Baltic Dry Index. 1865
+49 Brent
Crude 66.64
Never ending Brexit
now October 31st, maybe.
Nuclear Trump
China Tariffs Now In Effect.
USA v EU trade war
postponed to November, maybe.
“China
is a sleeping giant. Let her sleep, for when she wakes she will shake the
world.”
Napoleon
Bonaparte
Today we focus on
China and wonder if China has already surpassed the USA as the new driver of
the global economy. Is it now a case of when China sneezes, the rest of the
world, including America, catches a cold?
The jury’s still out
on that one, but from far away London it’s become a fair question. President
Trump seems to be losing his trade war against China. China, while slowing is
showing signs of having weathered the worst. So much so that President Trump
has taken to suggesting weaponizing competitive dollar devaluation.
If implemented, a
weaponised dollar devaluation really would threaten a 1930s style trade calamity.
A very different world would be the result, and not an improved social order
either.
Below, a Monday
morning look at China.
China second quarter GDP growth slows to 6.2% year-on-year, 27-year low
July 15, 2019 /
12:22 AM
BEIJING (Reuters)
- China’s economic growth slowed to 6.2% in the second quarter from a year
earlier, the weakest in at least 27 years, as demand at home and abroad
faltered as the United States ratcheted up trade pressure.
But stronger-than-expected gains in June factory output and retail sales
offered some signs of stabilization.
China’s trading partners and financial markets are closely watching the
health of the world’s second-largest economy as the Sino-U.S. trade war gets
longer and costlier, fuelling worries of a global recession.
Monday’s growth data marked a further loss of momentum for the economy
from the first quarter’s 6.4%, amid expectations that Beijing needs to announce
more measures to boost consumption and investment and restore business
confidence.
Analysts polled by Reuters had forecast gross domestic product (GDP) in
the April-June quarter rose 6.2%, the slowest pace since the first quarter of
1992, the earliest quarterly data on record.
Beijing has leaned largely on fiscal stimulus to underpin growth this
year, announcing massive tax cuts worth nearly 2 trillion yuan ($291 billion)
and a quota of 2.15 trillion yuan for special bond issuance by local
governments aimed at boosting infrastructure construction.
The economy has been slow to respond, however, and business sentiment
remains cautious.
Premier Li Keqiang said this month that China will make timely use of
cuts in banks’ reserve requirement ratios (RRR) and other financing tools to
support smaller firms, while repeating a vow not to use “flood-like” stimulus.
But after weak readings in May, the data for industrial production,
retail sales and fixed-asset investment on Monday all beat analysts’ forecasts,
suggesting that Beijing’s efforts may be starting to have an effect.
Industrial output climbed 6.3% from a year
earlier, data from the National Bureau of Statistics showed, picking up from
May’s 17-year low and surpassing a forecast for 5.2% growth.
More
China June aluminium output climbs to daily record -Reuters calculations
July 15, 2019 /
4:17 AM
BEIJING (Reuters)
- China’s daily aluminium output hit record levels in June, according to
Reuters calculations, even as total production for the whole of the month fell
slightly according to data released by the National Bureau of Statistics on
Monday.
The world’s top aluminium producing country churned out 2.97 million
tonnes of the metal last month, the bureau said. That was down from 2.98
million tonnes in May, but up 1.3% year-on-year.
On a daily basis, output averaged 99,000 tonnes in June, according to
Reuters calculations. That was up from around 96,000 tonnes in May, and
surpassed the previous record of around 98,400 tonnes, sent last December.
The daily record high followed a jump in Shanghai aluminium prices
SAFcv1 to as much as 14,380 yuan (1,664.4 pounds) a tonne in May, turning
margins positive again for some smelters and incentivising ramp-ups.
But prices fell by 2% in June, and currently sit below the 14,000 yuan
($2,035.92) mark that is considered a break-even threshold for many Chinese
smelters.
Jackie Wang, an aluminium analyst at CRU in Beijing, said the high June
number was likely explained by ramp-ups at projects in Yunnan and Guizhou, both
in southwest China.
