Baltic Dry Index. 1947
-67 Brent
Crude 63.46
Never ending Brexit
now October 31st, maybe.
Nuclear Trump
China Tariffs Now In Effect.
USA v EU trade war
postponed to November, maybe.
“Reporters were under pressure because their
editors were looking for stories. People were looking for answers, there was a
tremendous amount of uncertainty, and there wasn’t a lot of information.
Reporters wanted historical data. They wanted to know about other stock market
drops. That’s why we decided to have a press conference. We held a press
conference at 4 o’clock in the Board Room on the sixth floor of the Stock
Exchange and it was standing room only.”
Tom Brokaw. News Anchor October 19, 1987.
Does history repeat?
To this old dinosaur market trader it looks like it might. More and more 2019
looks to me that it’s trying to repeat 1987. Are our hopelessly over optimistic
global stock markets heading for a Black Monday style ending later this year? A
repeat of something like Monday October 19, 1987, although the rout actually
started on the previous Friday.
Central bank interest
rate cuts due to the onset of a major global slowdown in the midst of an escalating
set of trade wars, are reasons to be selling stocks and getting into cash and
precious metals, rather than buying more stocks.
If the global economy
has already entered the next recession, or is in the process of entering the
next recession, many companies holding a Mount Everest of unrepayable debt face
a debt crisis. Many banks face a bleak Deutsche Bank style future.
Add to all of the
above, a possible global food production deficit in America and Europe from 2019s
unhelpful weather, and a very difficult second half of 2019 lies ahead. It’s
time for risk off rather than risk on. Preservation of capital ahead of a
potential, very damaging shake out.
Asian markets pull back as Japan-South Korea trade tensions escalate
By Associated
Press and Marketwatch
Published: July 25, 2019 11:04 p.m. ET
Asian shares were lower Friday as investors continued to
watch the brewing trade conflict between China and the U.S., and any signs of
what’s in store from central banks.Stocks fell the most in South Korea, after a report Friday by Kyodo News that Japan will remove the country from its list of most-favored trading partners, effective Aug. 2. Trade tensions between the two countries have been rising since a Korean court ruled last year that Japanese companies must pay compensation for forced-labor practices before and during World War II, a verdict that Japan claimed was illegal under international law.
South Korea’s Kospi 180721, -0.60% fell 0.7%, while Japan’s benchmark Nikkei 225 NIK, -0.56% slid 0.5% in morning trading. Australia’s S&P/ASX 200 XJO, -0.21% lost 0.2%. Hong Kong’s Hang Seng HSI, -0.45% was down about 0.5%, while the Shanghai Composite SHCOMP, -0.16% was about flat.
---- “Investors continue to digest green shoots of upcoming U.S.-China trade talks amid persisting anxiety about the likely turn economic policies in the developed world take. The ECB failed to deliver any easing yesterday and the focus now shifts to the Fed policy,” Nicholas Mapa and Prakash Sakpal, analysts at ING, wrote in their report.
U.S. and Chinese envoys are set to meet in Shanghai next week for talks aimed at ending a tariff war.
China’s Ministry of Commerce said Thursday that Chinese companies are willing to import more U.S. farm goods.
That announcement followed President Donald Trump’s criticism that Beijing was backsliding on a promise to narrow its trade surplus with the United States by purchasing more American farm products.
U.S. stocks retreated from record highs on Wall Street Thursday as large companies delivered weak earnings and disappointing forecasts.
More
https://www.marketwatch.com/story/asian-markets-pull-back-as-japan-south-korea-trade-tensions-escalate-2019-07-25?mod=mw_latestnews
U.S. economic growth seen slowing in second quarter
July 26, 2019 /
5:09 AM
WASHINGTON
(Reuters) - The U.S. economy likely grew at its slowest pace in more than two
years in the second quarter as an acceleration in consumer spending was
probably offset by weak exports and business investment.
The anticipated moderation in growth will come against the backdrop of
rising risks to the economy’s outlook, especially from a trade war between the
United States and China as well as slowing growth overseas, which are seen
encouraging the Federal Reserve to cut interest rates next Wednesday for the
first time in a decade.
