Baltic Dry Index. 772 -01 Brent Crude 65.30 Spot Gold 1547
Never ending Brexit now January 31.
Trump’s Nuclear China Tariffs Now in effect.
The USA v EU trade war started October 18. Now in effect.
Altogether shout it
now
There's no one
Who can doubt it now
So let's tell the world about it now
Happy days are here again
There's no one
Who can doubt it now
So let's tell the world about it now
Happy days are here again
Today, complacency rules, OK!
It’s all about the US employment figures due out later today,
good of course. Next week’s signing off
on the USA – China trade deal lite, phase one, good of course. Peace breaking out in the Middle East, (at
least for now,) good of course. And no
sign of a new recession in sight, (if you don’t look too hard,) good of course.
Below, happy days are here again.
Asian markets inch higher as Wall Street hits new records
By Associated Press
and Markwetwatch
Published: Jan 9,
2020 11:14 p.m. ET
Asian shares rose Friday as worries receded the United States and Iran might be stepping closer to the edge of war, and U.S. indexes hit records.
Japan’s benchmark Nikkei 225 NIK, +0.47% edged up 0.2% in morning trading while Hong Kong’s Hang Seng Index HSI, +0.23% was up 0.1%. The Shanghai Composite SHCOMP, -0.04% slipped 0.3% and the smaller-cap Shenzhen Composite 399106, -0.04% inched down 0.2%. South Korea’s Kospi 180721, +0.80% gained 0.5%, and benchmark indexes in Taiwan Y9999, +0.45% , Singapore STI, +0.21% , Malaysia FBMKLCI, -0.24% and Indonesia JAKIDX, +0.02% rose. Australia’s S&P/ASX 200 XJO, +0.80% advanced 0.7%.
---- On Wall Street, money flowed into riskier investments, such as technology stocks, and trickled out of traditional hiding spots for investors when they’re nervous, such as gold. A measure of fear in the stock market had its largest drop in a week.
Stocks have been rallying after investors took comments from President Donald Trump and Iranian officials to mean no military escalation is imminent in their tense conflict. Markets had tumbled on the threat of war after the United States killed a top Iranian general in a drone strike.
The S&P 500 SPX, +0.67% rose 21.65 points, or 0.7%, to 3,274.70 and surpassed its record set last week. The Dow Jones Industrial Average DJIA, +0.74% climbed 211.81 points, or 0.7%, to 28,956.90, and the Nasdaq composite COMP, +0.81% rose 74.18, or 0.8%, to 9,203.43. Both also hit records.
Diminishing worries about a U.S.-Iran war put more of the market’s focus on the economy, corporate profits and other inputs that directly affect stock prices.
“The market is in pretty solid shape,” said Matt Hanna, portfolio manager at Summit Global Investments. “We could see some volatility in the beginning of 2020” following a well-worn path of choppy first halves for stocks during presidential election years, “but we don’t see any sort of recession on the horizon.”
----The spotlight will move next to Friday’s labor report, and economists expect it to show employers added 160,000 jobs last month. They also forecast the unemployment rate to hold at its low level of 3.5%. The numbers are key because a strong job market has been propping up the economy and allowing U.S. households to continue to spend, even as manufacturing weakens due to tariffs and trade wars.
More
Trump says China trade deal may be signed shortly after January 15
January 10, 2020
/ 4:47 AM
(Reuters) - U.S. President Donald Trump, who announced last month that
the Phase 1 trade deal with China would be signed on Jan. 15, said on Thursday
the agreement could be signed “shortly thereafter.”
In an interview with the ABC TV affiliate in Toledo, Ohio, Trump said:
“We’re going to be signing on January 15th - I think it will be January 15th,
but shortly thereafter, but I think January 15th - a big deal with China.”
Trump announced the Jan. 15 signing date in a tweet on Dec. 31.
The White House did not immediately respond to a request for
clarification of Trump’s comments.
The Phase 1 deal, struck last month, is expected to reduce tariffs and
boost Chinese purchases of American farm, energy and manufactured goods while
addressing some disputes over intellectual property.
