Tuesday, 27 August 2019

Trump Wins. Market Believes Him, Sort Of.


Baltic Dry Index. 2168 Fri.  Brent Crude 59.01  Spot Gold $1,528

Never ending Brexit now October 31st, maybe.  65 days away.
Nuclear Trump China Tariffs Now In Effect.
USA v EU trade war postponed to November, maybe.

“I think they want to make a deal very badly. I think that was elevated last night. The vice chairman of China came out, he said he wants to see a deal made.”

President Trump. Biarritz, France.

According to President Trump, he has President Xi and China exactly where he wants them, over a barrel, desperate to make a deal on Trump’s terms.  Greater fool stock buyer surged back into stock markets again, willing to bet that President Trump will hold this line for the rest of the week. 

I have my doubts. America has a holiday weekend coming up. President Trump is sure to cause controversy via another tweet.

Below, stock buyers are back on hopium again.

Asian markets mostly rise on cautious optimism over trade war

By Marketwatch and Associated Press Published: Aug 26, 2019 11:00 p.m. ET
Asian markets mostly gained in early trading Tuesday, following upbeat remarks by President Donald Trump on Monday regarding the trade war with China.

Speaking at the conclusion of the G-7 summit in France, Trump said he was ready to resume trade negotiations with China, following what he said were two “very good calls” from Beijing. Chinese officials denied they made such calls though, but said they have been maintaining contact with U.S. officials. Still, Trump said China wants a deal “very badly” and left open the possibility of delaying or even canceling a fresh round of tariff hikes.

Japan’s Nikkei NIK, +1.18%   rose 1.2%, while Hong Kong’s Hang Seng Index HSI, +0.10%   was about flat. The Shanghai Composite SHCOMP, +1.68%   gained 1.8% while the Shenzhen Composite 399106, +2.12%   surged 2.1%. South Korea’s Kospi 180721, +0.65%   rose 0.8%, while benchmark indexes in Taiwan Y9999, +0.36%  , Singapore STI, +0.21%  , Malaysia FBMKLCI, -0.24%   and Indonesia JAKIDX, +0.71%   were mixed. Australia’s S&P/ASX 200 XJO, +0.61%   gained 0.5%.

---- “It remains all about trade as President Donald Trump’s comments on the matter had once again been the primary driver for markets at the start of the week. Even though the sentiment had taken a positive turn on the latest update, uncertainty nevertheless persists to warrant a more cautious stance,” said Jingyi Pan, market strategist at IG in Singapore.

The S&P 500 SPX, +1.10%   rose 31.27 points, or 1.1%, to 2,878.38. The Dow Jones Industrial Average DJIA, +1.05%   gained 269.93 points, or 1.1%, to 25,898.83. The Nasdaq COMP, +1.32%  , which is heavily weighted with technology stocks, rose 101.97 points, or 1.3%, to 7,853.74.

The major U.S. indexes are each on track for losses of 3% or more in August in what has been a volatile month for the market as investors try to gauge whether trade conflicts and slowing economies around the world will drag the U.S. into a recession.
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https://www.marketwatch.com/story/asian-markets-mostly-rise-on-cautious-optimism-over-trade-war-2019-08-26?mod=mw_latestnews

Trump says China trade deal coming, Beijing calls for resolution of dispute

August 26, 2019 / 8:22 AM
BIARRITZ, France/BEIJING (Reuters) - U.S. President Donald Trump on Monday predicted a trade deal with China after positive gestures by Beijing, calming global markets that have been roiled by new tariffs from the world’s two largest economies.

Trump said after a G7 summit of world leaders in Biarritz, France, that he believed China was sincere about wanting to reach a deal, citing what he described as increasing economic pressure on Beijing and job losses there. 

Chinese Vice Premier Liu He, who has been leading the talks with Washington, said on Monday that China was willing to resolve the trade dispute through “calm” negotiations and opposed any increase in trade tensions.

Trump cited Liu’s comments as a positive sign, underscoring his seniority, and repeated his assertion that Chinese officials had contacted U.S. trade counterparts overnight and offered to resume negotiations, an assertion that China declined to confirm.

“I think they want to make a deal very badly. I think that was elevated last night. The vice chairman of China came out, he said he wants to see a deal made,” Trump told a news conference with French President Emmanuel Macron.