With a strong labor market supporting consumer spending, a recession is,
however, not on the horizon. The Commerce Department will publish the
second-quarter gross domestic product (GDP) report on Friday at 8:30 a.m. EDT (1230
GMT).
“The slowing in the economy spooked the Fed and markets, but the sky is
not falling,” said Ryan Sweet, a senior economist at Moody’s Analytics in West
Chester, Pennsylvania. “If we do get a recession next year it would be because
we shot ourselves in the foot with the trade tensions.”
Gross domestic product probably increased at a 1.8% annualized rate in
the second quarter, also because of a smaller inventory build, according to a
Reuters survey of economists, after surging at a 3.1% pace in the January-March
period.
More
German Business Outlook Tumbles as Manufacturing Slump Deepens
By Kristie Pladson
July 25, 2019, 9:06 AM GMT+1 Updated on July 25, 2019,
9:49 AM GMT+1
German companies’ business outlook tumbled to the lowest in
a decade, adding to signs that Europe’s largest economy is getting dangerously
close to a recession.Manufacturing is mired in a deepening slump as trade tensions weigh on exports and auto factories struggle to cope with changes in the industry. Water levels on the Rhine river, one of the country’s main transport rivers, are again precariously low, and some of Germany’s bluechip companies have issued profit warnings. The Bundesbank says the economy probably shrank in the second quarter.
An Ifo gauge of business expectations fell to 92.2 in July, the lowest
level since 2009. Firms’ assessment of current conditions also declined,
leaving a composite index at 95.7, below even the most pessimistic forecast in
a Bloomberg survey of economists.
The euro was trading down 0.1 percent at $1.1132 at 10:33 a.m. Frankfurt
time. Stocks and bonds fell slightly after the report.
“What’s worrying is that the weakness in manufacturing continues but
it’s now spreading so we see numbers worsening in the services sector,” Ifo
President Clemens Fuest said in a Bloomberg Television interview. “It’s
certainly not getting better,” and “it’s starting to affect the labor market.”
The figures follow on the heels of a
similarly pessimistic report on Wednesday that showed manufacturing contracting
sharply. Private consumption has held strong so far, but may prove vulnerable
should Germany’s record-low unemployment start to rise from a record low, as predicted
by the Bundesbank.
More
Draghi Shouts Louder at Germany as ECB Scrapes Stimulus Barrel
By Brian Swint and Carolynn Look
·
·
Germany sees no crisis, says it won’t budge on
fiscal rules
Mario Draghi is shouting louder than ever for help with the euro-area economy, and still no one is listening.
After stating that the outlook is getting “worse and worse,” the
European Central Bank president said on Thursday it is “unquestionable” that
governments will need to pitch in with fiscal measures if conditions keep
deteriorating.
Draghi’s eight-year term, which ends in October, has been marked by
negative interest rates, bond purchases and bank loans. While he’s promising
that the ECB can add more stimulus, and looks poised to do so in September, the
comments suggest that the central bank is getting close to the limits of its
powers.
Yet Germany, which has a budget surplus and which can borrow money at
sub-zero rates, doesn’t see the problem even as its own manufacturing sector
contracts. Finance Minister Olaf Scholz told Bloomberg Television on Thursday,
minutes before Draghi’s press conference, that he has no plans to loosen the
country’s purse strings because it’s not “necessary or wise to act as if we
were in a crisis.”
The ECB has been in crisis-fighting mode for years, combating the
aftermath of the global financial meltdown, the euro zone’s own sovereign-debt
struggles and a flirtation with deflation. It has unleashed innovative
instruments including 2.6 trillion euros ($2.9 trillion) of quantitative easing
and ultra-cheap bank loans that have flooded the region with liquidity, and
promised to keep rates low for as long as needed to revive price growth.
For all the success the institution claims, such as six years of
economic growth and more than 10 million new jobs, inflation remains far short
of its goal. That’s a risk to the ECB’s credibility, especially with trade
tensions and Brexit threatening a new downturn.
