Baltic Dry Index. 2014
-151 Brent
Crude 63.36
Never ending Brexit
now October 31st, maybe.
Nuclear Trump
China Tariffs Now In Effect.
USA v EU trade war
postponed to November, maybe.
"There
is no means of avoiding the final collapse of a boom brought about by credit
expansion. The alternative is only whether the crisis should come sooner as the
result of voluntary abandonment of further credit expansion, or later as a
final and total catastrophe of the currency system involved."
Ludwig
von Mises
Today, more of the
same old story. Stock markets ignore the manufacturing, export, and haulage
recession, churning higher on the certainty that cowed central bankers have no
option but to cut interest rate back to ZIRP, or in Europe’s case, extend
Negative Interest Rates further.
The weak global
economy will eventually force all central banks to follow the Bank of Japan and
become buyer of last resort for all government debt. The “new economy” has
arrived. Since we owe the debt to ourselves, and it’s only fiat money anyway,
we can borrow and print our way to permanent prosperity. Let’s make everyone a
millionaire.
To this old dinosaur
market trader, the road to Venezuela and Zimbabwe lies down such reckless modern
thinking. What’s yours is mine, and mine is mine, has never worked in the past.
There’s no reason to think it will work now, as a new era of automation and artificial
intelligence is upon us.
Below, stocks setting
up for “the crack up boom.”
Asian markets little changed as investors await central bank decisions
By Marketwatch
and Associated
Press Published: July 24, 2019 11:58
p.m. ET
Asian markets were little changed in early trading
Thursday, despite new record highs on Wall Street.Investors were largely awaiting word from central banks. The European Central Bank will meet Thursday and is expected to lay groundwork for cutting rates in the fall. The head of the Reserve Bank of Australia will also speak Thursday and may give clues about future policy direction, and the Bank of Japan will meet next week, with experts saying its direction may depend on what the ECB does. The Fed also meets next week, when it is expected to cut interest rates.
Japan’s Nikkei NIK, +0.36% rose 0.3%, and Hong Kong’s Hang Seng Index HSI, +0.26% edged up 0.2%. The Shanghai Composite SHCOMP, +0.29% inched ahead 0.3% and the smaller-cap Shenzhen Composite 399106, +0.48% advanced 0.3%. South Korea’s Kospi 180721, -0.46% slipped 0.7% after North Korea launched two short range missiles into the sea., while benchmark indexes in Taiwan Y9999, -0.06% , Singapore STI, +0.25% , Malaysia FBMKLCI, -0.03% and Indonesia JAKIDX, +0.22% were a mixed bag. Australia’s S&P/ASX 200 XJO, +0.29% gained 0.3%.
----Wednesday on Wall Street, the S&P 500 SPX, +0.47% and Nasdaq COMP, +0.85% stock indexes closed at record on Wednesday despite mixed earnings and economic data and antitrust probes into leading U.S. technology stocks. The Dow Jones Industrial Average DJIA, -0.29% ended lower after disappointing earnings from Boeing BA, -3.12% and Caterpillar CAT, -4.48% .
Benchmark crude oil CLU19, +0.29% added 18 cents to $56.06 per barrel in electronic trading on the New York Mercantile Exchange. It fell 89 cents to settle at $55.88 a barrel on Wednesday. Brent crude oil BRNU19, +0.21% , the international standard, picked up 12 cents to $63.30 per barrel. Overnight, it fell 65 cents to close at $63.18 a barrel.
The dollar USDJPY, -0.06% was flat at 108.16 Japanese yen.
Economy becomes a rowboat with one oar. Services do all the work as manufacturers pull back
By Jeffry
Bartash Published: July 24, 2019
10:21 a.m. ET
Manufacturers grow at slowest pace in 10 years, IHS Markit finds
The numbers: U.S. manufacturers expanded in July at the slowest pace in almost 10 years, but the economy is still keeping its head above water due to faster growth in the much larger service sector in which most Americans are employed.IHS Markit said its manufacturing PMI slid to 50 this month from 50.6 in June, marking the lowest level since September 2009 just as the current expansion was getting underway. An index number of 50 is the cutoff point between whether companies are growing or shrinking.
The slowdown in the manufacturing dovetails with weakness in Europe and Asia that’s weighing on the global, though the U.S. is doing better by comparison. European manufacturers appear to be contracting.
Read: German flash manufacturing PMI slumps to seven-year low
Many economists say ongoing trade tensions have exacerbated the problem.
