100-year storm as market groups break below 50- and 200-day daily moving averages
1 – Hurricane Michael is ’100 year’ storm, Gov. Rick Scott warns
Hurricane Michael, which intensified into a Category 4 storm overnight, is expected to make landfall at that strength near Panama City later Wednesday. Forecasters said the storm’s winds had reached 145 mph and that the hurricane could bring 9 to 13 feet of storm surge along the coast — unprecedented for a region that has not seen a Category 4 landfall since records began in 1851.
This is going to be a storm with huge impact. It will cause massive damage and be difficult for oil producers in the Gulf of Mexico, something I mentioned in my last post on $100 oil.
2 – The market has been unable to rally after last week’s sell-off
So far the market has been unable to rally after last week’s sell-off and today’s decline is extending the technical damage: the S&P Mid-Cap & Russell 2000 broke their 200-day exponential moving averages; the S&P 500, Staples (XLY) & Industrials (XLI) broke their 50 day EMAs.
— Ralph Acampora CMT (@Ralph_Acampora) October 10, 2018
I don’t have a view on whether this is important. But the technicals are weak. And bonds are rallying at the same time.
3 – US homebuilders in bear market
Homebuilders close at an 18-month low, down 14 out of the last 15 trading days.
Housing is an interest rate sensitive sector. And many analysts anticipate that new home sales will be down over the coming months. The homebuilders’ stocks are now officially in a bear market, having declined 20%. That’s a bad sign for the housing sector overall.
4 – An homage to populism sounds a lot like Hitler
Two historians of the Nazi period say an op ed by a right-wing populist paraphrases a speech Hitler gave in 1933.
Alexander Gauland, co-leader of the far-right Alternative for Germany, penned a piece for the Frankfurter Allgemeine, a conservative daily, about the causes of populism. He described an elitist, globalized business and political class that enjoys privileges while the middle class and those on lower incomes suffer from international competition and immigration. It’s a colorful jibe at the English speakers he describes as detached and egotistical, stuck in their own bubble as they glide from Berlin to London to Singapore, indifferent to the places where they live. And, he says, that place, valued by those who live there and cannot move away, is being taken away by migration.
The piece seems to echo a speech by Hitler in Siemensstadt, a working-class Berlin neighborhood.
This is scary stuff, especially since the AfD is polling 2nd in Germany right now. Again, mass immigration, one aspect of globalization, is having a very negative impact on the sense of cultural identity for the western middle classes. Right-wing populism will continue to be attractive in this environment until mainstream parties figure out how to deal with their voters’ anxieties.
5 – Poll: Kavanaugh confirmation energizes Democrats more than GOP
Republicans are touting the confirmation of Supreme Court Justice Brett Kavanaugh as rocket fuel for the GOP grass roots in next month’s midterm elections, but it’s Democrats who appear more energized by the nomination fight, according to a new POLITICO/Morning Consult poll.
Kavanaugh’s confirmation is not popular: In the poll, which was conducted entirely after last week’s Senate vote, 46 percent of voters said the Senate “made the wrong decision” in approving the controversial judge, while 40 percent said it was right to elevate him to the high court.
And following the GOP-led effort to push through his nomination, enthusiasm among Democratic voters has surged. More than 3 in 4 Democrats (77 percent) say they are “very motivated” to turn out and vote in the midterms — more than the 68 percent of Republicans who say they’re “very motivated.”
Prior to Kavanaugh’s confirmation, some polls had showed an uptick in GOP interest in this year’s elections.
It’s not entirely clear that the Republicans are right in thinking they will get a bump in the Senate from the Kavanaugh hearing. This polling suggests otherwise.
6 – New poll finds a 30-point gender gap going into the midterms
Nearly two-thirds of registered women voters polled by CNN said they were more likely to vote for Democrats this November: 63 percent voting for the Democratic candidate, compared to 33 percent who said they’re more likely to vote for the Republican.
Men, on the other hand, are narrowly more likely to vote for Republican candidates — 50 percent of male voters said they were more likely to vote Republican, compared to 45 percent who said they were more likely to vote for the Democratic candidate in their district.
