Thursday, 3 September 2020

The Higher Stocks Go…


Baltic Dry Index. 1445 -26  Brent Crude 44.36
Spot Gold 1940

Coronavirus Cases 03/9/20 World 26,098,203
Deaths 871,419

"You can get much farther with a kind word and a gun than you can with a kind word alone."

Alphonse Capone. Traveller.

Humpty Dumpty stocks, the higher they go, the greater the fall. But will it be President Trump or a President Biden blamed for the coming crash?

Below, we all know what’s coming in the stock casinos, just not when or what the trigger will be. 

Ignore oil sinking again along with the Baltic Dry (shipping) Index. Ignore that it took just four days to go from 25 million confirmed Covid-19 global cases to 26 million cases. That’s the real world far from the central banksters “no billionaire left behind” world.

Can the Fed fuelled stock mania last past the US election on November 3rd?

How much further can the Fed go to try to re-elect President Trump?

Suppose it doesn’t work? What happens under Democratic Socialism?

What happened to Humpty Dumpty anyway?

Asian shares firm on U.S. stimulus hopes, upbeat China data

September 3, 2020 / 12:21 AM
SYDNEY (Reuters) - Asian equities started strong on Thursday as a sustained recovery in China’s services sector and the prospect of additional U.S. stimulus whetted risk appetite, while the dollar pared gains.

MSCI’s broadest index of Asia-Pacific shares outside of Japan climbed 0.5%, clocking its third straight session of gains to hover near a recent 2-1/2-year high. 

Australia’s S&P/ASX 200 rose 0.9% and Japan’s Nikkei added 1.3%. Hong Kong’s Hang Seng index was up 0.2% while China’s blue-chip index was 0.35% higher.

E-mini futures for the S&P 500 were barely changed.

A closely-watched survey showed China’s service sector activity grew for a fourth straight month in August, staying above the 50-mark, while companies hired more people for the first time since January.

The services sector, which accounts for about 60% of the economy and half of urban jobs, had been slower to return to growth initially than large manufacturers, but the recovery has gathered pace in recent months as COVID-19 restrictions on public gatherings lifted.

Analysts expect the equity markets rally to extend further as investors focus on the “easy money” dimension, though risks were growing.

---- Data on Wednesday showed U.S. private employers hired fewer workers than expected for a second straight month in August, suggesting that the labour market recovery was slowing.
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Apple more valuable than the entire FTSE 100

2 September 2020
The valuation of US tech giant Apple has continued to surge, surpassing the entire value of all the members of the UK's top share index.

Apple's shares rose 4% on Tuesday, valuing it at $2.3 trillion (£1.7tn), compared to the £1.5tn value of all the companies in the FTSE 100.

Apple shares fell back on Wednesday, but remained ahead of the London index at the close of trading on Wednesday.

It is just two weeks since Apple became the first US firm to be valued at $2tn.

Investors have been snapping up US tech stocks as demand for tech goods has surged amid the coronavirus pandemic.

More people are relying on technology to work and shop from home, and Apple has been one of the major beneficiaries.

The iPhone-maker has seen its share price more than double since March, when panic about the coronavirus pandemic swept the world's stock markets.

Demand for Apple's shares was also said to be boosted on Tuesday by company's decision to divide its shares, swapping four new ones for every old one investors held. The move is expected to make it easier for individuals to invest.

----"The FTSE 100 is a dinosaur, full of rather lumbering old-world stocks with precious little growth to offer," said Neil Wilson, chief market analyst for Markets.com. He added that it is also "a very good proxy for the global economy, which we know is on its knees".

With the exception of Ocado, "there is no tech to speak of, which is where the real money has been made this year," he added.

"Whilst the US has Zoom, we have BT and Vodafone. The US boasts Netflix and Amazon - the FTSE can muster ITV and Sainsbury's."

The FTSE 100 is trading at 5,972 points, down 22% from its 2020 high of 7,675 in January.

By contrast, the Nasdaq index in the US, which includes many large tech companies, hit a fresh record on Tuesday. It has almost doubled since the collapse in share prices in the immediate aftermath of the coronavirus outbreak.

----Stimulus from central banks to support struggling economies - including quantitative easing and historic low interest rates - have buoyed the value of many companies and assets.

In another sign of booming tech valuations, Tesla's 12% stock gain propelled founder Elon Musk's personal fortune to $115bn this week, briefly making him the third-richest person in the world, according to Bloomberg. He temporarily overtook Facebook founder Mark Zuckerberg.

 

David Rosenberg: No matter how you slice it, markets are in a bubble of historic proportions

And the higher they are, the harder they fall

Sep 02, 2020  
History shows multiples at these levels leave the market exposed compared to when they are at more reasonable or normal levels, writes David Rosenberg. Photo by Getty Images/File Photos

We are in a huge bubble now. Vaccine or no vaccine. Economic and earnings recovery or not. With or without the massive monetary creation by the U.S. Federal Reserve. This is a bubble of historic proportions.

