Baltic Dry Index. 1549
+103 Brent
Crude 63.45
Never ending Brexit
now October 31st, maybe.
Nuclear Trump
China Tariffs Now In Effect.
USA v EU trade war
postponed to November, maybe.
July 4, 1776. “Nothing much happened today.”
King George III. Diary.
Today
we congratulate Canadians and Americans who both celebrate their Independence
Day this week, American’s today. The Canadians did it the legal way by Act of
British Parliament. The Americans, as usual, did it by illegal force and relying
on French troops on the ground and the French Navy. It’s the one and only time
Americans have relied on the French. King George, as usual, was misinformed.
With
America closed for the day, and an 8:30 am appointment with Lucky’s far away
vets, today’s update will be briefer than most. Hopefully, this is Lucky’s last
follow up visit following his two operations on his front paws. But it does get
me stuck crossing two large towns during the morning rush hour, one of which
has major road works underway.
Happily,
I enjoy driving, Manhattan, Long Island, Palm Beach to New York City and back,
plus London, and London Edinburgh and back, among many others.
Today,
what’s wrong with this? A bubble or a rig?
Asian markets mixed after Wall Street’s record highs
By Marketwatch
and Associated
Press
Published: July 4,
2019 12:02 a.m. ET
Asian markets were mixed in early trading Thursday, following record closing highs for U.S. stocks in a shortened trading day.
The rally follows a slight easing of trade tensions between the U.S. and China after they agreed to refrain from new tariffs pending a new round of negotiations. That has relieved some pressure on markets, though the trade war still overshadows the global economic outlook.
Japan’s Nikkei NIK, +0.31% rose 0.2% but Hong Kong’s Hang Seng Index HSI, -0.11% gave up early gains and was last down 0.1%. After starting the trading day flat, the Shanghai Composite SHCOMP, -0.27% and the smaller-cap Shenzhen Composite 399106, -0.50% each fell slightly. South Korea’s Kospi 180721, +0.09% erased early losses and rose 0.1%. Benchmark indexes in Taiwan Y9999, +0.25% , Singapore STI, +0.14% and Indonesia JAKIDX, +0.25% rose modestly. Australia’s S&P/ASX 200 XJO, +0.43% rose 0.5%.
More
Just 77 companies are powering the global stock market rally
Published: July 3,
2019 3:19 p.m. ET
If the global economy is weakening, why have global markets rallied so forcefully this year?
That’s a question investors would be wise to consider as evidence mounts of economic growth slowing in Asia, Europe and the U.S. and as falling yields on government bonds indicate that at least bond investors are preparing themselves for tougher times ahead.
One reason for the discrepancy between the rise in broad indexes like the S&P 500 SPX, +0.77% or the MSCI World Index 892400, +0.55% which have gained 19.5% and 16.7%, respectively, and what appears to be a weakening global economy is that the advance is being powered by just a handful of megacap companies who’s global scale and reach allow them to better handle rising trade tensions and weakening demand and keep their sales and profits rising.
In a recent research note, Andrew Lapthorne, head of quantitative research at Société Générale, pointed out that within the nearly 1700 constituents of the MSCI World Index, “the megacap group [with market capitalizations above $100 billion] is powering ahead, whilst those in the sub- $5 billion market cap range are still struggling to make back last year’s loss.”
“The more remarkable numbers are this 100bn portfolio represents just 77
companies but 27% of the global market cap,” he added, while there are more
than 11,000 companies with market values of less than $1 billion, and the
median company in that group has shed nearly 10% of its value so far this year.
“And this is the problem, our increasing focus on a few large cap
indices populated by just a fraction of the world’s companies is giving
investors a false impression, Lapthorne wrote. “Corporates are struggling!”
This phenomenon whereby large companies are outperforming small ones is
present in the U.S., though not to the same magnitude as globally. Steven
DeSanctis equity strategist at Jeffries, wrote in a Wednesday research note
that small-cap U.S. stocks have trailed their larger cousins by 13% over the
past year, as small companies have been unable to thwart off margin pressures
as a result of rising costs in labor and materials, amid an environment of
slower economic growth.
