Friday, 5 April 2019

Brexit, GB’s Plan “B”. China Sorted, Trump Won.


Baltic Dry Index. 699 +27    Brent Crude 69.24

Car Crash Brexit now reset 7 days away, maybe.  Day 126 of the never-ending China trade talks. Everyone’s “optimistic.”

"I will build a great, great wall on our southern border, and I will have Mexico pay for that wall. Mark my words."

President Trump. June 2015.

For more on John Bull’s Plan “B” scroll down to the end.

It’s coming, it’s coming, the USA v China trade deal maybe only days away, if President Xi is to be believed, or it may be four weeks away, if President Trump is to be believed, although the unpredictable but exonerated President Trump appeared to hedge his bet with “[Trump] warned it would be difficult to let China trade with the United States if remaining issues were not resolved.”

Like the Brexit exit date, it all depends on what “it” is. And so on to today’s US employment numbers.

Below, stock markets generally liked what they heard yesterday.

"Our country is in serious trouble. We don't have victories any more. We used to have victories but [now] we don't have them. When was the last time anybody saw us beating, let's say, China, in a trade deal? They kill us. I beat China all the time. All the time."

President Trump. June 2015.

U.S. stock futures rise after China's Xi says substantial progress made on trade talks

By Mike Murphy  Published: Apr 4, 2019 11:08 p.m. ET
U.S. stock market futures reversed course and shot up into positive territory late Thursday after China's Xinhua News Agency reported that President Xi Jinping said in a letter to President Donald Trump that substantial progress has been made in U.S.-China trade talks in the past month, and called for negotiations to end as soon as possible. Xinhua added that Vice Premier Liu He, who met with Trump on Thursday in Washington, said new consensus had been reached on the text of a trade agreement.

Earlier in the day, Trump said of the talks: "We have a ways to go, but not very far," predicting a "monumental" announcement in the coming weeks. After a slow start, Dow Jones Industrial Average futures YMM9, +0.18% S&P 500 ESM9, +0.16% futures and Nasdaq futures NQM9, +0.17% all jumped to positive territory Thursday night.

Asia shares hug weekly gains, wait on U.S. jobs test

April 5, 2019 / 1:31 AM
SYDNEY (Reuters) - Asian share markets consolidated their weekly gains on Friday as Sino-U.S. talks produced a lot of headlines but no conclusions, while caution ahead of U.S. payrolls and a holiday in China dampened volatility.

MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.1 percent but was only just off its highest since the end of August. The index was still up 1.8 percent for the week and 13 percent for the year so far. 

Japan’s Nikkei added 0.3 percent, to be 2.8 percent firmer for the week. E-Mini futures for the S&P 500 edged up 0.1 percent.

“Share markets have run hard and fast from their December lows and are vulnerable to a short-term pullback,” said Shane Oliver, head of investment strategy at AMP Capital.

“But valuations are okay, global growth is expected to improve into the second half of the year, monetary and fiscal policy has become more supportive of markets and the trade war threat is receding.”

Xinhua reported Chinese President Xi Jinping had said progress was being made and called for an early conclusion of negotiations.

U.S. President Donald Trump said on Thursday a deal could be announced in about four weeks, but warned it would be difficult to let China trade with the United States if remaining issues were not resolved.
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But if China is all but “sorted,” that puts Europe up next in the firing line, and that’s not good for Europe nor America it seems.

While President Trump has a fixation with German autos, particularly Mercs, the rest of team Trump are busy bashing a  rapidly slowing Germany over NATO payments and the Nord Stream 2 gas pipeline, which Germany desperately needs since its closing all its nuclear and coal fired power plants.

The wind doesn’t blow enough nor the sun shine enough in Germany to rely on “green” energy alone.

Below, be careful what you wish for when attacking the wealth and jobs destroying EUSSR. Attack to hard and it may just go the way of the old USSR.

"When you see the other side chopping off heads, waterboarding doesn't sound very severe."

President Trump. August 2016.

Why an EU slowdown poses a bigger risk to stock market than China trade

By Chris Matthews  Published: Apr 4, 2019 7:01 a.m. ET

U.S. corporate earnings in Europe hit a record $284 billion in 2018

As investors have kept a laser focus on U.S.-China trade negotiations and hope that a resolution can give the global economy a much-needed shot in the arm, at least one strategist says markets may be overlooking a bigger risk: European economic contraction.