Chinese Vice Premier Liu He, head of the country’s negotiating team in
Sino-U.S. trade talks, will sign the deal in Washington next week, China’s
commerce ministry said on Thursday.
Liu will visit Washington from Jan. 13-15, said Gao Feng, spokesman at
the commerce ministry.
More
U.S. job growth seen slowing in December after robust gains
January 10, 2020 /
5:22 AM
WASHINGTON
(Reuters) - U.S. job growth likely slowed in December, but the pace of hiring
probably remains more than enough to keep the longest economic expansion in
history on track despite a deepening downturn in a manufacturing sector stung
by trade disputes.
The Labor Department’s closely watched monthly employment report on
Friday could buttress the Federal Reserve’s assessment that both the economy
and monetary policy are in a “good place.”
It would extend the run of upbeat data such as consumer spending, trade
and housing that have suggested the expansion, now in its 11th year, is not in
immediate danger of being derailed by a recession.
“The solid job growth at the end of 2019 set the stage for continued
strength from the consumer in 2020, helping to keep the economy chugging along
at a decent clip,” said Ben Ayers, senior economist at Nationwide in Columbus,
Ohio.
Worries that a downturn might be triggered by the Trump administration’s
trade war with China spurred the Fed to cut interest rates three times in 2019.
Indeed economic growth did slow last year, throttling back to 2.1% in the third
quarter from 2018’s pace of nearly 3%.
Now, though, with a Phase 1 deal with China set to be signed next week,
policymakers are more confident in the outlook and last month signaled
borrowing costs could remain unchanged at least through this year. Economists
are pegging growth at the end of last year around a 2.3% rate.
According to a
Reuters survey of economists, nonfarm payrolls probably increased by 164,000 in
December. Payrolls surged 266,000 in November, in part as 46,000 production workers
at General Motors (GM.N) returned to work after a strike.
More
Elsewhere, the days
are not quite so happy.
Japan households' mood hits 5-year low as tax hike bites
January 9, 2020 /
5:02 AM
TOKYO (Reuters) -
Japanese households’ confidence in the economy worsened to a five-year low in
the three months to December, a central bank survey showed on Thursday, adding
to a recent slew of gloomy signs for the fragile recovery.
The ratio of households who expect prices to rise a year from now also
slid to a more than two-year low, underscoring the challenge the Bank of Japan
faces in firing up inflation to its elusive 2% target.
A diffusion index measuring households’ confidence in the economy stood
at minus 29.8 in December, the worst reading since the corresponding month of
2014, the quarterly survey showed.
The survey, conducted for about a month to Dec. 3 on 4,000 households,
also showed that 32.9% of respondents cut back on spending after a sales tax
hike in October.
Households curbed spending on dining out, clothing and daily necessities
after the tax increase, the survey showed, highlighting the toll that the
higher levy was taking on private consumption.
Asked how prices were moving when excluding the impact of the sales tax
hike, 64.5% said prices rose from a year ago, down from 70.5% in the previous
survey.
Of the total, 73.3% expect prices to rise a year from now, down from
79.8% three months ago and the lowest level since September 2017, the survey
showed.
Japan’s economic growth ground to a near halt in July-September and is
likely to have contracted in the final quarter of last year as the U.S.-China
trade war knocked exports.
More
Next, Boeing. What were they thinking creating the
737-Max? Will the public ever trust the Boeing 737 Max again?
Damning Boeing Employee Messages Say Max ‘Designed by Clowns’
By Julie Johnsson and Ryan Beene
Updated on
Boeing Co. released a new batch of internal messages in which company employees discussed deep unease with the 737 Max and problems in flight simulators used to train pilots on the new jetliner, while also trying to avert greater regulator scrutiny of the plane.
“This airplane is designed by clowns, who in turn are supervised by monkeys,” said one company pilot in messages to a colleague in 2016, which Boeing disclosed publicly late Thursday. The company had already provided the documents to lawmakers and the U.S. Federal Aviation Administration, who are investigating the 737 Max and the process that cleared it to fly.
