Baltic Dry Index. 1873 +72 Brent
Crude 58.23 Spot Gold 1508
Never ending Brexit now October 31, maybe. 21 days away.
Trump’s Nuclear China Tariffs Now In Effect.
The USA v EU trade war starts October 18. Just 8 days
away.
There can be few fields of human endeavour in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present.
John
Kenneth Galbraith
If I didn’t know better, I’d say that someone, or some
group, are gaming the stock markets with USA v China trade talk announcements.
But we all know no one would do that, would they?
Below, today’s chapter on trade war yo-yo. Who gains, who loses?
To this old dinosaur trader, this game is not worth the
risk, but if I did get involved, it would only be by some synthetic double
options on the year end stock indexes.
Asian markets erase early losses on reports of partial trade deal, easing of Huawei blacklist
By Marketwatch
and Associated
Press Published: Oct 9, 2019 11:32 p.m. ET
Asian markets rallied from early losses into positive
territory in early trading Thursday, following conflicting reports of progress
in the U.S.-China trade war.Markets opened lower following a report by the South China Morning Post that “no progress” had been made in low-level meetings to lay the groundwork for a high-level meeting starting Thursday in Washington.
But a later report by Bloomberg News said the Trump administration was making moves toward a partial trade deal, including putting off tariff hikes scheduled to go into effect next week. The report said negotiations on touchier issues such as forced transfers of technologies could come later. The New York Times also reported that the U.S. would soon issue licenses to some U.S. companies to do business again with China’s Huawei Technologies, a move that could significantly ease tensions.
Japan’s
Nikkei NIK, +0.30%
rose 0.5% and Hong Kong’s Hang Seng Index HSI, +0.18%
gained 0.2%. The Shanghai Composite SHCOMP, +0.19%
advanced 0.2% and the Shenzhen Composite 399106, +0.51% jumped 0.5%. South
Korea’s Kospi 180721, -0.81% fell 0.8%, while
benchmark indexes in Singapore STI, -0.12%
and Indonesia JAKIDX, +0.12%
were mixed. Australia’s S&P/ASX 200 XJO, -0.18%
was about flat. Taiwan’s Taiex was closed for a holiday.
More
U.S. stock futures bounce back after conflicting reports on state of trade talks
By Mike
Murphy Published: Oct 9, 2019 10:41
p.m. ET
U.S. stock futures recovered from sharp early losses during
the overnight trading session Wednesday, rallying after a report that indicated
potential progress in the U.S.-China trade war.Bloomberg News reported Wednesday night that the White House may implement a previously-agreed-upon currency deal with China ahead of schedule, and suspend tariff hikes scheduled to take effect next week. Those moves would be part of a first-phase agreement with China, Bloomberg said, with negotiations on critical issues such as intellectual-property rights and forced technology transfers coming later in phase two.
Separately, the New York Times reported Wednesday night that President Donald Trump had green-lighted issuing licences to some U.S. companies to conduct business with Chinese telecom giant Huawei Technologies. The U.S. blacklisted Huawei earlier this year, and allowing sales of non-sensitive products could help defuse trade tensions.
The news comes ahead of the first face-to-face, high-level trade
negotiations between the U.S. and China since July. China’s Vice Premier Liu He
will meet with Trade Representative Robert Lighthizer and Treasury Secretary
Steven Mnuchin on Thursday in Washington.
The reports were welcome news to futures traders, who had been reacting
to bad news just hours before.
U.S. stock futures had sunk as the trading session opened after a report
that lower-level U.S.-China trade talks had made “no progress” in resolving the
yearlong trade war.
The Hong Kong-based English-language newspaper South China Morning Post reported late Wednesday that talks this week to lay the groundwork for the high-level negotiations had made no headway on critical issues, and that the main negotiation session had been cut from two days to just one day, with the Chinese delegation now scheduled to leave Washington after their conclusion Thursday. China reportedly refused to consider changes to forced transfers of technology, a main concern of the U.S.
After that report, Dow Jones Industrial Average futures YM00, -0.15% immediately fell nearly 300 points, or 1%. S&P 500 futures ES00, -0.16% and Nasdaq Composite futures NQ00, -0.10% were also down more than 1% at one point. But those losses were erased following the Bloomberg and Times reports. As of 10:40 p.m. Eastern, all three futures contracts were back to about zero.
