Baltic Dry Index. 1929 +56 Brent
Crude 59.42 Spot Gold 1495
Never ending Brexit now October 31, maybe. 20 days away.
Trump’s Nuclear China Tariffs Now In Effect.
The USA v EU trade war starts October 18. Just 7 days
away.
“When a country (USA) is losing many
billions of dollars on trade with virtually every country it does business
with, trade wars are good, and easy to win.”
President Donald Trump.
Desperate for a trade deal to shore up his re-election bid
for the Presidency, President Trump reversed himself yet again, and seems now
to be willing to settle for a limited trade deal with China, even to the extent
of dropping next week’s increased tariffs on Chinese goods, due to come in on
October 15.
The whipsawed markets responded with yet another relief
rally, though each relief rally is now, unsurprisingly, weaker than the one
before. This isn’t exactly “winning.”
Meanwhile, global political developments go from bad to
worse. Aside from a Turkish invasion of Syria’s Kurds, just abandoned by President
Trump, greenlighting Turkey’s invasion, but calling into question the wisdom of
allying with Trump’s America, there’s a dramatic rise in the number of the US
public calling for President Trump’s impeachment, according to the latest polls.
Sooner or later,
but my guess is sooner, this political melodrama will have a serious
drag effect on US stocks.
Below, yesterday’s developments. On to day two of the
trade talks and a meeting between President Trump and China’s top trade
representative Vice Premier Liu He. While it may
not be good for business, it’s certainly good for stock market trading action. Churn
and burn away at the top.
Asian shares up as 'very good' trade talks boost risk appetite
October 11, 2019 /
2:14 AM / Updated an hour ago
SHANGHAI
(Reuters) - Asian shares rose on Friday after U.S. President Donald Trump said
he would meet with China’s top trade negotiator, stirring hopes for an
agreement, while sterling was flat after earlier jumping on optimism over a
potential Brexit deal.
Investors' renewed appetite for riskier assets continued to weigh on the safe-haven yen JPY= and U.S. Treasury prices, while oil stayed firm on comments about possible supply cuts from the head of OPEC.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 1.2%, following on from gains on Wall Street. S&P e-mini futures ESc1 added more than 0.3%.
Australian shares climbed 0.8%, while Japan's Nikkei stock index .N225 gained 1%. Chinese blue-chips .CSI300 added 0.5%.
The bullish market mood came after a first day of trade talks between top U.S. and Chinese negotiators, characterised by Trump as “very, very good.”
---- Even before Trump's comments, hopes for an agreement helped to lift U.S. markets. The Dow Jones Industrial Average .DJI added 0.57%, the S&P 500 .SPX gained 0.64% and the Nasdaq Composite .IXIC rose 0.6%.
But while optimism around trade talks helped to drive a “classic risk-on session” overnight, the lack of runaway enthusiasm reflected broader investor caution, said Matt Simpson, senior market analyst at GAIN Capital in Singapore. “We know that it’s just a few words from Trump.”
Further positive developments in trade talks could boost markets on Monday, but low expectations for a deal mean that the lack of an agreement would not “necessarily (be) the end of the world for risk,” he added.
Analysts at National Australia Bank said freezing tariffs at current levels would be unlikely to reverse the trade-driven slowdown in economic growth.
More
Day 1 of U.S.-China trade talks ends with hopes for limited deal
October 10, 2019 /
6:09 AM / Updated 2 hours ago
WASHINGTON
(Reuters) - Top U.S. and Chinese negotiators wrapped up a first day of trade
talks in more than two months on Thursday as business groups expressed optimism
the two sides might be able to ease a 15-month trade war and delay a U.S.
tariff hike scheduled for next week.
U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative
Robert Lighthizer met with Vice Premier Liu He and other senior Chinese
officials for about seven hours at the USTR’s headquarters near the White
House.
“We had a very, very good negotiation with China,” U.S. President Donald
Trump told reporters after the talks concluded. He reiterated his plans to meet
with Liu at the White House on Friday, regarded as a good sign.
A White House official said talks had gone very well, “probably better
than expected.”
A smiling Liu waved to reporters before departing the USTR in a black
Cadillac, without answering questions. The two sides were due to meet for a
final day on Friday.
Negotiators could agree to low-level “early harvest” agreements on
issues such as currencies and copyright protections, despite increased
irritants between the world’s two largest economies, a U.S. Chamber of Commerce
official briefed by both sides said earlier on Thursday.
Myron Brilliant, the Chamber’s head of international affairs, told
reporters that negotiators were “trying to find a path toward the bigger deal”
with progress on market access and less controversial intellectual property and
other issues.
“I believe that there’s even the possibility of a currency agreement
this week. I think that could lead to a decision by the U.S. administration to
not put forth a tariff rate hike on Oct. 15.”
