Baltic Dry Index. 1189 -49 Brent Crude 61.52
The market can remain
irrational longer than you can
remain solvent.
John
Maynard Keynes.
We heard it from
Chairman Powell himself yesterday, there is a Powell Put in stocks and it will
be used to help re-elect President Trump. It’s simply what happens when you
politicise the central bank. The man at the top gets the benefit for a while,
but Venezuela here we come! Stock markets knee jerked higher, though the real
global economy is sickening fast. Irrational or rational behaviour?
Below, does the Fed
control the market or does the market control the Fed? Does Trump now control
both?
Asia stocks reach five-week high, yuan makes big weekly gains
January 11, 2019 / 1:21 AM / Updated 2
hours ago
TOKYO
(Reuters) - Asian stocks inched up to five-week highs on Friday, after Chairman
Jerome Powell reiterated the Federal Reserve will be patient about raising
interest rates and news that trade talks between Washington and Beijing are
moving to higher levels.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS gained 0.2 percent to the highest levels since Dec. 6, while Japan's benchmark Nikkei .N225 advanced 0.7 percent. Shanghai Composite Index .SSEC initially rose 0.8 percent, but that was pared to just 0.1 percent.
Wall Street extended its rally into a fifth straight day on Thursday in a whipsaw trading session as investors responded to mixed comments by Powell, while a warning from Macy’s (M.N) pummelled retail stocks. [.N]
At the Economic Club of Washington, Powell reiterated the views of other policymakers that the Fed would be patient about interest rate hikes.
Major U.S. stock indexes also quickly recovered from brief losses after Powell said that the Fed’s balance sheet would be “substantially smaller”.
“The word ‘patient’ is used often when the Fed’s policy direction is still tightening but its next rate hike can wait for a considerable time. So risk assets now enjoy support from what we can call Powell put,” said Tomoaki Shishido, economist at Nomura Securities.
“Similarly, Trump also softened his stance on China after sharp falls in
stock prices. He has offered an olive branch to China and there’s no reason
China would not want to accept it,” he said.
U.S. and Chinese officials are working on arrangements for higher-level
trade talks after mid-level officials this week discussed U.S. demands that
would require structural change in China to address issues such as IP theft,
forced technology transfers and other non-tariff barriers.
More
Dow and S&P 500 escape correction territory after 5-day stock-market surge
By Mark
DeCambre Published: Jan 10, 2019
5:14 p.m. ET
A new year, a new market. The Dow Jones Industrial Average and the S&P
500 exited their corrections after a multiday rally that has helped to mend at
least some of the stock-market wounds of 2018. The Dow DJIA, +0.51% and the S&P 500 SPX, +0.45% registered their fifth straight gains, at least partly attributed to optimism about three days of talks intended to resolve a protracted dispute over tariffs between China and the U.S., and growing signs that the Federal Reserve is ready to dial back what had been perceived as an aggressive rate-hike path.
It was concerns over trade and rising rates, and worries that global growth was receding with the U.S. was on the verge of a recession, that shattered investor confidence, and drove the stock market down from an autumn peak.
Anxieties around those matters, however, have subsided somewhat, with the Dow on the doorstep in recent days of exiting correction, at least by one measure. Comments by Fed Chairman Jerome Powell on Thursday at a fireside-chat-style discussion at the Economic Club of Washington helped to emphasize that view to investors.
A correction is usually defined as a drop of at least 10% from a recent peak. Some market-technicals purists believe that an asset must put in a new high to officially emerge from a correction phase, while Dow Jones’s data group views an exit from that phase any gain of 10% from the correction low. (Read more about market corrections.)