In line with Politico, CNN is also showing that Kavanaugh should have a negative effect on Republicans’ electoral outcomes. Women are abandoning the party.
7 – How Trump Voters View the President Now
All are white and all but one are committed to President Trump. Here’s what they think about his first two years in general, his choice of Brett Kavanaugh and the Judiciary Committee hearings, Trump’s immigration policies, his attempts to scrap Obamacare, his cutbacks to environmental regulations, and his approach to assault rifles, today’s economy, the 2017 tax law, nuclear weapons and the deficit.
Here is some anecdotal evidence surrounding the Trump base that will make for good reading. Most of these 2016 supporters are still with the president.
8 – Nikki Haley resignation
No idea what happened with Nikki Haley sudden resignation, but no admin says “hey, here’s a brainstorm! Let’s have one of our biggest Administration stars suddenly resign just 28 days before a rough election.” There is a story here, we just don’t know it… yet.
— Mike Murphy (@murphymike) October 9, 2018
For me, this tweet has the ring of truth to it. There’s more to this resignation than we now know.
9 – Alexa, Should We Trust You?
Privacy concerns have not stopped the march of these devices into our homes, however. Amazon doesn’t disclose exact figures, but when I asked how many Echo devices have been sold, a spokeswoman said “tens of millions.” By the end of last year, more than 40 million smart speakers had been installed worldwide, according to Canalys, a technology-research firm. Based on current sales, Canalys estimates that this figure will reach 100 million by the end of this year. According to a 2018 report by National Public Radio and Edison Research, 8 million Americans own three or more smart speakers, suggesting that they feel the need to always have one within earshot. By 2021, according to another research firm, Ovum, there will be almost as many voice-activated assistants on the planet as people. It took about 30 years for mobile phones to outnumber humans. Alexa and her ilk may get there in less than half that time.
One reason is that Amazon and Google are pushing these devices hard, discounting them so heavily during last year’s holiday season that industry observers suspect that the companies lost money on each unit sold. These and other tech corporations have grand ambitions. They want to colonize space. Not interplanetary space. Everyday space: home, office, car. In the near future, everything from your lighting to your air-conditioning to your refrigerator, your coffee maker, and even your toilet could be wired to a system controlled by voice.
The company that succeeds in cornering the smart-speaker market will lock appliance manufacturers, app designers, and consumers into its ecosystem of devices and services, just as Microsoft tethered the personal-computer industry to its operating system in the 1990s.
It’s that last paragraph that is the big takeaway here. Yes, privacy concerns are the dominating media headline. But the real threat is dominance of the home automation market by a couple of firms. I know of one vendor in particular that told me Amazon is trying to force company lock-in to their ecosystem by making changes to the API.
10 – Ed Sheeran paid more tax (£5.29 million) in the UK last year than Google.
Hello @GoogleUK. Here’s your political problem is a single tweet. You’re too big, too unaccountable and have so many lawyers and lobbyists you’ve lost sight of what’s right and wrong. https://t.co/E0k0gvfhKG
— Tom Watson (@tom_watson) October 10, 2018
Speaking of technology and tech, Tom Watson is the Deputy head of Britain’s Labour Party. The fact that he is tweeting this tells you that big American tech companies are really in the crosshairs every which way you look. They will all face tougher regulatory scrutiny in the years ahead, particularly in Europe.
11 – Bank of Greece Blames Bank Stocks’ Rout on Contagion From Italy
Greece’s central bank blamed Italy’s populist fiscal policy for a plunge in the stock prices of local banks, in the first official acknowledgment that the country’s plans to widen its budget deficit next year are having effects elsewhere in the euro area.
“The recent stock market developments in respect of the banking sector are not related to the soundness of Greek banks and are due to purely exogenous factors, such as rises in interest rates internationally and in Greece’s neighboring countries in particular,” Bank of Greece Governor Yannis Stournaras said in a statement on Wednesday.
It’s a remarkable turnaround when you have Greece complaining about contagion. It’s a perfect metaphor for the trouble Italy finds itself in.
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