Yet similar survey of the much larger service side of the U.S. economy — retail, health care, software, tourism and the like — rose to a three-month high of 52.2 from 51.5 in June. Some 80% of Americans work in the service sector.
What happened: Manufacturers have slowed production and trimmed employment for the
first time in six years, IHS Markit said. The automotive sector has shown
particular weakness.
The good news? Demand in the United States remains fairly robust, with
most of the problems tied to exports and a slumping global economy.
The service side of the economy, on the other hand, showed some
improvement. Executives said consumer spending remain fairly strong, though
some companies had to resort to discounting to boost sales.
Morehttps://www.marketwatch.com/story/us-economy-now-a-rowboat-with-one-oar-services-do-all-the-work-as-manufacturers-pull-back-2019-07-24?mod=mw_latestnews
U.S. housing, manufacturing sectors mired in weakness
Sales of new U.S. single-family
homes rebounded sharply in June, but sales for the prior three months were
revised down, indicating that the housing market continued to tread water
despite lower mortgage rates and a strong labour market.
Other data on Wednesday showed
manufacturing activity slowing to a near 10-year low in early July, with
production volumes and purchases falling. Weak housing and manufacturing are
offsetting strong consumer spending, holding back the economy and posing a threat
to the longest expansion in history.
Worries about slowing growth,
especially tied to trade tensions between the United States and China, and
weakness overseas are likely to encourage the Federal Reserve to cut interest
rates next Wednesday for the first time in a decade.
The Commerce Department said new home sales rebounded 7.0 per cent to a
seasonally adjusted annual rate of 646,000 units last month. May’s sales pace
was revised down to 604,000 units from the previously reported 626,000 units.
Data for March and April was also revised down. Economists polled by
Reuters had forecast new home sales, which account for about 11 per cent of
housing market sales, increasing 6.0 per cent to a pace of 660,000 units in
June. New home sales are drawn from permits and tend to be volatile on a
month-to-month basis. Sales increased 4.5 per cent from a year ago.
“There is no evidence here to change the narrative that the response of
the housing market to lower mortgage rates has been underwhelming,” said John
Ryding, chief economist at RDQ Economics in New York. “The best description of
home sales is that they have levelled out in the neighbourhood of 620,000.”
Morehttps://www.theglobeandmail.com/business/international-business/us-business/article-us-new-home-sales-rise-prior-three-months-revised-down/
Falling Real Yields Signal Worry Over U.S. Economy
Decline in yield on 10-year Treasury inflation-protected securities has been especially persistent
Fed Chairman Jerome Powell during congressional testimony earlier this
month. There is a broad consensus that inflation won’t break above the central
bank’s 2% target anytime soon. Photo: erin scott/Reuters
Yields on U.S. government bonds have fallen broadly this year. But the
decline in the yield on one particular type has been especially persistent and
is, according to some investors, a sign of concern for the U.S. economy.
Since last fall, the yield on 10-year Treasury inflation-protected
securities, a measure of what are known as real yields, has tumbled from a high
of 1.154% to a recent low of 0.241%, the stingiest rate of return since
November 2016.
Real yields are notable because they show the purchasing power investors
can expect to obtain from government bonds after accounting for inflation. In
recent weeks, they have fallen even as the more-closely-followed nominal
10-year Treasury yield has stabilized at just above 2%.
The continued decline in the 10-year TIPS yield is potentially worrisome
because it is sometimes viewed as a gauge of economic growth expectations, one
even more refined than the nominal yield.
At least in theory, “real yields and real growth should be tied
together,” said Thomas Simons, senior vice president and money-market economist
in the fixed-income group at Jefferies.
Created with Highcharts 6.0.4Real LowThe yield on the inflation-indexed
10-year U.S. governmentbond has fallen steeply.Source: FactSet
Created with Highcharts 6.0.4%2015’16’17’18’19-0.20.00.20.40.60.81.01.2
Because the TIPS yield removes the expected rate of inflation baked into
the nominal Treasury yield, it can be seen as the baseline, or risk-free, rate
of return investors expect from investing in the U.S. economy. Its decline,
therefore, suggests investors are anticipating slower growth.
More
Here comes the central-bank punch — and it might not juice stocks much
By Steve
Goldstein Published: July 24, 2019 10:29 a.m. ET
Central bankers across the world are set to fill up the
proverbial punch bowl, but it may not juice stock markets much.That’s according to a new strategy note from Deutsche Bank, which outlined what it expects major central banks around the world to do in the coming months.
