Baltic Dry Index. 734
+09 Brent
Crude 71.42
Never ending Brexit
now October 31, maybe. Day 132 of the
never-ending China trade talks. Everyone’s still “optimistic.”
Minutes from a March 19-20
meeting of Federal Reserve policymakers showed they agreed to be patient about
any changes to interest rate policy as they saw the U.S. economy weathering a
global slowdown without a recession in the next few years.
From the Fedster’s mouth to our ears, there will be no
recession in the next few years, according to the minutes of the Fed meeting
held in March. Great news for President Trump’s re-election campaign, but
disastrous news for the 500 or so Democrat Presidential wannabes all adopting socialism
in a mass attempt to defeat him.
Still to this old dinosaur commodities trader and
stock follower, I can’t help but wonder if they’re right given their track
record. Since 1945 they’ve never called a recession ahead of time and they didn’t
call the Great Depression of the 1930s either. Who am I to believe? The
Washington District of Crooks Fedsters, or all the rising signs of a major
global slowdown underway?
Below, Asia unsure whether to cheer or panic.
Never believe anything in
politics until it has been officially denied.
Count Otto von Bismarck
Growth woes douse rally in Asian shares, dollar slips
April 11, 2019 /
1:48 AM
SYDNEY (Reuters) -
Asian stocks stepped back from near eight-month highs on Thursday and the
dollar eased as European and U.S. central banks reinforced investor worries
about the global economic outlook and trade protectionism.
In a fresh escalation of trade tensions, U.S. President Donald Trump has
threatened new tariffs on goods from the European Union even as the Sino-U.S.
trade dispute remains unresolved.
MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.3
percent after four straight days of gains took it to the highest since last
August.
Chinese shares were subdued with the blue-chip CSI300 off 1 percent
while Hong Kong’s Hang Seng index stumbled 0.6 percent.
Australian shares also lost ground, pressured by political uncertainty after
the country’s prime minister called a national election for May 18.
Japan’s Nikkei fell 0.3 percent as the yen strengthened.
“It has been another mixed day in the market with investors still
searching for the next push one way or the other and the majority of products
are trading at familiar levels,” said Nick Twidale, Sydney-based analyst at
Rakuten Securities Australia.
“Traders continue to operate in a ‘wait and watch’ mode as they look for
the next opportunity in a cautious market. Two big event risks are now behind
us with the ECB and Fed.”
On Wednesday, the European Central Bank (ECB) kept its loose policy
stance and warned that threats to global economic growth remained. The ECB has
already pushed back its first post-crisis interest rate hike, and President
Mario Draghi raised the prospect of more support for the struggling euro zone
economy if its slowdown persisted.
---- Separately, data showed U.S. consumer prices increased by the most in 14 months in March but underlying inflation remained benign against a backdrop of slowing global economic growth.
Minutes from a March 19-20 meeting of Federal Reserve policymakers
showed they agreed to be patient about any changes to interest rate policy as
they saw the U.S. economy weathering a global slowdown without a recession in
the next few years.
More
Guggenheim says next recession will be less severe — but the ensuing stock market fall will be brutal
By Sunny
Oh Published: Apr 10, 2019 4:36 p.m.
ET
Guggenheim expects the S&P 500 to sink by 40-50% as economic recession takes hold as early as 2020
Asset-management firm Guggenheim has some good news and some really bad
news for Wall Street: The coming recession will be milder than past recessions
— that’s the good news. The bad news is that the stock market is still likely
to suffer a savage beatdown as an economic downturn sets in as early as 2020.
They said a lack of pent-up problems in the housing market and a
well-capitalized banking system mean the economy is more resilient. That should
be welcome news for risk assets, in the wake of March’s inversion of the yield
curve — an apparent harbinger of coming recessions, closely watched by Wall
Street types and economists.
However, despite a relatively soft landing for the economy, equity
benchmarks are likely to see a severe slump, partly due to lofty valuations and
a lack of available fiscal and monetary policy tools, analysts at Guggenheim
Investments led by Scott Minerd wrote in a Tuesday research note.
Guggenheim says the level of equity valuations going into the recession generally dictates the potential magnitude of the slide in stocks, sometimes more than other standard economic metrics.
