Baltic Dry Index. 453 -13 Brent Crude 54.60 Spot Gold 1560
Brexit Freedom Underway
Trump’s Nuclear China Tariffs Now in effect.
Coronavirus Cases 5/2/20 China 24,583
Deaths 494
"There
is no means of avoiding the final collapse of a boom brought about by credit
expansion. The alternative is only whether the crisis should come sooner as the
result of voluntary abandonment of further credit expansion, or later as a
final and total catastrophe of the currency system involved."
Ludwig
von Mises
We are all privileged, we are living in the greatest
stock market disconnect from reality ever! Enjoy it before the inevitable bust
arrives.
Call it the “Repo Monetary Madness Bubble,” the Fear of
Missing Out Bubble, (FOMO,) or even The Great Insanity, but while with each
passing day the coronavirus crisis massively drops global activity and with it
the global economy, stocks and shares bubble on as if nothing has happened.
Below, the greatest disconnect from a still out of
control coronavirus crisis. To this old dinosaur commodities trader, a classic time
to sell most commodities and stocks.
Asia stocks rise, oil rebounds but China virus toll mounts
February 5, 2020 /
12:52 AM
TOKYO (Reuters) -
Asian stocks steadied on Wednesday as Chinese shares moved higher on hopes of
additional stimulus to cushion the economic blow from a coronavirus outbreak,
but risks remain as the illness continued to spread and the death toll neared 500.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.6%.
Shares in China rose 1.66% while stocks in Hong Kong climbed 0.52%.
Oil prices bounced by around 1% on hopes for more output cuts from OPEC
and its allies but sentiment remained weak on worries about a long-term dent in
demand for energy and other commodities.
The onshore yuan was little changed versus the dollar, highlighting the
cautious mood as investors monitor the impact of the virus.
Euro Stoxx 50 futures were down 0.19%, German DAX futures were down
0.04%, while FTSE futures were down 0.29% in a sign European equities are
poised for a cautious start to trading.
China and other countries have imposed travel restrictions to try to
contain a new virus that emerged in the central Chinese city of Wuhan late last
year, slamming the breaks on manufacturing and tourism in the world’s
second-largest economy.
Many investors argue that any slowdown will be temporary and that
Chinese policy steps are reason to remain optimistic about the growth outlook,
but so far public health officials have not found a way to stop the spread of
the virus both inside and outside of China.
More
China virus toll nears 500; cruise ships, Hong Kong flights hit
February 5, 2020
/ 1:47 AM
BEIJING/SHANGHAI
(Reuters) - The death toll from a coronavirus outbreak in China passed 490 on
Wednesday, as two U.S. airlines suspended flights to Hong Kong following the
first fatality there and 10 cases were confirmed on a cruise ship quarantined
in Japan.
China’s National Health Commission said another 65 deaths were reported
on Tuesday, a new daily record bringing the toll on the mainland to 490, mostly
in and around the locked-down central city of Wuhan where the virus emerged
late last year.
There have been two deaths outside mainland China. A 39-year-old man in
Hong Kong with an underlying illness who had visited Wuhan city died on
Tuesday. A man died in the Philippines last week after visiting Wuhan, the
first virus-related overseas fatality.
---- Ten people on a cruise liner under quarantine at the Japanese port of Yokohama tested positive for coronavirus, Japan’s health minister said, a figure that could rise as medical screening of thousands of patients and crew continued.
The 10 infected people will be transported to a medical facility, while the remaining around 3,700 people will be quarantined on board the Carnival Corp (CCL.N) ship Diamond Princess for 14 days.
There are now 33 cases in Japan.
“I want to take sufficient care of the health of passengers and crew and make every effort to prevent the spread of the virus,” Health Minister Katsunobu Kato told a media briefing.
Carnival on Tuesday cancelled cruises scheduled to depart the Japanese ports of Yokohama and Kobe this week because of delays related to the coronavirus checks.
Another cruise ship, the World Dream operated by Dream Cruises, docked
in Hong Kong on Wednesday after being denied entry to Taiwan, with all
passengers and crew undergoing health checks, Hong Kong’s Cable TV reported.
Nearly 230 cases have been reported in 27 other countries and regions
outside mainland China, according to a Reuters tally based on official
statements from the authorities involved.