Central bank
|
Expected action
|
U.S. Federal Reserve
|
Three cuts in 2019
|
European Central Bank
|
10-basis-point cut in September and
December, maybe more QE and “tiering” in September
|
Bank of Japan
|
On hold with no changes in target yields
possibly into 2020
|
Bank of England
|
No hikes until August 2020
|
People’s Bank of China
|
To cut open market operations rate by 10
to 50 basis points, and one reserve requirement ratio cut
|
Emerging markets
|
Cuts coming in Russia, South Africa,
Turkey, India, Indonesia, Philippines, Vietnam, Brazil and Chile
|
That should help limit slowing growth momentum, and Deutsche Bank sees world growth of around 3.2% this year. The monetary-policy actions, the Deutsche Bank strategists say, should allow for “cautious” near-term growth, as the central-bank easing counteracts political and trade headwinds.
Equity markets already are pricing in a strong rebound in growth, limiting the potential for upside.
This year, the Dow Jones Industrial Average DJIA, -0.29% has gained 17%, the S&P 500 SPX, +0.47% has jumped 20% and the Nasdaq Composite COMP, +0.85% has risen 24%.
The Deutsche Bank strategists also don’t see much movement in either Treasurys TMUBMUSD10Y, -0.18% or German bunds, expecting them to trade close to flat from current levels.
Finally, in China news, is the USA
playing with fire? Bluffing that China will never regain Taiwan? Never block
Taiwan’s move towards independence?
China warns of war in case of move toward Taiwan independence
July 24, 2019 /
3:54 AM
BEIJING (Reuters)
- China warned on Wednesday that it was ready for war if there was any move
toward Taiwan’s independence, accusing the United States of undermining global
stability and denouncing its arms sales to the self-ruled island.
The Pentagon said this month the U.S. State Department had approved
sales of weapons requested by Taiwan, including tanks and Stinger missiles
estimated to be worth $2.2 billion.
China responded by saying it would impose sanctions on U.S. firms
involved in any deals.
Defense ministry spokesman Wu Qian told a news briefing on a defense
white paper, the first like it in several years to outline the military’s
strategic concerns, that China would make its greatest effort for peaceful
reunification with Taiwan.
“However, we must firmly point out that seeking Taiwan independence is a
dead end,” Wu said.
“If there are people who dare to try to split Taiwan from the country,
China’s military will be ready to go to war to firmly safeguard national
sovereignty, unity, and territorial integrity,” he said.
The United States is the main arms supplier to Taiwan, which China deems
a wayward province. Beijing has never renounced the use of force to bring the
island under its control.
The United States has no formal ties with democratic Taiwan, but is
bound by law to help provide it with the means to defend itself.
The Chinese ministry said the United States had “provoked intensified competition among major countries, significantly increased its defense expenditure ... and undermined global strategic stability.”
Taiwan’s Mainland Affairs Council said later in a statement that Beijing’s “provocative behavior ... seriously violated the peace principle in international laws and relations, challenging regional safety and order”.
More
“Fiat-money! Let the State 'create' money, and make the poor
rich, and free them from the bonds of the capitalists! How foolish to forego
the opportunity of making everybody rich, and consequently happy, that the
State's right to create money gives it! How wrong to forego it simply because
this would run counter to the interests of the rich! How wicked of the
economists to assert that it is not within the power of the State to create
wealth by means of the printing press!- You statesmen want to build railways,
and complain of the low state of the exchequer? Well, then, do not beg loans
from the capitalists and anxiously calculate whether your railways will bring
in enough to enable you to pay interest and amortization on your debt. Create
money, and help yourselves.”
Ludwig von Mises, The
Theory of Money and Credit
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled
over.
Today, the dodgy EUSSR again. Put
them in charge of the Sahara, and in 5
years there’d be a shortage of sand, to misquote Milton Friedman. This
year it’s a shortage of water.
Paris Scorches in Historic Drought as Heatwave Fries Europe
By Megan Durisin and William Wilkes
July 24, 2019, 5:00 AM GMT+1 Updated on July 24, 2019,
9:05 AM GMT+1
·
France’s corn fields are at risk from sweltering
weather
·
French power prices jump to a 5-month high; EDF
cuts output
Paris is its driest in almost 150 years and temperatures across Europe
are reaching extreme levels, scorching fields and shutting power plants.
