Baltic Dry Index. 1107
+25 Brent
Crude 69.71
Never ending Brexit
now October 31st, maybe.
Nuclear Trump
Tariffs Now In Effect.
USA v EU trade war postponed
to November, maybe.
“Openness brings progress, shutting off brings backwardness”.
Wang Zhaoxing, a vice chairman of China’s banking and insurance
regulator.
Run do not walk to the lifeboat stations! Over
the summer the USA v China trade war is about to get very nasty. “The expression
“don’t say we didn’t warn you” is generally only used by official Chinese media
to warn rivals over major areas of disagreement, for example during a border
dispute with India in 2017 and in 1978 before China invaded Vietnam.” For more on that scroll down to Crooks Corner.
Which country can
handle likely rising unemployment and a stock market crash better? Which
country can absorb a coming debt default crisis better? Which trade war loser,
loses least? Which country is desperate for a “win” before next year’s elections?
Below, global stock
markets brace for a summer of follies.
Asian markets dig deeper hole as selloff continues
By Associated Press
and MarketWatch
Published: May 29,
2019 11:37 p.m. ET
Asian shares were mostly lower Thursday after another round
of selling on Wall Street and investor worries about a trade war.Japan’s benchmark Nikkei 225 NIK, -0.57% dropped nearly 0.9% in morning trading. Australia’s S&P/ASX 200 XJO, -0.83% slipped 0.7% while South Korea’s Kospi 180721, +0.31% edged up 0.2%. Hong Kong’s Hang Seng HSI, -0.42% was down 0.6%, while the Shanghai Composite SHCOMP, -0.83% lost 0.8%. Stocks rose in Taiwan Y9999, +0.63% but fell in Singapore STI, -0.78% .
The latest market slide comes as investors worry that the trade war
between the U.S. and China will derail global economic and corporate profit
growth as it drags on with no sign of a resolution.
“The cracks in global equity markets threatened to grow wider still as
relentless haven-buying of sovereign bonds overnight pushed key yields even
lower and sent recession fears through stocks,” said Jeffrey Halley, senior
market analyst at Oanda.
“Asia is unlikely to feel much relief today either with both the Nikkei
225 and the ASX 200 down.”
More
Dow slides more than 200 points as yields fall on worries about the economy
The Dow Jones Industrial Average dropped 221.36 points to 25,126.41 while the S&P 500 slid 0.7% to 2,783.02. The Nasdaq Composite declined by 0.8% 7,547.31. The Dow briefly fell more than 400 points as the 10-year Treasury note yield hit its low of the day.
The 10-year Treasury note yield fell to its lowest level since September 2017 before rebounding to about 2.26%. A portion of the yield curve further inverted as 3-month Treasury bills last yielded 2.36%, well above the 10-year rate. A yield curve inversion is seen by traders as a potential sign that a recession is in the horizon.
Bank shares fell along with yields. Bank of America and J.P. Morgan Chase both slid more than 0.2%. Citigroup dipped 0.1%. Shares of the three banks had dropped more than 1% earlier in the day.
The S&P 500 broke below 2,800, a key technical level watched by traders. The broad index also traded around its lowest level since late March.
“The topping pattern is crystal clear,” Frank Cappelleri, executive
director at Instinet, wrote in a note. He added that other stock indexes across
the globe were also showing topping patterns. “The equity advance through April
was broad, which helped keep the uptrend intact. Now, with so many areas
sporting bearish patterns like this, if one breaks, the odds are it will have
company.”
Washington and Beijing have imposed tariffs on billions of dollars’
worth of one another’s goods since the start of 2018, battering financial
markets and souring business and consumer sentiment.
More
Taking aim at U.S., China says provoking trade disputes is 'naked economic terrorism'
May 30, 2019 /
3:01 AM
BEIJING (Reuters)
- Provoking trade disputes is “naked economic terrorism”, a senior Chinese
diplomat said on Thursday, ramping up the rhetoric against the United States
amid a bitter trade war that is showing no signs of ending soon.