“Our work shows that when recessions hit, the severity of the downturn has a relatively minor impact on the magnitude of the associated bear market in stocks,” they said.
Currently, the S&P 500 SPX, +0.35% and the Nasdaq Composite Index COMP, +0.69% are within 2.6% from their respective all-time highs put in last year, even after the worst annual return by those benchmarks since 2008 and the ugliest one-day slide on the trading session before Christmas on record.
---- “Given that valuations reached elevated levels in this cycle, we expect a severe equity bear market of 40–50 percent in the next recession, consistent with our previous analysis that pointed to low expected returns over the next 10 years,” Guggenheim said. Those predictions amount to a severe bear market, defined as a downturn from a recent peak of at least 20%.
A popular measure of stock values, the Shiller CAPE ratio, show that price-to-earnings, or P/Es stand at 31.05, compared with a historical average of 16.61. The measure was developed by Nobel laureate economist Robert Shiller of Yale University and compares the price against inflation-adjusted earnings over the previous 10 years.
More
This economic slowdown is not a blip, warns strategist who manages $4.5B
By Shawn
Langlois Published: Apr 10, 2019
2:24 p.m. ET
Merely a blip or long-term problems? Investors are grappling with mixed signals these days, and how they react to all the noise could have serious consequences for their portfolios, according to Bleakley Advisory Group’s Peter Boockvar.
Specifically, he said stocks suggest an economic slowdown is only temporary in this climate, while the bond market’s message is much more ominous.
“The stock market is assuming…things will improve in Q2 and throughout the second half,” he told CNBC in an interview Tuesday. “The bond market has a less-optimistic take on that, saying that the data is weak, and we’re going to reflect that right now in lower yields and inversions within the yield curve.”
An inverted yield curve, in which short-term yields rise above their longer-term counterparts, is seen as an accurate predictor of recessions. The closely followed spread between the short-term 3-month T-bill TMUBMUSD03M, +0.00% and benchmark 10-year Treasury TMUBMUSD10Y, +0.23% watched closely by economists, inverted in March.
For Boockvar’s part, the fixed-income market is the indicator to watch.
“The bond market is going to be right,” said Boockvar, who oversees $4.5 billion in assets as Bleakley’s CIO. “We’re in a slowdown that’s not just temporary, and I think that’s something that’s going to last throughout the year.”
As for this earnings season, he says that 70% of companies will beat estimates “because that’s always the case.” But that won’t sway him.
“I’m waiting to see the extent of those beats,” he explained. “And I think it’s more likely than not that we’re going to see a decline.”
More
In other news, the rump-EU orders Brexit on Halloween. I suspect that we
will not get that far. With the UK Conservative Party facing a wipe-out in next
month’s local elections and the now to be held European elections, the odds are
soaring for a summer General Election in GB. 17.4 million thwarted Brexit
voters are all too likely to put in power communist Comrade Agent Corbyn.
EU leaders offer Britain a Brexit deadline extension until Halloween
By Associated
Press Published: Apr 10, 2019 7:11
p.m. ET
BRUSSELS — European Union leaders on Thursday offered Britain a delay to
its EU departure date until Halloween.
Leaders of the 27 remaining EU member states met for more than six hours
before agreeing to postpone Brexit until Oct. 31, two officials said. The
officials spoke to the Associated Press on condition of anonymity to discuss
the closed-door negotiations. European Council President Donald Tusk confirmed
in a tweet that an extension had been agreed to, but he did not disclose the
date.
---- EU leaders spent a long dinner meeting wrangling over whether to save Britain from a precipitous and potentially calamitous Brexit, or to give the foot-dragging departing nation a shove over the edge.
May pleaded with them at an emergency summit to delay Britain’s exit,
due on Friday, until June 30 while the U.K. sorts out the mess that Brexit has
become.
Some were sympathetic, but French President Emmanuel Macron struck a
warning note.
“Nothing is decided,” Macron said, insisting on “clarity” from May about
what Britain wants.
“What’s indispensable is that nothing should compromise the European
project in the months to come,” he said.