Some will say that the valuations are supported by interest rates. Frankly, real 10-year rates moved into negative terrain in January, before the stock market plunged and before the recession began. 
Now, they have become even more negative.

There is actually no such thing as a free lunch and the thing about negative rates is that they coexist over time with a flat economy. And that economy is where earnings are derived from.

Don’t be fooled by the fact that the monthly U.S. data are beating “expectations” (like earnings). At the margin, economic momentum is starting to wane in the more up-to-date data. The bounce we saw previously in consumption growth is ebbing. Initial U.S. jobless claims are back rising at a one-million pace over the past two weeks. The latest information on mobility, retail traffic and airline activity has softened, and bankruptcies are mounting.

The other reality is that positive real rates tend to coincide with real growth of three per cent, or better, historically. Yes, the discount rate inflates the present value of those future earnings streams. 
But these same rates tell us that the profit growth itself before the discount factor is applied is going to be anemic for a long period of time. You can’t have it both ways.

That said, the bulls are in charge. The market is always right, so they say. Indeed, it was right in September 1929 and then right again a month later. It was right in September 2007 and then right again a month later. It was right in February 2020 and also right a month later.

It’s not even so much about being right. It’s more about the assumptions that are underlying the price action at any given moment in time. And we are back to being priced for perfection and the complacency is a major concern to us.

Valuations are at extreme levels. No matter what decision you make, know that. The S&P 500, on a trailing basis, now has a 27.4x price-to-earnings multiple. Only 0.4 per cent of the time in the past 70 years has the multiple been so rich. On a forward 12-month basis, only 0.1 per cent of the time has the market been more extreme than its current 23x. As for the Nasdaq, it, too, is in the top one per cent of valuation rankings ever recorded.

The smoothed cyclically adjusted PE ratio (CAPE) multiple says the same thing. It never did actually compress to a normal recession-trough multiple in March: it briefly touched 24.8x and has since jumped to 30.6x. It is almost back to the 30.7x peak it had in February (ahem) and the prior peak before that in October 2018 when it was as high as 31x (next thing you know, we are in for an unforeseen near-20-per-cent correction).

The current multiple actually exceeds the 27.3x peak of October 2007… and we know what happened next. Before the tech mania, that is, before June 1997, not once did we have the CAPE north of 30x for one month, until we go all the way back to September 1929 (32.6x).
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"The tumultuous populace of large cities are ever to be dreaded."

George Washington, Revolutionary, General and 1st United States President

Covid-19 Corner                       

This section will continue until it becomes unneeded.

Fear and dread haunt COVID-19 'long-haulers'

September 3, 2020 / 5:06 AM
LONDON (Reuters) - Until March 19 this year, Felicity Callard, a 49 year-old British university professor and lecturer, was fit, active and strong. Now, she says, she’s exhausted, frail and scared.

Her mind fills with fears about what kind of damage might have been done to her heart, lungs and brain when she suffered what is classified as a “mild” case of COVID-19 more than five months ago - and she’s terrified it might happen again. 

“I was absolutely, completely destroyed by this illness,” she told Reuters. “My life has completely changed. I’m basically confined to a kilometre from my house and back - because that’s as far as I can walk.”

Back in March, she says, she felt more individual control over her health. She was reassured in part by messages that the vast majority of cases are mild, and that good infection control, hand hygiene and social distancing would reduce the risk of contracting COVID-19. Now, however, she feels as though “the threat is everywhere.”

Callard is one of thousands of people worldwide who are reporting a wide range of ongoing symptoms many months after being diagnosed with COVID-19. Some call themselves COVID “long haulers”, while others have adopted the term “long COVID” to describe their condition.
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Steroids cut death rates among critically ill COVID-19 patients, major study finds

September 2, 2020 / 2:09 PM
LONDON (Reuters) - Treating critically ill COVID-19 patients with corticosteroid drugs reduces the risk of death by 20%, an analysis of seven international trials found on Wednesday, prompting the World Health Organisation to update its advice on treatment.

The analysis - which pooled data from separate trials of low dose hydrocortisone, dexamethasone and methylprednisolone - found that steroids improve survival rates of COVID-19 patients sick enough to be in intensive care in hospital.

“This is equivalent to around 68% of (the sickest COVID-19) patients surviving after treatment with corticosteroids, compared to around 60% surviving in the absence of corticosteroids,” the researchers said in a statement.

“Steroids are a cheap and readily available medication, and our analysis has confirmed that they are effective in reducing deaths amongst the people most severely affected by COVID-19,” Jonathan Sterne, a professor of medical statistics and epidemiology at Britain’s Bristol University who worked on the analysis, told the briefing.