U.S. trade, services industry data point to slowing economy
July 3, 2019 /
2:33 PM
WASHINGTON
(Reuters) - The U.S. trade deficit jumped to a five-month high in May as
imports of goods increased, likely as businesses restocked ahead of an increase
in tariffs on Chinese merchandise, overshadowing a broad rise in exports.
The wider trade deficit reported by the Commerce Department on Wednesday
added to weak housing, manufacturing, business investment and moderate consumer
spending in suggesting that economic growth slowed in the second quarter. The
labour market also appears to be losing momentum, with private employers adding
far fewer-than-expected jobs to their payrolls in June.
News on the vast services sector was also downbeat.
The slowdown in activity as last year’s massive stimulus from tax cuts
and more government spending fades could prompt the Federal Reserve to cut
interest rates this month. The U.S. central bank last month signalled it could
ease monetary policy as early as at its July 30-31 meeting, citing rising risks
to the economy from the trade war between the United States and China, and low
inflation.
The trade deficit surged 8.4% to $55.5 billion (£44.1 billion). Data for
April was revised higher to show the trade gap widening to $51.2 billion
instead of the previously reported $50.8 billion. Economists polled by Reuters
had forecast the trade gap widening to $54.0 billion in May.
The goods trade
deficit with China, a focus of President Donald Trump’s “America First” agenda,
increased 12.2% to $30.2 billion, with imports rising 12.8%. Trump imposed
additional import tariffs on Chinese goods, after a breakdown in negotiations,
prompting Beijing to retaliate.
In May, goods imports increased 4.0% to $217.0 billion. Apart from
drawing more imports from China, imports from the European Union, Mexico and
Canada increased to record highs in May. Imports of consumer goods rose $1.4
billion, while those of motor vehicle and parts soared $2.3 billion to an
all-time high.
There were also big increases in imports of capital goods and industrial
supplies and materials. Some of the jump in the import bill in May also
reflected higher petroleum imports and more expensive crude oil.
More
Earnings recession risk increases as a flood of warnings hit
By Tomi Kilgore Published: July 2, 2019 4:13 p.m. ET
The S&P 500 looks set to suffer its first earnings
recession in three years, as the number of companies cutting guidance is among
the highest seen in the past 13 years.The unofficial start of the second-quarter earnings reporting season is less than two weeks away, and preliminary reports suggest the outlook keeps getting worse. The blended year-over-year growth estimate for earnings per share for the S&P 500 SPX, +0.29% , which represents already reported results and the average analyst estimates of coming results, is negative 2.82% as of midday Tuesday, with six of 11 sectors estimated to post declines, according to data provided by FactSet.
Actual reports, however, have been much worse. With 20 of the 505 S&P 500 companies, or about 4%, having already reported results, actual reported EPS is down 14.69% from a year ago.
Adding to the negative outlook, 113 S&P 500 companies have issued
EPS guidance as the second quarter ended, with 87 companies, or 77% of that
total, providing guidance that was below the average estimate of analysts. That
is well above the five-year average of 74 companies that warn of earnings
misses, and the second most since FactSet began tracking data in 2006.
The only time the number was higher at this stage was in the first
quarter of 2016, when 92 companies warned of earnings misses. Overall EPS fell
6.58% that quarter, FactSet said.
More
The U.S. economy just entered a record-shattering 11th year of expansion
By Jeffry
Bartash Published: July 2, 2019 9:36
a.m. ET
You’ve come a long way, baby: The U.S. economy has now entered a record
11th year of expansion.
The current recovery began in June 2009 and has lasted 121 months,
breaking the previous record of 120 months set from 1991 to 2001.
It hasn’t been all sunshine, however. The expansion has taken awhile to
get going and has been somewhat uneven. While unemployment has fallen to a 49-year
low of 3.6%, the pace of the current expansion is the slowest in the modern
era.
Gross domestic product, or GDP, the yardstick of economic growth, has
averaged just 2.3% since the U.S. exited recession in mid-2009. And for the
first time since WWII, the economy has failed to reach 3% annual growth in any
single calendar year.
More
Euro zone June business growth slow as factories still faltering
July 3, 2019 /
9:12 AM
LONDON (Reuters) -
Euro zone business activity picked up slightly last month but remained weak as
a modest but broad-based upturn in the services industry offset a continued
deep downturn in factory output, a survey showed.
