to slow down in 2019 and
stabilise thereafter, the European Central Bank said on Thursday, while still
expecting prices to rise.
Investors have been bracing for a worldwide slowdown in economic growth,
mainly driven by higher borrowing costs for dollar debtors and trade tensions
between the United States and China.
The ECB threw its weight behind that expectation in its regular economic
bulletin, but still saw “inflationary pressures” globally and in the euro zone.
“Looking ahead, global economic activity is expected to decelerate in
2019 and remain steady thereafter,” the ECB said.
“Global inflationary pressures are expected to rise slowly as spare
capacity diminishes.”
The bulletin illustrated the ECB’s decision at its December meeting to
end its 2.6 trillion euro ($2.96 trillion) bond-buying programme but continue
reinvesting the money it receives from maturing paper for a long time after its
first rate hike.
The decision was criticised by some as untimely given the weakening
economy. But the ECB, whose sole objective is hitting its inflation target,
reaffirmed its confidence that core prices would continue to rise in the euro
zone.
“Underlying inflation is expected to increase gradually over the medium
term, supported by the ECB’s monetary policy measures, the continuing economic
expansion and rising wage growth,” the ECB said.
Sears may be down to its last 24 hours. Iconic retailer likely liquidates if no bid comes in tomorrow.
|
Sears, the 125-year-old icon, has 24 hours to survive.The employer of more than 68,000 filed for bankruptcy in October. Its last shot at survival is a $4.6 billion proposal put forward by its chairman, Eddie Lampert, to buy the company out of bankruptcy through his hedge fund, ESL Investments. ESL is the only party offering to buy Sears as a whole, people familiar with the situation tell CNBC. Without that bid or another like it, liquidators will break the company up into pieces.
But as Lampert stares down a deadline of Dec. 28 to submit his offer, he is quickly running out of time. As of Thursday afternoon, Lampert had neither submitted his bid, nor rounded up financing, the people familiar said. Should Lampert submit a bid, Sears’ advisors would have until Jan. 4 to decide whether he is a “qualified bidder.” Only then, could ESL take part in an auction against liquidation bids on Jan. 14.
It is possible Lampert, Sears’ largest investor, secures financing in time to meet the deadline, these people said. The hedge fund manager turned retailer has managed last-minute feats before. Due to requirements by the Securities and Exchange Commission, Lampert will be required to make his bid public. That stipulation that could sway him to prolong the filing until its exact deadline of 4:00 p.m. ET Friday.
More
Oh, the cleverness of me.
The PPT,
with apologies to Peter Pan.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over
banksters and politicians.
Today, “deficits don’t matter,” famously said Vice President Cheney,
until suddenly one day they do.
The U.S.'s interest payments are about to skyrocket. Does it matter?
The Fed's interest rate hikes are doing more than hitting consumers in the credit cards. They're also making it much more expensive for the U.S. to carry its debt load.While they're not currently a subject of President Trump's Twitter outrage, America's interest payments have become a point of concern for some on Wall Street. Those payments are projected to triple to more than $600 billion by 2023, reflecting rising interest rates as well as the exploding deficit. That figure approaches the amount the U.S. spends on national defense every year, and dwarfs what it spends on agriculture, Medicaid, income security and veterans' programs, to name just a few.
"Rarely have deficits risen when the economy is booming. And never
in modern U.S. history have deficits been so high outside of a war or recession
(or their aftermath)," the Committee for a Responsible Federal Budget
wrote in a recent blog post.
In the first full year of Donald Trump's presidency, the federal deficit
rose to its highest level in six years. Next year, it's projected to rise even
higher.
Is this historic abnormality a problem? Some economists think so. The
Congressional Budget Office warned about the debt in its latest budget
projection. "[H]igh and rising debt would have serious negative
consequences for the budget and the nation," the CBO wrote, adding that
high debt makes a fiscal crisis more likely and leaves less room for lawmakers
to change tax and spending policies to help solve a crisis.
Former Trump White House Economic Adviser Gary Cohn echoed these fears last week. "We have a huge debt and deficit problem," Cohn said on "CBS This Morning," while claiming the deficit was unrelated to the substantial tax cuts he orchestrated last year.
A recent Moody's analysis noted that persistent high debt, among other factors, would lead to "persistent deterioration in the U.S.'s fiscal strength over the next 10 years." Because it's the world's largest economy and the dollar is the world's favorite reserve currency, the U.S. is better positioned to withstand debt levels that might send a smaller economy reeling, William Foster, senior credit officer at Moody's, told CBS MoneyWatch. But it still wouldn't be great for the country's long-term financial health.
"We don't know how that would impact the U.S., but it would impact the [credit] rating itself, potentially," Foster said.
More
https://www.cbsnews.com/news/u-s-national-debt-interest-costs-are-about-to-skyrocket-does-it-matter/
Clinton Treasury Secretary ups chances of recession before 2020
December 26, 2018
The markets aren't looking good, but former Treasury Secretary Lawrence Summers says not to panic ... yet.
