Baltic Dry Index. 1271 -08 Brent Crude 50.50
"I think it’s a tremendous
opportunity to buy. Really a great opportunity to buy."
President
Trump, Stock Bull. Christmas Day 2018.
With most global
markets reopening today after the Christmas break, the big question of the
remaining part of the month is rout or bounce? There’s little reason to expect
the FAANG led bull market to return, but a short covering bounce is possible,
given the US stock markets dramatic fall Monday in thin conditions and a shortened
trading day.
Will President Trump’s
stock advice be enough to tempt in any brave bargain hunters ahead of the year-end
itself? Then again, when was the last time a President said "sell stocks?" When was the first time?
Below, plenty of
reasons to be wary of any bounce. With the Democrats set to take over the House
of Representatives later next month, vowing revenge on President Trump for
defeating Hillary Clinton in 2016, US politics looks set to repeat 1973 – 74
and the hounding of President Nixon, a two year period that was anything but
good for US stocks or President Nixon.
Add in a slowing
global economy as the downside of the trade wars starts to bite, the countdown
to Brexit with or without an agreed exit deal, a rump-EU that’s becoming increasingly
disillusioned with its ruling elite, and a collapse in the oil price, as too
much supply exceeds a slowing demand and there’s little reason to expect the Fairy
Godmother to show up to send Cinderella to the ball.
"We
feel that fundamentally Wall Street is sound, and that for people who can
afford to pay for them outright, good stocks are cheap at these prices."
Goodbody
and Company market-letter quoted in The New
York Times, Friday,
October 25, 1929
Trump says U.S. government shutdown to last until agreement on border wall
December 25, 2018 / 3:48 PM
WASHINGTON (Reuters) - U.S. President Donald Trump on Tuesday said the
partial shutdown of the federal government was going to last until his demand
for funds to build a wall on the U.S.-Mexico border is met.
The U.S. government partially shut down on Saturday, and there is not
yet any sign of tangible efforts to reopen agencies closed by a political
impasse over Trump’s demand for border wall funds
“I can’t tell you when the government is going to reopen,” Trump said,
speaking after a Christmas Day video conference with U.S. troops serving
abroad. “I can tell you it’s not going to reopen until we have a wall, a fence,
whatever they’d like to call it. I’ll call it whatever they want, but it’s all
the same thing. It’s a barrier from people pouring into the country, from
drugs.”
He added: “If you don’t have that (the wall), then we’re just not
opening.”
Funding for about a quarter of federal programs - including the
departments of Homeland Security, Justice and Agriculture - expired at midnight
on Friday. Without a deal to break the impasse, the shutdown is likely to
stretch into the new year.
Building the wall was one of Trump’s most frequently repeated campaign
promises, but Democrats are vehemently opposed to it.
Stocks under a cloud as U.S. political tumult adds to growth anxiety
December 26, 2018 / 12:56 AM / Updated 2
hours ago
TOKYO
(Reuters) - Global stock markets headed into the year-end under a heavy cloud
after another rout this week as U.S. political uncertainty added to heightened
concerns over slowing global economic growth.
Asian equities were shaky on Wednesday following a Christmas eve Wall
Street plunge, as investors were unnerved by U.S. political developments
including a U.S. federal government shutdown and President Donald Trump’s
hostile stance towards the Federal Reserve chairman.
U.S. Treasury Secretary Steven Mnuchin had also raised market concerns
by convening a crisis group amid the pullback in stocks.
S&P 500 emini futures ESc1 moved in and out of the red and were last
down 0.1 percent, pointing towards a subdued start for Wall Street when the
U.S. market reopens after Christmas Day, when many of the world’s financial
markets were shut.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS
dipped 0.15 percent.
The Shanghai Composite Index .SSEC inched down 0.1 percent while South Korea's KOSPI .KS11 shed more than 1 percent.
Japan's Nikkei .N225 bounced 0.75 percent after diving 5 percent the previous day to a 20-month low and slipping into bear market territory.
“In addition to concerns towards the U.S. economy, the markets are now having to grapple with growing turmoil in the White House which has raised political risk ahead of the year-end,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.
