Tuesday, 19 November 2019

A Trade Deal of Great Advantage, But…


Baltic Dry Index. 1338 -19 Brent Crude 62.26 Spot Gold 1473

Never ending Brexit now January 31, or maybe sooner.
Trump’s Nuclear China Tariffs Now in effect.
The USA v EU trade war started October 18. Now in effect.

"a company for carrying out an undertaking of great advantage, but nobody to know what it is"

1720 South Sea Bubble.

Today, more of the same. Another day of waiting for Godot to show up. Make that Trump’s trade deal “lite” part one. It being a Tuesday, it’s a day to talk down expectations again. Not for the moment that it seems to be halting the Fed’s latest stock market bubble.

Fear is rising that Beijing is dragging things out, fully aware that time is on China’s side not the USA’s, where President Trump faces a re-election problem, now less than a year away. For more on that re-election problem scroll down to Crooks Corner, where the Ford Motor Company seems about to fall off President Trump’s MAGA wagon.

Asian shares mixed as doubts grow on elusive U.S.-China trade deal

November 19, 2019 / 12:25 AM
SINGAPORE (Reuters) - Asian share markets were mixed on Tuesday, as another day awaiting clearer news on the progress of U.S.-China trade negotiations left investors bereft of trading motivation.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS inched 0.2% higher as hopes for stimulus in China lifted Shanghai blue chips by 0.8% and Hong Kong’s Hang Seng by 1%.
Japan's Nikkei .N225, however, shed 0.2% and South Korea's Kospi 200 dropped 0.3%. Australia's S&P/ASX 200 rose 0.4%. 

Volumes were light across the board. E-Mini futures for the S&P 500 ESc1 were flat.

“It’s subdued today for sure,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank’s Asia Treasury Department in Singapore, adding that focus was by default on efforts to resolve the trade war between the world’s two biggest economies that has dented global growth.

“There are some lingering doubts over whether a phase one deal can be struck ... I think the suspicion is that there’s a lot more wrinkles to iron out than initially thought.”

Overnight, CNBC had reported the mood in Beijing was pessimistic about the prospects of sealing an agreement.

On the other hand, a new extension allowing U.S. companies to keep doing business with Chinese telecoms giant Huawei suggested something of an olive branch.

Still, neither morsel shed much light on progress in U.s.-China negotiations, and this week’s listless trading suggests optimism that resolution is near is beginning to run out of steam.

“We’re still waiting,” said Michael McCarthy, chief market strategist at brokerage CMC Markets in Sydney. “The longer we go on, the more concerns will arise. The reality is the clock is ticking.”

The next deadline in the dispute is Dec. 15, when another round of U.S. tariffs on Chinese good is scheduled to take effect.
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Opinion: As the market hits new highs, most stocks are sinking

By Simon Maierhofer  Published: Nov 18, 2019 5:15 p.m. ET
In a recent period of almost two weeks, the S&P 500 Index reached new all-time highs on four of eight trading days.

But on six of those eight days, more stocks declined than advanced (see chart below).

---- Can the S&P 500 SPX, +0.05%, Nasdaq COMP, +0.11%  and Dow Jones Industrial Average DJIA, +0.11%  continue higher despite this kind of internal weakness?

The chart below helps us identify other times the S&P 500 reached new all-time highs as less than 50% of NYSE-traded stocks advanced. We will call those “lackluster” days, which are represented by the bottom blue graph.

---- There were two of four lackluster days prior to the Sept. 20, 2018, high.

• There were four of nine lackluster days prior to the Jan. 26, 2018, high.
• There were four of eight lackluster days prior to Nov. 8, 2017.
• There were four of eight lackluster days prior to Aug. 7, 2017.

Obviously the first two instances proved to be ominous precursors of worse things to come, but the latter two only saw hiccups.

Just based on those four precedents, one could file this constellation away as a 50/50 scenario. But, like an onion, the more you peel away on the current setup, the more it stinks.

Internal deterioration is widespread. The following indicators failed to confirm last Thursday’s new S&P 500 high, creating a number of bearish divergences:
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In other news, the Hong Kong standoff is about to come an end. How it ends and world reaction to it will likely affect relations with China for months to come, trade deal or no trade deal. Hong Kong, and US relations with HK, will now all too likely become a contentious issue in next year’s US presidential election.

