Baltic Dry Index. 1267 -15 Brent Crude 56.25
“When “conditions” are good, the forward looking investor
buys. But when “conditions” are good, stocks are high. Then without anyone
having the courtesy to ring a bell, “conditions” get bad.”
Where Are the Customers’ Yachts?
Fred Schwed, 1955.
President Trump and
his Treasury Secretary’s stock market Plunge Protection Team went AWOL
yesterday, probably hiding after Apple blew up after the previous day’s close.
But will they reappear today to try to salvage something of the week?
They have two things
going for them if they want to try. On Monday and Tuesday in Beijing there will
be two days of trade talks between high level representatives of both parties.
Closer to Washington, the Dallas Fed President now thinks that the Fed should delay
any further interest rate rises until well into next year, if at all.
The trouble is, any
PPT rally becomes an exit rally for all shareholders unable to stomach our new
violent, wealth destroying whipsaw markets. In any event, any PPT action really
depends on their winning the last hour of trading. Better to get the margin
call selling out of the way first.
But if the PPT does
decide to rig the close, they’ll get plenty of help from the order flow front
running High Frequency Trading thieves stealing money from the PPT.
Below, where are the
customer’s yachts?
In any great organization it is far, far safer to be wrong with the majority than to be right alone.
John Kenneth Galbraith.
Dow closes down more than 600 points as Apple has its worst day since 2013
U.S. stocks closed down Thursday, with the Dow Jones Industrial Average sinking more than 600 points as Apple Inc. posted its biggest percentage drop since 2013 while investors reacted badly to a weaker-than-expected reading on manufacturing activity.Thursday’s swoon translated to the worst start to a year for both the S&P 500 and the Dow since 2000, while for Nasdaq it was the weakest start since 2005.
How did the benchmarks fare?
The Dow Jones Industrial Average DJIA, -2.83% slumped 660.02 points, or 2.8%, to 22,686.22. The S&P 500 index SPX, -2.48% shed 62.14 points, or 2.5%, to 2,447.89, and the Nasdaq Composite Index COMP, -3.04% tumbled 202.43 points, or 3%, to 6,463.50.Read: Citi’s Levkovich cuts S&P 500 target as sentiment enters panic mode
What drove the market?
Apple AAPL, -9.96% slashed its quarterly revenue forecast for the first time in more than 15 years Wednesday evening, in a move that the iPhone maker’s chief executive, Tim Cook, said was prompted by signs of weakness in the world’s second-largest economy — China.The announcement by Apple comes as investors are wrestling with worries that a protracted tariff dispute between Washington and Beijing is starting to hurt some of the biggest and most influential U.S. companies, threatening the growth outlook and a longstanding bull market that already appears in tatters.
Fragile sentiment was further battered after a survey from the Institute for Supply Management showed U.S. manufacturing growing at the slowest pace in two years, intensifying concerns among investors that the U.S. economy is running out of steam along with other large economies in Asia and Europe.
More
The Bad Stuff That the Stock Market Worried About Is Starting to Happen
By Sarah Ponczek and Vildana Hajric
Updated on 3 January 2019, 16:35 GMT
All of a sudden, the fundamentals aren’t looking as strong.
First it was Apple Inc.’s $5 billion revenue miss, hints of which lopped 30 percent from its stock over three months. Now it’s a closely watched gauge of U.S. factory activity, which dropped to a two-year low and missed every estimate in a Bloomberg survey.
What’s going on? Over and over in the fourth quarter, as the S&P 500 plunged 19.8 percent to the brink of a bear market, investors heard the same refrain: don’t panic, the economy, and corporate earnings, look strong.
In
the last 24 hours, confidence in those assurances has taken a hit. The Dow
Jones Industrial Average fell more than 600 points, or 2.6 percent, Thursday
morning, while losses in the Nasdaq 100 spiraled toward 3 percent.
All the bad news has put an abrupt halt to what had been the equity market’s best five-day run since 2011, a surge in the S&P 500 that reached 7.2 percent at yesterday’s high point. It’s reprising anxiety that left stocks within points of a bear market on Christmas Eve.
While plenty of real-time irritants existed to explain the fourth-quarter tumble -- tariff wars, the Federal Reserve, stretched valuations -- many bulls expressed bewilderment about the velocity of the plunge given estimates for growth. The U.S. economy is forecast to expand by 2.6 percent in 2019 and corporate earnings, while off this year’s torrid pace, are expected by analysts to rise 8.3 percent
----For the first time during Donald Trump’s presidency, both economic statistics and sentiment indicators are missing analysts’ expectations. So-called hard data includes government and private-sector data on consumer spending, jobs, manufacturing and housing, while the soft stats looks to Fed factory surveys and consumer confidence polls.