More
China won't resort to massive monetary stimulus next year: central bank adviser Sheng
December 25, 2018 / 3:29 AM
SHANGHAI (Reuters) - China will not resort to “flood-like” stimulus in
monetary policy next year, although it will consider more cuts as needed to
reserves held at commercial banks, local media quoted a central bank adviser as
saying in a report on Tuesday.
The Chinese economy will face downward pressure in 2019, while the pace
of growth will gradually stabilize, the 21st Century Business Herald quoted
Sheng Songcheng, an adviser to the People’s Bank of China (PBOC), as saying.
“Monetary policy will remain prudent and won’t be a ‘flood’. Otherwise,
funds will likely flow into the property sector again,” Sheng was quoted as
saying by the state-backed newspaper.
---- China will bolster support next year for its economy, the world’s second-largest, by cutting taxes and keeping liquidity ample, the official Xinhua news agency said after last week’s Central Economic Work Conference, an annual closed-door gathering of party leaders and policymakers.
Sheng said China would embrace a proactive fiscal policy in 2019, with
the government’s budget deficit ratio likely to rise to 3 percent from this
year’s 2.6 percent.
More
China Cutting Tariffs On 700 Items Amid Push To Boost Imports By $30 Trillion
Published: December 24, 2018
As part of China's efforts to open its economy - something its leaders have
been touting at least since President Xi's keynote speech at the 2017 World
Economic Forum - Xi revealed on Monday a detailed breakdown of what
will be the third round of tariff reductions this year, measures that
were teased by President Xi during a speech nearly two months ago.The plans to spend more on foreign goods are part of China's plan to import an additional $30 trillion over the next 15 years as the world's second-largest economy continues its transition from an industrial powerhouse to a service-focused economy, according to Bloomberg.
In addition to the $30 trillion in goods (which is higher than the $24 trillion previously promised by Xi), China is also hoping to increase services imports by $10 trillion during the same period. The measures come as China is weighing whether to abandon its "Made in China 2025" initiative and speed up the liberalization of its economy and its openness to foreign competition as a means of reducing wasteful state-directed spending that has heavily contributed to the massive pile of bad debt swirling around China's corporate sector.
The
tariffs will have the added bonus of cutting costs for Chinese consumers at a
time when a dramatically weaker yuan is expected to stoke inflation. The
announcement follows a raft of disappointing economic data released earlier
this month raised
fears of a global recession (and sent stocks around the world
tumbling lower).
----- The lowered tariffs, which will impact some 700 goods, will take effect on Jan. 1. The "temporary" rates can be changed at will and also can be lower than the current most-favored nations levels, though these tariffs will also apply to goods imported from all WTO members.
Here's a breakdown of the tariff highlights courtesy of Bloomberg.
- With tariffs on U.S. soybeans stopping a key source of edible meal (often used for animal feed), China will implement zero tariffs on imports of a variety of meals including sunflower and canola.
- Some materials for pharmaceutical manufacturing will also be subject to zero tariffs, and taxes on high-tech imports will be set "relatively low," including at 1 percent for a type of generator for aircraft, and 5 percent for a type of welding robots used in car assembly lines.
- The ministry said MFN tariffs will be further cut for a wide-range of information technology imports starting from July 1, 2019, including for medical diagnosis machines, speakers and printers, according to a separate table on its website.
- The nation will also scrap export tariffs on 94 items of products starting from the new year, including fertilizers, iron ore, coal tar, and wood pulp. Export tariffs on these goods are as high as 40 percent currently.
- Imports from nations that have reached a trade pact with China will be levied at the rates agreed by both sides. China’s bilateral deals with New Zealand, Peru, Costa Rica, Switzerland, Iceland, South Korea, Australia, Georgia already included promises to further lower tariffs in 2019, as does the Asia-Pacific Trade Agreement.
- Imports from Hong Kong, Macau will also enjoy lower taxes.
More
Oil plunges 6 percent as economic slowdown fears grip market
December 24, 2018 / 1:27 AM
NEW
YORK (Reuters) - Oil prices plunged more than 6 percent to the lowest level in
more than a year on Monday, pulling back sharply late in the session as fears
of an economic slowdown rattled the market.
U.S. crude futures CLc1 and global benchmark Brent LCOc1 hit their
lowest levels since 2017 during the session, putting both benchmarks on track
for losses of about 40 percent in the fourth quarter.