---- Nearly $700 billion was wiped off mainland Chinese stocks on Monday and many factories remain closed, cities cut off and travel in and out of China severely restricted, fuelling worries about global supply chains.
White House economic adviser Larry Kudlow said the epidemic would delay
a surge in U.S. exports to China expected from the Phase 1 trade deal set to
take effect later this month.
Bank of Japan Deputy Governor Masazumi Wakatabe said the central bank of
the world’s third-biggest economy was ready to ramp up stimulus measures,
citing “heightening uncertainties regarding the impact of the spread of the coronavirus”
among other headwinds.
More
China Caixin services PMI hits 3-month low
By MarketWatch
Published: Feb 4, 2020 9:55 p.m. ET
BEIJING--Growth of activity in China's service sector slowed to a
three-month low, a private gauge showed Wednesday, contrasting with official
data that showed a faster expansion.
The Caixin China services purchasing managers index fell to 51.8 in
January from 52.5 in December, Caixin Media Co. and research firm Markit said.
But the reading was still above the 50 mark that separates expansion of
activity from contraction.
Total new orders grew at a softer pace in January, though new orders
from abroad rose at a faster pace, Caixin said.
Service providers' expectations of the sector's development rose to a
16-month high, boosted by an initial trade deal signed by the U.S. and China,
according to a subindex.
"China's economic recovery was not strong enough due to limited
improvement in demand, and some companies didn't replenish inventories,"
Zhengsheng Zhong, director of Macroeconomic Analysis at CEBM Group, said in a
statement accompanying the data.
Mr. Zhong noted that policymakers need to make efforts to limit
disruptions brought by the outbreak of a deadly coronavirus.
China's official nonmanufacturing purchasing managers index, which
includes the construction sector, rose to 54.1 in January from 53.5 in
December, the National Bureau of Statistics said last Friday.
Hong Kong records first virus death, Macau shuts casinos
February 4, 2020 /
1:32 AM
HONG KONG/BEIJING
(Reuters) - Hong Kong reported its first death from the newly identified
coronavirus on Tuesday, the second outside mainland China from an outbreak that
has killed more than 420 people, spread around the world and raised fears for
global economic growth.
---- Macau, the world’s biggest gambling hub, said it had asked all casino operators to suspend operations for two weeks to help curb the spread of the virus.
In another announcement that will compound worries about the economic impact, Hyundai Motor (005380.KS) said it would gradually suspend production at its South Korean factories because of supply chain disruptions from the outbreak.
The Hong Kong death took to 427 the toll from the virus, including a man who died in the Philippines last week after visiting Wuhan, the central Chinese city at the epicentre of the outbreak.
Chinese authorities said the toll in China rose by a record 64 from the
previous day to 425, mostly in Hubei, the virtually locked down province whose
capital is Wuhan.
New cases were reported in the United States, including a patient in
California infected through close contact with someone in the same household
who had been infected in China.
It was the second instance of person-to-person spread in the United
States after a case reported last week in Illinois.
“We expect to see more cases of person-to-person spread,” said Dr Nancy
Messonnier, director of the National Center for Immunization and Respiratory
Diseases at the U.S. Centers for Disease Control and Prevention (CDC).
The total number of infections in China rose by 3,235 to 20,438, and
there were at least 151 cases in 23 other countries and regions.
More
Thailand confirms six new cases of coronavirus, including four Thais - health ministry
February 4, 2020
/ 9:15 AM
BANGKOK (Reuters) - Thailand confirmed six new cases of the new
coronavirus on Tuesday, four of them Thai nationals and two Chinese.
The four Thai people included a couple who had visited Japan and two
drivers who had picked up Chinese passengers in Thailand, the health ministry
said.
The new cases brought the total reported in the country to 25.
Hyundai Motor to suspend South Korea production on China virus impact - union official
February 4, 2020
/ 5:25 AM
SEOUL (Reuters) - Hyundai Motor (005380.KS) plans to
gradually suspend production at its South Korean factories from Tuesday, as a
virus outbreak in China has disrupted supplies of vehicle components, a Hyundai
Motor union official said. Such a move would make Hyundai the first major global automaker to suspend production outside China due to supply chain disruptions caused by the outbreak of the virus, which has led to more than 420 deaths.