The price of alumina, a substance used to make aluminium metal, has also
been on the decline since the second half of June, Wang said, easing the
pressure on smelter margins. “If their costs decrease they can continue to
operate,” she added.
More
China imports from US plunge 31 percent in June amid tariff war
Joe McDonald/AP Business WriterJuly 13, 2019 10:09:57 PM
BEIJING -- China's trade with the United States plunged last month as a tariff war battered exporters on both sides of the Pacific Ocean.
And there's no letup in sight: Tensions between the world's two biggest economies continue to simmer even though President Donald Trump and his Chinese counterpart, Xi Jinping, called a ceasefire two weeks ago.
Data out Friday showed that the hostilities are taking a toll.
Chinese imports of U.S. goods fell 31.4 percent from a year earlier to $9.4 billion, while exports to the American market declined 7.8 percent to $39.3 billion, according to Chinese customs data. China's trade surplus with the United States widened by 3 percent to $29.9 billion.
The two countries are fighting over U.S. allegations that China deploys predatory tactics -- including stealing trade secrets and forcing foreign firms to hand over technology -- in a headlong drive to challenge American technological dominance.
The U.S. has imposed tariffs on $250 billion in Chinese imports, drawing retaliatory sanctions from Beijing on $110 billion in U.S. products. China also directed importers to find non-U.S. suppliers.
The dispute won't be easy to solve. Mistrust between Washington and Beijing runs high. And a substantive solution likely would require China to scale back its ambitions to become a world leader in advanced technologies such as artificial intelligence and electric cars.
More
https://www.cdispatch.com/news/article.asp?aid=74771
Finally, Huawei again. Mixed messages.
Is Huawei a security threat or not? But with Huawei layoffs in the USA things
are turning ugly. When will China strike back and where? President Trump is
turning US companies into unreliable suppliers.
Exclusive: U.S. firms may get nod to restart Huawei sales in two-four weeks - official
July 15, 2019 /
12:06 AM
WASHINGTON
(Reuters) - The U.S. may approve licenses for companies to re-start new sales
to Huawei in as little as two weeks, according to a senior U.S. official, in a
sign President Donald Trump’s recent effort to ease restrictions on the Chinese
company could move forward quickly.
Huawei, the world’s largest telecommunications equipment
maker, was added to a Commerce Department list in May that prohibits U.S.
companies from supplying it with new American-made goods and services unless
they obtain licenses that will likely be denied. But late last month, after meeting with Chinese president Xi Jinping, President Donald Trump announced American firms could sell products to Huawei. And in recent days, Commerce Secretary Wilbur Ross said licenses would be issued where there is no threat to national security.
Trump’s reversal, and rapid implementation by the Commerce Department, suggests chip industry lobbying, coupled with Chinese political pressure, may well reignite U.S. technology sales to Huawei.
Two U.S. chipmakers who supply Huawei told Reuters in recent days they would apply for more licenses after Ross’s comments. They asked to remain anonymous.
A customer response management company and a firm that simulates cross-sectional radar for Huawei are also likely to file applications in the coming days, according to Craig Ridgley, a trade compliance consultant in Washington.
Out of $70 billion that Huawei spent buying components in 2018, some $11 billion went to U.S. firms including Qualcomm (QCOM.O), Intel (INTC.O) and Micron Technology (MU.O).
“Since there’s no downside, companies are absolutely submitting applications, as required by the regulations,” said Washington lawyer Kevin Wolf, a former Commerce Department official.
More
Huawei plans extensive layoffs at its U.S. operations: WSJ
July 14, 2019 /
8:20 AM
(Reuters) - Huawei Technologies Co Ltd [HWT.UL] is planning extensive
layoffs in the United States as the Chinese telecoms equipment company grapples
with its U.S. blacklisting, the Wall Street Journal reported, citing people
familiar with the matter.
The layoffs are expected to affect jobs at Huawei’s U.S.-based research
and development subsidiary Futurewei Technologies, which employs about 850
people in research labs across the United States, the Journal said .
