Market Talk – December 6, 2019

ASIA:

More ups and downs regarding the US-China trade deal, with China suggesting they will remove tariffs on soybeans and pork as a gesture of goodwill. Meanwhile, US advisor to the White House Kudlow stated that the trade deal is in a better place than where they were mid-November, but also hinted that US President Trump is willing to walk away from the deal at any time.

Netflix plans to invest $420M to fight Disney in India. Netflix continues to bet heavily on India, one of the world’s largest entertainment markets, where it competes with more than three dozen rivals including Disney. Reed Hastings, the chief executive of Netflix, said at a conference in Delhi that Netflix is planning to spend about USD 450M on developing and licensing content into 2020.

While it remains unclear exactly how much capital other streaming services are pouring on content, a recent KPMG report estimated that Disney’s Hotstar was spending about $17 million on producing seven original shows this year, while Eros Now had pumped about $50 million into its India business to create 100 new original shows.

India has emerged as one of the last great growth markets for global technology and entertainment firms. About half of the nation’s 1.3 billion population is now online and the country’s on-demand video market is expected to grow to $5 billion in the next four years, according to Boston Consulting Group.

The major Asian stock markets had a mixed day today:

  • Shanghai increased 12.55 points or 0.43% to 2,912.01
  • Kospi increased 21.11 points or 1.02% to 2,081.85
  • ASX 200 increased 24.00 points or 0.36% to 6,707.00
  • NIKKEI 225 increased 54.31 points or 0.23% to 23,354.40
  • Hang Seng increased 281.33 points or 1.07% to 26,498.37
  • SENSEX decreased 334.44 points or -0.82% to 40,445.15

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.0008 or 0.12% to 0.6841
  • NZDUSD increased 0.0029 or 0.45% to 0.6573
  • USDJPY decreased 0.1460 or 0.13% to 108.6080
  • USDCNY decreased 0.0111 or 0.16% to 7.0289

Precious Metals:

  • Gold decreased 14.15 USD/t oz. or -0.96% to 1,461.31
  • Silver decreased 0.3834 USD/t. oz or -2.26%% to 16.5505

Some economic news from last night:

Japan:

Average Cash Earnings (YoY) remain the same at 0.5%

Household Spending (MoM) (Oct) decreased from 5.5% to -11.5%

Household Spending (YoY) (Oct) decreased from 9.5% to -5.1%

Overall wage income of employees (Oct) remain the same at 0.5%

Overtime Pay (YoY) (Oct) increased from -0.20% to 0.00%

Foreign Reserves (USD) (Nov) decreased from 1,324.5B to 1,317.3B

Australia:

AIG Construction Index (Nov) decreased from 43.9 to 40.0

Indonesia:

FX Reserves (USD) (Nov) decreased from 126.70B to 126.60B

Some economic news from today:

India:

Bank Loan Growth decreased from 8.1% to 8.0%

Deposit Growth decreased from 9.9% to 9.7%

FX Reserves, USD increased from 448.60B to 451.08B

M3 Money Supply decreased from 9.9% to 9.8%

Japan:

Coincident Indicator (MoM) (Oct) decreased from 1.7% to -5.6%

Leading Index decreased from 92.2 to 91.8

Leading Index (MoM) (Oct) remain the same at -0.1%

Hong Kong:

Foreign Reserves (USD) (Nov) decreased from 440.60B to 434.30B

EUROPE:

Jeremy Corbyn announced that he will release evidence that “Johnson is deliberately misleading the people.” The document entitled “NI Protocol: Unfettered Access to the UK Internal Market” shows that a border with Northern Ireland would occur under Johnson’s Brexit plan, despite Johnson claiming that would not occur. According to the document, customs declarations would also be required when traveling between NI and Britain, which Corbyn called “highly disruptive.” Tonight, Corbyn and Johnson will face off in a final debate.

Former President of the European Council Donald Tusk called Brexit “one of the most spectacular mistakes” in EU history. Furthermore, Tusk said that pro-EU politicians have based their campaigns on “an unprecedented readiness to lie.” Tusk, who previously praised France’s Macron, criticized him for favoring France rather than the EU as a whole and cited his ideology as another reason why the EU is not working.

Italy may be the next EU member to request an exit. The Lega Nord per l’Indipendenza della Padania (Northern League for the Independence of Padania) Party under Matteo Salvini announced that they will carry out “Italexit” if they win the next election. Economic advisor Claudio Borghi stated that he is against the European Stability Mechanism (ESM) as it would create harsher financial aid terms for Italy. “We have informed [citizens] of the damage done by the single currency before anyone else and while we want to avoid unilateral actions, if other countries come up with inclusive projects to change the EU’s single currency, we will consider them,” Borgi announced.

