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North Korea warns that Kim’s thoughts on Trump can change

  
Analysis, Politics
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North Korea warns Trump on year-end deadline

North Korea US

In case you missed the news from earlier today, North Korea has set a year-end deadline for the US to change its policies or Kim Jong Un may “embark on a new path” as denuclearisation talks between the two countries appear to have broken down.

If you’ve been following our headlines over the past few months, it is clear that the two countries aren’t getting along well with how frequent North Korea has been conducting missile launches and tests during the period.
As things stand, they want the US to lift more sanctions before committing to any more “denuclearisation” projects but the US wants it to be the other way around. Hence, we have reached a bit of an impasse at the moment.
If anything else, keep an eye on this issue here as it could present a wild card risk for markets in 2020 – alongside the host of other issues.

China likes Trump as US president: a “business man”, “would be glad to have him re-elected”

  
  Analysis
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Despite the US-China tensions it seems China is very happy to be negotiating with US President Trump.

Washington Post carries the endorsement:
  • “Trump is a businessman. We can just pay him money and the problems will be solved,” said a politically connected person in Beijing, speaking on the condition of anonymity 
  • he is “easy to read,” said Long Yongtu, a former vice minister of foreign trade
  • “We want Trump to be reelected; we would be glad to see that happen.”
Its worth checking out the article, there is plenty more. Here is the link and it isn’t long.
It makes the ‘China is waiting it out until after the US election’ point of view less valid?
China is very happy to be negotiating with US President Trump.

The verbatim of Trump’s latest comments is another sign the deal is falling apart

  
Analysis, Politics
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Trump spoke in a Q&A at Apple headquarters

Trump at Apple
Keep in mind that Trump said earlier in his comments that they were considering exempting Apple from tariffs. To me, that alone says he is already a couple steps along in the process of adding tariffs, or at least strongly considering it.
The main headlines have been reported already but the last part is where the context matters.
Reporter: Will there be a trade deal in place before the end of the year?
Trump: So, I can tell you this: China would much rather make a trade deal than me?
Reporter: Then why haven’t they?
Trump: Because I haven’t wanted to do it yet.
Reporter: Why haven’t you wanted to do it.
Trump: Because I don’t think they’re stepping up to the level that I want
Reporter: I spoke earlier today with Mr Cook and he said another round of tariffs would be bad for business, it would be bad for the United States (interrupted by Trump)
Trump: You know, here’s what I would say. What do you know? I put in tariffs and everyone said ‘Oh geez, you’re taking in hundreds of billions of dollars’ and everyone said ‘oh that’s going to be bad for the economy’. Well, as you just heard from Tim Cook, we have the strongest economy by far in the world and we’re taking in billions and billions. So we’ll see what happens.

(more…)

What’s on calendar today? Trump.

  
  Analysis
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That’s about it….

The calendar is bare. There will be no economic releases from NY or Canada.
As far as events, the focus will be squarely on the speech by Pres. Trump at the Economic Club of New York. That will be at 12 PM ET.  Will it be a rah-rah speech or will he speak more on China? If on China, the evergreen story always has the ability to push stocks higher on increased optimism for a trade deal (or lower on decreased optimism for a trade deal if he is particularly ornery).
There is another speaker… Fed Harker will speak also in New York at a Reuters event. There is no text expected, however, Q&A from audience is likely. The speech will start at 12:55 PM ET/1755 GMT.

Think it’s too late? The world’s greatest fund manager didn’t make money until he was 52

  
Analysis, Education
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Jim Simons had modest wealth at 52; now he’s worth $23 billion

Jim Simons
Financial markets — and risk taking in general — are largely the domain of the young. Early adulthood is the time to swing for the fences while middle age is a time for prudence, perhaps risking a manageable part of the nest egg.
Yet that’s not always true. It’s particularly untrue of some of the world’s greatest investors.
Among them is Jim Simons, the king of quants. Yesterday Gregory Zuckerman published “The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution.”
It details how a 40-year old math professor walked away from a job at Stony Brook University to try trading currencies. He had no idea what he was doing but raised $4 million with a few partners. He recruited renowned mathematicians to help him. It didn’t work and losses topped $1 million.
“If you make money, you feel like a genius,” he told a friend. “If you lose, you’re a dope.”
He gathered more data and persevered through the 1980s with a mixed record. In 1989 he lost 4%.
Finally, Simons along with recently recruited colleagues Henry Laufer and Elwyn Berlekamp, started to focus on short-term patterns — Monday’s price action often followed Friday’s, while Tuesday saw reversions to earlier trends.
It worked and the Medallion fund gained 55.9% in 1990. It hasn’t stopped. His fund as generated average returns of 66%, racking up gains of $100 billion. No other fund or manager is even close. A $10,000 investment 30 years ago excluding fees would be worth $40 billion today. Even after fees, it would be worth $195 million.
How the fund makes money is one of the world’s most-closely guarded secrets but it’s story isn’t. Simonds certainly had mathematical talents but he know almost nothing about markets when he started out at age 40 and managed to amass one of the world’s great fortunes.