China lowers expectations for U.S. trade talks after blacklist: officials
October 9, 2019 /
8:58 PM
BEIJING/WASHINGTON
(Reuters) - Surprised and upset by the U.S. blacklisting of Chinese companies,
China has lowered expectations for significant progress from this week’s trade
talks with the United States, Chinese government officials told Reuters, even
as President Donald Trump on Wednesday expressed fresh optimism.
While Beijing theoretically wants to end the trade war, Chinese
Communist Party officials are not optimistic about the size or scope of any
agreement with Washington in the short-term, the Chinese officials said.
Top U.S. and Chinese trade and economic officials will meet in
Washington on Thursday and Friday to try to end a 15-month-old trade war that
is slowing the global economy and threatens to upend decades-old trade systems.
Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and
Treasury Secretary Steven Mnuchin are due to take part.
Without significant progress, Trump is set to hike the tariff rate on
$250 billion worth of Chinese goods to 30% from 25% next Tuesday.
Speaking to reporters in Washington, Trump said: “If we can make a deal,
we’re going to make a deal, there’s a really good chance.”
“In my opinion China wants to make a deal more than I do,” Trump added.
Based on the current situation, there is a possibility that this week’s
talks between the world’s two largest economies could end in a deadlock,
according to a Chinese official briefed on preparations for the talks who spoke
on condition of anonymity. Asked about the probability of reaching an
agreement, the official said, “This is not an easy task. It requires a lot of
preparation work and consensus on both sides.”
While previous lower-level talks between
U.S. and Chinese officials aimed to create a good atmosphere for the upcoming meeting,
the U.S. blacklisting of 28 Chinese companies has generated a negative
atmosphere instead, Chinese officials said.
More
U.S. Weighing Currency Pact With China as Part of Partial Deal
By Jenny Leonard
Updated on October 10, 2019, 5:51 AM GMT+1
The White House is looking at rolling out a previously agreed currency
pact with China as part of an early harvest deal that could also see a tariff
increase next week suspended, according to people familiar with the discussions.
The currency accord, which the U.S. said had been agreed to earlier this
year before trade talks broke down, would be part of what the White House
considers to be a first-phase agreement with Beijing. It would be followed by
more negotiations on core issues like intellectual property and forced
technology transfers, the people said.
The offshore yuan rose more than 0.3%, erasing an earlier loss. U.S.
stock futures whipsawed Thursday morning in Asia amid uncertainty about the
outcome of the negotiations.
People familiar with the Chinese delegation’s arrangements said
negotiators are currently scheduled to leave on Friday evening, though there
could be changes depending on how the talks progress. One person said there may
also be a meeting with Trump that day, though again it would depend on how the
talks go.
---- During a speech in Sydney on Thursday, U.S. Commerce Secretary Wilbur Ross -- who has only played a peripheral role in negotiations -- took shots at China. Beijing’s trade practices have “gotten worse” and the tariffs are “forcing China to pay attention,” Ross said in prepared remarks for a speech in Sydney.
“It’s very hard to forecast,” Ross said when asked about the likelihood the two sides would even reach a partial agreement. “We would like a deal. They would like a deal. We’ll see what happens.”
More
Opinion: Professional investors are selling stocks as international risks pile up
By Nigam
Arora Published: Oct 8, 2019 12:00
p.m. ET
The repression of human rights in China, limits on American money
flowing to Chinese stocks and a mini-crisis in Turkey are beginning to weigh on
the stock market.
Let’s explore this issue with the help of two charts.
---- Note the following:
• For proper context, please start by reading “President Trump might just be the best stock market timer ever.”
• The first chart shows how Trump ran up the stock market when there was a great setup for it to fall.
• The second chart shows the drop in stock market futures on China concerns.
• The second chart shows the VUD indicator. The VUD indicator is the most sensitive measure of net supply and demand in real time. The chart shows net buying in green and net selling in orange.
More
Finally, there will be another recession but when? According to the BBC Inquiry program, not for
at least another two years.
Still, the BBC never saw the recession of 2007-2009 coming, nor the bank run on
Northern Rock, the Dot com crash of March 2000, nor the recession of 2001, nor
the stock market crash of October 1987. Not the best record to be making future
predictions.
Eroding profit margins will push U.S. into recession in 2020, leading forecaster says
By Rex Nutting Published: Oct 9, 2019 8:40 a.m. ET
Stephen Gallagher stands out among Wall Street economists because he’s
one of the few willing to go on the record to forecast a recession in 2020.
Also because he’s not blaming it on tweets, Trump or tariffs.
The chief U.S. economist for Societe Generale also stands out because
he’s just won MarketWatch’s Forecaster of the Month contest, which we designed
to recognize the most accurate U.S. economic forecasters.
