{"id":1164203,"date":"2020-02-06T17:04:38","date_gmt":"2020-02-06T23:04:38","guid":{"rendered":"https:\/\/dailyreckoning.com\/?p=108943"},"modified":"2020-02-06T17:04:38","modified_gmt":"2020-02-06T23:04:38","slug":"a-flood-of-good-news","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1164203","title":{"rendered":"A Flood of Good News"},"content":{"rendered":"

This post A Flood of Good News<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

What are we to make of all the good news? Good news?<\/p>\n

We learn by the United States Department of Labor that Americans were 1.8% more productive in 2019 than in 2018.<\/p>\n

Here we have the greatest annual productivity gain since 2009.<\/p>\n

We learn further that Americans\u2019 real hourly wages (inflation-adjusted, that is) expanded 1.9% last year \u2014 the highest rate since 2015.<\/p>\n

Meantime, Gallup informs us 59% of Americans feel more financially flush this year than last.<\/p>\n

That is a record figure… nosing out the previous 58% from January 1999.<\/p>\n

And a record 74% of American adults expect next year will find them in easier waters yet.<\/p>\n

74% eclipses the previous 71% high from 1998.<\/p>\n

Thus the American outlook is bright\u2026 and the spirit of gain is on the stretch.<\/p>\n

More Good News?<\/b><\/h2>\n

Now what is this? Yet another sunshaft cracks through the overcast\u2026<\/p>\n

China has announced \u2014 unexpectedly \u2014 that it will slash tariffs on $75 billion of United States exports. Some, reportedly, as much as 50%.<\/p>\n

And whispers swirl that researchers are nearing an antidote to the coronavirus.<\/p>\n

China announced it will begin an experimental trial of the drug remdesivir. The New England Journal of Medicine<\/i> reports the drug may offer at least limited salvation.<\/p>\n

Reports MarketPulse:<\/p>\n

\n

It seems the world is nearing a cure for the coronavirus and that could mean markets may only need to price in only one bad quarter of data for China.<\/i><\/p>\n<\/blockquote>\n

Therefore:<\/p>\n

\n

\u2026 the playbook remains once Wall Street is beyond the virus [and] risky assets will remain supported on central bank stimulus and the global growth rebound story.<\/i><\/p>\n<\/blockquote>\n

We should not be surprised then that the stock market had itself a day at the races yesterday…<\/p>\n

The Bulls Are Back in Charge<\/b><\/h2>\n

The Dow Jones ran up nearly 500 points by the closing whistle. The S&P went on a similar spree.<\/p>\n

Both indexes extended their gains today.<\/p>\n

The Dow Jones added 89 points; the S&P, 11. The Nasdaq took on 63 points of its own.<\/p>\n

Gushes analyst Adam Crisafulli:<\/p>\n

\n

The bullish narrative that\u2019s been driving stocks since late 2019 is firmly back in control of the tape after taking a brief pause during the final days of January.<\/i><\/p>\n<\/blockquote>\n

Just so.<\/p>\n

But let us draw a thick gray cloud across the sky\u2026 and patch the widening gap in the overcast.<\/p>\n

We begin with United States productivity\u2026<\/p>\n

Show Us More<\/b><\/h2>\n

Productivity may have expanded 1.8% last year. Yet one swallow does not a summer make\u2026 as the phrase runs.<\/p>\n

Productivity still goes far beneath the 2.1% average prevailing since the Second World War.<\/p>\n

And the current expansion\u2019s annual productivity gains?<\/p>\n

They average a slender 1.3% altogether \u2014 thin, thin gruel.<\/p>\n

We demand to see far more. But we may not see more…<\/p>\n

Business investment remains depressed. And absent a sustained upward pressure, we have little reason to expect additional productivity gains.<\/p>\n

Explain the gentlemen and ladies of Oxford Economics:<\/p>\n

\n

Productivity growth reached its fastest pace since 2010 last year, but we do not believe such performance will be sustained given lower domestic and global growth prospects.<\/i><\/p>\n<\/blockquote>\n

But what about China\u2019s newfound receptiveness to American wares? Should that not fill the sails of growth\u2026 and elevate the global outlook?<\/p>\n

Have another guess, says Northman Trader\u2019s Sven Henrich\u2026<\/p>\n

The Coronavirus Could Cut 2% From Global GDP<\/b><\/h2>\n

Look to the coronavirus. Henrich says the decision is a mere expression of Chinese desperation:<\/p>\n

\n

How long before people realize that China proactively capitulating on tariffs is a sign of how serious the economic impact of this [corona]virus situation actually is?<\/i><\/p>\n<\/blockquote>\n