More
Worst may not be over for stock market, technical analysts say
By Chris
Matthews Published: Jan 10, 2019
2:03 p.m. ET
Markets were oversold before Christmas, now they look overbought
The stock market’s rebound from what was the worst Christmas Eve on record for the Dow Jones Industrial Average in history has been nothing short of incredible—but markets may sour after a bullish stretch, some market technicians say.At the end of trade Wednesday, the Dow DJIA, +0.51% and the S&P 500 index SPX, +0.45% were just a hair’s breadth from a 10% comeback from their correction lows on Dec. 24, a span of just nine trading days. The current rebounds are historic outliers: Since World War II, there have only been 12 other declines of 15% or more within the span of three months that were immediately followed by a rally of 10% or better in 10 trading days or fewer, according to Bespoke Investment Group.
How much longer will the rally last? Not much longer, according to several technical indicators, which show that U.S. equities have reached so-called overbought conditions in the medium term.
Tony Dwyer, chief market strategist at Canaccord Genuit, says markets
are stretched, citing the moving average convergence divergence, or MACD
indicator, a measure of momentum for stocks.
Though usually deployed to find buy signals for individual stocks, when
the broad market is showing overwhelming momentum to the upside, it acts as a
contrary, “sell” signal. A particularly high read can mean that the potential
for a sell-off or downturn is high.
Dwyer said over the past 10 days, the indicator showed 71.1% of S&P
500 components displaying rapid momentum to the upside, while also pointing out
that the market has only breached the 70% mark five times since 1990.
“All five instances occurred after a rapid reflex rally in prices off a
low,” just as we have seen in recent weeks, according to Dwyer. “In four out of
the five instances, the ultimate low occurred after the signal, suggesting that
the recent low in December will be at the very least retested prior to a move
to new highs in 2019.”
In other words, in 80% of the instances since 1990 when markets have
seen such a similarly broad swath of the assets displaying such rapid momentum
to the upside, as we do today, the equity benchmarks put in new lows shortly
thereafter.
More
Next garbage in,
garbage out in Japan. Who gained from the useless fake news (doctored?)
figures. I think we all know. Does trust still exist in the 21st
century?
Japan labour ministry says it underreported regular wages since 2004
January 11, 2019 / 3:50 AM
TOKYO (Reuters) - Japan’s labour ministry said on Friday that
discrepancies in its polling methods caused it to underreport regular wage data
from 2004 to 2017.
The labour ministry also said its sample size for wage data for October
last year was smaller than it should have been due to polling errors, according
to a statement.
The ministry on Friday revised regular wage data from January 2012 to
October 2018 to partially rectify the polling errors.
Labour Minister Takumi Nemoto told reporters he is still investigating
the motives behind the polling errors.
Labour ministry officials admitted on Wednesday that they have issued
monthly wage data without meeting sampling standards for years, hurting the
credibility of a key gauge of the success of Prime Minister Shinzo Abe’s
economic policies.
In other news, move
over Tesla, make room for the Cadilac EV.
Exclusive : GM's Cadillac will introduce EV in fight against Tesla - sources
January 11, 2019 / 12:54 AM
WASHINGTON (Reuters) - Cadillac is
expected to become General Motors Co’s (GM.N) lead electric vehicle brand as the
largest U.S. automaker gears up to introduce a new model under that luxury
marquee to challenge Tesla Inc (TSLA.O), two people briefed on the matter
said Thursday.
GM is set to announce Friday as part of an investor update that a
Cadillac will be the first vehicle based on its forthcoming “BEV3” platform,
the people said. The vehicle platform is the basis for vehicle underpinnings,
including the battery system and other structural and mechanical parts.
GM is not expected to disclose on Friday additional details, including
precisely when the Cadillac EV will be built, whether it will be a crossover or
sedan, or where it will be assembled, the sources said.
A GM spokesman declined to comment.
GM had previously focused on making electric vehicles under its mass
market Chevrolet brand, including its plug-in Chevrolet Volt and battery
electric Bolt. GM announced last year it was ending production of the plug-in
Volt as well as a low-selling plug-in Cadillac CT6, even as it moved to boost
EV spending.
GM said in November as part of its restructuring efforts it was doubling
resources for electric and autonomous vehicle programs over the next two years.