Gallagher’s recession story is a relatively simple one: U.S. recessions
are typically preceded by an erosion in corporate profit margins, or profit per
dollar of revenue. Costs generally rise near the end of the cycle while sales
flatten out.
Profit margins for U.S. nonfinancial corporations peaked in 2015 at
15.2% of gross value added, and have fallen to 10.9% in the latest quarter.
Gallagher has been warning about a slow squeeze on profits since 2016.
Since few corporations have any pricing power, the only way for managers to defend their margins against higher labor costs is to turn defensive, focusing on cost-cutting instead of growth. Once companies begin to reduce investment and payrolls, it’s only a matter of time before consumer spending stalls.
Oddly perhaps, one way corporations could avoid narrowing margins would be to aggressively invest in productivity-enhancing technologies. That isn’t happening. Although investments in R&D and software are up, capital spending on structures and equipment is quite weak.
“The erosion in margins is the key to business-cycle dynamics,” Gallagher said in an interview. If the U.S. does enter a recession in 2020, “history is very likely to view it as a trade-war recession,” he wrote early in 2018. But trade tensions are only the catalyst, not the main cause, he says.
More
The Inquiry.
Are we heading for a global recession?
John Kenneth Galbraith.
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled
over.
No
crooks again today, today a little history on Atlantic hurricanes and partly why
Lord Cornwallis got cornered by the French fleet at Yorktown and surrendered,
bringing the American revolution to a close.
Great Hurricane of 1780
The Great Hurricane of 1780, also known as Huracán San Calixto, the Great Hurricane of the Antilles, and the 1780 Disaster,[1][2] is the deadliest Atlantic hurricane on record. Between 22,000 and 27,501 people died throughout the Lesser Antilles when the storm passed through them from October 10–16.[3] Specifics on the hurricane's track and strength are unknown because the official Atlantic hurricane database goes back only to 1851.[4]The hurricane struck Barbados likely as a Category 5 hurricane, with at least one estimate of wind speeds as high as 200 mph (320 km/h)[5] (greater than any in recorded Atlantic basin history) before moving past Martinique, Saint Lucia, and Sint Eustatius, and causing thousands of deaths on those islands. Coming in the midst of the American Revolution, the storm caused heavy losses to the British fleet contesting for control of the area, largely weakening British control over the Atlantic.
The hurricane later passed near Puerto Rico and over the eastern portion of Hispaniola, causing heavy damage near the coastlines. It ultimately turned to the northeast and was last observed on October 20 southeast of Atlantic Canada.
The death toll from the Great Hurricane alone exceeds that of many entire decades of Atlantic hurricanes. Estimates are marginally higher than for Hurricane Mitch, the second-deadliest Atlantic storm, for which figures are likely more accurate. The hurricane was part of the disastrous 1780 Atlantic hurricane season, with two other deadly storms occurring in October.[3]
British islands
About 4,500 people died on Barbados.[8] The hurricane began affecting the island with rain late on October 9. The ships in the bay broke their moorings by 4:00 the afternoon of October 10, and the full impact arrived around 6:00 in the evening. The hurricane produced violent winds "so deafening that people could not hear their own voices."... a dreadful hurricane which began to rage with great fury at noon [the 10th] and continue with great violence till four o'clock the next morning, the 11th; At eight o'clock at night St. Thomas's parsonage was demolished and the church where the Rector and his family sought shelter began to fall about two hours after, the Chancel fell while the family were in the church ... St. Thomas's Chapel, St. Michael's, St. George's, Christ Church's and St. Lucy's churches were totally destroyed, the other churches were severely 'injured' (except St. Peter's and St. Philip's). Because of the demolition of the parish church and chapel[,] 'divine services' continued in the 'boiling house' at the 'Rock Hall' estate of Thomas Harper by Rev Wm Duke and curate Hugh Austin of St Thomas. Most other buildings and works were blown down and many lives were lost. The dead could not be brought to a church so were buried in gardens and private land.[9]
The hurricane stripped the bark off trees and left none standing on Barbados.[2] Cuban meteorologist José Carlos Millás has estimated that this damage could be caused only by winds exceeding 200 miles per hour (320 km/h).[8] Every house and fort on Barbados was destroyed.[2] According to British Admiral George Brydges Rodney, the winds carried their heavy cannons aloft 100 feet (30 m).