Most of Hyundai’s South Korean factories will be fully idled from Feb. 7
to Feb. 10 or Feb. 11, the official, who declined to be identified due to the
sensitivity of the matter, said.
The idling, which had been discussed by Hyundai management since Monday,
was due to a shortage of auto parts called wiring harnesses, auto industry
officials told Reuters earlier. The automaker did not keep a large inventory of
the part, a majority of which was produced in two South Korean firms’ China
production lines.
A Hyundai Motor spokeswoman did not have an immediate comment when
contacted by Reuters.
South Korea
imported $1.56 billion (£1.2 billion) worth of auto parts from China in 2019,
up from $1.47 billion in 2018, according to trade data.
Breakingviews - Epidemic impact will simulate China mini-recession
February 4, 2020
/ 7:31 AM
HONG KONG (Reuters Breakingviews) - The Wuhan virus could spark China’s
first recession-like experience. With quarantines depressing consumption, whole
industries are at risk of severe hits.
Officially GDP growth will stay
positive, but for a generation that has never experienced a normal economic
cycle, this downturn may provide a realistic simulation.
The People’s Republic has weathered emergencies before, including the
SARS epidemic in 2002 and the 2008 global financial crisis. In both cases, the
country was able to outgrow the impact using state-driven investment.
As Beijing now confronts the coronavirus, its economy is more mature,
more indebted and thus more vulnerable. Consumption, not exports, account for
the bulk of GDP growth, while yields from infrastructure investment have
naturally diminished. China’s leading companies are domestic e-commerce
operations run by tech giants such as Alibaba and Tencent.
Consumption is harder to kickstart with policy easing, especially when
everything is under quarantine. UBS economist Wang Tao has cut her consumption
growth estimate for this year to 5% from 6.8%; a government economist said the
crisis could knock estimated growth down a full percentage point to 5% in the
first quarter of 2020.
And that’s the optimistic case. It could take months for health
authorities to control the outbreak, and a year or more to discover and
distribute a vaccine. In the meantime, the private sector, which creates four
out of five jobs, is under duress. Jia Guolong, who runs the popular Xibei
restaurant chain, told local media that his 400 stores are closed; he only has
enough cash for three months, and called for tax amnesty and wage subsidies.
More
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, airlines drop China.
China's airlines told not to axe global flights as thousands cut
February 4, 2020
/ 4:45 AM
SHANGHAI (Reuters) - China’s civil aviation authority has urged domestic
carriers to continue flying international routes as they consider cuts in
response to a drop in demand due to the coronavirus outbreak, state news agency
Xinhua reported on Tuesday.
Airline capacity is being axed in the world’s second largest aviation
market with “the most dramatic change in schedules”, OAG Aviation Worldwide Ltd
said, adding that more than 25,000 flights to, from or within China will be
cancelled this week.
The coronavirus epidemic, which has killed more than 400 people in
China, has resulted in bans or restrictions on travel to and from China imposed
by countries including Singapore and Italy. The World Health Organization’s
director-general, Tedros Adhanom Ghebreyesus, had said travel bans were
unnecessary.
The Civil Aviation Administration of China’s appeal to the country’s
airlines was reported on Xinhua’s account on Chinese messaging app Weibo.
Data from aviation statistics provider VariFlight showed 41 Chinese
carriers cancelled nearly two-thirds of the 16,623 planned flights for Tuesday
as of 10:30 a.m. Beijing time (0230 GMT).
In addition, 10 regional airlines from Hong Kong and Taiwan had cancelled
162 flights, while 37 airlines from other countries cancelled 168 flights on
the same day, VariFlight said.
It also said that some 90,000 flights were cancelled between Jan. 10 and
Feb. 3, and that about 10,000 planned flights on average have been scrapped
each day since the start of February.
The coronavirus outbreak has stopped millions of Chinese people from travelling, with the number of trips over this year’s Lunar New Year break down 30% to 1.3 billion compared to last year, Ministry of Transportation data showed.
Hong Kong’s Cathay Pacific (0293.HK) plans to cut around 30% of its capacity over the next two months, including around 90% of its flights to mainland China, as it grapples with the epidemic, its CEO said on Tuesday.