Hong Kong police official says surrender is only option for protesters as campus siege tightens

By Associated Press  Published: Nov 18, 2019 9:11 p.m. ET
HONG KONG — Police tightened their siege of a university campus where hundreds of protesters remained trapped overnight Tuesday in the latest dramatic episode in months of protests against growing Chinese control over the semi-autonomous city.

In yet another escalation for the movement, protests raged across other parts of the city, fueled by palpable public anger over the police blockade of Hong Kong Polytechnic University and the desire to help the students stuck inside.

Now in its fifth month, the Hong Kong protest movement has steadily intensified as local and Beijing authorities harden their positions and refuse to make concessions. Universities have become the latest battleground for the protesters, who used gasoline bombs and bows-and-arrows in their fight to keep riot police backed by armored cars and water cannon off of two campuses in the past week.

China, which took control of the former British colony in 1997 promising to let it retain its autonomy, flexed its muscles, sending troops outside their barracks over the weekend in a cleanup operation.

China’s ambassador to Britain accused the U.K. and the U.S. of meddling in the country’s internal affairs and warned that the Chinese government “will not sit on our hands” if the situation in Hong Kong “becomes uncontrollable.”

“These rioters, they are also criminals. They have to face the consequences of their acts,” said Cheuk Hau-yip, the commander of Kowloon West district, where Polytechnic University is located.

“Other than coming out to surrender, I don’t see that there’s any viable option for them,” he said, adding that police have the ability and resolve to end the standoff.

Authorities, meanwhile, were dealt a setback Monday when Hong Kong’s high court struck down a contentious ban on wearing face masks in public imposed last month, ruling it unconstitutional.
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As with yesterday, a good day to sit out developments in cash (and fully paid up physical precious metals.)
"The leaders of the French Revolution excited the poor against the rich; this made the rich poor, but it never made the poor rich."
Fisher Ames.

Crooks and Scoundrels Corner.

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

Today, Ford Motor Co., again. Specifically, the Ford Mustang electric vehicle that we covered back on Thursday November 7th. Someone at Ford didn’t get President Trump’s memo. Ford are proposing to build them in Mexico, and are even considering making them in China!

So which aid is brave/foolish enough to go and inform President Trump?

“If I had asked people what they wanted, they would have said ‘faster horses.”

 Henry Ford

Ford Unveils Electric Mustang SUV to Challenge Tesla Dominance

Keith Naughton
Bloomberg November 18, 2019
Bloomberg) -- Ford Motor Co. is reinventing one of its marquee models -- the Mustang muscle car -- as a battery-powered crossover to become a player in the electric-vehicle market that is expected to take off in the coming decade.

In a splashy ceremony Sunday ahead of the Los Angeles Auto Show, the carmaker unveiled the Mustang Mach-E, a swoopy hatchback with distinctive pony-car haunches and familiar shark nose that it claims has the power to take on Porsche. When it goes on sale next fall, Ford hopes to convince mainstream buyers its electrified Mustang is an alternative to the Tesla models dominating the EV market.

And Ford, which exited the battery-car business last year when it pulled the plug on its slow-selling Focus EV, is betting it’s cracked the code on turning a profit on plug-ins. By building the Mach-E in Mexico, where labor costs are low, and with a price starting at $43,895, the automaker says it will avoid the losses automakers typically suffer selling high-cost EVs.

The company is even considering making the car in China, depending on how the trade war plays out, Ford Chief Executive Officer Jim Hackett told Bloomberg News.

Read more: Ford May Make New Electric Mustang Mach-E in China (1)

The Mach-E will make a profit “on vehicle one,” he said in a Bloomberg TV interview. “That’s surprising a lot of people because electrics have not had a history of making money. This will.”
Hackett said it will turn a profit because the vehicle “creates the passion that follows with Mustang” and prices start in the mid-$30,000 when U.S. subsides on electric cars are factored in. “So it’s attractive to customers.”