The wind directions recorded during the hurricane suggest that the eye missed Barbados to the north. Northwesterly winds increased through the day on October 10. The wind gradually backed to westerly through the night of October 10 and peaked at midnight. Wind speed returned to normal by 8:00 the morning of October 11.[2]
Strong winds affected Antigua and Saint Kitts, with many ships in Saint Kitts washed ashore. At Grenada, nineteen Dutch ships were wrecked.
The hurricane later grounded 50 ships near Bermuda.
More
French-American Cooperation: 230 Years Ago, the Battle of Yorktown
Published on October 19, 2011
---- On October 19, 1781, after 21 days of
fighting, the British troops, led by Lieutenant General Lord Cornwallis,
surrendered their weapons to the American revolutionary forces, led by General
George Washington, and to the French troops under the command of the Comte de
Rochambeau.
This battle, which marked the defeat of the British forces and paved the
way for American independence, took place in the small town of Yorktown at the
entrance to Chesapeake Bay in Virginia. It was here in this colony that Sir
Henry Clinton, who was leading the British forces on American soil and
controlled New York City at the time, had ordered Lord Cornwallis to establish
a military port.
This
was a strategic decision, strengthened by the arrival of French Admiral de
Grasse in the Chesapeake Bay with a fleet of 28 ships, which cut off seaborne
supplies to the British and prevented any chance of escape. On the ground, no
less than 8,800 Americans and 10,800 French soldiers were mobilized against
some 7,500 British soldiers — a quarter of the British forces deployed to the
continent.
On October 17, 1781, Lord Cornwallis was forced to surrender, powerless
in the face of the allied military force. After two days of negotiations, the
official ceremony to mark the British surrender took place without the presence
of Cornwallis, who claimed he was sick.
The Mosquito Factor
In addition to the numerical and strategic superiority of the allies,
there was one factor that worked against the British. The region was swarming
with mosquitoes carrying malaria; in contrast to the British, many American
soldiers were immune to this disease. The French benefited from the incubation
period of around 6 months for this disease: the first symptoms only appeared
after the battle was over.
The allied victory in Yorktown paved the way for the Treaty of Paris of
September 3, 1783, which ended the war. Regularly celebrated in reenactments as
a critical step toward securing American independence, it still remains one of
the key symbols of French-American cooperation in history.
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?
Physicists unlock the mystery of thermionic emission in graphene
Date:
October 7, 2019
Source:
Singapore University of Technology and Design
Summary:
Researchers discover a new theory that paves the way for the design of better
graphene electronics and energy converters.
When a metal is heated to a sufficiently high temperature, electrons can
be ejected out from the surface in a process known as the thermionic emission,
a process that is similar to the evaporation of water molecules from the
surface of boiling water.
The thermionic emission of electron plays an important role in both
fundamental physics and digital electronic technology. Historically, the
discovery of thermionic emission enables physicists to produce beams of
free-flowing electrons in a vacuum. Such electron beams had been used in the
hallmark experiment performed by Clinton Davisson and Lester Germer in the
1920s' to illustrate the wave-particle duality of electrons -- a bizarre
consequence of quantum physics, which marked the dawn of the modern quantum
era. Technologically, thermionic emission forms the core of the vacuum tube
technology -- the precursor of modern-day transistor technology -- that enabled
the development of the first-generation digital computer. Today, thermionic
emission remains one of the most important electricity conduction mechanisms
that governs the operation of billions of transistors embedded in our
modern-day computers and smartphones.
Although the thermionic emission in traditional materials, such as
copper and silicon, has been well-explained by a theoretical model put forward
by British physicist O. W. Richardson in 1901, exactly how thermionic emission
takes place in graphene, a one-atom thin nanomaterials with highly unusual
physical properties, remains a poorly understood problem.
Understanding the thermionic emission from graphene is particularly
important as graphene may hold the key to revolutionizing a vast array of
technologies, including computing electronics, biological sensor, quantum
computer, energy harvester, and even mosquito repellent. Graphene and its
broader family of atomically-thin nanomaterials -- also known as '2D materials'
-- have been highlighted as the top 10 emerging technologies by the World
Economic Forum in 2016.
Reporting in Physical Review Applied, researchers from the
Singapore University of Technology and Design (SUTD) have discovered a general
theory that describes the thermionic emission from graphene. By carefully
studying the electronic properties of graphene, they have constructed a
generalized theoretical framework that can be used to accurately capture the
thermionic emission physics in graphene and is suitable for the modeling of a
wide range of graphene-based devices.
More
John Kenneth Galbraith
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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