The communications threaten to upend Boeing’s efforts to rebuild public trust in the 737 Max, which has been grounded since March after two deadly crashes. That will add to the hurdles for David Calhoun, a longtime board member who will take over on Jan. 13 as chief executive officer from Dennis Muilenburg, who was ousted last month.
“These newly-released emails are incredibly damning,” said U.S. Representative Peter DeFazio, an Oregon Democrat who chairs a committee that is investigating Boeing and the Max.
“They paint a deeply disturbing picture of the lengths Boeing was apparently willing to go to in order to evade scrutiny from regulators, flight crews, and the flying public, even as its own employees were sounding alarms internally,” DeFazio said in a statement.
Boeing, which provided the documents under pressure from U.S. lawmakers, apologized and said it was committed to “full transparency” with the FAA.
“We regret the content of these communications, and apologize to the FAA, Congress, our airline customers, and to the flying public for them,” the Chicago-based company said in a statement. “We have made significant changes as a company to enhance our safety processes, organizations, and culture.”
More
Finally, more gloom from
those always secretive, rarely cheerful, Gnomes of Zurich.
Why a bustling labor force could signal a recession looming in the near future
By Joy
Wiltermuth Published: Jan 8, 2020
5:56 p.m. ET
Strong consumer demand and a bustling job market have been two key
reasons why Wall Street thinks U.S. stocks will rise and the American economy
can grow this year.
But low unemployment also can be a “defining characteristic” of a
late-cycle economy where “recession looms in the near future,” warned a team of
Credit Suisse economists led by James Sweeney, in the bank’s 2020 outlook
published Tuesday.
The team credits the spending power of employed households with helping
to prevent recent global manufacturing weakness from spiraling into “something
more severe,” but also stressed that higher wages over time come at a cost for
companies.
This chart also shows how higher labor costs coming out of the 2007-’09
recession have cut into U.S. corporate profits:
----To put a finer point on its, U.S. companies saw incomes grow 7.1% a year on average in the first five years of expansion following the 2008 financial crisis, but slumped to only 2% annual growth in the past five years.
And while lower corporate profits don’t bode well over the long run,
they also likely won’t spur investors to suddenly dump corporate stocks or
drive the U.S. economy off a cliff.
----Other ways to offset tepid corporate profits? Companies could see revenues rise on the back of a “modest” pickup in global growth and improved trade, which Credit Suisse economists expect this year.
Companies also can try to boost profits by raising prices of their
products — essentially passing on higher wage costs to consumers — or by taking
the more dramatic steps of reducing capital spending or cutting staff.
“With an upswing imminent, we don’t think that is a near-term risk,”
Sweeney’s team wrote. “But when the industrial cycle next turns down, possibly
in a couple of years, that could be an approach firms take.”
And in the past, low unemployment rates and falling corporate profits
have been reliable harbingers of recession, the team wrote.
“Because although they sustain the cycle, they are not sustainable.”
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
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled
over.
Today, as China prepares for next week’s signing of USA – China trade
deal lite, phase one, China news.
Chinese government shell firms buy cash-strapped companies for first time
January 9, 2020 /
8:57 AM
SHANGHAI/BEIJING
(Reuters) - Local government shell companies in China bought into struggling
privately run listed firms for the first time last year, veering from their
typical remit of financing infrastructure projects to pump over $2 billion into
cash-strapped businesses.
Local government financing vehicles (LGFVs) acquired controlling or near-dominant stakes in 11 China-listed firms, showed Reuters calculations based on stock exchange filings. They also bought into a handful of small, capital-starved banks.
The stimulus comes amid central government calls to aid struggling private-run businesses at a time when economic growth has slowed to its weakest pace in almost 30 years.
At the same time, the government has moved to curb LGFV activity to stem financial risk, calling on them to operate independently and banning local authorities from offering them implicit guarantees.
Buying into struggling firms, however, raises concern about the weight of LGFVs’ own debt pile which S&P Global Ratings said was as much as $6 trillion in October 2019 - a year in which they sold a record $430 billion worth of bonds.
Of last year’s 11 deals, the biggest was the $500 million Jinan Urban Construction Group Co Ltd paid for 26% of textile conglomerate Shandong Ruyi, which has racked up substantial debt after an international luxury brand buying spree.
