Baltic Dry Index. 1031
+20 Brent
Crude 72.00
Never ending Brexit
now October 31, maybe.
Day 153 of the
never-ending USA v China trade talks. Everyone’s “optimistic.”
USA v EU trade war 13
days away? No one optimistic.
Bah
humbug!
Prime
Minister May, with apologies to Ebenezer Scrooge, aka Chancellor Hammond.
No not a massacre in
stocks or bonds, nor in Tesla or any other maker of electric lemons, aka EVs.
Today’s May massacre, if the polls are to be believed, is of incumbent UK Conservative local government councillors, by English
voters furious by Prime Minister May’s incompetence at delivering Brexit.
But we open today in
this holiday affected week, with the Fed’s somewhat bearish statement yesterday
causing those Asian markets actually open, to pause. Was that as good as markets
get this year, even if the USA and China cobble together some kind of face
saving trade deal for both countries? Higher crude oil prices are just starting
to feed into most global economies.
Is rising inflation
the next shoe to drop? Sell in May, go away looks pretty attractive in May
2019.
Asian shares trade sideways as investors await fresh cues
May 2, 2019 / 2:16
AM
SYDNEY (Reuters) -
Asian markets marked time on Thursday with two major centers - Japan and China
- shut for holidays while the dollar held on to overnight gains after the U.S.
central bank poured cold water on rate cut expectations.
MSCI’s broadest index of Asia-Pacific shares outside Japan was off 0.1
percent, trading in a tight band. Australian shares slipped 0.7 percent while
New Zealand was up 0.4 percent and South Korea’s KOSPI index added 0.1 percent.
E-Mini futures for the S&P 500 were unchanged.
Trading in Japan will resume next Tuesday while China will be back in
action on Monday.
Global equities markets have scaled new highs since the start of the
year largely on expectations of easy monetary policies around the world while a
positive tone on U.S.-China trade negotiations has also aided sentiment.
But analysts are now wondering whether this strong run can continue.
“Coming into May, the search for the next catalyst becomes an obvious
necessary condition to give an answer to the traditional question: is it time
to sell and go away?” said Claudio Irigoyen, economist at Bank of
America-Merrill Lynch.
Irigoyen was referring to a well-known adage, “sell in May and go away”,
which warns investors to dump their equities holdings in May ahead of the
northern hemisphere summer trading lull and switch to fixed income in a bid to
maximize returns.
More
U.S. Fed sees no strong case for hiking or cutting rates
May 1, 2019 /
7:05 PM
WASHINGTON
(Reuters) - The U.S. Federal Reserve on Wednesday held interest rates steady
and signalled little appetite to adjust them any time soon, taking heart in
continued job gains and economic growth and the likelihood that weak inflation
will edge higher.
“We think our policy stance is appropriate at the moment; we don’t see a
strong case for moving it in either direction,” Fed Chairman Jerome Powell said
in a press conference following the end of the central bank’s latest two-day
policy meeting.
Overall, he said, “I see us on a good path for this year.”
Fed policymakers said ongoing economic growth, a strong labour market
and an eventual rise in inflation were still “the most likely outcomes” as the
U.S. expansion nears its 10-year mark.
“The labour market remains strong ... economic activity rose at a solid
rate” in recent weeks, the Fed said in a policy statement a day after President
Donald Trump called on it to cut rates by a full percentage point and take
other steps to stimulate the economy.
The policy statement, and particularly Powell’s insistence the Fed saw
no compelling reason to consider a rate cut in response to weak inflation,
prompted a modest selloff in stock markets and pushed bond yields higher. The
S&P 500 index fell 0.75 percent, its largest daily decline since mid-March.
Interest rate futures also reversed direction, signalling a lower degree
of confidence the next Fed move would be a rate cut, exactly the point Powell
was driving at in a “stay-the-course” message, said analysts at Cornerstone
Macro.
More
In
other news this quiet holiday affected week, India.
End of Iran sanctions waivers to hit Indian economy: analysts
Date created :
The end on Thursday of US sanctions waivers for purchases of Iranian oil
is likely to hit India's economy hard, increasing fuel costs and quickening
inflation, analysts say.
Last May, President Donald Trump withdrew Washington from the 2015 Iran
nuclear deal with world powers that had given Tehran sanctions relief in
exchange for curbs on its nuclear programme.
The United States reimposed oil sanctions on Iran in November but
initially gave eight countries -- including India and several other US allies
-- six-month reprieves.