“The longer they wait, the harder it is to put back, if it can be put back at all. I don’t think they have a choice.”

---- Trump said he was more upbeat about the prospects for an agreement with China than in the recent past, and signaled that Washington could also reach a trade agreement with Brussels that averted car tariffs on car imports from Europe.

The U.S. leader also downplayed the prospect of new U.S. tariffs on autos imported from Japan, after a trade deal reached by the largest and third-largest economies on Sunday.

---- When pressed on whether a call had taken place, Trump emphasized Liu’s comments. U.S. Treasury Secretary Steven Mnuchin said there had been contact between the two sides but declined to say with whom.

Hu Xijin, editor of the state-controlled Global Times newspaper, tweeted: “Based on what I know, Chinese and U.S. top negotiators didn’t hold phone talks in recent days. The two sides have been keeping contact at technical level, it doesn’t have significance that President Trump suggested. China didn’t change its position. China won’t cave to U.S. pressure.”
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Trump's aggressive, mixed signals on China whiplash Wall Street

August 26, 2019 / 10:06 PM
SAN FRANCISCO (Reuters) - President Donald Trump’s aggressive stance and often mixed signals in his trade war with China are taking a toll on the shares of U.S. companies that are most reliant on the world’s second largest economy.

U.S. stocks rose more than 1% on Monday after Trump predicted a U.S.-China trade deal following remarks by Vice Premier Liu He, who has been leading the talks with Washington, that China was willing to resolve their dispute through “calm” negotiations. 

On Friday, the S&P 500 tumbled 2.6% after Trump announced an additional duty on some $550 billion (448 billion pounds) of Chinese goods in retaliation for Beijing’s announcement of more tariffs of its own earlier in the day. Trump also sent a tweet demanding U.S. companies seek alternatives to doing business with China, but appeared to back off the threat on Sunday.

Escalating uncertainty related to Trump’s intentions regarding the year-old trade conflict is adding to pain on Wall Street, where investors are worried that tariffs could tip the U.S. economy into a recession.

---- “This trade war is having more plot twists than a Quentin Tarantino movie,” OANDA senior market analyst Edward Moya wrote in a research note. He added that higher and wider tariffs will punish U.S. consumers and potentially hobble the U.S. economy.

A basket of companies impacted by the trade war, created by Barclays, has sharply underperformed the S&P 500 this month after tracking evenly with the broader market for the three previous months. Barclays’ basket includes companies that rely heavily on Chinese imports and are likely to face profit-margin pressure from tariffs, such as Apple (AAPL.O), Nike (NKE.N) and Honeywell International (HON.N).

---- U.S. semiconductor stocks have also underperformed this month. Micron Technology (MU.O), Qualcomm (QCOM.O) and Qorvo (QRVO.O) each get 50% or more of their revenue from China. Consumer electronics and other products made with semiconductors will be included in additional U.S. tariffs, starting on Sept. 1 and Dec. 15, the U.S. government said this month. The Philadelphia Semiconductor index .SOX has lost almost 6% in August.
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Meanwhile, China gets on with the business of business.

China names six new 'free trade zones' amid U.S. trade war

Aug. 26, 2019 / 10:38 AM
Aug. 26 (UPI) -- China has designated six new free trade zones amid an ongoing trade dispute with the United States.

In a move that signals China's willingness to expand upon the free flow of goods and investment, the Chinese government said Monday it is launching multiple "pilot free trade zones" in different parts of the country, Xinhua news agency reported. 

China's pro-trade policy comes at a time when it is increasing tariffs, including new taxes on $75 billion worth of U.S. goods. As Beijing retaliates against the Trump administration for multiple tariff hikes against Chinese imports, it is also signaling to other countries, including neighbors, it is open for business.

The free trade zones could stimulate growth in less industrialized parts of China, including Shandong, Jiangsu, Yunnan and Heilongjiang provinces. Heilongjiang is in northeast China not far from the North Korean border.

The new free trade zones are to allow a wider range of foreign investment in the fields of finance, transportation, retail services and the culture sector. They are a signature project of Chinese President Xi Jinping.