Anything that suggests cracks in the earnings and macro foundation would go down poorly on Wall Street. That’s what was happening Thursday, as Apple’s outlook clouded profit forecasts at everything from semiconductor suppliers to electronics retailers, and the Institute for Supply Management index miss spurred speculation the economy isn’t doing as well as hoped.
More
Bad omen for economy? ISM survey posts biggest drop since Lehman crisis in 2008
By Jeffry
Bartash Published: Jan 3,
2019 10:27 a.m. ET
The numbers: American manufacturers grew in December at the slowest pace in two
years as demand for their products softened, a potential warning sign for a
U.S. economy that’s been running close to full tilt for the past year.
The Institute for Supply Management said its manufacturing index fell to
54.1% last month from 59.3%. Economists surveyed by MarketWatch had forecast
the index to fall to just 57%.
The last time the index has fallen more steeply was in October 2008, at
the height of a U.S. financial crisis sparked by the failure of Lehman
Brothers, and in 2001 after the terrorist attack in September.
The index had hovered near 60 for the past year and a half before
dropping off in December.
What happened: The index for new orders sank a whopping 11 points to 51.1, the weakest
number since August 2016. That largely explains the big drop in the ISM survey.
The indexes for production and employment also fell, though not as much.
The index is compiled from a survey of executives who order raw
materials and other supplies for their companies. The gauge tends to rise or
fall in tandem with the health of the economy.
Although readings over 50% indicate more companies are expanding instead
of shrinking, recent declines in the ISM and IHS Markit manufacturing index
could be signaling trouble ahead for the U.S. economy.
More
Fed faces critical time with interest rates and should move to sidelines, Kaplan says
By Greg Robb
Published: Jan 3, 2019 10:52 a.m. ET
The Federal Reserve should take no further action on interest rates for
now, in order to gauge the health of the economy and get a better sense of any
message being sent by weaker financial markets, said Dallas Fed President
Robert Kaplan, on Thursday.
“We shouldn’t be taking further action until some of these uncertainties
resolve themselves, and I think that could take several months,” Kaplan said in
an interview on Bloomberg Television.
The Fed can afford to be patient because inflation “is not running away
from us,” he said.
Kaplan is not a voting member of the Fed’s interest-rate committee this
year, but he is influential as a member of the central bank’s subcommittee on
communications with markets.
The Fed has penciled in two rate hikes in 2019. With the recent sell-off in stocks SPX, -2.14% investors now think the next Fed move will be to cut interest rates.
Asked if the markets “know something the Fed hasn’t seen,” Kaplan replied that it was “critical in the job I’m in, that you pay very close attention to what the markets are saying.”
Some market forces can spill over and cause economic growth to slow, he said. This may already be happening, he added.
The Dallas Fed president said the weakness in financial markets is likely reflecting three big issues: a deceleration in global growth, weakness in interest-sensitive sectors and tightness in financial markets in the form of widening credit spreads.
“It is going to take some time to see the depth and breadth of those three issues. We should not take any further actions until these issues are resolved for better or worse,” he said.
The Fed should also be “very open” to possibly slowing down the pace of its balance sheet runoff, he said.
----The Fed is now allowing as much as $50 billion in maturing securities to roll off its balance sheet every month. Some traders are concerned this program, known as quantitative tightening, is drying up liquidity.
The Dallas Fed projects gross domestic product will slow to a “little
below” a 2% annual rate this year.
Kaplan said the Fed projected some slowing as the economy entered 2019
but the actual slowdown seen has been “a little greater than we expected.”
The U.S. economy will not be immune from weaker growth in China, he
said.
More
“Those classes of investments considered “best” change from
period to period. The pathetic fallacy is that what are thought to be the best
are in truth only the most popular – the most active, the most talked of, the
most boosted, and consequently, the highest in price at that time.”
Where Are the Customers’ Yachts?
Fred Schwed, 1955.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over
banksters and politicians.
Not the usual suspects today. Today President
Trump, needlessly going out of his way to make new enemies in an already
difficult part of the planet. This as the USA has just opened up peace talks
with the Taliban to try to end the never ending war.
