Baltic
Dry Index 668 -53
Brent Crude 61.89
Trump
25 percent tariffs 29 days away. Brexit 57
days away.
Politics is too serious a matter to be left to the
politicians.
Charles de Gaulle
With
typical understatement and modesty, President Trump says that he is close to
reaching “the biggest deal ever made,” in the trade war with China. Well
nearly, since nothing is settled like Brexit until everything is settled, which
is intended to take place when Presidents Trump and Xi next meet.
Elsewhere
it is day one of the new Free Trade Zone between the EU and Japan. The Japanese
will eventually get tariff free EU wines, cheeses and pork, while the EU will
eventually, (2027,) get tariff free Japanese made cars. Whether either side
wants or needs either is an open question, especially given the global glut of
autos especially in Europe, but France has to find somewhere to dump all of
their excess cheese.
Below,
how the world looks this cold and snowy morning from the UK.
How can anyone govern a nation that has two hundred
and forty-six different kinds of cheese?
Charles de Gaulle
Asian markets muted after disappointing Chinese manufacturing data
Asian markets were mixed on Friday as trade talks ended in Washington with no deal but the promise of a second meeting between U.S. President Donald Trump and Chinese leader Xi Jinping. Gains were limited by a private survey showing that Chinese manufacturing slowed to the lowest level in almost three years.Hong Kong’s Hang Seng index HSI, -0.39% lost 0.3% while the Shanghai Composite index SHCOMP, +0.53% jumped 0.8%. Japan’s Nikkei 225 index NIK, +0.01% rose 0.1%after the country’s unemployment rate unexpectedly fell to 2.4% in December, from 2.5% the month before. South Korea’s Kospi SEU, +0.02% edged 0.1% higher while Australia’s S&P ASX 200 c XJO, -0.05% was flat. Shares were higher in Singapore STI, -0.07% and JAKIDX, +1.06% . Markets in Taiwan were closed.
----Corporate earnings helped U.S. indexes seal a strong performance in January. Facebook FB, +10.82% reported that it earned $6.9 billion in the fourth quarter, 61% higher than a year earlier. After the close of regular trading, Amazon AMZN, +2.89% said its quarterly profits topped $3 billion for the first time, though its forecast for the current quarter was tepid. The S&P 500 index SPX, +0.86% added 0.9% to 2,704.10. It rose 7.9% in January, its best monthly gain since October 2015. The Dow Jones Industrial Average DJIA, -0.06% eased 0.1% to 24,999.67 while the Nasdaq composite COMP, +1.37% jumped 1.4% to 7,281.74.
American and Chinese negotiators wrapped up two days of talks Thursday without a deal but with an upbeat outlook. President Donald Trump said China has agreed to buy more American soybeans, but he expects to meet his Chinese counterpart Xi Jinping to seek agreement on other contentious issues. “There are some points we don’t agree to, but we will agree,” Trump said. “I think when Xi and I meet, every point will be agreed to.” A tariffs cease-fire between the U.S. and China is set to be lifted on March 2, and the U.S. is expected to raise import taxes from 10% to 25% for $200 billion in Chinese goods.
A private survey released on Friday suggested that manufacturing in China slowed in January. China’s Caixin Manufacturing PMI was 48.3 in January, down from 49.7 in December. This was its lowest reading since February 2016. Readings below 50 indicate contraction on the index’s 100-point scale. The survey said that Chinese production and new orders slipped further in January while export orders climbed, fueling fears that the world’s second largest economy was experiencing a slowdown.
More
Factory activity shrinks across Asia as cooling China threatens global growth
February 1, 2019 / 3:57 AM
HONG KONG (Reuters) - Factory activity shrank across
much of Asia in January, falling to the weakest in years in several countries
and adding to worries that trade tariffs and cooling demand in China pose an
increasing threat to global growth.
The weak Purchasing Managers Index (PMI) readings
reinforce expectations that central banks in Asia will put any further interest
rate hikes on hold this year.
In some countries, such as China, Australia and
India, there is even chatter about potential rate cuts.
Trade-focused Asia appears to be suffering the most
visible loss of momentum so far, but the euro zone economy is stuck in low gear
and many emerging markets are sputtering.
