Tuesday 30 April 2019

Boeing Blames The 737 Max Pilots.

Baltic Dry Index. 913 +24    Brent Crude 71.82

Never ending Brexit now October 31, maybe. 
Day 151 of the never-ending USA v China trade talks. Everyone’s “optimistic.”
USA v EU trade war 15 days away? No one optimistic.

Let me get this straight, “you’re only talking to me because the rent’s not paid? Is that all I am to you? A tenant?”

Today, Asia pauses, China slows again, the Fed gets a complication, Trump’s trade war against China stumbles on. Europe up next possibly as early as May 15.  Europe prepares by taking tomorrow off. British voters prepare to eradicate May’s Conservatives on Thursday, that’s if any voters bother to show up at all.

In an unwise lame excuse move all too likely to backfire, Boeing’s CEO blames the pilots.

Below, slow markets in a slow week.

“We knew we wouldn’t be able to pay next month’s rent, so we decided to not pay this month’s rent either.”

Asian markets mixed as U.S.-China trade talks resume

By Marketwatch and Associated Press Published: Apr 30, 2019 12:00 a.m. ET
Asian markets were mixed in early trading Tuesday, as a fresh round of U.S.-China trade talks were set to kick off in Beijing.

Treasury Secretary Steven Mnuchin, who will lead the U.S. delegation along with Trade Representative Robert Lighthizer, said Monday that negotiators should know this week or next whether a final trade deal will be made — or not. “We hope within the next two rounds of (talks) in China and in D.C. to be at the point where we can either recommend to the president we have a deal or make a recommendation we don’t,” Mnuchin told Fox Business Network. “There is a strong desire for both sides to see if we can wrap this up or move on.”

----“Softer than expected, manufacturing PMI out of China sets the region up for decline,” said Jingyi Pan of IG in a report.

That suggests some of March’s improvement was due to the rebound from the Lunar New Year holiday, when factories close for up to two weeks, said William Adams of PNC Financial Services Group. But he noted it was the second-strongest reading since October.

China April factory growth unexpectedly slows as economy struggles for traction

April 30, 2019 / 2:52 AM
BEIJING (Reuters) - Factory activity in China expanded for a second straight month in April but at a much slower pace than expected, an official survey showed on Tuesday, suggesting the economy is still struggling for traction despite a flurry of support measures.

The unexpected loss of momentum at the start of the second quarter followed upbeat data in March which had raised hopes among global investors that the world’s second-largest economy was getting back on firmer footing.

A private business survey on Tuesday also pointed to a loss of momentum, confounding expectations for a pick-up, with factories starting to shed jobs again after adding staff in March for the first time in years.

The weak manufacturing readings, along with softer construction growth, could stoke debate over how much more stimulus China needs to generate a sustainable recovery, without risking a rapid jump in debt.

The official Purchasing Managers’ Index (PMI) for manufacturing fell to 50.1 in April from March’s reading of 50.5, which was the first expansion in four months, data from the statistics bureau showed.

It hovered just above the neutral 50-point mark which separates expansion from contraction on a monthly basis.

Analysts surveyed by Reuters had forecast the PMI to match March’s 50.5.

“For now, the official PMIs suggest that Q2 got off to a weaker start and reinforce our view that there are still some downside risks to near-term activity,” Julian Evans-Pritchard, senior China economist at Capital Economics, said in a research note.

Warning Signs Are Flashing in China's Stock Market After Surge

Bloomberg News
Updated on 30 April 2019, 03:26 BST

Catalysts for further gains are lacking now, Shen Bifan says 
Investors seeking shelter in more stable large-cap shares

March consumer spending climbed at highest rate since 2010

April 29, 2019 / 1:02 PM
April 29 (UPI) -- U.S. consumer spending rose about 1 percent in March, the Bureau of Economic Analysis said Monday, a possible indication the post-recession rebound continues.

The Commerce Department said in its monthly report personal income increased $11.4 billion, or 0.1 percent, while disposable personal income rose by $600 million. Personal consumption expenditures increased $123.5 billion and were widespread across the economy, officials said. Spending in the automotive sector was the leading contributor.