The major Europe stock markets had a green day today:

  • CAC 40 increased 70.37 points or 1.21% to 5,871.91
  • FTSE 100 increased 101.81 points, or 1.43% to 7,239.66
  • DAX 30 increased 111.78 points or 0.86% to 13,166.58

The major Europe currency markets had a mixed day today:

  • EURUSD decreased 0.0053 or 0.47% to 1.1052
  • GBPUSD decreased 0.0032 or 0.24% to 1.3126
  • USDCHF increased 0.0035 or 0.35% to 0.9907

Some economic news from Europe today:

Germany:

German Industrial Production (MoM) (Oct) decreased from -0.6% to -1.7%

Norway:

Manufacturing Production (MoM) (Oct) decreased from 0.8% to 0.0%

France:

French Current Account (Oct) increased from -2.90B to -2.40B

French Exports (Oct) increased from 47.0B to 47.7B

French Imports (Oct) increased from 41.6B to 43.0B

French Reserve Assets Total (Nov) decreased from 176,831.0M to 174,711.0M

French Trade Balance (Oct) increased from -5.4B to -4.7B

UK:

Halifax House Price Index (YoY) increased from 0.9% to 2.1%

Halifax House Price Index (MoM) (Nov) increased from -0.1% to 1.0%

Italy:

Italian Retail Sales (YoY) (Oct) increased from 0.8% to 1.0%

Italian Retail Sales (MoM) (Oct) decreased from 0.6% to -0.2%

US/AMERICAS:

Stocks soared this Friday after the Labor Department released a strong jobs report for November. The US economy added 266,000 nonfarm jobs last month, exceeding analysts’ expectations of 180,000. Additionally, unemployment sank to 3.5% — a 50-year low.

White House National Economic Council Director Larry Kudlow said today that a trade deal with China is close, however, President Trump is prepared to walk away if his terms are not met. “The president has said many times if the deal is no good, if the assurances with respect to preventing future thefts, if the enforcement procedure is no good he has said we will not go for it. We will walk away,” Kudlow told reporters at CNBC. This week, Trump hinted that the deal may have to wait until after the 2020 presidential elections. As of now, the US is prepared to impose a 15% tariff on $165 billion worth of Chinese goods on December 15.

Next week, the Federal Open Market Committee (FOMC) will make its final policy decision of 2019. Based on recent comments from Fed Chairman Jerome Powell, it appears that the Fed may choose to maintain rates for the remainder of the year. “We would need to see a really significant move up in inflation that’s persistent before we would consider raising rates to address inflation concerns,” Powell stated after the last policy meeting.

Bank of Canada Governor Stephen Poloz will step down from his position after serving seven years. His term will end in June of 2020. “It has been a privilege to serve as the ninth Governor of the Bank of Canada,” Poloz said in a statement released this Friday. It is unknown who his replacement will be, although there is much speculation.

US Market Closings:

  • Dow advanced 337.27 points or 1.22% to 28,015.06
  • S&P 500 advanced 28.48 points or 0.91% to 3,145.91
  • Nasdaq advanced 85.83 points or 1% to 8,656.53
  • Russell 2000 advanced 19 points or 1.18% to 1,633.84

Canada Market Closings:

  • TSX Composite advanced 142.05 points or 0.84% to 16,996.97
  • TSX 60 advanced 10.22 points or 1.02% to 1,015.09

Brazil Market Closing:

  • Bovespa advanced 503.48 points or 0.46% to 111,125.75

ENERGY:

The price of oil fell today after OPEC+ announced an agreement to reduce production by 500,000 barrels per day for the next three months.

The oil markets had a mixed day today:

  • Crude Oil increased 0.7911 USD/BBL or 1.36% to 59.0598
  • Brent increased 0.9197 USD/BBL or  1.45% to 64.3379
  • Natural gas decreased 0.0628 USD/MMBtu or -2.59% to 2.3573
  • Gasoline increased 0.0212USD/GAL or 1.31% to 1.6436
  • Heating oil increased 0.0134 USD/GAL or 0.69% to 1.9437
  • Top commodity gainers: Ethanol(2.11%),Copper(2.44%),Brent(1.45%), and Palm Oil(1.38%)
  • Top commodity losers: Steel(-5.03%), Natural Gas(-2.59%), Silver (-2.26%), and Cocoa(-1.40%)

The above data was collected around 12:36 pm EST on Friday.