The U.S. economy, while a bit wobbly of late, still
looks set to post solid growth, though softer than last year’s pace.
---- “A lot depends on whether the U.S. and China come to a reasonable deal. Then we can actually avert this potential trade recession, but at the moment it’s all tentative.”
U.S. President Donald Trump said on Thursday he
will meet with Chinese President Xi Jinping soon to try to seal a comprehensive
trade deal as Trump and his top trade negotiator both cited substantial
progress in two days of high-level talks.
Trump, speaking at the White House during a meeting
with Chinese Vice Premier Liu He, said he was optimistic that the world’s two
largest economies could reach “the biggest deal ever made.”
Meanwhile, bleak factory gauges suggests that the
global economy will get worse before it gets better.
China’s factory activity shrank by the most in
almost three years in January as new orders slumped further and output fell,
the private Caixin/Markit PMI survey showed. The numbers were weaker than
Thursday’s official PMI survey.
More
Finally,
in the EUSSR suicidal Brexit game of Russian roulette, who gets hurt worst?
Hint: it starts with a big “I” followed next by an even bigger “E.”
Besides,
Europe’s up next in President Trump’s tariff war firing line. 25 percent US tariffs
on German auto exports, plus a WTO Brexit tariff on German GB motor exports,
ought to get someone’s attention pretty fast, or Germany will follow Italy into
recession.
Jean-Claude Juncker. Failed Luxembourg Prime Minister and
ex-president of the Euro Group of Finance Ministers. Confessed liar. European Commission
President. Scotch connoisseur.
Italy in recession amid stagnant eurozone
January 31, 2019
Italy's economy tipped into recession at the end of
last year, according to latest figures.
In the final three months of 2018, the economy
shrank by 0.2%, following a 0.1% decline in the third quarter, the Istat
statistics office said.
Italian Prime Minister Giuseppe Conte said the
contraction was likely to continue into 2019.
Meanwhile, figures from the EU showed economic
growth in the 19-country eurozone still languishing.
Growth in the euro area remained at 0.2% in the
final quarter of 2018, the same as the previous quarter and in line with
analysts' expectations.
Italy's coalition government was forced to revise
its expansionary 2019 budget last month after the European Commission raised
concerns about the impact on Italy's debt levels.
Euro zone growth sticks to lowest rate in four years
January 31, 2019 / 10:11 AM
BRUSSELS (Reuters) - The euro zone economy stuck to
its lowest pace of growth in four years in the final three months of 2018, data
showed on Thursday.
Gross domestic product (GDP) in the 19 countries
sharing the single currency rose by 0.2 percent in the quarter and by 1.2
percent year-on-year, data from the European statistics agency Eurostat showed.
Both figures matched the average forecasts of
economists polled by Reuters.
The quarter-on-quarter rate in the fourth quarter
matched that of the third quarter, which had been the lowest rate since the
second quarter of 2014.
No-deal Brexit would push Europe back into deep recession, with explosive consequences
Economic growth across the eurozone core has dropped to stall speed. This is the price that Europe pays for clinging to a mercantilist trade model.If you depend on perpetual surpluses and the rest of the world’s consumer demand to stay afloat, you become acutely vulnerable in a Sino-led global trade slump.
Italy has been in recession for the last six months. Credible forecasts are warning of outright contraction for the whole 2019 as well, posing a lethal threat for Italy’s fragile debt dynamics.
Germany and France are both in an industrial slump. The IHS Markit composite index of French manufacturing and services fell deep into contraction territory in January.
No nation has friends only interests.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over banksters and politicians.
Today, more on that that easy to win trade war again. But exactly who is
“winning and why?” Is anyone “winning” at all?
Below China says it will buy more USA soybeans again. Why not? The
boycott was always a play to hurt Trump and the Republicans at last November’s
elections. It’s a lot cheaper to ship beans from Oregon to China than from
Brazil.
Trump to meet with China's Xi to try to seal trade deal, progress reported
January 31, 2019 / 1:02 PM
WASHINGTON (Reuters) - U.S. President Donald Trump
said on Thursday he will meet with Chinese President Xi Jinping soon to try to
seal a comprehensive trade deal as Trump and his top trade negotiator both
cited substantial progress in two days of high-level talks.