“For U.S. large cap companies, a recession in the EU is a bigger risk” than an unsuccessful resolution to the U.S.-China trade dispute, Joe Quinlan, head of CIO market strategy for Merrill and Bank of America Private Bank told MarketWatch. For companies in the S&P 500 index SPX, +0.21% foreign sales have contributed between 43% and 47% of total revenue, according to S&P Dow Jones Indices.

“Europe remains, by far, the most important market for U.S. multinational companies, with the region accounting for 55% of global foreign affiliate income,” Quinlan wrote in a Tuesday research report. He said U.S. corporate earnings in Europe hit a record $284 billion in 2018, up 7% from the year before. Meanwhile, U.S. affiliates in China earned just $13.3 billion in China, a 1.1% decrease from the year earlier.

“In other words America’s trans-Atlantic partnership with Europe has proven to pay significant dividends,” Quinlan argued, with profits from the EU rising rapidly despite a slowing European economy. “However, rising investment uncertainty and structural issues throughout Europe could lead to a more challenging operating environment for U.S. multinationals, which have long counted on Europe to drive the bulk of their non-U.S. earnings growth.”

While economic dataout of China have been somewhat encouraging of late, European figures have been less so. The German manufacturing sector is contracting, according to Markit’s PMI survey, issued on Monday. Markit data also indicating a contracting French manufacturing sector and a shrinking British services sector, fueled by uncertainty surrounding Britain’s future relationship with the European Union.
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German institutes slash 2019 growth forecast as industry orders tumble

April 4, 2019 / 10:26 AM
BERLIN (Reuters) - Germany’s leading economic institutes slashed their forecasts for 2019 growth by more than half on Thursday and warned growth could slow much further if Britain quits the European Union without an agreement
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Separately, data from the Economy Ministry showed industrial orders fell in February, by 4.2 percent - their biggest drop in more than two years - as foreign demand slumped. That confounded expectations for a 0.3 percent increase.

The institutes cut their overall forecast for this year to 0.8 percent from a previous 1.9 percent and said risks had increased since autumn. They pointed to Britain’s expected departure from the EU and trade conflict between the United States and China.

Germany has long been the euro zone’s economic powerhouse, but it narrowly skirted a recession at the end of last year and posted its weakest growth in five years in 2018.

---- The institutes’ estimates feed into the government’s own growth projections, which will be updated later this month. In January, the government forecast growth of 1.0 percent for this year.

“The long-term upswing of the German economy has come to an end,” Oliver Holtemoeller, one of the economists involved in the report, said.
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Euro falls after report Italy to cut growth forecast

April 4, 2019 / 2:10 AM
LONDON (Reuters) - The euro fell to a session low on Thursday after a report that Italy will slash its growth forecasts prompted fears about a broader economic slump.

Political wrangling over the finances of heavily indebted Italy has seen the euro weaken versus the dollar.

Reuters reported on Wednesday that Rome will this month likely cut its 2019 growth estimate to 0.3 percent or 0.4 percent.

The news was circulating for almost a day before the markets appeared to react to a Bloomberg report that said the government is preparing to cut its GDP forecast to 0.1 percent from 1 percent previously.

“The euro stabilized soon after the Italy news triggered an initial move lower... that suggests that the negative sentiment toward the Eurozone may be priced in and that the single currency may have carved out a near-term bottom against the U.S. dollar,” said Fawad Razaqzada, a market analyst at Forex.com.

The euro was also pressured on Thursday by more signs of weakness in the German economy.
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"The U.S. cannot allow EBOLA-infected people back. People that go to far away places to help out are great - but must suffer the consequences!"

President Trump. Twitter, 2/9/14

Crooks and Scoundrels Corner

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

Today, Toyota. Toyota has a new ploy to make the future of EVs, Toyota. Still with poor Carlos Ghosn back in a Japanese jail yet again without trial, many global executives will probably think twice before taking up Toyota’s bear hug.

Toyota offers free access to over 20 years of electric vehicle patents

April 3 2019
Almost 5 years after Elon Musk allowed other manufacturers access to Tesla patents without fear of legal action – effectively making them open source – Toyota has announced that it's opening up its vehicle electrification patent archive to help speed up the development and adoption of electric vehicles.

Research and development of electric vehicles is costly and time consuming, as startups like Faraday Future know only too well. Toyota wants to help, announcing that it will grant royalty-free licenses to other manufacturers for nearly 24,000 patents (including some pending applications) relating to vehicle electrification technologies.