BONDS:

Japan -0.01%(+3bp), US 2’s 1.61% (+2bps), US 10’s 1.83%(+3bps)US 30’s 2.27%(+3bps), Bunds -0.29% (+2bp), France -0.04% (-7bp), Italy 1.46% (+6bp), Turkey 12.04% (+15bp), Greece 1.56% (-51bp), Portugal 0.43% (+2bp), Spain 0.51% (+0bp) and UK Gilts 0.77% (-1bp).

 

Drug Trade, Violence, & Capital Flows

QUESTION:

Good afternoon Mr. Armstrong,

First of all, thank you for all the information you give us on your blog so that we who are and live in third world countries like me can understand the behavior of the global economy and especially in the rich countries. The way I approach the issue of the sovereign debt crisis has been very helpful, but I think that just as the press does not talk about the issue, you do not address the issue of how the illegal economy, especially that of drug trafficking, It affects the global economy.

Can you tell us what Socrates says about this last topic?

A big and warm greeting

CMGB

ANSWER: The drug trade is cash. It has had a major impact upon keeping the political governments south of the United States in chaos. In all honestly, if drugs were legalized, it would save so many lives and help reduce crime. In America, many are attracted to selling drugs because of the money they can make without education. South of the border, people are killed and subjected to slavery, tyranny, and political corruption all because of the drug trade. The number of people who die from the violence far exceeds the number of people die of an overdose.

Socrates picks up the cash flows. Much of the money is laundered into real estate around the world, but particularly into Miami.

 

The Rising Tide of Civil Unrest Globally

QUESTION:

Dear Marty , what do you’re models say about the unrest in South America (Chili, Peru, Bolivia, Colombia, Venezuela, Argentinia) .

It looks like the whole continent is on flames.

All the best,

ciao G

ANSWER: I will update the Cycle of War in 2020. As I have stated many times, the computer has correlated both the international war among nations as well as the civil unrest which leads to revolutions. Normally, these two separate models move at different times. When they align, we get the most dramatic changes. This is what is taking place right now on a global scale. We have rising civil unrest around the globe. There is no place that is exempt.

We will see even the US 2020 elections become much more violent. It will be similar to the 1960s, but this is not over race. This time economics is driving the cycle which is being articulated in the battle between socialism v capitalism. Never before in history do we see the losing side simply refuse to accept their loss and move on. This nonsense that Trump is “#NotMyPresident” reflects the rising discontent which will turn to violence next year.

Then the socialists are out to destroy capitalism using climate change. This is also a cleverly orchestrated movement that is political beneath the surface. Shutting down fuel, ending cars and air travel — people have no idea that the agenda is to send society back to the Stone Age and end, not just industrialization, but capitalism.

This is not going to end well. The stupidity of people to ascribe to climate change without looking closely at the proposals is just an illustration of how easily the mob can be fooled. They are being convinced to surrender all their freedoms on the pretense that we face extinction in 12 years.

Market Talk – December 5, 2019

ASIA:

China warned the US that a “price must be paid” for the latest sanctions imposed due to the China’s oppression of the people of Uighur decent. It seems this is a step back in the long discussions over the trade war.

Japan, under Prime Minister Abe, has approved a stimulus package worth in excess of 120 billion USD (13 trillion yen) in order to prop up the Japanese economy. Retail sales fell in October by 7.1% as the government raised the sales tax from 8% to 10%. The figure is expected to rise to 25 trillion yen when public spending is included.

The major Asian stock markets had a mixed day today:

  • Shanghai increased 21.35 points or 0.74% to 2,899.47
  • Kospi decreased -8.15 points or -0.39% to 2,060.74
  • ASX 200 increased 76.50 points or 1.16% to 6,683.00
  • NIKKEI 225 increased 164.86 points or 0.71% to 23,300.09
  • Hang Seng increased 154.48 points or 0.59% to 26,217.04
  • SENSEX decreased 70.70 points or -0.17% to 40,779.59

The major Asian currency markets had a negative day today:

  • AUDUSD decreased 0.0018 or 0.26% to 0.6833
  • NZDUSD decreased 0.0002 or 0.04% to 0.6547
  • USDJPY decreased 0.0760 or 0.07% to 108.7570
  • USDCNY decreased 0.0152 or 0.22% to 7.03840

Precious Metals:

  • Gold increased 0.3 USD/t oz. or 0.02% to 1,478.48
  • Silver increased 0.0801 USD/t. oz or 0.47%% to 16.9891

Some economic news from last night:

Japan:

