Baltic Dry Index. 2064
+53 Brent
Crude 63.77
Never ending Brexit
now October 31st, maybe.
Nuclear Trump
China Tariffs Now In Effect.
USA v EU trade war
postponed to November, maybe.
“No two
countries that both had McDonald’s had fought a war against each other since
each got its McDonald’s”.
Thomas
Friedman. (But Thomas, there’s a first in everything.)
Marking time or
rolling over? Is gravity finally catching up to high flying stocks? With a Fed
interest rate cut already priced in, if for all the wrong reasons, have stocks
finally come face to face with real world reality?
Of course, it’s to
early to say for certain, but to this old dinosaur market trader, the rally was
an exit rally, an opportunity to take profits and get back to the safety of
cash. Getting out early always beats getting carried out last.
For those willing to
bet that the Fed has stock buyers covered, and it’s still safe to buy stocks in
the stratosphere even as a new global slowdown is speeding up, it’s a long way
from July 2019 to a Trump re-election in November 2020.
Even were a Trump
cowed Fed to try, I doubt a Trump Fed can carry the stock market for another 16
months.
Below, a new storm
blowing in.
Stocks wobble on trade, earnings unease; US Treasury yields fall
July 18, 2019 /
2:23 AM
TOKYO (Reuters) -
Asian shares edged lower on Thursday as Wall Street stocks dropped on early
signs that the U.S.-China trade war could hurt corporate earnings, which helped
underpin solid demand for safe-haven U.S. Treasuries.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS eased 0.2%, while Japan's benchmark Nikkei .N225 shed 1.7% and Australian shares fell 0.3%.
Chinese shares followed the suit, with the benchmark Shanghai Composite .SSEC and the blue-chip CSI 300 .CSI300 down 0.7% and 0.6%, respectively, while Hong Kong's Hang Seng .HSI retreated 0.5%.
South Korea's market .KS11 was off 0.4% after the Bank of Korea unexpectedly cut its policy interest rate for the first time in three years, as uncertainties from a trade dispute with Japan added to anxiety about the economy's outlook.
On Wall Street, all three major indexes fell on Wednesday as weak results from trade-related CSX Corp (CSX.O) stoked concerns that the protracted trade standoff between the United States and China could hurt U.S. corporate earnings.
Earlier in the week, U.S. President Donald Trump kept up pressure on Beijing with a threat to put tariffs on another $325 billion of Chinese goods, amid market nervousness over when face-to-face talks will resume.
The Wall Street Journal reported that progress toward a U.S.-China trade deal has stalled while the Trump administration determines how to address Beijing’s demands that it ease restrictions on Huawei Technologies.
The Dow Jones Industrial Average .DJI fell 0.4%, the S&P 500 .SPX lost 0.7% and the Nasdaq Composite .IXIC dropped 0.5%.
Netflix Inc (NFLX.O) shares tumbled in after-market trade after the world’s dominant subscription video service lost U.S. streaming customers for the first time in eight years and missed targets for new subscribers overseas, raising worries in an already nervous the market.
More
Netflix Plunges After Biggest Stumble Since DVD-by-Mail Era
By Lucas Shaw
Updated on July 18, 2019, 1:20 AM GMT+1
·
·
Shortfall marks worst miss since Qwikster
debacle in 2011
Netflix Inc. shocked investors by reporting a drop in U.S. customers and much slower growth overseas, raising fears that the streaming giant is losing momentum just as competitors prepare to pounce.
The shares plunged as much as 13% to $314 in late trading after Netflix reported the loss of 130,000 customers in the U.S. -- the result of higher prices and a weak slate of TV shows. It signed up 2.8 million subscribers internationally in the period, roughly half what the company predicted.
----Netflix said the miss is a one-time blip rather than a long-term problem. The second quarter has typically been its weakest time of year: The company missed its forecast during the period in three of the past four years.
Netflix looks to add 7 million subscribers in the current quarter, thanks in part to the return of top shows “Stranger Things” and “Orange Is the New Black.”
“Our position is excellent,” Chief Executive Officer Reed Hastings said during a videoconference call Wednesday. “We’re building amazing capacity for content. Our product has never been in better shape.”
Heavy Spending
For now, the second-quarter shortfall is renewing investor concern about the company’s heavy program spending and low profitability. Netflix shelled out more than $3 billion on programming in the quarter and another $600 million to market its shows. The company spent $594 million more than it took in and will need to raise money to fund programming.Investors had been forgiving about the spending and the debt -- so long as customers grew at record rates. But the loss of subscribers in the U.S. was the first since the Qwikster debacle, and it suggests Netflix may be running into price resistance or the limits of the addressable domestic market. The company has forecast it can reach as much as 90 million customers in the U.S., compared with 60.1 million currently.