Trump, speaking at the White House during a meeting
with Chinese Vice Premier Liu He, said he was optimistic that the world’s two
largest economies could reach “the biggest deal ever made.”
The Chinese trade delegation said in a statement
that the two days of high-level talks made “important progress,” China’s
official Xinhua news agency reported.
No specific plans for a meeting with Xi were
announced, but Trump said there could be more than one meeting. U.S. Trade Representative
Robert Lighthizer and Treasury Secretary Steven Mnuchin were invited to bring a
U.S. negotiating team to Beijing around mid-February, with dates still pending.
At the end of the talks next door to the White
House, Liu told Trump that China would make a new, immediate commitment to
increase soybean purchases. An administration official later clarified the
amount as a total of 5 million tonnes, effectively doubling the amount bought
by China since resuming limited purchases in December.
U.S. soybean sales to China, which totalled 31.7
million tonnes in 2017, were largely cut off in the second half of last year by
China’s retaliatory tariffs and the announcement drew a positive reaction from
Trump, who said it would “make our farmers very happy.”
The Chinese delegation’s statement said China will
expand imports of U.S. agricultural, energy, service and industrial products,
according to Xinhua.
---- Asked whether the two sides discussed lifting U.S. tariffs on Chinese goods, Lighthizer said tariffs were not part of the talks.
A person familiar with the discussions said a broad
range of concerns about access to Chinese agricultural markets were raised in
the talks but little progress was made.
The White House said in a statement that a
scheduled March 2 tariff increase on $200 billion of Chinese goods to 25
percent from 10 percent was a “hard deadline” if no deal was reached by March
1.
---- The U.S. tariffs on Chinese goods are
just one front in Trump’s efforts to upend the global trading order with his
“America First” strategy. He has also imposed global tariffs on imported steel
and aluminium, washing machines and solar panels and has threatened to raise
tariffs on imported cars unless Japan and the European Union offer trade
concessions.
More
Study: U.S. dairy farmers could lose $1.3 billion in exports without Japan trade deal
Jan. 30, 2019 / 6:20 PM
EVANSVILLE, Ind., Jan. 30 (UPI) -- U.S. dairy
farmers could lose $1.3 billion in exports over the next decade unless the
Trump administration brokers a favorable trade deal with Japan, a new
industry-funded study says.
Japan is currently the fourth-largest export
destination for U.S. dairy exports, according to the report released by the
U.S. Dairy Export Council. However, Japan currently has favorable trade deals
with Australia, New Zealand and the European Union. Those deals will allow
those countries to overtake the U.S. in dairy exports in the coming years, the
report says.
"These agreements will give our competition a significant economic advantage that will enable them to increase their market share in Japan, costing the U.S. dairy industry billions of dollars in lost sales," Tom Vilsack, the dairy export council's president and CEO, said in a statement.
"U.S. dairy farmers and processors strongly support the administration's launch of trade talks with Japan," Vilsack said. "We hope this report provides fresh ammunition to our negotiators about why a strong U.S.-Japan agreement is so important for American agriculture."
The export council sent its report, released Wednesday, to administration officials and members of Congress in hopes it will spur them to seek a deal.
"U.S. dairy farmers are facing economic hardships, and expanding opportunities overseas is the best way to counter that," said Jim Mulhern, president and CEO of the National Milk Producers Federation. "A trade deal with Japan that significantly expands dairy access would make 2019 a brighter year."
https://www.upi.com/Top_News/US/2019/01/30/Study-US-dairy-farmers-could-lose-13-billion-in-exports-without-Japan-trade-deal/5251548883357/?ts_tn_us=3
Germany, France, Britain to launch mechanism for trade with Iran
January 31, 2019 / 6:46 AM
PARIS/BERLIN (Reuters) - Germany, France and Britain
have officially set up a European mechanism to facilitate non-dollar trade with
Iran and circumvent U.S. sanctions, two diplomats said on Thursday.
The EU has been preparing the system, in effect a
clearing house that avoids monetary transfers in dollars between the EU and
Iran for months although it is unlikely to become operational for several
months due to technical details.