Foreign Bonds Buying decreased from -150.8B to -511.1B

Foreign Investments in Japanese Stocks increased from 131.1B to 394.0B

South Korea:

Current Account (Oct) increased from 7.48B to 7.83B

Australia:

Exports (MoM) (Oct) decreased from 3% to -5%

Imports (MoM) (Oct) decreased from 3% to 0%

Retail Sales (MoM) (Oct) decreased from 0.2% to 0.0%

Trade Balance (Oct) decreased from 7.180B to 4.502B

Some economic news from today:

Indonesia:

Consumer Confidence increased from 118.4 to 124.2

India:

Cash Reserve Ratio remain the same at 4.00%

Interest Rate Decision remain the same at 5.15%

Reverse REPO Rate remain the same at 4.90%

EUROPE/EMEA:

UK PM Boris Johnson assured the public that if he is re-elected that he will get Brexit done as well as a budget within 100 days. The UK elections will take place on the 12th of December, with the Conservatives heavily favorited to be elected again in the third general election in four years.

The European environmental agency says that many of the targets set regarding curbing emission rates will not be met by 2020.

As many as 800,000 people took to the streets in France to march against pension reforms. Today, there were transportation strikes as well which are expected to be extended until Friday due to the same issue regarding pension reforms. The reform will make workers retire later or receive a reduced payout. We wrote about the upcoming pension crisis and how this will be a common theme going forward.

European countries have warned the UN that Iran is capable of building nuclear weapons. A newly tested ballistic missile system from Iran could be equipped with nukes. The Iranian foreign minister dismissed the accusations as lies and said it was a cover up for the EU’s failure to deliver the bare minimum to the deal.

The major Europe stock markets had a mixed day today:

  • CAC 40 increased 1.87 points or 0.03% to 5,801.55
  • FTSE 100 decreased 50.65 points, or -0.70% to 7,137.85
  • DAX 30 decreased 85.77 points or -0.65% to 13,054.80

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.0016 or 0.15% to 1.1098
  • GBPUSD increased 0.0047 or 0.36% to 1.31570
  • USDCHF decreased 0.0008 or 0.08% to 0.9874

 

Some economic news from Europe today:

Germany:

German Factory Orders (MoM) (Oct) decreased from 1.5% to -0.4%

Spain:

Spanish Industrial Production (YoY) (Oct) decreased from 0.8% to -1.3%

Spanish Consumer Confidence increased from 73.3 to 77.4

Euro Zone:

Employment Change (YoY) (Q3) remain the same at 0.9%

Employment Change (QoQ) (Q3) decreased from 0.2% to 0.1%

Employment Overall (Q3) decreased from 160,170.1K to 160,128.1K

GDP (QoQ) (Q3) remain the same at 0.2%

GDP (YoY) (Q3) remain the same at 1.2%

Retail Sales (YoY) (Oct) decreased from 2.7% to 1.4%

Retail Sales (MoM) (Oct) decreased from -0.2% to -0.6%

US/AMERICAS:

Chinese negotiators reiterated today that they require reduced tariffs to sign phase one of the trade deal. “The Chinese side believes that if the two sides reach a phase one deal, tariffs should be lowered accordingly,” ministry spokesman Gao Feng stated. Yesterday, China warned the US not to interfere in their handling of the Uighur population, as the US has accused China of additional human rights violations. The next round of tariffs on Chinese goods will be implemented in ten days.

US home sales will see a significant decline in 2020, according to a new report by realtor.com. Based on their housing data, they foresee housing declining by 1.8% next year while housing prices will increase by 0.8%. The main reason for the decline will be a reduction is supply, despite new construction of single-family homes expected to increase by 6%. American Millennials are expected to flood the housing market next year, accounting for potentially 50% of all mortgages.

New data released by Statistics Canada today corroborates the Bank of Canada’s forecast of a strengthening economy. Canada’s trade deficit declined in October at $1.1 billion, exceeding analysts’ expectations of $1.5 billion. The ongoing political dispute with China was felt in the figures after trade declined by 19.3%. The US remains Canada’s strongest trading partner, with Canada posting a surplus of $5.5 billion.

Brazilian President Bolsonaro believes a new culprit is to blame for the wildfires in the Amazon – actor Leonardo DiCaprio. “This Leonardo DiCaprio is a cool guy, right? Giving money to torch the Amazon,” Bolsonaro said. DiCaprio, a proponent of climate change, denied the allegations, and admires the Brazilian peoples’ “passion needed to save the environment.” The incident has put the spotlight back on the Brazilian government, who many accuse of sparking the fires to further agricultural deforestation.