He said the trials - conducted by researchers in Britain, Brazil, Canada, China, France, Spain, and the United States - gave a consistent message throughout, showing the drugs were beneficial in the sickest patients regardless of age or sex or how long patients had been ill.

The findings, published in the Journal of the American Medical Association, reinforce results that were hailed as a major breakthrough and announced in June, when dexamethasone became the first drug shown to be able to reduce death rates among severely sick COVID-19 patients.

Dexamethasone has been in widespread use in intensive care wards treating COVID-19 patients in some countries since then.

Martin Landray, a professor of medicine and epidemiology at the University of Oxford who worked on the dexamethasone trial that was a key part of the pooled analysis published on Wednesday, said the results mean doctors in hospitals across the world can safely switch to using the drugs to save lives.
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Large antibody study offers hope for virus vaccine efforts

Antibodies that people make to fight the new coronavirus last for at least four months after diagnosis and do not fade quickly as some earlier reports suggested, scientists have found.

Tuesday’s report, from tests on more than 30,000 people in Iceland, is the most extensive work yet on the immune system’s response to the virus over time, and is good news for efforts to develop vaccines.

If a vaccine can spur production of long-lasting antibodies as natural infection seems to do, it gives hope that “immunity to this unpredictable and highly contagious virus may not be fleeting,” scientists from Harvard University and the U.S. National Institutes of Health wrote in a commentary published with the study in the New England Journal of Medicine.

One of the big mysteries of the pandemic is whether having had the coronavirus helps protect against future infection, and for how long. Some smaller studies previously suggested that antibodies may disappear quickly and that some people with few or no symptoms may not make many at all.

The new study was done by Reykjavik-based deCODE Genetics, a subsidiary of the U.S. biotech company Amgen, with several hospitals, universities and health officials in Iceland. The country tested 15% of its population since late February, when its first COVID-19 cases were detected, giving a solid base for comparisons.

Scientists used two different types of coronavirus testing: the kind from nose swabs or other samples that detects bits of the virus, indicating infection, and tests that measure antibodies in the blood, which can show whether someone was infected now or in the past.

Blood samples were analyzed from 30,576 people using various methods, and someone was counted as a case if at least two of the antibody tests were positive. These included a range of people, from those without symptoms to people hospitalized with signs of COVID-19.

In a subgroup who tested positive, further testing found that antibodies rose for two months after their infection initially was diagnosed and then plateaued and remained stable for four months.

Previous studies suggesting antibodies faded quickly may have been just looking at the first wave of antibodies the immune system makes in response to infection; those studies mostly looked 28 days after diagnosis. A second wave of antibodies forms after a month or two into infection, and this seems more stable and long-lasting, the researchers report.

----The study also found:

— Testing through the bits-of-virus method that’s commonly done in community settings missed nearly half of people who were found to have had the virus by blood antibody testing. That means the blood tests are far more reliable and better for tracking spread of the disease in a region and for guiding decisions and returning to work or school, researchers say.

— Nearly a third of infections were in people who reported no symptoms.

— Nearly 1% of Iceland’s population was infected in this first wave of the pandemic, meaning the other 99% are still vulnerable to the virus.

— The infection fatality rate was 0.3%. That’s about three times the fatality rate of seasonal flu and in keeping with some other more recent estimates, said Dr. Derek Angus, critical care chief at the University of Pittsburgh Medical Center.

Although many studies have been reporting death rates based on specific groups such as hospitalized patients, the rate of death among all infected with the coronavirus has been unknown.

The Latest: India’s daily surges making it world’s epicenter

India registered 78,357 new coronavirus cases in the past 24 hours, raising its total over 3.7 million as the government eases pandemic restrictions nationwide to help the battered economy.

India, a nation of 1.4 billion people, is fast becoming the world’s coronavirus epicenter. It has been reporting the highest daily increases in new cases for more than three weeks, and at its current rate is likely to soon pass Brazil and ultimately the United States in total reported cases.

The Health Ministry on Wednesday also reported 1,045 deaths in the past 24 hours, taking total fatalities up to 66,333. It now has the third-most deaths after recently passing Mexico’s toll, according to a Johns Hopkins University tally.

India registered 78,357 new coronavirus cases in the past 24 hours, raising its total over 3.7 million as the government eases pandemic restrictions nationwide to help the battered economy.

India, a nation of 1.4 billion people, is fast becoming the world’s coronavirus epicenter. It has been reporting the highest daily increases in new cases for more than three weeks, and at its current rate is likely to soon pass Brazil and ultimately the United States in total reported cases.