---- Many leaders said they were inclined to grant a Brexit delay, though Macron had reservations after hearing May speak. An official in the French president’s office said the British leader hadn’t offered “sufficient guarantees” to justify a long extension.
Macron is concerned that letting Britain stay too long would distract
the EU from other issues — notably next month’s European Parliament elections.
“The no-deal situation is a real option,” said the official, who was not
authorized to be publicly named according to presidential policy. “Putting in
danger the functioning of Europe is not preferable to a no-deal.”
Others suggested a longer delay would likely be needed, given the depth
of Britain’s political disarray.
More
Finally, in India, 900 million
voters start to vote. How do you count 900 million ballot papers? Answer: one
at a time for a very long time, and hope no one asks for a recount.
Brisk voting and long queues as India's giant election begins
April 11, 2019 /
2:39 AM
MUZAFFARNAGAR, India (Reuters) - Indians
began voting in the first phase of a mammoth general election on Thursday, with
Prime Minister Narendra Modi seeking a second term after campaigning strongly
on his national security record following a flare-up in tensions with Pakistan.
Reuters reporters saw long queues outside many polling stations. The
Election Commission said voters were turning out in large numbers in an eastern
district where Maoist insurgents were blamed for a bomb attack on Tuesday,
which killed a state legislator from Modi’s Hindu nationalist Bharatiya Janata
Party (BJP) and four security officials.
Two people were also killed on Tuesday in Jammu and Kashmir, the
country’s only Muslim majority state, prompting authorities to increase
security even further.
Shadab Ali, an 18-year-old first-time voter in the volatile
Muzaffarnagar constituency in the northern state of Uttar Pradesh, queued with
a group of friends at a polling station set up in a primary school.
Hindu-Muslim riots there killed at least 65 people before the previous election
in 2014.
----Voting in the first of seven rounds is being held in 91 parliament
constituencies across 20 states and federally administered regions. There are
543 seats at stake.
Almost 900 million of India’s 1.3 billion people are eligible to vote.
The first phase of voting covers an electorate of 142 million, some of whom
will vote in pink booths staffed by female security personnel and polling
officials.
The election is spread over 39 days, with the final phase on May 19 and
the result announced four days later.
More
Note, there will be no update
tomorrow, due to having to take Romanian rescue dog Lucky in to the vet for a very early appointment for
X-rays and follow up to his earlier operation on his right front paw. All being
well, his other paw will be operated on in early June. The weekend update will
be on Saturday.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled
over.
Today, Boeing. Boeing flies into a dog fight with the US tort bar.
Another crash expected, though Boeing has at least now apologised to the
families of the dead of both 737 Max crashes.
Boeing shareholders sue over 737 MAX crashes, disclosures
April 10, 2019 /
12:57 AM / Updated 9 hours ago
(Reuters)
- Boeing Co’s legal troubles grew on Tuesday as a new lawsuit accused the company
of defrauding shareholders by concealing safety deficiencies in its 737 MAX
planes before two fatal crashes led to their worldwide grounding.
The proposed class action filed in Chicago federal court seeks damages
for alleged securities fraud violations, after Boeing’s market value tumbled by
$34 billion within two weeks of the March 10 crash of an Ethiopian Airlines 737
MAX.
Chief Executive Dennis Muilenburg and Chief Financial Officer Gregory
Smith were also named as defendants.
Boeing spokesman Charles Bickers had no immediate comment.
According to the complaint, Boeing “effectively put profitability and
growth ahead of airplane safety and honesty” by rushing the 737 MAX to market
to compete with Airbus SE, while leaving out “extra” or “optional” features
designed to prevent the Ethiopian Airlines and Lion Air crashes.
It also said Boeing’s statements about its growth prospects and the 737
MAX were undermined by its alleged conflict of interest from retaining broad
authority from federal regulators to assess the plane’s safety.
Richard Seeks, the lead plaintiff, said Boeing’s compromises began to
emerge after the Ethiopian Airlines crash killed all 157 onboard, five months
after the Lion Air crash killed 189.
Seeks said he bought 300 Boeing shares in early March, and sold them at
a loss within the last two weeks. The lawsuit seeks damages for Boeing stock
investors from Jan. 8 to March 21.