Trade tensions between Washington and Beijing escalated sharply earlier
this month after the Trump administration accused China of having “reneged” on
its previous promises to make structural changes to its economic practices.
Washington later slapped additional tariffs of up to 25% on $200 billion
(£158.4 billion) of Chinese goods, prompting Beijing to retaliate.
Speaking to reporters in Beijing, Chinese Vice Foreign Minister Zhang
Hanhui said China opposed the use of “big sticks” like trade sanctions, tariffs
and protectionism.
“We oppose a trade war but are not afraid of a trade war. This kind of
deliberately provoking trade disputes is naked economic terrorism, economic
homicide, economic bullying,” Zhang said, when asked about the trade war with
the United States.
Everyone loses in a trade war, he added, addressing a briefing on
Chinese President Xi Jinping’s state visit to Russia next week, where he will
meet Russian President Vladimir Putin and speak at a major investor forum in St
Petersburg.
“This trade clash will have a serious negative effect on global economic
development and recovery,” Zhang added.
“We will
definitely properly deal with all external challenges, do our own thing well,
develop our economy, and continue to raise the living standards of our two
peoples,” he said, referring to China and Russia.
“At the same time, we have the confidence, resolve and ability to
safeguard our country’s sovereignty, security, respect and security and
development interests.”
From combative missives in state media and patriotic fervour on social
media, to a mobilisation of ambassadors around the world to get its message
out, China has intensified its criticism of Washington since the United States
this month moved to increase tariffs on Chinese imports and blacklisted tech
giant Huawei Technologies Co Ltd.
On Thursday, a broadcaster from Chinese state television and a Fox
Business host staged an unprecedented live debate about the China-U.S.
frictions on the U.S. cable network.
----
On Thursday, the state-run China Daily newspaper said “it
would be naive to think that China does not have other countermeasures apart
from rare earths to hand”.
“As Chinese officials have reiterated,
they have a ‘tool box’ large enough to fix any problem that may arise as trade
tensions escalate, and they are ready to fight back ‘at any cost’,” it said in
an editorial.
More
Here’s the damage done to the stock market since Trump’s May 5 trade tweet
Published: May 29,
2019 6:03 p.m. ET
What’s our damage so far? The bullish dynamic for risk assets on Wall Street is beginning to unravel, clearly. Blame it on trade-war fears, at least partly sparked by a May 5 tweet from President Donald Trump, or peg it to worries that the global economy is facing a pronounced slowdown. In any case, major assets are reflecting deepening concerns about the durability of bull run for stocks, which will mark its 10th year in about a month.
Here is how the market is setting up:
----
The Nasdaq Composite Index COMP, -0.79%
stands down 7.6% from its record on May 3. Most market participants view a
decline of at least 10% from a recent high as representing a correction.
----
The S&P 500 SPX, -0.69% is trading at or near its
200-day moving average, at 2,776.04, as of Wednesday afternoon trade. A breach
below that point would represent a longer-term bearish momentum shift for the
broad-market index. Market technicians tend to view moving averages as the
demarcation between bullish and bearish momentum in an asset.
More
In Europe news, paymaster Germany’s already buckling even
before Juncker-Barnier’s attempt at a punitive Brexit. Nothing good lies ahead
for the EUSSR on its present course.
German jobless total rises unexpectedly in May as economy slows
May 29, 2019 /
9:08 AM
BERLIN (Reuters) - German unemployment rose unexpectedly in May for the
first time in nearly two years, data showed on Wednesday, in a sign that a
slowdown in Europe’s largest economy is spilling over to the labour market.
The number of people out of work rose by 60,000 to 2.279 million in
seasonally adjusted terms, according to data from the Federal Labour Office.
That compared with the Reuters consensus forecast for a fall of 8,000.
The Labour Office said that the rise was mainly due to a special effect,
but also to the slowing economy.