Under Xi, other regions were "liberalized," including Shanghai in 2013, followed by cities Tianjin, Chongqing and the provinces of Fujian, Guangdong, Henan and Hainan, an island. The six new trade zones bring the total to 18, according to Xinhua.

China's free trade zones are being used to connect to its neighbors. The planned zone in Heilongjiang will be used as a "base for cooperation" with Russia in the northeast, and transform the city of Harbin into a logistics center, the report says.
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Finally, is the age of robotic ships about to steam in? The new Turbinia perhaps.

The Robot Ship Set to Cross the Atlantic and Change the World

Maxlimer could be the first unmanned surface vessel to make the vaunted crossing—opening the way for a new generation of oceangoing drones, cutting prices and carbon footprints.
Updated 08.26.19 10:48AM ET 08.26.19 5:03AM ET

The blocky, 36-foot-long, yellow- and white-striped vessel bobbing off the coast of the United Kingdom sure doesn’t look like much. But Maxlimer just might be the most important ship in the world right now.

Maxlimer is totally robotic. And it’s poised to be the first unmanned surface vessel, or USV, to cross the Atlantic. The journey could prove the case for a host of new oceangoing drones: crewless cargo ships; unmanned oil tankers; robotic work boats.

But don’t hold your breath. Widespread adoption could take years or even decades.

Maxlimer is a product of SEA-KIT, a maritime tech company based in southeast England. Eyeing potentially lucrative contracts supporting offshore oil and gas drilling, SEA-KIT aimed to produce a flexible ship that’s cheaper and safer than manned ships are.

With no need to support a human crew, a robotic support ship could devote more space to equipment, including a flotilla of smaller drone boats and submarines that it can launch and retrieve. Since it doesn’t get hungry, tired, or sick, it could sail at a leisurely eight miles per hour until it runs out of fuel, potentially nine months at a stretch.

Maxlimer is “almost like a utility pickup vehicle of the sea,” SEA-KIT managing director Ben Simpson said. “It’s robust, it’s adaptable, it’s got a huge range.” It can carry 2 1/2 tons of cargo.

And it’s cheap. “SEA-KIT vessels use less than five percent of the fuel required to operate a standard ocean-going vessel,” Neil Tinmouth, SEA-KIT’s chief operating officer, told The Daily Beast. “This is a game-changer when it comes to the carbon footprint and environmental impact of these operations.”

Starting in 2016, SEA-KIT worked with a U.K. shipbuilder to produce Maxlimer’s aluminum hull. A Norwegian defense firm provided the electronics for remote control. In the crowded waters of a port, a human operator remotely steers Maxlimer via radio. On the open ocean, it autonomously follows GPS signals.

Maxlimer launched in 2017 and spent a couple years in testing. The results were encouraging. In May 2019 the Maxlimer team snagged the Shell Ocean Discovery X-Prize, a $7 million award for the best ocean-mapping technology. 

That same month, Maxlimer made a quick cargo run between Britain and Belgium, hauling oysters and beer. This fall, the robot ship sailed to Norway for what Tinmouth described as “the first completely unmanned offshore commercial pipeline inspection” using onboard sensors and a small drone submarine.

“The numerous missions allowed our shore-based crew to operate and test the vessel offshore in various scenarios and sea-states, both day and night,” Tinmouth told The Daily Beast.

Next up: the vaunted Atlantic crossing. Tinmouth said the month-long journey is on schedule for the first half of 2020. Assuming Maxlimer successfully completes the trip, SEA-KIT hopes to begin expanding the technology. “We have already designed and are looking to develop a larger USV with additional capabilities.”

 Turbinia

Turbinia was the first steam turbine-powered steamship. Built as an experimental vessel in 1894, and easily the fastest ship in the world at that time, Turbinia was demonstrated dramatically at the Spithead Navy Review in 1897 and set the standard for the next generation of steamships, the majority of which would be turbine powered. The vessel is currently located at the Discovery Museum in Newcastle upon Tyne, North East England, while her original powerplant is located at the Science Museum in London.

---- Charles Algernon Parsons invented the modern steam turbine in 1884 and, having foreseen its potential to power ships, he set up the Parsons Marine Steam Turbine Company with five associates in 1893. To develop this he had the experimental vessel Turbinia built in a light design of steel by the firm of Brown and Hood, based at Wallsend on Tyne[1] in the Northeast of England.