The layoffs could be in the hundreds, one person told the Journal.
Huawei’s Chinese employees in the United States were being given an option to
return home and stay with the company, another person added.
Some employees have already been notified of their dismissal, while more
planned job cuts could be announced soon, the newspaper said.
Huawei declined to comment when contacted by Reuters.
After the Commerce Department decided to put Huawei on its so-called
entity list, Futurewei employees have faced restrictions to communicate with
their colleagues in Huawei’s home offices located in China, the people told the
Journal.
Last week, Commerce Secretary Wilbur Ross said the U.S. government would
issue licenses to companies seeking to sell goods to Huawei where there was no
threat to national security.
US tells Britain: Fall into line over China and Huawei, or no trade deal
Donald Trump’s negotiators have signalled that the next prime minister’s hopes of a post-Brexit trade deal with the United States rest on his willingness to fall in line with tough American policies against the Chinese telecoms giant Huawei.Whitehall correspondence seen by The Sunday Telegraph reveals that British officials close to transatlantic trade talks believe allowing Huawei to provide equipment for new 5G mobile networks could be a deal-breaker.
More
https://www.telegraph.co.uk/business/2019/07/13/us-tells-britain-fall-line-china-huawei-no-trade-deal/
“I've read hundreds of books about China over the decades. I know the Chinese. I've made a lot of money with the Chinese. I understand the Chinese mind.”
The Art of the Deal
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled
over.
Today, more on those USA record Spring rains. Is there more on the way from what’s left of tropical storm Barry? According to the USDA, the average yield per acre for corn (maize) was 166 bushels, though in good years is substantially higher; while for soybeans it’s 51.6 bushels. What happens now in the rest of the growing season to planted crops will determine just how poor 2019’s harvest will be.
Millions of acres of Midwest farmland eligible for U.S.-backed insurance
July 12, 2019 /
5:13 PM
EVANSVILLE, Ind., July 12 (UPI) -- Insurance claims for unplanted crops
may top $1 billion after record spring rainfall prevented Midwest farmers from
planting millions of acres.
As of this week, the U.S. Department of Agriculture had paid $184
million on nearly 2 million acres of unplanted land, with the money coming from
federally subsidized crop insurance, which covers "prevented
planting," when a farmer is unable to plant due to weather or other events
out of their control.
The number of "prevented planting" insurance claims is expected to rise substantially in the next few weeks. Agriculture Undersecretary Bill Northey has predicted unplanted acres could exceed 10 million.
"Around this area, it is unbelievable how much prevented planting there is," said Rodney Weinzier, the executive director of the Illinois Corn Growers Association. "It is far more widespread than it's been in the past."
In 2018, only 2.2 million acres went unplanted.
There is fierce debate among the farm community as to just how many acres were made unplantable by this spring's historic Midwest flooding. A July USDA report indicated the unplanted area was below 5 million acres for corn and soybeans.
The USDA's findings did not match industry estimates, so many in the farming industry did not believe the report, and the USDA warned that the number might not be accurate. The figures were based on estimates collected in June during a time farmers still hoped to plant many millions of acres.
The agency plans to resurvey farms this month and will update the report later this summer.
In the meantime, insurance claims may offer a clearer picture. The deadline for farmers to submit those claims is July 22.
"It is still too early to know what the total prevented planting losses will be in 2019," said Justin Fritscher, a USDA spokesman.
For the farmers who receive "prevented planting" insurance payments, it will be a tough year, Weinzier said. The claims cover about half of what a farmer would have made had he been able to plant.
"So, for standard crop insurance, the max you can insure is 85 percent of the crop's value," Weinzier said. "In a prevented planting claim, the max is 55 percent of that 85 percent."
The crops' value is determined by averaging the farm's previous yields
and incomes.