US Market Closings:

  • Dow advanced 28.01 points or 0.10% to 27,677.79
  • S&P 500 advanced 4.67 points or 0.15% to 3,117.43
  • Nasdaq advanced 4.03 points or 0.05% to 8,570.70
  • Russell 2000 advanced 0.94 of a point or 0.06% to 1,614.83

Canada Market Closings:

  • TSX Composite declined 42.42 points or -0.25% to 16,854.92
  • TSX 60 declined 4.13 points or -0.41% to 1,004.87

Brazil Market Closing:

  • Bovespa advanced 321.34 points or 0.29% to 110,622.27

ENERGY:

Saudi was apparently disappointed at OPEC+ members for failing to comply with production cuts, and they said they are willing to increase production themselves. However, later in the day, the group agreed to further cuts from 1.2 mbpd to 1.7 mbpd which caused the price of oil to jump slightly.

The oil markets had a mixed day today:

  • Crude Oil increased 0.0732 USD/BBL or 0.13% to 58.4537
  • Brent increased 0.3179 USD/BBL or 0.50% to 63.4601
  • Natural gas increased 0.0151 USD/MMBtu or 0.63% to 2.4299
  • Gasoline increased 0.0114USD/GAL or 0.71% to 1.6241
  • Heating oil increased 0.0078 USD/GAL or 0.40% to 1.9349
  • Top commodity gainers: Steel (5.47%),Rubber(3.70%),Oat(3.48%), and Palm Oil(1.76%)
  • Top commodity losers: Corn(-1.64%), Lean Hogs(-0.79%), Cotton (-0.79%), and Coal (-0.83%)

The above data was collected around 14:45 EST on Thursday.

BONDS:

Japan -0.02%(+3bp), US 2’s 1.59% (+0bps), US 10’s 1.80%(+2bps), US 30’s 2.25%(+2bps), Bunds -0.32% (+3bp), France -0.04% (-7bp), Italy 1.48% (+9bp), Turkey 11.98% (+9bp), Greece 1.58% (-52bp), Portugal 0.43% (+5bp), Spain 0.46% (+1bp) and UK Gilts 0.77% (+3bp).

  • US 4-Week Bill Auction decreased from 1.620% to 1.500%
  • US 8-Week Bill Auction decreased from 1.570% to 1.520%
  • UK 30-Year Treasury Gilt Auction increased from 1.254% to 1.289%
  • French 10-Year OAT Auction decreased from -0.03% to -0.08%
  • Spanish 5-Year Bonos Auction increased from -0.106% to -0.085%
  • Spanish 10-Year Obligacion Auction increased from 0.409% to 0.440%
  • Japan 30-Year JGB Auction decreased from 0.460% to 0.430%

 

Y2K & the Two-Digit Date Systems

 

COMMENT:

Was Y2K a possible problem ?

I was programmer then systems programmer and Senior programmer for several companies in the late 1960’s into mid 1970’s. Indeed our records did have just a 2 digit year in all records.

Of course technology improved and and space would have become less important and history would suggest that the problem was foreseen and handled significantly.

Was that guaranteed ?

Of course not.

REPLY: There were computer systems that were the old system based only on a two-digit date. Those systems were predominantly the problem, but they were exaggerated to make it seem that the entire computer world would crash. So in that respect, I was wrong in not addressing the old two-digit systems. They were the minority.

European Banks to be Prohibited from Dealing in Repo?

QUESTION: Mr Armstrong,
I have great respect for your work.
Can you explain how the Fed’s QE fits into the cycle of things. It seems to me that their interference in the markets is disrupting/altering the cycle. For example, the latest Fed purchases of T-bills every month in the amount of $60.
Who are they buying from? I assume Inv Banks, Comm Banks and hedge funds, and now these entities, instead of having low yielding bills on their books have zero coupon cash, which they then seek yield and put into the shares markets. It seems pretty clear and appears to extends the cycle. Can money printing just cause the 8.6 yr cycle for instance to extend to say a harmonic of that, 17.2 or 25. 8?

ANSWER: No. The Repo Crisis is on time. Our forecast for the start of the Liquidity Crisis was after Labor Day in September. The Fed is trying to prevent short-term rates from rising. They are not engaging in Quantitative Easing for the sake of “stimulating” the economy.

Things are getting bad and the rumor behind the curtain is that European banks will be prohibited from participating in repo for year-end. That is how bad things are getting.

So the cycle appears to be coming on time. All the implications are far too great to cover in a blog, which is why I have created a a report on the repo crisis that is around 150 pages.