As temperatures climb across Europe, peaking on Thursday in Paris and
London, the effects of extreme weather are becoming clearer. Electricite de
France SA cut its nuclear output because river water is too warm to cool
plants, power prices have jumped and farmers are frustrated by another bad
spell for crops.
This summer has already seen raging wildfires in Portugal and Spain, falling water levels on Germany’s Rhine River and irrigation restrictions in France. The extreme conditions follow last year’s drought that pummeled crops, and has heightened attention on the environment amid concern over climate change.
In the east German state of Mecklenburg-Western Pomerania, Christa-Maria Wendig is worried these once-rare droughts are becoming common. She plans to give up planting rapeseed in the coming months because of the dry weather and the heatwave stunted her ripening corn crop.
"Our ponds are empty and the meadows withered," she said.
More
Europe's Most Important River Risks a Repeat of Historic Shutdown
Looming heatwave raises fears that last year’s halt to Rhine shipping could happen again.By William Wilkes, Bill Lehane, and Vanessa Dezem
July 23, 2019, 5:00 AM GMT+1
The bustling boat traffic on Europe’s Rhine river ground to a halt for
the first time in living memory last year, as shrinking alpine glaciers and
severe drought made the key transport artery impassable.
Those historic
conditions could be repeated in a few weeks.
With little rainfall recently, water levels at Kaub — a critical
chokepoint near Frankfurt — dropped to about 150 centimeters (59 inches),
half the depth from just a month ago. Movements of the heaviest barges are
already restricted, and all river cargo could again cease if the level falls
below 50 centimeters.
“Extreme weather events are becoming more common,” Chancellor Angela Merkel said this month in a weekly podcast. “We must do more” to protect the planet.
The Rhine is critical to commerce in the region. Europe’s most important waterway snakes 800 miles through industrial zones in Switzerland, Germany and the Netherlands before emptying into the North Sea at the busy Rotterdam port. It’s a key conduit for raw materials and goods from coal and iron ore to chemicals, fertilizers and car parts. Last year’s disruption contributed to a contraction in the German economy.
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?
The 150,000-square-meter sky bridge of Shanghai’s 'Rafael Gallery' will be covered in solar
July
19, 2019
Solar company Hanergy announced that its thin-film solar modules will
cover the 150,000 square meter roof of the ‘Rafael Gallery’ located at a Tech
City in Shanghai.
Designed by architect, Rafael Vinoly, the ‘Rafael Gallery’ at Songjiang
District of Pudong is a 1.5-kilometer sky bridge stretching across the top of
over 20 skyscrapers, making it the longest urban industrial porch in the
world.
Outlined with successive curves, elevation between highest and lowest
points being 18 meters, and floating above buildings as tall as 80 meters, the
sky bridge resembles a giant rolling cloud, looked from afar. With a roof of
150,000 square meters, size of nearly 20 soccer fields, and weight of 14,000
tons, it’s also the world’s largest aluminum structure rooftop.
The capacity of the solar on the roof of the Rafael Gallery is estimated
to be about 1 MW in the first phase. Powering the 1.5-kilometer-long sky
bridge, each 125-W thin-film module weighs 2 kilograms, and measures 2.5 mms
thick.
Hanergy’s CIGS technology mean the panels offer better performance under
weak light condition to efficiently generate power even in cloudy days,
according to the company.
“The conversion efficiency of the panels on record is 18.5%, the highest
among products of the same kind”, according to a technician in Dachang Mobile
Energy Industrial Park, where the panels were manufactured.
The “Rafael Gallery” is expected to attract a cluster of restaurants,
boutique stores, shopping centers and entertainment outlets, and serve as a
base for high-end enterprises, corporate headquarters, luxury hotels,
convention centers, etc. “It will become not only a new landmark of the city,
but also a platform for high-end industries”, said a project director of
Lingang Songjiang Tech City in Shanghai. The whole complex has already finished
the first phase of construction and kicked off the second phase this year.
The “Rafael Gallery” is one of the key projects of China’s 13th
five-year plan and supports the research for two of the national major topics
by providing the data and spearheading the experiments for the study on
renewable energy, large-scale application of BIPV products, optimization of
multiple-format energy provision, and integration of CCHP and energy storage
system.
“But it [the boom] could not
last forever even if inflation and credit expansion were to go on endlessly. It
would then encounter the barriers which prevent the boundless expansion of circulation
credit. It would lead to the crack-up boom and the breakdown of the whole
monetary system.”
Ludwig
von Mises.
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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