Baltic Dry Index. 1271 Brent Crude 53.35
Stocks
take the escalator up and the elevator down.
Wall
Street Adage.
Led by wobbly Asian
markets, ex-Japan which is closed, and supported by weakening crude oil prices
suffering from slowing Asian demand and rising US oil production, our stock
elevator is resuming down again at the start of 2019. President Trump needs to
declare trade war victory over China and the EU fast, and get some semblance of
stability back in the global economy.
Tomorrow the
Democrats take over the House of Representatives, and start their first phase
in the persecution of President Trump for having effrontery of defeating “Madam
President Clinton” in 2016. A repeat of the hounding of President Nixon
1973-1974 lies directly ahead. A period that was far from good for US stocks.
Below, the elevator
operator, yes they used to exist, says “going down.”
Don’t
fight the Fed.
Wall
Street Adage.
Asia Stocks Fall as China Data Hits New Year Start: Markets Wrap
By Andreea Papuc
Updated on 2 January 2019, 04:27 GMT
·
S&P 500 futures sink after gauge has worst
December since 1931
·
Aussie dollar drops, oil retreats; yen leads
havens higher
Declines spread from Hong Kong to Sydney after a closely watched Chinese manufacturing gauge showed factory conditions slumping in December amid the prolonged U.S.-China trade war. S&P 500 Index futures reversed an advance spurred by signs U.S. President Donald Trump may be more willing to make a deal to end a government shut down. European futures also declined.
Risk
aversion returned after the S&P 500 ended the worst year for U.S. stocks
since 2008 with a narrow gain in thin pre-holiday trading Monday on optimism
about a deal on trade between the U.S. and China. Treasuries won’t trade
because of a holiday in Japan for most of this week.
Stocks around the world limped into the end of a dismal year that’s seen
bear markets in equities from Japan to Germany. The MSCI Asia Pacific Index
declined 16 percent last year, the most since 2011. The S&P 500 had its
worst December rout since 1931, ending the month down 9.2 percent. That monthly
rout capped a 6.2 percent slide in the year, the biggest of the record bull
market. The 10-year Treasury yield slid to 2.68 percent, the lowest since
February.
The Chinese manufacturing gauge had its lowest reading since May 2017,
signaling a contraction as it fell below a reading of 50. The Australian dollar
tumbled and oil gave up early gains.
More
Opinion: For the 2019 economic outlook, don’t watch the stock market, watch the Fed
By Caroline Baum
Published: Jan 1, 2019 8:23 a.m. ET
Risks are mounting, but long expansion could continue if Fed doesn’t invert the yield curve
An ugly, year-end stock-market selloff and the return of volatility has
put the economic expansion, soon to be the longest on record, under the
microscope. Cyclical sectors, such as housing, are slowing, as the Federal
Reserve raises interest rates.
The risks to the economy seem to be multiplying, from trade tensions to
national security threats to a president who prefers to conduct the nation’s
affairs via Twitter.
The question everyone is asking is: Are the gut-wrenching ups and downs
in the U.S. stock market just noise? Or is the flirtation with a bear market an
early warning sign of what the U.S. economy can expect in 2019?
The Fed will be the ultimate arbiter of how things play out.
It is said that the stock market SPX, +0.85% is not the economy, and that’s true. But the stock market does convey certain information and expectations about things that affect the economy, and are affected by it, such as corporate earnings. And those profit expectations have been tempered after the spectacular, double-digit gains in 2018. (Year-over-year comparisons become more challenging next year.)
In 2019 we will learn whether the Tax Cuts and Jobs Act, which reduced the corporate income tax rate to 21% from 35%, was truly a stimulus for productivity-enhancing capital investment or merely a stimulus for profits.
Business fixed-investment did accelerate in the first half of 2018, rising 11.5% in the first quarter and 8.7% in the second, before reverting to a 2.5% increase in the third. A good chunk of the tax cut went to stock buybacks, which exceeded a record $1 trillion in 2018.
The U.S. economy, meanwhile, is not sending out alarm bells just yet.