More
Global economic growth rut at risk of deepening despite rate cuts: Reuters polls
July 26, 2019 /
1:24 AM
Major sovereign bond yields have tumbled as recent economic data have
mostly underscored those concerns on growth, which appears to be slowing across
most industrialized and important developing economies.
But at the same time, stock markets have rallied on hopes of easier
monetary policy, despite clear signs that trade conflict and geopolitical
uncertainty are undercutting investment and activity.
Increasing pessimism is clear from the latest Reuters polls taken July
1-24, which show the growth outlook for nearly 90% of over 45 economies polled
was either downgraded or left unchanged. That applied not just to this year but
also 2020.
“As uncertainty around trade policy is unresolved, the impact on the
growth outlook is becoming more pronounced. We project global growth to slow
even further, and any sustained escalation from here raises recession risks,”
said Chetan Ahya, global head of economics at Morgan Stanley.
“While we believe that the easing cycle will be back in full swing, the
drag from elevated uncertainty should still weigh on the macro outlook,” he
added.
With the broad shift away by the world’s two biggest economies from
freer trade toward tariffs, over 70% of around 250 economists who answered an
additional question said a deeper global economic downturn is more likely than
previously expected.
While the remaining respondents still expect a global rebound from the
current rut, economists were split nearly 50-50 on that question only three
months ago.
More
Finally, poor hot
Europe. In GB at least, after a day in the 90s yesterday in southeast and
eastern England, today’s high is expected to be a more seasonal mid-seventies. Unlike
Florida in July where temps in the 90s are commonplace, our overnight low was a
pleasant 63 degrees versus Florida’s 84 to 88 degrees Fahrenheit. For GB at least, yesterday was probably
summer.
Climate records fall as Europe bakes in heatwave
July 25, 2019 /
2:58 PM
PARIS/LONDON
(Reuters) - Soaring temperatures broke records in Germany, France, Britain and
the Netherlands on Thursday, as a heatwave gripped Europe for the second time
in a month in what scientists said were becoming more frequent events as the
planet heats up.
As a cauldron of hot air from the Sahara desert moved across the
continent, drawn northwards by high pressure, Paris saw its highest temperature
since records began and Britain reported its hottest weather for the month of
July.
An all-time high was measured in Germany for a second day running, at
41.5 degrees Celsius (106.7 degrees Fahrenheit) in the northwestern town of
Lingen - similar temperatures to those in some Gulf Arab capitals on Thursday.
The unusual conditions brought a reduction in French and German nuclear
power output, disrupted rail travel in parts of Britain and sent some
Europeans, not habitual users of air conditioning in their homes, out to the
shops in search of fans.
Health authorities issued warnings to the elderly, especially vulnerable
to spikes in temperature. In cities, children splashed about in water fountains
to cool off.
----The mercury in Paris touched 42.6 C (108.68 F) in mid-afternoon,
above the previous Paris record of 40.4 C (104.72 F) recorded in July 1947.
In Britain, the temperature reached its highest for July, hitting 38.1 C
(100.58 F), said the Met Office, the national weather service. The temperature,
recorded in Cambridge, beat the previously July record of 36.7 C (98.06°F) in
2015.
This was the second highest temperature recorded in the country. The
hottest day, in August 2003, saw 38.5 C (101.3 F).
In the southern Netherlands, the temperature peaked at 40.4 C (104.7 F),
topping 40 C (104 F) for the first time on record, Dutch meteorology institute
KNMI said. That broke the national record of 39.3 C set the previous day.
Before this week, the national heat record of 38.6 C had stood for 75 years.
The heat is expected to persist until Friday.