The report is the latest sign the U.S. economy remains strong in its 11th year of recovery since the 2008 recession. The job market has added 180,000 workers per month, on average, so far this year and wages increased 0.4 percent for the month after a slightly weaker rise in February. 

Unemployment claims have decreased to record lows.

Inflation has remained below the Federal Reserve's Open Markets Committee's target range of 2 percent. The FOMC will meet Tuesday to consider raising interest rates, although it has previously signaled a hike is unlikely.

The increase in March consumer spending, which was the largest monthly boost since 2010, is a possible indicator the U.S. economy will have a strong second quarter after a growth of 3.2 percent in the first quarter.

In defence spending news, Uncle Sam tops the list yet again, while Russia slips out of the top 5. More grist to the mill of the Democrat Socialists hoping to run against President Trump in 2020.

U.S. tops world in defense spending; Russia falls out of top 5

April 29, 2019 / 9:13 AM
April 29 (UPI) -- The United States spent more than any other country on defense in 2018, but Russia fell out of the top five for the first time in nearly 15 years, a report from the Stockholm International Peace Research Institute said Monday.

The report detailed regional and selected national military expenditure data for 2018 and trends over the past 10 years. The SIPRI database outlines military spending by countries from 1949 to 2018.

According to the report, the United States spent $649 billion on defense for 2018, far and away more than any other country, followed by China with $250 billion and Saudi Arabia with $67.6 billion. India spent $66 billion and France nearly $64 billion. Russia was sixth, with $61.4 billion.

"Starting in 2016, Russia's military budget has trended downwards," the report said. "However, due to a one-off government debt repayment of almost $11.8 billion to Russian arms producers in 2016, spending rose 7.2 percent. Without this payment, Russia military spending would have fallen by 11 percent."

The report noted Russia spending is still 27 percent higher than it was in 2009. Russia had been in the top five since 2006.

U.S. spending increased by 4.6 percent and continues to spend more on defense than the next eight countries combined, the study said.

Concern over Russia's military, though, continues to drive spending in Europe. Ukraine, Bulgaria, Romania, Latvia and Lithuania all showed an increase in military spending.

Finally, in other news, a desperate Boeing fights back by smearing the dead 737 Max pilots. I doubt that this will cut any ice with the American tort bar or the victims families.

“I’m getting really tired of paying this rent every month!” “I’ll pay you when I can.”

Boeing CEO: Pilots didn't 'completely' follow procedures in 737 Max crashes

April 29, 2019 / 5:26 PM
April 29 (UPI) -- Boeing CEO Dennis Muilenburg said Monday that pilots did not "completely" follow the company's procedures in two crashes involving its 737 Max airliner.

Speaking to media after a shareholder meeting in Chicago, Muilenburg said Boeing was unable to find any "technical slip or gap" in its anti-stall software -- known as the Maneuvering Characteristics Augmentation System -- that was linked to both crashes.

"When we design these systems, understand that these airplanes are flown in the hands of pilots," he said.

Muilenburg also reiterated the company's stance that it "owns" the responsibility to update the software, but doesn't entirely "own" the Ethiopian Airlines and Lion Air crashes that collectively resulted in 346 deaths.

Reports detailing the events of both crashes mentioned that inaccurate sensor readings related to MCAS occurred prior to the crashes. Muilenburg said these issues were "one link in a longer chain of events," but didn't indicate a design flaw.

"There are multiple contributing factors. There are factors that we can control in the design and in this case that common link related to the MCAS system and its activation," Muilenburg said. "We're going to break that link and this will prevent accidents like this from happening again."

Muilenburg also disputed reports that pilots had not been properly made aware of MCAS, saying it is "not a separate system" but rather something that is included in training a pilot to fly the plane.

---- American Airlines pilot and union spokesman Capt. Jason Goldberg told NPR pilots do train to overcome pitch adjustment system issues, but MCAS malfunctions create other problems.

"You would have the stick shaker, which [activates] a rather violent aggressive shaking of the control column," Goldberg said. "You would have the appearance of unreliable airspeed. You would have a number of warnings that don't immediately or intuitively give the impression of a pitch trim problem."