Last month, two Ohio senators asked GM to commit to building all future
electric vehicles for U.S. buyers within the country.
GM said in 2017 it planned by 2021 to
introduce a new dedicated flexible electric vehicle architecture and an
advanced battery system to support the development of at least 20 new models in
the United States and China.
More
Finally, where fake news is headed. Once only possible in
the realms of the spy agencies, today’s technology is widespread and all too
easily available. Coming soon to a TV station near you? Does Trump get another
Supreme Court pick?
Q13 FOX editor fired over doctored Trump address video
January 10, 2019 at 1:11 pm
A
Q13 editor was fired Thursday, after it was revealed that they had doctored a
clip of President Trump’s Tuesday Oval Office address.
A
listener to my program sent me a video that appears to show a deceptively
edited video of President Trump’s speech from the Oval Office. We performed a
side-by-side comparison of the video from our listener, apparently taken by a
smart phone recording of Q13, to the raw video of Trump’s speech from CNN.
That comparison revealed the Q13 video creating a loop of the President
licking his lips — making it seem bizarre and unbalanced — it also seems that
someone distorted the President’s face and may have added an orange tone to his
skin.
Less than a day after placing the editor responsible on leave pending an
investigation, Q13 terminated his employment.
“We’ve completed our investigation into this incident and determined
that the actions were the result of an individual editor whose employment has
been terminated,” said Q13’s news director in a Thursday update.
“This does not meet our editorial standards and we regret if it is seen
as portraying the President in a negative light,” Q13 told KTTH and MyNorthwest
on Wednesday evening.
Trump White House urging allies to prepare for possible RBG departure
After an ailing Supreme Court Justice Ruth Bader Ginsburg
missed oral arguments, the Trump team began early groundwork for another
potential confirmation battle.
The White House is reaching out to political allies and conservative
activist groups to prepare for an ailing Justice Ruth Bader
Ginsburg’s possible death or departure from the Supreme Court — an event that
would trigger the second bitter confirmation battle of President Donald Trump’s
tenure.
The outreach began after Ginsburg, 85, on Monday missed oral
arguments at the court for the first time in her 25 years on the bench.
The justice, who was nominated to the court by President Bill Clinton in 1993,
announced in late December that she underwent a surgical procedure to
remove two cancerous growths from her lungs.
----
The nine-member court is currently divided 5-4 between its conservative and
liberal wings. Ginsburg’s departure would allow Trump to create the Court’s
strongest conservative majority in decades, a scenario sure to bring intense
opposition from Democrats and liberal activists still furious over the October
confirmation of Justice Brett Kavanaugh.
More
The importance of money flows
from it being a link between the present and the future.
John Maynard Keynes
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over
banksters and politicians.
No crooks
today. Today after a hammering, auto manufacturers attempt to restructure.
Another sign of the next recession arriving, after China auto sales went into
reverse?
Ford Europe to slash thousands of jobs in turnaround plan
January 10, 2019 / 10:05 AM
FRANKFURT (Reuters) - Ford said on
Thursday it will cut thousands of jobs, exit unprofitable markets and
discontinue loss-making vehicle lines as part of a turnaround effort aimed at
achieving a 6 percent operating margin in Europe.
The carmaker is under pressure to
restructure its European operations after archrival General Motors raised
profits by selling its European Opel and Vauxhall brand to France’s Peugeot SA.
Ford said it will seek to exit the
multivan segment, stop manufacturing automatic transmissions in Bordeaux in
August, review its operations in Russia, and combine the headquarters of Ford
U.K. and Ford Credit to a site in Dunton, Essex.
“We are taking decisive action to transform the Ford business in
Europe,” Steven Armstrong, group vice president, Europe, Middle East and
Africa, said in a statement.
Ford’s announcement on layoffs came as Britain’s biggest carmaker Jaguar
Land Rover (JLR) is also set to announce “substantial” job cuts in the
thousands, a source told Reuters.