The US/China deal can be delayed until December: Senior Trump administration official

  
  Analysis
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Negative moves in stocks… Yields move lower… Gold moves higher

  • Trump/Xi meeting to sign US–China trade deal could be delayed until December as discussions continue over terms and venue
  • Still possible US – China trade deal pack will not be reached, but deal more likely than not
  • Europe a likely venue for the Trump-Xi meeting with Switzerland and Sweden among sites under consideration. Iowa is not a likely
  • Push for more tariffs rollbacks not seen derailing progress toward trade deal
  • Believes China sees quick trade deal as best chance for favorable terms, given Trump’s electoral and impeachment pressures
The stocks have moved to a new session lows (modest declines are picking up steam a bit).
  • S&P index fell to a low of 3067.26. We currently trade at 3069.5
  • NASDAQ fell to a low of 8387.61. We currently trade at 8389.32
  • Dow fell to 27420.17 with the price currently at 27435
US yields moved lower as well with the 10 year at 1.824%, -3.5 basis points.
Gold prices have moved higher with spot gold up $9 or 0.61% at $1493 currently.
WTI crude oil futures have moved lower they trading near session lows at $56.33 (currently at $56.42).
The USDJPY has moved to a new session low at 108.83. The 200 hour moving average comes in at 108.659.  There is a risk off in risk pairs like USDCAD, AUDUSD and NZDUSD.

Trump invites southeast Asian leaders to US for special summit

  
  Analysis
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Trump makes a move

The geographical battleground of the trade war is in southeast Asia.
It’s an area where China is trying to expand and solidify ties while the US is trying to beat back Beijing. There’s a military component as well as China tries to dominate the South China Sea.
This weekend, Trump skipped the ASEAN summit, which is attempting to finalize the Regional Comprehensive Economic Partnership — a massive trade deal.
Trump’s move to invite Southeast Asian leaders will undoubtedly raise eyebrows in Beijing and further convince leaders there that the Phase One deal will probably only be a ceasefire and that the US is planning to curb China’s growth and influence.

Trump takes another shot at the Federal Reserve

  
Analysis, Politics
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Trump with the usual stuff

People are VERY disappointed in Jay Powell and the Federal Reserve. The Fed has called it wrong from the beginning, too fast, too slow. They even tightened in the beginning. Others are running circles around them and laughing all the way to the bank. Dollar & Rates are hurting..our manufacturers. We should have lower interest rates than Germany, Japan and all others. We are now, by far, the biggest and strongest Country, but the Fed puts us at a competitive disadvantage. China is not our problem, the Federal Reserve is! We will win anyway.
If you’ve been watching CNBC lately, it sure sounds like Jim Cramer is making a real pitch to be the next Fed chair. There was also talk about turfing Powell after the election in a move that would undoubtedly cause a legal fight.

China issued 10m tonnes quota for US soybeans purchases – report

  
  Analysis
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It’s not the 40-50m tonnes Trump talked about but it’s a start

The idea was never to buy all the soybeans at once, but over the course of a year. China nees the food.
Reuters reports that Chinese officials gave tariff-free quotas to soybean buyers for up to 10m tonnes.
It’s a sign of concrete progress and good faith in the trade war but it could all fall apart very quickly.

Tariffs being imposed Dec.15 if no China trade deal, says Mnuchin

  
  Analysis
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U.S. Treasury Secretary Steven Mnuchin said on Monday that an additional round of tariffs on Chinese imports will likely be imposed if a trade deal with China has not been reached by then, but added that he expected the agreement to go through.

“I have every expectation – if there’s not a deal, those tariffs would go in place – but I expect we’ll have a deal,” he said in an interview with CNBC, when asked about a round of tariffs scheduled for Dec. 15.

U.S. President Donald Trump said on Friday that China and the United States had reached the first phase of a trade deal that covered agriculture, currency and some aspects of intellectual property protections, and would ease the reciprocal trade restrictions that the world’s two largest economies have been imposing for 15 months.

But officials on both sides have said more work is needed to finalize the accord, and Trump acknowledged the agreement could still collapse. U.S. Trade Representative Lighthizer said on Friday that Trump had not made a decision about the December tariffs.

Mnuchin said more trade negotiations at various levels would take place over the coming weeks, including a phone call between himself, Lighthizer and Chinese Vice Premier Liu He, and talks between Trump and Chinese leader Xi Jinping.

Asked about a dispute between China and the U.S. National Basketball Association stemming from a tweet by Houston Rockets manager Daryl Morey expressing support for pro-democracy protests in Hong Kong, Mnuchin said he hoped the two sides could come to a solution.

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