Airlines suspend China flights because of coronavirus outbreak
February 4, 2020
/ 11:44 AM
(Reuters) -
Airlines are suspending flights to China in the wake of the new coronavirus
outbreak.
Here is the latest on their plans (in alphabetical order):
AIR CANADA (AC.TO)
Air Canada said on Jan. 28 it was cancelling select flights to China.
AIR FRANCE (AIRF.PA)
Air France said on Jan. 30 it had suspended all scheduled flights to and from mainland China until Feb. 9.
AIR INDIA
Air India said it was cancelling its Mumbai-Delhi-Shanghai flight from Jan. 31 to Feb. 14.AIR NEW ZEALAND (AIR.NZ)
Air New Zealand said on Feb. 1 it would suspend its Auckland-Shanghai service from Feb. 9 to March 29 due to travel restrictions affecting crew and a decline in forward bookings.
----AMERICAN AIRLINES (AAL.O)
American Airlines said it would cancel flights to Beijing and Shanghai starting Jan. 31, and run through March 27, though it would continue to fly to Hong Kong.
AUSTRIAN
Austrian Airlines said it was suspending flights to China until the end of February.BRITISH AIRWAYS (ICAG.L)
BA said on Jan. 30 it had cancelled all flights to mainland China for a month.
CATHAY PACIFIC AIRWAYS (0293.HK)
Hong Kong’s Cathay Pacific said it would progressively reduce capacity to and from mainland China by 50% or more from Jan. 30 to the end of March.
DELTA AIR LINES (DAL.N)
Delta Air Lines accelerated earlier announced suspensions: the last China-bound flights were due to leave on Feb. 1, and the last returning flights from China were due to leave China on Feb. 2.
More
In any great organization it is far, far safer to be wrong with the majority than to be right alone.
John Kenneth Galbraith.
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?
World’s first solar and battery powered ice cream van at the Ice Cream and Artisan Food Show
3 February 2020
The World’s first and only commercially available solar and battery
powered ice cream van – The Styles Solar Van – will be showcased at the Ice
Cream and Artisan Food Show, 11-13 February 2020 in Harrogate – see it on Stand
1.
David said:
“I listened to our customers – event organisers and show directors – who
did not want their visitors to inhale the fumes from a diesel engine ice cream
van whilst they were stationary selling ice cream.
So, I went looking for
a solution. After a great deal of research and development, I created a
successful system using solar panels and batteries.”
The Styles Solar Van is the brainchild of David Baker, the owner
of Styles Farmhouse Ice Cream, based in Rodhuish, Somerset.
The Styles Solar Van concept started life in 2016. The first
prototype – using four solar panels – was ready in 2018 and the second prototype
using eight solar panels started trials in May 2019. It is now available
commercially for the first time.
It is built on the Peugeot Boxer Van (though other van types can be
used). Its latest Euro 6 low emission engine will get you from
‘A’ to ‘B’ – but when you are on site the solar panels and batteries will power
not just the freezer compartments but also Mr Softee machines as well as
equipment like coffee and slush machines.
David said:
“We have been trialling our vans all summer and have had an
overwhelmingly enthusiastic response from both event organisers and the public
at places like Glastonbury and the Henley Regatta.
In full sun the van can operate for up to five to six days. On cloudy
days it will run for two to three days. The system can be fully
re-charged using mains electricity in just four hours.”
ICA CEO Zelica Carr said:
“This is brilliant news for both the ice cream sector and The Ice Cream
and Artisan Food Show.
Issues with vehicle pollution, idling engines, and Local Authorities
restricting and banning diesel vehicles will only increase. Development and use
of the Styles Solar Van shows that the sector is environmentally aware AND
doing something about it. David Baker and his team are to be
congratulated.”
“But it [the boom] could not
last forever even if inflation and credit expansion were to go on endlessly. It
would then encounter the barriers which prevent the boundless expansion of circulation
credit. It would lead to the crack-up boom and the breakdown of the whole
monetary system.”
Ludwig
von Mises.
The monthly Coppock Indicators finished January
DJIA: 28,256 +97 Up. NASDAQ: 9,151 +152 Up.
SP500: 3,226 +130 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,
made all the more urgent by the rising economic threat from the coronavirus
crisis.
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