Friday 31 July 2020

Stocks v Reality. A Day of Reckoning Looms.

Baltic Dry Index. 1348 +31  Brent Crude 43.14
Spot Gold 1968

Coronavirus Cases 31/7/20 World 17,412,031
Deaths 675,100

If economists could manage to get themselves thought of as humble, competent people on a level with dentists, that would be splendid.

John Maynard Keynes.

Dress up Friday has arrived, in our central bankster rigged casinos. How high will the Fed’s New York City plunge protection team allow their friends and cronies to front run today’s buying?

In about another 18 hours July’s markets will be history. Shame that all the central bankster “no billionaire left behind” rigging, doesn’t make an ounce of difference in the real economy, where I suspect, another round of firings and business closings is just getting underway.

This weekend is the first weekend in America where those unemployed won’t be receiving that extra $600 dole from the Feds. I suspect for many it will make a big difference, even if it’s eventually mostly made up in a few weeks.

For many getting from here to there will be hard.

Asian stocks falter as global growth fears temper tech boost

July 31, 2020 / 1:22 AM
Reuters) - Asian shares wobbled in a choppy session on Friday as abysmal economic data from the United States and rising global COVID-19 cases weighed on sentiment, despite strong U.S. tech earnings and signs of manufacturing recovery in China and Japan.

The U.S. dollar was also set for its worst month in a decade amid expectations the Fed will maintain its ultra-loose monetary policy for years. 

U.S. GDP collapsed at a 32.9% annualized rate in the second quarter, the deepest decline on record, while jobless claims rose last week, adding to signs the momentum of economic recovery has slowed.

Those figures overshadowed positive manufacturing data from China and Japan. China’s official Purchasing Manager’s Index (PMI) data showed that factory activity grew in July for a fifth straight month and at a faster pace, defying expectations of a slowdown, while Japan’s industrial output snapped four months of declines in June.

“We are seeing some tentative signs of an improvement in global trade flows as economies reopen, but the overhang from recessionary conditions in the developed world and rising infection rates are kind of a focus for investors at the moment,” said Ryan Felsman, senior economist at CommSec in Sydney.

After rising in early trade, MSCI’s broadest index of Asian shares outside Japan .MIAPJ0000PUS turned lower by late morning. It was last down 0.22%.

Australian shares slid 1.85% amid month-end profit taking and Seoul's Kospi .KS11 ticked down 0.2%. Japan's Nikkei .N225 dropped 1.87% as a stronger yen weighed on exporters.

Chinese blue-chips .CSI300 were last down 0.29% in a choppy session.

But futures resolutely pointed to a positive open on Wall Street on Friday after Apple (AAPL.O), Amazon (AMZN.O), Facebook (FB.O) and Alphabet (GOOGL.O) reported quarterly earnings on the same day for the first time ever, all topping Wall Street estimates.

---- U.S. stock markets, oil prices and the dollar slid on Thursday as the new data underscored the deep economic impact of the coronavirus and U.S. President Donald Trump raised the possibility of delaying the November election.

On Wall Street, the Dow Jones Industrial Average .DJI fell 225.92 points, or 0.85%, to 26,313.65, the S&P 500 .SPX lost 12.22 points, or 0.38%, to 3,246.22 and the Nasdaq Composite .IXIC added 44.87 points, or 0.43%, to 10,587.81.

Japan slashes GDP forecasts, expects biggest contraction in decades this fiscal year

July 30, 2020 / 10:27 AM
TOKYO (Reuters) - Japan sharply downgraded its gross domestic product forecasts for this fiscal year, expecting the world’s third-largest economy to suffer its biggest contraction in over two decades amid the fallout of the coronavirus pandemic.

The government expects the economy to shrink 4.5% this fiscal year to March 2021 compared with January’s forecast for 1.4% growth. That would be the biggest contraction since comparable data became available in 1994. 

The economy could contract about 5% if there is a second large-scale coronavirus outbreak overseas, according to the government, which unusually gave forecasts for various scenarios mirroring what some international organizations have done.

