Baltic Dry Index. 1041
+01 Brent
Crude 72.17
Never ending Brexit
now October 31st, maybe.
Nuclear Trump
Tariffs Now In Effect.
USA v EU trade war postponed
to November, maybe.
“Those who don't know history are destined to repeat it.”
Edmund Burke.
After declaring
nuclear war on Huawei last Friday, by Monday the Trump administration was
furiously back peddling on the restrictions about dealing with or selling to, Huawei.
It is unlikely to make much difference in the long run. The Trump government is
fast turning US high-tech companies into unreliable and dangerous suppliers.
Today, China, ZTE and Huawei, tomorrow Siemens and Nokia? Major global users of US technology products
have now twice been incentivised to review product sourcing.
To say the least,
with a global recession looming, high priced oil, and political trouble rampant, an escalating
trade war now turning into a technology war, is a dangerous, reckless way to be
running our integrated global economy. What could possibly go wrong? Plenty. Massive
global unemployment for one thing.
Below, Asia
cautiously awaits further developments.
Asian shares off four-month lows, but Huawei row casts shadow
May 21, 2019 /
2:22 AM
TOKYO (Reuters) -
Asian shares won some respite on Tuesday after Washington temporarily eased
trade restrictions imposed last week on China’s Huawei, although fears of a
further escalation in tensions kept investors on edge.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.35%
but stayed not far from a four-month low touched on Friday.
It has fallen almost 8% from a nine-month peak hit just over a month
ago. Japan’s Nikkei fell 0.4%.
The blue-chip CSI300 index rose 1.0%, a day after it fell to a
three-month intraday low as Washington allowed Huawei Technologies Co Ltd to
purchase American-made goods in order to maintain existing networks and provide
software updates to existing Huawei handsets until Aug. 19.
Still, an increasingly acrimonious atmosphere between the world’s two
biggest economies have led investors to abandon any hopes of an early
resolution, a sea change from just a few weeks ago when a deal was considered
to be within reach.
“With the news around the U.S. and Huawei taking a turn for the worse,
it seems that the trade war is increasingly showing signs of becoming a tech
war,” said Seema Shah, senior global investment Strategist at Principal Global
Investors in London.
“The further this trend develops, the bigger the collateral damage will
be – particularly in Asia and the U.S., but the ripple effect will be
significant across the globe.”
In New York, the S&P 500 lost 0.67% while the Nasdaq Composite
dropped 1.46%. The Philadelphia Semiconductor Index fell 4.02% to two-month
lows.
Huawei suppliers took a hit, with Qualcomm falling 6.0% and Micron
Technology 4.0%.
“The determination
of the U.S. administration to paralyse China’s aspirations to become a
technology super power is clear when you consider that its actions against
Huawei are not only damaging to China’s technology sector, but also the U.S.
tech sector,” Shah said.
---- Following Washington’s Huawei ban, Beijing could take retaliatory measures against U.S. companies, further escalating tensions, said Norihiro Fujito, chief investment analyst at Mitsubishi UFJ Morgan Stanley Securities.
Corporate earnings guidance provided to investors so far does not take
into account the impact of the Huawei ban, said Nobuhiko Kuramochi, chief
strategist at Mizuho Securities.
More
U.S., China bicker over 'extravagant expectations' on trade deal
May 20, 2019 / 11:00 AM
BEIJING/WASHINGTON (Reuters) - China accused the United States on Monday
of harbouring “extravagant expectations” for a trade deal, underlining the gulf
between the two sides as U.S. action against China’s technology giant Huawei
began hitting the global tech sector.
Adding to bilateral tension, the U.S. military said one of its warships
sailed near the disputed Scarborough Shoal claimed by China in the South China
Sea on Sunday, the latest in a series of “freedom of navigation operations,”
angering Beijing.
Alphabet Inc’s Google has also suspended business with China’s Huawei
Technologies Co Ltd that requires the transfer of hardware, software and
technical services, except those publicly available via open source licensing,
a source familiar with the matter told Reuters on Sunday, in a blow to the
company that the U.S. government has sought to blacklist around the world.
Shares in European chipmakers Infineon Technologies, AMS and STMicroelectronics
fell sharply on Monday amid worries the Huawei Technologies suppliers may
suspend shipments to the Chinese firm due to the U.S. blacklisting of it last
week.
The Trump administration’s addition of Huawei to a trade blacklist on
Thursday immediately enacted restrictions that will make it extremely difficult
for it to do business with U.S. counterparts.
----
In Beijing, Chinese Foreign Ministry spokesman Lu Kang said he didn’t know what
Trump was talking about.