Trump launched the trade war against China with demands for sweeping
structural reforms, but Beijing has indicated it is not willing to
fundamentally change the way it controls China’s economy. Asked by reporters on
Thursday whether he was prepared to accept a “smaller deal,” Trump did not
answer and walked away.
Previously, the president said he did not want to have a more limited
deal, preferring to hold out for one that was broad in scope.
More
Finally, an expert sees trouble ahead for US stocks,
trade deal or no trade deal with China.
WeWork signals a return to sanity in US IPOs. The tide is now going out,
not coming in.
Expert who called the 2008 crisis says repeat of December meltdown is inevitable
By Barbara
Kollmeyer Published: Oct 10, 2019
8:35 a.m. ET
----And then earnings season kicks off next week with some big
banks. Before you know it, we’re hitting the holidays and maybe some uneasy
flashbacks to last year’s December stock meltdown.A repeat of that rout may be unavoidable, warns our call of the day from former Goldman Sachs alumnus Raoul Pal. “We’re coming into a period of illiquidity for equities,” the author of the Global Macro Investor newsletter, followed by the world’s biggest hedge funds, told MarketWatch in a recent interview.
He cites three reasons why a repeat of that stock selloff may be inevitable. The first is the blackout period for companies, which hits around earnings time when their share buy backs start to slow.
Secondly, he notes that this year has also seen problems with the short-term borrowing market, or repo market, that the Federal Reserve has been trying to tackle. It could mean less buying from market makers — who help create liquidity for markets by bringing buyers and sellers together.
Pal says the third biggest issue facing stocks involves the baby boomers, Americans born between the mid 1940s and mid 1960s. They face an annual requirement to sell about 5% of their individual retirement accounts, loaded with stocks in some cases, as they reach 70.5 years old.
“The problem is the gap between this year and last year is huge. It’s like 50% increase in the amount of selling that has to be done,” said Pal. “They have to start selling by year-end. If you take out the Christmas week and you’re a financial adviser, and you want to get this done early, you will start in October.”
He blames boomer selling for part of the meltdown for stocks late last year. “The marginal change of an American baby boomer thinking ‘I’ve got too much equities,’ which they do have — that is catastrophic for the system, because they have way, way too much risk,” says Pal, co-founder of Real Vision financial television.
Opinion: WeWork is a symptom of a disease that may not have a cure
Published: Oct 10,
2019 6:35 p.m. ET
The spectacular blow-up of the proposed public offering of WeWork’s parent company We Co. shows that the public markets are savvier than private investors about buying into the hype of high-value, high-risk unicorn companies masquerading as tech companies.
The public market’s response to the most recent batch of these mega-private valuation companies? A firm, “No thanks.”
“The Street has gotten sort of stale on the idea of hope,” said Daniel Morgan, senior portfolio manager at Synovus Trust Company. “I don’t think [the IPO window] is shut, but there has got to be more deals like Zoom ZM, -2.54% and Pinterest PINS, +0.55%, where you have a light at the end of the tunnel...You have to have a [business] model that is profitable eventually.”
---- The seeming tide of never-ending losses at We, Uber Technologies Inc. UBER, -0.69% UBER, -0.69% Lyft Inc. LYFT, -1.31%, and Peloton Interactive Inc. PTON, -3.58% has become a problem for investors, along with corporate governance issues at companies like We and Peloton.
Before the We Co. completely shelved its IPO, the office-sharing company was planning to go public with three classes of stock, ensuring majority control would remain with Founder Adam Neumann, who stepped down last month as CEO but remains non-executive chairman. As a private company,
We had a valuation of $47 billion at the time of its last funding raise. But ultimately, its bankers could not even take it public at a valuation of $15 billion.
---- “I think the message is that a path to profitably that does not require magical thinking matters,” said Lise Buyer, founder of Class V Group, a consulting firm which advises company management on the process of going public. “So does corporate governance, and at what valuation it is being offered.”
Zoom Technologies, a corporate video streaming service, and Pinterest Inc., a photo pinning social network, as Morgan from Synovus pointed out, have an actual technology product. But the biggest losers in the IPO market in recent months beyond the We Co. are companies that claim to be tech companies, but are really using technology to enhance a product, such as a car service from Uber and UBER, -0.69% Lyft, Peloton’s exercise bike, and Fiverr International Ltd. FVRR, +0.29% a freelance job-seeking hub that has trademarked the word gig.
More
"The
rules-based multilateral trading system is the bedrock of economic
globalization and free trade, and provides important safeguards for win-win
outcomes. The authority and efficacy of the system should be respected and
protected. Some WTO rules do need to be improved. The right approach is for all
to sit down as equals to find solutions.
"The
fundamental principles of free trade should be upheld, the interests and
concerns of all parties be accommodated, and the broadest possible consensus on
reform be built up. Taking a unilateralist approach will not solve any
problems."