Japan’s economy is expected to suffer a sharp contraction in the second quarter as the coronavirus hit global growth and the nation’s state of emergency forced people to stay home and businesses to close.

The dismal forecasts underscore policymakers’ concerns about a deep economic recession, but also raises the prospect of more government support, after it already delivered $2.2 trillion worth of stimulus this year.

The economy is expected to rebound with a 3.4% growth in the next fiscal year ending March 2022, according to the latest estimates.

Private sector economists in a Reuters poll expected Japan’s economy to contract by a steeper 5.3% this fiscal year and expand 3.3% next fiscal year. [ECILT/JP]

German economy shrinks by record 10.1% in second quarter

July 30, 2020 / 9:47 AM
BERLIN (Reuters) - The German economy contracted by 10.1% in the second quarter, its steepest plunge on record, as household spending, business investment and exports collapsed during the COVID-19 pandemic, preliminary data showed on Thursday.

The statistics office said the plunge was the sharpest since 1970 and was worse than the 9% contraction predicted by economists in a Reuters poll. It wiped out nearly 10 years of economic growth. 

“Now it’s official, it’s the recession of a century,” said DekaBank economist Andreas Scheuerle.
“What has so far been impossible to achieve with stock market crashes or oil price shocks was achieved by a 160 nanometre tiny creature named Corona.”

On the year, gross domestic product in Europe’s largest economy declined by 11.7% from April to June, seasonally adjusted figures from the Federal Statistics Office showed. Analysts polled by Reuters had expected a 11.3% contraction.

Both exports and imports of goods and services collapsed in the second quarter of 2020, as did household spending and investment in equipment. But state spending increased.

COVID-19 pandemic threatens global food security, researchers say

July 30, 2020 / 5:42 PM
July 30 (UPI) -- According to the United Nations, the four pillars of global food security are availability, access, utilization and stability.

New research suggests the global economic slowdown caused by the COVID-19 pandemic has imperiled all four. 

In a paper published Thursday in the journal Science, analysts at the International Food Policy Research Institute detailed the many ways the global pandemic is undermining global food security.

In many parts of the world, lockdowns necessitated by uncontrolled COVID-19 outbreaks have disrupted the labor market, threatening the food supply chain and the stability of agricultural and food markets.

Labor shortages affect both supply and demand. Without enough workers, farms, processing plants and distribution networks can't grow, harvest and get the food where it needs to go.

And when people are without jobs, they often don't have the resources to buy enough good food to feed themselves and their families.

"The most important impact of the pandemic on food security is through income declines that put food access at risk," study co-author Johan Swinnen, director-general of IFPRI, said in a news release. "This is especially a concern for the extreme poor, who spend on average about 70 percent of their total income on food."

So far this year, the global economy has shrunk by 5 percent, a decline steeper than that triggered by the 2008 financial crisis.

Models developed by researchers at IFPRI suggest such a sizable recession is likely to push 150 million people into extreme poverty -- predominately in sub-Saharan Africa and South Asia.

"Disruptions in food systems both contribute to increases in poverty, by affecting a critical source of income for many of the world's poor, and also exacerbate the impacts of poverty by reducing access to food, particularly nutritious foods," said Swinnen.

Researchers suggest income declines have the strongest impact on demand for fruits, vegetables and animal products like meat and dairy.

Airbus trims A350 output, quarterly loss worse than expected

July 30, 2020 / 5:54 AM
PARIS (Reuters) - Europe’s Airbus (AIR.PA) announced a new cut in production of its marquee A350 jet on Thursday as it swung to a larger-than-expected second-quarter loss in the face of the global pandemic.

But boosting its shares, the planemaker also said it hoped to avoid consuming cash in the second half of the year after a smaller-than-expected second-quarter outflow of 4.4 billion euros as deliveries tumbled due to the coronavirus crisis. 

“We believe it is going to be a long and slow recovery,” Chief Executive Guillaume Faury told reporters, adding that travel was picking up but more slowly than previously expected.

