Baltic Dry Index. 525 -14 Brent Crude 59.20 Spot Gold 1577
Never ending Brexit now January 31. 2 days away.
Trump’s Nuclear China Tariffs Now in effect.
The USA v EU trade war started October 18. Now in effect.
J.P. Morgan economists on Thursday said a big negative shock in the current quarter could knock China’s growth from a previously-forecast 6.3% to 4.9%, for a year-on-year figure of 5.6%. ING economists made a similar forecast on Wednesday.
Are we getting the truth about the new coronavirus outbreak
in China? I suspect not. But without any hard facts to back up my suspicions, I
will keep my suspicions to myself.
Yesterday we started to get the first early, and likely
wrong, estimates of the hit to the Chinese economy, the world’s second largest.
My guess is that the early estimates will be far too optimistic.
Airlines are cancelling flights to China, cruise lines
are dropping Hong Kong and China, high end retail tourism has crashed. Disney and Ikea closed, and sports events in China are cancelled entirely, or postponed into next
year.
Worse, as goes China so goes a whole lot of the global
economy. If “Dr Copper” is signalling correctly, be prepared for a new global
recession later in the year.
Below, Asian stocks slide towards a new bear market.
Virus fears push Asian stocks to seven-week low, boost safe-haven assets
January 30, 2020 /
1:45 AM
SINGAPORE
(Reuters) - Asian stocks and currencies fell on Thursday as the death toll from
a new virus spreading in China rose and more cases were reported around the
world.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 1.7% to an almost seven-week low. It has dropped for six straight sessions.
Japan's Nikkei .N225 dropped 2%. Hong Kong's Hang Seng .HSI fell 1.7% and has lost more than 8% in the 10 days since the spread of the virus roiled markets.
Taiwan's benchmark index .TWII slumped 4.9%, which if sustained would be its biggest daily drop in 15 months, in its first session since the Lunar New Year break. The Taiwan dollar TWD=TP fell half a percentage point to its lowest this year.
Yields on benchmark 10-year U.S. Treasuries, which fall when prices rise, hit a three-month low of 1.5600% US10YT=RR.
China’s National Health Commission said on Thursday the total number of confirmed deaths from the coronavirus in the country climbed to 170 as of late Wednesday and the number of infected patients rose to 7,711.
Infections have been reported in at least 15 other countries and in every province of mainland China. Sweden’s IKEA said on Thursday that it has temporarily closed all its stores in China because of the outbreak of the new coronavirus.
---- J.P. Morgan economists on Thursday said a big negative shock in the current quarter could knock China’s growth from a previously-forecast 6.3% to 4.9%, for a year-on-year figure of 5.6%. ING economists made a similar forecast on Wednesday.
More
China halts domestic soccer to contain coronavirus spread
January 30, 2020
/ 2:51 AM
SHANGHAI (Reuters) - The Chinese Football Association (CFA) said on
Thursday it is postponing all domestic games due to the rapidly spreading
coronavirus epidemic as the total number of confirmed deaths from the newly
identified pathogen in the country rose to 170.
Chinese health authorities said there were 7,711 confirmed cases of
infection as of the end of Wednesday, mostly in Hubei province, while
infections have been reported in at least 15 other countries.
The virus has had a major impact on China’s sporting landscape, with
several events cancelled and the country’s Olympic women’s soccer team
quarantined in Australia.
On Thursday, the CFA said in a statement on its website that football games
at all levels would be postponed in order to help control the virus spread.
---- The Chinese women’s soccer team had travelled to Australia to play in an Olympic qualifying tournament but will remain quarantined in a Brisbane hotel.
Queensland Chief Health Officer Jeannette Young said the players were
healthy and being checked every day.
---- The Olympic tournament had originally been scheduled to be held in Wuhan, where the virus is believed to have originated, before it was switched to Nanjing and later transferred out of China to Sydney.
The Chinese team, who were scheduled to play their first match on Feb.
3, arrived in Brisbane on Wednesday and have been told to remain in their hotel
rooms until Feb. 5.
Late on Wednesday, the World Athletics Indoor Championships, scheduled
to take place in Nanjing in March, was postponed until 2021 over fears related
to the coronavirus outbreak, the sport’s governing body said.
The
governing bodies of several other sports, including skiing, badminton, tennis
and basketball, have also been forced into rearranging events, weighing
possible changes or monitoring the implications of the outbreak.
