Baltic Dry Index. 535 +18 Brent Crude 50.52 Spot
Gold 1586
Covid-19 Cases 08/2/20
China 35,010 Deaths 726 (Maybe.)
Covid-19 Cases
15/2/20 China 67,101
Deaths 1,526 (Maybe.)
Covid-19 Cases 22/2/20 China
77,816 Deaths
2,260 (Maybe.)
Covid-19 Cases 29/2/20 China
85,206 Deaths
2,923 (Maybe.)
“I'm normally not a
praying man, but if you're up there, please save me Superman.”
Fed Chairman Powell, with
apologies to Homer Simpson.
While the real economy is far more than
the sum of the central banksters global stock bubbles, they had managed since
last September to divorce the bubbles from all reality in the global economy.
Though the coronavirus crisis will
likely get the blame for being the pin that burst all of the central banksters’
bubbles, the bubbles were always going to burst at some point in 2020.
Keeping
the US bubbles going to November 3rd, and President Trump’s
re-election was always a tall order.
Barring a miracle from Superman, with
the new coronavirus mutating in a beneficial way, and largely going away, I
think the new global slowdown will be more slump than recession. Unemployment will rise as people try to avoid
crowds, travel, and spending.
The
velocity of money and activity will slow down.
With 5 to 6 trillion in global stock market
losses just this week, speculators and tracker hedge funds have to sell
everything and anything saleable to raise cash.
Margin call selling is probably over, stock and commodity fund selling
for redemptions is probably just getting started.
Central banksters will find that they’re
not gods either. Negative interest rates and helicopter money don’t solve a
pandemic coronavirus crisis.
Below, the new slump starts.
“Powell, you tried your
best, and you failed miserably. The lesson is: never try.”
Homer Simpson.
UPDATE 06:15 am
China February factory
activity contracts at record pace as coronavirus bites
February 29, 2020 / 1:55 AM
BEIJING (Reuters) - Factory activity in
China contracted at the fastest pace ever in February, even worse than during
the global financial crisis, highlighting the colossal damage from the
coronavirus outbreak on the world’s second-largest economy.
China’s
official Purchasing Managers’ Index (PMI) fell to a record low of 35.7 in
February from 50.0 in January, the National Bureau of Statistics said on
Saturday, well below the 50-point mark that separates monthly growth from
contraction.
Analysts
polled by Reuters expected the February PMI to come in at 46.0.
---- The data foreshadows that the economic disruption
from the virus will likely extend to the whole first quarter of 2020 since the
disease outbreak has caused widespread transport curbs and required tough
public health measures that have paralysed economic activity.
“We expect
year-on-year growth in all activity data to be negative in January-February as
China’s economy has been severely constrained since 23 January,” said analysts
at Nomura in a note after the data release, citing the extended Lunar New Year
holiday and the slow resumption of businesses.
Nomura now
expects first-quarter growth to be 2% year-on-year while Capital Economics
estimates China’s economy would contract outright in year-on-year terms this
quarter, the first time since at least the 1990s.
A sub-index
of manufacturing production nosedived to 27.8 in February from January’s 51.3
while a reading of new orders plunged to 29.3, down from 51.4 a month earlier.
More
Wall Street bounce too little, too late as world stocks post shock weekly decline
February 28, 2020 / 12:03 AM
NEW YORK (Reuters) - Coronavirus panic
sent world stock markets tumbling again on Friday, with an index of global
stocks setting its largest weekly fall since the 2008 global financial crisis,
and over $5 trillion wiped from global market value this week.
U.S. stocks
shaved most of the day’s losses late in the New York session but only the
Nasdaq eked out a positive close. The Dow lost nearly 3,600 points this week
and the S&P 500 posted a double-digit weekly percentage loss for only the
fifth time since 1940.
Yields on
U.S. government bonds, widely seen as the world’s most secure asset, ended the
day near the fresh record lows. [US/]
Disruptions
to international travel and supply chains, school closures and cancellations of
major events have all blackened the outlook for a world economy that was
already struggling with fallout from the U.S.-China trade war.
Hopes the
epidemic, first detected in China in December, would be over swiftly and
economic activity quickly return to normal have been shattered. Countries other
than China now account for about three-quarters of new infections.
“The uncertainty hovering over the markets will only be alleviated when there is a sense that the worst is almost over,” said Quincy Krosby, chief market strategist at Prudential Financial Inc. “Until then it is risk off.”
The Dow Jones Industrial Average .DJI fell 357.28 points, or 1.39%, to 25,409.36, and the S&P 500 .SPX lost 24.54 points, or 0.82%, to 2,954.22. The Nasdaq Composite .IXIC added 0.89 points, or 0.01%, to 8,567.37.