Washington announced last week that the waivers, which have also
benefited China and Turkey, would expire on May 2.
"US sanctions on Iran is a double whammy for India after the
Venezuelan sanctions," said Vandana Hari, founder of Vanda Insights, a
global energy markets portal.
"It will have to pay more for imports and face higher foreign
exchange outflows," she told AFP.
India -- Asia's third-largest economy -- imports over 80 percent of its
crude oil requirements, leaving it vulnerable to oil price surges.
A barrel of crude recently hit a six-month high of $75 due to America's
sanctions on Iran and Venezuela.
India buys mostly from Saudi Arabia but has a long history of purchasing
Iranian crude.
New Delhi announced last month that it would acquire additional supplies
from elsewhere but analysts say it won't be able to fill the gap left by Iran.
"No one is going to give charity to India in the oil market. Even
Saudi Arabia has no plans to replace Iranian crude in the global market,"
Madhu Nainan, editor of PetroWatch, told AFP.
Oil is paid for in dollars and soaring crude prices puts pressure on
India's rupee.
Higher prices also increases the cost of fuel at India's pumps and
curtails government attempts to keep inflation low.
India's government cut fuel duties last year in an attempt to quell
public anger after protesters took to the streets against record petrol prices.
With inflation low presently, India's central bank has cut interest
rates twice this year to help boost the economy.
Any surge in inflation sparked by the end of the sanctions waivers would
make it hard for the Reserve Bank of India to cut again at its next meeting in
June.
India is busy with a mammoth general election and analysts say whoever
forms the next government -- Narendra Modi's Bharatiya Janata Party or Rahul
Gandhi's Congress -- will have to come up with a long-term solution for its oil
needs.
More
India plans to evacuate 800,000 as cyclone nears east coast
May 2, 2019 /
5:38 AM
BHUBANESHWAR, India/NEW DELHI (Reuters) - India will use boats, buses
and trains to evacuate 800,000 people along its east coast on Thursday ahead of
an approaching cyclone that is forecast to make landfall within 24 hours,
officials said.
Severe Cyclonic Storm Fani was centered in the west of the Bay of
Bengal, the India Meteorological Office said. The south coast of Odisha state
was also expected to get heavy to very heavy rainfall on Thursday, it said in a
bulletin.
The state-run weather office also forecast wind speeds gusting up to 200
kph (125 mph) by Friday. Cyclone tracker Tropical Storm Risk rated Fani a
mid-range category 3 storm.
About 800,000 people were expected to be evacuated from low-lying areas
of 14 districts in Odisha to cyclone shelters, safer schools and college
buildings, a government statement said.
---- Tourists have also been advised to leave coastal towns in West Bengal and Odisha, state government officials said.
Sea conditions were also likely to be very rough off the coast of the
southeastern states of Tamil Nadu and Andhra Pradesh and federally administered
Puducherry, the weather office said.
India’s cyclone season generally lasts from April to December, with
severe storms often leading to the evacuation of tens of thousands of people,
widespread deaths and damage to crops and property in both India and
Bangladesh.
A super-cyclone battered the coast of Odisha for 30 hours, killing
10,000 people, two decades ago. A mass evacuation of nearly a million people in
2013 likely saved thousands of lives.
Mayday, Mayday, Mayday!
UK Conservatives.
Voters set to punish May's Conservatives over Brexit delay
May 2, 2019 /
12:30 AM
LONDON (Reuters) -
English voters are expected to use local government elections on Thursday to
punish Prime Minister Theresa May’s Conservative Party over its failure to
deliver Brexit, revealing a divided and dissatisfied electorate.
More than 8,000 seats on English councils - administrative bodies
responsible for day-to-day decisions on local policy ranging from education to
waste management - are up for grabs in the first elections since Britain missed
its March 29 Brexit date.
The results will paint a picture, albeit an imperfect one, of how that
has affected support for May’s centre-right Conservative Party, and the leftist
opposition Labour Party.
The Conservatives are forecast to lose hundreds of seats, and, according
to one analysis, the final toll could top 1,000. Labour, which rejects May’s
vision of Brexit but still supports leaving the bloc, are expected to make
gains, as are the anti-Brexit Liberal Democrats.
That would heap more pressure on May to resign, showing that the deep
dissatisfaction with her handling of Britain’s EU exit extends beyond party
members into the wider population, angering both those who want to leave and
those who want to stay.