The crisis has particularly affected demand for wide-body long-haul jets, which are expected to be the slowest to recover once demand returns to normal levels, which Airbus says could take until 2023 or 2025.

Airbus said it had cut wide-body A350 production to five jets a month, after dropping it to six from 9.5 in April.

The move came a day after U.S. rival Boeing (BA.N) announced further cuts in output of 787 and 777 jets, which compete with the A350 on depressed long-haul networks.

Airbus is shedding up to 15,000 jobs or 11% of its workforce to cope with the crisis, which it expects to hold output down by 40% for some two years compared with pre-crisis levels.

“We are reducing the costs across the board given the new situation,” Faury said.

UK car output plunges to lowest level since 1950s

July 30, 2020 / 12:09 AM
LONDON (Reuters) - British car production fell by more than an annual 40% in the first half of the year to the lowest level since 1954 as the coronavirus pandemic shut factories and dealerships, an industry body said on Thursday.

Plants and retailers closed in March and only some gradually began to reopen from May with certain sites still shut and others not at pre-virus levels. 

The hit leaves output at just over 381,000 cars, the lowest level since 1954, when Winston Churchill’s government ended food rationing imposed as part of the World War Two effort.

In 2020, the industry expects to churn out just over 880,000 cars, a third lower than in 2019 in what would be the worst performance for over 60 years, the Society of Motor Manufacturers and Traders (SMMT) said.

“Our factories were once set to make two million cars in 2020 but could now produce less than half that number, a result of the devastating effects of the pandemic on top of already challenging market conditions and years of Brexit uncertainty,” said SMMT CEO Mike Hawes.

But announced investment in the first half of the year rose from 90 million pounds in 2019 to 485 million pounds thanks primarily to Nissan, which is due to build its new Qashqai in Britain.

Renault handed 'wake-up call' with record 7 billion euro loss

July 30, 2020 / 6:36 AM
PARIS (Reuters) - French carmaker Renault (RENA.PA) said it had been given a wake-up call on Thursday with a record net loss of 7.29 billion euros ($8.6 billion) in the first half of the year, inflicted by the COVID-19 crisis and troubles at its alliance partner Nissan (7201.T).

Global automakers have been hit hard by the coronavirus pandemic, which has shuttered factories and kept many customers away from car dealerships. 

But the Renault-Nissan alliance has been hit especially hard as it was already weakened by low margins and boardroom turmoil surrounding Carlos Ghosn, the architect of the alliance who was ousted in 2018.

----- De Meo said the company would now double down on a previously announced turnaround plan, laying off thousands of workers, reducing the range of models, and improving cooperation between alliance partners on vehicle production.

He said a team of 40 senior executives from across Renault was cloistered on the top floor of the company’s headquarters in Boulogne-Billancourt near Paris, working on details of a strategic plan which will be presented in January at the latest.

He said his focus would be pushing the Renault brands that can deliver profits - especially compact cars, SUV crossovers, and electric and hybrid vehicles - and shifting emphasis from volume to value.

As pandemic rages on, world economic recovery looks ever more shaky: Reuters poll

July 31, 2020 / 1:32 AM
BENGALURU (Reuters) - The world economic outlook has dimmed again, with still-rising coronavirus infections and the risk of renewed lockdowns increasing the chances that any rebound will reverse course, according to Reuters polls of over 500 economists globally.

Over 17 million people have been infected worldwide by the coronavirus and more than two-thirds of a million people have died. That has forced governments to impose strict lockdown measures to curb the spread of the virus, keeping citizens at home and businesses closed and spurring recessions that aren’t over yet. 

Surging cases in the United States, where related deaths have surpassed 150,000, have led several states to reimpose restrictions. Most economists, long-term investors and even Fed Chair Jerome Powell have clearly said the economic outlook depends significantly on the course of the virus.

The Fed has pledged endless stimulus to support the world’s No. 1 economy, which was a major growth engine for the global economy before the pandemic and now risks being the biggest drag, sending the dollar to a two-year low.