More
WTO rules China could sanction U.S. over Obama-era tariffs
July 17, 2019 /
7:28 AM
July 17 (UPI) -- The United States is in breach of a World Trade Organization ruling
and is subject to sanctions from China unless it removes certain tariffs
against Beijing, the international trade body ruled Wednesday.The ruling by WTO appellate judges stems from a 2012 complaint by China against anti-subsidy tariffs imposed by the Obama administration. The tariffs affected exports like solar panels, steel pipes and lawn mowers worth about $7.3 billion.
The ruling Wednesday said the U.S. tariffs were unfair and open the door to new sanctions from Beijing.
WTO judges held that while some of the Chinese goods were subsidized by the government, evidence indicates U.S. officials did not correctly measure the influence of that government support.
"[W]e uphold the panel's finding ... that China has demonstrated that the United States acted inconsistently," the WTO said in a statement.
The U.S. Trade Representative's office said the ruling requires the United States to either use distorted Chinese prices to measure subsidies or provide additional evidence beyond the hundreds of pages already submitted to the court.
"This conclusion ignores the findings of the World Bank, OECD working papers, economic surveys and other objective evidence, all cites by the United States," the USTR said in a statement. "[It] undermines WTO rules, making them less effective to counteract Chinese [state-owned enterprises] subsidies that are harming U.S. workers and businesses and distorting markets worldwide."
More
South Korea: Japan's export restrictions could have 'dire consequences' for global economy
July 17, 2019 /
6:28 AM
SEOUL, July 17 (UPI) -- Japan's export restrictions to South Korea on
key materials used in manufacturing semiconductors and digital displays could
have a major global impact on companies and consumers and may lead to
"dire consequences," a South Korean government official said Wednesday.
The official, who spoke to reporters in Seoul in a background briefing
on government strategy, said Japan's moves could have "dire consequences
of stopping semiconductor lines."
"It will adversely affect companies ranging from Apple, Amazon and Dell to Sony and billions of consumers all over the world," the official said.
Japan announced export restrictions at the beginning of this month that will require suppliers to apply for licenses each time they ship certain chemical products to South Korea, a time-consuming process that takes about 90 days for approval.
The targeted products -- hydrogen fluoride, fluorinated polyimide and photo resist -- are key components used in South Korea's high-tech manufacturing industry.
Japan may also remove South Korea from a "white list" of trusted countries that face minimal restrictions on technology transfers seen as having national security implications.
The South Korean official claimed Japan's export restrictions are "inconsistent" with World Trade Organization principles and the values of free trade that Japanese Prime Minister Shinzo Abe vowed to uphold when he hosted the Group of 20 global summit in Osaka last month.
If you violate the "sacrosanct principles" of free trade, the South Korean official said, "the global value chain will
More
Analyst: Japan dispute with Korea could cripple U.S.' China tech policy
July 16, 2019 /
9:21 PM
NEW YORK, July 16 (UPI) -- Japan's trade restrictions targeting South
Korea could ultimately undermine U.S. policy designed to rein in Chinese
technology practices.
The decision from Japan's trade ministry to require individual
permission to export key chemicals to South Korea potentially slows production
at tech giants like Samsung and SK Hynix, Troy Stangarone, senior director of
congressional affairs and trade at the Korea Economic Institute in Washington,
D.C., told UPI.
As South Korean firms that control more than 60 percent of the global
memory chip market struggle with delays, Chinese companies could gain a
competitive advantage in the medium term, the U.S. analyst says.
"China is really pushing into the semiconductor industry with its
Made in China 2025 program," he said. "If Samsung or SK Hynix can't
supply, Chinese startups -- which are supposed to come online this year --
might step into the void."
The United States remains wary of China's use of technology. The Trump
administration has said there is evidence China is using technology to steal
information from the United States. It has also treated Chinese tech firm
Huawei as a threat to national security.
Japan may not realize its measures, designed to exclusively retaliate
against South Korea for longstanding disagreements, ultimately hurts the United
States and helps the United States' biggest rival, China.
More
Deutsche Bank, CEO Josef Ackermann. Davos, January 2007.
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled
over.
Presented without need for further comment. The
whole article is worth the read.
“One of the great mistakes is to judge policies and programs by their intentions rather than their results.”
Insanity: Now Even Junk Bonds Have Negative Yields
Wed, 07/17/2019 - 05:00
----The United States, weighed down by a costly war in Vietnam, suddenly
and unilaterally terminated the [Bretton Woods] agreement.The US government wanted the flexibility to print as much money as it needed without being forced to maintain the gold standard.
