Baltic Dry Index. 1262 +15 Brent Crude 59.45
Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof.
John Kenneth Galbraith
Despite all the Beijing
trade talk hype, generating the current relief rally in stocks, I suspect the
talks in reality went nowhere, and that very little was accomplished leaving it up
to President Trump’s meeting with President Xi in Davos January 22 to 25. A
case of buy the rumour sell the fact.
If I’m even half way
right, better crank up the Fed’s Plunge Protection Team in New York City for
the rest of the week and month. For in reality the global economy is going from
bad to worse in a hurry. From Asia to Europe the global economy is still firing
on all four cylinders, but no longer in the right order. To this old dinosaur
market watcher and commodities follower, the Fed is now desperately trying to
inflate another stock bubble. To this old dinosaur following markets since 1968,
it will be the final exit bubble to get out of stocks.
Below, plenty of hype
out of Asia this morning in the teeth of a darkening reality. Trump’s trade war
may already have done irreversible damage to the fragile global economy. The
Baltic Dry (shipping) Index is barely ticking over rather than steaming away.
Asian markets rally on optimism over U.S.-China trade talks
By MarketWatch and
Associated Press
Published: Jan 9, 2019 12:01 a.m. ET
Stocks up 2% in Hong Kong, South Korea; Nikkei rises more than 1%
Asian stock markets surged in early trading Wednesday as traders turned optimistic after trade talks between the U.S. and China were extended for a third day.President Donald Trump tweeted Tuesday that the mid-level talks in Beijing were “going very well,” and Bloomberg News reported the president was eager to reach a deal in hopes that it would boost the sagging stock market. While the current talks are not expected to resolve trade tensions, officials have said they hope they can serve as a stepladder to more fruitful negotiations.
The talks were “fuelling investor optimism suggesting there might be a light at the end of the trade war tumultuous tunnel,” Stephen Innes, head of Asia Pacific trading at Oanda, said in a Wednesday research note. “Markets already hope the base case scenario to be favorable and talks to continue into Davos later this month.”
More
U.S. trade delegation wrapping up meetings in Beijing - official
January 9, 2019 / 5:16 AM
BEIJING (Reuters) - The U.S. trade delegation in Beijing is wrapping up
meetings with Chinese officials and will return to the United States later on
Wednesday, a U.S. official said.
Ted McKinney, U.S. Under Secretary of Agriculture for Trade and Foreign
Agricultural Affairs, made the comments to reporters at the delegation’s hotel.
“I think they went just fine,” McKinney said of the talks. He declined
to answer further questions.
Commentary: A cold blast from China chills industrial metals markets
January 8, 2019
LONDON (Reuters) - Base metals started the
new year where they left off the old one, by falling again.
The London Metal Exchange index slumped to a one-and-a-half year low of
2730.1 on Jan. 3.
The trigger was Apple Inc’s revenue warning, not the type of news event
that normally roils prices of old-economy metals such as copper, lead and zinc
.
But the reaction was highly instructive of what to expect in the months
ahead.
First and foremost, it signals that base metals continue to be beholden
to the bigger financial narrative, locked into a risk-on, risk-off dance with
global markets, particularly the U.S. stock market.
The linkage comes in the form of U.S. President Donald Trump and the
tariffs tension with China.
What really spooked global markets in Apple’s rare warning was the
company’s comments about disappointing sales in China, an ominous sign that a
slowdown in the world’s second largest economy risks ricocheting on the world’s
largest.
Such fears were only exacerbated by sliding manufacturing purchasing
managers’ indices in both countries.
Signs of actual contraction in China bode particularly ill for metals,
given the country remains the engine of growth in global usage.
Metals bulls are banking on Beijing doing what it always does when the
going gets tough, opening the taps and stimulating investment down the usual
infrastructure and construction channels.
We’ve been here before in 2009 and 2015 and both times the trick worked.
This time, however, could be different.
More
Below, in the ever so genteel and unflappable
world of the World Bank, did someone just yell “fire” in the crowded theatre?
In central banking as in diplomacy, style, conservative
tailoring, and an easy association with the affluent count greatly and results
far much less.
John Kenneth Galbraith
World Bank sees global growth slowing in 2019
January 8, 2019 / 10:50 PM
(Reuters) - The growth of the global
economy is expected to slow to 2.9 percent in 2019 compared with 3 percent in
2018, the World Bank said on Tuesday, citing elevated trade tensions and
international trade moderation.