Ford is building it in Mexico because it had an open factory there and it needed to be overhauled to build an electric vehicle, Hackett said. “As we start to adopt more electric vehicles — we had capacity down there, we had no capacity in the United States — we’re going to have electric capacity here in the United States. They’ll be building other electric platforms.”

Still, it’s a high-risk gambit. The Mustang is Ford’s signature sports car, having sold more than 10 million units since it debuted in 1964 with simultaneous cover stories in Time and Newsweek. When Ford decided to abandon the traditional passenger-car business last year, it spared only one model: The Mustang.

New Configuration

For more than half a century, the Mustang has embodied high-octane power and unbridled strength. And Ford will continue to make gasoline-fueled versions of the classic muscle car.

The Mach-E is not only the first electric version of the Mustang, it’s also the first time it has been configured into a sport utility vehicle. That will test the elasticity of a brand built on low-slung speedsters.

“Calling this a true sports car would be stretching it,” said Jeff Schuster, senior vice president of forecasting for researcher LMC Automotive. “The market obviously has gone in the direction of the SUV body type, that’s what’s selling. But the Mustang is not an SUV. It’s been a sports car.”

Ford, having struggled to sell more mundane electric cars, is embarking on a strategy to electrify its icons, starting with the Mustang and following quickly thereafter with a plug-in version of its top-selling F-150 pickup. It is part of $11.5 billion the automaker is investing to roll out 40 electric and hybrid vehicles by 2022. The idea is to show that Ford’s EVs can be fast and tough and are not just “compliance cars” intended to meet more stringent environmental regulations around the world.

“We changed our whole strategy two years ago,” Ted Cannis, Ford’s global head of electrification, said at a briefing on the Mach-E at the company’s design studios in Dearborn, Michigan. “We said, ‘Let’s play to our strengths -- performance vehicles, pickups, vans, SUVs, the things Ford knows how to do.’”
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In other US car news, Germany makes a pitch to Tesla. But wouldn’t Tesla lose all those hidden subsidies?

VW’s CEO Says Germany Would Be Better Home for Tesla Car-Making Than California

By Craig Trudell

“There is one rule for the industrialist and that is: make the best quality goods possible at the lowest cost possible, paying the highest wages possible.”

Henry Ford    


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?

Researchers develop thin heat shield for superfast aircraft

Date:  November 14, 2019

Source: Florida State University

Summary: The world of aerospace increasingly relies on carbon fiber reinforced polymer composites to build the structures of satellites, rockets and jet aircraft. But the life of those materials is limited by how they handle heat. Engineers are now developing a design for a heat shield that better protects those extremely fast machines. 

----A team of FAMU-FSU College of Engineering researchers from Florida State University's High-Performance Materials Institute is developing a design for a heat shield that better protects those extremely fast machines. Their work will be published in the November edition of Carbon.

"Right now, our flight systems are becoming more and more high-speed, even going into hypersonic systems, which are five times the speed of sound," said Professor Richard Liang, director of HPMI. "When you have speeds that high, there's more heat on a surface. Therefore, we need a much better thermal protection system."

The team used carbon nanotubes, which are linked hexagons of carbon atoms in the shape of a cylinder, to build the heat shields. Sheets of those nanotubes are also known as "buckypaper," a material with incredible abilities to conduct heat and electricity that has been a focus of study at HPMI. By soaking the buckypaper in a resin made of a compound called phenol, the researchers were able to create a lightweight, flexible material that is also durable enough to potentially protect the body of a rocket or jet from the intense heat it faces while flying.

Existing heat shields are often very thick compared to the base they protect, said Ayou Hao, a research faculty member at HPMI.

This design lets engineers build a very thin shield, like a sort of skin that protects the aircraft and helps support its structure.

After building heat shields of varying thicknesses, the researchers put them to the test.
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We and the world can probably never get to carbon neutral no matter how many trillions are spent Google "The New Energy Economy: An Exercise in Magical Thinking," for the science of why not.

The monthly Coppock Indicators finished October

DJIA: 27,046 +59 Up. NASDAQ: 8,292 +67 Up. SP500: 3,038 +67 Up.

Another inconclusive month, but all three continued to move up weakly. A buy signal. But, like the Fed, I would await more data.

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