Baltic Dry Index. 1748 +28 Brent Crude 58.53
Spot Gold 1497
Never ending Brexit now October 31,
maybe. 82 days away.
Trump’s Nuclear China Tariffs
Now In Effect.
USA v EU trade war postponed to
November, maybe.
Somebody has to be on the other side.
George
Goodman, aka Adam Smith. The Money Game. Why Are The Little People Always
Wrong?
Who will win the trade and currency wars?
Will there be any winners? How will we recognise a winner? How much collateral
damage can the global economy take before there’s a general collapse?
If a new recession starts or is already
underway, when the over priced stock markets start to fall, how much “goodwill”
must be written off falling stocks?
Will a no deal Brexit push the rump-EU
into recession? Will a rump-EU recession drag the rest of the world into
recession, including Trump’s USA?
If the USA economy falls into recession
in a presidential election year, will the Federal Reserve follow the ECB and
Bank of Japan into a gamble on negative interest rates? If they do, where will
gold and silver eventually top out?
We are living in interesting and very
uncertain times.
David Rosenberg: Here are ten reasons you should take risk off the table right now
From the Fed to bonds to tariffs to all the global uncertainty, it's time to make some major portfolio changes — now
All the positive forces that propelled the equity markets earlier this year have fallen off the table. There’s been no trade deal with China, no smooth Brexit and the Fed pivot was less than it seemed. Little wonder the S&P 500 is coming off its worst stretch of the year. With signs that more trouble is brewing, here are 10 reasons to take risk off the table, and I recommend you don’t wait around.1. Tariff Man
We know what the recent past has taught us, which is that the stock market corrects hard in the aftermath of these Trump tariff threats and actions. If you recall, the initial round of tariffs came in early 2018 and that touched off a major correction in the market. The next round in September 2018 (10 per cent on US$200 billion) triggered a near-20-per-cent slide. And after the tariff boost to 25 per cent, we saw a 6.6 per cent setback in the S&P 500 in May. This latest threat to raise tariffs 10 per cent on the other US$300 billion of Chinese exports to the U.S. is a real game-changer because, unlike the previous 25 per cent hike on US$250 billion, this move will affect consumer products that U.S. households buy — the consumer was largely immune before. The notion that only China will pay for this is either a misguided comment from the White House or just another in the long list of outright untruths. Despite what the likes of Donald Trump and Larry Kudlow say, both economies are getting hurt.
2. The Fed’s flip flop
The Fed has constantly bungled its communications with the market and has flip-flopped in a manner I have not seen in more than 30 years as a market economist. After Jay Powell did everything to convince investors this was not going to be anything more than a mid-cycle policy adjustment, Mr. Market is saying, “Sorry, but you’re wrong once again” — and pricing in 100 per cent odds of a September move and a 90 per cent chance for two more cuts by year-end. There is this growing view among economists that the Fed shouldn’t be cutting rates because rate cuts are no antidote for the effects of rising trade tensions. It is a totally ridiculous argument because no central bank is going to maintain the same policy when its base-case GDP projection is hit with a negative demand shock.
That said, “pushing on a string” has been a pervasive theme of ours and has already come to fruition since such credit-sensitive aggregates as housing failed to respond to the bond-induced slide in mortgage rates.
3. Rolling the dice has become policy
The administration in the U.S. is making some major miscalculations, and rolling the dice now seems to be the favoured option. I’m not sure comments that “we will be taxing the hell out of China” are going to work because the Politburo fully realizes that without a deal, President Trump’s election chances take a hit — irrespective of who he ends up running against.
4. Beijing has more cards to play
China, in turn, is threatening retaliatory measures of its own. This is where the second-round negative economic impacts take hold. I cannot believe it when I hear pundits say that the U.S. has the upper hand because China has fewer imports it can raise tariffs on. That misses the point. China can ban tourism to the U.S., as it is doing now with Taiwan. China also can step up what it’s already doing to American companies with toeholds there — surprise inspections, shipment delays, licence rejections — and then there’s the big bomb: a boycott of American goods, or directing state-owned enterprises to cease their purchase of U.S. inputs. Think it through — China has plenty of options. There is no winner from a global trade war, period.
More
‘Befuddling’ Signals Whipsaw Stock Traders in Trump's Trade War
By Lu Wang and Elena Popina
Forgive
stock investors for feeling whipsawed. They just endured one of the wildest
weeks of the bull market only to see the S&P 500 end not far from where it
started.
The rapidly
escalating trade war bears the blame, sure, but that’s not going away anytime
soon. What matters for financial markets is the impact on future growth, and
equity traders looking for guidance often turn to Treasuries. The problem there
is that bulls and bears can both find succor.
----“It’s more than just a concern about tariffs, it’s a concern about a global slowdown. Then the question becomes, would a significant rate cut by the Fed staunch it?” said Quincy Krosby, chief market strategist at Prudential Financial Inc. “What you want is investors taking advantage of lower stock prices. But if you keep thinking, ‘it’s going to get lower,’ you’ll keep your cash.”
The S&P 500 slipped 0.5% over the five days, suffering the year’s worst rout Monday and another modest drop Friday. Sandwiched in between was the biggest three-day rally in two months. Trade headlines caused the ructions, and quant traders and balanced funds accounted for some of the intraweek gyrations, but in the end, investors were left to handicap whether the economy can withstand a level of global policy uncertainty that’s near a record.