Available data point to an economy still operating near full employment. At 3.7%, the civilian unemployment rate sits at a 49-year low. Wages are finally rising at a 3% rate for the first time since the Great Recession. And consumers opened their wallets during the Christmas shopping season. The 5.1% increase in holiday sales was the biggest in the last six years, according to Mastercard SpendingPulse.
That doesn’t mean the economic outlook is without risks. The sharp widening in credit spreads over the last three months, both high-yield and investment grade, seems to be mirroring the stress in the stock market.
----The geopolitical situation is replete with opportunities for disruption and chaos.
A trade war with China remains a distinct possibility. The terms of the
U.K.’s exit from the European Union, or Brexit, have yet to be determined.
France is dealing with anti-government street protests, triggered by an
announced fuel tax, since abandoned, and a push for a higher minimum wage.
Italy and the European Union, which were at loggerheads over Italy’s budget, have
come to some kind of an agreement that will allow Europe’s fourth-largest
economy to avoid sanctions for now.
In short, the liberal world order created after World War II and the
institutions created to promote democratic ideals and international trade and
prevent another outbreak of hostilities is being threatened by nationalist and
populist movements across the globe.
More
Oil opens 2019 with losses on surging supply, signs of economic slowdown
January 2, 2019 / 12:43 AM
SINGAPORE (Reuters) - Oil markets dropped
by around 1 percent in 2019’s first trading on Wednesday, pulled down by
surging U.S. output and concerns about an economic slowdown in 2019 as factory
activity in China, the world’s biggest oil importer, contracted.
International Brent crude futures LCOc1 for March were at $53.27 per
barrel at 0421 GMT, down 53 cents, or 1 percent, from their final close of
2018.
West Texas Intermediate (WTI) futures CLc1 were at $45.01 per barrel,
down 40 cents, or 0.9 percent.
In physical oil markets, Dubai crude averaged $57.318 a barrel for
December, the lowest since October 2017, two traders who participate in the
market said on Wednesday.
Similarly, Malaysia’s Petronas set the official selling price of a
basket of December-loading Malaysian crude grades at $62.79 a
barrel, the lowest since October 2017, the state oil firm said on Wednesday.
Traders said futures prices fell on expectations of oversupply amid
surging U.S. production and concerns about a global economic slowdown.
“We are most likely past the peak of this long economic uptrend,”
consultancy JBC Energy said in an analysis of 2018.
Factory activity weakened in December across Asia, including in China,
as the Sino-U.S. trade war and a slowdown in Chinese demand hit production in
most economies, pointing to a rocky start for the world’s top economic growth
region in 2019.
---- “Oil prices ... registered their first yearly decline in three years on fears of a slowing global economy and concerns of an ongoing supply glut,” said Adeel Minhas, a consultant at Australia’s Rivkin Securities.
For the year, WTI futures slumped nearly 25 percent, while Brent tumbled
nearly 20 percent.
The outlook for 2019 is riddled with uncertainty, analysts said,
including the U.S.-China trade concerns and Brexit, as well as political instability
and conflict in the Middle East.
---- On the production side, all eyes will be on the ongoing surge in U.S. output and on OPEC’s and Russia’s supply discipline.
“Don’t underestimate shale producers and the wider U.S. oil industry in
general. Too often this year the market pushed stories ... bottlenecks
(pipelines, frack crews, truck drivers, etc.), yet U.S. oil production will
have grown by a massive 2+ million barrels per day between 1.1.2018 and
1.1.2019,” JBC Energy said.
U.S.
crude output rose to an all-time high of 11.537 million barrels per day (bpd)
in October, the Energy Information Administration (EIA) said on Monday. That
makes the U.S. the world’s biggest oil producer ahead of Russia and Saudi
Arabia.
Hyundai flags tough 2019 as U.S., China demand stays slow
January 1, 2019 / 11:47 PM /
Updated an hour ago
SEOUL (Reuters) - South Korea’s Hyundai Motor Group flagged
another year of tepid car sales growth on the back of a slow 2018, saying trade
protectionism added uncertainty and major markets such as the United States and
China remained sluggish.