Worryingly for policymakers at the European Central Bank, who are under
pressure to support growth, forward-looking indicators did not point to a
bounce back and business expectations for the year ahead dropped.
By the end of September, the ECB will either cut its deposit rate or
ease its forward guidance further by pledging to keep interest rates lower for
longer, according to a majority of economists in a Reuters poll.
The European Union’s nomination of IMF chief Christine Lagarde to
replace Mario Draghi at the helm of the ECB has reinforced expectations for
easier monetary policy going forward.
Wednesday’s release of IHS Markit’s Euro Zone Composite Final Purchasing
Managers’ Index (PMI), considered a good measure of overall economic health,
will also do nothing to change those views. It only nudged up to 52.2 in June
from May’s 51.8.
That was a touch higher than a preliminary reading of 52.1 but it
remained close to the 50 mark separating growth from contraction.
The upturn was nevertheless evident throughout much of the euro zone,
and earlier figures from three of the bloc’s biggest economies — Germany,
France, and Spain — showed services activity accelerated.
More
UK economy shrinks as Brexit, global worries mount: PMI
July 3, 2019 /
10:55 AM
A day after Bank of England Governor Mark Carney warned of the growing
risks from a no-deal Brexit and protectionist trade policies, a gauge of
Britain’s huge services industry — the IHS Markit/CIPS services Purchasing
Managers’ Index (PMI) — slipped to 50.2 in June, just above the no-growth level
of 50.
Economists polled by Reuters had expected the PMI to remain at May’s
level of 51.0.
Equivalent surveys for manufacturing and construction published earlier
this week showed those sectors contracted in June, meaning Britain’s economy
overall probably shrank by 0.1 percent in the second quarter, IHS Markit/CIPS
said.
British gross domestic product last shrank from one quarter to another
in the final three months of 2012, according to official data. The last time
GDP shrank for two or more quarters in a row — the widely accepted definition
of a recession — was in 2008-2009, during the global financial crisis.
“The latest downturn has followed a gradual deterioration in demand over
the past year as Brexit-related uncertainty has increasingly exacerbated the
impact of a broader global economic slowdown,” said Chris Williamson, chief
business economist at IHS Markit.
“Risks also remain skewed to the downside as sentiment about the year
ahead is worryingly subdued, suggesting the third quarter could see businesses
continue to struggle.”
British government bond yields fell further after the survey, with the
yield on 10-year gilts hitting its lowest level since the months after the 2016
Brexit referendum.
More
Any
fool can criticise, condemn and complain and most fools do.
Benjamin
Franklin.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled
over.
Today, China make its position loud and clear to London and Ottawa.
People in glass houses shouldn’t throw stones. But is anyone in London or
Ottawa listening?
China criticises Britain for 'shameless' comments on Hong Kong
July 3, 2019 /
1:00 AM
BEIJING (Reuters)
- China on Wednesday denounced British Foreign Secretary Jeremy Hunt as
“shameless”, saying it had made a diplomatic complaint to London after he
warned of consequences if China neglected commitments made when it took back
Hong Kong in 1997.
China has stepped up a war of words with Hong Kong’s former colonial
ruler following mass protests there against a now suspended bill that would
allow extradition to mainland China.
“To say that the freedoms of Hong Kong residents is something Britain
strived for is simply shameless,” Foreign Ministry spokesman Geng Shuang told a
news briefing.
“I would like to ask Mr. Hunt, during the British colonial era in Hong
Kong, was there any democracy to speak of? Hong Kongers didn’t even have the
right to protest.”
Only after Hong Kong’s return to China did its people got an
“unprecedented” guarantee about democracy and freedom, he said.
Britain’s responsibilities to Hong Kong under the Sino-British Joint Declaration
have ended, and Hong Kong is purely an internal matter for China, Geng added,
repeating earlier remarks.
The comments followed remarks by Hunt to Reuters on Monday, condemning
violence on both sides and warning of consequences if China neglected
commitments to allow freedoms to Hong Kong not enjoyed in mainland China,
including the right to protest.
Late on Monday, hundreds of protesters in the former British colony had
besieged, and broken into, the legislature after a demonstration marking the
anniversary of return to Chinese rule.