With infections also on the rise elsewhere, including in Australia, India, Spain, and Brazil, economists again cut this year’s economic prospects in the July 3-29 polls which show the worst contraction on record for the world economy in 2020.

“We expect the economic reality of the virus to start catching up with businesses across the globe soon,” said Jan Lambregts, global head financial markets research at Rabobank.

“What we need is a vaccine or significant breakthroughs in medicines to decisively reopen our economies and restore business and consumer confidence – but there is no magic wand for the time being.”

John Kenneth Galbraith.

Covid-19 Corner                       

This section will continue until it becomes unneeded.

Researchers identify evolutionary origins of SARS-CoV-2

Issued: Tue, 28 Jul 2020 10:00:00 BST
By reconstructing the evolutionary history of SARS-CoV-2, the virus that is responsible for the COVID-19 pandemic, an international research team of Chinese, European and U.S. scientists has discovered that the lineage that gave rise to the virus has been circulating in bats for decades and likely includes other viruses with the ability to infect humans. The findings, which University of Glasgow scientists contributed to, have implications for the prevention of future pandemics stemming from this lineage.

“Coronaviruses have genetic material that is highly recombinant, meaning different regions of the virus’s genome can be derived from multiple sources,” said Maciej Boni, associate professor of biology, Penn State. “This has made it difficult to reconstruct SARS-CoV-2’s origins. You have to identify all the regions that have been recombining and trace their histories. To do that, we put together a diverse team with expertise in recombination, phylogenetic dating, virus sampling, and molecular and viral evolution.”

The team used three different bioinformatic approaches to identify and remove the recombinant regions within the SARS-CoV-2 genome. Next, they reconstructed phylogenetic histories for the non-recombinant regions and compared them to each other to see which specific viruses have been involved in recombination events in the past. They were able to reconstruct the evolutionary relationships between SARS-CoV-2 and its closest known bat and pangolin viruses. Their findings appear today in Nature Microbiology.

The researchers found that the lineage of viruses to which SARS-CoV-2 belongs diverged from other bat viruses about 40-70 years ago. Importantly, although SARS-CoV-2 is genetically similar (about 96%) to the RaTG13 coronavirus, which was sampled from a Rhinolophus affinis horseshoe bat in 2013 in Yunnan province, China, the team found that it diverged from RaTG13 a relatively long time ago, in 1969.

“The ability to estimate divergence times after disentangling recombination histories, which is something we developed in this collaboration, may lead to insights into the origins of many different viral pathogens,” said Philippe Lemey, principal investigator in the Department of Evolutionary and Computational Virology, KE Leuven.

The team found that one of the older traits that SARS-CoV-2 shares with its relatives is the receptor-binding domain (RBD) located on the Spike protein, which enables the virus to recognize and bind to receptors on the surfaces of human cells.

“This means that other viruses that are capable of infecting humans are circulating in horseshoe bats in China,” said David L. Robertson, professor of computational virology, MRC-University of Glasgow Centre for Virus Research.

Will these viruses be capable of jumping directly from bats into humans or will an intermediate species be required to make the leap? According to Robertson, for SARS-CoV-2, other research groups incorrectly proposed that key evolutionary changes occurred in pangolins.

Dr. Osterholm: Americans will be living with the coronavirus for decades

Published: July 30, 2020 at 2:26 p.m. ET
On Jan. 20, just nine days after Chinese health authorities published the DNA sequence for a new coronavirus that had sickened dozens of people in China, Dr. Michael Osterholm, an epidemiologist at the University of Minnesota, wrote in an email: “I’m certain this will cause our next pandemic.”

The next day the Centers for Disease Control and Prevention confirmed the first U.S. case of someone infected with what became known as COVID-19. Since then, as outbreaks intensified and the virus spread to Europe, and then the Americas, Osterholm, a flu expert with experience working in the CDC who heads up the Center for Infectious Disease Research and Policy, has become one of the nation’s leading voices on the pandemic, weighing in on everything from masks to contact tracing. 