In another deal, Harbin Economic Development & Investment Co and another government-backed asset manager bought a 48% controlling stake in Harbin Bank Co Ltd (6138.HK), loosening the lender’s ties with embattled conglomerate Tomorrow Holdings Co Ltd.
More
China opens up oil and gas exploration, production to foreign firms
January 9, 2020
/ 3:03 AM
SINGAPORE/BEIJING (Reuters) - China will for the first time allow
foreign companies to explore for and produce oil and gas in the country,
opening up the industry to firms other than state-run energy giants as Beijing
looks to boost domestic energy supplies.
The long-awaited opening comes alongside Beijing’s reshuffle in the
so-called “midstream” pipeline business, but experts say the policy relaxation
may not draw immediate interest from international drillers due to overall poor
asset quality of China’s hydrocarbon resources.
From May 1, 2020, foreign firms registered in China with net assets no
lower than 300 million yuan (33 million pounds) will be allowed to take part in
oil and gas exploration and production, the Ministry of Natural Resources said
at a media conference.
The change will also apply to domestic companies that meet the same
asset criteria.
“China is accelerating the sector reform due to growing energy security
concerns,” said Zhu Kunfeng, Beijing-based analyst with IHS Markit, “Vitalising
the industry by diversifying the participants, including foreign and private
investors, is the focus of that reform.”
China now imports 70% of crude oil it refines and nearly half its
natural gas consumption, and state firms face an uphill battle boosting
reserves and production outside China amid growing geopolitical risks.
Previously, international companies could enter the industry only via
joint-ventures or through cooperation with Chinese firms, mainly state-owned
majors such as China National Petroleum Company (CNPC), China Petrochemical
Corp (Sinopec) or their listed vehicles.
Mineral resources mining permits will be valid for 5 years at initial
registration, and can potentially be extended for another 5 years.
When firms apply for extensions, the government will automatically cut
the area of the mining/exploration zones by 25% from the originally registered
level, the ministry added.
The new rule on cutting the acreage size will effectively force state
firms which control most of the prospective oil and gas deposits to cede some
of their acreage, said a government official involved in the reform.
More
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?
Hundreds of cars destroyed by fire at Norway airport
January 08, 2020 09:09
AM
A major parking-garage fire at an airport on Norway's west
coast destroyed hundreds of cars, grounded air traffic and led to an evacuation
of the facilities.The fire, which started Tuesday afternoon and spread to several floors of the garage, was partly contained by 9:30 p.m. local time, Norwegian news agency NTB reported, citing police.
There were no reports of injuries from the fire on the outskirts of Stavanger, a city about 550 kilometers (340 miles) driving distance from the capital city of Oslo.
Fire fighters were still working to extinguish the blaze in the evening, and there was a risk the building could collapse, NTB reported, citing emergency services.
Hundreds of cars were destroyed in the fire, according to local newspaper Stavanger Aftenblad.
The vehicle garage in question has capacity for 3,000 cars and was nearly full when the fire started, according to broadcaster NRK.
The cause is unknown and under investigation, but local police said they were notified at about 3:30 p.m. that an electric car was on fire in the parking garage.
Norway has the most electric vehicles on the road per capita in the world.
All flights from Sola, as the airport is known, were canceled for the rest of the day, Avinor, the government-owned company that operates the airport, said on its website.
Another weekend and
perhaps I won’t bother getting an electric vehicle after all. My car insurer
would probably have me disappeared if my short circuit took out almost 3,000
other vehicles. If they didn’t, all the other owners probably would. In our new
arriving EV age, will multi story parking garages be able to get insurance and
employees?
Have a great weekend
everyone, stay tuned for further presidential tweets.
John Kenneth Galbraith
The monthly Coppock Indicators finished December
DJIA: 28,538 +91 Up. NASDAQ: 8,973 +125 Up.
SP500: 3,231 +114 Up.
All higher again, but it’s
not a buy signal I would take. The rally is all down to the Fed monetizing at a
rate of about 100 billion a month. I continue to look on the Fed’s latest stock
bubble as an exit rally.
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