In his first New Year address to employees, group heir apparent Euisun Chung said Hyundai Motor Co (005380.KS) and Kia Motors Corp (000270.KS) would together launch 13 new or face-lifted models in 2019.
He also promised to complete a restructuring of South Korea’s second-biggest conglomerate, which is expected to pave the way for him to formally succeed his octogenarian father as head of the group.
The complicated succession plans come as Hyundai contends with a bunch of problems that have cost it market share in China and the United States and stalled its rise up the ranks of global automakers.
More
Finally, with incoming
friends like this in the Senate who needs Democrat enemies? I might just place
a bet on an impeachment in 2019.
Incoming GOP Senator Romney Rips Trump for ‘Glaring’ Shortfalls
By Colin Keatinge and Laura Litvan
Updated on 2 January 2019, 04:44 GMT
Incoming Republican Senator Mitt Romney delivered a scathing critique of
President Donald Trump in an opinion column, calling his character shortfalls
“glaring” and saying his “words and actions have caused dismay around the
world.”
The 2012 Republican presidential nominee and former Massachusetts
governor wrote Tuesday in an op-ed in the Washington Post that the president
has “not risen to the mantle of the office,” distancing himself from Trump just
two days before he will be sworn into the Senate. Romney won the Utah seat long
held by GOP Senator Orrin Hatch in the November midterm elections.
“A
president should demonstrate the essential qualities of honesty and integrity,
and elevate the national discourse with comity and mutual respect,” Romney
wrote. “As a nation, we have been blessed with presidents who have called on
the greatness of the American spirit. With the nation so divided, resentful and
angry, presidential leadership in qualities of character is indispensable. And
it is in this province where the incumbent’s shortfall has been most glaring.”
More
Friends, Romans, countrymen, lend me your ears". I come to bury Caesar, not to praise him.
Senator Romney.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over
banksters and politicians.
Today, China. It may not quite be as goes China so goes the global economy,
but as the second largest economy on planet earth, it’s close and getting
closer with each passing year. 2019 looks likely to be the year where this
really matters. All the more so if President Trump misspoke over his optimism
about a USA – China trade deal. No deal,
and 2019 could be lose – lose all round rather than win - win. South Korea’s
red flag.
Beijing Dithers as the Economy Declines
China’s slowdown is more acute than appreciated, and December’s policy summit failed to set a clear direction.By Christopher Balding 31 December 2018, 22:00 GMT China’s annual economic policy summit has come and gone, leaving a wet lump of coal in place of stimulus hopes. Beijing will have to do better if it wants to steer the country to another year of robust growth.
The economy started slowing in September, and has only worsened since then. Consumption tax revenue was up 16.3 percent year-to-date as of that month. In the following two months, it collapsed, recording declines of 62 percent and 71 percent from a year earlier. Value-added tax revenue has also turned negative in the past three months. All this is a good sign that the economy’s deterioration is more rapid and pronounced than the government has acknowledged.
Against
this backdrop, the Central Economic Work Conference convened earlier this
month. Beijing made news by not making any news at all. No new
stimulus packages were announced. Monetary policy will be kept stable and prudent, Xinhua reported
after the meeting ended. Confusion surrounds real-estate policies after
officials announced some
cities would be allowed to ease sales restrictions, only to
backtrack a day later, emphasizing Beijing’s intention to control prices.
---- Beijing has done an admirable job of starting the long-promised deleveraging process. The economic slowdown reflects a sharp tightening of credit that began in November 2017, the month after President Xi Jinping’s reappointment for a second term as leader. It took a six-to-nine-month pass-through period for that squeeze to be felt.
However, 2019 will be where the reality of economic pain meets calls for more credit. Beijing is trying to negotiate an end to the U.S.-China trade war as internal opposition to the conflict gains momentum. The dispute has sapped confidence within China and is pushing the government to consider painful market-opening concessions.