“It has been treacherous to even dip your toe into the water,” said Peter Tchir, head of macro strategy at Academy Securities. “This pattern of large, rapid moves, sometimes in reaction to headlines, and even more befuddling, sometimes occurring with no obvious headline in sight has created an environment where it is extremely difficult to trade or manage risk.”
After Monday’s rout, equity bulls went off to the weekend pleased the S&P 500 sits just 3.5% below an all-time high reached 10 sessions ago. Much of their optimism is based on relative valuations. Among 22 Wall Street strategists tracked by Bloomberg, more than half have cut their profit forecasts for the S&P 500 since the start of May, but none lowered their year-end price targets. Lower rates make stocks look more attractive, they say.
Indeed, with a record $15 trillion of global bonds yielding less than zero, the S&P 500 can hardly be framed as expensive when companies hand out dividends equivalent to 1.9% of their share prices. For the first time since 2016, the equity benchmark’s payout exceeded the 10-year Treasury yield.
More
https://www.bloomberg.com/news/articles/2019-08-09/-befuddling-signals-whipsaw-stock-traders-in-trump-s-trade-war?srnd=premium-europe
Gold gains as trade concerns weigh on global markets
August 9, 2019 / 2:14 AM
NEW YORK (Reuters) - Signs of further
escalation of the U.S.-China trade war and weak UK economic data weighed on
global markets on Friday, capping a volatile week that has pushed gold to its
highest level in six years.
“It has been a very volatile week,” said Elwin de Groot, Rabobank’s head of macro strategy.
“Until recently, the markets’ view was that this trade war will be resolved, but clearly now the thinking is that maybe this is not the case and it could be accelerating from here,” he said.
MSCI’s gauge of stocks across the globe .MIWD00000PUS shed 0.53%.
On Wall Street, the Dow Jones Industrial Average .DJI fell 90.75 points, or 0.34%, to 26,287.44, the S&P 500 .SPX lost 19.42 points, or 0.66%, to 2,918.67 and the Nasdaq Composite .IXIC dropped 80.02 points, or 1%, to 7,959.14.
Stock losses accelerated after U.S. President Donald Trump said he was “not ready” to make a deal with China and that the United States would continue to refrain from doing business with Huawei.
“Until we get some sort of tangible answers to what the (Trump) administration is going to do with China, this is going to be an overhang on the market, creating plenty of sharp swings,” said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.
More
Downturn to hit Hong Kong like a 'tsunami', as China slaps warning on Cathay
August 9, 2019 / 3:34 AM
HONG KONG (Reuters) - Hong Kong’s protests
are hitting its economy, the city’s leader Carrie Lam said on Friday, echoing
warnings from business leaders including powerful local property developers, as
about 1,000 mostly young activists occupied the airport arrivals hall.
China, whose
rule over the city is being challenged by the protests, meanwhile demanded Hong
Kong flag carrier Cathay Pacific Airways suspend staff involved in the
demonstrations. One of its pilots was arrested last week.
The pair of
warnings — one aimed at residents planning more marches still and the other at
a business emblematic of the city’s colonial past — mark a toughening stance by
authorities as they grapple with Hong Kong’s deepest crisis in decades.
Flanked by
business leaders, Chief Executive Lam told reporters that companies in the
Asian financial hub were “very worried” about the economic fallout from the
protests, which began in June and have become increasingly violent.
“We have had
two months of political dispute,” she said after meeting business
representatives and senior officials, warning that a downturn “is coming very
quickly”.
“Some people
have described it as coming like a tsunami ... the economic recovery will take
a long time,” Lam said.
What started
as an angry response to a now-suspended measure for criminal suspects to be
extradited for trial in China has rapidly broadened to encompass calls for more
democracy, Lam’s resignation, and even keeping out mainland tourists.
The protests
represent a populist challenge to Chinese leader Xi Jinping, just as an
escalating trade war between China and the United States also hammers Hong
Kong’s economy.
More
Finally, we close for the weekend with
some bad news and some better news on dementia. Not a subject I’ve covered
before.
Alzheimer’s and dementia leading cause of death in England and Wales
Experts call for urgent action to tackle ‘biggest health crisis of our time’
Tue 6 Aug
2019 16.35 BST First published on Tue 6 Aug 2019 11.11 BST
Young blood cocktail stops Alzheimer's decline, early clinical trial reports
Rich Haridy August 7th, 2019
Alkahest,
a California-based biotech start-up, has just revealed some compelling early
results from an ongoing Phase 2 trial into the efficacy of its novel
formulation of plasma proteins derived from young blood, developed to slow, or
even stop, the cognitive decline associated with Alzheimer's disease.
Alkahest, while essentially working from the same belief in the therapeutic properties of young blood, has trod a more cautious path over the last couple of years, using classical evidence-based science to establish the efficacy of its products. Instead of simply using whole blood, or even whole plasma, Alkahest focuses on highly specific proteins found in young blood plasma.
More
This
is the way things are, and the Game has been so successful that, like
everything, it will get more and more successful until it stops being
successful.
George
Goodman, aka Adam Smith, The Money Game. 1968.
New: This weekend’s musical diversion. This
weekend time for Boccherini.
Luigi Boccherini / Luciano Berio: Ritirata notturna di Madrid (1975)
This
great Nation will endure as it has endured, will revive and will prosper. So,
first of all, let me assert my firm belief that the only thing we have to fear
is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed
efforts to convert retreat into advance.
Franklin
Delano Roosevelt 1932.
GB Brexit 2019.
GB Brexit 2019.
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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