More
Europe’s Cities Weren’t Built for This Kind of Heat
---- It might be a shock to learn that Amsterdam’s high temperatures are surpassing highs even in Las Vegas or Albuquerque. Not only are temperatures exceeding pretty much everywhere in the United States right now, they are doing so in an environment that is notably poorly equipped much to deal with such extremes. In London, July highs are typically around 75 degrees Fahrenheit. Home builders’ priority is often to fit in as many exterior windows as possible, bringing in light to leaven the gothic weight of the country’s autumn-to-spring perma-gloaming. Verandas are all but unheard of, shutters are a rare olde-worlde affectation, and awnings are exclusively for shops. Air conditioning is for commercial premises, while fly screens are something you’ll only find at an old-fashioned butcher. Our homes have always focused on keeping heat in. There’s been little thought expended on how to keep it out.
If such extremes are the new normal—and it looks as if they are—then
things will have to change, a lot. Better ventilation and such additions as
green roofs could improve things, although most roofs are pitched to deal with
all our rain. Another basic step would be getting sunshades for windows of the
type that are typical in Europe’s south (in Greece they often don’t bother
taking them up even in winter). Managing rising temperatures in environments
will still require not just retrofitting housing, but also undergoing a
cultural shift—even simple things like keeping the blinds down during the day are
novel in Britain, and we only have a month or so a year to learn the ropes.
More
“People
who manage big sums were convinced they didn’t have to worry about the market
dropping,” recalled John Bachmann, senior partner at St. Louis financial
services firm Edward D. Jones & Co. and at the time chairman of the
Securities Industry Association, a trade group.
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled
over.
Today China again. What has China done to the Mekong river’s water?
Missing Mekong waters rouse suspicions of China
July 25, 2019 /
11:19 AM
BAN NONG CHAN,
Thailand (Reuters) - By this time of year, the Mekong River should have been
rising steadily with the monsoon rains, bringing fishermen a bounty of fat
fish.
Instead, the river water in Thailand has fallen further than anyone can
remember and the only fish are tiny.
Scientists and people living along the river fear the impact of the
worst drought in years has been exacerbated by upstream dams raising the prospect
of irreversible change on the river that supports one of Southeast Asia’s most
important rice-growing regions.
A Chinese promise to release more dam water to ease the crisis has only
raised worries over the extent to which the river’s natural cycles - and the
communities that have depended on it for generations - have been forever
disrupted.
“Now China is completely in control of the water,” said Premrudee
Deoruong of Laos Dam Investment Monitor, an environmental group.
“From now on, the concern is that the water will be controlled by the
dam builders.”
In the northeastern Thai province of Nakhon Phanom, where the now
sluggish river forms the border with Laos, the measured depth of the Mekong
fell below 1.5 metres this week. The average depth there for the same time of
year is 8 metres.
“What I have seen this year has never happened before,” said Sun Prompakdee, who has been fishing from Ban Nong Chan village for most of his 60 years. “Now we only get small fish, there are no big fish when the water is this low.”
The collapse in the water level is partly due to drought - with rainfall during the past 60 days more than 40 percent below normal for the time of year.
But it is also because dams upstream cut off water just when it was most needed. China’s Jinghong hydropower station said in early July it was more than halving the flow rate for “grid maintenance” on what China calls the Lancang River.
Then the new Xayaburi dam, being built by a Thai company in Laos to provide power for Thailand, began test runs on July 15.
“It’s indicative of the difficulties of launching and operating mega projects in a system that is susceptible to wild swings in its seasonality as well as moving into a period in which climate change impacts are settling in,” said researcher Brian Eyler, author of “Last Days of the Mighty Mekong”.
It is just the kind of nightmare feared by the countries downstream -
Thailand, Laos, Cambodia and Vietnam - where tens of millions of people rely on
a river that gave rise to the region’s ancient kingdoms.
Facing water shortages in cities and fields, Thailand has told farmers
to stop planting more rice.
Thailand’s foreign ministry told Reuters it had invited in the Chinese
ambassador “to discuss ways to resolve the Mekong crisis regarding climate
change and drought”.
Morehttps://uk.reuters.com/article/uk-mekong-river/missing-mekong-waters-rouse-suspicions-of-china-idUKKCN1UK19Y?il=0
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?