“What’s happening in the stock market is raising fears that the economy
is grinding to a halt and thereby will basically kill any future oil demand,”
said Phil Flynn, an analyst at Price Futures Group in Chicago. “They’re pricing
in a slowdown in the economy if not a recession with this drop.”
The fourth-quarter price decline is likely to cause producers to
throttle back on their output, he said.
U.S. crude futures have hit the lowest level since June 22, 2017, as
jitters have grown about the impact of the escalating U.S.-China trade dispute
on global growth and crude demand. Brent crude is at its lowest level since
Aug. 17, 2017.
Markets across asset classes have come under pressure as the U.S.
government shutdown that began just after midnight on Saturday intensified
growth concerns. Investors have flocked to safe-haven assets such as gold and
government debt at the expense of crude oil and stocks.
A gauge of stocks worldwide hurtled toward an eighth straight decline on
Monday as investors ignored the U.S. Treasury secretary’s actions to reinforce
confidence in the economy and U.S. President Donald Trump criticized the
Federal Reserve as “the only problem our economy has.”
More
Time to stay safely
in the bunker, it seems to this old dinosaur commodities follower.
"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, in the New York
Herald Tribune, October
30, 1929
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over
banksters and politicians.
Below, just how bad Monday was.
"Hysteria
has now disappeared from Wall Street."
The Times of London, November 2, 1929
The stock market just booked its ugliest Christmas Eve plunge — ever
By Mark
DeCambre Published: Dec 24,
2018 2:32 p.m. ET
Never mind finding coal in your stocking for the holidays. Wall Street
investors scored a rare — and unwanted — gift this year.The S&P 500 index SPX, -2.71% fell by 2.7% Monday, marking the first session before Christmas that the broad-market benchmark has booked a loss of 1% or greater — ever.
----
That statistic has been confirmed by Dow Jones Market Data, which said the
largest decline in the index on the trading day before Christmas was Dec. 23 in
1933.
The
Dow Jones Industrial Average DJIA,
-2.91% finished down 653 points,
or 2.9%, representing its worst decline on the session prior to Christmas in
the 122-year-old blue-chip gauge’s history. Check out the table below from Dow
Jones Market Data:
----
It wasn’t pretty for the Nasdaq Composite Index COMP,
-2.21% either, with the
technology and internet-laden benchmark logging
a 2.2% loss. That also marked the worst Christmas Eve, or more
aptly, worst drop on the trading session just before Christmas in its shorter
history, with the next worst drop the 0.95% decline logged in 1973. The Nasdaq
began trading on Feb. 8, 1971.
More
Japan's Nikkei hits 20-mth low after Wall Street slide deepens
December 25, 2018 / 2:09 AM /
Updated 4 hours ago
TOKYO, Dec 25 (Reuters) - Japan’s
Nikkei slumped to a 20-month low on Tuesday after a deepening slide on Wall
Street heightened investors’ aversion to risk.
The Nikkei share average was down 4.57 percent at 19,247.08 as of 0146
GMT after brushing 19,206.06, its lowest since early May 2017.
The broader Topix was 4.55 percent lower at 1,420.31 after touching
1,420.82, its lowest since November 2016.
Wall Street stocks extended their steep sell-off on Monday, with the
S&P 500 dropping nearly 15 percent so far this month, as investors were
rattled by the U.S. Treasury secretary’s convening of a crisis group and by
other political developments.
“Negative sentiment has replaced logic, as is often the case during a
sell-off. A third of the selling is induced by panic, another third by
loss-cutting and the remaining third by speculators trying to make a profit
from the market rout,” said Takashi Hiroki, chief strategist at Monex
Securities in Tokyo.
“The sell-off is triggered almost entirely by developments in the U.S.
markets, rather than by negative factors unique to the domestic market.”
Treasury Secretary Steven Mnuchin called top U.S. bankers on Sunday amid
the pullback in stocks and said he was calling a meeting of financial
regulators to discuss ways to ensure “normal market operations”.
Wall Street also grappled with the U.S. federal government shutdown and
reports that President Donald Trump privately discussed the possibility of
firing the Federal Reserve chairman.
More
‘The worst is yet to come’: Experts say a global bear market is just getting started
Published Mon, Dec 24 2018 • 12:20 AM EST | Updated 4 hours ago
Volatility on Wall Street has led shares across the globe on a wild ride in
recent months, resulting in a number of stock markets dipping into bear territory.