Ford Europe, which currently employs 53,000 people, has struggled to
turn a profit, reporting a 245 million euro (£221.5 million) loss before
interest and taxes in the third quarter, equivalent to a negative 3.3 percent
EBIT margin.
---- “Ford aims to achieve the labour cost reductions as far as possible through voluntary employee separations in Europe,” the carmaker said in a statement on Thursday.
Armstrong said the company is in negotiations with worker
representatives about potential job cuts at its Saarlouis plant in Germany,
where 6,190 staff assemble cars, as the carmaker considers discontinuing
production of its Ford C-Max model.
“We will migrate out of the MPV segment,” Armstrong said, referring to
the family vans segment. Ford will focus instead on developing more profitable
“crossover” vehicles.
The company is unlikely to develop next-generation diesel engines for
smaller vehicles, Armstrong said, explaining that customers have been
abandoning the segment more aggressively than anticipated.
VW, Ford to reveal deeper alliance next week: sources
January 9, 2019 / 5:14 PM
HAMBURG/DETROIT (Reuters) - Volkswagen AG
(VOWG_p.DE)
and Ford Motor Co (F.N)
will unveil a deeper alliance next week that goes beyond cooperating in
commercial vehicles in a move meant to save the automakers billions of dollars
as they develop new technologies, two people familiar with the plan said on
Wednesday.
Ford and VW have been exploring closer cooperation as trade frictions
force carmakers to rethink where they build vehicles for Europe, the United
States and China, and as software companies prepare to launch their own
self-driving cars.
“A global alliance is expected to be announced,” one person said, adding
that the pact will be unveiled next Tuesday during the Detroit auto show. The
companies have previously said any alliance would not involve a merger or
equity stakes.
The expanding alliance highlights the growing pressure on all global
automakers to manage the costs of developing electric and self-driving
vehicles, as well as technology required to meet tougher emissions standards
for millions of internal combustion vehicles they will sell in the years to
come.
More
Jaguar Land Rover to cut thousands of UK jobs after China, diesel slump
January 10, 2019 / 7:13 AM
LONDON (Reuters) - Britain’s biggest
carmaker Jaguar Land Rover (JLR) (TAMO.NS)
is set to cut thousands of jobs as the company faces lower demand in China and
a slump in sales of diesel cars in Europe.
The central English firm builds a higher proportion of its cars in
Britain than any other major or medium-sized carmaker and has also spent millions
of pounds preparing for Brexit, in case there are tariffs or customs checks.
Britain’s business minister Greg Clark said on Thursday it is clear why
a no-deal Brexit would add to the problems with further costs and disruption.
JLR lost 354 million pounds between April and September 2018 and had
already cut around 1,000 roles in Britain, shut its Solihull plant for two
weeks and announced a three-day week at its Castle Bromwich site.
Its Chief Executive Ralf Speth warned in September that the wrong Brexit
deal could cost tens of thousands of car jobs and posed a threat to production
at the automaker.
The Tata Motors-owned company, which employs around 40,000 people in
Britain and has boosted its workforce at new plants in China and Slovakia in
recent years, unveiled plans to cut costs and improve cash flows by 2.5 billion
pounds last year including “reducing employment costs and employment levels.”
---- Those cuts will be “substantial” and run into the thousands, the source told Reuters.
“The announcement on job losses will be substantial, affecting
managerial, research, sales, design,” said the source, who spoke on condition
of anonymity, not affecting production-line staff “at this stage.”
---- Demand in China, which had once been one of its strongest countries but has since been hit by a slowdown, fell by 21.6 percent, the biggest drop of any of its markets.
“The economic slowdown in China along with ongoing trade tensions is
continuing to influence consumer confidence,” said Jaguar Land Rover Chief
Commercial Officer Felix Brautigam.
More
Chinese car sales fall for first time in more than 20 years
Trade war with US is handbrake on growth in world’s second biggest economy
Wed 9 Jan 2019 19.28 GMT Last modified on Wed 9 Jan
2019 23.10 GMT
Sales of cars in China have dropped for the first time in almost 30 years, a sign of the importance of ending the country’s trade dispute with the US as the world economy begins to falter.