Shareholders often file lawsuits accusing companies of securities fraud
for concealing material negative information that causes the stock price to
decline upon becoming public.
Chicago-based Boeing faces many other lawsuits over the crashes,
including by victims’ families and by participants in its employee retirement
plans.
Boeing said on Tuesday that aircraft orders in the first quarter fell to
95 from 180 a year earlier, with no orders for the 737 MAX following the
worldwide grounding.
On April 5, it said it planned to cut monthly 737 production to 42
planes from 52, and was making progress on a 737 MAX software update to prevent
further accidents.
The case is Seeks v Boeing Co et al, U.S. District Court, Northern
District of Illinois, No. 19-02394.
When you want to fool the world,
tell the truth.
Count Otto von Bismarck
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?
Global Solar PV Market To See 25% Growth, Reach 129 Gigawatts Of New Capacity In 2019
The global solar PV market is expected to
bounce back from slower growth in 2018 with a return to form in 2019 that will
see double-digit growth in the range of 25% and total solar installations
nearing 130 gigawatts (GW), according to analysts IHS Markit.
Global business information
provider IHS Markit published its latest PV Installations Tracker last week which
predicts that the global solar PV market will see growth of 25% in 2019 and
install a total of 129 GW worth of new solar capacity. This is up slightly on
the 123 GW the company predicted would be installed in 2019 back at the end of December. The growth is expected to
be driven from markets outside of China, which IHS Markit predicts will
increase their share by 43%.
Conversely, IHS Markit expects China’s growth to
only increase by 2% in 2019 after reaching 45 GW in 2018 — the majority of which
will come in the second half of the year.
“Right now, the outlook for
China remains highly uncertain, as the new support scheme for PV is yet to be
announced,” said Josefin Berg, research and analysis manager, IHS Markit.
“Plans to focus policy more on unsubsidized PV systems could slow near-term
deployment, unless strict construction deadlines are imposed to spur 2019
demand.”
IHS Markit
expects that the United States will overtake India in 2019 as the world’s
second-largest solar PV market, driven by the imminent conclusion of the
country’s 30% Investment Tax Credit which expires at the end of the year,
meaning many projects will rush to completion. However, this doesn’t mean that
the US solar industry will fall off a cliff in 2020, as the safe harbor provisions
introduced in 2018 — which require a 5% investment to be made by the end of
2019 to enjoy the full ITC rate — will shift projected installations out beyond
2019. “Increasing project development activity shows that the years after 2019
will be booming,” Berg said.
In India,
however, the drive towards lower tender prices at a time when solar components
have become more costly through the country’s safeguard duties has delayed
several tenders and could continue to muddle the Indian solar PV market moving
forward.
The European
solar market is expected to see continued strong growth in 2019 after the
conclusion of the region’s minimum import price on modules helped push 2018
growth to 23%, with IHS Markit expecting 2019 will see 19 GW installed, well up
from the 12 GW installed in 2018.
More
BP considers further investment in solar power
Oil giant BP has announced that it is
looking for further investment opportunities in solar power.
The firm confirmed today it is looking to “fund, develop and manage some
of the world’s biggest, most innovative solar projects”.
In 2017 BP made a high-profile 43% investment in solar firm Lightsource,
now called lightsource BP, for more than £150 million.
Lightsource BP is the largest solar development company in Europe, which
is focused on the acquisition, development and long-term management of
large-scale solar projects.
The firm has filed a proposal to build one of the largest solar farms in
Angus.
With a maximum capacity of 49.99 megawatts (MW), the project would be
located at a disused airfield in Moray.
Lightsource BP also has the 6.3MW floating solar installation on the
surface of the Queen Elizabeth II reservoir near Walton-on-Thames, supplying
power to a nearby water treatment centre that provides clean drinking water to
10 million people in the UK capital and beyond.
Nick Boyle, chief executive officer, Lightsource BP, said: “We founded
Lightsource to lead the solar revolution and chose to partner with BP because,
like us, their ambition is to build and grow this company for the long term.
“Solar power is the fastest-growing source
of new energy and we are excited to be at the forefront of this development
with BP.”
There is a Providence that
protects idiots, drunkards, children and the United States of America.
Count Otto von Bismarck
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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