---- Parsons' ship turned up unannounced[6] at the Navy Review for the Diamond Jubilee of Queen Victoria at Spithead, on 26 June 1897, in front of the Prince of Wales, foreign dignitaries and Lords of the Admiralty. As an audacious publicity stunt, Turbinia, which was much faster than any ship at the time, raced between the two lines of navy ships and steamed up and down in front of the crowd and princes, while easily evading a navy picket boat that tried to pursue her, almost swamping it with her wake.
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“A good politician is quite as unthinkable as an honest burglar.”
H. L. Mencken.

Crooks and Scoundrels Corner.

The bent, the seriously bent, and the totally doubled over.

Today, German auto news. Nothing good for German motors.

New China tariffs will hit BMW, Mercedes exports from U.S.

August 23, 2019 03:11 PM updated 49 minutes ago
BEIJING -- President Donald Trump late Friday said he would raise tariffs on Chinese imports as high as 30 percent in coming months after Beijing said it would place added tariffs on U.S. goods, including light vehicles.

Trump tweeted on Friday that tariffs on $250 billion of Chinese exports would go to 30 percent on Oct. 1, up from the current 25 percent. New tariffs set for Sept. 1 would increase to 15 percent from 10 percent.

"Sadly, past Administrations have allowed China to get so far ahead of Fair and Balanced Trade that it has become a great burden to the American Taxpayer," Trump said on Twitter. "As President, I can no longer allow this to happen!"

Early Friday, China said that it will impose additional tariffs on a total of $75 billion of U.S. goods in retaliation for Trump’s latest planned levies on Chinese imports, rattling automakers and raising fears of an extended trade battle between the two economic giants.

Some of China's countermeasures will take effect starting Sept. 1, while the rest will come into effect from Dec. 15, according to the announcement from the Ministry of Commerce. The new duties mirror an earlier timetable the U.S. laid out for 10 percent tariffs on nearly $300 billion of Chinese shipments.

An extra 5 percent tariff will be put on American soybeans and crude-oil imports starting next month, and a 25 percent duty on U.S. cars will resume Dec. 15, China said.

Beijing earlier waived a 25 percent duty on light vehicles from the U.S. as part of efforts to restart trade talks between the two nations.

Among automakers, Ford, Tesla and Daimler and BMW are the most vulnerable to the additional levies. Ford exports the Lincoln MKC and Ford Explorer crossovers to China, among other vehicles. Jeep and Lexus also ship vehicles to China from U.S. plants.

BMW and Daimler export large numbers of SUVs from plants in the U.S. to China, while Tesla does not yet make electric vehicles in the country. Six of the top ten vehicles exported from the U.S. to the world’s biggest car market are from the two German brands, according to forecaster LMC Automotive.

“The tit-for-tat tariffs, absent any meaningful negotiations, are damaging to the American auto industry," John Bozzella, who chairs the ad-hoc group "Here for America" that includes VW, Daimler and BMW, said in a statement.

---- China imported 190,118 U.S.-made vehicles in 2018, a decline of 35 percent from 2017, according to data from the country's top vehicle importer, Sinomach Auto, citing trade tensions and tariff adjustments.

Ford, in a statement Friday, urged "the U.S. and China to find a near-term resolution on remaining issues through continued negotiations. It is essential for these two important economies to work together to advance balanced and fair trade." 
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VW explores buying stakes in Chinese suppliers, report says

August 23, 2019 03:53 AM
Volkswagen Group is exploring potential investments in Chinese automotive suppliers as it seeks to secure access to key technology in the world’s largest car market, people familiar with the matter said.

Options under discussion include buying equity stakes or forging joint ventures with Chinese suppliers, particularly companies with technology used in electric vehicles, according to the people. VW has been examining several possible targets including Guoxuan High-Tech Co., a battery maker based in China’s Anhui province, the people said, asking not to be identified because the information is private.

Shares of Guoxuan High-Tech jumped 6 percent in Shenzhen trading after Bloomberg reported the talks, more than doubling their gain for the year. The company has a market value of about $2.1 billion. VW was up 0.4 percent in Frankfurt.