Amid a month of falling stocks, Summers cautioned that "weak markets" don't necessarily mean "economic disaster is around the corner." Still, he's increasing his prediction of a recession from "a bit less than 50 percent" to 60 percent, he tweeted Wednesday.
Summers served as former President Bill Clinton's Treasury Secretary and directed the National Economic Council under former President Barack Obama. In tweets Wednesday, he cited the assertion of Robert Rubin, his predecessor at the Treasury Department, that "markets go up, markets go down" to describe slumping stocks. President Trump shouldn't have claimed credit for August's roaring markets, Summers said. But seeing as "one can see essentially no trace of even the 1987 crash in economic data," Summers said we should remember "markets are noisy, flawed predictors of the economy."
Still, Summers went on to say that before December's tanking market he predicted a "bit less than 50 percent" chance of a recession starting next year. He's now increased those odds to 60 percent.
Stock markets are still on track for their worst December performance since the Great Depression, especially after an unprecedented Christmas Eve drop.
“Dreams
do come true, if only we wish hard enough. You can have anything in life if you
will sacrifice everything else for it.”
President Trump, with
apologies to Peter Pan.
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?
Chinese Researchers Claim Wind Resources Are Dwindling
“The results show that surface wind speeds were decreasing in the past four decades over most regions in the Northern Hemisphere.”
Jason DeignDecember 26, 2018
The amount of wind power available to onshore turbines appears to have
dropped across the Northern Hemisphere, Chinese research unveiled this month.
A team from the Beijing-based Chinese Academy of Sciences, along with a
researcher from Purdue University in the U.S., analyzed data from more than
1,000 weather stations worldwide and found 67 percent had experienced a
significant decrease in wind power potential since 1979.
The effect was strongest in Asia, where the team estimated about 80
percent of locations had seen a 30 percent drop or more in available hub-height
wind power.
In Europe, roughly half of all locations had seen a similar drop, while
in North America around 30 percent of sites had seen a 30 percent fall in wind.
“The results show that surface wind speeds were decreasing in the past four decades over most regions in the Northern Hemisphere,” said the team in a paper published in Energy in November and announced by the Chinese Academy of Sciences this month.
In China, which has the world’s largest installed wind energy capacity, the regions with the strongest decrease tended to be those with the most abundant resources and “where a number of gigantic commercial wind farms were built,” said the paper.
Corresponding author Dr. Gang Huang told GTM the team is now conducting a follow-up study to investigate possible reasons for the drop.
Factors such as land use and surface cover changes could be to blame, he said. The expansion of cities could be affecting wind speeds in developing countries such as China and India. “Those are all assumptions, though,” he said.
In a Chinese Academy of Sciences press release, lead author Qun Tian said the study compared observed long-term changes in wind energy against those predicted by global climate models.
“The climate models have a notable deficiency in simulating wind energy,” Tian said.
Nevertheless, a simulation-based study published in Nature Geoscience a year ago did predict that increases in carbon dioxide emissions would lead to decreases in wind power across the Northern Hemisphere mid-latitudes.
The study, led by Kristopher Karnauskas of the Department of Atmospheric and Oceanic Sciences at the University of Colorado in Boulder, predicted there would also be increases across the tropics and Southern Hemisphere, with substantial regional variations.
The Global Wind Energy Council and the European wind industry body WindEurope both declined to comment on the Chinese study.
But Geoffrey Taunton-Collins, senior analyst at specialist renewable energy insurance provider GCube, said: “It should be of particular concern to operational wind farms whose financials are based on resource estimates which don’t factor in lower future wind speeds.”
More
https://www.greentechmedia.com/articles/read/chinese-researchers-claim-global-wind-resources-are-dwindling#gs.Q4mPfUw
Once again, another year draws
to a close and it’s time for my annual appeal. If you are one of the regular
LIR readers of this usually six days a week update, that helps support my
efforts with the occasional donation via the Paypal button, once again I
sincerely thank you. A special thanks this year to the very kind reader that so
generously helped me with my vet bills for the operation on my late border
collie Rosie. After 12 years, Christmas won’t be the same without Rosie.
If you are a regular reader who finds the LIR
informative, interesting, occasionally amusing or entertaining, please consider
making a small donation via the Paypal button on the right of the LIR website.
For obvious reasons in our new age of mainstream media fake news, I want to
keep the LIR advertising free. But in any event thank you for reading and
sending along helpful articles and suggestions.
The monthly Coppock Indicators finished November.
DJIA: 25,538 +157 Down. NASDAQ:
7,331 +205 Down. SP500: 2,760 +129 Down.
All three slow indicators are
signalling more correction to come, although not necessarily ahead of the
year-end. However, if a tidal wave of stock fund redemptions hits in December,
2018 could end in a great rising wave of panic selling into a generally thin
markets trading year-end.
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