MSCI’s gauge of stocks across the globe .MIWD00000PUS shed 1.76% for a weekly loss over 10%, its second largest on record.
The over $5 trillion lost in market capitalization globally this week is roughly equivalent to Japan’s yearly GDP, the third-largest in the world.
More
Coronavirus spreads in three continents; $5 trillion wiped off markets
February 28, 2020 / 2:01 AM
GENEVA/BEIJING (Reuters) - Countries on
three continents reported their first cases of the coronavirus on Friday as the
world prepared for a pandemic and investors dumped equities in expectation of a
global recession.
Coronavirus
panic sent world share markets crashing again, compounding their worst week
since the 2008 global financial crisis and bringing the wipeout to $5 trillion
(3.8 trillion pounds). [MKTS/GLOB]
Hopes that
the epidemic that started in China late last year would be over in months, and
that economic activity would quickly return to normal, have been shattered as
the number of international cases have spiralled.
“Investors
are trying to price in the worst-case scenario and the biggest risk is what
happens now in the United States and other major countries outside of Asia,”
said SEI Investments Head of Asian Equities John Lau.
“These are
highly uncertain times, no one really knows the answer and the markets are
really panicking.”
Mainland
China reported 327 new cases, the lowest since Jan. 23, taking its tally to
more than 78,800 cases with almost 2,800 deaths.
But as the
outbreak eases in China it is surging elsewhere.
Four more
countries reported their first cases, taking the number of countries and
territories outside China with infections to 55, with more than 4,200 cases
killing about 70 people.
Countries
other than China now account for about three-quarters of new infections.
An Italian
man who arrived in Nigeria was confirmed as the first coronavirus case in
Africa’s most populous country. And a person who returned on a flight from Iran
became the first in New Zealand.
In eastern
Europe, Belarus and Lithuania reported their first cases.
Ratings agency Moody’s said a pandemic -
usually taken to mean a disease spreading quickly in different places - would
trigger global and U.S. recessions in the first half of the year.
More
Mexico confirms first case of coronavirus
February 28, 2020 / 1:44 PM
MEXICO CITY
(Reuters) - Mexican authorities said on Friday they have confirmed the first
case of coronavirus in Mexico, in what is only the second case in Latin
America.
A patient
with a possible coronavirus infection went through a second test that turned up
positive results early on Friday, Deputy Health Minister Hugo Lopez-Gatell
Ramirez told reporters.
Global downturn looms as countries struggle to contain coronavirus outbreak
February 28, 2020 / 2:01 AM
GENEVA/BEIJING
(Reuters) - The coronavirus spread further on Friday, with cases reported for
the first time in at least six countries across four continents, battering
markets and leading the World Health Organization (WHO) to raise its impact
risk alert to “very high.”
Hopes that
the epidemic that started in China late last year would be over in months, and
that economic activity would quickly return to normal, have been shattered.
World shares
were on course for their largest weekly fall since the 2008 financial crisis,
bringing the global wipeout to $5 trillion as supply chains were disrupted,
travel plans postponed and major events cancelled.
The WHO said
it was raising its assessment of the global risk to ‘very high’ from ‘high’,
which its head of emergencies Dr Mike Ryan said was intended to put national
authorities on full alert.
“I think
this is a reality check for every government on the planet - wake up, get
ready, this virus may be on its way and you need to be ready,” Ryan said.
The latest
WHO figures indicate over 82,000 people have been infected, with over 2,700
deaths in China and 57 deaths in 46 other countries.
Mexico,
Nigeria, New Zealand, Lithuania, Belarus and Azerbaijan reported their first
cases, all with travel history connected to epicentres in Italy and Iran.
Mexico is the second Latin American country to register the virus, after
Brazil.
----
Potentially making it even harder to eradicate, a growing number of discharged
coronavirus patients in China and elsewhere are testing positive again,
sometimes weeks after being allowed to leave the hospital.
More
Swiss government bans all events over 1,000 people
By Associated Press Published: Feb 28, 2020 5:12 a.m. ET
GENEVA (AP)
— The Swiss government announced an immediate ban Friday on all “public and
private” events in the country involving more than 1,000 people as a measure to
halt the spread of COVID-19.
The measure
announced Friday comes will last until at least March 15, officials said.
Among the
events that will be effected are the annual Geneva International Motor Show,
which was due to take place from March 5-15 and draws tens of thousands of
visitors every year. Organizers of the auto show did not provide immediate
comment on the Swiss government announcement.
The
government said it was “aware that this measure will have a significant impact
on public life in Switzerland.”
“However,
the move is expected to provide effective protection to people in Switzerland
and to public health,” the government said. “It should prevent or delay the
spread of the disease in Switzerland, thus reducing its momentum.”