Boeing didn’t tell Southwest that 737 Max safety feature had been turned off

By Andy Pasztor  Published: Apr 28, 2019 7:13 p.m. ET

Biggest buyer of 737 Max unaware of change until after Indonesia crash

Plane maker Boeing Co. didn’t tell Southwest Airlines Co. when the carrier began flying 737 Max jets in 2017 that a standard safety feature, found on earlier models and designed to warn pilots about malfunctioning sensors, had been deactivated.

Federal Aviation Administration safety inspectors and supervisors responsible for monitoring Southwest LUV, -0.69%  , the largest Max customer, were also unaware of the change, according to government and industry officials.

Boeing BA, -0.33%   had turned off the alerts which, in previous versions of the 737, informed pilots if a sensor known as an “angle-of-attack vane” was transmitting errant data about the pitch of a plane’s nose. In the Max, which featured a new automated stall-prevention system called MCAS, Boeing made those alerts optional; they would be operative only if carriers bought additional safety features.

Southwest’s cockpit crews and management didn’t know about the change for more than a year after the planes went into service. They and most other airlines operating the Max globally learned about it only after the fatal Lion Air crash last year led to scrutiny of the plane’s revised design. The FAA office’s lack of knowledge about Boeing’s move hasn’t been previously reported. “Southwest’s own manuals were wrong” about the status of the alerts, said Southwest pilots union president, Jon Weaks. Since Boeing hadn’t communicated the modification to the carrier, the manuals still reflected incorrect information.

An expanded version of this report appears on WSJ.com.

Look, I know I owe you money, but don’t worry, it won’t be long before I pay you. The cheque’s in the mail.

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

With little surprise Virgin Australia delays accepting their 737 Max’s. Someone didn’t get CEO Muilenburg’s latest excuse.

Virgin Australia delays Boeing 737 MAX order

Date created :
Virgin Australia said on Tuesday it had delayed delivery of its order of 48 Boeing 737 MAX aircraft over safety concerns, following two deadly crashes.

The 737 MAX has been grounded worldwide since mid-March following the crash of an Ethiopian Airlines flight and an earlier Lion Air crash in Indonesia, which killed a total of 346 passengers and crew.

Virgin Australia said in a statement that it was deferring delivery of its first batch of planes from November 2019 to July 2021.

"Safety is always the number one priority for Virgin Australia. As we have previously stated, we will not introduce any new aircraft to the fleet unless we are completely satisfied with its safety," Virgin Chief Executive Paul Scurrah said.

"We are confident in Boeing's commitment to returning the 737 MAX to service safely and as a long-term partner of Boeing, we will be working with them through this process."

Virgin also said it was shifting some of its orders of 737 MAX 8s to Max 10s while keeping the total at 48 planes.

The Virgin announcement comes as Boeing executives faced several shareholder challenges Monday at its annual general meeting, with the crisis raising questions about whether the aerospace giant put profits ahead of safety to market a new narrow-body plane.

The US firm has said both crashes involved erroneous information generated by the anti-stall system.
But it has defended the design of the MAX saying multiple factors can contribute to catastrophic accidents.

Boeing expects the Federal Aviation Administration to conduct a test flight of a software fix for the anti-stall system soon.

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?

Shell to replace gas with solar for Oman port

Global energy company Shell has partnered with major port in Oman to set up several solar power projects to replace gas power for local businesses.

SOHAR deep-sea port and free-zone has signed a 600-hectare lease agreement with Shell Development Oman (SDO) for land to set up industrial and commercial solar panels. The port is managed in a joint-venture between the Port of Rotterdam and the Sultanate of Oman.

An initial 25MW project will directly supply Al Tamman Indsil Ferrochrome LLC. The region is a major exporter of Chromite ore.

Mark Geilenkirchen, CEO of SOHAR Port and Freezone said: “Sustainability is one of our key values in driving development at SOHAR and this partnership with Shell will create solar-powered solutions that are the first-of-its-kind in the country. This also marks an incredible milestone and the first step in our proactive long-term programme, that we have already begun implementing, to transform our 4,500-hectare development into a ‘green Freezone’. We hope that the changes we are implementing today will encourage current clients and future investors to adopt cleaner technologies and sustainable practices tomorrow.”