The Big Bang and the Process Unfolding into 2025

QUESTION:  Hi Martin, I am a long time follower and devoted to your blogs. It’s something that goes well with that first cup of coffee in the morning. In your responses to some people regarding an alternate place to escape from government tyranny, I would suggest that it is not easy for many who have a spouse, family or grandchildren (if if you have the means to do so). Another aspect is how does one assess whether the place they are moving to will have a stable government five years from now or longer, because there is always the threat from another country wanting your resources, workers, strategic land, etc. I don’t think it is easy for anyone to up and move away from family and friends whom they would leave behind – and contact via social media, well, that’s doesn’t work for me.

Thank you.

PP

ANSWER: The cracks in the system will begin to appear next year. This is part of the Big Bang that began 2015.75, and was the PEAK in government confidence. As this unfolds, it will become clearer as to where to go. Keep in mind that the collapse in governments is predominantly in the West, which includes South America. There will be rising separatist movements, so we will see varying pockets of political unrest. We are just too far away from that for me to speak without guessing. It does appear that Asia will be the better place in general. They are not embracing socialism or this insane climate change agenda.

Market Talk – December 4, 2019

 

ASIA:

US President Donald Trump sounded a little more optimistic over the trade deal with China today, having stated that current talks are going very well. Yesterday, President Trump sent the market into a slight frenzy suggesting that perhaps it would be better to wait until after the elections in November next year to conclude any deal. Still, there remains pressing issues between the two countries mainly the issue with Hong Kong and the Xinjiang region. Regarding the Xinjiang region, the US passed a bill that can enable sanctions on ministers who are involved with the Chinese treatment of Uighurs.

Japan and the US have now concluded a trade deal that passed through the Japanese upper house today. The initial deal was drawn out at the start of the year when Japanese Prime Minister Shinzo Abe and US President Donald Trump met. Some critics are pointing to a US victory in the deal as a 2.5% tariff remains on any Japanese cars exported to the US.

India has passed a Citizenship Act Amendment Bill which will allow many Sikhs, Hindus, and other religious minorities who have fled Pakistan, Bangladesh, and Afghanistan to take refuge in India. There was some criticism of the bill as it omitted those of the Muslim faith, however, President Modi’s camp said that those of the Muslim faith would not be required to use the bill as they can take refuge in Islamic nations across the globe.

The major Asian stock markets had a mixed day today:

  • Shanghai decreased 6.58 points or -0.23% to 2,878.12
  • Kospi decreased -15.18 points or -0.73% to 2,068.89
  • ASX 200 decreased 105.80 points or -1.58% to 6,606.50
  • NIKKEI 225 decreased 244.58 points or -1.05% to 23,135.23
  • Hang Seng decreased 328.74 points or -1.25% to 26,062.56
  • SENSEX increased 174.84 points or 0.43% to 40,850.29

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.0003 or -0.05% to 0.68459
  • NZDUSD increased 0.0012 or 0.18% to 0.6528
  • USDJPY increased 0.1910 or 0.18% to 108.8240
  • USDCNY decreased 0.0182 or 0.26% to 7.0502

Precious Metals:

  • Gold decreased 3.40 USD/t oz. or -0.23% to 1,475.32
  • Silver decreased 0.26 USD/t. oz or -1.50%% to 16.9318

Some economic news from last night:

China:

Caixin Services PMI (Nov) increased from 51.1 to 53.5

Chinese Composite PMI (Nov) increased from 52.0 to 53.2

Japan:

Services PMI (Nov) increased from 49.7to 50.3

South Korea:

FX Reserves – USD (Nov) increased from 406.32B to 407.46B

Hong Kong:

Manufacturing PMI (Nov) decreased from 39.3 to 38.5

Australia:

AIG Services Index (Nov) decreased from 54.2 to 53.7

Services PMI decreased from 50.1 to 49.7

GDP (YoY) (Q3) increased from 1.4% to 1.7%

GDP (QoQ) (Q3) dccreased from 0.5% to 0.4%

GDP Capital Expenditure (Q3) increased from -1.7% to -0.2%

GDP Chain Price Index (Q3) decreased from 1.2% to 0.7%

GDP Final Consumption (Q3) decreased from 1.0% to 0.3%

New Zealand:

ANZ Commodity Price Index (MoM) increased from 1.2% to 4.3%

Some economic news from today:

India:

Nikkei Services PMI (Nov) increased from 49.2 to 52.7

EUROPE/EMEA:

Latest in the UK Brexit case is that UK PM Boris Johnson is seemly failing to rule out leaving the EU on WTO terms. The UK Foreign Secretary Dominic Raab backed the PM by saying he is absolutely right to be leaving a “no-deal” outcome on the table during negotiations. During questioning, the PM failed to criticise Raab but said, “We have a great deal. It’s going to allow us to come out smoothly and efficiently on 31 January.” A leaked document by the Conservatives shows that they are considering that the Brexit negotiations could lead on for years even with the withdrawal agreement passed. Labour and Lib Dem members were quick to comment on the leaked document, stating that PM Boris Johnson could not be trusted and that a realistic trade deal cannot be passed as quickly as they promise.