German broadcaster NDR reported that the European
Special Purpose Vehicle (SPV) would be named INSTEX-Instrument In Support Of
Trade Exchanges.
The idea is for the SPV to help preserve the
economic benefits for Iran derived from the curbs it placed on its nuclear
program under a 2015 deal with world powers.
Europe has been keen to show good faith toward Iran
since U.S. President Donald Trump withdrew from the deal last year.
The entity is not likely to revive trade with Iran
to begin with as its focus will primarily be food, medicine and humanitarian,
with transactions small. It will not be used for oil-related transactions that
have been hit hard by U.S. sanctions.
“It won’t change things dramatically, but it’s an
important political message to Iran to show that we are determined to save the
JCPOA and also the United States to show we defend our interests despite their
extraterritorial sanctions,” one European diplomat said.
More
You may be sure that the Americans will commit all
the stupidities they can think of, plus some that are beyond imagination.
Charles de Gaulle
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?
Waterproof graphene electronic circuits
Date: January 30, 2019
Source: FECYT - Spanish Foundation for Science and
Technology
Summary: Water molecules distort the electrical
resistance of graphene, but a team of researchers has discovered that when this
two-dimensional material is integrated with the metal of a circuit, contact
resistance is not impaired by humidity. This finding will help to develop new
sensors -- the interface between circuits and the real world -- with a
significant cost reduction.
The many applications of graphene, an atomically-thin
sheet of carbon atoms with extraordinary conductivity and mechanical
properties, include the manufacture of sensors. These transform environmental
parameters into electrical signals that can be processed and measured with a
computer.
Due to their two-dimensional structure,
graphene-based sensors are extremely sensitive and promise good performance at
low manufacturing cost in the next years.
To achieve this, graphene needs to make efficient
electrical contacts when integrated with a conventional electronic circuit.
Such proper contacts are crucial in any sensor and significantly affect its
performance.
But a problem arises: graphene is sensitive to
humidity, to the water molecules in the surrounding air that are adsorbed onto
its surface. H2O molecules change the electrical resistance of this
carbon material, which introduces a false signal into the sensor.
However, Swedish scientists have found that when
graphene binds to the metal of electronic circuits, the contact resistance (the
part of a material's total resistance due to imperfect contact at the
interface) is not affected by moisture.
"This will make life easier for sensor
designers, since they won't have to worry about humidity influencing the
contacts, just the influence on the graphene itself," explains Arne
Quellmalz, a PhD student at KTH Royal Institute of Technology (Sweden) and the
main researcher of the research.
The study, published in the journal ACS Applied
Materials & Interfaces, has been carried out experimentally using graphene
together with gold metallization and silica substrates in transmission line
model test structures, as well as computer simulations.
"By combining graphene with conventional
electronics, you can take advantage of both the unique properties of graphene and
the low cost of conventional integrated circuits." says Quellmalz,
"One way of combining these two technologies is to place the graphene on
top of finished electronics, rather than depositing the metal on top the
graphene sheet."
As part of the European CO2-DETECT
project, the authors are applying this new approach to create the first
prototypes of graphene-based sensors. More specifically, the purpose is to
measure carbon dioxide (CO2), the main greenhouse gas, by means of
optical detection of mid-infrared light and at lower costs than with other
technologies.
More
Another weekend and while much of America freezes, the FBI investigates
whether this is how Putin’s Russia is taking over America. Meanwhile Waltzing
Matilda, down under, is sweating from record heat. Here in sclerotic Europe
much of Europe has snow, including much of GB. That means cars in ditches,
walls, and into each other, planes and trains grounded, and all of it blamed by
the BBC and other fake media on Brexit! Have a great weekend everyone.
Hell has frozen overThe low temperature was minus 15 degrees in Hell, an unincorporated community in Livingston County, Michigan. The high temperature was minus 4, prompting some on social media to note that Hell had literally frozen over.
The monthly Coppock Indicators finished January.
DJIA: 24,999 +76 Down. NASDAQ: 7,282 +124 Down.
SP500: 2,704 +71
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 the Fed’s Plunge
Protection Team now officially part of President Trump’s re-election team, probably
the safest action here is fully paid up synthetic double options on most of the
major indexes.
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