“We don’t know what this agreement is the United States is talking
about. Perhaps the United States has an agreement they all along had
extravagant expectations for, but it’s certainly not a so-called agreement that
China agreed to,” he told a daily news briefing.
The reason the last round of China-U.S. talks did not reach an agreement
is because the United States tried “to achieve unreasonable interests through
extreme pressure”, Lu said.”From the start this wouldn’t work.”
China went into the last round of talks with a sincere and constructive
attitude, he said.
“I would like to reiterate once again that China-U.S. economic and trade
consultation can only follow the correct track of mutual respect, equality and
mutual benefit for there to be hope of success.”
More
Ford to lay off 7,000 white collar workers
May 20, 2019 /
2:01 PM
May 20 (UPI) -- Ford Motor Co. said Monday it is planning to layoff
white collar 7,000 workers, with 800 coming this summer -- most in the Detroit
area.The automaker said the layoffs will start with 500 salaried workers leaving involuntarily this week and another 300 in June. The majority of the affected workers will be notified Tuesday.
"Ford is a family company and saying goodbye to colleagues is
difficult and emotional," Ford CEO James Hackett said in a email Monday.
"We have moved away from past practices in some regions where team members
who were separate had to leave immediately with their belongings, instead
giving people the choice to stay a few days to wrap up and say goodbye."
The cuts are part of a massive reorganization that will ultimately
result in 7,000 voluntary and involuntary separations worldwide through August.
The goal is to remove layers of management, give managers more authority and
decide which skills are valuable for the future. The move, it said, will save
Ford about $600 million a year.
"As we enter the final weeks of Smart Redesign in North America, I want to update you on our overall progress," Hackett said in the email. "To succeed in our competitive industry, and position Ford to win in a fast-changing future, we must reduce bureaucracy, empower managers, speed decision making, focus on the most valuable work and cut costs. This required intensive work across multiple layers of our company."
Employees interviewed by the Detroit Free Press said a significant portion would be leaving the world headquarters in the Detroit area.
Ford said in March it would cut at least manufacturing 5,000 jobs in Europe.
Finally, more on the
fall out from America’s assault on China’s Huawei. By turning US hi-tech firms into
unreliable and dangerous suppliers, is it a long term gain for everyone else?
Time will tell in the next three years. But did Trade War Team Trump yet again
go off half cocked?
U.S. eases restrictions on Huawei; founder says U.S. underestimates Chinese firm
May 20, 2019 /
9:45 PM
(Reuters) - The
U.S. government has temporarily eased trade restrictions imposed last week on
China’s Huawei, a move aimed at minimizing disruption for its customers but
dismissed by its founder who said the tech firm had prepared for U.S. action.
The U.S. Commerce Department will allow Huawei Technologies Co Ltd to
purchase American-made goods in order to maintain existing networks and provide
software updates to existing Huawei handsets.
The world’s largest telecommunications equipment maker is still prohibited
from buying American parts and components to manufacture new products without
license approvals that likely will be denied.
The U.S. government said it imposed the restrictions because of Huawei’s
involvement in activities contrary to national security or foreign policy
interests.
The new authorization is intended to give telecommunications operators
that rely on Huawei equipment time to make other arrangements, U.S. Secretary
of Commerce Wilbur Ross said in a statement on Monday.
“In short, this license will allow operations to continue for existing
Huawei mobile phone users and rural broadband networks,” Ross added.
The license, which is in effect until Aug. 19, suggests changes to
Huawei’s supply chain may have immediate, far-reaching and unintended
consequences for its customers.
---- Huawei founder Ren Zhengfei on Tuesday said the temporary reprieve move bore little meaning for the company as it had been making preparations for such a scenario.
“The U.S. government’s actions at the moment underestimate our
capabilities,” Ren said in an interview with CCTV, according to a transcript
published by the Chinese state broadcaster.
He said Huawei was at odds with the U.S. government, not U.S. firms, and
that Huawei is capable of making the chips it buys from the United States
though that does not mean it will stop buying American chips.
More
Chips are down: Huawei U.S. blacklisting knocks EU semiconductor stocks
May 20, 2019 /
10:00 AM
LONDON (Reuters) -
European chipmakers Infineon Technologies, AMS and STMicroelectronics fell
sharply on Monday amid worries the Huawei Technologies suppliers may suspend
shipments to the Chinese firm due to a U.S. crackdown.
STMicro was down 4% at the bottom of Paris’ CAC 40, while Infineon fell
3.4% to the bottom of Frankfurt’s DAX 30 and AMS was down 4.6% at 0836 GMT.
The selling came after Nikkei Asian Review reported that Infineon had
halted shipments to Huawei after Washington added the world’s No. 2 smartphone
maker to a trade blacklist last week, imposing restrictions that will make it
difficult to do business with U.S. companies.