Chris Breeze, Shell Oman country chairman, added: “These solar PV projects will free up natural gas resources for better economic use, support the green agenda of the Sohar freezone and enable further economic development in Sohar, by unlocking large-scale solar opportunities.” Recent Shell activity has included the acquisition of German energy storage firm sonnen, the re-branding of its UK consumer-facing renewables-only energy supplier First Utility to Shell Energy.

Are you interested in the transition to solar energy in the Middle East? You'll love this story on the world's largest solar park.


The monthly Coppock Indicators finished March

DJIA: 25,929 +54 Down. NASDAQ: 7,729 +94 Down. SP500: 2,834 +53 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.

Monday 29 April 2019

A New Emperor, Golden Week. The Fed And A Hammering.

Baltic Dry Index. 889 +20    Brent Crude 71.79

Never ending Brexit now October 31, maybe. 

Day 150 of the never-ending USA v China trade talks. Everyone’s “optimistic.”

USA v EU trade war 16 days away? No one optimistic.

“To improve is to change; to be perfect is to change often.”

Sir Winston Churchill.

It is almost May, “time to sell stocks and go away,” as the old Wall Street adage has it. Well maybe.

This week, we get another Fed meeting, nothing new expected. Yet another round of USA v China trade talks, as always, everyone optimistic. A new Japanese Emperor. The “Golden Week” 10 days of holidays in Japan. India continues voting in its never-ending general election, results expected May 23.

Spain gets to try to figure out how to form a government following yesterday’s general election.

And in the UK, yet another referendum on Brexit in the form of the local elections, where the incompetent Mrs May’s Conservative Party is expected to get hammered at the polls on Thursday.  The Tories only hope, widespread rain and a record low turnout. Only the latter is expected with a massive turnoff by voters disgusted by all politicians. Later in the month, UK voters get to do it  all again in European elections that no one wants.

Below, this morning’s news from Asia.

“If I’d asked my customers what they wanted, they’d have said ‘Don’t change anything.’”

Henry Ford

Asian markets mixed after surprising U.S. GDP report

By Marketwatch and Associated Press Published: Apr 29, 2019 12:02 a.m. ET

Hang Seng up, Shanghai down; Nikkei closed for 10-day holiday

Asian markets were mixed in early trading Monday, following a better-than-expected U.S. GDP report on Friday and ahead of a new round of U.S.-China trade talks.

On Friday, data showed the U.S. economy grew 3.2% in the first quarter, higher than analysts’ expectations. That was thanks in part to the stockpiling of goods, although it was not immediately clear how, since data showed both domestic production and imports fell in the first three months of the year. On Wall Street, the benchmark Standard & Poor’s 500 index SPX, +0.47%   hit a new high Friday while the Dow Jones Industrial Average DJIA, +0.31%   also eked out a gain but ended the week down.

U.S. trade representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will lead a U.S. delegation to China on Tuesday to resume trade negotiations. Those will be followed by talks in Washington starting May 8. There have been reports that negotiations are in their final stage, and a final deal may be signed in late May or early June, putting an end to the yearlong tariff war between the world’s two largest economies.

The Fed board meets Tuesday and is due to issue a statement on its interest rate outlook Wednesday.

Two U.S. Navy warships sail through strategic Taiwan Strait

April 29, 2019 / 1:11 AM
WASHINGTON (Reuters) - The U.S. military said it sent two Navy warships through the Taiwan Strait on Sunday as the Pentagon increases the frequency of movement through the strategic waterway despite opposition from China.

The voyage risks further raising tensions with China but will likely be viewed by self-ruled Taiwan as a sign of support from the Trump administration amid growing friction between Taipei and Beijing.
Taiwan is one of a growing number of flashpoints in the U.S.-China relationship, which also include a trade war, U.S. sanctions and China’s increasingly muscular military posture in the South China Sea, where the United States also conducts freedom-of-navigation patrols. 

The two destroyers were identified as the William P. Lawrence and Stethem. The 112-mile-wide (180-km) Taiwan Strait separates Taiwan from China.