The seasonally adjusted jobless rate rose to 5.0%.
Rehn says ECB ready to react if slowdown persists
May 29, 2019 /
9:49 AM
LONDON (Reuters)
- The European Central Bank is ready to reintroduce monetary support measures
if required, policymaker Olli Rehn said on Wednesday, while hitting out at
calls from Italy for it to guarantee countries’ debt.
Speaking at a Reuters Breakingviews event, Rehn said the ECB would
discuss options at a policy meeting next week, when it will also have a new set
of in-house economic forecasts at its disposal.
“We now have a soft patch in the economy and we are analyzing whether
this is a genuine soft patch or a more of a long lasting economic slowdown,”
Rehn said, blaming the U.S.-China trade war for further eroding confidence.
“If things turn south and we face a recession we are ready to use all
instruments.”
While a euro zone
recession was not currently the central scenario, an ample degree of policy
stimulus remained appropriate, Rehn said.
---- Rehn, who also heads the Bank of Finland and is viewed as an outside bet to take over as ECB president when Mario Draghi steps down in October, repeated calls for a slightly more flexible policy framework for the bank.
Persistently low inflation across the developed world has prompted a
debate about central bank policy and the effectiveness of inflation-targeting.
Rehn said he would not change the ECB’s inflation-focused mandate but
would loosen its close-but-below 2% definition of price stability. “My view is
that 2% is not a ceiling and inflation can deviate in both directions,” he
said.
He rejected a call this week by Italy’s Deputy Prime Minister Matteo
Salvini for the ECB to “guarantee” government debt in order to keep borrowing
costs low.
More
I
could see that, if not actually disgruntled, the markets were far from being
gruntled.
With
apologies to P. G. Wodehouse.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled
over.
Today, that USA v China easy to win trade war again. With the USA going
nuclear on Huawei and ZTE, China considers going nuclear back via rare earths.
Mutual Assured Destruction lies ahead, with mass unemployment and social
disorder to follow if we repeat 2008-2009.
Not to worry though, America’s Epoch Times says China doesn’t stand a
chance in a trade war with America. But how does the world gain from a China
back in the 1960s chaos?
China ready to hit back at U.S. with rare earths: newspapers
May 29, 2019 /
3:54 AM
BEIJING (Reuters)
- China is ready to use rare earths to strike back in a trade war with the
United States, Chinese newspapers warned on Wednesday in strongly worded
commentaries on a move that would escalate tensions between the world’s two
largest economies.
President Xi Jinping’s visit to a rare earths plant last week had
sparked speculation that China would use its dominant position as an exporter
of rare earths to the United States as leverage in the trade war.
Rare earths are a group of 17 chemical elements used in everything from
high-tech consumer electronics to military equipment. The prospect that their
value could soar as a result of the trade war caused sharp increases in the
share prices of producers, including the company visited by Xi.
While China has so far not explicitly said it would restrict rare earths
sales to the United States, Chinese media has strongly implied this will
happen.
In a commentary headlined “United States, don’t underestimate China’s
ability to strike back”, the official People’s Daily noted the United States’
“uncomfortable” dependence on rare earths from China.
“Will rare earths become a counter weapon for China to hit back against
the pressure the United States has put on for no reason at all? The answer is
no mystery,” it said.
“Undoubtedly, the U.S. side wants to use the products made by China’s
exported rare earths to counter and suppress China’s development. The Chinese
people will never accept this!” the ruling Communist Party newspaper added.
“We advise the U.S. side not to underestimate the Chinese side’s ability
to safeguard its development rights and interests. Don’t say we didn’t warn
you!”
The expression “don’t say we didn’t warn you” is generally only used by
official Chinese media to warn rivals over major areas of disagreement, for
example during a border dispute with India in 2017 and in 1978 before China
invaded Vietnam.
In its own editorial on Wednesday, sister paper the Global Times said an
export ban on rare earths “is a powerful weapon if used in the China-U.S. trade
war.”