China called the violence an “undisguised challenge” to the “one
country, two systems” model under which Hong Kong has been ruled for 22 years.
The turbulence in Hong Kong was triggered by an extradition bill
opponents say will undermine Hong Kong’s much-cherished rule of law and give
Beijing powers to prosecute activists in mainland courts, which are controlled
by the Communist Party.
Hunt, who is seeking to become Britain’s next prime minister, has made
no attempt to correct his mistakes in talking about Hong Kong and has
“continued to wag his tongue too freely” on the issue, Geng said.
Had Britain’s parliament been surrounded and attacked, would authorities
have stood by and done nothing, he asked.
“Does he think that the British police’s handling of the August, 2011
riots in London was repression?” Geng asked, referring to rioting in London
that year.
More
China warns 'naive' Canada not to count on the US
Date created : 03/07/2019 - 12:31
China on Wednesday warned Canada not to be "naive" and believe
that US pressure could help resolve thorny issues plaguing relations between
Ottawa and Beijing.
Prime Minister Justin Trudeau said Tuesday he was "confident"
US President Donald Trump had brought up the cases of Canadians detained in
China during weekend talks with President Xi Jinping at the G20 in Japan.
Don't be naive and mistakenly think that mustering a certain so-called
ally to put pressure on China will have an impact," Chinese foreign
ministry spokesman Geng Shuang said at a regular press briefing.
Ottawa "should not naively think its so-called ally will really
exert itself on Canada's behalf", he said.
"At most the (Americans) will move their lips a bit, because in
reality this is an issue between China and Canada," Geng said at a regular
press briefing.
Relations deteriorated between China and Canada following the December
arrest in Vancouver of Meng Wanzhou, a top executive at Chinese telecom giant
Huawei, who is wanted by the United States for allegedly circumventing
sanctions on Iran.
In moves widely seen as retaliation, Chinese authorities arrested two
Canadians on national security grounds and blocked imports of Canadian
agricultural products.
Trudeau said he had spoken to Xi about ex-diplomat Michael Kovrig and
consultant Michael Spavor during brief, informal exchanges on the sidelines of
the G20 summit last week.
Geng blamed Ottawa for the fraught relations.
"Canada knows clearly what the crux of the issue is between the two
countries," he said.
"We hope that Canada will take measures to put China-Canada
bilateral relations back on track as soon as possible," Geng said.
It is
hard for an empty bag to stand upright.
Benjamin
Franklin.
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?
The Downside of 5G: Overwhelmed Cities, Torn-Up Streets, a Decade Until Completion
As carriers launch their 5G networks, the promise of superfast wireless is clashing with the reality of the rollout; ‘the real onslaught has not yet begun’
Christopher MimsJune 29, 2019 12:00 am ET
In every major city in America where carriers are rolling out 5G, there’s someone like Keith Hubbard, manager of a 16-person fiber technician team for AT&T . His job: to set up shop in a trailer in the middle of a busy street, after other teams have already dug up the street or sidewalk and laid fiber-optic cable under it. On sweltering summer days in Atlanta, where his team is based, his technicians must perform surgery on a 1¼- inch bundle of glass fibers. In a typical cable there are 864 insulated strands, splayed out like a head of hair, and each is a high-bandwidth conduit to some business, home or cell tower. Cut the wrong strand, and people lose internet access.
Thousands of engineers and planners like Mr. Hubbard, along with diggers of trenches and installers of antennas, must coordinate to link more fiber-optic cable, in more places in the U.S. than ever before. All so we can do more stuff on mobile devices.
This is the paradox of 5G, the collection of technologies behind next-generation wireless networks: They require a gargantuan quantity of wires. This is because 5G requires many more small towers, all of which must be wired to the internet. The consequences of this unavoidable reality are myriad. The 5G build-out, which could take more than a decade, could disrupt our commutes, festoon nearly every city block with antennas, limit what cities can charge for renting spots on their infrastructure to carriers on which to place their antennas, and result in an unequal distribution of access to high-speed wireless, at least at first.
More
https://www.wsj.com/articles/the-downside-of-5g-overwhelmed-cities-torn-up-streets-a-decade-until-completion-11561780801?mod=mhp
Three may keep a secret, if two of them are dead.
Benjamin
Franklin.
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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