As the US and China appeared to be edging closer to ending the trade dispute between them on Wednesday, the figures illustrate how the bitter standoff, as well as sluggish local demand, have acted as a handbrake on growth in the world’s second biggest economy.
Passenger vehicle sales in mainland China dropped by 5.8% last year to 22.35m, according to the China Passenger Car Association, the first reverse in the world’s biggest car market since 1992.
The development came as financial markets around the world rallied following signs of a breakthrough in trade talks between Washington and Beijing, after three days of talks in the Chinese capital.
---- However, a deal still needs to be reached by 2 March, when the White House is due to raise tariff levels from 10% to 25% on $200bn (£160bn) of Chinese imports.
Although the Chinese economy had gradually begun slowing before the trade war escalated, the economy has underperformed expectations in recent months amid the tensions.
The International Monetary Fund downgraded its forecast for global GDP growth for 2018 and 2019 on the back of the standoff, while estimating growth in China will fall from about 6.6% last year to 6.2% in 2019.
Factory output in China fell for the first time in two years in December, with analysts warning that the trade dispute had harmed demand. Apple also reported a decline in sales in China, blaming softer consumer appetite as the economy cools.
More
There is no harm in being
sometimes wrong - especially if one is promptly found out.
John Maynard Keynes
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?
Exclusive: VW, China spearhead $300 billion global drive to electrify cars
January 10, 2019 / 6:18 AM
(Reuters) - Global automakers are planning
a $300 billion surge in spending on electric vehicle technology over the next
five to 10 years, with nearly half of the money targeted at China, accelerating
the industry’s transition from fossil fuels and shifting power to Asian battery
and electric vehicle technology suppliers.
The unprecedented level of spending - much
of it by Germany’s Volkswagen AG (VOWG_p.DE)
- is driven in large measure by government policies adopted to cut carbon
dioxide emissions, and will extend technological advances that have improved battery
cost, range and charging time to make electric vehicles more appealing to
consumers, according to an exclusive Reuters analysis of public data released
by those companies.
China for decades played catch-up to
German, Japanese and American automakers, which dominated internal combustion
vehicle technology. Now, China is positioned to lead electric vehicle
development, industry executives say.
“The future of Volkswagen will be decided in the Chinese market,” said Herbert Diess, chief executive of VW, which has decades-old joint ventures with two of China’s largest automakers, SAIC Motor (600104.SS) and FAW Car (000800.SZ).
Speaking earlier this week to a small group of reporters in Beijing, Diess said China “will become one of the automotive powerhouses in the world.”
“What we find (in China) is really the right environment to develop the next generation of cars and we find the right skills, which we only partially have in Europe or other places,” he said.
Diess added, “We have very clear policies established here in China. Policymakers and regulators are requiring” a shift to electric vehicles.
As China and other countries place more restrictions on conventional
gasoline and diesel engines, auto companies have accelerated the shift to
electrification. A year ago global automakers said they planned to spend $90
billion on electric vehicle development.
The $300 billion that automakers have earmarked to put electric vehicles
into mass production in China, Europe and North America is greater than the
economies of Egypt or Chile.
Almost one-third of the industry’s EV spending total, about $91 billion,
is being committed by the Volkswagen Group, which is aggressively trying to
distance itself from the Dieselgate scandal, which has cost it billions in
penalties and legal settlements.
More
Another weekend, and signs of rising
economic problems practically everywhere, so why are stock markets so bullish?
They think they see a Fed totally in awe of US stock markets. At the first sign
of trouble, they think, they now have a “Powell Put.” And maybe they have, but I think a new
recession swamps any Powell Put. New Lehmans will surface on every continent
except Antarctica. Driven under by mountains of unrepayable debt. Have a great
weekend everyone.
The BBC, taxing poor people to pay astronomical sums to rich people, who then insult their beliefs and views.
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? [Yes] 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.
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