The report also said STMicro was set to have meetings this week to
discuss whether to continue shipping to Huawei.
Germany’s Infineon and France’s STMicro, Europe’s biggest chipmakers,
had no immediate comment.
Even if companies can continue to sell components without being subject
to U.S. restrictions, any disruption to Huawei’s operations will have a
knock-on effect on its suppliers, said Liberum analyst Janardan Menon.
“In coming months it can broadly be assumed that the Huawei portion of
their (European chip suppliers’) business will see quite a bit of weakness, if
the U.S. government does not change its mind,” he said.
The impact will not be uniform because the companies have different
levels of exposure.
The selling was particularly amplified as investors exited bullish
positions built up in the trade-sensitive sector in recent months as worries
about the U.S.-China trade spat eased and companies forecast a recovery in
smartphone demand in the second half of the year.
More
European Chipmakers to Keep on Supplying Huawei After Trump Ban
By Stefan Nicola and Natalia Drozdiak
20 May 2019, 08:43 BST Updated on 20 May 2019,
12:32 BST
European semiconductor makers said they would still keep on
supplying to Huawei Technologies Co., after the effects of the
U.S. ban continued to ripple across global markets.The Trump administration on Friday blacklisted Huawei -- which it accuses of aiding Beijing in espionage -- and threatened to cut it off from the U.S. software and semiconductors it needs to make its products.
A spokesman for Infineon Technologies AG -- one of Europe’s largest chipmakers -- said the majority of products it delivers to Huawei are not subject to U.S. restrictions, adding that the chipmaker can "make adaptions in our international supply chain." Austria-based AMS AG also said that it had not suspended shipments to Huawei.
Huawei accounts for 1.3% of Infineon’s sales, and 3.7% of AMS’s revenue, according to data compiled by Bloomberg. Infineon has suspended deliveries to Huawei, Nikkei Asian Review reported earlier Monday, citing two people familiar with the matter.
The U.S. Commerce Department has said it will put Huawei on an “Entity List” -- meaning any U.S. company will need a special license to sell products to the world’s largest networking gear maker and second-largest smartphone brand. Commerce Secretary Wilbur Ross told Bloomberg Television the measures limiting its access to U.S. components would become official on May 17.
U.S. chipmakers including Intel Corp., Qualcomm Inc., Xilinx Inc. and Broadcom Inc. have told their employees they will not supply Huawei till further notice, according to people familiar with their actions.
The ruling means that suppliers outside the U.S. that can supply research and manufacture products for Huawei may not be as badly hit.
----Some companies are even openly optimistic. "As a U.K. headquartered global organisation, with no research and development in the USA, we’re in a unique position to work with companies around the world,” said Woz Ahmed, executive vice president of corporate development at Imagination Technologies.
----Huawei is said to have stockpiled enough chips and other vital components to keep its business running for at least three months, and has been preparing for such an eventuality since at least the middle of 2018, hoarding components while designing its own chips, people familiar with the matter said.
More
"Any
nation which gives up its freedom in pursuit of economic advantage deserves to
lose both."
Thomas Jefferson, US President 1801-1809.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled
over.
Today, how much higher will global pork prices go?
Swine fever sending pork prices higher
Date created :
20/05/2019 - 12:48
In a cruel irony in the Chinese Year of the Pig, outbreaks of African
Swine Fever are forcing huge culls that could send pork prices to levels never
seen before.
According to the UN's Food and Agricultural Organization, pork prices
"have begun to soar", rising by up to 50 percent both in China and on
the Chicago futures exchange.
In Europe, the rise has been 18 percent since the beginning of March as
Japan and South Korea, two major importing nations, have started to build up
reserves in cases of disruptions to supplies, according to commodities markets
research firm Cyclope.
In France and Germany, pork prices have "risen by 30 percent since
the start of year due to China," said Jean-Paul Simier, an agricultural
market analyst at French bank Credit Agricole who authored the meat section of
the latest Cyclope annual report.
Home to nearly half of the world's pigs, China is both the world's
largest consumer and producer of pork, which is a staple of its cuisine.
African Swine Fever, a virus that is not dangerous to humans but fatal
to pigs and wild boar, began sweeping across China last year.
Chinese officials have said hundreds of thousands of pigs were culled in
a bid to stop its spread -- an effort that has also seen restrictions placed on
moving pigs from affected areas.
Despite the measures, African Swine Fever continued to spread,
eventually hitting China's major pig farming area in Sichuan province.
Cyclope said that since the start of the year 20 Chinese provinces have
been hit, leading authorities to cull one million pigs, and removing them from
the food chain.