Ultrathin transistors for faster computer chips
Date:
July 24, 2019
Source:
Vienna University of Technology
Summary:
The next big miniaturization step in microelectronics could soon become
possible -- with so-called two-dimensional materials. With the help of a novel
insulator made of calcium fluoride, scientists have created an ultra-thin
transistor, which has excellent electrical properties and, in contrast to
previous technologies, can be miniaturized to an extremely small size.
For decades, the transistors on our microchips have become smaller,
faster and cheaper.
Approximately every two years the number of transistors on
commercial chips has doubled -- this phenomenon became known as "Moore's
Law." But for several years now, Moore's law does not hold any more. The
miniaturization has reached a natural limit, as completely new problems arise
when a length scale of only a few nanometers is approached.
Now, however, the next big miniaturization step could soon become
possible -- with so-called "two-dimensional (2D) materials" that may
consist of only a single atomic layer. With the help of a novel insulator made
of calcium fluoride, scientists at TU Wien (Vienna) have created an ultra-thin
transistor, which has excellent electrical properties and, in contrast to
previous technologies, can be miniaturized to an extremely small size. The new
technology has now been presented in the journal Nature Electronics.
Ultra-Thin Semiconductors and Insulators
Research on semiconductor materials needed to fabricate transistors has
seen significant progress in recent years. Today, ultra-thin semiconductors can
be made of 2D materials, consisting of only a few atomic layers. "But this
is not enough to build an extremely small transistor," says Professor
Tibor Grasser from the Institute of Microelectronics at TU Wien. "In
addition to the ultra-thin semiconductor, we also need an ultra-thin
insulator."
This is due to the fundamental design structure of a transistor: current
can flow from one side of the transistor to the other, but only if a voltage is
applied in the middle, creating an electric field. The electrode providing this
field must be electrically insulated from the semiconductor itself. "There
have already been transistor experiments with ultra-thin semiconductors, but
until now they were coupled with ordinary insulators," says Tibor Grasser.
"There is not much benefit in reducing the thickness of the semiconductor
when it still has to be combined with a thick layer of insulator material.
There is no way of miniaturizing such a transistor any further. Also, at very
small length scales the insulator surface turned out to disturb the electronic
properties of the semiconductor."
Therefore, Yury Illarionov, a postdoc in Tibor Grasser's team, tried a
novel approach. He used ultra-thin 2D-materials not only for the semiconductor
part of the transistor, but also for the insulating part. By selecting
ultra-thin insulating materials such as ionic crystals, a transistor with a
size of only a few nanometers can be built. The electronic properties are
improved because ionic crystals can have a perfectly regular surface, without a
single atom protruding from the surface, which could disturb the electric
field. "Conventional materials have covalent bonds in the third dimension
-- atoms that couple to the neighboring materials above and below,"
explains Tibor Grasser. "This is not the case in 2D materials and ionic
crystals, and so they do not interfere with the electrical properties of the
semiconductor."
The Prototype is a World Champion
More
Another
weekend and a hot one for most of western Europe. A cooler one for President
Trump, following the disastrous flop of the Mueller testimony earlier in the
week. But what will President Trump tweet. And so on to next week’s big event,
the Trump cowed Fed interest rate cut. Have a great weekend everyone.
“It felt like the
world was ending.
“It was almost like
being caught in an earthquake where you’re half in shock. There’s a sense of
incredible disbelief.
“You looked at the
number — down 508 points in a day — and it was just unbelievable at that time.”
---- “Down 508 points from the 2200 level was dramatic — the market fell
22.6 percent. Almost a quarter of the wealth of the stock market in one day.
For our generation, it was unprecedented.”
Chris Rupkey, who was an
economist at MCM Moneywatch.
The monthly Coppock Indicators finished June
DJIA: 26,600 +51 Up. NASDAQ: 8,006 +70 Down.
SP500: 2,942 +50 Up.
The S&P has reversed again to up after only one month. The Dow has
reversed to up, while the NASDAQ remains down. On to next
month’s numbers for clarification.
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