"At the beginning of 2018 the global
economy was firing on all cylinders, but it lost speed during the year and the
ride could get even bumpier in the year ahead," World Bank Chief Executive
Officer Kristalina Georgieva said in the semi-annual Global Economic Prospects
report here.
The World Bank outlook comes as the United States and China have been
engaged in a bitter trade dispute, which has jolted financial markets across
the world for months. The two economies have imposed tit-for-tat duties on each
other’s goods, although there were signs of progress on Tuesday as the two
countries prepared to enter a third day of talks in Beijing.
Growth in the United States is likely to slow to 2.5 percent this year
from 2.9 percent in 2018, while China is expected to grow at 6.2 percent in the
year compared with 6.5 percent in 2018, according to the World Bank.
Emerging market economies are expected to grow at 4.2 percent this year,
with advanced economies expected to grow at 2 percent, the World Bank said in
the report.
Finally, news from
the wealth and jobs destroying insane asylum, aka the EU. Brexit now,
before
the EUSSR’s elite start the Great Repression.
Euro zone economic sentiment slumps as industry brakes
January 8, 2019 / 10:14 AM
BRUSSELS (Reuters) - Euro zone economic
sentiment deteriorated markedly and by more than expected in December, wrapping
up a year that saw optimism falling every month, European Commission data
showed on Tuesday, in a new sign of weakness for the bloc’s economy.
The gloomier expectations partly reflected
declining confidence in industry, which was consistent with the third
consecutive monthly fall in November of industrial output in Germany, the
largest economy of the 19-country currency bloc.
In a bad sign for the bloc’ growth prospects in the last quarter of the
year, euro zone economic sentiment eased to 107.3 points in December from 109.5
in November, the European Commission said, marking the indicators’ 12th
consecutive monthly drop and the lowest level since January 2017.
Economists polled by Reuters had expected a less sharp fall to 108.2,
but a slide of optimism among industry managers and consumers worsened the
picture.
Sentiment in industry fell to 1.1 points from 3.4 in November, against
market expectations of a 2.9 point reading.
The mood of consumers also fell sharply to -6.2 points from -3.9 in
November, but this did not prevent shoppers from buying more goods, as retail
sales kept growing in November, official estimates released on Monday showed.
As a consequence, retail trade confidence went up by 0.5 points in
December, although it could not offset the general gloomier mood.
Sentiment in services, a sector which produces two thirds of the euro
zone GDP, went down by 1.4 points.
The worse-than-expected sentiment reading confirms expectations of
economists that forecast slowing growth of the euro zone in the last quarter of
the year, after GDP growth eased to 0.2 percent in the third quarter from 0.4
percent in the April-June period.
A separate business climate indicator, which helps point to the phase of
the business cycle, also decreased in December to 0.82 from 1.04 in November,
below expectations of a drop to 0.99.
German recession fears mount after more poor industrial data
January 8, 2019
BERLIN (AP) — Government figures show that industrial production in Germany
dropped for the third consecutive month in November, a development that’s
likely to fuel concerns that Europe’s biggest economy may have entered a
technical recession in last year’s fourth quarter.
The Economy Ministry said Tuesday that production was down 1.9 percent
compared with the previous month.
That follows declines of 0.8 percent and 0.1 percent in the previous two
months, meaning that the crucially important industrial sector will be a
sizeable drag on the overall economy during the third quarter.
Germany’s economy shrank in the third quarter largely because of
one-time factors related to new car emissions standards. Another quarterly drop
would mean Germany will have entered a recession, defined as two straight
quarters of negative output
John
Kenneth Galbraith
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over
banksters and politicians.
Below, outside of the Fed Plunge Protection Team, does any of this sound
like a reason to be long stocks, let alone be buying more?
If economists could
manage to get themselves thought of as humble, competent people on a level with
dentists, that would be splendid.
John Maynard Keynes
LG Electronics sees 80 percent drop in fourth-quarter profit; analysts point to thinning TV margins
January 8, 2019 / 7:09 AM
SEOUL (Reuters) - South Korea’s LG Electronics Inc (066570.KS)
said on Tuesday its fourth-quarter operating profit likely plummeted 80 percent
from the same period a year earlier, falling well below analyst expectations. The world’s second-biggest television set maker behind compatriot Samsung Electronics Co Ltd (005930.KS) estimated profit of 75.3 billion won ($67.03 million) for October-December last year. That would compare with the 387 billion won average of 11 analyst estimates in an I/B/E/S Refinitiv poll.