---- Taiwan’s Defense Ministry said the U.S. ships had sailed north through the strait.

“U.S. ships freely passing through the Taiwan Strait is part of the mission of carrying out the Indo-Pacific strategy,” it said in a statement.

Taiwan’s armed forces monitored the transit and nothing out of the ordinary happened during it, the ministry said.

There was no immediate comment from China.

The United States has no formal ties with Taiwan but is bound by law to help provide the island with the means to defend itself and is its main source of arms.

China says criticisms on IP protection lack evidence amid trade spat

April 28, 2019 / 5:41 AM
BEIJING (Reuters) - Criticisms of China’s intellectual property (IP) protection “lack evidence” and IP infringement is a worldwide problem, the head of China’s National Intellectual Property Administration said on Sunday. 

Critics also ignored the significant progress China has made on IP protection, Shen Changyu told a press conference in response to a question on concerns raised by countries like the United States.

“Some countries’ criticisms of China’s IP protection lack evidence and are non-specific,” Shen said.
IP protection has been a topic of “deep concern” in ongoing Sino-U.S. trade negotiations and China would take further measures to comprehensively strengthen its IP protections this year, he said.

The measures will include amending China’s IP laws to increase the cost for infringements, boosting the efficiency of IP approvals, and providing lower-cost and more convenient IP protection channels, Shen said.

Washington and Beijing last year slapped import duties on each other’s products as the United States seeks reforms to Chinese practices that it says result in the theft of U.S. intellectual property and the forced transfer of technology from U.S. companies to Chinese firms.

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will travel to Beijing for trade talks beginning on April 30 to discuss issues including intellectual property and forced technology transfer.

Bollywood stars, rich Indians vote in fourth phase of giant election

April 29, 2019 / 4:22 AM
MUMBAI/NEW DELHI (Reuters) - Some of India’s richest families, Bollywood stars and others voted early on Monday in Mumbai and elsewhere in the country as the fourth phase of a massive, staggered general election got underway. 

More than 127 million people are eligible to vote in this round of the seven-phase election held across 71 seats in nine states. Prime Minister Narendra Modi’s coalition won more than 75 percent of the seats in the previous election in 2014.

Many of the constituencies are in Uttar Pradesh state in the north and western India’s Maharashtra, where the financial capital Mumbai is located. Uttar Pradesh elects the most MPs, with Maharashtra next, and both states are ruled by Modi’s Hindu nationalist Bharatiya Janata Party (BJP).

However, political analysts say the BJP may struggle to repeat its strong showing this time due mainly to a jobs shortage and weak farm prices, issues upon which the main opposition Congress party has seized.

“Jobs should be the priority for the new government,” said Aaditya Nair, a hotel management student, as he stood in line outside a polling station in Mumbai.

India’s financial markets were closed on Monday for the election.

Mumbai, which has six seats, is India’s wealthiest city but ageing and insufficient infrastructure is a major concern. Six people were killed last month when part of a pedestrian bridge collapsed, bringing back memories of a 2017 rush-hour stampede that killed at least 22 people on a narrow pedestrian bridge.

In the European news update, today and tomorrow might be a very good time to sell and go away for the rest of May, at least. Below Spain goes hard left as the Vox Party splits the vote on the right.

Brits opt for non European holidays, which if true, will leave a big hole in the Iberian peninsula economies. The UK Tories are told by Mrs May to go back to your constituencies and lose. Will GB have a new Prime Minister by this time next week?

Spain's Socialists on course to regain power but talks await

April 27, 2019 / 11:07 PM / Updated an hour ago
MADRID (Reuters) - Spanish Prime Minister Pedro Sanchez looks set to regain power after his Socialists overcame a historic challenge by right-wing nationalists in elections on Sunday, a result he portrayed as a morale booster for the European Union.

The Socialists gained seats in one of Spain’s most hotly contested elections in decades, which featured the rise of far-right party Vox whose ultra-nationalist campaign echoed political trends across Europe where traditional parties have ceded to anti-immigration and eurosceptic forces.