So the whole system collapsed, practically overnight.
And it was replaced by a new standard where unelected central bankers have supreme authority to conjure near infinite quantities of money out of thin air.
The effects have been pretty disastrous.
Ever since the end of Bretton Woods, global debt has skyrocketed to roughly $200 TRILLION, approximately 225% of GDP.
Banking crises and financial shocks have become much more commonplace. Market crashes are more severe. Recessions are more common. Inflation worldwide has soared.
(It’s ironic that, back in 1944, the price of a room at the Mount Washington was $18. Today it’s over $250.)
Think about this: a junk bond is basically debt issued by a company with
financials so risky that analysts expect there’s a good chance the company
won’t pay its debts.
Hell, the company might not even be in business by the time the debt
matures.
And yet, despite these substantial risks, investors are willing to loan
money to these companies… at NEGATIVE rates of return.
Seriously?? You take all that risk and then GUARANTEE that you’ll lose
money.
----Honestly I’m not a pessimistic person. But this sort of absurdity makes me pause and consider what might happen next.
The global economic expansion is one of the longest on record, ever.
Financial markets around the world are soaring at all-time highs. Stocks.
Bonds. Real Estate.
One of the only things we know for sure about financial markets is that
they are ALWAYS cyclical. Up/Down, Boom/Bust. These cycles have been with us
forever.
It’s impossible to predict exactly WHEN the decline will occur. But when
you see JUNK bonds with NEGATIVE yields, it’s likely that we’re probably close
to the end of the boom phase.
It’s possible this madness could continue for a while longer. Or it
could end tomorrow.
No one has a crystal ball… but the important fact is to realize that
at some point, this trend has got to correct.
All the trillions of dollars printed out of thin air to buy securities
that yield negative interest rates will eventually have consequences.
That’s why I think makes sense to take sensible steps to protect
yourself… no matter what happens next.
That’s why I own gold.
Gold is still one of the only asset classes in the world that’s not
anywhere near an all-time high (unlike stocks, bonds and real estate).
Morehttps://www.zerohedge.com/news/2019-07-16/insanity-now-even-junk-bonds-have-negative-yields
In central banking as in diplomacy, style, conservative
tailoring, and an easy association with the affluent count greatly and results
far much less.
John Kenneth 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?
Blink & You’ll Miss It: AI Solves Rubik’s Cube — In A Fraction Of A Second!
July 16, 2019
IRVINE, Calif. — The Rubik’s Cube has been frustrating would-be solvers for decades, and whenever someone is able to conquer it, it’s an achievement worthy of recognition. Now, researchers from the University of California have created an extraordinary artificial intelligence system capable of solving the Rubik’s Cube — in a fraction of a second.
The AI system is a deep reinforcement learning algorithm named DeepCubeA, and — perhaps even more astonishing — it doesn’t need to be provided with any specific information on the Rubik’s cube or in-game coaching to beat the puzzle. It learns all on its own.
For reference on just how impressive beating a Rubik’s Cube in under a second really is, consider that each cube features billions of possible moves and completion paths.
According to researchers, the AI solved the Rubik’s Cube in 100% of all test runs, and found the absolute shortest path to victory 60% of the time. DeepCubeA doesn’t just play with Rubik’s Cubes either, its creators say it can also play games such as Lights Out and Sokoban.
“Artificial intelligence can defeat the world’s best human chess and Go players, but some of the more difficult puzzles, such as the Rubik’s Cube, had not been solved by computers, so we thought they were open for AI approaches,” explains senior author Pierre Baldi in a release. “The solution to the Rubik’s Cube involves more symbolic, mathematical and abstract thinking, so a deep learning machine that can crack such a puzzle is getting closer to becoming a system that can think, reason, plan and make decisions.”
Baldi and his team say that some extremely bright individuals, specifically teenagers, are able to solve a Rubik’s Cube in around 50 moves. The AI, on the other hand, usually only takes a mind-bending 20 moves. This had lead Baldi to hypothesize that the AI goes about solving the puzzle in a completely different way than a human ever would.
The AI’s creators say that the end goal of projects like this is to build the next generation of AI systems like Siri and Alexa. However, while current AI system are certainly impressive in some ways, they are still very much a work in progress.
“But these systems are not really intelligent; they’re brittle, and you can easily break or fool them,” Baldi comments. “How do we create advanced AI that is smarter, more robust and capable of reasoning, understanding and planning? This work is a step toward this hefty goal.”
The study is published in the scientific journal Nature Machine Intelligence.
https://www.studyfinds.org/blink-youll-miss-it-artificial-intelligence-solves-rubiks-cube-fraction-of-second/
If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand.
Milton Friedman.
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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