For events
with fewer than 1,000 people, organizers “must carry out a risk assessment in
conjunction with the competent cantonal (state) authorities to decide whether
or not the event can be held,” the government said
Switzerland
has reported 15 confirmed cases of the new coronavirus. It borders northern
Italy, which has seen the largest cluster of cases in Europe.
Switzerland's Palexpo informs carmakers Geneva car show cancelled - sources
February 28, 2020 / 10:22 AM
FRANKFURT
(Reuters) - The organisers of the Geneva car show, Palexpo, have informed
carmakers that the international auto show has been called off due to
coronavirus concerns, three people familiar with the matter told Reuters.
A
spokeswoman for Palexpo declined to comment.
---- The car show was set to begin next week but had already seen some high profile executives cancel their attendance.
Restrictions
on travel and fears of the spread of the coronavirus have caused other fairs
including the Mobile World Congress in Barcelona, Frankfurt’s Light + Building
fair and the Beijing Auto Show to be postponed or cancelled.
Tokyo Disneyland to close through mid-March on coronavirus concerns
February 28, 2020 / 3:00 AM
TOKYO (Reuters) - Tokyo Disneyland will be closed starting
from Saturday through to March 15 due to concerns about coronavirus infections
spreading in Japan, its operator said on Friday, leaving all of Walt Disney
Co’s (DIS.N) theme parks
in Asia temporarily shut. Both Tokyo Disneyland and DisneySea will be closed after a government recommendation that big gatherings and events be curtailed for two weeks, park operator Oriental Land Co Ltd (4661.T) said.
The move
also comes after Prime Minister Shinzo Abe called for all schools to close to
stop the coronavirus spreading.
“We plan to
reopen on March 16, but we will make an announcement after keeping close
contact with relevant institutions,” Oriental Land said on its website.
It said it
would inform ticket holders of policies on refunds.
Disney’s
Shanghai and Hong Kong theme parks remain closed for more than a month, and the
company earlier this month warned of a negative impact on its second quarter
results.
It said on
an earnings call on Feb. 5 that closure of the Shanghai park could impact
operating profit by about $135 million if closed for 2 months.
Malaysia's AirAsia X defers A330neo deliveries as coronavirus crimps demand
February 28, 2020 / 4:31 AM
KUALA LUMPUR/SYDNEY (Reuters) - Malaysian
long-haul budget airline AirAsia X Bhd (AIRX.KL) said it will defer
delivery of 78 Airbus SE (AIR.PA)
A330neo planes and consider other changes to reduce its fleet as the coronavirus
dents demand.
AirAsia X
said late on Thursday it might sell two A330s that could fetch up to $100
million (£77 million) and return five others to lessors early, adding it was
already in negotiations with lessors about a targeted 30% cut in lease rates.
The airline
cancelled 600 flights in March, according to an investor presentation published
after it released financial results showing a widened net loss and flagging
lower forward bookings and fares under pressure.
Flights to
and from mainland China accounted for about 30% of AirAsia X’s capacity before
the outbreak of the virus. It has a fleet of 24 A330 planes.
AirAsia X
shares fell by 5% on Friday to a record low after it posted a net loss of 95.8
million ringgit (£17.4 million), worsening from an 88.1 million ringgit loss a
year ago.
The carrier
last August reached a revised deal with Airbus to take 78 A330neos and 30
long-range A321XLR narrowbodies, down from earlier plans for 100 A330neos.
AirAsiaX is Airbus’ biggest customer for the A330neo, a more fuel efficient
version of the older A330 model.
AirAsia X
said delivery of the A330neos would be deferred and it would move toward a
dual-fleet strategy with A321s set to replace its A330s on routes of four to
six hours when demand recovers.
More
IAG says can't give guidance due to coronavirus
Published: Feb 28, 2020 3:06 a.m. ET
International
Consolidated Airlines Group SA said Friday that net profit in 2019 fell 40%,
and given the current coronavirus epidemic it wasn't able to give accurate
profit guidance for 2020.
The airline
group--which houses British Airways, Iberia, and Vueling among others--said net
profit for the year was 1.72 billion euros ($1.88 billion) compared with
EUR2.89 billion in 2018.
Revenue
increased to EUR25.51 billion compared with EUR24.41 billion the year before.
----The company said its earnings outlook for the year was being affected by weaker demand stemming from the coronavirus epidemic and that it was redeploying some of its freed-up long-haul capacity to routes with stronger demand.
IAG said
capacity on Italian routes has been significantly reduced through cancellations
and change of aircraft gauge, and that further capacity reductions will be
activated over the coming days.
"Our
operating companies will continue to take mitigating actions to better match
supply to demand in line with the evolving situation. Cost and revenue
initiatives are being implemented across the business," the company said.