Revenue likely fell 7 percent to 15.8 trillion won, LG said in a regulatory filing, versus analysts’ 16.3 trillion won estimate.
LG did not disclose further details of fourth-quarter operations and
will announce full results at the end of January.
Analysts said likely causes included profit margins for its high-end TVs
being thinned by increasing competition, while the firm’s smartphone business
continues to lose money.
“It’s a surprise,” said analyst Lee Jae-yun at Yuanta Securities. “Home
appliance sales were worse in emerging markets and China, while its high-end TV
business isn’t making profit as much as before.”
Analysts also said earnings were likely squeezed by higher year-end
bonuses and marketing expenses for new handsets.
LG held a 3 percent share of the global smartphone market in the second
quarter of last year, showed latest data from market tracker Counterpoint
Research.
More
Samsung warns of profit drop as chip demand slows
8 January 2019
The firm forecasts operating earnings of 10.8 trillion Korean won ($9.7bn; £7.6bn) for the last three months of 2018.
It marks the first quarterly profit drop in two years as strong demand for chips had boosted earnings at the firm.
Samsung also faces fierce competition from Apple and Chinese rivals.
In a statement on Tuesday, the firm cited lacklustre demand and rising competition for its darkening outlook.
"We expect earnings to remain subdued in the first quarter of 2019 due to difficult conditions for the memory business," the South Korean tech giant said in a statement.
It forecasts revenue will decline 11% to 59 trillion won.
Samsung will provide detailed earnings later this month.
More
Apple faces an 'informal boycott' in China
8 January 2019 •
10:46am
pple is facing an “informal boycott” in China which may be dragging
down its iPhone sales in the country, analysts have claimed.A research note published Bank of America Merrill Lynch warned that Apple may have been caught up in “a general redirection of Chinese demand away from US products”.
This “informal boycott against US goods” is likely to have an impact on sales of iPhones in China, analysts claimed.
Chinese imports are still growing but “given the battles around high tech, this spillover from politics into sales could be particularly high in the cell phone market”.
Earlier this month, Apple shocked Wall Street by issuing its first cut to its sales forecast since 2002. The company said that iPhones sales were well below expectations during the final three months of 2018, blaming an economic slowdown in China.
Tim Cook, Apple's chief executive, said the company would report revenues of around $84bn (£67bn) for the three months to the end of December.
That was down from Apple’s earlier forecast of around $91bn and meant that the company is expected to announce its first sales decline in two years when it unveils its earnings later this month.
During an interview with CNBC earlier this month, Mr Cook said he has
seen reports of boycotts of iPhones in China. He said: “There are ...
sporadic reports, about somebody talking about not buying our products because
we’re American, maybe a little bit on social media, maybe a guy standing in
front of a store or something. My personal sense is that this is small."
“Do I think anybody elected not to buy because of that? I’m sure some
people did,” he added. “But my sense is the much larger issue is the slowing
of the economy.”
A survey conducted by Bank of America Merrill Lynch showed that
consumers in China and India are becoming less interested in purchasing new
iPhones and are instead increasingly looking at cheaper smartphones from
competitors including Xiaomi and Samsung.
Apple to cut iPhone production by 10% this quarter: report
By Mike
Murphy Published: Jan 8, 2019 11:18 p.m. ET
Apple Inc. AAPL, +1.91%
will cut production of its three new iPhone models by 10% in the January-March
quarter, the Nikkei Asian Review reported Wednesday. Last week, Apple
shares tumbled after the tech giant announced disappointing iPhone sales and a
sharply lower revenue forecast for the holiday quarter.
The Nikkei said Apple has asked suppliers twice in
the past two months to trim planned production of the iPhone XR, XS and XS Max.
The latest request was reportedly made before last week's announcement. The
Nikkei reported the move would reduce the total number of iPhones made this
quarter from the previously estimated range of between 47 million and 48
million, to between 40 million and 43 million, or more than 20% less in terms
of year-over-year quarterly production. Apple did not immediately respond to a
request for comment. Stocks of Asia-based Apple component makers surged Wednesday,
with AAC 2018, +6.88%
Sunny Optical 2382, +4.93%
and Largan Precision 3008, +5.09%
all up more than 5%.
If it
looks like a duck, swims like a duck, and quacks like a duck, then it probably
is a duck.
Anon.
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?
No update today, more tomorrow.
Alan Schwartz, CEO Bear Stearns, March 12, 2008.
Bust March 16, 2008.
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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