Morehttps://www.upi.com/Top_News/US/2019/07/12/Millions-of-acres-of-Midwest-farmland-eligible-for-US-backed-insurance/3001562961074/?ts_fn=1
A roller-coaster ride ahead for U.S. farmers thanks to extreme weather
Updated July 13,
2019 at 1:37 PM
U.S. farmers already dealing with a difficult growing season will feel
like they're on a roller-coaster ride in the days ahead as the up-and-down
weather goes to two extremes.
Hurricane Barry will bring heavy rains and flooding to the Delta region
from Saturday into Monday. Some cotton and soybean fields likely will be
flooded with some risk of damage, especially in Louisiana and Mississippi,
according to AccuWeather meteorologists.
And then the heat wave arrives. AccuWeather is forecasting temperatures to be in the 93- to 98-degree range over most of the western half of the Midwest Corn Belt later next week.
"There is growing concern for a spell of drier-than-normal and hotter-than-normal weather late in July in that area," AccuWeather senior meteorologist Jason Nicholls said. "This would be during the critical pollination stage for corn, so this hot weather can adversely impact the corn crop."
---- The condition of corn and soybeans rated "good" or "excellent" has been rated 60 percent or lower by the U.S. Department of Agriculture for four straight weeks. Last year at this time, that number was 75 percent. For soybeans, the condition was 53 percent last week, compared with 71 percent at the same time last year.
A new weekly report will be issued Monday and AccuWeather's Nicholls isn't expecting much improvement.
"We expect the condition of corn and soybeans to go up maybe by 1-2 percent but it's still well below where it has been historically," said Nicholls.
Because of the wet weather this spring, an AccuWeather analysis predicts there will be 13.03 billion bushels of corn produced this year. That would be the lowest total since 2012 when 10.76 billion bushels of corn were harvested. In 2018, the total was 14.42 billion bushels.
More
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?
'Just a matter of when': the $20bn plan to power Singapore with Australian solar
Ambitious export plan could generate billions and make Australia the centre of low-cost energy in a future zero-carbon worldSun 14 Jul 2019 02.52 BST
The desert outside Tennant Creek, deep in the Northern Territory, is not the most obvious place to build and transmit Singapore’s future electricity supply. Though few in the southern states are yet to take notice, a group of Australian developers are betting that will change.
If they are right, it could have far-reaching consequences for Australia’s energy industry and what the country sells to the world.
Known as Sun Cable, it is promised to be the world’s largest solar farm. If developed as planned, a 10-gigawatt-capacity array of panels will be spread across 15,000 hectares and be backed by battery storage to ensure it can supply power around the clock.
Overhead transmission lines will send electricity to Darwin and plug into the NT grid. But the bulk would be exported via a high-voltage direct-current submarine cable snaking through the Indonesian archipelago to Singapore. The developers say it will be able to provide one-fifth of the island city-state’s electricity needs, replacing its increasingly expensive gas-fired power.
After 18 months in development, the $20bn Sun Cable development had a quiet coming out party in the Top End three weeks ago at a series of events held to highlight the NT’s solar potential. The idea has been embraced by the NT government and attracted the attention of the software billionaire Mike Cannon-Brookes, who is considering involvement through his Grok Ventures private investment firm.
The NT plan follows a similarly ambitious proposal for the Pilbara, where another group of developers are working on an even bigger wind and solar hybrid plant to power local industry and develop a green hydrogen manufacturing hub. On Friday, project developer Andrew Dickson announced the scale of the proposed Asian Renewable Energy Hub had grown by more than a third, from 11GW to 15GW. “To our knowledge, it’s the largest wind-solar hybrid in the world,” he says
These developments are still at relatively early stages of planning. Both teams say it will be four years before they lock in finance, with production scheduled to start mid-to-late next decade. But renewable energy watchers are cautiously optimistic they could help spark a new way of thinking about Australia’s energy exports – one that better aligns with the country’s commitment to the Paris climate agreement, rather than broadening a fossil fuel trade at odds with it.
More
https://www.theguardian.com/environment/2019/jul/14/just-a-matter-of-when-the-20bn-plan-to-power-singapore-with-australian-solar
“China is a big country, inhabited by many Chinese. ”
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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