Reporters Claim To Have Proof China Lying About Virus Death Toll As Total Cases Near 8,000; Another 12,000 Suspected
China's NHC just released another up . China now admits to 7,771 cases across the country, Adding nearly 1,800 from 5,974 yesterday. The death toll has climbed to 170, and 170 patients have been cured. Some 31 cases were labeled "severe" and nearly 82,000 are under observation. What is perhaps most shocking is that the number of suspected cases soared by nearly 3,000 overnight from 9,239 to 12,167.
In another major development, state media reports that the first case of coronavirus has been confirmed in Tibet. It was the only region in China with zero confirmed cases, though that streak is now over.
In a disturbing development, three of the Japanese citizens rescued from Wuhan aboard Japan's evac flight Wednesday have tested positive for cornavirus - so now the Japanese government is essentially importing the virus on the evacuation flight. We hope all those on the flight will be quarantined for a while given the virus's reputation of spreading asymptomatically.
More
In other news, a new reality has started to sink in. As
usual, in central bank speak, they never see recession coming.
Fed chair sees China virus as possible risk to world economy
WASHINGTON (AP) — Just as the outlook for the
global economy had been brightening in recent months, a new threat has suddenly
emerged in the form of the viral outbreak in China.
That was the cautionary message that Chairman
Jerome Powell delivered Wednesday after the Federal Reserve held interest rates
low after its latest policy meeting.
Speaking at a news conference, Powell said the
signing of a preliminary U.S.-China trade deal earlier this month, the
resolution of Brexit and continuing low interest rates in the United States and
abroad had suggested that the world economy would start to expand more quickly
after being held back by trade conflicts. That scenario is now complicated by
the emergence of the virus.
“There is likely to be some disruption to
activity in China and globally,” Powell said. “It’s very uncertain how far it
will spread and what the (economic) effects will be in China, for its trading
partners, and around the world.... We are very carefully monitoring the
situation.”
Even so, Powell said he thinks there are “there
are signs and reasons to expect” a global economic rebound. And he said the
initial U.S.-China trade agreement and a new trade pact among the U.S., Canada
and Mexico that President Donald Trump signed into law Wednesday could
potentially boost the U.S. economy.
More
ECB data point to widening split in euro zone economy
January 29, 2020
/ 10:21 AM
FRANKFURT (Reuters) - Bank lending to euro zone companies dropped to a
two-year low last month while household lending expanded to a
post-financial-crisis high, suggesting a widening rift in the bloc’s economy,
European Central Bank data showed on Wednesday.
Many companies in the euro zone are struggling with plunging trade and a
manufacturing recession, but consumers remain relatively optimistic. Wages and
employment are still rising and the service sector continues to expand.
Lending growth to non-financial corporations slipped to 3.2% from 3.4% a
month earlier, the lowest figure in 24 months. At the same time, lending to
households accelerated to 3.7% from 3.5%, the best reading in 11 years.
Hoping to prop up growth, the ECB introduced a controversial stimulus
package in September, aimed at cutting credit costs to keep money flowing to
businesses while growth was slowing. Recent surveys indicate stabilisation, but
Wednesday’s lending figures add nuance to that picture.
The monthly flow of loans to businesses was just 0.7 billion euros, less
then a tenth of the average monthly flow last year and the second-worst monthly
reading all year.
The drop came as companies shied away from long-term credit, the segment
the ECB is hoping to boost with ultra cheap funding.
The 23.8 billion-euro monthly flow of household loans, meanwhile, was
the best figure since early 2008 as consumers were picking up cheap mortgages.
The mortgage lending figure comes just days after an ECB board member
warned that ultra-easy policy may be fuelling bubbles, particularly in the
housing market, and the ECB could be sowing the seeds of the next crisis.
The annual growth rate of the M3 measure of money supply, which often
serves as an indicator of future activity, dropped to 5.0%, undershooting
expectations for 5.5%.
Finally, did we just hit Peak Autos? And if we did,
what does that mean for the global economy and jobs?
World may have hit peak car output, says auto-parts supplier Bosch
January 29, 2020 /
9:11 AM
STUTTGART,
Germany (Reuters) - Global automotive production may have peaked, auto supplier
Robert Bosch said on Wednesday, announcing job cuts and a review of its
business to cope with a 44% drop in full-year operating profit and a downturn
in demand for cars.
Global automotive production is expected to fall for the third
consecutive year, by 2.6% to 89 million vehicles in 2020, following a drop in
demand in China, Europe and the United States, the Stuttgart-based car parts
supplier said.
“It could well be that we have passed the peak of automotive
production,” Bosch CEO Volkmar Denner said.
He also said he assumed the low level would remain constant and did not
expected an increase in global automotive production before 2025, while the
market would shrink by 10 million units in 2020 compared with 2017.
---- A shift to electric cars is expected to create opportunities longer term, but will impact jobs in the near term, Denner said.