There may be sound justice here.<\/p>\n

Goldman Sachs estimates the coronavirus\u2019 compounding effects may hatchet global GDP 2% this quarter.<\/p>\n

Zero Hedge, in summary of Goldman:<\/p>\n

\n

According to Goldman’s chief economist Jan Hatzius, the assumed hit to Chinese growth will directly subtract about 1% from global GDP growth in Q1. In addition, spillover effects to the rest of the world will take just under 1% off global growth, for a total hit of nearly 2% in the first quarter. The spillover effects consist of reduced exports to China (worth about 0.3%) and reduced spending by Chinese tourists abroad (worth about 0.6%).<\/i><\/p>\n<\/blockquote>\n

But since we are the very soul of fairness, we must report that Goldman\u2019s crackerjacks expect a full recovery.<\/p>\n

Global growth will attain 3.25% by year\u2019s end, they project \u2014 exceling last year\u2019s 3.1%.<\/p>\n

But what if they are wrong? What if this coronavirus is not so easily caged, conquered or killed?<\/p>\n

\u201cWe\u2019re Shadow Boxing\u201d<\/b><\/h2>\n

The director of the World Health Organization \u2014 a certain Dr. Tedros Adhanom Ghebreyesus \u2014 warns against excessive zeal.<\/p>\n

Put aside all rumors, he appears to say. No effective vaccinations or treatments yet exist.<\/p>\n

\u201cTo put it bluntly,\u201d says he, \u201cwe\u2019re shadow boxing.\u201d More:<\/p>\n

\u201cWe don\u2019t properly understand its transmissibility or severity\u2026 We need to bring this virus out into the light so we can attack it properly.\u201d<\/p>\n

Meantime, evidence mounts that China is vastly underreporting corona\u2019s viral reach\u2026<\/p>\n

Our agents \u2014 for example \u2014 report hospitals in Wuhan are packed to suffocation, bursting with victims.<\/p>\n

Neil Ferguson, disease modeler at Imperial College London, supports their claim:<\/p>\n

\n

There are likely to be many times more cases in Wuhan than officially confirmed. Clearly, the hospitals are overwhelmed.<\/i><\/p>\n<\/blockquote>\n

We further understand the body-burners are busy \u2014 our men report pillars of smoke billowing constantly from the local crematoria.<\/p>\n

But we must concede, our information comes secondhand. We are unable to confirm it.<\/p>\n

We can confirm, however, the galloping confidence of Americans referenced above\u2026<\/p>\n

Irrational Exuberance<\/b><\/h2>\n

Let us briefly revisit the details:<\/p>\n

\n

Gallup informs us 59% of Americans feel more financially flush this year than last.<\/i><\/p>\n

That is a record figure… nosing out the previous 58% from January 1999.<\/i><\/p>\n

And a record 74% of American adults expect next year will find them in easier waters yet.<\/i><\/p>\n

Seventy-four percent eclipses the previous 71% high from 1998.<\/i><\/p>\n<\/blockquote>\n

Have you noticed the dates when Americans were last so exuberant?<\/p>\n

That is correct \u2014 1998 and 1999. Do you recall the subsequent events of 2000\u201302?<\/p>\n

That too is correct. And the Nasdaq absorbed an 80% trouncing as they unfolded.<\/p>\n

We suspect markets are in for similar roughhouse in the not-distant future. Next year? Perhaps in 2022?<\/p>\n

We have no answer of course.<\/p>\n

Nature Abhors Extremes<\/b><\/h2>\n

But stock valuations presently rise to heights truly obscene, heights never before equalled by certain measures.<\/p>\n

That is, stocks are more expensive than ever by certain measures.<\/p>\n

Nature abhors a vacuum, it is said. But nature also abhors extremes.<\/p>\n

We suspect nature will iron out today\u2019s extremes\u2026 and with great gusto.<\/p>\n

Unfortunately, it will flatten the 59% of Americans who feel flush with cash, the 74% of Americans expecting easy waters ahead.<\/p>\n

Again, we cannot say when.<\/p>\n

But remember \u2014 nature abhors extremes. Remember also:<\/p>\n

Nature bats last…<\/p>\n

Regards,<\/p>\n

Brian Maher
\nManaging editor The Daily Reckoning<\/i><\/p>\n

The post A Flood of Good News<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

This post A Flood of Good News<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

Overwhelmed by a torrent of good news…<\/p>\n

The post A Flood of Good News<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n","protected":false},"author":16,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[3884,3724,366,462,463],"tags":[30],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1164203"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1164203"}],"version-history":[{"count":1,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1164203\/revisions"}],"predecessor-version":[{"id":1164204,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1164203\/revisions\/1164204"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1164203"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1164203"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1164203"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}