The
trade negotiations have probably delayed Beijing’s response to the economic
downturn, as officials wait to see what concessions they may have to make (the
U.S. and other countries are pushing for verifiable changes to Chinese
protectionism and overseas investment). With reports of a weak job market
and falling asset prices, their indecision becomes more problematic each day.
More
Cooperation best for both China and U.S., Xi tells Trump
January 1, 2019 / 12:46 AM
BEIJING (Reuters) - History shows that
cooperation is the best choice for both China and the United States, Chinese
President Xi Jinping told U.S. President Donald Trump in a congratulatory
message on Tuesday to mark 40 years since the establishment of diplomatic
relations.
The two countries agreed last month to a 90-day temporary ceasefire in
their bitter trade war to give them time to hold fresh talks to try and end a
dispute that has seen them level increasingly severe tariffs on each others’
goods.
In his message to Trump, Xi said China-U.S. relations have experienced
ups and downs but have made historic progress over the past four decades, state
news agency Xinhua said.
This has brought huge benefits to the two peoples and has contributed
greatly to world peace,
stability and prosperity, Xi added.
“History has proved that cooperation is the best choice for both sides,”
Xi said.
Sino-U.S. relations are in an important stage, he added.
“I attach great importance to the development
of China-U.S. relations and am willing to work with President Trump to
summarise the experience of the development of China-U.S. relations and
implement the consensus we have reached in a joint effort to advance China-U.S.
relations featuring coordination, cooperation and stability so as to better
benefit the two peoples as well as the people of the rest of the world,” he
said.
More
South Korea Trade Slips in Another Bearish Sign for World Economy
By Jungah Lee and Shinhye Kang
1 January 2019, 00:50 GMT Updated
on 1 January 2019, 01:40 GMT
South Korea’s exports fell in December in the latest sign that the slowdown
in China and the global trade war is weighing on global commerce.- Shipments decreased 1.2 percent in the month from a year earlier, lower than the 2.5 percent increase forecast by economists.
- Exports to China dipped 13.9 percent compared to a 14.8 percent rise a year-earlier.
Key Insights
- The downbeat data follows reports from the world’s biggest economies that show factories ended 2018 on a sluggish note. Five U.S. Federal Reserve indexes of regional manufacturing all slumped in December, the first time they’ve fallen in unison since May 2016, and China’s manufacturing purchasing managers index dropped to the weakest since early 2016 and below the 50 level that denotes contraction.
- Bloomberg’s Global Trade Checkup is softening amid a fading rush to front-load export orders ahead of threatened tariffs, with economists warning 2019 will be the year the global economy feels the strain of trade tensions.
- Concerns are rising that South Korea’s export growth will wane in 2019 as the trade conflict between Washington and Beijing drags on.
·
Many of Korea’s exports to China consist of intermediate goods that go
into finished products that are shipped to the U.S. and elsewhere.
Shipments of semiconductors, which dominate the country’s exports, fell 8.3 percent from a year earlier as large IT companies adjusted investment in data centers and memory chip supply shortage eased, the trade ministry said in a statement Tuesday.
More
economy?srnd=premium
Freedom
is the right to tell people what they do not want to hear.
George
Orwell.
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?
Why it is important to outsmart the smart devices
'You have to take responsibility for your own privacy and your family's privacy and that takes some work'
· CBC News · Posted: Dec 28, 2018 6:00 AM AT |
Last Updated: December 28, 2018
Nova Scotia's information and privacy commissioner says it is important
for people to pay attention to the privacy settings on their smart devices.
Catherine Tully says people don't take the time to figure out exactly
what information is being recorded and monitored.
Devices such as Google Home, the Amazon Echo smart speakers
and smart watches all have privacy risks, she said.
"It's interesting how much a device like this and the
companies behind them can learn about us, from our conversations, our habits,
that's why they're making them," said Tully. "[It is] because they
can learn this about us and then sell it as important personal information,
mainly for marketing."
People need to know exactly what they're giving away when they turn on
any of these electronics, said Tully.