Ten workers are needed to make a diesel injection system, three for a
gasoline system, and one to produce an electric motor, he said.
As a result, Bosch has said staff adjustments will be made where
necessary, including shorter working hours, voluntary redundancy and severance
packages, although Bosch declined to provide a global figure for headcount
reductions.
Already last year, Bosch reduced its headcount by 6,800 to 402,800, with
2,000 jobs cut in Germany and 3,600 positions reduced in Asia Pacific.
More
In central banking as in diplomacy, style, conservative
tailoring, and an easy association with the affluent count greatly and results
far much less.
John Kenneth Galbraith
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled
over.
Below, more on that new reality.
Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof.
John Kenneth Galbraith
Bosch CEO warns coronavirus could hit global auto supply chains
January 29, 2020
/ 9:07 AM
STUTTGART, Germany (Reuters) - The chief executive of Robert Bosch, the
world’s biggest auto components supplier, warned that coronavirus could impact
its global supply chain, which is heavily dependent on China.
“We are naturally concerned, but on the basis of the facts today, we
have no disruption to our business or supply chain,” Chief Executive Volkmar
Denner said at a meeting with journalists in Fellbach, Stuttgart on Tuesday, in
remarks which were embargoed for Wednesday.
Bosch is relying on China as a global manufacturing base for exporting
electric motors, transmission and power electronics for electric cars.
“We need to wait to see how things develop. If this situation continues,
supply chains will be disrupted. There are forecasts that predict the peak for
infections will drag on until February or March,” Denner said.
“In Wuhan Bosch has two plants making steering systems and
thermotechnologies, with around 800 employees. There have been no reports of
infections,” Denner said.
Bosch’s China plants have been shut for Chinese new year and the holiday
has been extended to February 3, an extension which will not disrupt Bosch’s
global business, Denner explained.
Bosch has been in China since 1909 and has 23 automotive manufacturing
facilities in more than 60 locations in the world’s largest auto market, which
is home to the largest Bosch workforce outside of Germany.
Bosch employs 403,000 people globally.
Bosch makes multimedia infotainment systems in Wuhu, brake booster
systems in Nanjing, automotive electronics for use in connected and automated
driving in Wujin, 48-volt battery systems in Wuxi and builds electric vehicle
motors, transmissions, and power electronics in Taicang.
More
British Airways suspends direct flights to mainland China amid virus fears
January 29, 2020 /
7:02 AM
LONDON (Reuters) -
British Airways (ICAG.L) has suspended
all direct flights to and from mainland China, one of the biggest names in
aviation to do so, as worries grow about the impact of a spreading coronavirus
on global travel.
Direct flights to the Chinese-ruled autonomous region of Hong Kong were unaffected.
BA’s move followed some flight cancellations to China by U.S. airline United Airlines Holdings Inc (UAL.O) which blamed a sharp fall in demand.
---- UK-based airline Virgin Atlantic said its flights to Shanghai would continue to operate as scheduled.
British Airways usually flies daily between London’s Heathrow airport
and both Beijing and Shanghai.
---- According to analysts, IAG (ICAG.L), the group which owns BA and Iberia, is less exposed to the Asia-Pacific region on a capacity basis compared to rival European airlines like Air France-KLM (AIRF.PA) and Lufthansa (LHAG.DE).
Asia Pacific accounts for about 19% of both Air France-KLM and Lufthansa’s available seat kilometres and 8% of IAG’s in 2019, Goodbody analysts said.
more
No hot meals, blankets, magazines as airlines step up fight on virus
January 29, 2020
/ 6:40 AM
BANGKOK (Reuters) - Passengers on some flights to China will have to
make do without hot meals, blankets and newspapers, as airlines step up
measures to protect crew and travellers from a new virus that has killed more
than 130 in the country.
Seeking to contain the spread of the coronavirus by reducing personal
contact, Taiwan’s China Airlines said it was encouraging passengers to bring
their own drinks bottles and would limit re-usable items by replacing them with
disposables.
The airline and its regional arm Mandarin Airlines stopped from Monday
serving hot meals and have replaced tablecloths and napkins with paper towels
on cross-strait and Hong Kong flights.
They have also stopped providing blankets, pillows, towels, magazines
and newspapers, while drinks and disposable headphones are supplied only on
request.
“The seat back pocket will only contain the aircraft safety card and
sick bag,” said Tigerair Taiwan, also a member of China Airlines group, adding
duty-free sales were also not available.
Hong Kong’s Cathay Pacific Airways Ltd said on Wednesday amenities such
as hot towels, blankets and magazines would not be offered on flights to and
from mainland China from Thursday until further notice.