India rebuffs Trump 'Afghan library' swipe
Date created :
03/01/2019 - 13:11
India rejected US President Donald Trump's comments mocking Prime
Minister Narendra Modi for funding a library in Afghanistan, saying Thursday
that New Delhi has provided $3 billion in development assistance to the
war-torn country.
The US president on Wednesday took a swipe at what he claimed were
Modi's frequent comments on building the library: "You know what that is?
That's like five hours of what we spend.
"And we're supposed to say, 'Oh, thank you for the library.' I
don't know who's using it in Afghanistan," Trump said.
A statement provided by government sources in New Delhi said "India
plays a significant role as a development partner," in Afghanistan, with
projects aimed at achieving "a tangible improvement in the lives of its
people".
As the "largest donor in the region", New Delhi has helped
with infrastructure projects, humanitarian assistance and economic development,
the statement said.
Highlights include a 218-kilometre (135-mile) road, a dam providing
irrigation to farmers and training programmes for more than 3,500 Afghans in
India.
New Delhi has also provided 1.1 million tonnes of wheat to Afghanistan
as well as a 400-bed children's hospital built in 1972 and renovated after the
fall of the Taliban in 2002.
Ram Madhav, general secretary of Modi's ruling Bharatiya Janata Party
(BJP), said on Twitter that India was "building lives" in
Afghanistan.
"Trump should know that while he is decrying every other help in
(Afghanistan), India has been building not only libraries, but roads, dams,
schools and even parliament building", he said.
Ahmed Patel, a lawmaker and a senior member of the opposition Congress
party, tweeted that the "tenor and tone" of the US leader's remarks
was "not in good taste & is completely unacceptable".
“The burnt customer certainly prefers to believe that he has
been robbed rather than that he has been a fool on the advice of fools.”
Where Are the Customers’ Yachts?
Fred Schwed, 1955.
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?
Promising new Alzheimer’s treatment unexpectedly found in old antibiotic
Rich Haridy 3 January 2019
Fascinating
new research from a team at Yale has described a promising new Alzheimer's
treatment developed from a half-century old antibiotic. The research suggests a
drinkable cocktail composed of newly discovered polymers may disrupt the early
stages of the neurodegenerative disease.
The general scientific consensus is that the primary symptoms of
Alzheimer's disease are caused by toxic accumulations in the brain of amyloid
beta and tau proteins. However, many human clinical trials into drugs designed
to break up these toxic plaques have failed, leading some scientists to
reconsider their approach.
A team of researchers from Yale decided to zoom in on one of the
earliest points in the development of Alzheimer's brain pathology. It was
discovered that a compound called cellular prion protein is a vital part of the
toxic signaling process associated with amyloid beta plaques, and if the
interaction between these two compounds could be disrupted then Alzheimer's
could potentially be stopped in its earliest stages.
"We wanted to find molecules that might have a therapeutic effect
on this network," explains Stephen Strittmatter, senior author on the new
research.
Over 10,000 potential molecules were screened in the hunt for inhibitors
and one particular sample significantly stood out. The cephalosporin antibiotic
cefixime revealed itself as highly inhibitory, but initial attempts to validate
the activity failed, leading the researchers to suspect a degradation product
may be responsible.
Subsequent experiments revealed that decomposing the antibiotic over a
number of days resulted in the formation of a specific polymer that could pass
through the blood-brain barrier and disrupt the interaction between amyloid
beta and cellular prion protein. Interestingly, this novel molecule was only
found to result from cefixime or ceftazidime and no other cephalosporin
antibiotics.
The polymer molecule was optimized, dissolved into a liquid, and tested
on Alzheimer's mouse models. The results were promising, with the animals
showing remarkable synapse repair and improved memory. The experimental polymer
cocktail was also tested on cells modeled to have Creutzfeldt-Jakob Disease,
with similar reported success.
More
Another
weekend and the first weekend of 2019. The first weekend of a new bear market?
It’s still too early to call. Will next week’s trade talks between the USA and
China in Beijing bring a breakthrough, one big enough to stabilise global stock
markets? Hopefully yes, and the crude oil price has bounced slightly as some of
the shorts scale back in case the talks turn meaningful.
But
what if they don’t. What if both sides expect the other to give way? Then the
outlook for stocks will continue ugly. Have a great weekend everyone.
“Before October 1929,
nobody objected to short sellers except their families. The families objected
to going bankrupt.”
Where Are the Customers’ Yachts?
Fred Schwed, 1955.
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.
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