The Health Ministry on Wednesday also reported 1,045 deaths in the past 24 hours, taking total fatalities up to 66,333. It now has the third-most deaths after recently passing Mexico’s toll, according to a Johns Hopkins University tally.

Infections have been spreading fast from people in India’s big cities to smaller towns and rural areas.

Some useful Covid links.

Johns Hopkins Coronavirus resource centre

Rt Covid-19

Covid19info.live

In later editions, Mackay added a footnote referencing the Railway Mania of the 1840s as another "popular delusion" which was at least as important as the South Sea Bubble. Mathematician Andrew Odlyzko has pointed out, in a published lecture, that Mackay himself played a role in this economic bubble; as leader writer in the Glasgow Argus, Mackay wrote on 2 October 1845: "There is no reason whatever to fear a crash"



Railway Mania was an instance of a stock market bubble in the United Kingdom of Great Britain and Ireland in the 1840s. It followed a common pattern: as the price of railway shares increased, speculators invested more money, which further increased the price of railway shares, until the share price collapsed. The mania reached its zenith in 1846, when 272 Acts of Parliament setting up new railway companies were passed, with the proposed routes totaling 9,500 miles (15,300 km). About a third of the railways authorised were never built—the companies either collapsed due to poor financial planning, were bought out by larger competitors before they could build their line, or turned out to be fraudulent enterprises to channel investors' money into other businesses.



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.

Team's flexible micro LEDs may reshape future of wearable technology

Novel devices can be folded, cut, attached to surfaces

Date: August 31, 2020

Source: University of Texas at Dallas

Summary: Researchers have developed a method to create micro LEDs that can be folded, twisted, cut and stuck to different surfaces.

The research, published online in June in the journal Science Advances, helps pave the way for the next generation of flexible, wearable technology.

Used in products ranging from brake lights to billboards, LEDs are ideal components for backlighting and displays in electronic devices because they are lightweight, thin, energy efficient and visible in different types of lighting. Micro LEDs, which can be as small as 2 micrometers and bundled to be any size, provide higher resolution than other LEDs. Their size makes them a good fit for small devices such as smart watches, but they can be bundled to work in flat-screen TVs and other larger displays. LEDs of all sizes, however, are brittle and typically can only be used on flat surfaces.

The researchers' new micro LEDs aim to fill a demand for bendable, wearable electronics.

"The biggest benefit of this research is that we have created a detachable LED that can be attached to almost anything," said Dr. Moon Kim, Louis Beecherl Jr. Distinguished Professor of materials science and engineering at UT Dallas and a corresponding author of the study. "You can transfer it onto your clothing or even rubber -- that was the main idea. It can survive even if you wrinkle it. If you cut it, you can use half of the LED."

Researchers in the Erik Jonsson School of Engineering and Computer Science and the School of Natural Sciences and Mathematics helped develop the flexible LED through a technique called remote epitaxy, which involves growing a thin layer of LED crystals on the surface of a sapphire crystal wafer, or substrate.

Typically, the LED would remain on the wafer. To make it detachable, researchers added a nonstick layer to the substrate, which acts similarly to the way parchment paper protects a baking sheet and allows for the easy removal of cookies, for instance. The added layer, made of a one-atom-thick sheet of carbon called graphene, prevents the new layer of LED crystals from sticking to the wafer.

"The graphene does not form chemical bonds with the LED material, so it adds a layer that allows us to peel the LEDs from the wafer and stick them to any surface," said Kim, who oversaw the physical analysis of the LEDs using an atomic resolution scanning/transmission electron microscope at UT Dallas' Nano Characterization Facility.

Colleagues in South Korea carried out laboratory tests of LEDs by adhering them to curved surfaces, as well as to materials that were subsequently twisted, bent and crumpled. In another demonstration, they adhered an LED to the legs of a Lego minifigure with different leg positions.

Bending and cutting do not affect the quality or electronic properties of the LED, Kim said.

The bendy LEDs have a variety of possible uses, including flexible lighting, clothing and wearable biomedical devices. From a manufacturing perspective, the fabrication technique offers another advantage: Because the LED can be removed without breaking the underlying wafer substrate, the wafer can be used repeatedly.

"You can use one substrate many times, and it will have the same functionality," Kim said.
In ongoing studies, the researchers also are applying the fabrication technique to other types of materials.

"It's very exciting; this method is not limited to one type of material," Kim said. "It's open to all kinds of materials."

US Politics Betting Odds


The Monthly Coppock Indicators finished August

DJIA: 28,430 Up. NASDAQ: 11,775 Up. SP500: 3,500 Up.

The NASDAQ remained up. The DJIA and SP500 turned up in uly. With stock mania running fueled by trillions of central bankster new fiat money programs, especially tech stock mania in the NASDAQ, the indicators are essentially worthless after all these years. I will discontinue this section at the end of the month.

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