“Never did I think a time would exist where I’d get abuse from
Conservatives for telling Conservatives to vote for Conservatives, but here we
are,” said Stephen Canning a local councillor campaigning for the Conservatives
in a pro-Brexit part of south-east England.
More
Finally, today, glyphosate. Who’s right, the US EPA or the
trial juries? The only sure winner in all this is the US tort bar.
U.S. environment agency says glyphosate weed killer is not a carcinogen
April 30, 2019 /
11:23 PM
CHICAGO
(Reuters) - The U.S. Environmental Protection Agency (EPA) said on Tuesday that
glyphosate, a chemical in many popular weed killers, is not a carcinogen,
contradicting decisions by U.S. juries that found it caused cancer in people.
The EPA’s announcement reaffirms its earlier findings about the safety
of glyphosate, the key ingredient in Bayer’s Roundup. The company faces
thousands of lawsuits from Roundup users who allege it caused their cancer.
“EPA continues to find that there are no risks to public health when
glyphosate is used in accordance with its current label and that glyphosate is
not a carcinogen,” the agency said in a statement.
Farmers spray glyphosate, the most widely used herbicide in U.S.
agriculture, on fields of soybeans and other crops. Roundup is also used on
lawns, golf courses and elsewhere.
The EPA did previously find ecological risks from the chemical and has
proposed new measures to protect the environment from glyphosate use by farmers
and to reduce the problem of weeds becoming resistant to it.
Bayer said it was pleased the EPA and other regulators who have assessed
the science on glyphosate for more than 40 years continue to conclude it is not
carcinogenic. “Bayer firmly believes that the science supports the safety of
glyphosate-based herbicides,” it said in a statement. The company has
repeatedly denied allegations that glyphosate and Roundup cause cancer.
But critics of the chemical disputed the EPA’s assurances.
“Unfortunately American consumers cannot trust the EPA assessment of
glyphosate’s safety,” said Nathan Donley, a senior scientist at the
environmental group Center for Biological Diversity.
Monsanto developed Roundup as the first glyphosate-based weed killer,
but it is no longer patent-protected and many other versions are available.
Bayer bought Monsanto last year for $63 billion.
More
Some of
the queries Quakers are asked to consider, are: "Do you maintain strict
integrity in your business transactions and in your relations with individuals
and organizations? Are you personally scrupulous and responsible in the use of
money entrusted to you, and are you careful not to defraud the public
revenue?"
Probably
why there a no Quakers on Wall Street, in the City, or in Parliament.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled
over.
Today, when smoke and mirrors
fail and the smoke blows away. In China a one-off or the start of something
bigger? Has China adopted the modern American business model?
A $4.4 Billion Accounting Error Burns Investors in China
By Ina Zhou 30 April 2019, 02:55 BST Updated on 30 April 2019, 06:39 BST One of China’s largest listed drugmakers said it overstated cash holdings by $4.4 billion, sending its shares and bonds tumbling and heightening concerns about the quality of accounting in a country that has become a fast-growing part of global investment portfolios.Kangmei Pharmaceutical Co., a producer of traditional Chinese medicines, said in a filing on Tuesday that an accounting “error” led to the overstatement of its 2017 cash position. The disclosure came about four months after Kangmei told investors it was being investigated by regulators. The stock, a constituent of MSCI Inc.’s global indexes, plunged by the 10 percent daily limit. Kangmei’s 2.4 billion yuan ($356 million) notes due 2022 fell as much as 14 yuan to 60 yuan.
The
immense size of Kangmei’s restatement, described by one securities lawyer as
unprecedented for China, puts a spotlight on disclosure practices in a country
where companies are defaulting at a record pace and
several instances of questionable accounting have emerged in recent months. The
issue has become increasingly important for global investors and securities
firms as they gain unprecedented access to China’s gargantuan stock and bond
markets.
“Investors have to be more careful about Chinese firms’ reporting,” said
Andrew Lam, a director at BDO, an international accounting firm. “They will
have to do real homework, examining closely companies’ financial reporting for
any potential irregularities.”
The China Securities Regulatory Commission, which in recent years has been pushing the nation’s stock exchanges to delist companies that provide inaccurate disclosures, didn’t immediately reply to a faxed request for comment. The Shanghai Composite Index rose 0.5 percent at 1:36 p.m. local time.