However, the rise of Vox also splintered the right-wing vote, further fragmenting Spain’s political landscape and playing into the hands of the Socialists which won an almost 50 percent increase in seats.

“The Socialists have won the general election,” Sanchez declared, smiling broadly as he addressed jubilant supporters at party headquarters in Madrid. Outside, hundreds celebrated in the street, waving red party flags and chanting ‘Long live Spain’ and ‘Long live Socialism’.

---- Vox secured one in 10 votes and 24 seats, the first far-right party to get a sizeable presence in parliament since the country’s return to democracy in the late 1970s, but it did not get the kingmaker role it was looking for.

Far left-wing party Podemos immediately offered to open coalition talks with Sanchez, though the two parties together cannot command a majority.

---- It was unclear in the early hours of Monday if he would also require the support of separatist lawmakers from Catalonia, the country’s richest region where a push for independence flared into violence two years ago.

“Pedro Sanchez is in a good position,” said Pablo Simon, a political science professor at Madrid’s Carlos III University.

A government deal would be complicated and certainly not be clinched before next month’s 
European Parliament elections, he added.

Britons opt for non-EU holidays in face of Brexit impasse - Thomas Cook

April 29, 2019 / 12:31 AM
LONDON (Reuters) - British holidaymakers are favouring destinations outside the European Union after repeated delays to Brexit discouraged travellers from booking early and prompted them to look further afield, travel firm Thomas Cook said on Monday.

Turkey and Tunisia are among the biggest beneficiaries from the trend towards non-EU bookings, the firm said in a report, with demand for both recovering after security concerns curbed bookings in recent years.

Britain was due to leave the EU on March 29, but an impasse in parliament over the terms of Prime Minister Theresa May’s Brexit deal has delayed departure. A new deadline of Oct. 31 was agreed with Brussels.

Thomas Cook, the world’s oldest travel company, said it was “clear that the prolonged uncertainty around the manner and timing of Britain’s exit from the European Union has led many to delay their decision on when and where they book for their summer holidays.”

But a majority of the 3,422 UK holidaymakers surveyed by the company nevertheless said they were more likely to holiday abroad than last year, with a quarter saying that a foreign holiday was higher in their spending priorities than in 2018, compared to just 8 percent who said it was lower.

---- “The political turmoil is having an impact in other ways, revealing itself in a clear shift to non-EU countries.”

Thomas Cook said 48 percent of its UK package holiday bookings for this summer so far were to non-EU destinations, up 10 percentage points on the same time last year.

Conservatives expected to get hammering in local elections

Party anticipates difficult night as voters get chance to show exasperation over Brexit process
Sun 28 Apr 2019
“The public have had enough,” the prime minister told voters in her televised address from the podium in No 10 last month. “You’re tired of the infighting. You’re tired of the political games. Tired of MPs talking about nothing else but Brexit.”

On Thursday, many of those voters will get their first chance to go to the polls, since Westminster entered deadlock and Brexit was delayed. Election-watchers expect them to use it to hammer Theresa May’s Conservatives.

More than 8,300 council seats are up for grabs, in 248 English local authorities, as well as six mayoralties, and 11 councils in Northern Ireland.

Many of the contests in England are in traditionally Tory areas. The last fight over them coincided with the 2015 general election, at which David Cameron’s party clinched an unexpected outright majority.

Local election results are notoriously hard to interpret. Turnout tends to be low – particularly when, as this year, there is no other vote taking place on the same day – and genuinely local issues, from hospital closures to bin collections, can swing results.

But this week’s vote will inevitably be seen as a measure of the public’s exasperation with the political wrangling that resulted in May accepting a second Brexit delay, potentially until 31 October.

The Conservatives’ deputy chair, Helen Whately, said on Sunday the council elections would be a difficult night for the party and that there was limited “bandwidth” in government to tackle issues aside from Brexit.

Pollsters put it more strongly. “It is going to be desperate for the Tories,” says Deborah Mattinson of the political consultancy Britain Thinks.

“Typically local elections are one part potholes and dog poo, and three or four parts a referendum on the government – but in this instance, the potholes and dog poo aren’t featuring at all.”