EasyJet to cancel flights and cut costs as coronavirus hits demand
Published: Feb 28, 2020 2:28 a.m. ET
European budget carrier easyJet PLC said Friday that it
will cancel some flights and launch cost-cutting measures as the coronavirus
outbreak has hit demand in Italy and other European markets.The company EZJ, +0.23% said it has experienced a significant weakening of demand and load factors into and out of its northern Italian bases, as well as slower demand across its other European markets following increased incidents of Covid-19 cases in northern Italy.
The company said it is adapting its flying program to support demand. The canceled flights are particularly those into and out of Italy, easyJet said.
It is too early to determine what the impact of coronavirus will be on the company’s outlook for the current year, it said.
Hyundai Motor halts work at factory after worker tests positive for coronavirus
February 28, 2020 / 2:39 AM
SEOUL (Reuters) - Hyundai Motor (005380.KS)
shut down a factory in South Korea on Friday after a worker tested positive for
the new coronavirus, disrupting production of popular models such as Palisade
sport utility vehicle.
Shares of the automaker ended down more than 5% after the news, while the wider market .KS11 was down 3.3%. The closing dealt a fresh setback to Hyundai Motor, which has gradually resumed production at local plants hit by a Chinese parts shortage in the wake of the virus outbreak.
South Korea has the most infected people outside China, affecting companies like Samsung and Hyundai. South Korea on Friday reported 256 new cases, bringing the total number of infected to 2,022, as the world prepared for a global recession.
“The company has also placed colleagues who came in close contact with the infected employee in self-quarantine and taken steps to have them tested for possible infection,” Hyundai Motor said in a news release.
The company added that it was disinfecting the factory. It did not say when production would resume.
More
Finally,
some common sense from one of the best economists in the west. Central
banksters can’t do much in a pandemic. Forget a “V” shaped recovery. It’s much
more likely to be “L” shaped, once the long freefall ends.
Markets are too complacent about coronavirus despite sell-off
Assumption after assumption about the
impact of the outbreak has been proven wrong
----The idea of a V-shaped recovery is
nonsensical. Suppose that the best Goldilocks scenario does occur: the shock to
China hits only the first quarter and the contagion is mostly contained to the
country. If its output shrinks just 2 per cent in the first quarter, that is an
annualised contraction of 8 per cent. A V-shaped rebound would therefore
require the same annualised growth, which exceeds the 6 per cent that China
managed before the virus.
Assuming that China will rebound at this rate
in the final three quarters of the year — which would imply growth in 2020 of 4
per cent — is heroically optimistic. It is more likely that a V-shape shows
growth returning to a pre-virus annualised level of 6 per cent from the second
quarter onwards. In this case, China’s calendar-year growth would be 2.5 per
cent.
Compare both the rosy and more realistic scenario with current market expectations, which have revised growth estimates for China from 6 per cent to 5.5 per cent, and you can see how investors are still delusional. An annual growth rate in the range of 2.5-4 per cent would also be a major shock to global growth and to other economies.
Compare both the rosy and more realistic scenario with current market expectations, which have revised growth estimates for China from 6 per cent to 5.5 per cent, and you can see how investors are still delusional. An annual growth rate in the range of 2.5-4 per cent would also be a major shock to global growth and to other economies.
More
https://www.ft.com/content/e0ca01ee-57cb-11ea-abe5-8e03987b7b20
This weekend’s musical diversion. Vivaldi
again. Manic music for manic times.
"This
Crisis Will Spill Over and Result in a Disaster"
Economist Nouriel Roubini correctly
predicted the 2008 financial crisis. Now, he believes that stock markets will
plunge by 30 to 40 percent because of the coronavirus. And that Trump will lose
his re-election bid.
Interview Conducted by Tim Bartz
27.02.2020, 18:04 Uhr
Nouriel Roubini is one of the
most prominent and enigmatic economists in the world. He correctly predicted
the bursting of the U.S. housing bubble in addition to the 2008 financial
crisis along with the ramifications of austerity measures for debt-laden
Greece. Roubini is famous for his daring prognostications and now, he has
another one: He believes that coronavirus will lead to a global economic
disaster and that U.S. President Donald Trump will not be re-elected as a
result.
More
Vivaldi: La Folia (Madness) -- Apollo's Fire
"English? Who needs
that? I’m never going to England."
Homer Simpson.
The monthly Coppock Indicators
finished February
DJIA: 25,409
-75 Down. NASDAQ: 8,567 +171 Up. SP500: 2,954 +133 Up.
A mixed bag. But given the severity of the still growing coronavirus
crisis, I wouldn’t follow technical signals in what I think will turn into the
first depression since the 1930s.
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