They have to read their gadget's terms and conditions, along with its
privacy policy.
Then people need to adjust their privacy settings to make sure
they're only handing over information they are prepared to allow. She said this
is especially true with smart speakers, which can record conversations.
"We have lots of conversations in our home and lots of them can be
highly confidential, embarrassing, maybe details of financial transactions or
health," said Tully. "Or perhaps you're engaged in activity that you
don't really want to have recorded and now it's been transmitted."
---- Google and Amazon say that their smart speaker systems are secure.
Both companies refused to do an interview with CBC News. But they did
provide some information on their respective devices.
In an email, a spokesperson for Google said that Google Home employs
advanced security techniques that are employed in consumer electronics to
protect code and content.
The device also only stores voice-based questions after a user says the
activation phrase "OK Google"
---- Amazon sent along the following statement via email:
"At Amazon, customer trust is of the utmost importance. That's why
we've built multiple layers of privacy protections into our Echo devices,
including the ability to see and delete voice recordings, clear visual
indications for when the device is streaming audio to the cloud, and a
microphone off button that electrically disconnects them."
---- Other smart devices, such as smart kettles, can pose another kind of security risk, according to Tully. She said objects like smart kettles are often the weak link in a home's Wi-Fi system.
Most people don't change the default username and password on kettles
and items like it.
Those default passwords are available on the internet and people can use
them to access the kettle. From there, they can gain access to the Wi-Fi
network that connects it.
Once in the system, a person might be able to monitor all the traffic on
a person's Wi-Fi, including their financial transactions, the movies they rent and
personal communications, said Tully.
"It's not that I want to discourage people from using new
technology and embracing it and using it in the way it's intended," she
said.
Researchers develop artificial fingerprints, claiming they could hack into a third of smartphones
Published Mon, Dec 31 2018 • 1:00 AM EST
Artificial fingerprints have been developed by researchers who say they
could one day be used to hack into everyday devices.
Researchers from New York University and Michigan State University
successfully generated what they call “DeepMasterPrints” earlier this year.
These are machine-learning methods that act as a kind of “masterkey” which, the
researchers claim, have the potential to unlock around one in three
fingerprint-protected smartphones.
In the paper released in October, the authors said synthetic
fingerprints could be “used by an adversary to launch an attack … that can
compromise the security of a fingerprint-based recognition system.”
Philip Bontrager, Aditi Roy, Julian Togelius, Nasir Memon and Arun Ross,
the researchers behind the study, said the way fingerprints were recognized on
smartphones and other devices was often problematic.
“Phones and many more devices don’t capture your entire fingerprint,”
they told CNBC over the phone. “There’s not enough space on the device, so they
capture a partial fingerprint — which is not as secure as the full image.
(People assume) the device stitches images of their fingerprint together, but
that’s not really what happens — it keeps sets of partial fingerprints.”
More
This great Nation
will endure as it has endured, will revive and will prosper. So, first of all,
let me assert my firm belief that the only thing we have to fear is fear
itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts
to convert retreat into advance.
FDR 1932.
GB Brexit 2019.
GB Brexit 2019.
Many thanks to all who generously
donated via Paypal in my annual year end appeal. Your help, and articles and
suggestions, are greatly appreciated in my sometimes different to MSM
interpretation of market events. A very
healthy, happy and prosperous 2019 to all.
The monthly Coppock Indicators finished December.
DJIA: 23,327 +115 Down. NASDAQ:
6,635 +152 Down. SP500: 2,507 +90 Down.
Normally this would suggest more
correction still to come, but with President Trump wanting to be judged by the
performance of the stock market and his Treasury Secretary activating the
Plunge Protection Team after the Christmas Eve Crash, will a politicised PPT
cover the President’s back? Probably the
safest action here is fully paid up synthetic double options on most of the major indexes.
Hopefully a USA – China trade deal
reinvigorates the markets, but failure and 25 percent tariffs, is a market
killer.
Thanks for sharing, it was interesting to read!
ReplyDelete