The situation in Iran is apparently getting worse as there was a major crackdown on protesters yesterday. A human rights organization believes that at least 208 people have now died since the protests began. Still, the country has an internet blackout after the government raised prices and placed quotas on petroleum. Meanwhile, Iran has announced a joint naval exercise with Russia and China in the Indian Ocean, which is expected to commence at the end of the year.

Turkey has lowered their opposition to the NATO Baltic plan, as they have now agreed to support the deal which will bolster the defences of the Baltic states and Poland against Russia. Initially, Turkey was against such a deal as they received a hard time with regards to their battle with the YPG in Syria.

France is battling internally with transportation strikes as they brace for potentially the worst strike in decades. The strikes are expected to commence tomorrow on the 5th of December with the country expected to be forced to a standstill.

The major Europe stock markets had a green day today:

  • CAC 40 increased 72.47 points or 1.27% to 5,799.68
  • FTSE 100 increased 29.74 points, or 0.42% to 7,188.50
  • DAX 30 increased 151.28 points or 1.16% to 13,140.57

The major Europe currency markets had a green day today:

  • EURUSD increased 0.00089 or 0.08% to 1.10899
  • GBPUSD increased 0.01107 or 0.85% to 1.31077
  • USDCHF increased 0.0014 or 0.14% to 0.9885

Some economic news from Europe today:

Norway:

Current Account (Q3) decreased from 26.5B to 23.9B

House Price Index (YoY) (Nov) increased from 2.4% to 3.1%

Spain:

Spanish Services PMI (Nov) increased from 52.7 to 53.2

Italy:

Italian Composite PMI (Nov) decreased from 50.8 to 49.6

Italian Services PMI (Nov) decreased from 52.2 to 50.4

France:

French Markit Composite PMI (Nov) decreased from 52.6 to 52.1

French Services PMI (Nov) decreased from 52.9 to 52.2

Germany:

German Composite PMI (Nov) increased from 48.9 to 49.4

German Services PMI (Nov) increased from 51.6 to 51.7

Euro Zone:

Markit Composite PMI (Nov) remain the same at 50.6

Services PMI (Nov) decreased from 52.2 to 51.9

UK:

Composite PMI (Nov) decreased from 50.0 to 49.3

Services PMI (Nov) decreased from 50.0 to 49.3

US/AMERICAS:

The NATO summit in London wrapped up today, and it appears progress has been made between NATO members. Members have agreed to increase their annual spending by a combined $130 billion and that figure is expected to increase to $400 billion by 2024. Currently, only nine members are meeting their 2% of GDP spending requirement. Britain, Poland, Estonia, Latvia, Lithuania, Greece, Bulgaria, Romania, and the US are all expected to meet their spending requirements this year.

Expected controversies occurred during the event. French, Canadian, and UK leaders were secretly recorded on a hot mic mocking US President Trump. During a press conference with Germany’s Merkel, Trump responded to the incident by calling Canadian PM Trudeau “two-faced” and upset that Canada failed to meet the 2% spending requirement. The incident likely worsened relations between Macron and Trump after their spat on Tuesday. However, the White House called France “a partner of the United States in many key ventures.”

President Trump came out in favor of the Iranian protesters, much to the dismay of the Iranian authorities. Yesterday, Iran declared that the US owes them $130 billion to compensate for losses due to sanctions.

The Bank of Canada (BoC) announced this Wednesday that they will hold the current benchmark rate at 1.75%. Unlike the majority of central banks who have opted to lower rates, the BoC has continued to stick to the course. Canada’s central bank sees an uptick in the overall global economy as well as future growth in the upcoming years. “Financial markets have been supported by central bank actions and waning recession concerns, while being buffeted by news on the trade front. Indeed, ongoing trade conflicts and related uncertainty are still weighing on global economic activity, and remain the biggest source of risk to the outlook. In this context, commodity prices and the Canadian dollar have remained relatively stable,” the bank said in their official statement.