Kangmei, based in China’s southern Guangdong province, said it faces forced delisting if the CSRC classifies its behavior as a major legal violation, according to a company notice on risks related to its ongoing CSRC investigation. The drugmaker’s upcoming bond maturities include a 750 million yuan note due Sept. 3. Kangmei plans to sell as much as 20 billion yuan of bonds to replenish working capital and repay debt, the firm said in a filing on Tuesday.
Other companies that have faced similar scrutiny from regulators include Kangde Xin Composite Material Group Co., which defaulted on a bond in January after reporting cash levels just four months earlier that were enough to pay the debt 15 times over. The CSRC began investigating Kangde Xin in October.
“We have seen a number of Chinese companies with high cash balances still seek funding from investors, and later on the cash just disappears,” said Raymond Chia, head of credit research for Asia excluding Japan at Schroder Investment Management Ltd. “We should really question borrowers.”
More
“It is hard for us, without being flippant, to even
see a scenario within any kind of realm of reason that would see us losing one
dollar in any of those [CDS] transactions.”
Joseph J. Cassano, a former A.I.G. executive,
August 2007, on Credit Default Swaps that wiped out A.I.G in 2008.
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?
Strategy to make graphene luminescent
Date:
April 30, 2019
Source:
University of Córdoba
Summary:
A research project is able to incorporate luminescence into this super
material, paving a new way to continue expanding properties.
Lighter than aluminum, harder than a diamond, more elastic than rubber
and tougher than steel.
These are only a few of the characteristics of
graphene, a super material that acts as an excellent heat and electrical
conductor. Due to its features, it is called upon to be a key player in future
technological advances in the fields of research, electronics, IT and medicine.
The FQM-346 Organic Chemistry research group at the University of
Cordoba came up with the way this material acts in a luminescent way, a new
feature it did not have before and that now ushers in a new range of
applications. Professor Francisco José Romero Salguero, one of the authors of
the research piece, explains that luminescence is a characteristic of some
substances which allows them to emit light at a different wave length than the
one they absorbed it at. In other words, luminescent materials can emit visible
light from energy, a property that makes them useful as photocatalysts and
fluorescent tags that can be displayed in macromolecules and biological
materials. Now, thanks to this new research, luminescence is added to the long
list of services graphene can provide.
This research was published in Chemistry -- A European Journal,
sponsored by the main chemical societies in Europe, and also involved the work
of UCO researchers Juan Amaro Gahete, César Jiménez-Sanchidrián and Dolores
Esquivel, along with another Belgian research group. Because of its degree of
relevance, this journal described the article as a hot paper.
Though previous attempts have been made to endow this super material
with light properties, all of those were unsuccessful. What really makes
graphene special is its hexagonal structure based on highly cohesive carbon
atoms by means of a kind of electronic cloud in the shape of a sandwich. If the
connection between the atoms in this cloud is interrupted, part of the
properties are lost, explains researcher Francisco Romero.
Specifically, overcoming this obstacle is where the success of the
research lies. The group was able to incorporate luminescence into this material
without affecting its other qualities, thus safeguarding the functionality of
its complex structure. In order to do so, europium was integrated into
graphene. Europium is a metal that perfectly coordinates with the modified
molecules of this super material and is the one that grants it its luminous
properties.
The results offer immediate applications, since this luminescent
graphene could be used in biological material and for analyzing tissue cells.
However, the research goes even further. The use of europium "is just a
concept test," explains University of Cordoba Professor César
Jiménez-Sanchidrián.
Henceforth, this study opens the door to the use of a variety of
chemical elements that could be combined with graphene to confer new
characteristics on it. For instance, if certain kinds of metals are integrated,
a magnetic graphene could be generated. Ultimately, it is a line of research
that this group, which belongs to the the University Institute of Nanochemistry
(abbreviated to IUNAN in Spanish) and the College of Science, will continue to
work on with the aim of adding new properties to the list of graphene's
qualities. Doing so will increase the versatility of this substance that holds
very promising characteristics and that has already earned the right to be
called a material of the future.
Prime
Minister May: Some people are born mediocre, some people achieve mediocrity,
and some people have mediocrity thrust upon them. Mrs May hit the Trifecta.
With
apologies to Joseph Heller.
The monthly Coppock Indicators finished April
DJIA: 26,593 +51 Down. NASDAQ: 8,095 +89 Down.
SP500: 2,946
+55 Up.
The S&P has
reversed to up largely as a result of the Fed falling into line with President
Trump’s demands, 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 still fully paid up synthetic double options on most of the
major indexes. This could all go very wrong very fast.
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