Battery technology is a critical area for VW as it seeks to safeguard vast purchasing volumes needed to power the auto industry’s largest push into electric cars, which is led by China. VW picked China’s Contemporary Amperex Technology Co. as its initial battery provider in the country.

The Chinese market will take on a bigger role for VW as both a production hub and research center, CEO Herbert Diess told reporters in April in Shanghai. The company plans to deliver 22 million fully electric vehicles worldwide by 2028, with more than half of them made in China.
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Continental could shut plants as part of restructuring

August 23, 2019 09:05 AM updated an hour ago
HAMBURG -- Continental is examining whether to shut plants, including in Germany, as part of its restructuring, a spokesman for the company said on Friday after a newspaper reported that nine plants in its powertrain unit could be closed.

"It is beyond question that we are reviewing all divisions," a spokesman for the supplier said without giving details on how many plants and jobs could be involved.

German daily Hannoversche Allgemeine, citing union sources, said Continental was planning to shut nine of the 32 production sites in its powertrain unit, which could result in the loss of 4,000 jobs.
Continental's rubber division is also being put on review, the spokesman told Reuters.

This month, Continental said it was seeking deeper cost cuts as it reported a 41 percent fall in second-quarter net profit reflecting lower auto demand in China and steep investments for electric and autonomous cars.
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Pythagoras's theorem - 24 words.
The Lord's Prayer - 66 words.
Archimedes's Principle - 67 words.
The 10 Commandments - 179 words.
The Gettysburg address - 286 words.
U.S. Declaration of Independence - 1,300 words.
U.S. Constitution with all 27 Amendments - 7,818 words.
EU regulations on the sale of cabbage - 26,911 words.

Brexit leaving contract, 585 pages of Brussels legalese.

Time to leave the EUSSR without a deal.

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?

Quantum teleportation takes on a new dimension in new experiments

Michael Irving  August 26, 2019
Unlike regular computers where data is stored in binary bits as 0 or 1, the “qubits” in quantum computers can exist as both at the same time. Stranger still, this information can be effectively “teleported” over any distance. Now, scientists from Austria and China have managed to create photons that exist as 0,1 and 2 simultaneously, and teleported these complex quantum states.

Quantum computers are poised to leave traditional computers and even supercomputers in the dust, and they owe their exponential increase in power to the fact that they go beyond binary. One “bit” of information isn’t limited to a 0 or a 1 – it can be either or both at the same time, much like Schrödinger’s infamous cat.

In theory, adding extra states boosts the power even more: throw in a 2, for example, and the range of possible states goes up exponentially. One qubit can be any individual value, or any pairing of two, or all three at once.

And now these theoretical higher-dimension quantum states have not only been demonstrated in lab experiments, but teleported as well. The team includes scientists from the Austrian Academy of Sciences, the University of Vienna, and the University of Science and Technology of China.

The team based its experiments on a long-standing favorite called the Bell test. In this, two photons are emitted in different directions at the same time, and when a certain property of one is manipulated and measured, the other usually ends up being the same. That information appears to be “teleported” to the second photon, no matter how far apart they are.

For the new study, the researchers adapted the classic experiment to teleport a three-level state, which they call a “qutrit.” The quantum state in this case is which of three optical fibers a photon is traveling through – remembering of course, that quantum physics allows a single photon to be in any or all three of the fibers at once.

The team used a multiport beam splitter to direct the photons, and then manipulated their states using auxiliary photons. By carefully controlling the interference patterns of these photons, the team was able to successfully teleport that quantum information to another photon, even though the two photons never interacted physically.

This experiment shows that quantum teleportation can not only be done in three dimensions, but theoretically it can be done in any number of dimensions.

This study is a step towards harnessing quantum mechanics for better electronics. In the not-too-distant future, a quantum internet could connect quantum computers together to send data incredibly fast through quantum teleportation.

The research was published in the journal Physical Review Letters.
Source: University of Vienna


Russian Foreign Minister Lavrov. May 2017.

The monthly Coppock Indicators finished July

DJIA: 26,864 +53 Up. NASDAQ: 8,175 +65 Down. SP500: 2,980 +53 Up. 

The S&P and Dow remain up, but in very unconvincing fashion. The NASDAQ remains down.  Like the Fed, I would await a better data driven signal.

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