More
China virus outbreak poses new threat to fragile global economy
By Associated Press Published: Jan 28, 2020 5:16 p.m. ET
This should be peak season for a 12-room hotel near the train station in
the Chinese industrial hub of Wuhan. The Chinese New Year usually brings in
plenty of travelers and delivers profits of around $3,000 a month.
But the place is empty. Wuhan, the center of a deadly viral outbreak, is
on lockdown. “There is not a single customer,’’ said the hotel’s owner, who
gave only his surname, Cui. He still has to pay rent and his utility bills.
Instead of counting his earnings, he’s expecting to lose $1,500 a month.
The outbreak arrives at a bad time for Wuhan, China and the world
economy.
China, with the world’s No. 2 economy, was decelerating even before the
coronavirus hit.
And the world economy is coping with an unexpectedly sharp slowdown in
No. 7 India, which prompted the International Monetary Fund last week to
downgrade its outlook for global growth this year.
The coronavirus is drawing comparisons to the SARS outbreak, which
paralyzed the economies of China and Hong Kong for weeks in 2003. But what
happens in China carries a lot more weight these days: In 2003, China accounted
for 4% of global output. Now its share is 16%, according to the World Bank.
“A growth slowdown in China could have sizable ripple effects across
Asia and the rest of the world, given the size of China’s economy and its role
as the key driver of global growth in recent years,” said Eswar Prasad, a
Cornell University economist and former head of the International Monetary
Fund’s China division.
No one knows exactly how the outbreak will play out or what its economic
impact will be.
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?
Method detects defects in 2D materials for future electronics, sensors
Date:
January 27, 2020
Source:
Penn State
Summary:
To further shrink electronic devices and to lower energy consumption, the
semiconductor industry is interested in using 2D materials, but manufacturers
need a quick and accurate method for detecting defects in these materials to
determine if the material is suitable for device manufacture.
Now a team of
researchers has developed a technique to quickly and sensitively characterize
defects in 2D materials.
Two-dimensional materials are atomically thin, the most well-known being
graphene, a single-atom-thick layer of carbon atoms.
"People have struggled to make these 2D materials without
defects," said Mauricio Terrones, Verne M. Willaman Professor of Physics,
Penn State. "That's the ultimate goal. We want to have a 2D material on a
four-inch wafer with at least an acceptable number of defects, but you want to
evaluate it in a quick way."
The researchers' -- who represent Penn State, Northeastern University,
Rice University and Universidade Federal de Minas Gerais in Brazil -- solution
is to use laser light combined with second harmonic generation, a phenomenon in
which the frequency of the light shone on the material reflects at double the
original frequency. They add dark field imaging, a technique in which
extraneous light is filtered out so that defects shine through. According to
the researchers, this is the first instance in which dark field imaging was
used, and it provides three times the brightness of the standard bright field
imaging method, making it possible to see types of defects previously
invisible.
"The localization and identification of defects with the commonly
used bright field second harmonic generation is limited because of interference
effects between different grains of 2D materials," said Leandro Mallard, a
senior author on a recent paper in Nano Letters and a professor at
Universidade Federal de Minas Gerais. "In this work we have shown that by
the use of dark field SHG we remove the interference effects and reveal the
grain boundaries and edges of semiconducting 2D materials.
Such a novel
technique has good spatial resolution and can image large area samples that
could be used to monitor the quality of the material produced in industrial
scales."
Vincent H. Crespi, Distinguished Professor of Physics, Materials Science
and Engineering, and Chemistry, Penn State, added, "Crystals are made of
atoms, and so the defects within crystals -- where atoms are misplaced -- are
also of atomic size.
"Usually, powerful, expensive and slow experimental probes that do
microscopy using beams of electrons are needed to discern such fine details in
a material," said Crespi. "Here, we use a fast and accessible optical
method that pulls out just the signal that originates from the defect itself to
rapidly and reliably find out how 2D materials are stitched together out of grains
oriented in different ways."
Another coauthor compared the technique to finding a particular zero on
a page full of zeroes.
"In the dark field, all the zeroes are made invisible so that only
the defective zero stands out," said Yuanxi Wang, assistant research professor
at Penn State's Materials Research Institute.
The semiconductor industry wants to have the ability to check for
defects on the production line, but 2D materials will likely be used in sensors
before they are used in electronics, according to Terrones. Because 2D
materials are flexible and can be incorporated into very small spaces, they are
good candidates for multiple sensors in a smartwatch or smartphone and the
myriad of other places where small, flexible sensors are required.
More
"In
economics, hope and faith coexist with great scientific pretension."
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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