Osterholm’s viewpoint is sobering. The 67-year-old expects the novel coronavirus to be present for the rest of his life. He doesn’t believe the wave theory (a first wave, a lull, followed by other waves) will apply to this pandemic. “That’s not what’s happening here,” he told MarketWatch in an interview.

MarketWatch: One of the things I’m pretty interested in is the talk and the hope around a vaccine. Do you think we have misconceptions about what it means when we have a vaccine?

Michael Osterholm: Everyone is looking at the vaccine as being a light switch: on or off. And I look at it as a rheostat, that’s going to take a long time, from turning it on from its darkest position to a lightest position. If you’re anticipating a light switch, you’re going to be concerned, confused, and in some cases very disappointed in what it might look like in those first days to months with a vaccine.

MarketWatch: I saw a piece in The Atlantic this week and I thought they positioned it well. They described it as the beginning of the end.

Michael Osterholm: It won’t be. We will be dealing with this virus forever. Effective and safe vaccines and hopefully ones with some durability will be very important, even critical tools, in fighting it. But the whole world is going to be experiencing COVID-19 ‘til the end of time. We’re not going to be vaccinating our way out of this to eight-plus billion people in the world right now. And if we don’t get durable immunity, we’re potentially looking at revaccination on a routine basis, if we can do that. We’ve really got to come to grips with actually living with this virus, for at least my lifetime, and at the same time, it doesn’t mean we can’t do a lot about it.

Coronavirus: Australia's Victoria records huge case jump

30 July 2020.
Australia's virus-hit state of Victoria has reported its worst death toll and case rise, prompting fears that a six-week lockdown of state capital Melbourne is not working.

The state confirmed 13 new deaths and 723 new cases on Thursday - a 36% jump on the case record set on Monday.

There are fears now that Melbourne's lockdown, which began on 7 July, will need to be extended.
The spike meant Australia overall had its deadliest day in the pandemic.

A 14th person died late on Thursday but his death will be included in Friday's figures as it was announced after the government's briefing.

Officials in Victoria renewed appeals for people with symptoms to get tested quickly.

Last week, the Victorian government said sick people breaking isolation rules - or not getting tested in time - was leading to continued spread despite lockdown measures.

"If you've got symptoms, the only thing you can do is get tested," said Premier Daniel Andrews.
"You just can't go to work. Because all you'll be doing is spreading the virus."

Thursday's figures dash hopes that recent lower case numbers indicated the state had turned a corner.

Some useful Covid links.

Johns Hopkins Coronavirus resource centre

Rt Covid-19

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.
Today, something a little different. How we invented the present. No guarantees that this is the truth, the whole truth, and nothing but the truth, but close enough for 9 interesting reads.

Surprising Stories of Accidental Inventions

From life-changing penicillin to the whimsical wonder that is Play-Doh.

Necessity isn’t always the mother of invention. Sometimes it’s serendipity. Dive into these nine great reads about everyday innovations that were invented by accident, from life-changing penicillin to the whimsical wonder that is Play-Doh. Turns out even the color mauve came to us by chance.

The Amazing True Story of How the Microwave Was Invented by Accident

The Science of Serendipity

An Idea That Stuck

The Accidental Invention of Play-Doh

The Shy Scientist Who Could See Through Skin

What Happens When Chemists Don’t Wash Their Hands

The Real Story Behind Penicillin

The Color Purple: How an Accidental Discovery Changed Fashion Forever

Super Glue Built Planes, Nukes and Saved Soldiers’ Lives

Another weekend and will this be the weekend Senator Biden announces his pick to run as Vice President with him? What will President Trump tweet? Will we hit 18 million Covid-19 cases globally?  Will Florida get its first hurricane of the new season? Have a great, safe weekend everyone.
The significant problems we face cannot be solved at the same level of thinking we were at when we created them.
Albert Einstein.

The Monthly Coppock Indicators finished June

DJIA: 25,813 -2 Down. NASDAQ: 10,059 +196 Up. SP500: 3,100 +75 Down.

The NASDAQ has remained up. The S&P and the DJIA still remain down despite the best efforts of the Fed to get them to go higher. The Dow has now gone negative.