Chinese Premier Li
Keqiang. September 2018.
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled
over.
We’re sticking with historic hurricanes again
today, but this time on the other side of the Atlantic, in the North Sea. Only
they didn’t know it as a remnant of a probable hurricane, just as a great
storm.
Don’t let on to any of the climate change
terrorists, or the extreme left wing BBC, but our last two days of great
storms, can’t be blamed on “man-made global warming” nor on Brexit.
Burchardi flood October 11, 1634.
The Burchardi flood (also known as the second Grote
Mandrenke) was a storm tide that struck the North Sea
coast of North Frisia and Dithmarschen
(in modern-day Germany)
on the night between 11 and 12 October 1634. Overrunning dikes, it shattered
the coastline and caused thousands of deaths (8,000 to 15,000 people
drowned) and catastrophic material damage. Much of the island of Strand
washed away, forming the islands Nordstrand, Pellworm and
several Halligen.
The water rose so high that not only were the dikes destroyed but also houses in the shallow marshlands and even those on artificial dwelling hills were flooded. Some houses collapsed while others were set on fire due to unattended fireplaces.
More
For real science on the subject of changing the global economy, Google:
THE “NEW ENERGY ECONOMY”: AN EXERCISE IN MAGICAL THINKING
"This daunting challenge elicits a common response: “If we can put
a man on the moon, surely we can [fill in the blank with any aspirational
goal].” But transforming the energy economy is not like putting a few people on
the moon a few times. It is like putting all of humanity on the
moon—permanently."
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?
Graphene substrate improves the conductivity of carbon nanotube network
Date:
October 9, 2019
Source:
Aalto University
Summary:
Scientists have combined graphene and single-walled carbon nanotubes into a
transparent hybrid material with conductivity higher than either component
exhibits separately.
Transparent conductive films (TCFs) have many applications in touch
screens, organic light emitting diodes and solar cells. These applications need
materials that are strong, energy efficient and stable, which is why companies
and researchers are interested in carbon-based materials. This applies
especially to networks of single-walled carbon nanotubes, which are expected to
replace the metal-oxide films that are currently used.
Graphene is the thinnest imaginable material, it is just one atomic
layer of carbon atoms. Rolling this into a cylinder makes a carbon nanotube,
which is better suited to carrying electricity in real-world applications. In
an article published in ACS Nano, scientists at Aalto University and the
University of Vienna introduce a hybrid material made by combining carbon
nanotubes and graphene, which improves the conductivity of the film beyond what
is possible when using each of these component structures separately.
Professor Kauppinen's group at Aalto has years of experience in making
carbon nanotubes for TCFs. This new work applies the techniques they have
developed to place densely-packed and clean random nanotube networks on
graphene. "This is another application of the technologies we have
developed over the past decades. Put simply, this work is about how the two
materials are put together without solvents," Kauppinen explains.
In the study, the scientists used a process called thermophoresis to
deposit nanotubes on prefabricated graphene electrodes. The hybrid films'
conductivities were roughly twice as high as predicted.
The experiments conducted by the team at the University of Vienna, led
by Jani Kotakoski, showed that the strong electrical interactions of graphene
enhanced the flow of electrons between the nanotubes by encouraging
charge-tunneling. The team used a scanning transmission electron microscope to
look at the material on the scale of individual atoms, and saw that the van der
Waals interaction between the graphene and nanotubes was strong enough to
collapse the circular nanotube bundles into flat ribbons.
The lead scientist from the Vienna group, Kimmo Mustonen, explains:
"This is really an ingenious approach. The charge transport in
nanomaterials is very sensitive to any external factors. What you really want
is to avoid unnecessary processing steps if your goal is to make the ideal
conductive film." Mustonen adds, "It actually is quite remarkable. We
of course knew that the interaction is quite strong. For instance, think of
graphite; it is just a large number of graphene layers bound together by the
same mechanism. Yet we did not expect that it has such a strong impact on
conductivity."
The results provide opportunities to improve the conductivity of similar
hybrid nanomaterials.
Another weekend and a
weekend to ponder on what exactly happened in the trade talks in Washington,
and to a lesser extent in the sudden Brexit optimism that developed on
Thursday. Was a real breakthrough achieved on either problem, or is it all just
more talk and spin? Punditry is going to have a stellar weekend. Have a great
weekend everyone.
“One of the key
problems today is that politics is such a disgrace. Good people don’t go into
government.”
Donald J. Trump.
The monthly Coppock Indicators finished September
DJIA: 26,917 +57 Up. NASDAQ: 7,999 +62 Up. SP500: 2,977 +61 Up.
Another inconclusive month,
but all three moved up weakly. I would not rely on nor take such a weak buy
signal.
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