Third quarter growth in Canada met analysts’ expectations at 1.3%. Unlike its neighbor to the north, Canada has successfully maintained its core inflation target of around 2%. The BoC foresees inflation remaining close to target for the next two years. In addition to monitoring volatile global trade, the bank is honing in on consumer spending and housing activity in advance of the next policy decision.

US Market Closings:

  • Dow advanced 146.97 points or 0.53% to 27,649.78
  • S&P 500 advanced 19.56 points or 0.63% to 3,112.76
  • Nasdaq advanced 46.03 points or 0.54% to 8,566.67
  • Russell 2000 advanced 11.27 points or 0.70% to 1,613.90

Canada Market Closings:

  • TSX Composite advanced 5.16 or 0.03% to 16,897.34
  • TSX 60 advanced 0.04 of a point or 0% to 1,009.00

Brazil Market Closing:

  • Bovespa advanced 1,344.91 points or 1.23% to 110,300.93

ENERGY:

The EIA reported a crude oil inventory draw of 4.9 million barrels for the week to November 29th, which caused crude to move up by nearly 4%. Analyst had expected there to be a slight build in Crude. The OPEC+ meeting is due to happen this week in Vienna where Iraq’s oil minister told reporters that a deep cut to production is “preferred by a number of key members.”

The oil markets had a mixed day today:

  • Crude Oil increased 2.0708 USD/BBL or 3.67% to 58.5672
  • Brent increased 2.154 USD/BBL or 3.52% to 63.3932
  • Natural gas decreased 0.059 USD/MMBtu or -2.41% to 2.3899
  • Gasoline increased 0.0477USD/GAL or 3.04% to 1.6151
  • Heating oil increased 0.0496 USD/GAL or 2.63% to 1.9386
  • Top commodity gainers: Ethanol (4.79%),Crude Oil(3.67%),Brent(3.52%), and Gasoline(3.04%)
  • Top commodity losers: Cheese (-5.67%), Milk (-5.05%), Steel (-4.18%), and Natural Gas (-2.41%)

The above data was collected around 11:25 am EST on Wednesday.

BONDS:

Japan -0.02%(+3bp), US 2’s 1.56% (+2bps), US 10’s 1.74%(+3bps), US 30’s 2.20%(+5bps), Bunds -0.35% (-7bp), France -0.04% (-7bp), Italy 1.37% (-4bp), Turkey 12.00% (+11bp), Greece 1.58% (-50bp), Portugal 0.37% (-1bp), Spain 0.43% (-0bp) and UK Gilts 0.71% (+4bp).

  • German 10-Year Bund Auction decreased from -0.290% to -0.330%

 

Socrates Project – Best Kept Secret

QUESTION: Marty; A friend of mine is an analyst at one of the major banks in New York. He said they are not allowed to forecast some things as you said. He used to work for a European bank and did say it was much worse.  He said everyone who is anyone reads you. He also said that none of the mainstream media will ever report on Socrates because you will put all analysis out of business. Is this why you intend to go public?

Thanks so much for your insight in creating Socrates.

MH

ANSWER: Mainstream press in the USA has never been interested in really covering our analysis. They are not interested in reporting that a computer can actually write reports and forecast the entire world. You have to understand, we remain the best-kept secret. Even when Nigel Farage was our guest speaker in Rome, he said he had to come after we forecast BREXIT. Now, not a single British newspaper ever reported our forecast before or after. Nonetheless, those in power and in strategic institutions and corporations, all know what our forecasts were. So it is an interesting paradox. We are the best-read, but the most under-reported.

Nobody wants to report there is a computer that forecasts the world for it at the same time exposes the true trend of the economy and all the interconnections, including climate change. In the summer when the Inverted Yield Curve was taking place, all the newspapers were forecasting Trump would lose because the economy was headed into a recession. That was their typical biased war against Trump. Our model showed there would be a moderate decline in the expansion into the ECM for January, but that we did not see a major correction or a major recession.

These types of forecasts are not luck nor are they based upon what “I think” for we are all human and thus we are subject to making mistakes. We need a dispassionate analysis of a computer to provide an objective outlook. People keep trying to compete with me personally which is often quite funny to me.

Socrates will only be recognized when (1) we go public, and (2) after my death. That is just how things work. Even in the Bible, Jesus said that a prophet has no honor or is recognized in his own country’ (John 4:44). That is the way it has ALWAYS been in every field. Not exactly sure why it is that way. It just is! I have always been covered more by the press outside the USA than inside.