The focus of the electric vehicle technology being opened up by Toyota is for hybrid electric vehicles, plug-in hybrids and fuel cell electrics rather than battery EVs, and represents patents registered over more than 20 years of research and development. That shapes up as nearly 2,600 electric motor patents, 2,020 relating to power control units, 7,550 for system controls, 1,320 for engine transaxles, 2,200 for chargers, and the addition of 2,380 fuel cell patents to the 5,680 already available since 2015.

The company will also offer technical support to vehicle manufacturers that make use of Toyota's motors, batteries, power control units, electronic control units and more – for a fee.

"Based on the high volume of inquiries we receive about our vehicle electrification systems from companies that recognize a need to popularize hybrid and other electrified vehicle technologies, we believe that now is the time for cooperation," said the firm's Shigeki Terashi. "If the number of electrified vehicles accelerates significantly in the next 10 years, they will become standard, and we hope to play a role in supporting that process."

Applications for access to the royalty-free patents are open now, with the doors remaining ajar until the end on 2030.

"The concept of global warming was created by and for the Chinese in order to make U.S. manufacturing non-competitive."

President Trump. Twitter, 6/10/12

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?

Florida Power & Light’s Huge Solar-Plus-Storage System the ‘New Norm’ for Utilities

The NextEra-owned utility’s 409-megawatt Manatee Energy Storage Center will be powered by utility-scale solar.
Karl-Erik Stromsta

Florida Power & Light, the utility owned by NextEra Energy, said it plans to build a 409-megawatt energy storage project to be powered by utility-scale solar, among the largest battery systems announced to date in the U.S.

Expected to be up and running by late 2021, the FPL Manatee Energy Storage Center will be a landmark project for the storage sector, four times the size of the world’s largest battery system currently in operation, FPL said in a statement.

It's the largest battery project unveiled so far in the U.S. on a megawatt basis, and among the largest on a megawatt-hour basis, said Wood Mackenzie senior storage analyst Dan Finn-Foley.

It's the largest battery project unveiled so far in the U.S. on a megawatt basis, and among the largest on a megawatt-hour basis, said Wood Mackenzie senior storage analyst Dan Finn-Foley.

The Manatee Energy Storage Center will have the ability to distribute 900 megawatt-hours of electricity, enough to power 329,000 homes for 2 hours. The facility will be charged by an existing FPL solar plant in Manatee County in southwest Florida, and will help the utility accelerate the retirement of two 1970s-era natural-gas-fired plants.

The project underscores FPL's recent embrace of large-scale solar and storage in the Sunshine State — following the aggressive lead of its sister company NextEra Energy Resources, which is active across the continent as North America’s leading renewables developer.

The Manatee project is part of a wider modernization plan for FPL as it looks to leverage NextEra's experience with large-scale renewables and storage in other parts of the country to decarbonize its generation fleet in Florida. Replacing the two gas-fired plants with a combination of solar arrays, battery installations and upgrades to combustion turbines at other power plants will save consumers $100 million over time, the utility said.

Gigawatt-scale solar-plus-storage facilities are quickly becoming the "new norm," following similar announcements out of Arizona and Puerto Rico this year, Finn-Foley said.

"Based on what we are seeing out of Arizona, Florida, Puerto Rico and Hawaii, you can draw a line across the sunniest parts of the U.S. and find where solar-plus-storage has begun to outcompete natural-gas peakers," he said. "As battery costs continue to drop and incentives are rolled out, expect that line to creep farther and farther north."
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https://www.greentechmedia.com/articles/read/florida-power-light-to-build-409-megawatt-solar-powered-battery-system?utm_medium=email&utm_source=Storage&utm_campaign=GTMStorage#gs.49p2fi

Another weekend and likely a frantic one on both sides of the Atlantic. Prime Minister May is doing a fantastic job destroying the 185 year old Conservative Party, while Barnier and Juncker on the other side of the English Channel are pretty much doing the same to the dying rump-EUSSR.

In America, it all depends on today’s employment numbers and what an exonerated President Trump tweets at the weekend, and against whom. The US role of Barnier and Juncker is currently under audition by 20 and counting pouting Democrats.  Have a great weekend everyone.

May: Ok Juncker you win, we’re staying. 

After all that's gone on, imagine how happy the rump-EU will be to have GB back in the EU summit meetings again playing lead spoiler and miser. But this time with Italy, Hungary, Austria, the Czech Republic, Poland, Greece, Cyprus, Malta and a few others along for the ride. Universal glee.

Oh, and what about those GB Kommissioners and other UK jobs you reassigned? All those EU Parliament seats! Get them back, now!  GB Plan B, were it to happen, ought to be such fun!

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.

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