That’s set to worsen in the new year, experts told CNBC on Monday.Bear markets — typically defined as 20 percent or more off a recent peak — are threatening investors worldwide. In the U.S., the Nasdaq Composite closed in a bear market on Friday and the S&P 500 entered one on Monday. Globally, Germany’s DAX and China’s Shanghai Composite have also entered bear market levels.
Major market risks remain, experts said. The Federal Reserve is likely to continue raising interest rates and worries about a global economic slowdown — made worse by a trade war between the U.S. and China — are mounting.
“I would love to be more optimistic but i just don’t see too many positives out there. I think the worst is yet to come next year, we’re still in the first half of a global equity bear market with more to come next year,” Mark Jolley, global strategist at CCB International Securities, told CNBC’s “Squawk Box.”
More
https://www.cnbc.com/2018/12/24/investing-global-bear-market-just-started-worse-to-come-in-2019.html
"The
end of the decline of the Stock Market will probably not be long, only a few
more days at most."
Irving
Fisher, Professor of Economics at Yale University, November 14, 1929
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?
Discovery could lead to munitions that go further, much faster
Date:
December 20, 2018
Source:
U.S. Army Research Laboratory
Summary:
Researchers have discovered a new way to get more energy out of energetic
materials containing aluminum, common in battlefield systems, by igniting
aluminum micron powders coated with graphene oxide.
Researchers from the U.S. Army and top universities discovered a new way
to get more energy out of energetic materials containing aluminum, common in
battlefield systems, by igniting aluminum micron powders coated with graphene
oxide.
This discovery coincides with the one of the Army's modernization
priorities: Long Range Precision Fires. This research could lead to enhanced
energetic performance of metal powders as propellant/explosive ingredients in
Army's munitions.
Lauded as a miracle material, graphene is considered the strongest and
lightest material in the world. It's also the most conductive and transparent,
and expensive to produce. Its applications are many, extending to electronics
by enabling touchscreen laptops, for example, with light-emitting diode, or
LCD, or in organic light-emitting diode, or OLED displays and medicine like DNA
sequencing. By oxidizing graphite is cheaper to produce en masse. The result:
graphene oxide (GO).
Although GO is a popular two-dimensional material that has attracted
intense interest across numerous disciplines and materials applications, this
discovery exploits GO as an effective light-weight additive for practical
energetic applications using micron-size aluminum powders (µAl), i.e., aluminum
particles one millionth of a meter in diameter.
The research team published their findings in the October edition of ACS
Nano with collaboration from the RDECOM Research Laboratory, the Army's
corporate research laboratory (ARL), Stanford University, University of
Southern California, Massachusetts Institute of Technology and Argonne National
Laboratory.
This new published work signals a beginning at ARL for the development
of functionalized particles as novel energetics under several new leveraged
programs led by Drs. Chi-Chin Wu and Jennifer Gottfried. ARL is leading joint
scientific efforts with the University of Tennessee, Texas Tech University,
Army Research, Development and Engineering Center at Picatinny, N.J., and with
the Air Force Research Laboratory establishing a new research avenue to develop
superior novel metal propellant/explosive ingredients to protect more lives for
the Army warfighters.
---- The team demonstrated the value of µAl/GO composites as potential propellant/explosive ingredients through a collaborative research effort led by Professor Xiaolin Zheng at Stanford University and supported by ARL's Dr. Chi-Chin Wu and Dr. Jennifer Gottfried. This research demonstrated that GO can enable the efficient ignition of µAl via an optical flash lamp, releasing more energy at a faster rate -- thus significantly improving the energetic performance of µAl beyond that of the more expensive nanometer-sized Al powder. The team also discovered that the ignition and combustion of µAl powders can be controlled by varying the GO content to achieve the desired energy output.
More
https://www.sciencedaily.com/releases/2018/12/181220104652.htm?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+sciencedaily%2Fmatter_energy%2Fgraphene+%28Graphene+News+--+ScienceDaily%29
"I see nothing in the present
situation that is either menacing or warrants pessimism... I have every
confidence that there will be a revival of activity in the spring, and that
during this coming year the country will make steady progress."
Andrew W. Mellon, U.S. Secretary of the
Treasury December 31, 1929
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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