“Nevertheless, China will mainly use it for defense,” it added, noting
that while China might incur losses from a ban on exports, the United States
would suffer more.
----
Chinese trade experts say if Beijing moves forward with new restrictions on
rare earth exports to the United States, it will likely follow Washington’s
example and use national security as a justification.
More
The Chinese Regime Stands No Chance in US Trade War
By Joshua Philipp, The Epoch Times
May 27, 2019 Updated: May 28, 2019
The real “trade war” between the United States and the
Chinese regime is just starting. Right now, the playing field is merely being
laid out in a way that allows companies to compete on fairer grounds, with
honest businesses able to win through rule of law.The United States has begun to fight back against the Chinese Communist Party’s (CCP) decades-old trade war of currency manipulation, intellectual property theft, and policies that made it nearly impossible for foreign companies to compete with Chinese companies. In 2018, the U.S. trade deficit with China was $419 billion, and until recently, it didn’t appear this would change.
For the Chinese regime, trade policy is war. Trade has been regarded even publicly as a method to occupy and overtake the United States through nonmilitary means. According to the CCP’s “Unrestricted Warfare” doctrine, which uses financial warfare, trade warfare, and other nonmilitary systems to achieve dominance, “There is now no domain which warfare cannot use, and there is almost no domain which does not have warfare’s offensive pattern.”
More
Alan Schwartz, CEO Bear Stearns, March 12, 2008.
Bust March 16, 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?
Centrica launches solar and battery products to power EV switchover
Energy giant to install on-site solar and batteries to boost companies'
EV charging infrastructure
Businesses will be able to install solar panels and battery banks to
boost their infrastructure for charging electric vehicles, under a new offer
launched today by Centrica.
The energy giant said its offer will enable businesses - from
shopping centres to transport hubs - to meet the demands of EV charging points
with power generated on site.
Many businesses are keen to accelerate their transition to electric
vehicles, but without costly grid upgrades will struggle to charge more than
one or two vehicles at once.
Centrica's own research found that while 75 per cent of businesses are planning
to introduce EVs into their fleet, less than half of those have considered how
doing so could impact their energy demand.
"This is a very real issue as we're increasingly hearing that the
complexity of implementing the infrastructure that surrounds EV is proving to
be a barrier to customers," a spokeswoman explained.
"For example,
we've had customers come to us and ask for help because they'd planned to
install 20 charging points only to find that they don't have a big enough grid
connection to cope with that additional power demand. So they're effectively
falling at the first hurdle."
The firm's new product offers include installing solar panels and battery storage on business premises, as well as the charge points themselves. This would help firms invest in EV infrastructure while bypassing the need for grid improvements, according to Centrica.
"We believe this is the most comprehensive commercial EV offer in the UK to date, giving businesses in the ability to future-proof against the increased power requirements of the electrification of their fleets," the spokeswoman added.
Under pressure to tackle air pollution, the UK government has committed to banning sales of new petrol and diesel cars by 2040 - while the Committee on Climate Change has called for this to be brought forward to 2035.
Currently, EVs account for less than one per cent of new sales. Transitioning to a fully electric fleet in the UK could require 18GW of additional power capacity by 2050, according to the National Grid, which suggests that EVs could increase Britain's peak power demand by a third unless measures are taken to balance the demand peaks using smart technologies.
Centrica, which owns British Gas and has installed over 17,000 charging
points since 2012, argued localised generation could be key to meeting
heightened power demand.
"We believe distributed energy technologies will be key to
supporting the cost-effective roll out of EVs, reducing the need for costly
grid upgrades and new centralised generation capacity," said Jorge
Pikunic, global managing director for Centrica Business Solutions. "The
adoption of electric vehicles is no longer a question for tomorrow. For
businesses, the transition to EV is a big opportunity to become cleaner, more
sustainable and more efficient."
George Orwell.
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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