It has continued to spread further, approaching the border with Laos in
the south of the country and to the tropical island of Hainan, according to a
map produced by the FAO.
Cambodia, Mongolia and Vietnam have also been hit, with nearly 100,000
pigs culled in the three countries.
The culls mean that China must now begin importing pork massively to
compensate for lost production, said Jean-Paul Simier.
"China is the decisive market for pork, you need to understand that
700 million pigs live in China, compared to 20 million in France for
example," he said.
"The outbreak of African Swine Fever (ASF) in East Asia is likely
to have a noticeable impact on meat and feed markets worldwide," said the
FAO in its latest semi-annual report on food markets that came out earlier this
month.
It warned of "challenges to maintaining adequate meat supplies in
affected countries," saying that based on reports by government officials,
industry sources and news media that the extent of the cull may have reached 20
percent of China's pig herd.
Simier has a more conservative forecast of a drop in Chinese pork
production of 10 percent this year, or nearly 6 million tonnes.
"That is already enormous, because the international meat trade is
only some 10 million tonnes per year," he said.
"If the disease situation gets out of control, pork could hit
prices never seen before," he added.
While that is bad news for consumers, it means good business ahead for
pig farmers in regions that haven't been touched by African Swine Fever.
But farmers who raise feed grains for pigs, particularly soybeans, could
be hurt by a drop in Chinese demand.
There can be few fields of human endeavour in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present.
J. K. Galbraith.
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?
Coventry to be home of UK Battery Industrialisation Centre
20th May 2019 10:52 am
New £108m facility will provide world-leading
testing facilities for new battery technology and train engineers in battery
manufacturingA new national centre of excellence in battery technologies, aimed specifically at electric car energy storage, is envisaged as a stepping stone to a large-scale battery factory for electric vehicles – “a Gigafactory in the UK,” according to minister for business and industry Andrew Stephenson, announcing an additional £28m funding for the centre. The total cost of the facility will be £108m, said mayor of the West Midlands Andy Street.
Coventry won a national competition to choose where the UK Battery Industrialisation Centre (UKBIC) would be cited, and the centre is part of the West Midlands Local Industrial Strategy, which was developed with many local businesses and is the first of its type in the country. The funding Stephenson announced is in addition to an £80m previously-announced investment from the government’s Faraday Battery Challenge – a £246m commitment over the next four years on developing automotive batteries.
The Local Industrial Strategy (LIS) sets out a long-term vision to
increase productivity across the region, and aims to put the West Midlands, and
Coventry in particular, back at the centre for technology development in the
UK’s automotive sector. Electric vehicles and driverless cars are central to
these plans.
“Putting the UK at the forefront of the design and manufacturing of zero
emission vehicles is at the heart of our plans – creating jobs, growth and
opportunity across the country,” Stephenson said. “Driven by the potential of
fast-paced development of battery technology, this investment puts the UK –
amongst a handful of countries around the world – on the next step to meet the
challenge by the future of mobility. Our investment of £28m in this new facility
will support the UK’s world-leading automotive industry to compete
internationally, attract further investment and establish supply chains for new
electric vehicle battery design and development.”
Although the automotive sector is central to the LIS, it is not the sole
focus, Andy Street stressed. “A The Local Industrial Strategy being launched
today also highlights advanced manufacturing, medical research and the creative
and digital industries as distinct strengths of the West Midlands. The Strategy
will build on these strengths and other opportunities so we have a strong and
resilient economic future that can benefit all communities across the whole
region.”
Among other goals of the strategy is to deliver UK’s the first
large-scale 5G testbed, and to develop a translational medicine and med-tech
commission to accelerate the transfer of technologies and pharmaceuticals from
lab to patient.
UKBIC will develop battery chemistry, electrodes, cell design, modules
and battery packs, and is aimed to open in 2020. It will be managed by Jeff
Pratt, who was previously general manager at Nissan’s lithium ion battery plant
in Sunderland. It will create around 100 permanent jobs, but it hopes to be the
springboard for 10,000 new jobs in the supply chain and related technologies
once it is running at full capacity.
Tony Harper, Faraday Battery Challenge director at UK Research and Innovation, said: “This new world-class facility will allow the UK to rigorously prepare our home-grown battery technologies for global competitiveness. This additional investment will mean its ambitious facilities will be expanded and improved to meet the soaring demand of the electric vehicle global market.”
https://www.theengineer.co.uk/coventry-uk-battery-industrialisation/
“Europe
exemplifies a situation unfavourable to a common currency. It is composed of
separate nations, speaking different languages, with different customs, and
having citizens feeling far greater loyalty and attachment to their own country
than to a common market or to the idea of Europe".
Professor Milton Friedman, The Times 19 November
1997.
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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